Exhibit 9.9
PARTICIPATION AGREEMENT
Among
XXXXXX INSTITUTIONAL PRODUCTS TRUST
BBOI WORLDWIDE LLC
and
CANADA LIFE INSURANCE COMPANY OF AMERICA
THIS AGREEMENT, made and entered into this 1st day of May, 1997
by and among CANADA LIFE INSURANCE COMPANY OF AMERICA, (hereinafter
the "Insurance Company"), a Michigan corporation, on its own behalf
and on behalf of each segregated asset account of the Insurance
Company set forth on Schedule A hereto as may be amended from time to
time (each such account hereinafter referred to as the "Account"),
XXXXXX INSTITUTIONAL PRODUCTS TRUST, a Delaware business trust (the
"Trust") and BBOI WORLDWIDE LLC, a Delaware limited liability company
("BBOI Worldwide").
WHEREAS, the Trust engages in business as an open-end management
investment company and is available to act as the investment vehicle
for variable annuity and life insurance contracts to be offered by
separate accounts of insurance companies which have entered into
participation agreements substantially identical to this Agreement
("Participating Insurance Companies") and for qualified retirement and
pension plans ("Qualified Plans"); and
WHEREAS, the beneficial interest in the Trust is divided into
several series of shares, each designated a "Fund" and representing
the interest in a particular managed portfolio of securities and other
assets; and
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission (the "Commission"), dated April 24, 1996 (File No.
812-9852), granting Participating Insurance Companies and their
separate accounts exemptions from the provisions of Sections 9(a),
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13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as
amended, (the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Trust to
be sold to and held by Qualified Plans and by variable annuity and
variable life insurance separate accounts of life insurance companies
that may or may not be affiliated with one another (the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management
investment company under the 1940 Act and the offering of its shares
is registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act"); and
WHEREAS, BBOI Worldwide is duly registered as an investment
adviser under the Investment Advisers Act of 1940 and any applicable
state securities law; and
WHEREAS, the Insurance Company has registered under the 1933 Act,
or will register under the 1933 Act, certain variable annuity or
variable life insurance contracts identified by the form number(s)
listed on Schedule B to this Agreement, as amended from time to time
hereafter by mutual written agreement of all the parties hereto (the
"Contracts"); and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the board of
directors of the Insurance Company on the date shown for that Account
on Schedule A hereto, to set aside and invest assets attributable to
the Contracts; and
WHEREAS, the Insurance Company has registered or will register
each Account as a unit investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Insurance Company intends to purchase shares in the
Funds at net asset value on behalf of each Account to fund the
Contracts;
NOW, THEREFORE, in consideration of their mutual promises, the
Insurance Company, the Trust and BBOI Worldwide agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. The Trust agrees to sell to the Insurance Company those
shares of the Trust which each Account orders, executing such orders
on a daily basis at the net asset value next computed after receipt by
the Trust or its designee of the order for the shares of the Trust.
For purposes of this Section 1.1, the Insurance Company shall be the
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designee of the Trust for receipt of such orders from the Accounts and
receipt by such designee shall constitute receipt by the Trust;
provided that the Trust receives notice of such order by 7:00 a.m.,
Mountain Time, on the next following Business Day. In this Agreement,
"Business Day" shall mean any day on which the New York Stock Exchange
is open for trading and on which the Trust calculates its net asset
value pursuant to the rules of the Commission.
1.2. The Trust agrees to make its shares available for purchase
at the applicable net asset value per share by the Insurance Company
and its Accounts on those days on which the Trust calculates its
Funds' net asset values pursuant to rules of the Commission and the
Trust shall use reasonable efforts to calculate its Funds' net asset
values on each day on which the New York Stock Exchange is open for
trading. Notwithstanding the foregoing, the trustees of the Trust may
refuse to sell shares of any Fund to any person, or suspend or
terminate the offering of shares of any Fund if such action is
required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the trustees of the Trust acting in good
faith and in light of their fiduciary duties under federal and any
applicable state laws, necessary in the best interests of the
shareholders of that Fund.
1.3. The Trust agrees that shares of the Trust will be sold only
to Accounts of Participating Insurance Companies and to Qualified
Plans. No shares of any Fund will be sold to the general public.
1.4. The Trust will not sell its shares to any insurance company
or separate account unless an agreement containing provisions
substantially the same as Sections 2.4, 3.4, 3.5, and Sections 7.1 -
7.7 of this Agreement is in effect to govern such sales.
1.5. The Trust agrees to redeem, on the Insurance Company's
request, any full or fractional shares of the Trust held by the
Account, executing such requests on a daily basis at the net asset
value next computed after receipt by the Trust or its designee of the
request for redemption. However, if one or more Funds has determined
to settle redemption transactions for all of its shareholders on a
delayed basis (more than one business day, but in no event more than
three Business Days, after the date on which the redemption order is
received, unless otherwise permitted by an order of the Commission
under Section 22(e) of the 1940 Act), the Trust shall be permitted to
delay sending redemption proceeds to the Insurance Company by the same
number of days that the Trust is delaying sending redemption proceeds
to the other shareholders of the Fund. For purposes of this Section
1.5, the Insurance Company shall be the designee of the Trust for
receipt of requests for redemption from each Account and receipt by
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that designee shall constitute receipt by the Trust; provided that the
Trust receives notice of the request for redemption by 7:00 a.m.,
Mountain Time, on the next following Business Day.
