Exhibit 23(h)(5)
Participation Agreement with Transamerica Life Insurance Company, Transamerica
Financial Life Insurance Company and Monumental Life Insurance Company, dated
July 1, 1992, as amended May 1, 2009
AMENDMENT NO. 40 TO
PARTICIPATION AGREEMENT AMONG
TRANSAMERICA SERIES TRUST,
TRANSAMERICA LIFE INSURANCE COMPANY,
TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY, AND
MONUMENTAL LIFE INSURANCE COMPANY
The Participation Agreement, dated July 1, 1992, as amended ("Agreement")
among Transamerica Series Trust (the "Fund"), Transamerica Life Insurance
Company ("Transamerica"), Transamerica Financial Life Insurance Company
("TFLIC"), and Monumental Life Insurance Company ("Monumental") is hereby
amended as follows:
Schedule A of the Agreement is deleted in its entirety and replaced with
the following Amended Schedule A:
AMENDED SCHEDULE A
Effective May 1, 2009
Account(s), Policy(ies) and Portfolio(s)
Subject to the Participation Agreement
ACCOUNTS: Separate Account VA B
Separate Account VA BNY
Mutual Fund Account
Separate Account VA A
Separate Account VA C
Separate Account VA CC
Separate Account VA D
Separate Account VA EE
Retirement Builder Variable Annuity Account
TFLIC Separate Account C
Separate Account VUL-A
TFLIC Series Life Account
TFLIC Series Annuity Account
Separate Account VA E
Separate Account VA F
Separate Account VUL-1 of Transamerica Life insurance Company
Separate Account VUL-2 of Transamerica Life insurance Company
Separate Account VUL-3 of Transamerica Life insurance Company
Separate Account VUL-4 of Transamerica Life insurance Company
Separate Account VUL-5 of Transamerica Life insurance Company
Separate Account VUL-6 of Transamerica Life insurance Company
Separate Account VA-8
Separate Account VA J
TA PPVUL 1
Separate Account VA K
Separate Account VA-2LNY
Separate Account VA-2L
Separate Account VL A
AES Private Placement VA Separate Account
Separate Account VA L
Separate Account VA P
PFL Corporate Account One
Separate Account VA R
Separate Account VA S
Separate Account VA Q
ACCOUNTS: (Continued)
Separate Account VA GNY
Separate Account VA HNY
Separate Account VA QNY
Separate Account VA W
Separate Account VA WNY
Separate Account VA YNY
Separate Account VA WM
TFLIC Separate Account VNY
Separate Account VA X
Separate Account VA Y
Separate Account VA Z
Separate Account VA-6
Separate Account VA-6NY
Separate Account VA-7
Separate Account VL
Transamerica Occidental Separate Account Two
Transamerica Corporate Separate Account Sixteen
Separate Account Fund B
Separate Account Fund C
POLICIES: Transamerica Landmark Variable Annuity
Transamerica Landmark NY Variable Annuity
The Atlas Portfolio Builder Variable Annuity
Transamerica Extra Variable Annuity
Transamerica Access Variable Annuity
Retirement Income Builder II Variable Annuity
Advisor's Edge(R) Variable Annuity
Advisors's Edge Select(R) Variable Annuity
Advisor's Edge(R) Variable Annuity (NY)
Legacy Builder Plus
TFLIC Financial Freedom Builder
Transamerica Elite
Privilege Select Variable Annuity
Estate Enhancer Variable Life
TransMark Optimum Choice Variable Annuity
TFLIC Freedom Elite Builder
TFLIC Freedom Premier(SM)
Immediate Income Builder II
Premier Asset Builder Variable Annuity
TFLIC Freedom Wealth Protector
Advantage V
Retirement Income Builder Variable Annuity
Retirement Income Builder - BAI Variable Annuity
Dreyfus/Transamerica Triple Advantage(R) Variable Annuity (NY)
Dreyfus/Transamerica Triple Advantage(R) Variable Annuity
Advisor's Edge Select Private Placement
Transamerica Preferred Advantage Variable Annuity
Portfolio SelectSM Variable Annuity
Flexible Premium Variable Annuity - A
Flexible Premium Variable Annuity - B
Flexible Premium Variable Annuity - C
