EXHIBIT 9(a)(3)
AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT, made and entered into as
of this 16th day of December, 1996, supplementing and amending the Participation
Agreement made and entered into the 19th day of May, 1995 (the "Original
Participation Agreement," and together with this Amendment No. 1, the
"Agreement") by and between XXXXXX ADVISORS TRUST, an unincorporated business
trust formed under the laws of Massachusetts (the "Trust"), and PROVIDIAN LIFE
AND HEALTH INSURANCE COMPANY, (formerly named National Home Life Assurance
Company) a Missouri life insurance company (the "Company"), on its own behalf
and on behalf of each separate account of the Company identified in the
Agreement.
WHEREAS, the Trust currently serves as an investment vehicle for certain
accounts of the Company pursuant to the Original Participation Agreement; and
WHEREAS, the Trust has applied for an order from the Securities and
Exchange Commission (the "SEC") (File No. 812-10198), granting Participating
Insurance Companies (as defined in the Original Participation Agreement) and
variable annuity and variable life separate accounts exemptions from the
provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act (as defined
in the Original Participation Agreement) and Rules 6e-2(b)(15) and 6e-
3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Trust
and each Series thereof to be sold to and held by variable annuity and variable
life insurance separate accounts of life insurance companies that may or may not
be affiliated with one another and qualified pension and retirement plans
outside of the separate account context (the "Exemptive Order"); and
WHEREAS, the Company and the Trust have agreed to hereby supplement and
amend the Original Participation Agreement in order to reflect the conditions
and undertakings that are expected to be imposed on the Company and the Trust by
virtue of such Exemptive Order;
NOW, THEREFORE, in consideration of their mutual promises, the Trust and
the Company agree as follows:
SECTION 1. Definitions
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For all purposes of this Amendment No. 1, except as otherwise expressly
provided or unless the context otherwise requires:
(1) All references in this Amendment No. 1 and the Original Participation
Agreement to designated "Articles" and other subdivisions are to the designated
Articles and other subdivisions of the Original Participation Agreement. The
words "herein," "hereof," "hereto," "hereby" and "hereunder" and other words of
similar import refer to this Amendment No. 1 as a whole and not to any
particular "Section" or other subdivision.
(2) All terms used herein and not otherwise defined shall have the same
meanings as those given to such terms in the Original Participation Agreement,
and include the plural as well as the singular, and the Original Participation
Agreement is hereby amended to included any terms defined herein.
(3) Any references to the "Agreement" in the Original Participation
Agreement are hereby amended to include, collectively, the Original
Participation Agreement and this Amendment No. 1.
SECTION 2. Amendment to Article VII
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Article VII of the Original Participation Agreement is hereby amended to
read in its entirety as follows:
"ARTICLE VII. Potential Conflicts and Compliance With
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Exemptive Order
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7.1. The Trust Board will monitor the Trust for the existence of any
material irreconcilable conflict between the interests of the Contract
Owners of all Participating Accounts and of Qualified Participants
investing in the Trust and each Series thereof. A material irreconcilable
conflict may arise for a variety of reasons, including: (a) an action by
any state insurance regulatory authority; (b) a change in applicable
federal or state insurance, tax, or securities laws or regulations, or a
public ruling, private letter ruling, no-action or interpretative letter,
or any similar action by insurance, tax, or securities regulatory
authorities; (c) an administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of any Series are
managed; (e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract owners; (f) a decision by a
Participating Insurance Company to disregard the voting instructions of
contract owners; or (g) if applicable, a decision by a Qualified Entity to
disregard the voting instructions of Qualified Participants. The Trust
Board shall promptly inform the Company in writing if it determines that a
material irreconcilable conflict exists and the implications thereof.
7.2 The Company shall report any potential or existing conflicts to
the Trust Board. The Company will be responsible for assisting the Trust
Board in carrying out its responsibilities by providing the Trust Board
with all information reasonably necessary for the Trust Board to consider
any issues raised. This responsibility includes, but is not limited to, an
obligation by the Company to inform the Trust Board whenever it has
determined to disregard Contract Owner voting instructions. Such
responsibilities shall be carried out by the Participants with a view only
to the interests of Contract Owners.
7.3. If it is determined by a majority of the Trust Board, or a
majority of the members of the Trust Board who are not interested persons
of the Trust, the Investment Adviser or any sub-adviser to any of the
Series (the "Independent
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Trustees"), that a material irreconcilable conflict exists, the Company
shall, at its expense and to the extent reasonably practicable (as
determined by a majority of the Independent Trustees), take whatever steps
are necessary to remedy or eliminate the material irreconcilable conflict
including: (a) withdrawing the assets allocable to some or all of the
separate accounts from the Trust or any Series and reinvesting such assets
in a different investment medium, which may include another Series of the
Trust, or submitting the question of 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 (b) establishing a new registered management
investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract Owner voting instructions and
that decision represents a minority position or would preclude a majority
vote, the Company may be required, at the Trust's election, to withdraw the
Account's investment in the Trust and terminate this Agreement and no
charge or penalty will be imposed as a result of such withdrawal. 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 Investment Adviser and the Trust
shall continue to accept and implement orders by the 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 Company conflicts
with the majority of other state regulators, then the Company will withdraw
the Account's investment in the Trust and terminate this Agreement within
six months after the Trust Board informs the Company in writing that it has
determined that such decision has created a material irreconcilable
conflict. Until the end of the foregoing six month period, the Investment
Adviser and the Trust shall continue to accept and implement orders by the
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 material irreconcilable conflict, but in no
event will the Trust or the Investment Adviser 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 Contracts if an offer
to do so has been declined by vote of a majority of Contract Owners
materially adversely affected by the material irreconcilable conflict. In
the event that the Trust Board determines that any proposed action does not
adequately remedy any material irreconcilable
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conflict, then the Company will withdraw the Account's investment in the
Trust and terminate this Agreement within six (6) months after the Trust
Board informs the Company in writing of the foregoing determination.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of
the 1940 Act or the rules promulgated thereunder with respect to mixed or
shared funding (as defined in the Exemptive Order) on terms and conditions
materially different from those contained in the Exemptive Order, then (a)
the Trust and/or the Company, as appropriate, shall take such steps as may
be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule
6e-3, as adopted, to the extent such rules are applicable; and (b) Article
V and Sections 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.
7.8 The Company shall at least annually submit to the Trust Board such
reports, materials or data as the Trust Board may reasonably request so
that the Trust Board may fully carry out its obligations under the
Exemptive Order; provided, however, that the Board may require the
submission of such reports on data on a more frequent basis if it so deems
appropriate.
7.9 The Company, or any affiliate, will maintain at its home office,
available to the SEC, (a) a list of its officers, directors and employees
who participate directly in the management of administration of any Account
and/or (b) a list of its agents who, as registered representatives, offer
and sell Contracts."
SECTION 3. Schedules
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Schedules 1, 2 and 3 to the Original Participation Agreement are hereby
amended to read as Schedules 1, 2 and 3 to this Amendment No.1, respectively.
SECTION 4. Miscellaneous
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4.1 The captions in this Amendment No. 1 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.
4.2 This Amendment No. 1 may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.
4.3 If any provision of this Amendment No. 1 shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
No. 1 to be executed in its name and behalf by its duly authorized office on the
date specified below.
PROVIDIAN LIFE AND
HEALTH INSURANCE COMPANY
(Company)
Date: December 16, 1996 By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
XXXXXX ADVISORS TRUST
(Trust)
Date: December 16, 1996 By: /s/ Xxxxxxx X. XxXxxxx
Name: Xxxxxxx X. XxXxxxx
Title: Senior Vice President
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