FUND PARTICIPATION AGREEMENT
TABLE OF CONTENTS
ARTICLE I. Sale of Fund Shares......................................................
ARTICLE II. Representations and Warranties...........................................
ARTICLE III. Prospectuses and Proxy Statements; Voting................................
ARTICLE IV. Sales Material and Information...........................................
ARTICLE V. Fees and Expenses........................................................
ARTICLE VI. Diversification and Qualification........................................
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order ................................
ARTICLE VIII. Indemnification .........................................................
ARTICLE IX. Applicable Law...........................................................
ARTICLE X. Termination..............................................................
ARTICLE XI. Notices..................................................................
ARTICLE XII. Miscellaneous............................................................
SCHEDULE A Designated Portfolios....................................................
SCHEDULE B Reports per Section 6.6..................................................
SCHEDULE C Expenses.................................................................
SCHEDULE D Administrative Services..................................................
SCHEDULE E Market Timing and Excessive Trading Procedures...........................
FUND PARTICIPATION AGREEMENT
Among
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
XXXXXXX VARIABLE SERIES I, XXXXXXX VARIABLE SERIES II and
XXXXXXX INVESTMENTS VIT FUNDS,
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. and
DEUTSCHE ASSET MANAGEMENT, INC.,
and
XXXXXXX DISTRIBUTORS, INC.
THIS AGREEMENT, made and entered into as of this ____ day of March, 2005
by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "GWL&A"),
a Colorado life insurance company, on its own behalf and on behalf of its
Separate Account COLI VUL 2 Series Account (the "Account"); XXXXXXX VARIABLE
SERIES I, XXXXXXX VARIABLE SERIES II and XXXXXXX INVESTMENTS VIT FUNDS
(individually, a "Fund"), each a Massachusetts business trust created under a
Declaration of Trust, as amended; DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
and DEUTSCHE ASSET MANAGEMENT, INC., each a Delaware corporation (collectively,
the "Adviser"); and XXXXXXX DISTRIBUTORS, INC., a corporation organized under
the laws of Delaware (hereinafter the "Distributor"). The parties agree that a
single document is being used for ease of administration and that this Agreement
shall be treated as if it were a separate agreement with respect to each Fund,
and each series thereof, that is a party hereto, severally and not jointly, as
if such entity had entered into a separate agreement naming only itself as a
party. Without limiting the foregoing, no Fund, or series thereof, shall have
any liability under this Agreement for the obligations of any other Fund, or
series thereof.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts (collectively, the "Variable Insurance Products") to
be offered by insurance companies, including GWL&A, which have entered into
participation agreements similar to this Agreement (hereinafter "Participating
Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (hereinafter the "SEC") granting Participating Insurance Companies
and variable annuity and variable life insurance separate accounts exemptions
from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment
Company Act of 1940, as amended, (hereinafter 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 life insurance companies that may or may not be
affiliated with one another and, for Xxxxxxx Investments VIT Funds, qualified
pension and retirement plans ("Qualified Plans") (hereinafter the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolio(s) are registered under
the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, and any applicable state
securities laws; and
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, GWL&A has registered certain variable life contracts supported
wholly or partially by the Account (the "Contracts") to be made available to
owners thereof, including any participants or employees of such owners as
applicable ("Contract Owners"); and
WHEREAS, the Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of GWL&A,
under the insurance laws of the State of Colorado, to set aside and invest
assets attributable to the Contracts; and
WHEREAS, GWL&A has registered the Account as a unit investment trust
under the 1940 Act and has registered the securities deemed to be issued by the
Account under the 1933 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, GWL&A intends to purchase shares in the Portfolio(s) listed in
Schedule A attached hereto and incorporated herein by reference, as such
Schedule may be amended from time to time by mutual written agreement (the
"Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and
the Fund is authorized to sell such shares to unit investment trusts such as the
Account at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Account also intends to purchase shares in other open-end
investment companies or series thereof not affiliated with the Fund (the
"Unaffiliated Funds") on behalf of the Account to fund the Contracts; and
WHEREAS, GWL&A intends to utilize its NSCC member broker/dealer
affiliate, GWFS Equities, Inc. (formerly known as BenefitsCorp Equities, Inc.)
("GWFS") to transmit instructions for the purchase, redemption and transfer of
Fund shares on behalf of the Account, and GWFS, alone, or with the assistance of
a recordkeeping affiliate, to perform certain recordkeeping functions associated
with the transfer of Fund shares into and out of the Account in order to
recognize certain organizational economies; and
NOW, THEREFORE, in consideration of their mutual promises, GWL&A, the
Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1 The Fund agrees to make shares of the Designated Portfolio(s) available
for purchase at the applicable net asset value per share by GWL&A and the
Account on those days on which the Fund calculates its Designated Portfolio(s)'
net asset value pursuant to rules of the SEC, and the Fund shall calculate such
net asset value on each Business Day (as defined below). Notwithstanding the
foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may
refuse to sell shares of any Designated Portfolio to any person, or suspend or
terminate the offering of shares of any Designated Portfolio if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, necessary in the best
interests of the shareholders of such Designated Portfolio. The Fund reserves
the right to cease offering Shares of any Designated Portfolio in the discretion
of the Fund.
1.2 The Fund agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts and to other
persons or plans ("Qualified Persons") that qualify to purchase Shares of the
Fund under Section 817(h) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder without impairing the ability of the
Account to consider the portfolio investments of the Fund as constituting
investments of the Account for the purpose of satisfying the diversification
requirements of Section 817(h). GWL&A hereby represents and warrants that it and
the Account are Qualified Persons. No shares of any Designated Portfolio will be
sold to the general public. The Fund will not sell shares of the Designated
Portfolio(s) to any other Participating Insurance Company separate account
unless an agreement containing provisions substantially similar to Sections 2.4,
2.10, 3.5, 3.6 and Article VII of this Agreement is in effect to govern such
sales.
1.3. The Fund agrees to (a) sell to GWL&A those full and fractional
shares of the Designated Portfolio(s) that GWL&A, on behalf of the Account,
orders, and (b) redeem, on GWL&A's order, any full or fractional shares of the
Fund held by GWL&A, in each case executing such orders on each Business Day at
the net asset value next computed after receipt by the Fund or its designee of
the order for the shares of the Designated Portfolios. For purposes of this
Section 1.3, GWL&A shall be the designee of the Fund for receipt of such orders
and receipt by such designee shall constitute receipt by the Fund, provided that
the Fund receives notice of any such order by 10:00 a.m. Eastern time on the
next following Business Day or later time permitted by Section 1.6 hereof.
"Business Day" shall mean any day on which the New York Stock Exchange is open
for regular trading and on which the Designated Portfolio calculates its net
asset value pursuant to the rules of the SEC. GWL&A shall provide the Fund with
net purchase and redemption requests computed in accordance with Section 1.7
hereof.
GWL&A shall not redeem Fund shares attributable to the Contracts (as opposed to
Fund shares attributable to GWL&A's assets held in the Account) except (a) as
necessary to implement Contract Owner initiated or approved transactions, (b) as
required by state and/or federal laws or regulations or judicial or other legal
precedent of general application (hereinafter referred to as a "Legally Required
Redemption"), (c) as permitted by an order of the SEC pursuant to Section 26(b)
of the 1940 Act, or (d) as permitted under the terms of the Contract. Upon
request, GWL&A will promptly furnish the Fund and the Distributor reasonable
assurance that any redemption pursuant to clause (b) above is a Legally Required
Redemption. Furthermore, except in cases where permitted under the terms of the
Contracts or by termination of this Agreement or as may otherwise be permitted
under the terms of this Agreement, GWL&A shall not prevent Contract Owners from
allocating payments to a Designated Portfolio that was otherwise available under
the Contracts without first giving the Fund or the Distributor thirty (30) days
notice of its intention to do so.
1.4 In the event of net purchases, GWL&A shall pay for Fund shares before the
close of the federal wire transfer system on the next Business Day after an
order to purchase Fund shares is made in accordance with the provisions of
Section 1.3 hereof. Payment shall be in federal funds transmitted to the Fund by
wire. Upon receipt by the Fund of the federal funds so wired, such funds shall
cease to be the responsibility of GWL&A and shall become the responsibility of
the Fund.