Flexible Premium Variable Annuity - D
Flexible Premium Variable Annuity - E
POLICIES: (Continued)
Flexible Premium Variable Annuity - G
TFLIC Freedom Elite Builder II
Flexible Premium Variable Annuity - H
Advisor's Edge(R) NY Variable Annuity
Flexible Premium Variable Annuity - I
Flexible Premium Variable Annuity - J
Flexible Premium Variable Annuity - K
Flexible Premium Variable Annuity - L
Flexible Premium Variable Annuity - N
Flexible Premium Variable Annuity - O
Flexible Premium Variable Annuity - P
Flexible Premium Variable Annuity - GM
Transamerica Freedom Variable Annuity
TransAccumulator(R) VUL
TransAccumulator(R) VUL II
TransUltra(R) VUL
Transamerica Classic(R) Variable Annuity
Transamerica Catalyst(R) Variable Annuity
Transamerica Classic(R) Variable Annuity (NY)
Transamerica Bounty(R) Variable Annuity
Transamerica Extra Variable Annuity
Transamerica Freedom Variable Annuity
Inheritance Builder Plus
TransEquity(R)
TransEquity II
Advantaage VI
Advantage SE
Advantage X
TransSurvivor(SM) VUL
Transamerica Lineage(R)
Transamerica Tribute(R)
PORTFOLIOS: TRANSAMERICA SERIES TRUST - EACH PORTFOLIO HAS AN
INITIAL CLASS AND A SERVICE CLASS OF SHARES EXCEPT AS NOTED
Transamerica American Century Large Company Value VP
Transamerica Asset Allocation - Conservative VP
Transamerica Asset Allocation - Growth VP
Transamerica Asset Allocation - Moderate VP
Transamerica Asset Allocation - Moderate Growth VP
Transamerica Balanced VP
Transamerica BlackRock Large Cap Value VP
Transamerica BlackRock Global Allocation VP (Initial Class Shares currently not
being offered)
Transamerica BlackRock Tactical Allocation VP (Initial Class Shares currently not
being offered)
Transamerica Capital Guardian Value VP
Transamerica Clarion Global Real Estate Securities VP
Transamerica Convertible Securities VP
Transamerica Efficient Markets VP
Transamerica Equity VP
Transamerica Equity II VP (Service Class Shares currently not being offered)
Transamerica Federated Market Opportunity VP
PORTFOLIOS: TRANSAMERICA SERIES TRUST - EACH PORTFOLIO HAS AN INITIAL
CLASS AND A SERVICE CLASS OF SHARES EXCEPT AS NOTED (Continued)
Transamerica Foxhall Emerging Markets/Pacific Rim VP
Transamerica Foxhall Global Conservative VP
Transamerica Foxhall Global Growth VP
Transamerica Foxhall Global Hard Asset VP
Transamerica Growth Opportunities VP
Transamerica ▇▇▇▇▇▇ Balanced VP
Transamerica ▇▇▇▇▇▇ Growth VP
Transamerica ▇▇▇▇▇▇ Growth and Income VP
Transamerica ▇▇▇▇▇▇ Managed Income VP
Transamerica Index 50 VP
Transamerica Index 75 VP
Transamerica International Moderate Growth VP
Transamerica JPMorgan Core Bond VP
Transamerica JPMorgan Enhanced Index VP
Transamerica JPMorgan Mid Cap Value VP
Transamerica ▇▇▇▇▇▇▇▇ Growth VP
Transamerica ▇▇▇▇ ▇▇▇▇▇ Partners All Cap VP
Transamerica MFS High Yield VP
Transamerica MFS International Equity VP
Transamerica ▇▇▇▇▇▇▇ Growth VP
Transamerica Money Market VP
Transamerica Munder Net50 VP
Transamerica PIMCO Total Return VP
Transamerica ProFund UltraBear VP (Initial Class Shares currently not being offered)
Transamerica Science & Technology VP
Transamerica Small/Mid Cap Value VP
Transamerica ▇. ▇▇▇▇ Price Equity Income VP
Transamerica ▇. ▇▇▇▇ Price Growth Stock VP
Transamerica ▇. ▇▇▇▇ Price Small Cap VP
Transamerica ▇▇▇▇▇▇▇▇▇ Global VP
Transamerica Third Avenue Value VP
Transamerica U.S. Government Securities VP
Transamerica Value Balanced VP
Transamerica ▇▇▇ ▇▇▇▇▇▇ Active International Allocation VP
Transamerica ▇▇▇ ▇▇▇▇▇▇ Large Cap Core VP
Transamerica ▇▇▇ ▇▇▇▇▇▇ Mid-Cap Growth VP
(Signatures on following page)
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and on its behalf by its duly authorized representative,
effective as of May 1, 2009.