1.6. The Insurance Company agrees to purchase and redeem the
shares of each Fund offered by the then-current prospectus of the
Trust in accordance with the provisions of that prospectus. The
Insurance Company agrees that all net amounts available under the
Contracts shall be invested in the Trust, or in the Insurance
Company's general account, provided that such amounts may also be
invested in an investment company other than the Trust if (a) the
other investment company, or series thereof, has investment objectives
or policies that are substantially different from the investment
objectives and policies of any Fund of the Trust in which the Account
may invest; or (b) the other investment company was available as a
funding vehicle for the Contracts prior to the date of this Agreement
and the Insurance Company so informs the Trust and BBOI Worldwide
prior to their signing this Agreement; or (c) the Trust and BBOI
Worldwide consent in advance in writing to the use of the other
investment company.
1.7. The Insurance Company shall pay for Trust shares by 1:00
p.m., Mountain Time, on the next Business Day after an order to
purchase Trust shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by
wire. For the purpose of Sections 2.9 and 2.10, upon receipt by the
Trust of the federal funds so wired, such funds shall cease to be the
responsibility of the Insurance Company and shall become the
responsibility of the Trust. Payment of net redemption proceeds
(aggregate redemptions of a Fund's shares by an Account minus
aggregate purchases of that Fund's shares by that Account) of less
than $1 million for a given Business Day will be made by wiring
federal funds to the Insurance Company on the next Business Day after
receipt of the redemption request. Payment of net redemption proceeds
of $1 million or more will be by wiring federal funds within three
Business Days after receipt of the redemption request. However,
payment may be postponed under unusual circumstances, such as when
normal trading is not taking place on the New York Stock Exchange, an
emergency as defined by the Securities and Exchange Commission exists,
or as permitted by the Securities and Exchange Commission.
1.8. Issuance and transfer of the Trust's shares will be by book
entry only. Stock certificates will not be issued to the Insurance
Company or any Account. Shares ordered from the Trust will be
recorded in an appropriate title for each Account or the appropriate
subaccount of each Account.
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1.9. The Trust shall furnish same day notice (by wire or
telephone, followed by written confirmation) to the Insurance Company
of any income, dividends or capital gain distributions payable on the
Funds' shares. The Insurance Company hereby elects to receive all
income dividends and capital gain distributions payable on a Fund's
shares in additional shares of that Fund. The Insurance Company
reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Trust
shall notify the Insurance Company of the number of shares issued as
payment of dividends and distributions. Any material errors in the
calculation of the income dividends and capital gain distributions
shall be reported immediately upon discovery to the Insurance Company.
Non-material errors will be corrected in the next Business Day's net
asset value per share for the Fund in question.
1.10. The Trust shall make the net asset value per share for
each Fund available to the Insurance Company on a daily basis as soon
as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make those per-share net
asset values available by 4:00 p.m., Mountain Time. Any material
error in the calculation of the net asset value per share shall be
reported immediately upon discovery to the Insurance Company. Non-
material errors will be corrected in the next Business Day's net asset
value per share for the Fund in question.
ARTICLE II. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
2.1. The Insurance Company represents, warrants and agrees that
the offerings of 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 applicable state insurance suitability requirements. The
Insurance Company 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 thereof as a segregated asset account under Section 500.925 of
the Michigan Insurance Code and has registered, or warrants and agrees
that prior to any issuance or sale of the Contracts it will register,
the Account as a unit investment trust in accordance with the provi-
sions of the 1940 Act to serve as a segregated investment account for
the Contracts.
2.2. The Trust warrants and agrees that Trust shares sold
pursuant to this Agreement shall be registered under the 1933 Act,
duly authorized for issuance and sale in compliance with the laws of
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the State of Delaware and all applicable federal securities laws and
that the Trust is and shall remain registered under the 1940 Act. The
Trust warrants and agrees that it 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 effect the continuous offering of its
shares. The Trust shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to the
extent deemed advisable by the Trust or BBOI Worldwide.
2.3. The Trust represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended, (the "Code") and warrants and agrees
that it will make all reasonable efforts to maintain its qualification
(under Subchapter M or any successor or similar provision) and that it
will notify the Insurance Company immediately upon having a reasonable
basis for believing that it has ceased to so qualify or that it might
not so qualify in the future.
2.4. The Insurance Company represents that the Contracts are
currently treated as annuity or life insurance contracts under
applicable provisions of the Code and warrants and agrees that it will
make every effort to maintain such treatment and that it will notify
the Trust and BBOI Worldwide 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.
2.5. The Trust may elect to make payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act. To
the extent that it decides to finance distribution expenses pursuant
to Rule 12b-1, the Trust undertakes to have a board of trustees, a
majority of whom are not interested persons of the Trust, formulate
and approve any plan under Rule 12b-1 to finance distribution
expenses.
2.6. The Trust makes no representation warranties as to whether
any aspect of its operations (including, but not limited to, fees and
expenses and investment policies) complies or will comply with the
insurance laws or regulations of the various states.
2.7. The Trust represents that it is lawfully organized and
validly existing under the laws of the State of Delaware and
represents, warrants and agrees that it does and will comply in all
material respects with the 1940 Act.
2.8. BBOI Worldwide represents that it is and warrants that it
shall remain duly registered as an investment adviser under all
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applicable federal and state securities laws and agrees that it shall
perform its obligations for the Trust in compliance in all material
respects with the laws of the State of Colorado and any applicable
state and federal securities laws.
2.9. The Trust and BBOI Worldwide represent and warrant that all
of their officers, employees, investment advisers, investment sub-
advisers, and other individuals or entities described in Rule 17g-1
under the 1940 Act dealing with the money and/or securities of the
Trust are, and shall continue to be at all times, covered by a blanket
fidelity bond or similar coverage for the benefit of the Trust in an
amount not less than the minimum coverage required currently by Rule
17g-1 under the 1940 Act or related provisions as may be promulgated
from time to time. That fidelity bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company.