1.5 In the event of net redemptions, the Fund shall pay and transmit the
proceeds of redemptions of Fund shares by 3:00 p.m. Eastern time on the next
Business Day after a redemption order is received in accordance with Section 1.3
hereof. Payment shall be in federal funds transmitted to GWL&A or its designee
by wire.
1.6 The Fund shall make the net asset value per share for each Designated
Portfolio available to GWL&A on each Business Day 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 6:30 p.m.
Eastern time. In the event that the Fund is unable to meet the 6:30 p.m. time
stated herein, the Fund shall provide additional time for GWL&A to place orders
for the purchase and redemption of shares equal to the additional time it takes
the Fund to make the net asset value available to GWL&A. However, if net asset
values are not available for inclusion in the next business cycle and purchase
orders/redemptions are not able to be calculated and available for GWL&A to
execute within the time frame identified in Section 1.3 hereof, GWL&A on behalf
of the Account, shall be entitled to an adjustment to the number of shares
purchased or redeemed to reflect the correct share net asset value.
1.7 At the end of each Business Day, GWL&A shall use the information
described herein to calculate Account unit values for the day. Using these unit
values, GWL&A shall process each such Business Day's separate account
transactions based on requests and premiums received by it by the close of
regular trading on the floor of the New York Stock Exchange (currently 4:00
p.m., Eastern time) to determine the net dollar amount of Fund shares which
shall be purchased or redeemed at that day's closing net asset value per share.
1.8 In the event of an error in the computation of a Designated Portfolio's
net asset value per share ("NAV") or any dividend or capital gain distribution
(each, a "pricing error"), the Adviser or the Fund shall immediately notify
GWL&A as soon as possible after discovery of the error. Such notification may be
verbal, but shall be confirmed promptly in writing in accordance with Article XI
of this Agreement. A pricing error shall be corrected in accordance with the
procedures for correcting net asset value errors adopted by the Fund's Board of
Trustees and in effect at the time of the error. The Fund represents and
warrants that its procedures for correcting net asset value errors currently
comply, and will continue to comply, with the 1940 Act and generally
industry-wide accepted SEC staff interpretations concerning pricing errors in
effect at the time of an error. GWL&A will be reimbursed for the administrative
costs of adjustments made to correct Contract Owner accounts in accordance with
the provisions of Schedule C hereof. If an adjustment is necessary to correct an
error pursuant to the Fund's procedures which has caused Contract Owners to
receive less than the amount to which they are entitled, the number of shares of
the appropriate Designated Portfolio(s) attributable to the accounts of the
Contract Owners will be adjusted and the amount of any underpayments shall be
credited by the Adviser or the Fund, as appropriate, to GWL&A for crediting of
such amounts to the applicable Contract Owners accounts. Upon notification by
the Adviser of any overpayment due to an error, GWL&A shall promptly remit to
the Adviser or the Fund, as appropriate, any overpayment that has not been paid
to Contract Owners; however, the Parties acknowledge that GWL&A does not intend
to seek additional payments from any Contract Owner who, because of a pricing
error, may have underpaid for units of interest credited to his/her account. In
no event shall GWL&A be liable to Contract Owners for any such adjustments or
underpayment amounts.
The standards set forth in this Section 1.8 are based on the Parties'
understanding of the views expressed by the staff of the SEC as of the date of
this Agreement. In the event the views of the SEC staff are later modified or
superseded by SEC or judicial interpretation, the Parties shall amend the
foregoing provisions of this Agreement to comport with the appropriate
applicable standards, on terms mutually satisfactory to all Parties.
1.9 The Fund shall furnish same day notice (by wire or telephone, followed
by written confirmation) to GWL&A of any income, dividends or capital gain
distributions payable on the Designated Portfolio(s)' shares. GWL&A hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Designated Portfolio shares in additional shares of that
Designated Portfolio. GWL&A reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash. The
Fund shall notify GWL&A by the end of the next following Business Day of the
number of shares so issued as payment of such dividends and distributions.
1.10 Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to GWL&A or the Account. Shares ordered
from the Fund will be recorded in an appropriate title for the Account or the
appropriate subaccount of the Account. Purchases and redemptions of Designated
Portfolio shares shall be subject to the prospectus of the Fund from time to
time in effect.
1.11 The Parties acknowledge that the arrangement contemplated by this
Agreement is not exclusive; the Fund's shares may be sold to other Participating
Insurance Companies (subject to Section 1.2 and Article VII hereof) and the cash
value of the Contracts may be invested in other investment companies.
1.12 All purchases, redemptions and exchanges of Designated Portfolio
shares by GWL&A on behalf of the Account shall be governed by and subject to the
terms of a Fund/SERV Agreement and an NSCC Networking Agreement, entered into by
and between GWFS, an affiliate of GWL&A, and Xxxxxxx Investments Service Company
("SISvC"), an affiliate of the Adviser, dated March 28, 2005, as amended from
time to time; provided, however, in the event of a conflict between such
Fund/SERV and NSCC Agreements and this Agreement, this Agreement shall govern.
GWL&A agrees that GWFS is authorized to act on its behalf under the Fund/SERV
and NSCC Networking Agreements. The Fund agrees that SISvC is authorized as
transfer agent of the Fund to act on its behalf under the Fund/SERV and NSCC
Networking Agreements.
ARTICLE II. Representations and Warranties
2.1. GWL&A represents and warrants that the Contracts and the securities
deemed to be issued by the Account under the Contracts are or will be registered
under the 1933 Act; that the Contracts will be issued and sold in compliance in
all material respects with all applicable federal and state laws and that the
sale of the Contracts shall comply in all material respects with state insurance
suitability requirements. GWL&A further represents that it is an insurance
company duly organized and in good standing under applicable law and that it has
legally and validly established the Account prior to any issuance or sale of
units thereof as a segregated asset account under Colorado insurance law and has
registered the 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 and that it will maintain such registration for so long as any
Contracts are outstanding as required by applicable law.
2.2. The Fund represents and warrants that Designated Portfolio(s)
shares sold pursuant to this Agreement shall be registered under the 1933 Act,
duly authorized for issuance and sold in compliance with all applicable federal
securities laws including without limitation the 1933 Act, the 1934 Act, and the
1940 Act and that the Fund is and shall remain registered under the 0000 Xxx.
The Fund shall amend the registration statement for its shares under the 1933
Act and the 1940 Act from time to time as required in order to permit the
continuous offering of its shares.
2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1
under the 1940 Act and to impose an asset-based or other charge to finance
distribution expenses as permitted by applicable law and regulation. In any
event, the Fund and Adviser agree to comply with applicable provisions and SEC
staff interpretations of the 1940 Act to assure that the investment advisory or
management fees paid to the Adviser by the Fund are in accordance with the
requirements of the 1940 Act. To the extent that the Fund decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its
Board, a majority of whom are not interested persons of the Fund, formulate and
approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses.
2.4. The Fund represents and warrants that it will cooperate with GWL&A
to ensure that the investment policies, fees and expenses of the Designated
Portfolio(s) are and shall at all times remain in compliance with the insurance
and other applicable laws of the State of Colorado to the extent required to
perform this Agreement, provided that GWL&A gives the Fund and Adviser notice of
any such laws. The Fund further represents and warrants that it will make every
effort to ensure that Designated Portfolio(s) shares will be sold in compliance
with applicable securities and insurance laws of the State of Colorado, provided
that GWL&A gives the Fund and Adviser notice of any such laws. The Fund shall
register and qualify the shares for sale in accordance with the laws of the
various states if and to the extent required by applicable law. GWL&A shall be
solely responsible for (i) identifying any changes in state insurance laws,
regulations or interpretations that may affect the Designated Portfolios ("Law
Change"); and (ii) notifying the Fund, Adviser and Distributor of such Law
Change. In the event of a Law Change, the Fund agrees that any action required
by a Law Change will be taken, except in those circumstances where the Fund has
advised GWL&A that its Board has determined that implementation of a particular
Law Change is not in the best interest of all the Fund's shareholders.
2.5. The Fund represents and warrants that it 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 the 1940 Act.
2.6. The Adviser represents and warrants that it is and shall remain
duly registered under all applicable federal and state securities laws and that
it shall perform its obligations for the Fund in compliance in all material
respects with any applicable state and federal securities laws.
2.7. The Distributor represents and warrants that it is and shall remain
duly registered under all applicable federal and state securities laws and that
it shall perform its obligations for the Fund in compliance in all material
respects with any applicable state and federal securities laws.