TRANSAMERICA SERIES TRUST TRANSAMERICA LIFE INSURANCE COMPANY
By its authorized officer, By its authorized officer,
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Title: Vice President
TRANSAMERICA FINANCIAL MONUMENTAL LIFE INSURANCE
LIFE INSURANCE COMPANY COMPANY
By its authorized officer, By its authorized officer,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Title: Vice President
PARTICIPATION AGREEMENT
Among
WRL SERIES FUND, INC.,
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO,
and
PFL LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into this .1st day of July, 1992 by and among
PFL LIFE INSURANCE COMPANY, an Iowa corporation (hereinafter the "Company") on
Its own behalf and on behalf of the PFL Endeavor Variable Annuity Account, and
other segregated asset accounts of the Company (hereinafter the "Account(s)"),
and WRL SERIES FUND, INC., a Maryland corporation (hereinafter the "Fund"), and
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO, an Ohio corporation and an affiliate
of the Company (hereinafter "WRL").
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for the Account(s),
and other separate accounts established for variable life insurance policies and
variable annuity contracts of WRL and its affiliates; and
WHEREAS, shares of common stock of the Fund are divided into several series of
shares each designated a "Portfolio" or collectively, "Portfolios," arid each
representing the interests in a particular managed pool of securities and other
assets; and
WHEREAS, the Fund is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "l940 Act") and its
shares are registered under the Securities Act of 1933, as amended (hereinafter
the "1933 Act"); and
WHEREAS, WRL is duly registered as an investment adviser under the federal
Investment Advisers Act of 1940 and any applicable state securities law, and is
the Fund's investment adviser; and
WHEREAS, the Company has registered or will register certain variable annuity
and/or life insurance contracts under the 1933 Act (hereinafter, individually,
the "Policy" or, collectively, the "Policies"); and
WHEREAS, the Account(s) are duly organized, validly existing segregated asset
account(s), established by resolution of the Board of Directors of the Company,
to set aside and invest assets attributable to the aforesaid variable annuity
and/or life insurance contracts that are allocated to the Account(s) (the
Policies and the Account(s) covered by this Agreement, and each corresponding
Portfolio covered by this Agreement in which the Account(s) invest(s), is
specified in Schedule A attached hereto as may be modified from time to time);
and
WHEREAS, the Company has registered or will register the Account(s) as unit
investment trust(s) under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in one or more of the Portfolios
specified in Schedule A attached hereto (the 'Shares") on behalf of :the
Account(s) to fund the Policies, and the Fund intends to sell such Shares to the
Account(s) at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Fund, WRL and the
Company agree as follows:
ARTICLE I. Sale of Fund Shares
--------------------
1.1. The Fund agrees to sell to the Company those Shares which the Account(s)
orders and which are available for purchase by such Account, executing such
orders on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the order for the Shares. For purposes of this
Section 1.1, the Company shall be the designee of the Fund for receipt of such
orders from Policy owners and receipt by such designee shall constitute receipt
by the Fund; provided that the Fund receives notice of such order by 9:30 a.m.
New York time on the next following Business Day "Business Day" shall mean any
day on which 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 Securities and
Exchange Commission (the "SEC").