2.10. The Insurance Company represents and warrants that all of
its officers, employees, investment advisers, and other individuals or
entities described in Rule 17g-1 under the 1940 Act are and shall
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Trust, in an amount not less
than the minimum coverage required currently for entities subject to
the requirements of Rule 17g-1 of the 1940 Act or related provisions
or may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
ARTICLE III. DISCLOSURE DOCUMENTS AND VOTING
3.1. BBOI Worldwide shall provide the Insurance Company (at the
Insurance Company's expense) with as many copies of the Trust's
current prospectus as the Insurance Company may reasonably request.
If requested by the Insurance Company in lieu thereof, the Trust shall
provide such documentation (including a final copy of the new
prospectus as set in type at the Trust's expense) and other assistance
as is reasonably necessary in order for the Insurance Company once
each year (or more frequently if the prospectus for the Trust is
amended) to have the prospectus for the Contracts and the Trust's
prospectus printed together in one document (at the Insurance
Company's expense).
3.2. The Trust's prospectus shall state that the Statement of
Additional Information for the Trust (the "SAI") is available from the
Trust, and BBOI Worldwide (or the Trust), at its expense, shall print
and provide the SAI free of charge to the Insurance Company and to any
owner of a Contract or prospective owner who requests the SAI.
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3.3. The Trust, at its expense, shall provide the Insurance
Company with copies of its proxy material, reports to shareholders and
other communications to shareholders in such quantity as the Insurance
Company shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law, the Insurance Company
shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Trust shares in accordance with instruc-
tions received from Contract owners; and
(iii) vote Trust shares for which no instructions have
been received in the same proportion as Trust
shares of that Fund for which instructions have
been received;
so long as and to the extent that the Commission continues to
interpret the 1940 Act to require pass-through voting privileges for
variable contract owners. The Insurance Company reserves the right to
vote Trust shares held in any segregated asset account in its own
right, to the extent permitted by law. Participating Insurance
Companies shall be responsible for assuring that each of their
separate accounts participating in the Trust calculates voting
privileges in a manner consistent with the standards set forth on
Schedule C attached hereto and incorporated herein by this reference,
which standards will also be provided to the other Participating
Insurance Companies. The Insurance Company shall fulfill its
obligation under, and abide by the terms and conditions of, the Mixed
and Shared Funding Exemptive Order.
3.5. The Trust will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Trust will
either provide for annual meetings (except insofar as the Commission
may interpret Section 16 of the 1940 Act not to require such meetings)
or, as the Trust currently intends, comply with Section 16(c) of the
1940 Act (although the Trust 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 Trust will act in accordance
with the Commission's interpretation of the requirements of Section
16(a) with respect to periodic elections of trustees and with whatever
rules the Commission may promulgate with respect thereto.
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ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Insurance Company shall furnish, or shall cause to be
furnished, to the Trust or its designee, each piece of sales
literature or other promotional material in which the Trust, a sub-
adviser of one of the Funds, or BBOI Worldwide is named, at least
fifteen calendar days prior to its use. No such material shall be
used if the Trust or its designee objects to such use within ten
calendar days after receipt of such material.
4.2. The Insurance Company shall not give any information or
make any representations or statements on behalf of the Trust or
concerning the Trust in connection with the sale of the Contracts
other than the information or representations contained in the Trust's
registration statement, prospectus or SAI, as that registration
statement, prospectus or SAI may be amended or supplemented from time
to time, or in reports or proxy statements for the Trust, or in sales
literature or other promotional material approved by the Trust or its
designee or by BBOI Worldwide or its designee, except with the
permission of the Trust or BBOI Worldwide or their designees.
4.3. The Trust, BBOI Worldwide, or its designee shall furnish,
or shall cause to be furnished, to the Insurance Company or its
designee, each piece of sales literature or other promotional material
in which the Insurance Company or the Account is named at least
fifteen calendar days prior to its use. No such material shall be
used if the Insurance Company or its designee objects to such use
within ten calendar days after receipt of that material.
4.4. The Trust and BBOI Worldwide, or their designees, shall not
give any information or make any representations on behalf of the
Insurance Company or concerning the Insurance Company, any Account, or
the Contracts other than the information or representations contained
in a registration statement, prospectus or statement of additional
information for the Contracts, as that registration statement,
prospectus or statement of additional information may be amended or
supplemented from time to time, or in published reports for any
Account which are in the public domain or approved by the Insurance
Company for distribution to Contract owners, or in sales literature or
other promotional material approved by the Insurance Company or its
designee, except with the permission of the Insurance Company.
4.5. The Trust will provide to the Insurance Company at least
one complete copy of each registration statement, prospectus,
statement of additional information, report, proxy statement, piece of
sales literature or other promotional material, application for
exemption, request for no-action letter, and any amendment to any of
the above, that relate to the Trust or its shares, contemporaneously
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with the filing of the document with the Commission, the National
Association of Securities Dealers, Inc. ("NASD"), or other regulatory
authorities.
4.6. The Insurance Company will provide to the Trust at least
one complete copy of each registration statement, prospectus,
statement of additional information, report, solicitation for voting
instructions, piece of sales literature and other promotional
material, application for exemption, request for no-action letter, and
any amendment to any of the above, that relates to the Contracts or
the Account, contemporaneously with the filing of the document with
the Commission, the NASD, or other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is not limited
to, advertisements, newspaper, magazine, or other periodical, radio,
television, telephone or tape recording, videotape display, signs or
billboards, motion pictures, or other public 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, shareholder
newsletters, 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
registration statements, prospectuses, statements of additional
information, shareholder reports, and proxy materials.
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.
ARTICLE V. FEES AND EXPENSES
5.1. The Trust and BBOI Worldwide shall pay no fee or other
compensation to the Insurance Company under this agreement, except as
set forth in Section 5.4 and except that if the Trust or any Fund
adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, BBOI Worldwide or the Trust may make payments
to the Insurance Company in amounts consistent with that 12b-1 plan,
subject to review by the trustees of the Trust.