2.8. The Fund and the Adviser represent and warrant that all of their
respective officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are, and shall
continue to be at all times, covered by one or more blanket fidelity bonds or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions
as may be promulgated from time to time. The aforesaid bonds shall include
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company.
2.9. The Fund will provide GWL&A with as much advance notice as is
reasonably practicable of any material change affecting the Designated
Portfolio(s) (including, but not limited to, any material change in the
registration statement or prospectus affecting the Designated Portfolio(s)) and
any proxy solicitation affecting the Designated Portfolio(s) and consult with
GWL&A in order to implement any such change in an orderly manner, recognizing
the expenses of changes and attempting to minimize such expenses by implementing
them in conjunction with regular annual updates of the prospectus for the
Contracts. The Fund agrees to share equitably in expenses incurred by GWL&A as a
result of actions taken by the Fund, consistent with the allocation of expenses
contained in Schedule C attached hereto and incorporated herein by reference.
2.10. GWL&A represents and warrants, for purposes other than
diversification under Section 817 of the Internal Revenue Code of 1986 as
amended ("the Code"), that the Contracts are currently and at the time of
issuance will be treated as life insurance contracts under applicable provisions
of the Code, and that it will make every effort to maintain such treatment and
that it will notify the Fund, the Distributor 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. In addition, GWL&A
represents and warrants that the Account is a "segregated asset account" and
that interests in the Account are offered exclusively through the purchase of or
transfer into a "variable contract" within the meaning of such terms under
Section 817 of the Code and the regulations thereunder. GWL&A will use every
effort to continue to meet such definitional requirements, and it will notify
the Fund, the Distributor and the Adviser immediately upon having a reasonable
basis for believing that such requirements have ceased to be met or that they
might not be met in the future. GWL&A represents and warrants that it will not
purchase Fund shares with assets derived from tax-qualified retirement plans
except, indirectly, through Contracts purchased in connection with such plans.
2.11. GWL&A has policies and procedures reasonably designed to help
prevent the use of the Accounts by Contract Owners engaged in short-term trading
or excessive trading, which policies and procedures shall be reasonably
acceptable to the Fund, the Adviser and the Distributor. If GWL&A modifies such
policies and procedures, GWL&A will provide notice thereof to the Fund, the
Adviser and the Distributor. GWL&A's Abusive Trading Procedures are attached
hereto as Schedule E and incorporated herein by reference. In the event that it
may become necessary or appropriate for GWL&A to implement trading restrictions
under section 4 of Schedule E in a particular situation, GWL&A agrees to consult
with the Fund in regard to which trading restriction to implement. In addition,
GWL&A agrees to provide the Fund, on request from time to time, specific
transaction information to help the Fund monitor suspected short-term or
excessive trading activity; provided, however, the provision of any such
information to the Fund will not relieve GWL&A of any obligations that it may
otherwise have with respect to such trading activity.
In addition to the foregoing, GWL&A will use reasonable efforts to develop,
implement and maintain procedures as necessary or appropriate to further any
specific policies and procedures of the Fund, the Adviser or the Distributor for
one or more Designated Portfolios in regard to short-term trading or excessive
trading. In the event that GWL&A deems it impractical to implement any such
procedures, GWL&A and the Fund, the Adviser and the Distributor shall discuss
alternative approaches and, in the event that agreement can not be reached as to
an alternative approach, any party may terminate this Agreement upon written
notice to the other parties.
If, notwithstanding the foregoing, the Fund, the Adviser or the Distributor
notifies GWL&A that a pattern or patterns of transactions involving short-term
trading or excessive trading in one or more Accounts is having or may have, in
their sole discretion, an adverse effect on a Designated Portfolio, GWL&A will,
in accordance with Schedule E, promptly take such actions and implement such
procedures as are appropriate to prevent such trading. The parties hereto
acknowledge that, if necessary, such actions and procedures may include the
identification of Contract Owners engaged in such trading and the imposition of
complete or partial restrictions on their requests to purchase shares of the
Designated Portfolio.
GWL&A acknowledges that all orders accepted by GWL&A for the Accounts are
subject to the obligations of GWL&A in this Section 2.11, including the
obligation to help prevent the use of the Accounts for short-term trading or
excessive trading, and that the Fund, the Adviser or the Distributor may take
such actions as it deems to be in the best interests of shareholders of the
Designated Portfolios to enforce such obligations and to otherwise prevent such
trading in shares of the Designated Portfolios, including, among other things,
the right to revoke, reject or cancel purchase orders for shares of the
Designated Portfolios made by GWL&A. Any such revocation, rejection or
cancellation may be made in whole or in part, it being understood that the Fund,
the Adviser and the Distributor are not required to isolate objectionable
trades. The Fund, the Underwriter and the Adviser acknowledge that revocation,
cancellation or rejection of a purchase order poses potentially significant
consequences to the Company and the Contract holders and represent that purchase
orders normally will be rejected only after attempts to prevent the activity
through the Company have failed.
The Fund, the Adviser and the Distributor shall not be responsible for any
losses or costs incurred by GWL&A, the Account or Contract Owners as a result of
the revocation, rejection or cancellation of orders made by GWL&A in furtherance
of the enforcement of their policy to prevent short-term trading and excessive
trading in shares of the Designated Portfolios. 2.12. GWL&A represents and
warrants as follows:
(i) GWL&A has in place an anti-money laundering program ("AML program")
that does now and will continue to comply with applicable laws and regulations,
including the relevant provisions of the USA PATRIOT Act (Pub. L. No. 107-56
(2001)) and the regulations issued thereunder by the U.S. Treasury Department
and the rules of the National Association of Securities Dealers, Inc., as
applicable.
(ii) GWL&A has in place - and has conducted due diligence pursuant to -
policies, procedures and internal controls reasonably designed (a) to verify the
identity of the Contract Owners that invest in the Account, and (b) to identify
those Contract Owners' sources of funds, and have no reason to believe that any
of the invested funds were derived from illegal activities.
(iii) GWL&A has, after undertaking reasonable inquiry, no information or
knowledge that (a) any Contract Owner that invests in the Account, or (b) any
person or entity controlling, controlled by or under common control with such
Contract Owner is an individual or entity or in a country or territory that is
on an Office of Foreign Assets Control ("OFAC") list or similar list of
sanctioned or prohibited persons maintained by a U.S. governmental or regulatory
body.
(iv) GWL&A further agrees promptly to notify the Fund and the Distributor
should it become aware of any change in the representations and warranties set
forth in 12.2 (i), (ii) or (iii) above.
(v) GWL&A agrees to require any broker-dealer/insurance agency that
distributes the Contracts to have an AML Program in substantial compliance with
the foregoing.
In addition, the Distributor and the Fund hereby provide notice to GWL&A that
the Distributor and/or the Fund reserve the right to make inquiries of and
request additional information from GWL&A regarding its AML program.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the Adviser or Distributor shall provide GWL&A with
as many copies of the Fund's current prospectus for the Designated Portfolio(s)
as GWL&A may reasonably request for marketing purposes (including distribution
to Contract Owners with respect to new sales of a Contract), with expenses to be
borne in accordance with Schedule C hereof. If requested by GWL&A in lieu
thereof, the Advisor, Distributor or Fund shall provide such documentation
(including a camera-ready copy and computer diskette of the current prospectus
for the Designated Portfolio(s)) and other assistance as is reasonably necessary
in order for GWL&A once each year (or more frequently if the prospectuses for
the Designated Portfolio(s) are amended) to have the prospectus for the
Contracts and the Fund's prospectus for the Designated Portfolio(s) printed
together in one document. The Fund and Adviser agree that the prospectus (and
semi-annual and annual reports) for the Designated Portfolio(s) will describe
only the Designated Portfolio(s) and will not name or describe any other
portfolios or series that may be in the Fund unless required by law.
3.2. If applicable state or federal laws or regulations require that the
Statement of Additional Information ("SAI") for the Fund be distributed to all
Contract Owners, then the Fund, Distributor and/or the Adviser shall provide
GWL&A with copies of the Fund's SAI or documentation thereof for the Designated
Portfolio(s) in such quantities, with expenses to be borne in accordance with
Schedule C hereof, as GWL&A may reasonably require to permit timely distribution
thereof to Contract Owners. The Adviser, Distributor and/or the Fund shall also
provide SAIs to any Contract Owner or prospective owner who requests such SAI
from the Fund (although it is anticipated that such requests will be made to
GWL&A).