1.2. The Fund agrees to make the Shares available indefinitely for purchase at
the applicable net asset value per share by the Company and the Account(s) on
those days on which the Fund calculates its net asset value pursuant to rules of
the SEC and the Fund shall use reasonable efforts to calculate such net asset
value on each day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Directors of the Fund (hereinafter
the "Board") may refuse to sell any Shares to the Company and the Account(s), or
suspend or terminate the offering of the Shares if such action is required by
law or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Board acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, necessary in the best
interests of the shareholders of such Portfolio.
1.3. The Fund agrees that the Shares will be sold only to the Company and the
Account(s) and/or WRL and its separate accounts. In addition, the Shares may be
sold to other insurance companies affiliated with WRL or their separate accounts
only with the express written consent of WRL. The Shares will not be sold to the
general public or to other investors. Nothing herein shall prohibit the-Company
from establishing separate accounts or subaccounts of separate accounts which
purchase shares from investment companies other than the Fund.
1.4. The Fund agrees to redeem for cash, on the Company's request, any full or
fractional Shares held by the Company, executing such requests on a daily basis
at the net asset value next computed after receipt by the Fund or its designee
of the request for redemption. For purposes of this Section 1.4, the Company
shall be the designee of the Fund for receipt of requests for redemption from
Policy owners and receipt by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of such request for redemption by 9:30
a.m New York time on the next following Business Day.
1.5. The Company shall pay for the Shares by 2:00 p.m. New York time on the next
Business Day after an order to purchase the Shares is made in accordance with
the provisions of Section 1.1 hereof. Payment shall be in federal funds
transmitted by wire or by a credit for any Shares redeemed. For purpose of
Section 2.9, upon receipt by the Fund of the federal funds so wired, such funds
shall cease to be the responsibility of the Company and shall become the
responsibility of the Fund.
1.6. Issuance and transfer of the Shares will be by book entry only. Stock
certificates will not be issued to the Company or the Account(s). The Shares
ordered from the Fund will be recorded in an appropriate title for the
Account(s) or the appropriate subaccount of the Account(s).
1.7. The Fund shall furnish same day notice (by wire or telephone followed by
written confirmation) to the Company of any income, dividends or capital gain
distributions payable on the Shares. The Company hereby elects to receive all
such dividends and distributions as are payable on a Portfolios Shares in
additional Shares of that Portfolio. The Fund shall notify the Company of the
number of Shares so issued as payment of such dividends and distributions.
1.8. The Fund or its custodian shall make the net asset value per share for each
Portfolio available to the Company on each Business Day as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6:30 pm. New
York time.
ARTICLE II. Representations and Warranties
-------------------------------
2.1. The Company represents and warrants that the Policies are or will be
registered under the 1933 Act, and that the Policies will be issued, sold, and
distributed in compliance in all material respects with all applicable state and
federal laws, including without limitation the 1933 Act, the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and the 1940 Act. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established, the PFL Endeavor Variable Annuity Account as a segregated asset
account under Iowa law and has registered or, prior to any issuance or sale of
the Policies, will register the Account(s) as unit investment trust(s) in
accordance with the provisions of the 1940 Act (unless exempt therefrom) to
serve as a segregated investment account(s) for the Policies, and that it will
maintain such registration(s) for so long as any Policies are outstanding.
The Company shall amend the registration statement(s) under the 1933 Act for the
Policies and the registration statement(s) under the 1940 Act for the Account(s)
from time to time as required in order to effect the continuous offering of the
Policies or as may otherwise be required by applicable law. The Company shall
register and qualify the Policies for sale in accordance with the securities
laws of the various states only if and to the extent deemed necessary by the
Company.
2.2 The Company represents that it believes, in good faith, that the Policies
are currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Code"1, that it will make every effort to
maintain such treatment and that it will notify the Fund and WRL immediately
upon having a reasonable basis for believing that the Policies have ceased to be
so treated or that they might not be so treated in the future.
2.3. The Fund and WRL each separately represents and warrants that the Shares
sold pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of Maryland and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the ▇▇▇▇ ▇▇▇. 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 its Shares. The Fund
shall register and qualify the Shares for sale in accordance with the laws of
the various states only if arid to the extent deemed necessary by the Fund, with
the concurrence of WRL.