5.2. All expenses incident to performance by the Trust under
this Agreement shall be paid by the Trust. The Trust shall see to it
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that any offering of its shares is registered and that all of its
shares are authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Trust or
BBOI Worldwide, in accordance with applicable state laws prior to
their sale. The Trust shall bear the cost of registration and
qualification of the Trust's shares, preparation and filing of the
Trust's prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and printing
the proxy materials and reports to shareholders, the preparation of
all statements and notices required by any federal or state law, and
all taxes on the issuance or transfer of the Trust's shares.
5.3. The Insurance Company shall bear the expenses of printing
and distributing to Contract owners the Contract prospectuses and of
distributing to Contract owners the Trust's prospectus, proxy
materials and reports.
5.4. The Insurance Company bears the responsibility and
correlative expense for administrative and support services for
Contract owners. BBOI Worldwide recognizes the Insurance Company as
the sole shareholder of shares of the Trust issued under this
Agreement. From time to time, BBOI Worldwide may pay amounts from its
past profits to the Insurance Company for providing certain
administrative services for the Trust or for providing other services
that relate to the Trust. In consideration of the savings resulting
from such arrangement, and to compensate the Insurance Company for its
costs, BBOI Worldwide agrees to pay to the Insurance Company an amount
equal to 25 basis points (0.25%) per annum of the average aggregate
amount invested by the Insurance Company in the Trust under this
Agreement. Such payments will be made only when the average aggregate
amount invested exceeds $1,000,000. The parties agree that such
payments are for administrative services and investor support
services, and do not constitute payment for investment advisory,
distribution or other services. Payment of such amounts by BBOI
Worldwide shall not increase the fees paid by the Trust or its
shareholders. The obligation to pay the amounts provided for in this
Section 5.4 may be assigned by BBOI Worldwide in its discretion to
Xxxxxx Associates, Inc., or other entity acceptable to the Insurance
Company.
ARTICLE VI. DIVERSIFICATION
6.1. The Trust will comply with Section 817(h) of the Code and
Treasury Regulation 1.817-5 relating to the diversification
requirements for variable annuity, endowment, modified endowment or
life insurance contracts and any amendments or other modifications to
that Section or Regulation at all times necessary to satisfy those
requirements.
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ARTICLE VII. POTENTIAL CONFLICTS
7.1. The trustees of the Trust will monitor the Trust for the
existence of any material irreconcilable conflict between the
interests of the variable Contract owners of all separate accounts
investing in the Trust and the participants of all Qualified Plans
investing in the Trust. 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 interpretive 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
Fund are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract
owners; or (f) a decision by a Participating Insurance Company to
disregard the voting instructions of variable contract owners. The
trustees of the Trust shall promptly inform the Insurance Company if
they determine that an irreconcilable material conflict exists and the
implications thereof. The trustees of the Trust shall have sole
authority to determine whether an irreconcilable material conflict
exists and their determination shall be binding upon the Insurance
Company.
7.2. The Insurance Company and BBOI Worldwide each will report
promptly any potential or existing conflicts of which it is aware to
the trustees of the Trust. The Insurance Company and BBOI Worldwide
each will assist the trustees of the Trust in carrying out their
responsibilities under the Mixed and Shared Funding Exemptive Order,
by providing the trustees of the Trust with all information reasonably
necessary for them to consider any issues raised. This includes, but
is not limited to, an obligation by the Insurance Company to inform
the trustees of the Trust whenever Contract owner voting instructions
are to be disregarded. These responsibilities shall be carried out by
the Insurance Company with a view only to the interests of the
Contract owners and by BBOI Worldwide with a view only to the
interests of Contract holders and Qualified Plan participants.
7.3. If it is determined by a majority of the trustees of the
Trust, or a majority of the trustees who are not interested persons of
the Trust, any of its Funds, or BBOI Worldwide (the "Independent
Trustees"), that a material irreconcilable conflict exists, the
Insurance Company and/or other Participating Insurance Companies or
Qualified Plans that have executed participation agreements shall, at
their expense and to the extent reasonably practicable (as determined
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by a majority of the Independent Trustees), 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 Trust or any Fund and
reinvesting those assets in a different investment medium, including
(but not limited to) another Fund of the Trust, or submitting the
question whether such segregation should be implemented to a vote of
all affected variable contract owners and, as appropriate, segregating
the assets of any appropriate group (e.g., 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 variable contract owners the
option of making such a change; and (2) establishing a new registered
management investment company or managed separate account and
obtaining any necessary approvals or orders of the Commission in
connection therewith.
7.4. If a material irreconcilable conflict arises because of a
decision by the Insurance Company to disregard Contract owner voting
instructions and that decision represents a minority position or would
preclude a majority vote, the Insurance Company may be required, at
the Trust's election, to withdraw the affected Account's investment in
the Trust and terminate this Agreement with respect to that Account;
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
Trustees. Any such withdrawal and termination must take place within
six (6) months after the Trust gives written notice that this
provision is being implemented, and, until the end of that six month
period, the Trust shall continue to accept and implement orders by the
Insurance Company for the purchase (and redemption) of shares of the
Trust.
