AMENDMENT NO. 2 TO
PARTICIPATION AGREEMENT AMONG
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK,
XXXXXXX VARIABLE SERIES II,
XXXXXXX DISTRIBUTORS, INC. AND
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
WHEREAS, GE LIFE AND ANNUITY ASSURANCE COMPANY on behalf of itself and its
separate accounts, XXXXXXX VARIABLE SERIES II, XXXXXXX DISTRIBUTORS, INC. and
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. have previously entered into a
Participation Agreement dated October 1, 2002 (the "Agreement");
NOW, THEREFORE, the parties hereby agree as follows:
1. SCHEDULE A, is replaced in its entirety with the attached. (AMENDMENT
NO. 1 to SCHEDULE A.)
2. The Agreement, as supplemented by this AMENDMENT NO. 2 and the
AMENDMENT NO. 1 to SCHEDULE A attached hereto, is ratified and
confirmed effective April 29, 2005.
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK on behalf of itself and its
separate accounts
By:
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Xxxxxxxx X. Stiff
Senior Vice President
XXXXXXX VARIABLE SERIES II
By:
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Name:
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Title:
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XXXXXXX DISTRIBUTORS, INC.
By:
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Name:
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Title:
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DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
By:
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Name:
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Title:
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Amendment No. 1 to Schedule A
Separate Accounts and Associated Contracts
Name of Separate Account and Date Separate
Account Established Contracts Funded by the Separate Account
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GE Capital Life Separate Account II, established Foundation NY - NY1155
April 1, 1996
SUPPLEMENT TO PARTICIPATION AGREEMENT
DATED AS OF OCTOBER 1, 2002
(as amended and supplemented from time to time)
AMONG
XXXXXXX VARIABLE SERIES II
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
XXXXXXX DISTRIBUTORS, INC.
AND
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
The parties hereto agree that the Participation Agreement is amended to (i) add
as a party to the Agreement Capital Brokerage Corporation ("CBC"), a broker
dealer registered with the Securities and Exchange Commission and an affiliate
of the Company serving as principal underwriter of the Contracts, and (ii) to
replace Section 2.3 of the Agreement in its entirety with the following:
"2.3. The provisions of this Section 2.3 apply to Class B Shares. CBC
agrees to provide distribution services ("Distribution Services") for the Class
B Shares of the Designated Portfolios including the following types of services:
(1) Printing and mailing of Fund prospectuses, statements of
additional information, any supplements thereto and shareholder reports for
prospective Contract owners.
(2) Developing, preparing, printing and mailing of Fund
advertisements, sales literature and other promotional materials describing
and/or relating to the Fund and including materials intended for use within the
Company, or for broker-dealer only use.
(3) Obtaining information and providing explanations to Contract
owners regarding Fund investment objectives and policies and other information
about the Fund and its Portfolios, including the performance of the Portfolios.
(4) Training sales personnel regarding the Fund and its Portfolios.
(5) Personal service with respect to Fund Shares attributable to
Contract accounts.
In consideration of CBC performing the Distribution Services, the Underwriter
will make quarterly payments to CBC pursuant to the Fund's Master Distribution
Plan for Class B Shares, as amended from time to time, at the annual rate of
0.25% of the average daily net asset value of the Class B shares of each
Designated Portfolio held by the Company pursuant to this Agreement."
IN WITNESS WHEREOF, each of the parties has caused this Supplement to be
executed in its name and on its behalf by its duly authorized representative as
of August 1, 2003.
COMPANY GE Capital Life Assurance Company of New York
By: /s/ Illegible
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Title: Sr. V.P.
CBC Capital Brokerage Corporation
By: /s/ Illegible
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Title: Sr. V.P.
FUND Xxxxxxx Variable Series II
By: /s/ Illegible
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Title: Illegible
ADVISER Deutsche Investment Management Americas Inc.
By: /s/ Illegible
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Title: Managing Director
UNDERWRITER Xxxxxxx Distributors, Inc.
By: /s/ Illegible
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Title: Vice President
SVS II
PARTICIPATION AGREEMENT
THIS AGREEMENT, dated as of the 1st day of October, 2002 by and among
GE Capital Life Assurance Company of New York (the "Company"), a Virginia life
insurance company, on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule A hereto as may be amended from
time to time (each separate account hereinafter referred to as the "Separate
Account"), XXXXXXX VARIABLE SERIES II (the "Fund"), a Massachusetts business
trust created under a Declaration of Trust, as amended, XXXXXXX DISTRIBUTORS,
INC. (the "Underwriter"), a Delaware corporation, and DEUTSCHE INVESTMENT
MANAGEMENT AMERICAS INC., a Delaware corporation (the "Adviser").
WHEREAS, the Fund engages in business as an open-end management
investment company and is or will be available to act as the investment vehicle
for separate accounts established for variable life insurance and variable
annuity contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and
Underwriter ("Participating Insurance Companies");
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares of beneficial interest without par value, and, with respect to
certain series, classes thereof ("Shares"), and additional series of Shares, and
classes thereof, may be established, each such series of Shares designated a
"Portfolio" and representing the interest in a particular managed portfolio of
securities and other assets;
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission (the "SEC"), dated October 13, 1989 (Release No. IC-17164;
File No. 812-7345) 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 (the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(1
5) thereunder, to the extent necessary to permit Shares of the Fund to be sold
to and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (the "Mixed and Shared
Funding Exemptive Order");
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and Shares of the Portfolios are registered under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, the Adviser, which serves as investment adviser to the Fund,
is duly registered as an investment adviser under the Investment Advisers Act of
1940, as amended, and any applicable state securities laws;
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by the
Separate Account (the
"Contracts"), and said Contracts are listed in Schedule A hereto, as it may be
amended from time to time by mutual written agreement;
WHEREAS, the Separate Account is duly established and maintained as a
segregated asset account, established by resolution of the Board of Directors of
the Company, on the date shown for such Separate Account on Schedule A hereto,
to set aside and invest assets attributable to the aforesaid Contracts;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker dealer with the SEC 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, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios, and
classes thereof, listed in Schedule B hereto, as it may be amended from time to
time by mutual written agreement (the "Designated Portfolios") on behalf of the
Separate Account to fund the aforesaid Contracts, and the Underwriter is
authorized to sell such Shares to the Separate Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund, the Adviser and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund has granted to the Underwriter exclusive authority to
distribute the Fund's Shares, and has agreed to instruct, and has so instructed,
the Underwriter to make available to the Company for purchase, on behalf of the
Separate Account, Fund Shares of those Designated Portfolios selected by the
Underwriter. Pursuant to such authority and instructions, and subject to Article
X hereof, the Underwriter agrees to make available to the Company for purchase
on behalf of the Separate Account, Shares of those Designated Portfolios listed
on Schedule B to this Agreement, such purchases to be effected at net asset
value in accordance with Section 1.3 of this Agreement. Notwithstanding the
foregoing, (i) Fund series (other than those listed on Schedule B) in existence
now or that may be established in the future will be made available to the
Company only as the Underwriter may so provide, and (ii) the Board of Trustees
of the Fund (the "Board") may refuse to sell shares of any Designated Portfolio
to any person, or suspend or terminate the offering of Fund Shares of any
Designated Portfolio or class thereof, if such action is required by law or by
regulatory authorities having jurisdiction or if, 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, suspension or termination is in the best
interests of the shareholders of such Designated Portfolio.