2.4. The Fund and WRL each separately represents that each Portfolio of the Fund
is currently qualified or will be qualified as a Regulated Investment Company
under Subchapter M of the Code and that every effort will be made to maintain
such qualification (under Subchapter M or any successor or similar provision)
and that the Fund or WRL, as appropriate, will notify the Company orally
(followed by written notice) or by wire immediately upon having a reasonable
basis for believing that any Portfolio of the Fund has ceased to so qualify or
that any Portfolio might not so qualify in the future.
2.5. The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule l2b-l under the 1940 Act or otherwise,
although to the extent permitted and in conformity with the requirements under
the 1940 Act it may make such payments in the future.
2.6. The Fund represents that it will sell and distribute the Shares in
accordance in all material respects with all applicable state and federal
securities lass, including without limitation the 1933 Act, the 1934 Act, and
the ▇▇▇▇ ▇▇▇.
2.7. The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Maryland and that it does and will comply in all
material respects with the 1940 Act.
2.8. WRL represents and warrants that it is and shall remain duly registered
under all applicable federal and state securities laws and that it shall perform
its obligations for the Fund in compliance in all material respects with any
applicable state and federal securities laws.
2.9. The Fund and WRL each separately represents and warrants that, to the
extent required by Section 17(g) and Rule 17g-1 of the 1940 Act, or related
provisions as may be promulgated from time to time, all of its 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 minimal coverage as required
currently by Section 17(g) and Rule 17g-l of the 1940 Act or 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.
ARTICLE III. Prospectus and Proxy Statements; Voting
----------------------------------------
3.1. At least annually, the Fund or WRL, as appropriate, shall provide the
Company, free of charge, with as many copies of the current prospectus for the
Shares as the Company may reasonably request for distribution to existing Policy
owners whose Policies are funded by such Shares. The Fund or WRL, as
appropriate, shall provide the Company, at the Company's expense, with as many
copies of the current prospectus for the Shares as the Company may reasonable
request for distribution to prospective purchasers of Policies. If requested by
the Company in lieu thereof, the Fund or WRL, as appropriate, shall provide such
documentation (including a final "camera ready" copy of the new prospectus as
set in type at the expense of the Fund or WRL, as the case may be) and other
assistance as is reasonably necessary in order for the parties hereto once each
year (or more frequently if the prospectus for the Shares is supplemented or
amended) to have the prospectus for the Policies and the prospectus for the
Shares printed together in one document; the expenses of such printing to be
apportioned between (a) the Company, and (b) the Fund or WRL, as the case may
be, in proportion to the number of pages of the Policy and Shares' prospectuses,
taking account of other relevant factors affecting the expense of printing, such
as columns, charts, etc.; the Fund or WRL, as the case may be, to bear the cost
of printing the Shares' prospectus portion of such document for distribution to
owners of existing Policies funded by the Shares, and the Company to bear the
expenses of printing the portion of such document relating to the Account(s);
provided, however, that the Company shall bear all printing expenses of such
combined documents where used for distribution to prospective purchasers or to
owners of existing Policies not funded by the Shares.
3.2. The prospectus for the Shares shall state that the Statement of Additional
Information for the Shares is available from the Fund (or WRL). The Fund or WRL,
at its expense, as appropriate, shall print and provide such Statement to the
Company (or a master of such Statement suitable for duplication by the Company)
for distribution to any owner of a Policy funded by the Shares. WRL, at the
Company's expense, shall print and provide such Statement to the Company (or a
master of such Statement suitable for duplication by the Company) for
distribution to a prospective purchaser who requests such Statement or to an
owner of a Policy not funded by the Shares.
3.3. The Fund shall provide the Company free of charge copies, if and to the
extent applicable to the Shares, of the Fund's proxy material, reports to
Shareholders and other communications to Shareholders in such quantity as the
Company shall reasonably require for distributing to Policy owners.