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the
Insurance Company conflicts with the majority of other state
regulators, then the Insurance Company will withdraw the affected
Account's investment in the Trust and terminate this Agreement with
respect to that Account within six months after the trustees of the
Trust inform the Insurance Company in writing that they have deter-
mined that the state insurance regulator's 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 Independent Trustees. Until the end of the foregoing
six month period, the Trust shall continue to accept and implement
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orders by the Insurance Company for the purchase (and redemption) of
shares of the Trust.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement,
a majority of the Independent Trustees shall determine whether any
proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Trust be required to establish a
new funding medium for the Contracts. The Insurance Company 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 materially adversely affected by the irreconcilable
material conflict. In the event that the trustees of the Trust
determine that any proposed action does not adequately remedy any
irreconcilable material conflict, then the Insurance Company will
withdraw the Account's investment in the Trust and terminate this
Agreement within six (6) months after the trustees of the Trust inform
the Insurance Company in writing of the foregoing determination,
provided, however, that the withdrawal and termination shall be
limited to the extent required by the material irreconcilable
conflict, as determined by a majority of the Independent Trustees.
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 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 Trust 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 those rules are applicable; and (b) Sections 3.4, 3.5, 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
those Sections are contained in the Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY THE INSURANCE COMPANY
8.1(a). The Insurance Company agrees to indemnify and hold
harmless the Trust and each trustee, officer, employee or agent of the
Trust, and each person, if any, who controls the Trust 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, damages, liabilities (including amounts paid in settlement
with the written consent of the Insurance Company) or litigation
14
(including legal and other expenses), to which the Indemnified Parties
may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to
the sale, acquisition, or redemption of the Trust'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 for the Contracts or
contained in the Contracts or sales literature 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 the Insurance Company by
or on behalf of the Trust for use in the
registration statement or prospectus for the
Contracts or in the Contracts or sales literature
(or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts
or shares of the Trust;
(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 of the
Trust not supplied by the Insurance Company, or
persons under its control) or wrongful conduct of
the Insurance Company or persons under its
control, with respect to the sale or distribution
of the Contracts or Trust Shares;
(iii) arise out of any untrue statement or
alleged untrue statement of a material fact
contained in a registration statement, prospectus,
or sales literature of the Trust 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
-15
the statements therein not misleading if such a
statement or omission was made in reliance upon
information furnished in writing to the Trust by
or on behalf of the Insurance Company;
(iv) arise as a result of any failure by the
Insurance Company 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, warranty or
agreement made by the Insurance Company in this
Agreement or arise out of or result from any other
material breach of this Agreement by the Insurance
Company,
as limited by and in accordance with the provisions of Sections 8.1(b)
and 8.1(c) hereof.
8.1(b). The Insurance Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified
Party that may arise from that Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of that
Indemnified Party's duties or by reason of that Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to
the Trust, whichever is applicable.
8.1(c). The Insurance Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless that Indemnified Party shall have notified
the Insurance Company 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 that Indemnified Party (or
after the Indemnified Party shall have received notice of such service
on any designated agent). Notwithstanding the foregoing, the failure
of any Indemnified Party to give notice as provided herein shall not
relieve the Insurance Company of its obligations hereunder except to
the extent that the Insurance Company has been prejudiced by such
failure to give notice. In addition, any failure by the Indemnified
Party to notify the Insurance Company of any such claim shall not
relieve the Insurance Company from any liability which it may have to
the Indemnified Party against whom the action is brought otherwise
than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Insurance
Company shall be entitled to participate, at its own expense, in the
defense of the action. The Insurance Company also shall be entitled
16
to assume the defense thereof, with counsel satisfactory to the party
named in the action; provided, however, that if the Indemnified Party
-------- -------
shall have reasonably concluded that there may be defenses available
to it which are different from or additional to those available to the
Insurance Company, the Insurance Company shall not have the right to
assume said defense, but shall pay the costs and expenses thereof
(except that in no event shall the Insurance Company be liable for the
fees and expenses of more than one counsel for Indemnified Parties in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances). After notice from the Insurance
Company to the Indemnified Party of the Insurance Company's election
to assume the defense thereof, and in the absence of such a reasonable
conclusion that there may be different or additional defenses
available to the Indemnified Party, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it, and
the Insurance Company will not be liable to that party under this
Agreement for any legal or other expenses subsequently incurred by the
party independently in connection with the defense thereof other than
reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the
Insurance Company of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the Trust's
shares or the Contracts or the operation of the Trust.
8.2. INDEMNIFICATION BY BBOI WORLDWIDE
8.2(a). BBOI Worldwide agrees to indemnify and hold harmless the
Insurance Company and each of its directors, officers, employees or
agents, and each person, if any, who controls the Insurance Company
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, damages, liabilities (including amounts paid
in settlement with the written consent of BBOI Worldwide) or
litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, 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, acquisition or redemption of the Trust'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 sales literature of the
Trust (or any amendment or supplement to any of
17
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 the statement or omission or
alleged statement or omission was made in reliance
upon and in conformity with information furnished
in writing to BBOI Worldwide or the Trust by or on
behalf of the Insurance Company for use in the
registration statement or prospectus for the Trust
or in sales literature (or any amendment or
supplement) or otherwise for use in connection
with the sale of the Contracts or Trust shares;
(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 for the
Contracts not supplied by BBOI Worldwide or
persons under its control) or wrongful conduct of
the Trust, BBOI Worldwide or persons under their
control, with respect to the sale or distribution
of the Contracts or shares of the Trust;
(iii) arise out of any untrue statement or
alleged untrue statement of a material fact
contained in a registration statement, prospectus,
or sales literature 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 the Insurance Company by
or on behalf of the Trust;
(iv) arise as a result of any failure by the
Trust to provide the services and furnish the
materials under the terms of this Agreement
(including a failure, whether unintentional or in
good faith or otherwise, to comply with the
diversification requirements specified in Article
VI of this Agreement); or
18
(v) arise out of or result from any material
breach of any representation, warranty or
agreement made by BBOI Worldwide in this Agreement
or arise out of or result from any other material
breach of this Agreement by BBOI Worldwide;
as limited by and in accordance with the provisions of Sections 8.2(b)
and 8.2(c) hereof.