1.2. The Fund shall redeem, at the Company's request, any full or
fractional Designated Portfolio Shares held by the Company on behalf of the
Separate Account, such redemptions to be effected at net asset value in
accordance with Section 1.3 of this Agreement. Notwithstanding the foregoing,
(i) the Company shall not redeem Fund Shares attributable to Contract owners
except in the circumstances permitted in Section 10.3 of this Agreement, and
(ii) the Fund may suspend the right of redemption or postpone the date of
payment or satisfaction
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upon redemption of Fund Shares of any Designated Portfolio to the extent
permitted by the 1940 Act, any rules, regulations or orders thereunder, or the
then current Fund Prospectus.
1.3. Purchase and Redemption Procedures
(a) The Fund hereby appoints the Company as an agent of the Fund for
the limited purpose of receiving purchase and redemption requests on behalf of
the Separate Account (but not with respect to any Fund Shares that may be held
in the general account of the Company) for Shares of those Designated Portfolios
made available hereunder, based on allocations of amounts to the Separate
Account or subaccounts thereof under the Contracts and other transactions
relating to the Contracts or the Separate Account. Receipt of any such request
(or relevant transactional information therefor) on any day the New York Stock
Exchange is open for trading and on which the Fund calculates its net asset
value pursuant to the rules of the SEC (a "Business Day") by the Company as such
limited agent of the Fund prior to the time that the Fund calculates its net
asset value as described from time to time in the Fund Prospectus (which as of
the date of execution of this Agreement is 4:00 p.m. Eastern Time) shall
constitute receipt by the Fund on that same Business Day, provided that the Fund
receives notice of such request by 9:30 a.m. Eastern Time on the next following
Business Day.
(b) The Company shall pay for Shares of each Designated Portfolio on
the same day that it notifies the Fund of a purchase request for such Shares.
Payment for Designated Portfolio Shares shall be made in federal funds
transmitted to the Fund by wire to be received by the Fund by 12:00 p.m. Eastern
Time on the day the Fund is notified of the purchase request for Designated
Portfolio Shares (unless the Fund determines and so advises the Company that
sufficient proceeds are available from redemption of Shares of other Designated
Portfolios effected pursuant to redemption requests tendered by the Company on
behalf of the Separate Account). If federal funds are not received on time, such
funds will be invested, and Designated Portfolio Shares purchased thereby will
be issued, as soon as practicable and the Company shall promptly, upon the
Fund's request, reimburse the Fund for any charges, costs, fees, interest or
other expenses incurred by the Fund in connection with any advances to, or
borrowing or overdrafts by, the Fund, or any similar expenses incurred by the
Fund, as a result of portfolio transactions effected by the Fund based upon such
purchase request. Upon receipt of federal funds so wired, such funds shall cease
to be the responsibility of the Company and shall become the responsibility of
the Fund.
(c) Payment for Designated Portfolio Shares redeemed by the Separate
Account or the Company shall be made in federal funds transmitted by wire to the
Company or any other designated person normally on the next Business Day after
the Fund is properly notified of the redemption order of such Shares (unless
redemption proceeds are to be applied to the purchase of Shares of other
Designated Portfolio in accordance with Section 1.3(b) of this Agreement),
except that the Fund reserves the right to redeem Designated Portfolio Shares in
assets other than cash and to delay payment of redemption proceeds to the extent
permitted under Section 22(e) of the 1940 Act and any Rules thereunder, and in
accordance with the procedures and policies of the Fund as described in the then
current prospectus. The Fund shall not bear any responsibility whatsoever for
the proper disbursement or crediting of redemption proceeds by the Company, the
Company alone shall be responsible for such action.
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(d) Any purchase or redemption request for Designated Portfolio Shares
held or to be held in the Company's general account shall be effected at the net
asset value per share next determined after the Fund's receipt of such request,
provided that, in the case of a purchase request, payment for Fund Shares so
requested is received by the Fund in federal funds prior to close of business
for determination of such value, as defined from time to time in the Fund
Prospectus.
1.4. The Fund shall use its best efforts to make the net asset value per
share for each Designated Portfolio available to the Company by 6:30 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio is
calculated, and shall calculate such net asset value in accordance with the
Fund's Prospectus. Neither the Fund, any Designated Portfolio, the Underwriter,
nor any of their affiliates shall be liable for any information provided to the
Company pursuant to this Agreement which information is based on incorrect
information supplied by the Company or any other Participating Insurance Company
to the Fund or the Underwriter.
1.5. The Fund shall furnish notice (by wire or telephone followed by
written confirmation) to the Company as soon as reasonably practicable of any
income dividends or capital gain distributions payable on any Designated
Portfolio Shares. The Company, on its behalf and on behalf of the Separate
Account, hereby elects to receive all such dividends and distributions as are
payable on any Designated Portfolio Shares in the form of additional Shares of
that Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the Separate Account, to revoke this election and to receive all such
dividends and capital gain distributions in cash. The Fund shall notify the
Company of the number of Designated Portfolio Shares so issued as payment of
such dividends and distributions.