3.4. Notwithstanding the provisions of Sections 3.1, 3.2, and 3.3 above, or of
Article V below, the Company shall pay the expense of printing or providing
documents to the extent such cost is considered a distribution expense.
Distribution expenses would include by way of illustration, but are not limited
to, the, printing of the Shares' prospectus for distribution to prospective
purchasers or to owners of existing Policies not funded by such Shares.
3.5. If and to the extent required by law, the Company shall:
(i) solicit voting instructions from Policy owners;
(ii) vote the Shares in accordance with instructions received from Policy
owners; and
(iii) vote the Shares for which no instructions have been received in the same
proportion as the Shares of such 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.
The Company reserves the right to vote the Shares held in the Account(s) in its
own right, to the extent permitted by law.
3.6. The process of soliciting Policy owners' voting instructions, tabulating
votes, etc. shall be conducted in accordance with Schedule B attached hereto.
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 in
which the Fund or the Fund's advisers are named, at least ten Business Days
prior to its use. No such material shall be used if the Fund or its designee
object to such use within ten Business Days after receipt of such material.
4.2. The Company shall not give any information or make any representations or
statements on behalf of the Fund or its advisers concerning the Fund or its
advisers in connection with the sale of the Policies other than the information
or representation contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus 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 except with the permission of the Fund. The Fund or its designee agrees
to respond to any request for approval on a prompt and timely basis.
4.3. WRL shall furnish, or shall cause to be furnished, to the Company or its
designee, each piece of sales literature or other promotional material in which
the Company and/or the Account(s) is named, at least ten Business Days prior to
its use. No such material shall be used if the Company or its designee object to
such use within ten Business Days after receipt of such material.
4.4. The Fund and WRL each separately agrees not to give any information or make
any representations on behalf of the Company or concerning the Company, the
Account(s), or the Policies other than information or representations contained
in a registration statement or prospectus for the Policies, as such registration
statement and prospectus may be amended or supplemented from time to time, or in
reports for the Account(s) which are in the public domain or approved by the
Company for distribution to Policy owners, or in sales literature or other
promotional material approved by the Company or its designee, except with the
permission of the Company. The Company or its designee agrees to respond to any
request for approval on a prompt and timely basis.
4.5. The Company and Fund (or WRL in lieu of the Fund, as appropriate) will each
provide to the other at least one complete copy of all registration statements,
prospectuses, Statements of Additional Information, reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no action letters, and all amendments to any of the above, that
relate to the Policies, or to the Fund or its Shares, prior to or
contemporaneously with the filing of such document with the SEC or other
regulatory authorities. The Company or Fund shall also each promptly inform the
other of the results of any examination by the SEC (or other regulatory
authorities) that relates to the Policies, the Fund or its Shares, and the party
that was the subject of the examination shall provide the other party with a
copy of any "deficiency letter" or other correspondence or written report
regarding any such examination.
4.6. For purposes of this Article IV, the phrase "sales literature or other
promotional material" means advertisements (such as material published, or
designed for use in, a newspaper, magazine, or other periodical, radio,
television, telephone or tape recording, videotape display, signs or billboard),
and sales literature (such as brochures, circulars, market letters and form
letters), distributed or made generally available to customers or the public,
educational or training materials or communications distributed or made
generally available to some or all agents or employees.
ARTICLE V. Fees and Expenses
------------------
5.1. Neither the Fund nor WRL shall pay any fee or other compensation to the
Company under this Agreement, and the Company shall pay no fee or other
compensation to the Fund or WRL, except that if the Fund or any Portfolio adopts
and implements a plan pursuant to Rule 12b-l under the 1940 Act to finance
distribution expenses, then, subject to obtaining any required exemptive orders
or regulatory approvals, the Fund may make payments to the Company or to the
underwriter for the Policies if and in
amounts agreed to by the Fund in writing (currently no such payments are
contemplated). Each party, however, shall, in accordance with the allocation of
expenses specified in Articles III and V hereof, reimburse other parties for
expenses initially paid by one party but allocated to another party.