8.2(b) BBOI Worldwide shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified
Party that may arise from the Indemnified Party's willful misfeasance,
bad faith, or gross negligence in the performance of the Indemnified
Party's duties or by reason of the Indemnified Party's reckless
disregard of obligations and duties under this Agreement or to the
Insurance Company or the Account, whichever is applicable.
8.2(c) BBOI Worldwide shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless the Indemnified Party shall have notified
BBOI Worldwide 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 the Indemnified Party (or after the
Indemnified Party shall have received notice of such service on any
designated agent). Notwithstanding the foregoing, the failure of any
Indemnified Party to give notice as provided herein shall not relieve
BBOI Worldwide of its obligations hereunder except to the extent that
BBOI Worldwide has been prejudiced by such failure to give notice. In
addition, any failure by the Indemnified Party to notify BBOI
Worldwide of any such claim shall not relieve BBOI Worldwide 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. In case any such action is brought against the Indemnified
Parties, BBOI Worldwide will be entitled to participate, at its own
expense, in the defense thereof. BBOI Worldwide also shall be
entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action; provided, however, that if the Indemni-
fied Party shall have reasonably concluded that there may be defenses
available to it which are different from or additional to those
available to BBOI Worldwide, BBOI Worldwide shall not have the right
to assume said defense, but shall pay the costs and expenses thereof
(except that in no event shall BBOI Worldwide be liable for the fees
and expenses of more than one counsel for Indemnified Parties in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances). After notice from BBOI Worldwide to
the Indemnified Party of BBOI Worldwide's election to assume the
19
defense thereof, and in the absence of such a reasonable conclusion
that there may be different or additional defenses available to the
Indemnified Party, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and BBOI Worldwide
will not be liable to that party under this Agreement for any legal or
other expenses subsequently incurred by that party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d) The Insurance Company agrees to notify BBOI Worldwide
promptly 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 TRUST
8.3(a). The Trust agrees to indemnify and hold harmless the
Insurance Company, and each of its directors, officers, employees and
agents, and each person, if any, who controls the Insurance Company
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, damages, liabilities (including legal and
other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as those
losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements result from the gross negligence, bad
faith or willful misconduct of any trustee(s) of the Trust, are
related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust
to provide the services and furnish the materials
under the terms of this Agreement (including a
failure to comply with the diversification
requirements specified in Article VI of this
Agreement); or
(ii) arise out of or result from any material
breach of any representation, warranty or
agreement made by the Trust in this Agreement or
arise out of or result from any other material
breach of this Agreement by the Trust;
as limited by, and in accordance with the provisions of, Sections
8.3(b) and 8.3(c) hereof.
8.3(b). The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against an Indemnified Party that may
20
arise from the Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of the Indemnified Party's duties
or by reason of the Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Insurance
Company, the Trust, BBOI Worldwide or the Account, whichever is
applicable.
8.3(c). The Trust shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless the Indemnified Party shall have notified the Trust 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 the Indemnified Party (or after the Indemnified Party
shall have received notice of such service on any designated agent).
Notwithstanding the foregoing, the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Trust of its
obligations hereunder except to the extent that the Trust has been
prejudiced by such failure to give notice. In addition, any failure
by the Indemnified Party to notify the Trust of any such claim shall
not relieve the Trust 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. In case any such action
is brought against the Indemnified Parties, the Trust will be entitled
to participate, at its own expense, in the defense thereof. The Trust
also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action; provided, however, that
-------- -------
if the Indemnified Party shall have reasonably concluded that there
may be defenses available to it which are different from or additional
to those available to the Trust, the Trust shall not have the right to
assume said defense, but shall pay the costs and expenses thereof
(except that in no event shall the Trust be liable for the fees and
expenses of more than one counsel for Indemnified Parties in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances). After notice from the Trust to the
Indemnified Party of the Trust's election to assume the defense
thereof, and in the absence of such a reasonable conclusion that there
may be different or additional defenses available to the Indemnified
Party, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Trust will not be liable to
that party under this Agreement for any legal or other expenses
subsequently incurred by that party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.3(d). The Insurance Company and BBOI Worldwide agree promptly
to notify the Trust of the commencement of any litigation or proceed-
ings against it or any of its respective officers or directors in
21
connection with this Agreement, the issuance or sale of the Contracts,
the operation of the Account, or the sale or acquisition of shares of
the Trust.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and provisions hereof
interpreted under and in accordance with the laws of the State of
Delaware.