1.6. Issuance and transfer of Fund Shares shall be by book entry only.
Stock certificates will not be issued to the Company or the Separate Account.
Purchase and redemption orders for Fund Shares shall be recorded in an
appropriate ledger for the Separate Account or the appropriate subaccount of the
Separate Account.
1.7. The parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's Shares may be sold to other
insurance companies (subject to Section 1.8 hereof) and to certain qualified
retirement plans, and the cash value of the Contracts may be invested in other
investment companies.
1.8. The Underwriter and the Fund shall sell Fund Shares only to
Participating Insurance Companies and their separate accounts and to 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 Separate
Account to consider the portfolio investments of the Fund as constituting
investments of the Separate Account for the purpose of satisfying the
diversification requirements of Section 817(h). The Underwriter and the Fund
shall not sell Fund Shares to any insurance company or separate account unless
an agreement complying with Article VI of this Agreement is in effect to govern
such sales. The Company hereby represents and warrants that it and the Separate
Account are Qualified Persons. The Fund reserves the right to cease offering
Shares of any Designated Portfolio in the discretion of the Fund.
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ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts (a) are or,
prior to issuance, will be registered under the 1933 Act or, alternatively (b)
are not registered because they are properly exempt from registration under the
1933 Act or will be offered exclusively in transactions that are properly exempt
from registration under the 1933 Act. The Company further represents and
warrants that the Contracts will be issued and sold in compliance in all
material respects with all applicable federal securities and state securities
and insurance laws and that the sale of the Contracts shall comply in all
material respects with state insurance suitability requirements. The Company
further represents and warrants that it is an insurance company duly organized
and in good standing under applicable law, that it has legally and validly
established the Separate Accounts prior to any issuance or sale thereof as a
segregated asset account under applicable insurance laws, and that it (a) has
registered or, prior to any issuance or sale of the Contracts, will register the
Separate Accounts as a unit investment trust in accordance with the provisions
of the 1940 Act to serve as a segregated investment account for the Contracts,
or alternatively or (b) has not registered the Separate Accounts in proper
reliance upon an exclusion from registration under the 1940 Act. The Company
shall register and qualify the Contracts or interests therein as securities in
accordance with the laws of the various states only if and to the extent deemed
advisable by the Company.
2.2. The Fund represents and warrants that Fund Shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance in all material respects with all applicable
federal securities laws 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
effect the continuous offering of the shares of the Designated Portfolios. The
Fund shall register and qualify such Shares for sale in accordance with the laws
of the various states only if and to the extent deemed advisable by the Fund or
the Underwriter after taking into consideration any state insurance law
requirements that the Company advises the Fund may be applicable.
2.3. With respect to the Class B Shares of a Designated Portfolio, the Fund
may make payments quarterly for distribution expenses incurred or paid (as the
case may be) by the Company or the Underwriter and approved by the Fund's Board
pursuant to the Fund's Master Distribution Plan for Class B Shares, as amended
from time to time. No such payment to the Company shall be made with respect to
any quarterly period in excess of an amount determined for such period at the
annual rate of 0.25% of the average daily net asset value of the Class B shares
of such Designated Portfolio attributable to the Contract owners during that
quarterly period. The Company shall submit to the Underwriter within a
reasonable period of time following each quarter for which payment is sought a
Quarterly Distribution Expense Report in a form reasonably acceptable to the
Underwriter. The Fund's prospectus or statement of additional information may
provide further details about such payments.
2.4. The Fund makes no representations as to whether any aspect of its
operations, including, but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the various
states, except that the Fund represents that the investment policies, fees and
expenses of the Designated Portfolios, are and shall at all times remain in
compliance with the insurance laws of the state of organization of the Company
set forth on the first page (the "State") to the extent required to perform this
Agreement. The
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Company will advise the Fund in writing as to any requirements of State
insurance law that affect the Designated Portfolios, and the Fund will be deemed
to be in compliance with this Section 2.4 so long as the Fund complies with such
advice of the Company.
2.5. The Fund represents that it is a Massachusetts business trust duly
organized and validly existing under the laws of the Commonwealth of
Massachusetts and that the Designated Portfolios do and will comply in all
material respects with all applicable provisions of the 1940 Act.
2.6. The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the shares of
the Designated Portfolios in accordance with any applicable state and federal
securities laws.
2.7. The Adviser represents and warrants that it is and shall remain duly
registered as an investment adviser 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, the Adviser and the Underwriter represent and warrant that
all of their trustees, directors, 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 a blanket fidelity
bond or similar coverage for the benefit of the Fund in an amount not less than
the minimum coverage as required currently by Rule 17g-l of the 1940 Act or such
related provisions as 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.
2.9. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals or entities
employed or controlled by the Company dealing with the money and/or securities
of the Separate Account are covered by a blanket fidelity bond or similar
coverage for the benefit of the Separate Account, in an amount not less than $20
million. The aforesaid bond includes coverage for larceny and embezzlement and
is issued by a reputable bonding company. The Company agrees to hold for the
benefit of the Fund and to pay to the Fund any amounts lost from larceny,
embezzlement or other events covered by the aforesaid bond to the extent such
amounts properly belong to the Fund pursuant to the terms of this Agreement. The
Company agrees to make all reasonable efforts to see that this bond or another
bond containing these provisions is always in effect, and agrees to notify the
Fund and the Underwriter in the event that such coverage no longer applies.