3.3. The Fund, Distributor and/or Adviser shall provide GWL&A with copies
of the Fund's proxy material, reports to stockholders and other communications
to stockholders for the Designated Portfolio(s) in such quantity, with expenses
to be borne in accordance with Schedule C hereof, as GWL&A may reasonably
require to permit timely distribution thereof to Contract Owners as required by
applicable law.
3.4. It is understood and agreed that, except with respect to information
regarding GWL&A provided in writing by that party, GWL&A is not responsible for
the content of the prospectus or SAI for the Designated Portfolio(s). It is also
understood and agreed that, except with respect to information regarding the
Fund, the Distributor, the Adviser or the Designated Portfolio(s) provided in
writing by the Fund, the Distributor or the Adviser, neither the Fund, the
Distributor nor Adviser are responsible for the content of the prospectus or SAI
for the Contracts.
3.5. If and to the extent required by law GWL&A shall:
(i) solicit voting instructions from Contract Owners;
(ii) vote the Designated Portfolio(s) shares held in the Account in
accordance with instructions received from Contract Owners: and
(iii) vote Designated Portfolio shares held in the Account for which
no instructions have been received in the same proportion as
Designated Portfolio(s) shares for which instructions have been
received from Contract Owners, so long as and to the extent that
the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for variable contract owners.
GWL&A reserves the right to vote Fund shares held in any
segregated asset account in its own right, to the extent
permitted by law.
3.6. GWL&A shall be responsible for assuring that each of its separate
accounts holding shares of a Designated Portfolio votes shares in a manner that
is consistent with the Mixed and Shared Funding Exemptive Order. The Fund agrees
to promptly notify GWL&A of any changes of interpretations or amendments of the
Mixed and Shared Funding Exemptive Order.
3.7. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the 1940
Act not to require such meetings) or, as the Fund currently intends, 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 Fund will act in accordance with the
SEC's interpretation of the requirements of Section 16(a) with respect to
periodic elections of directors or trustees and with whatever rules the
Commission may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. GWL&A shall furnish, or shall cause to be furnished, to the Fund or
its designee, a copy of each piece of sales literature or other promotional
material that GWL&A, respectively, develops or proposes to use and in which the
Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the
Distributor is named in connection with the Contracts, at least ten (10)
business days prior to its use. No such material shall be used if the Fund
objects to such use within five (5) business days after receipt of such
material. Notwithstanding the foregoing, GWL&A shall not be required to furnish
to the Fund or its designee any sales literature or other promotional material
which GWL&A receives from the Fund, the Distributor or Adviser and which is
unaltered by GWL&A.
4.2. GWL&A shall not give any information or make any representations or
statements on behalf of the Fund in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement, prospectus or SAI for the Fund shares, as the same may be amended or
supplemented from time to time, or in sales literature or other promotional
material approved by the Fund, Distributor or Adviser, except with the
permission of the Fund, Distributor or Adviser.
4.3. The Fund or the Adviser shall furnish, or shall cause to be
furnished, to GWL&A, a copy of each piece of sales literature or other
promotional material in which GWL&A and/or its separate account(s), is named at
least ten (10) business days prior to its use. No such material shall be used if
GWL&A objects to such use within five (5) business days after receipt of such
material.
4.4. The Fund, the Distributor and the Adviser shall not give any
information or make any representations on behalf of GWL&A or concerning GWL&A,
the Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus or SAI for the Contracts, as
the same may be amended or supplemented from time to time, or in sales
literature or other promotional material approved by GWL&A or its designee,
except with the permission of GWL&A. GWL&A agrees that the Fund and the Adviser
may include in the Fund's proxy materials, shareholder reports, registration
statements, prospectuses or SAIs information about GWL&A and the Account, to the
extent such information is required by applicable law to be included therein.
4.5. The Fund will provide to GWL&A at least one complete copy of any
prospectuses and SAIs and all amendments to any of the above, that relate to the
Designated Portfolio(s), reasonably promptly after the filing of such
document(s) with the SEC or NASD or other regulatory authorities. Upon request,
the Fund will provide to GWL&A copies of SEC exemptive orders and no-action
letters and sales literature and other promotional material that relate to the
Designated Portfolios and to the performance of this Agreement by the parties.
4.6. GWL&A will provide to the Fund at least one complete copy of any
prospectuses and SAIs, and all amendments to any of the above, that relate to
the Contracts or the Account, reasonably promptly after the filing of such
document(s) with the SEC, NASD, or other regulatory authority. Upon request, the
GWL&A will provide to the Fund copies of SEC exemptive orders and no-action
letters, solicitations of voting instructions and sales literature and other
promotional material that relate to the Contracts or the Account and the
performance of this Agreement by the parties.
4.7. For purposes of Articles IV and VIII, the phrase "sales literature
and 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 media), 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 advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and shareholder reports, and proxy
materials (including solicitations for voting instructions) and any other
material constituting sales literature or advertising under the NASD rules, the
1933 Act or the 0000 Xxx.
4.8. At the request of any party to this Agreement, each other party
will make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records, data and
access to operating procedures that may be reasonably requested in connection
with compliance and regulatory requirements related to this Agreement or any
party's obligations under this Agreement.
ARTICLE V. Fees and Expenses
5.1. Neither the Fund, the Distributor nor the Adviser shall pay any fee
or other compensation to GWL&A under this Agreement, other than pursuant to
Schedule D attached hereto and incorporated by reference herein. In addition,
the parties will bear certain expenses in accordance with Schedule C, Articles
III, V, and other provisions of this Agreement.
5.2. All expenses incident to performance by the Fund, the Distributor
and the Adviser under this Agreement shall be paid by the appropriate party, as
further provided in Schedule C. The Fund shall see to it that all shares of the
Designated Portfolio(s) are registered and authorized for issuance in accordance
with applicable federal law and, if and to the extent required, in accordance
with applicable state laws prior to their sale.
5.3. The parties shall bear the expenses of any routine annual
distribution (mailing costs) of the Fund's prospectus and distribution (mailing
costs) of the Fund's proxy materials and reports to owners of Contracts offered
by GWL&A, in accordance with Schedule C.
5.4. The Fund, the Distributor and the Adviser acknowledge that a
principal feature of the Contracts is the Contract Owner's ability to choose
from a number of unaffiliated mutual funds (and portfolios or series thereof),
including the Designated Portfolio(s) and the Unaffiliated Funds, and to
transfer the Contract's cash value between funds and portfolios. The Fund, the
Distributor and the Adviser agree to cooperate with GWL&A in facilitating the
operation of the Account and the Contracts as described in the prospectus for
the Contracts, including but not limited to cooperation in facilitating
transfers between Unaffiliated Funds.
ARTICLE VI. Diversification and Qualification
6.1. The Fund, the Distributor and the Adviser represent and warrant that
the Fund will at all times sell its shares and invest its assets in such a
manner as to ensure that the Contracts will be treated as life insurance
contracts under the Code, and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Fund, Distributor and Adviser represent
and warrant that the Fund and each Designated Portfolio thereof will at all
times comply with Section 817(h) of the Code and Treasury Regulation ss.1.817-5,
as amended from time to time, and any Treasury interpretations thereof, relating
to the diversification requirements for variable annuity, endowment, or life
insurance contracts and any amendments or other modifications or successor
provisions to such Section or Regulations. The Fund, the Distributor and the
Adviser agree that shares of the Designated Portfolio(s) will be sold only to
Participating Insurance Companies and their separate accounts and to other
Qualified Persons.
6.2. No shares of any Designated Portfolio of the Fund will be sold to the
general public.
6.3. The Fund, the Distributor and the Adviser represent and warrant that
the Fund and each Designated Portfolio is currently qualified as a Regulated
Investment Company under Subchapter M of the Code, and that each Designated
Portfolio will maintain such qualification (under Subchapter M or any successor
or similar provisions) as long as this Agreement is in effect.
6.4. The Fund, Distributor or Adviser will notify GWL&A immediately upon
having a reasonable basis for believing that the Fund or any Designated
Portfolio has ceased to comply with the aforesaid Section 817(h) diversification
or Subchapter M qualification requirements or might not so comply in the future.