5.2. The Fund or WRL, as appropriate, shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable federal and
state laws, including preparation and filing of the Fund's registration
statement, and payment of filing fees and registration fees; preparation and
filing of the Fund's proxy materials and reports to Shareholders; setting in
type and printing its prospectus (to the extent provided by and as determined in
accordance with Article III above); setting in type and printing the proxy
materials and reports to Shareholders (to the extent provided by and as
determined in accordance with Article III above); the preparation of all
statements and notices required of the Fund by any federal or state law with
respect to its Shares; all taxes on the issuance or transfer of the Shares; and
the costs of distributing the Fund's prospectuses and proxy materials to owners
of Policies funded by the Shares and any expenses permitted to be paid or
assumed by the Fund pursuant to a plan, if any, under Rule 12b-l of the ▇▇▇▇
▇▇▇. The Fund shall not bear any expenses of marketing the Policies.
5.3. The Company shall bear the expenses of distributing the Shares' prospectus
in connection with new sales of the Policies and of distributing the Fund's
Shareholder reports to Policy owners. The Company shall bear all expenses
associated with the registration, qualification, and filing of the Policies
under applicable federal securities and state insurance laws; the cost of
printing the Policy prospectus; and the cost of preparing and printing annual
individual account statements for Policy owners as required by state insurance
laws.
ARTICLE VI. Diversification and Related Limitations
----------------------------------------
6.1. The Fund and WRL each separately represents and, warrants that the Fund
will at all times invest its assets in such a manner as to ensure that the
Policies will be treated as annuity, endowment, or life insurance contracts
under the Code and the regulations issued thereunder. Without limiting the scope
of the foregoing, the Fund will at all times comply with Section 817(h) of the
Code and Treas. Req. Section 1.817-5, as amended from time to time, and any
Treasury interpretations thereof, relating to the diversification requirements
for variable annuity, endowment, or life insurance contracts and any amendments
or other modifications to such Section or Regulations.
The Shares will not be sold to any person or entity that would result in
the Policies not being treated as annuity, endowment, or life insurance
contracts, in accordance, with the statutes and regulations referred to in the
preceding paragraph (Section 6.1 hereof).
ARTICLE VII. Potential Material Conflicts
-----------------------------
7.1 The Fund agrees that the Board, constituted with a majority of disinterested
directors, will monitor each Portfolio of the Fund for the existence of any
material irreconcilable conflict between the interests of the variable annuity
contract owners and the variable life insurance policy owners of the Company
and/or affiliated companies ("contract owners") investing in the Fund. The Board
shall have the sole authority to determine if a material irreconcilable conflict
exists, and such determination shall be binding on the Company only if approved
in the form of a resolution by a majority of the Board, or a majority of the
disinterested directors of the Board. The Board will give prompt notice of any
such determination to the Company.
7.2 The Company and WM. each separately agrees that it will be responsible for
promptly reporting any potential or existing conflicts of which it is aware to
the Board. The Company also agrees that, if a material irreconcilable conflict
arises, it will at its own cost remedy such conflict up to and including (a)
withdrawing the assets allocable to some or all of the Accounts from the Fund or
any Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Fund, or submitting to a
vote of all affected contract owners whether to withdraw assets from the Fund or
any Portfolio and reinvesting such assets in a different investment medium and,
as appropriate, segregating the assets attributable to any appropriate group of
contract owners that votes in favor of such
segregation, or offering to any of the affected contract owners the option of
segregating the assets attributable to their contracts or policies, and (b)
establishing a new registered management investment company and segregating the
assets underlying the Policies, unless a majority of Policy owners materially
adversely affected by the conflict have voted to decline the offer to establish
a new registered management investment company.
7.3 A majority of the disinterested directors of the Board shall determine
whether any proposed action by the Company adequately remedies any material
irreconcilable conflict. In the event that the Board determines that any
proposed action does not adequately remedy any material irreconcilable conflict,
the Company will withdraw from investment in the Fund each of the Account(s)
designated by the disinterested directors 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 to remedy any such material irreconcilable
conflict as determined by a majority of the disinterested directors of the
Board.
7.4 The Fund agrees that it will not enter into any agreement with a life
insurance company affiliated with the Company unless such agreement includes a
section substantially identical to this Article VII.