2.10. The Company represents and warrants that all shares of the Designated
Portfolios purchased by the Company will be purchased on behalf of one or more
unmanaged separate accounts that offer interests therein that are registered
under the 1933 Act and upon which a registration fee has been or will be paid or
that are unregistered because the interests are exempt from registration under
the 1933 Act, and the Company acknowledges that the Fund intends to rely upon
this representation and warranty for purposes of calculating SEC registration
fees payable with respect to such Shares of the Designated Portfolios pursuant
to Form 24F-2 or any similar form or SEC registration fee calculation procedure
that allows the Fund to exclude Shares so sold for purposes of calculating its
SEC registration fee. The Company will certify the
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amount of any Shares of the Designated Portfolios purchased by the Company on
behalf of any separate account offering interests not subject to registration
under the 1933 Act. The Company agrees to cooperate with the Fund on no less
than an annual basis to certify as to its continuing compliance with this
representation and warranty.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with as many copies of the
Fund's current prospectus (describing only the Designated Portfolios listed on
Schedule B) as the Company may reasonably request. If requested by the Company
in lieu thereof, the Fund shall provide such documentation (including a final
copy of the new prospectus on computer diskette or other electronic means at the
Fund's expense) and other assistance as is reasonably necessary in order for the
Company once each year (or more frequently if the prospectus for a Designated
Portfolio is amended) to have the prospectus for the Contracts and the
prospectus for the Designated Portfolios printed together in one document.
Expenses with respect to the foregoing shall be borne as provided under Article
V.
3.2. The Fund's prospectus shall state that the current Statement of
Additional Information ("SAI") for the Fund is available from the Company (or in
the Fund's discretion, from the Fund), and the Fund shall provide a copy of such
SAI to any owner of a Contract who requests such SAI and to the Company in such
quantities as the Company may reasonably request. Expenses with respect to the
foregoing shall be borne as provided under Article V.
3.3. The Fund shall provide the Company with copies of its proxy material,
reports to shareholders, and other communications to shareholders of the
Designated Portfolios in such quantity as the Company shall reasonably require
for distributing to Contract owners. All such materials shall be provided in a
manner agreed upon by the parties and within a reasonable amount of time prior
to the date such materials are required to be delivered to Contract owners.
Expenses with respect to the foregoing shall be borne as provided under Article
V.
3.4. The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the shares of each Designated Portfolio in accordance
with instructions received from Contract owners; and
(iii) vote shares of each Designated Portfolio for which no
instructions have been received in the same proportion as fund shares of such
Designated Portfolio for which instructions have been received, 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 or to the extent
otherwise required by law. The Company reserves the right to vote shares of each
Designated Portfolio in any segregated asset account in its own right, to the
extent permitted by law.
3.5. The Fund reserves the right, upon prior written notice to the Company
(given at the earliest practicable time), to take all actions, including but not
limited to, the dissolution, termination, merger and sale of all assets of the
Fund or any Designated Portfolio upon the sole
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authorization of the Board, to the extent permitted by the laws of the
Commonwealth of Massachusetts and the 1940 Act.
3.6. Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in a Designated Portfolio
calculates voting privileges as required by the Mixed and Shared Funding
Exemptive Order and consistent with any reasonable standards that the Fund may
adopt and provide in writing.
3.7. It is understood and agreed that, except with respect to information
regarding the Fund, the Underwriter, the Adviser or Designated Portfolios
provided in writing by the Fund, the Underwriter or the Adviser, none of the
Fund, the Underwriter or the Adviser is responsible for the content of the
prospectus or statement of additional information for the Contracts.
3.8. The Company, the Adviser and the Underwriter shall each comply with
any applicable privacy and notice provisions of 15 U.S.C. (S)(S) 6801-6827 and
any applicable regulations promulgated thereunder (including but not limited to
17 C.F.R. Part 248) as they may be amended.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material
that the Company develops or uses and in which the Fund (or a Designated
Portfolio thereof) or the Adviser or the Underwriter is named. No such material
shall be used until approved by the Fund or its designee, and the Fund will use
its best efforts for it or its designee to review such sales literature or
promotional material within ten Business Days after receipt of such material.
The Fund or its designee reserves the right to reasonably object to the
continued use of any such sales literature or other promotional material in
which the Fund (or a Designated Portfolio thereof) or the Adviser or the
Underwriter is named, and no such material shall be used if the Fund or its
designee so objects.
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund in connection with
the sale of the Contracts other than the information or representations
contained in the then current registration statement or prospectus or SAI for
the Fund Shares, as such registration statement and prospectus or SAI may be
amended or supplemented from time to time, or in reports or proxy statements for
the Fund, or in sales literature or other promotional material approved by the
Fund or its designee or by the Underwriter, except with the permission of the
Fund or the Underwriter or the designee of either.
4.3. The Fund and the Underwriter, or their designee, shall furnish, or
shall cause to be, furnished, to the Company, each piece of sales literature or
other promotional material that it develops or uses and in which the Company,
and/or its Separate Account, is named. No such material shall be used until
approved by the Company, and the Company will use its best efforts to review
such sales literature or promotional material within ten Business Days after
receipt of such material. The Company reserves the right to reasonably object to
the continued use of any such sales literature or other promotional material in
which the Company and/or its Account is named, and no such material shall be
used if the Company so objects.
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4.4 The Fund and the Underwriter shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Separate
Account, or the Contracts other than the information or representations
contained in the then current registration statement, prospectus (which shall
include an offering memorandum, if any, if the Contracts issued by the Company
or interests therein are not registered under the 1933 Act), or SAI for the
Contracts, as such registration statement, prospectus, or SAI may be amended or
supplemented from time to time, or in published reports for the Separate Account
which are in the public domain or approved by the Company for distribution to
Contract owners, or in sales literature or other promotional material approved
by the Company or its designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, SAIs, reports, proxy statements, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Fund or its Shares, contemporaneously with the filing of such
document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions or substitutions, requests for no-action letters, and all amendments
to any of the above, that relate to the Contracts or the Separate Account,
contemporaneously with the filing of such document(s) with the SEC or other
regulatory authorities. The Company shall provide to the Fund and the
Underwriter any complaints received from the Contract owners pertaining to the
Fund or the Designated Portfolio.
4.7 The Fund will provide the Company with as much notice as is reasonably
practicable of any proxy solicitation for any Designated Portfolio, and of any
material change in the Fund's registration statement, particularly any change
resulting in a change to the registration statement or prospectus for any
Separate Account. The Fund will work with the Company so as to enable the
Company to solicit proxies from Contract owners, or to make changes to its
prospectus or registration statement, in an orderly manner. The Fund will make
reasonable efforts to attempt to have changes affecting Contract prospectuses
become effective simultaneously with the annual updates for such prospectuses.