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 any exemptions from those statutes, rules and
regulations the Commission 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 upon one year advance
written notice to the other parties; provided, however,
such notice shall not be given earlier than one year
following the date of this Agreement; or
(b) at the option of the Insurance Company to the extent
that shares of Funds are not reasonably available to
meet the requirements of the Contracts as determined by
the Insurance Company, provided, however, that such a
termination shall apply only to the Fund(s) not reason-
ably available. Prompt written notice of the election
to terminate for such cause shall be furnished by the
Insurance Company to the Trust and BBOI Worldwide; or
(c) at the option of the Trust or BBOI Worldwide, in the
event that formal administrative proceedings are
instituted against the Insurance Company by the NASD,
the Commission, an insurance commissioner or any other
regulatory body regarding the Insurance Company's
duties under this Agreement or related to the sale of
the Contracts, the operation of any Account, or the
purchase of the Trust's shares, provided, however, that
the Trust 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 Insurance Company to perform its obligations under
this Agreement; or
22
(d) at the option of the Insurance Company in the event
that formal administrative proceedings are instituted
against the Trust or BBOI Worldwide by the NASD, the
Commission, or any state securities or insurance
department or any other regulatory body, provided,
however, that the Insurance Company determines in its
sole judgement exercised in good faith, that any such
administrative proceedings will have a material adverse
effect upon the ability of the Trust or BBOI Worldwide
to perform its obligations under this Agreement; or
(e) with respect to any Account, upon requisite vote of the
Contract owners having an interest in that Account (or
any subaccount) to substitute the shares of another
investment company for the corresponding Fund shares in
accordance with the terms of the Contracts for which
those Fund shares had been selected to serve as the
underlying investment media. The Insurance Company
will give at least 30 days' prior written notice to the
Trust of the date of any proposed vote to replace the
Trust's shares; or
(f) at the option of the Insurance Company, in the event
any of the Trust's shares are not registered, issued or
sold in accordance with applicable state and/or federal
law or exemptions therefrom, or such law precludes the
use of those shares as the underlying investment media
of the Contracts issued or to be issued by the
Insurance Company; or
(g) at the option of the Insurance Company, if the Trust
ceases to qualify as a regulated investment company
under Subchapter M of the Code or under any successor
or similar provision, or if the Insurance Company
reasonably believes that the Trust may fail to so
qualify; or
(h) at the option of the Insurance Company, if the Trust
fails to meet the diversification requirements
specified in Article VI hereof; or
(i) at the option of either the Trust or BBOI Worldwide, if
(1) the Trust or BBOI Worldwide, respectively, shall
determine, in their sole judgment reasonably exercised
in good faith, that the Insurance Company has suffered
a material adverse change in its business or financial
23
condition or is the subject of material adverse
publicity and that material adverse change or material
adverse publicity will have a material adverse impact
upon the business and operations of either the Trust or
BBOI Worldwide, (2) the Trust or BBOI Worldwide shall
notify the Insurance Company in writing of that
determination and its intent to terminate this
Agreement, and (3) after considering the actions taken
by the Insurance Company and any other changes in
circumstances since the giving of such a notice, the
determination of the Trust or BBOI Worldwide 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
(j) at the option of the Insurance Company, if (1) the
Insurance Company shall determine, in its sole judgment
reasonably exercised in good faith, that either the
Trust or BBOI Worldwide 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 material adverse publicity will have
a material adverse impact upon the business and
operations of the Insurance Company, (2) the Insurance
Company shall notify the Trust and BBOI Worldwide in
writing of the determination and its intent to
terminate the Agreement, and (3) after considering the
actions taken by the Trust and/or BBOI Worldwide and
any other changes in circumstances since the giving of
such a notice, the determination shall continue to
apply on the sixtieth (60th) day following the giving
of the notice, which sixtieth day shall be the
effective date of termination.
10.2. It is understood and agreed that the right of any party
hereto to terminate this Agreement pursuant to Section 10.1(a) may be
exercised for any reason or for no reason.
10.3. No termination of this Agreement shall be effective unless
and until the party terminating this Agreement gives prior written
notice to all other parties to this Agreement of its intent to
terminate, which notice shall set forth the basis for the termination.
Furthermore,
(a) In the event that any termination is based upon the
provisions of Article VII, or the provision of Section 10.1(a),
24
10.1(i), 10.1(j), or 10.1(k) of this Agreement, the prior written
notice shall be given in advance of the effective date of termination
as required by those provisions; and
(b) in the event that any termination is based upon the
provisions of Section 10.1(c) or 10.1(d) of this Agreement, the prior
written notice shall be given at least ninety (90) days before the
effective date of termination.
10.4. Notwithstanding any termination of this Agreement, subject
to Section 1.2 of this Agreement and for so long as the Trust
continues to exist, the Trust and BBOI Worldwide shall at the option
of the Insurance Company, continue to make available additional shares
of the Trust pursuant to the terms and conditions of this Agreement,
for all Contracts in effect on the effective date of termination of
this Agreement ("Existing Contracts"). Specifically, without limita-
tion, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Trust, redeem investments in the Trust
and/or invest in the Trust upon the making of additional purchase
payments under the Existing Contracts. The parties agree that this
Section 10.4 shall not apply to any terminations under Article VII and
the effect of Article VII terminations shall be governed by Article
VII of this Agreement.
10.5. The Insurance Company shall not redeem Trust shares
attributable to the Contracts (as opposed to Trust shares attributable
to the Insurance Company's assets held in the Account) except (i) as
necessary to implement Contract-owner-initiated transactions, or (ii)
as required by state and/or federal laws or regulations or judicial or
other legal precedent of general application (a "Legally Required
Redemption"). Upon request, the Insurance Company will promptly
furnish to the Trust and BBOI Worldwide the opinion of counsel for the
Insurance Company (which counsel shall be reasonably satisfactory to
the Trust and BBOI Worldwide) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, the Insurance Company shall not prevent new Contract
owners from allocating payments to a Fund that formerly was available
under the Contracts without first giving the Trust or BBOI Worldwide
90 days notice of its intention to do so.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of that other party
set forth below or at such other address as the other party may from
time to time specify in writing.
25
If to the Trust:
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxx, Vice President
If to the Insurance Company:
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Chief Counsel
If to BBOI Worldwide:
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxx
ARTICLE XII. MISCELLANEOUS
12.1. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential
the names and addresses of the owners of the Contracts and all
information reasonably identified as confidential in writing by any
other party hereto and, except as permitted by this Agreement, shall
not disclose, disseminate or utilize such names and addresses and
other confidential information without the express written consent of
the affected party unless and until that information may come into the
public domain.
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 Commission, the NASD and state insurance regulators)
and shall permit those authorities reasonable access to its books and
records in connection with any lawful investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
26
12.6. 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.
12.7. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns;
provided, that no party may assign this Agreement without the prior
written consent of the others.
27
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 of the date specified below.