6.5. Without in any way limiting the effect of Sections 8.2, 8.3 and 8.4
hereof and without in any way limiting or restricting any other remedies
available to GWL&A, the Adviser or Distributor 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 GWL&A and any federal income
taxes or tax penalties and interest thereon (or "toll charges" or exactments or
amounts paid in settlement) incurred by GWL&A with respect to itself or owners
of its Contracts in connection with any such failure or anticipated or
reasonably foreseeable failure.
6.6. The Fund at the Fund's expense shall provide GWL&A or its designee
with reports certifying compliance with the aforesaid Section 817(h)
diversification and Subchapter M qualification requirements, at the times
provided for and substantially in the form attached hereto as Schedule B and
incorporated herein by reference; provided, however, that providing such reports
does not relieve the Fund of its responsibility for such compliance or of its
liability for any non-compliance.
6.7. GWL&A agrees that if the Internal Revenue Service ("IRS") asserts in
writing in connection with any governmental audit or review of GWL&A or, to
GWL&A's knowledge, or any Contract Owner that any Designated Portfolio has
failed to comply with the diversification requirements of Section 817(h) of the
Code or GWL&A otherwise becomes aware of any facts that could give rise to any
claim against the Fund, Distributor or Adviser as a result of such a failure or
alleged failure:
(a) GWL&A shall promptly notify the Fund, the Distributor and the
Adviser of such assertion or potential claim;
(b) GWL&A shall consult with the Fund, the Distributor and the Adviser
as to how to minimize any liability that may arise as a result of such
failure or alleged failure;
(c) GWL&A shall use its best efforts to minimize any liability of the
Fund, the Distributor and the Adviser resulting from such failure,
including, without limitation, demonstrating, pursuant to Treasury
Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that
such failure was inadvertent;
(d) any written materials to be submitted by GWL&A to the IRS, any
Contract Owner or any other claimant in connection with any of the
foregoing proceedings or contests (including, without limitation, any
such materials to be submitted to the IRS pursuant to Treasury
Regulations, Section 1.817-5(a)(2)) shall be provided by GWL&A to the
Fund, the Distributor and the Adviser (together with any supporting
information or analysis) within at least two (2) business days prior to
submission;
(e) GWL&A shall provide the Fund, the Distributor and the Adviser with
such cooperation as the Fund, the Distributor and the Adviser shall
reasonably request (including, without limitation, by permitting the
Fund, the Distributor and the Adviser to review the relevant books and
records of GWL&A) in order to facilitate review by the Fund, the
Distributor and the Adviser of any written submissions provided to it or
its assessment of the validity or amount of any claim against it arising
from such failure or alleged failure;
(f) GWL&A shall not with respect to any claim of the IRS or any Contract
Owner that would give rise to a claim against the Fund, the Distributor
and the Adviser (i) compromise or settle any claim, (ii) accept any
adjustment on audit, or (iii) forego any allowable administrative or
judicial appeals, without the express written consent of the Fund, the
Distributor and the Adviser, which shall not be unreasonably withheld;
provided that, GWL&A shall not be required to appeal any adverse
judicial decision unless the Fund and the Adviser shall have provided an
opinion of independent counsel to the effect that a reasonable basis
exists for taking such appeal; and further provided that the Fund, the
Distributor and the Adviser shall bear the costs and expenses, including
reasonable attorney's fees, incurred by GWL&A in complying with this
clause (f).
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners 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 variable annuity contract and variable life insurance contract owners or by
contract owners of different Participating Insurance Companies; or (f) a
decision by a Participating Insurance Company to disregard the voting
instructions of contract owners. The Board shall promptly inform GWL&A if it
determines that an irreconcilable material conflict exists and the implications
thereof.
7.2. GWL&A will report any potential or existing conflicts of which it
is aware to the Board. GWL&A will assist the Board in carrying out its
responsibilities under the Mixed and Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an obligation
by GWL&A to inform the Board whenever Contract Owner voting instructions are to
be disregarded. Such responsibilities shall be carried out by GWL&A with a view
only to the interests of its Contract Owners.
7.3. If it is determined by a majority of the Board, or a majority of
its directors who are not interested persons of the Fund, the Distributor, the
Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent
Directors"), that a material irreconcilable conflict exists, GWL&A and other
Participating Insurance Companies shall, at their expense and to the extent
reasonably practicable (as determined by a majority of the Independent
Directors), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (1) withdrawing the
assets allocable to some or all of the separate accounts 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 contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision
by GWL&A to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, GWL&A may be
required, at the Fund's election, to withdraw the Account's investment in the
Fund and terminate this Agreement; 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 Independent
Directors. Any such withdrawal and termination must take place within six (6)
months after the Fund gives written notice that this provision is being
implemented, and until the end of that six month period the Adviser, the
Distributor and the Fund shall continue to accept and implement orders by GWL&A
for the purchase (and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to GWL&A conflicts with the
majority of other state regulators, then GWL&A will withdraw the Account's
investment in the Fund and terminate this Agreement within six months after the
Board informs GWL&A 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 members of the Board. Until the end of the foregoing six month
period, the Fund shall continue to accept and implement orders by GWL&A for the
purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. GWL&A shall 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 Contract owners affected by the irreconcilable material conflict. In
the event that the Board determines that any proposed action does not adequately
remedy any irreconcilable material conflict, then GWL&A will withdraw the
Account's investment in the Fund and terminate this Agreement within six (6)
months after the Board informs GWL&A 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 Independent Directors.
7.7. 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, 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: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3,
7.4, and 7.5 of this Agreement shall 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 GWL&A
8.1(a).GWL&A agrees to indemnify and hold harmless the Fund, the
Distributor and the Adviser and each of their respective officers and directors
or trustees and each person, if any, who controls the Fund, Distributor or
Adviser within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, expenses, damages and liabilities (including amounts paid in
settlement with the written consent of GWL&A) or litigation (including
reasonable legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, expenses, damages or liabilities (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts and:
(i) 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 or SAI covering the
Contracts or contained in the Contracts or sales literature or
other promotional material for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this
Agreement to indemnify shall 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 in writing to GWL&A by or on behalf of the
Adviser, Distributor or Fund for use in the registration
statement or prospectus for the Contracts or sales literature or
other promotional material (or any amendment or supplement to any
of the foregoing) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature or other
promotional material of the Fund not supplied by GWL&A or persons
under its control) or wrongful conduct of GWL&A or persons under
its control, with respect to the sale or distribution of the
Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, SAI, or sales literature or other promotional
material of the Fund, or any amendment thereof or supplement
thereto, 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 a statement or
omission was made in reliance upon information furnished in
writing to the Fund by or on behalf of GWL&A; or
(iv) arise as a result of any failure by GWL&A to provide the services
and furnish the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by GWL&A in this Agreement or
arise out of or result from any other material breach of this
Agreement by GWL&A, including without limitation Section 2.10 and
Section 6.7 hereof,
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). GWL&A shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or 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 or to
any of the Indemnified Parties.
8.1(c). GWL&A shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified GWL&A in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify GWL&A of any such claim shall not relieve GWL&A
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision,
except to the extent that GWL&A has been prejudiced by such failure to give
notice. In case any such action is brought against the Indemnified Parties,
GWL&A shall be entitled to participate, at its own expense, in the defense of
such action. GWL&A also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from GWL&A
to such party of GWL&A's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and GWL&A 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.
8.1(d).The Indemnified Parties will promptly notify GWL&A of the
commencement of any litigation or proceedings 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
8.2(a).The Adviser agrees to indemnify and hold harmless GWL&A and its
directors and officers and each person, if any, who controls GWL&A within the
meaning of Section 15 of the 1933 Act (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
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Fund's shares or the Contracts
and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or SAI or sales literature
or other promotional material of the Fund prepared by the Fund,
the Distributor or the Adviser (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this Agreement to indemnify
shall 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 in
writing to the Adviser, the Distributor or the Fund by or on
behalf of GWL&A for use in the registration statement, prospectus
or SAI for the Fund or in sales literature or other promotional
material (or any amendment or supplement to any of the foregoing)
or otherwise for use in connection with the sale of the Contracts
or the Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI or sales literature or
other promotional material for the Contracts not supplied by the
Adviser or persons under its control) or wrongful conduct of the
Fund, the Distributor or the Adviser or persons under their
control, with respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, SAI, or sales literature or other promotional
material covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance
upon information furnished in writing to GWL&A by or on behalf of
the Adviser, the Distributor or the Fund; or
(iv) arise as a result of any failure by the Fund, the Distributor or
the Adviser 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 and other qualification requirements specified in
Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, the Distributor
or the Adviser in this Agreement or arise out of or result from
any other material breach of this Agreement by the Adviser, the
Distributor or the Fund; or
(vi) arise out of or result from a breach of this Agreement pertaining
to the incorrect or untimely calculation or reporting by the
Fund, the Distributor or the Adviser of the daily net asset value
per share or dividend or capital gain distribution rate;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Adviser specified in Article VI hereof.