4.8. For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, internet website (or other electronic
media), 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, 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 registration statements, prospectuses, SAIs, shareholder reports,
proxy materials, and any other communications distributed or made generally
available with regard to the Fund.
-9-
ARTICLE V. Fees and Expenses
5.1. The Fund, the Adviser and the Underwriter shall pay no fee or other
compensation to the Company under this Agreement, although the parties hereto
will bear certain expenses in accordance with Schedule C and other provisions of
this Agreement.
5.2. All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund, except and as further provided in Schedule C. The
cost of setting the Fund's prospectus in type, setting in type and printing the
Fund's proxy materials and reports to shareholders (including the costs of
printing a prospectus that constitutes an annual report), the preparation of all
statements and notices relating to the Fund required by any federal or state
law, and all taxes on the issuance or transfer of the Fund's Shares shall be
borne by the parties hereto as set forth in Schedule C.
5.3. The expenses of distributing the Fund's prospectus to new and existing
owners of Contracts issued by the Company and of distributing the Fund's proxy
materials and reports to Contract owners shall be borne by the parties hereto as
set forth in Schedule C.
5.4 The Company will develop, implement and maintain policies and
procedures reasonably designed to prevent the use of the Separate Accounts by
persons engaged in market timing, short-term trading or excessive trading, which
policies and procedures shall be reasonably acceptable to the Fund, the Adviser
and the Underwriter. If the Company proposes to modify such policies and
procedures following their implementation, the Company will first discuss its
proposal with the Fund, the Adviser and the Underwriter and will not materially
modify such policies and procedures without the written consent of the Fund, the
Adviser and the Underwriter.
In addition to the foregoing, the Company will develop, implement and
maintain procedures as necessary or appropriate to further any specific policies
and procedures of the Fund, the Adviser or the Underwriter for one or more
Designated Portfolios in regard to market timing, short-term trading or
excessive trading.
The Company represents and warrants that it has reserved sufficient
flexibility in the Contracts to impose such limitations and restrictions on
transfers and purchases of the underlying investments for the Contracts,
including specifically the Designated Portfolios, as may be necessary to
implement the policies and procedures referred in this Section 5.4.
If, notwithstanding the foregoing, the Fund, the Adviser or the
Underwriter notifies the Company that a pattern or patterns of transactions
involving market timing, short-term trading or excessive trading in one or more
Separate Accounts is having or may have, in their sole discretion, an adverse
effect on a Designated Portfolio, the Company will promptly take such actions
and implement such procedures as are appropriate to prevent such trading. The
parties hereto acknowledge that, if necessary and consistent with applicable
law, such actions and procedures may include the identification of Separate
Account participants engaged in such trading and the imposition of complete or
partial restrictions on their requests to purchase shares of the Designated
Portfolio.
-10-
The Company acknowledges that all orders accepted by the Company for
the Separate Accounts are subject to the obligations of the Company in this
Section 5.4, including the obligation to prevent the use of the Separate
Accounts for market timing, short-term trading or excessive trading, and that
the Fund, the Adviser or the Underwriter 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
the Company. Any such revocation, rejection or cancellation may be made in whole
or in Part, it being understood that the Fund, the Adviser and the Underwriter
are not required to isolate objectionable trades.
The Fund, the Adviser and the Underwriter shall not be responsible for
any losses or costs incurred by the Company, the Separate Accounts or Separate
Account participants as a result of the revocation, rejection or cancellation
orders made by the Company in furtherance of the enforcement of their policy to
prevent market timing, short-term trading and excessive trading in shares of the
Designated Portfolios.
5.5 The Company agrees that the Fund, the Underwriter and the Adviser
shall bear no responsibility for any act or omission of any unaffiliated fund or
the investment adviser or underwriter thereof.
ARTICLE VI. Diversification and Qualification
6.1. The Fund will invest the assets of each Designated Portfolio in such a
manner as to ensure that the Contracts will be treated as annuity or life
insurance contracts, whichever is appropriate, under the Code and the
regulations issued thereunder (or any successor provisions). Without limiting
the scope of the foregoing, the Fund will, with respect to each Designated
Portfolio, comply with Section 817(h) of the Code and Treasury Regulation
(S)1.817-5, 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. In the event of a breach of this Article VI by the
Fund, it will take all reasonable steps (a) to notify the Company of such breach
and (b) to adequately diversify the affected Designated Portfolio so as to
achieve compliance within the grace period afforded by Treasury Regulation
(S)1.817-5.
6.2. The Fund represents that each Designated Portfolio is or will be
qualified as a Regulated Investment Company under Subchapter M of the Code, and
that it will make every effort to maintain such qualification (under Subchapter
M or any successor or similar provisions) and that it will notify the Company
immediately upon having a reasonable basis for believing that a Designated
Portfolio has ceased to so qualify or that it might not so qualify in the
future.
6.3. The Company represents that the Contracts are currently, and at the
time of issuance shall be, treated as life insurance or annuity 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 and the
Underwriter immediately upon having a reasonable basis for believing the
Contracts have ceased to be so treated or that they might not be so treated in
the future. The Company agrees that any prospectus offering a contract that is a
"modified
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endowment contract" as that term is defined in Section 7702A of the Code (or any
successor or similar provision), shall identify such contract as a modified
endowment contract.
ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict among 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 insurance laws or
regulations; (c) a tax ruling or provision of the Internal Revenue Code or the
regulations thereunder; (d) any other development relating to the tax treatment
of insurers, Contract or policy owners or beneficiaries of variable annuity
contracts or variable life insurance policies; (e) the manner in which the
investments of any Designated Portfolio are being managed; (f) a difference in
voting instructions given by variable annuity contract holders, on the one hand,
and variable life insurance policy owners, on the other hand, or by the contract
holders or policy owners of different Participating Insurance Companies; or (g)
a decision by a Participating Insurance Company to disregard the voting
instructions of its Contract owners. The Board shall promptly inform the Company
by written notice if it determines that an irreconcilable material conflict
exists and the implications thereof
7.2. The Company and the Adviser will report any potential or existing
conflicts of which it is aware to the Board. The Company 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 the Company to inform the Board whenever Contract
owner voting instructions are disregarded. At least annually, and more
frequently if deemed appropriate by the Board, the Company shall submit to the
Adviser, and the Adviser shall at least annually submit to the Board, such
reports, materials and data as the Board may reasonably request so that the
Board may fully carry out the obligations imposed upon it by the conditions
contained in the Mixed and Shared Funding Exemptive Order; and said reports,
materials and data shall be submitted more frequently if deemed appropriate by
the Board. The responsibility to report such information and conflicts to the
Board will be carried out with a view only to the interests of the Contract
owners.