Insurance Company:
CANADA LIFE INSURANCE COMPANY OF AMERICA
By its authorized officer,
By:_________________________________
Title:______________________________
Date:_______________________________
Trust:
XXXXXX INSTITUTIONAL PRODUCTS TRUST
By its authorized officer,
By:_________________________________
Title:______________________________
Date:_______________________________
BBOI Worldwide:
BBOI WORLDWIDE LLC
By its authorized officer,
By:_________________________________
Title:______________________________
Date:_______________________________
28
SCHEDULE A
ACCOUNTS
NAME OF ACCOUNT DATE OF RESOLUTION OF INSURANCE
COMPANY'S BOARD WHICH ESTABLISHED
Variable Annuity Account 1 THE ACCOUNT
July 22, 1988
29
SCHEDULE B
CONTRACTS
1. Contract Form - VariFund
--------
30
SCHEDULE C
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsi-
bilities for the handling of proxies relating to the Trust by BBOI
Worldwide, the Trust and the Insurance Company. The defined terms
herein shall have the meanings assigned in the Participation Agreement
except that the term "Insurance Company" shall also include the
department or third party assigned by the Insurance Company to perform
the steps delineated below.
1. The number of proxy proposals is given to the Insurance Company
by BBOI Worldwide as early as possible before the date set by the
Trust for the shareholder meeting to facilitate the establishment
of tabulation procedures. At this time BBOI Worldwide will
inform the Insurance Company of the Record, Mailing and Meeting
dates. This will be done verbally approximately two months
before meeting.
2. Promptly after the Record Date, the Insurance Company will
perform a "tape run", or other activity, which will generate the
names, addresses and number of units which are attributed to each
contractowner/policyholder (the "Customer") as of the Record
Date. Allowance should be made for account adjustments made
after this date that could affect the status of the Customers'
accounts of the Record Date.
Note: The number of proxy statements is determined by the
activities described in Step #2. The Insurance Company will use its
best efforts to call in the number of Customers to BBOI Worldwide, as
soon as possible, but no later than one week after the Record Date.
3. The text and format for the Voting Instruction Cards ("Cards" or
"Card") is provided to the Insurance Company by the Trust. The
Insurance Company, at its expense, shall produce and personalize
the Voting Instruction cards. BBOI Worldwide must approve the
Card before it is printed. Allow approximately 2-4 business days
for printing information on the Cards. Information commonly
found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and verification
of votes (already on Cards as printed by the Trust).
31
(This and related steps may occur later in the chronological
process due to possible uncertainties relating to the proposals.)
4. During this time, BBOI Worldwide will develop, produce, and the
Trust will pay for the Notice of Proxy and the Proxy Statement
(one document). Printed and folded notices and statements will
be sent to Insurance Company for insertion into envelopes
(envelopes and return envelopes are provided and paid for by the
Insurance Company). Contents of envelope sent to customers by
Insurance Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. Return envelope (postage pre-paid by Insurance Company)
addressed to the Insurance Company or its tabulation agent
d. "Urge buckslip" - optional, but recommended. (This is a
small, single sheet of paper that requests Customers to vote
as quickly as possible and that their vote is important.
One copy will be supplied by the Trust.)
e. Cover letter - optional, supplied by Insurance Company and
reviewed and approved in advance by BBOI Worldwide.
5. The above contents should be received by the Insurance Company
approximately 3-5 business days before mail date. Individual in
charge at Insurance Company reviews and approves the contents of
the mailing package to ensure correctness and completeness. Copy
of this approval sent to BBOI Worldwide.
6. Package mailed by the Insurance Company.
* The Trust must allow at least a 15-day solicitation time to
----
the Insurance Company as the shareowner. (A 5-week period
is recommended.) Solicitation time is calculated as
calendar days from (but not including) the meeting, counting
---
backwards.
7. Collection and tabulation of Cards begins. Tabulation usually
takes place in another department or another vendor depending on
process used. An often used procedure is to sort cards on
arrival by proposal into vote categories of all yes, no, or mixed
replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal
procedure.
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8. If Cards are mutilated, or for any reason are illegible or are
not signed properly, they are sent back to the Customer with an
explanatory letter, a new Card and return envelope. The
mutilated or illegible Card is disregarded and considered to be
not received for purposes of vote tabulation. Such mutilated or
--- --------
illegible Cards are "hand verified," i.e., examined as to why
they did not complete the system. Any questions on those Cards
are usually remedied individually.
9. There are various control procedures used to ensure proper
tabulation of votes and accuracy of that tabulation. The most
prevalent is to sort the Cards as they first arrive into
categories depending upon their vote; an estimate of how the vote
is progressing may then be calculated. If the initial estimates
and the actual vote do not coincide, then an internal audit of
that vote should occur. This may entail a recount.
10. The actual tabulation of votes is done in units which is then
converted to shares. (It is very important that the Trust
receives the tabulations stated in terms of a percentage and the
number of shares.) BBOI Worldwide must review and approve
------
tabulation format.
11. Final tabulation in shares is verbally given by the Insurance
Company to BBOI Worldwide on the morning of the meeting not
later than 10:00 a.m. Denver time. BBOI Worldwide may request an
earlier deadline if required to calculate the vote in time for
the meeting.
12. A Certificate of Mailing and Authorization to Vote Shares will
be required from the Insurance Company as well as an original
copy of the final vote. BBOI Worldwide will provide a standard
form for each Certification.
13. The Insurance Company will be required to box and archive the
Cards received from the Customers. In the event that any vote
is challenged or if otherwise necessary for legal, regulatory,
or accounting purposes, BBOI Worldwide will be permitted
reasonable access to such Cards.
14. All approvals and "signing-off" may be done orally, but must
always be followed up in writing.
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