8.2(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or 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 or to
any of the Indemnified Parties.
8.2(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision, except to the extent that the Adviser
has been prejudiced by such failure to give notice. In case any such action is
brought against the Indemnified Parties, the Adviser will be entitled to
participate, at its own expense, in the defense thereof. The Adviser also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Adviser to such party of the
Adviser's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Adviser 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.
8.2(d).GWL&A agrees to promptly notify the Adviser of the commencement of
any litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of the Contracts or the operation of the
Account.
8.3. Indemnification By the Fund
8.3(a).The Fund agrees to indemnify and hold harmless GWL&A and its
directors and officers and each person, if any, who controls GWL&A within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this Section 8.3) against any and all losses, claims, expenses,
damages and liabilities (including amounts paid in settlement with the written
consent of the Fund) or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties may be required to pay or become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, expenses, damages, liabilities or expenses (or actions in
respect thereof) or settlements, are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund 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 and other
qualification requirements specified in Article VI of this
Agreement); or
(ii) 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;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or 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 or to
any of the Indemnified Parties.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve it from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision, except to the extent that the Fund has been
prejudiced by such failure to give notice. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund shall also be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund 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.
8.3(d). GWL&A each agrees to promptly notify the Fund of the
commencement of any litigation or proceeding against itself or any of its
respective officers or directors in connection with the Agreement, the issuance
or sale of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Fund.
8.4. Indemnification by the Distributor
8.4(a).The Distributor agrees to indemnify and hold harmless GWL&A and
its directors and officers and each person, if any, who controls GWL&A within
the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.4) against any and all losses, claims,
expenses, damages and liabilities (including amounts paid in settlement with the
written consent of the Distributor) or litigation (including reasonable legal
and other expenses) to which the Indemnified Parties may become subject under
any statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund's shares or the
Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or SAI or sales literature
or other promotional material of the Fund prepared by the Fund,
Adviser or Distributor (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, provided that this Agreement to indemnify shall 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 in writing to the
Adviser, the Distributor or Fund by or on behalf of GWL&A for use
in the registration statement or SAI or prospectus for the Fund
or in sales literature or other promotional material (or any
amendment or supplement to any of the foregoing) or otherwise for
use in connection with the sale of the Contracts or Fund shares;
or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI, sales literature or
other promotional material for the Contracts not supplied by the
Distributor or persons under its control) or wrongful conduct of
the Fund, the Distributor or Adviser or persons under their
control, with respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, SAI, sales literature or other promotional material
covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished in writing to GWL&A by or on behalf of the Adviser, the
Distributor or Fund; or
(iv) arise as a result of any failure by the Fund, Adviser or
Distributor 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 and other qualification requirements specified in
Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, Adviser or
Distributor in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund, Adviser or
Distributor; or
(vi) arise out of or result from a breach of this Agreement pertaining
to the incorrect or untimely calculation or reporting of the
daily net asset value per share or dividend or capital gain
distribution rate;
as limited by and in accordance with the provisions of Sections 8.4(b) and
8.4(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Distributor specified in Article VI
hereof.
8.4(b).The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
any of the Indemnified Parties.
8.4(c) The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Distributor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Distributor of
any such claim shall not relieve the Distributor from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision, except to the extent that the
Distributor has been prejudiced by such failure to give notice. In case any such
action is brought against the Indemnified Parties, the Distributor will be
entitled to participate, at its own expense, in the defense thereof. The
Distributor also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Distributor
to such party of the Distributor's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Distributor 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.
8.4(d) GWL&A agrees to promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Colorado,
without regard to the Colorado Conflict of Laws provisions.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions 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 shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, with
respect to some or all Designated Portfolios, upon six (6) months
advance written notice delivered to the other parties; provided,
however, that such notice shall not be given earlier than six (6)
months following the date of this Agreement; or
(b) at the option of GWL&A by written notice to the other parties
with respect to any Designated Portfolio based upon GWL&A's
determination that shares of such Designated Portfolio are not
reasonably available to meet the requirements of the Contracts;
or
(c) at the option of GWL&A by written notice to 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 GWL&A; or
(d) at the option of the Fund, Distributor or Adviser in the
event that formal administrative proceedings are instituted
against GWL&A by the NASD, the SEC, the Insurance Commissioner or
like official of any state or any other regulatory body regarding
GWL&A's duties under this Agreement or related to the sale of the
Contracts, the operation of any Account, or the purchase of the
Fund shares, if, in each case, the Fund, Distributor or Adviser,
as the case may be, reasonably determines in its sole judgment
exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of GWL&A to
perform its obligations under this Agreement; or
(e) at the option of GWL&A in the event that formal
administrative proceedings are instituted against the Fund, the
Distributor or the Adviser by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body,
if GWL&A reasonably determines in its sole judgment exercised in
good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Fund, the
Distributor or the Adviser to perform their obligations under
this Agreement; or
(f) at the option of GWL&A by written notice to the Fund with
respect to any Portfolio if GWL&A reasonably believes that the
Portfolio will fail to meet the Section 817(h) diversification
requirements or Subchapter M qualifications specified in Article
VI hereof; or
(g) at the option of either the Fund, the Distributor or the
Adviser, if (i) the Fund, Distributor or Adviser, respectively,
shall determine, in its sole judgment reasonably exercised in
good faith, that GWL&A has suffered a material adverse change in
its business or financial condition or is the subject of material
adverse publicity and that material adverse change or publicity
will have a material adverse impact on GWL&A's ability to perform
its obligations under this Agreement, (ii) the Fund, Distributor
or Adviser notifies GWL&A of that determination and its intent to
terminate this Agreement, and (iii) after considering the actions
taken by GWL&A and any other changes in circumstances since the
giving of such a notice, the determination of the Fund,
Distributor or Adviser shall continue to apply on the sixtieth
(60th) day following the giving of that notice, which sixtieth
day shall be the effective date of termination; or
(h) at the option of either GWL&A, if (i) GWL&A shall determine,
in its sole judgment reasonably exercised in good faith, that the
Fund, Distributor or Adviser has suffered a material adverse
change in its business or financial condition or is the subject
of material adverse publicity and that material adverse change or
publicity will have a material adverse impact on the Fund's,
Distributor's or Adviser's ability to perform its obligations
under this Agreement, (ii) GWL&A notifies the Fund, Distributor
or Adviser, as appropriate, of that determination and its intent
to terminate this Agreement, and (iii) after considering the
actions taken by the Fund, Distributor or Adviser and any other
changes in circumstances since the giving of such a notice, the
determination of GWL&A shall continue to apply on the sixtieth
(60th) day following the giving of that notice, which sixtieth
day shall be the effective date of termination; or
(i) at the option of any non-defaulting party hereto in the event
of a material breach of this Agreement by any party hereto (the
"defaulting party") other than as described in 10.1(a)-(j);
provided, that the non-defaulting party gives written notice
thereof to the defaulting party, with copies of such notice to
all other non-defaulting parties, and if such breach shall not
have been remedied within thirty (30) days after such written
notice is given, then the non-defaulting party giving such
written notice may terminate this Agreement by giving thirty (30)
days written notice of termination to the defaulting party.
10.2. Notice Requirement. No termination of this Agreement shall 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
shall set forth the basis for the termination. Furthermore,
(a) in the event any termination is based upon the provisions of Article
VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this
Agreement, the prior written notice shall be given in advance of the
effective date of termination as required by those provisions unless
such notice period is shortened by mutual written agreement of the
parties; (b) in the event any termination is based upon the provisions
of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the
prior written notice shall be given at least sixty (60) days before the
effective date of termination; and (c) in the event any termination is
based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the
prior written notice shall be given in advance of the effective date of
termination, which date shall be determined by the party sending the
notice.