7.3. If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), 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 Designated 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.
-12-
7.4. If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Separate
Account's investment in any Designated Portfolio and terminate this Agreement
with respect to such Separate 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
disinterested members of the Board. The Company will bear the cost of any
remedial action, including such withdrawal and termination. 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 Fund shall continue to accept and implement orders by
the Company for the purchase (and redemption) of shares of such Designated
Portfolio.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Separate Account's investment in the Fund and terminate this Agreement
with respect to such Separate Account within six months after the Board informs
the Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. Until the end of the foregoing six month period, the Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of such Designated Portfolios.
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.
The Company shall not be required by Section 7.3 to establish a new funding
medium for the Contract 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 Board determines that any proposed
action does not adequately remedy any irreconcilable material conflict, then the
Company will withdraw an Separate Account's investment in any Designated
Portfolio and terminate this Agreement within six (6) months after the Board
informs the Company in writing of the foregoing determination; provided,
however, that such withdrawal and termination shall be limited to the extent
required by any such material irreconcilable conflict as determined by a
majority of the disinterested members of the Board.
7.7. If and to the extent the Mixed and Shared Funding Exemption Order or
any amendment thereto contains terms and conditions different from Sections 3.4,
3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of this Agreement, then the Fund and/or the
Participating Insurance Companies, as appropriate, shall take such steps as may
be necessary to comply with the Mixed and Shared Funding Exemptive Order, and
Sections 3.4, 3.6, 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 the Mixed and Shared Funding Exemptive Order
or any amendment thereto. If and to the extent that Rule 6e-2 and Rule 6e-3(T)
are amended, or Rule 6e-3 or any similar rule 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
-13-
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 or any similar rule, as adopted, to the extent such rules
are applicable; and (b) Sections 3.4, 3.6, 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 the Company
(a) The Company agrees to indemnify and hold harmless the Fund, the
Adviser and the Underwriter and each of its trustees, directors, trustees and
officers, and each person, if any, who controls the Fund, the Adviser or
Underwriter within the meaning of Section 15 of the 1933 Act or who is under
common control with the Underwriter (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 Company) or litigation (including 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 Shares of the Designated Portfolios or the Contracts; and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statements of any material fact contained in the registration
statement, prospectus (which shall include an offering memorandum, if any), or
SAI 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 Company by or on behalf of the Fund for
use in the registration statement, prospectus or SAI for the Contracts or in the
Contracts or sales literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or Fund Shares; or
(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 of the Fund not supplied by the
Company or persons under its control) or wrongful conduct of the Company or its
agents or persons under the Company's authorization or control, or any affiliate
thereof, 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 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
-14-
not misleading if such a statement or omission was made in reliance upon
information furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any material failure by the Company 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 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 Company in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Company.
as limited by and in accordance with the provisions of
Sections 8.l(b), 8.l(c) and 8.1(d) hereof.
(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, 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 gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of its obligations or duties under this Agreement.
(c) The Company 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 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 such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability that 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 Company
has been materially prejudiced by such failure to give notice. In case any such
action is brought against an Indemnified Party, the Company shall be entitled to
participate, at its own expense, in the defense of such action. The Company also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action and to settle the claim at its own expense;
provided, however, that no such settlement shall, without the Indemnified
Parties' written consent, include any factual stipulation referring to the
Indemnified Parties or their conduct. After notice from the Company to such
party of the Company'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 Company 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, but, in case the Company does not elect to assume the defense of
any such suit, the Company will reimburse the Fund, such officers, trustees and
directors or controlling person or persons, defendant or defendants in such
suit, for the reasonable fees and expenses of any counsel retained by them.
(d) The Indemnified Parties will promptly notify the Company 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.
-15-
8.2. Indemnification by the Underwriter
(a) The Underwriter agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who controls the
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 the Underwriter) or litigation (including 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 Shares of the Designated Portfolios 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 of the Fund (or any amendment
or supplement to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated 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 Underwriter or Fund by or on behalf of the Company for use in the
registration statement, prospectus or SAI for the Fund or in sales literature
(or any amendment or supplement) 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 or sales literature for the Contracts not supplied by
the Underwriter or persons under its control) or wrongful conduct of the Fund or
Underwriter 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 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 to the Company by or on behalf of the Fund
or the Underwriter; or
(iv) arise as a result of any failure by the Fund or the
Underwriter to provide the services and furnish the materials under the terms of
this Agreement (including a failure of the Fund, 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 Underwriter in this Agreement or
arise out of or result from any other material breach of this Agreement by the
Underwriter;
-16-
as limited by and in accordance with the provisions of
Sections 8.2(b), 8.2(c) and 8.2(d) hereof.
(b) The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, 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 gross negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Adviser, the Underwriter or the Separate Account,
whichever is applicable.
(c) The Underwriter 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 Underwriter 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 Underwriter of
any such claim shall not relieve the Underwriter 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
Underwriter has been prejudiced by such failure to give notice. In case any such
action is brought against the Indemnified Party, the Underwriter will be
entitled to participate, at its own expense, in the defense thereof. The
Underwriter also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action and to settle the claim at its own
expense; provided, however, that no such settlement shall, without the
Indemnified Parties' written consent, include any factual stipulation to the
Indemnified Parties or their conduct. After notice from the Underwriter to such
party of the Underwriter'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 Underwriter 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.
(d) The Company agrees promptly to notify the Underwriter 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 Separate Account.
8.3. Indemnification By the Fund
(a) The Fund agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who controls the
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, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation (including legal
and other expenses) to which the Indemnified Parties may be required to pay or
may 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:
-17-
(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), 8.3(c) and 8.3(d) hereof.
(b) The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, 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 gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to the
Company, the Fund, the Adviser, the Underwriter or the Account, whichever is
applicable.
(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 the Fund 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 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 also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action and
to settle the claim at its own expense; provided, however, that no such
settlement shall, without the Indemnified Parties' written consent include any
factual stipulation referring to the Indemnified Parties or their conduct. 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.
(d) The Company, the Adviser and the Underwriter agree promptly to
notify the Fund of the commencement of any litigation or proceeding against it
or any of its respective officers or trustees in connection with the Agreement,
the issuance or sale of the Contracts, the operation of any Separate Account, or
the sale or acquisition of Shares of the Fund.
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 Commonwealth of
Massachusetts.
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9.2. This Agreement shall be subject to the applicable 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, any Mixed and Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed in accordance
therewith. If, in the future, the Mixed and Shared Funding Exemptive Order
should no longer be necessary under applicable law, then Article VII shall no
longer apply.
ARTICLE X. Termination
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, for any reason with respect to some or
all Designated Portfolios, by three (3) months advance written notice delivered
to the other parties; or
(b) termination by the Company by written notice to the Fund, the
Adviser and the Underwriter based upon the Company's reasonable and good faith
determination that Shares of any Designated Portfolio are not reasonably
available to meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund, the
Adviser and the Underwriter in the event any of the Designated Portfolio's
Shares are not registered, issued or sold in accordance with applicable state
and/or federal securities laws or such law precludes the use of such Shares as
the underlying investment media of the Contracts issued or to be issued by the
Company; or
(d) termination by the Fund, the Adviser or Underwriter in the event
that formal administrative proceedings are instituted against the Company or any
affiliate by the NASD, the SEC, the Insurance Commissioner or like official of
any state or any other regulatory body regarding the Company's duties under this
Agreement or related to the sale of the Contracts, the operation of any Separate
Account, or the purchase of the Fund's Shares; provided, however, that the Fund,
the Adviser or Underwriter 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 Company to perform its obligations under this
Agreement; or
(e) termination by the Company in the event that formal administrative
proceedings are instituted against the Fund, the Adviser or Underwriter by the
NASD, the SEC, or any state securities or insurance department or any other
regulatory body; provided, however, that the Company 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 or Underwriter to
perform its obligations under this Agreement; or
(f) termination by the Company by written notice to the Fund, the
Adviser and the Underwriter with respect to any Designated Portfolio in the
event that such Portfolio ceases to qualify as a Regulated Investment Company
under Subchapter M or fails to comply with the Section 817(h) diversification
requirements specified in Article VI hereof, or if the Company reasonably
believes that such Designated Portfolio may fail to so qualify or comply; or
-19-
(g) termination by the Fund, the Adviser or Underwriter by written
notice to the Company in the event that the Contracts fail to meet the
qualifications specified in Article VI hereof; or
(h) termination by any of the Fund, the Adviser or the Underwriter by
written notice to the Company, if any of the Fund, the Adviser or the
Underwriter respectively, shall determine, in their sole judgment exercised in
good faith, that the Company has suffered a material adverse change in its
business, operations, financial condition, insurance company rating or prospects
since the date of this Agreement; or
(i) termination by the Company by written notice to the Fund, the
Adviser and the Underwriter, if the Company shall determine, in its sole
judgment exercised in good faith, that the Fund, the Adviser or the Underwriter
has suffered a material adverse change in its business, operations, financial
condition or prospects since the date of this Agreement or is the subject of
material adverse publicity, and that material adverse change or publicity will
have a material effect on the Fund's or the Underwriter's ability to perform its
obligation under this Agreement; or
(j) termination by the Company upon any substitution of the Shares of
another investment company or series thereof for Shares of a Designated
Portfolio of the Fund in accordance with the terms of the Contracts, provided
that the Company has given at least 45 days prior written notice to the Fund and
Underwriter of the date of substitution; or
(k) termination by any party in the event that the Fund's Board of
Trustees determines that a material irreconcilable conflict exists as provided
in Article VII; or
(l) at the option of the Company, as one party, or the Fund, the
Adviser and the Underwriter, as one party, upon the other party's material
breach of any provision of this Agreement upon 30 days' written notice and the
opportunity to cure within such notice period; or
(m) at the option of the Fund or the Adviser in the event the
Contracts are not treated as annuity contracts under applicable provisions of
the Code.
10.2. Notwithstanding any termination of this Agreement, the Fund and the
Underwriter shall, at the option of the Company, continue, for a one year period
from the date of termination and from year to year thereafter if deemed
appropriate by the Fund and the Adviser, to make available additional Shares of
a Designated Portfolio 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"), unless the
Underwriter elects to compel a substitution of other securities for the Shares
of the Designated Portfolios. Specifically, the owners of the Existing Contracts
may be permitted to reallocate investments in the Designated Portfolios, redeem
investments in the Designated Portfolios and/or invest in the Designated
Portfolios upon the making of additional purchase payments under the Existing
Contracts (subject to any such election by the Underwriter). The parties agree
that this Section 10.2 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. The parties further agree that this Section 10.2 shall not apply
to any terminations under Section 10.1(d),(g) or (m) of this Agreement.
-20-
10.3. The Company shall not redeem Fund Shares attributable to the
Contracts (as opposed to Fund Shares attributable to the Company's assets held
in the Separate Account) except (i) as necessary to implement Contract owner
initiated or approved transactions, (ii) 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"), (iii) as permitted
by an order of the SEC pursuant to Section 26(c) of the 1940 Act, but only if a
substitution of other securities for the Shares of the Designated Portfolios is
consistent with the terms of the Contracts, or (iv) as permitted under the terms
of the Contract. Upon request, the Company will promptly furnish to the Fund and
the Underwriter reasonable assurance that any redemption pursuant to clause (ii)
above is a Legally Required Redemption. Furthermore, except in cases where
permitted under the terms of the Contacts, the Company 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
Underwriter 45 days notice of its intention to do so.