10.3. Effect of Termination. Notwithstanding any termination of this
Agreement, other than as a result of a failure by either the Fund or GWL&A to
meet Section 817(h) of the Code diversification requirements, the Fund, the
Distributor and the Adviser shall, at the option of GWL&A, continue to make
available for a period of one (1) year after the effective date of termination
additional shares of the Designated Portfolio(s) 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 shall be permitted to reallocate investments in the Designated
Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in
the Designated Portfolio(s) upon the making of additional purchase payments
under the Existing Contracts. The parties agree that this Section 10.3 shall not
apply to any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.
10.4. Surviving Provisions. Notwithstanding any termination of this
Agreement, each party's obligations under Article VIII to indemnify other
parties shall survive and not be affected by any termination of this Agreement.
In addition, with respect to Existing Contracts, all provisions of this
Agreement shall also survive and not be affected by any termination of this
Agreement except as otherwise provided for herein.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund:
Xxxxxxx Variable Series I
Xxxxxxx Variable Series II
Xxxxxxx Investments VIT Funds
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Secretary
If to GWL&A:
Great-West Life & Annuity Insurance Company
0000 Xxxx Xxxxxxx Xxxx, 0X0
Xxxxxxxxx Xxxxxxx, XX 00000
Attention:Xxx Xxxxxxxxxxxx, Vice President, Life Insurance Markets
PC: Xxxxxxx Xxxxx, Vice President and Counsel
If to the Adviser:
Deutsche Investment Management Americas Inc.
Deutsche Asset Management, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Secretary
If to the Distributor:
Xxxxxxx Distributors, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Secretary
ARTICLE XII. Miscellaneous
12.1. The parties hereto acknowledge that any nonpublic personal
information (as defined by applicable law or regulation promulgated under Title
V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (the "Act")) of Contract Owners (and any
participants thereof, as applicable) will be disclosed or utilized solely to
carry out the terms of this Agreement or pursuant to an exception contained in
any applicable law or regulation promulgated under the Act. Each party each
represents that it has adopted and implemented procedures to safeguard such
non-public personal information that are reasonably designed to ensure the
security and confidentiality of such information and to ensure compliance with
the Act and applicable regulations thereunder. Without limiting the foregoing,
no party hereto shall disclose any information that another party has designated
as proprietary. Without limiting the foregoing, no party hereto shall disclose
any information that another party has designated as proprietary.
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 shall constitute one and the same
instrument.
12.4. 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.
12.5. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD 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.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Colorado Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable life
operations of GWL&A are being conducted in a manner consistent with the
applicable Colorado insurance regulations and any other applicable law or
regulations.
12.6. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum jointly
selected by the relevant parties (but if applicable law requires some other
forum, then such other forum) in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
12.7. 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.
12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
12.9. GWL&A is hereby expressly put on notice of the limitation of
liability as set forth in the Declarations of Trust of the Fund and agree that
the obligations assumed by the Fund, Distributor and the Adviser pursuant to
this Agreement shall be limited in any case to the Fund, Distributor and Adviser
and their respective assets and GWL&A shall not seek satisfaction of any such
obligation from the shareholders of the Fund, Distributor or the Adviser, the
Trustees, officers, employees or agents of the Fund, Distributor or Adviser, or
any of them.
12.10. The Fund, the Distributor and the Adviser agree that the
obligations assumed by GWL&A pursuant to this Agreement shall be limited in any
case to GWL&A and its assets and neither the Fund, Distributor nor Adviser shall
seek satisfaction of any such obligation from the shareholders of GWL&A, the
directors, officers, employees or agents of GWL&A, or any of them, except to the
extent permitted under this Agreement.
12.11. No provision of this Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or indemnifications, as
between the Adviser and the Fund, and the Distributor and the Fund.
12.12. None of the parties hereto shall be liable to the other for any
and all losses, damages, costs, charges, counsel fees, payments, expenses or
liability due to any failure, delay or interruption in performing its
obligations under this Agreement, and without the fault or negligence of such
party, due to causes or conditions beyond its control including, without
limitation, labor disputes, strikes (whether legal or illegal), lock outs
(whether legal or illegal), civil commotion, riots, war and war-like operations
including acts of terrorism, embargoes, epidemics, invasion, rebellion,
hostilities, insurrections, explosions, floods, unusually severe weather
conditions, earthquakes, military power, sabotage, governmental regulations or
controls, failure of power, fire or other casualty, accidents, national or local
emergencies, boycotts, picketing, slow-downs, work stoppages, acts of God or
natural disasters.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative as specified below.
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By its authorized officer,
By:______________________________
Title:
Date:
XXXXXXX VARIABLE SERIES I
By its authorized officer,
By:______________________________
Title:
Date:
XXXXXXX VARIABLE SERIES II
By its authorized officer,
By:____________________________
Title:
Date:
XXXXXXX INVESTMENTS VIT FUNDS
By its authorized officer,
By:____________________________
Title:
Date:
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
By its authorized officer,
By:____________________________
Title:
Date:
DEUTSCHE ASSET MANAGEMENT, INC.
By its authorized officer,
By:____________________________
Title:
Date:
SCHEDULE A
Designated Portfolios. Class A shares only.
X. Xxxxxxx Variable Series I
Capital Growth Portfolio
Global Discovery Portfolio
Growth and Income Portfolio
Health Sciences Portfolio
International Portfolio
Bond Portfolio
Money Market Portfolio
X. Xxxxxxx Variable Series II
Xxxxxxx Aggressive Growth Portfolio
Xxxxxxx Blue Chip Portfolio
Xxxxxxx Fixed Income Portfolio
Xxxxxxx Global Blue Chip Portfolio
Xxxxxxx Government & Agency Securities Portfolio Xxxxxxx High Income
Portfolio Xxxxxxx International Select Equity Portfolio Xxxxxxx Large
Cap Value Portfolio Xxxxxxx Money Market Portfolio Xxxxxxx Small Cap
Growth Portfolio Xxxxxxx Strategic Income Portfolio Xxxxxxx Technology
Growth Portfolio Xxxxxxx Total Return Portfolio SVS Dreman Financial
Services Portfolio SVS Dreman High Return Equity Portfolio SVS Dreman
Small Cap Value Portfolio
X. Xxxxxxx Investments VIT Funds
Xxxxxxx VIT Equity 500 Index Fund
Xxxxxxx VIT Small Cap Index Fund
Xxxxxxx Real Estate Securities Portfolio
SCHEDULE B
Reports per Section 6.6
With regard to the reports relating to the quarterly testing of
compliance with the requirements of Section 817(h) and Subchapter M under the
Internal Revenue Code (the "Code") and the regulations thereunder, the Fund
shall provide within twenty (20) business days of the close of the calendar
quarter a report to GWL&A in the Form B1 attached hereto and incorporated herein
by reference, regarding the status under such sections of the Code of the
Designated Portfolio(s), and if necessary, identification of any remedial action
to be taken to remedy non-compliance.
With regard to the reports relating to the year-end testing of
compliance with the requirements of Subchapter M of the Code, referred to
hereinafter as "RIC status," the Fund will provide the reports on the following
basis: (i) the last quarter's quarterly reports can be supplied within the
20-day period, and (ii) a year-end report will be provided 45 business days
after the end of the calendar year. However, if a problem with regard to RIC
status, as defined below, is identified in the third quarter report, on a weekly
basis, starting the first week of December, additional interim reports will be
provided specially addressing the problems identified in the third quarter
report. If any interim report memorializes the cure of the problem, subsequent
interim reports will not be required.
A problem with regard to RIC status is defined as any violation of the
following standards, as referenced to the applicable sections of the Code:
(a) Less than ninety percent of gross income is derived from sources of
income specified in Section 851(b)(2);
(b) Less than fifty percent of the value of total assets consists of
assets specified in Section 851(b)(3)(A); and
(c) No more than twenty-five percent of the value of total assets is
invested in the securities of one issuer, as that requirement is set
forth in Section 851(b)(3)(B).