10.4. Notwithstanding any termination of this Agreement, each party's
obligation under Article VIII to indemnify the other parties shall survive.
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 II
Two International Place
Boston, MA 02110-4103
Attn.: Secretary
If to the Company:
GE Life and Annuity Assurance Company
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Office of General Counsel
-21-
If to Underwriter:
Xxxxxxx Distributors, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn.: Secretary
If to the Adviser:
Deutsche Investment Management Americas Inc.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn.: Secretary
ARTICLE XII. Miscellaneous
12.1. The Fund's name is the designation of the Board for the time being
under a Declaration of Trust, as amended, and all persons dealing with the Fund
must look solely to the property of the Fund, and in the case of a series
company, the respective Designated Portfolios listed on Schedule B hereto as
though each such Designated Portfolio had separately contracted with the Company
and the Underwriter for the enforcement of any claims against the Fund. The
parties agree that neither the Board, officers, agents or shareholders of the
Fund assume any personal liability or responsibility for obligations entered
into by or on behalf of the Fund. No Portfolio shall be liable for any
obligations properly attributable to any other Portfolio.
12.2. 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 until such time as such information has come into the
public domain.
12.3. 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.
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5. This Agreement incorporates the entire understanding and agreement
among the parties hereto, and supersedes any and all prior understandings and
agreements between the parties hereto with respect to the subject matter hereof.
12.6. 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.
-22-
12.7. 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 State 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 annuity
operations of the Company are being conducted in a manner consistent with the
State variable annuity laws and regulations and any other applicable law or
regulations.
12.8. 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.
12.9. 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.
12.10. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee copies of the following reports upon request:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under generally accepted
accounting principles) filed with any state or federal regulatory body or
otherwise made available to the public, as soon as practicable and in any event
within 90 days after the end of each fiscal year; and
(b) any registration statement (without exhibits) and financial
reports of the Company filed with the SEC or any state regulatory agency, as
soon as practicable after the filing thereof.
12.11. The Fund shall furnish, or shall cause to be furnished, to the
Company or its designee copies of the following reports upon request;
(a) the Fund's annual statement and annual reports as filed with any
state or federal regulatory body or otherwise made available to the public, as
soon as practicable and in any event within 90 days after the end of each fiscal
year.
(b) any registration statement (including exhibits) and financial
reports of the Funds filed with the SEC or any state regulatory agency, as soon
as practicable after the filing thereof.
12.12. All persons are expressly put on notice of the Fund's Agreement and
Declaration of Trust and all amendments thereto, all of which are on file with
the Secretary of the Commonwealth of Massachusetts, and the limitation of
shareholder and trustee liability contained therein. This Agreement has been
executed by and on behalf of the Fund by its representatives as such
representatives and not individually, and the obligations of the Fund with
respect to a Designated Portfolio hereunder are not binding upon any of the
trustees, officers or shareholders of the Fund individually, but are binding
upon only the assets and property of such Designated Portfolio. All parties
dealing with the Fund with respect to a Designated Portfolio
-23-
shall look solely to the assets of such Designated Portfolio for the enforcement
of any claims against the Fund hereunder.
12.13. The Company is expressly put on notice that prospectus disclosure
regarding the potential risks of mixed and shared funding may be appropriate.
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 and its seal to be hereunder affixed hereto as of the date first
above written.
COMPANY:
By its authorized officer
By: /s/ Illegible
---------------------------------
Title: Sr. V.P
FUND:
By its authorized officer
By: /s/ Illegible
---------------------------------
Title: Vice President
UNDERWRITER:
By its authorized officer
By: /s/ Illegible
---------------------------------
Title: Vice President
ADVISER:
By its authorized officer
By: /s/ Illegible
---------------------------------
Title: Managing Director
-24-
SCHEDULE A
Name of Separate Account and Date Established by Board of Directors
GE Life & Annuity Separate Account 4 - August 19, 1987
Contracts Funded by Separate Account
GE Foundation (1933 Act File No. 333-31172, Form #P1154)
-25-
SCHEDULE B
DESIGNATED PORTFOLIOS
AND CLASSES THEREOF
1. Xxxxxxx Variable Series II - Xxxxxxx Technology Growth Portfolio - Class B
Shares
2. Xxxxxxx Variable Series II - SVS Dreman High Return Equity Portfolio -
Class B Shares
3. Xxxxxxx Variable Series II - SVS Dreman Small Cap Value Portfolio - Class B
Shares
-26-
SCHEDULE C
EXPENSES
================================================================================
PARTY
RESPONSIBLE
ITEM FUNCTION FOR EXPENSE
================================================================================
FUND PROSPECTUS
--------------------------------------------------------------------------------
Update Typesetting Fund
--------------------------------------------------------------------------------
New Sales: Printing Company
Distribution Company
--------------------------------------------------------------------------------
Existing Owners: Printing Fund
Distribution Fund
--------------------------------------------------------------------------------
STATEMENTS OF Same as Prospectus
ADDITIONAL
INFORMATION
--------------------------------------------------------------------------------
PROXY MATERIALS OF THE Typesetting Fund
FUND
Printing Fund
Distribution Fund
--------------------------------------------------------------------------------
ANNUAL REPORTS AND
OTHER COMMUNICATIONS
WITH SHAREHOLDERS OF
THE FUND
--------------------------------------------------------------------------------
All Typesetting Fund
--------------------------------------------------------------------------------
Marketing/1/ Printing Company
Distribution Company
================================================================================
----------
/1/ Solely as it relates to the contracts listed on Schedule A, as it is
attached to the same Agreement as this Schedule C.
-27-
================================================================================
Existing Owners: Printing Fund
Distribution Fund
--------------------------------------------------------------------------------
OPERATIONS OF FUND All operations and related expenses, Fund
including the cost of registration and
qualification of the Fund's shares,
preparation and filing of the Fund's
prospectus and registration statement,
proxy materials and reports, the
preparation of all statements and notices
required by any federal or state law and
all taxes on the issuance of the Fund's
shares, and all costs of management of
the business affairs of the Fund.
--------------------------------------------------------------------------------
-28-