FORM B1
CERTIFICATE OF COMPLIANCE
For the quarter ended:
---------------------------
I, , a duly authorized officer, director or agent of Fund hereby swear
and affirm that Fund is in compliance with all requirements of Section 817(h)
and Subchapter M of the Internal Revenue Code (the "Code") and the regulations
thereunder as required in the Fund Participation Agreement among Great-West Life
& Annuity Insurance Company, and other than the exceptions discussed below:
Exceptions Remedial Action
_________________________________ _______________________________
_________________________________ _______________________________
_________________________________ _______________________________
_________________________________ _______________________________
_________________________________ _______________________________
_________________________________ _______________________________
_________________________________ _______________________________
_________________________________ _______________________________
_________________________________ _______________________________
If no exception to report, please indicate "None."
Signed this day of , .
---- ------- -------
_____________________________________
(Signature)
By:__________________________________
(Type or Print Name and Title/Position)
SCHEDULE C
EXPENSES
The Fund and/or the Distributor and/or Adviser, and GWL&A will coordinate the
functions and pay the costs of completing these functions based upon an
allocation of costs in the tables below. Costs shall be allocated to reflect the
Fund's share of the total costs determined according to the number of pages of
the Fund's respective portions of the documents.
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Mutual Fund Prospectus Printing of GWL&A Fund,
prospectuses Distributor or
Adviser, as
applicable
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Fund, Distributor or GWL&A Fund,
Adviser shall supply Distributor or
GWL&A with such Adviser, as
numbers of the applicable
Designated
Portfolio(s)
prospectus(es) as
GWL&A shall
reasonably request
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Distribution to New GWL&A GWL&A
and Inforce Contract
Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Distribution to GWL&A GWL&A
Prospective Contract
Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Distribution to GWL&A Fund,
Contract Owners in Distributor, or
connection with Adviser, as
initial rollout of applicable
Fund in connection
with the Contracts
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Contract Prospectus Printing for Inforce GWL&A GWL&A
Contract Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Printing for GWL&A GWL&A
Prospective Contract
Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Distribution to New GWL&A GWL&A
and Inforce Contract
Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Distribution to GWL&A GWL&A
Prospective Contract
Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Mutual Fund Prospectus If Required by Fund, Fund, Distributor or Fund,
Update & Distribution Distributor or Adviser Distributor or
Adviser Adviser
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
If Required by GWL&A GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Contract Prospectus If Required by Fund, GWL&A Fund,
Update & Distribution Distributor or Distributor or
Adviser Adviser
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
If Required by GWL&A GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
Mutual Fund SAI Printing Fund, Distributor or Fund,
Adviser Distributor or
Adviser
------------------------- ---------------------- ---------------------- ------------------
Distribution GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
Product SAI Printing GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
Distribution GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
Proxy Material for Printing if proxy Fund, Distributor or Fund,
Mutual Fund: required by Law Adviser Distributor or
Adviser
------------------------- ---------------------- ---------------------- ------------------
Distribution GWL&A Fund,
(including labor) if Distributor or
proxy required by Law Adviser
------------------------- ---------------------- ---------------------- ------------------
Printing & GWL&A GWL&A
distribution if
required by GWL&A
========================= ====================== ====================== ==================
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
Mutual Fund Annual & Printing of combined GWL&A Fund,
Semi-Annual Report reports Distributor or
Adviser
------------------------- ---------------------- ---------------------- ------------------
Distribution GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
Other communication to If Required by the GWL&A Fund,
New and Prospective Fund, Distributor or Distributor or
clients Adviser Adviser
------------------------- ---------------------- ---------------------- ------------------
If Required by GWL&A GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible for Party
Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
Other communication to Distribution GWL&A Fund,
Inforce (including labor and Distributor or
printing) if Adviser required by the Fund, Distributor
or Adviser
------------------------- ---------------------- ---------------------- ------------------
Distribution GWL&A GWL&A
(including labor and
printing)if required
by GWL&A
========================= ====================== ====================== ==================
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
Errors in Share Price Cost of error to GWL&A Fund or Adviser
calculation pursuant to Contract
Section 1.8 Owners/participants
------------------------- ---------------------- ---------------------- ------------------
Cost of GWL&A Fund or Adviser
administrative work
to correct error
------------------------- ---------------------- ---------------------- ------------------
Operations of the Fund All operations and Fund, Distributor or Fund or Adviser
related expenses, Adviser
including the cost
of registration and
qualification of
shares, taxes on the
issuance or transfer
of shares, cost of
management of the
business affairs of
the Fund, and
expenses paid or
assumed by the fund
pursuant to any Rule
12b-1 plan
------------------------- ---------------------- ---------------------- ------------------
Operations of the Federal registration GWL&A GWL&A
Account of units of separate
account (24f-2 fees)
------------------------- ---------------------- ---------------------- ------------------
SCHEDULE D
ADMINISTRATIVE SERVICES
A. GWL&A, or an affiliate, will provide the properly registered and licensed
personnel and systems needed for all customer servicing and support - for
both Designated Portfolio and life insurance information and questions -
including:
responding to Contract Owner inquiries;
delivery of prospectus - Designated Portfolio(s);
entry of initial and subsequent orders;
transfer of cash to GWL&A and/or Designated Portfolio(s);
explanations of Designated Portfolio objectives and characteristics;
entry of transfers between funds;
Designated Portfolio balance and allocation inquiries;
mail Designated Portfolio prospectus.
B. GWL&A, or an affiliate, will communicate all purchase, withdrawal, and
exchange orders it receives from its customers to each Designated Portfolio.
ADMINISTRATIVE SERVICE FEE
For the services, GWL&A or its affiliate shall receive from the Adviser a fee of
0.25 of 1% per annum of the average aggregate daily net asset value of shares of
the Designated Portfolio(s) held in the Account payable by the Adviser directly
to GWL&A or its affiliate. Such fee shall be paid in arrears quarterly. Each
quarter's fee shall be determined based on assets in the Account during the
quarter and each quarterly fee will be independent of every other quarterly fee.
Such fee shall be due and payable automatically within 30 (thirty) days after
the last day of the quarter to which such payment relates. In the event such fee
is not paid by such time, interest, in addition to the amount due, at the rate
of six (6)% annually (or 1/2 of one (1) percent per month outstanding pro rated
for any applicable period if less than one year) shall be payable and owed until
payment is made.
The Adviser will calculate the asset balance for each day on which the fee is to
be paid pursuant to this Agreement with respect to each applicable portfolio of
the Fund. GWL&A shall have the right to reasonably audit the preparation of such
calculation.
The administrative service fee described herein shall remain payable and due so
long as there remain any assets held in the account invested in the Fund,
regardless of any termination of the Agreement, but in the case of a
termination, only for the period of one (1) year after such termination. The
Adviser may modify the rate of the administrative service fee only with 120
days' written notice to GWL&A prior to the end of any calendar year, with any
such revised rate becoming effective as of the 1st of January following any such
calendar year.
SCHEDULE E
MARKET TIMING AND EXCESSIVE TRADING PROCEDURES
GWL&A has adopted the following procedures to handle Contract Owners identified
by fund companies as market timers or excessive traders.
1. Upon request of a fund company that suspects a Contract Owner is market
timing or trading excessively ("abusive trading") in its fund, GWL&A
will provide a report of the suspected abusive trading to the fund
company and request its determination as to whether such activity
constitutes abusive trading according to that fund company's definition
of such.
2. If the fund company determines that such activity does constitute
abusive trading, we will contact the Contract Owners involved. The
Contract Owner will be contacted in writing requesting that he/she stop
such abusive trading.
3. We will then provide a report of the Contract Owner's trading activity
in that fund to the fund company.
4. Should the fund company determine that the Contract Owner has
continued abusive trading, and if the fund involved requests us to do
so, GWL&A will implement one of the four trading restrictions
identified below. The four possible trading restrictions are: (1)
restrict the Contract Owner to inquiry-only access for the web and
voice response unit so that the Contract Owner will only be allowed to
trade by written request mailed to GWL&A through U.S. mail; the
Contract Owner will not be permitted to trade via the web, voice
response unit, call center, fax or overnight mail. A restricted
Contract Owner may petition GWL&A to lift the restriction by signing,
dating and returning an acknowledgement form to GWL&A once the
restriction has been in place for six (6) months; (2) close the
fund(s) to all new monies, including contributions and transfers in,
of the Contract Owner; (3) restrict the Contract Owner to one purchase
in the applicable fund(s) per ninety (90) day period; or (4) remove
the fund(s) as an investment option for and convert all allocations in
that fund(s) to a different investment option.