ARTICLE VIII. Indemnification
----------------
8.1. Indemnification by the Company
-------------------------------
8.1(a). The Company agrees to indemnify and hold harmless the Fund, WRL, and
each of their respective directors and officers and each person, if any, who
controls the Fund or WRL within the meaning of Section 15 of the 1933 Act, and
any agents or employees of the foregoing (each an "Indemnified Party," or
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 an Indemnified Party may become subject
under any statute; regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements are related to the sale or acquisition of the Shares or the
Policies and:
(i) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the registration statement or
prospectus for the Policies or contained in the Policies or sales literature for
the Policies (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 reasonable and good faith reliance upon and in
conformity with information furnished the Company by or on behalf of the Fund or
WRL for use in the registration statement or prospectus for the Policies or in
the Policies or sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Policies or Shares; or
(ii) arise out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or sales literature of the Fund not supplied by the Company, or
persons under its control and on which the Company has reasonably relied in good
faith) or wrongful conduct of the Company or persons under its control, with
respect to the sale or distribution of the Policies or Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or sales
literature of the Fund or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading if
such statement or omission was made in reliance upon information furnished to
the Fund or WRL by or on behalf of the Company; or
(iv) 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; except to the
extent provided in Sections 8.1(b) and 8.1(c) hereof.
8.1(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 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 or duties under this Agreement or to the Fund,
whichever is applicable.
8.1(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 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 failure to notify results
in failure of actual notice to the Company and the Company is damaged solely as
a result of failure to give notice. In case any such action is brought against
one or more of the Indemnified Parties, 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. Each Indemnified Party shall fully cooperate with
the Company in defense of the action, regardless of whether the Company assumes
or only participates in the defense. After notice not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation, unless (i) the Company and the Indemnified
Party shall have mutually agreed on the retention of such counsel or (ii) the
named parties to any such proceeding (including any impeded parties) include
both the Company and the Indemnified Party and representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the Company agrees to
indemnify the Indemnified Party from all and against any loss or liability by
reason of such settlement or judgment.
8.1(d). Each Indemnified Party will promptly notify the Company of the
commencement of any litigation or proceedings against it in connection with the
issuance or sale of the Shares or the Policies or the operation of the Fund and
each Indemnified Party will provide the Company with all relevant information
and documents in its possession or in the possession of a person within its
control requested by the Company. For purposes of this Section 8.1(d), the
"commencement" of proceedings shall include any informal or formal
Communications from the SEC or its staff (or the receipt of information from any
other persons or entities) indicating that enforcement action by the SEC or
staff may be contemplated or forthcoming; this includes any information to the
effect that any matter(s) has been referred to the SEC's Division of
Enforcement, or that any matter(s) is being discussed with that Division.
8.2. Indemnification by WRL
-----------------------
8.2(a). WRL 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, and any agents or employees of the
foregoing (each an "Indemnified Party," or 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 WRL) or litigation (including legal and other expenses) to which an
Indemnified Party may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Shares or the Policies and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or
prospectus or sales literature of the 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 reasonable and good faith reliance upon and in conformity with
information furnished to WRL by or on behalf of the Company for use in the
registration statement or prospectus for the Fund or in sales literature for the
Fund (or any amendment or supplement) or otherwise for use in connection with
the sale of the Policies or Shares; or (ii) arise out of or as a result of
statements or representations (other than statements or representations
contained in the registration statement, prospectus or sales literature far the
Policies not supplied by WRL, or persons under its control and on which WRL has
reasonably relied in good faith) or wrongful conduct of WRL or persons under its
control, with respect to the sale or distribution of the Policies or Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or sales
literature covering the Policies, 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 WRL; or (iv) arise out
of or result from any material breach of any representation and/or warranty made
by WRL in this Agreement or arise out of or result from any other material
breach of this Agreement by WRL (including a failure, whether unintentional or
in good faith or otherwise, to comply with the requirements specified in Article
VI of this Agreement); except to the extent provided in Sections 8.2(b) and
8.2(c) hereof action. Each Indemnified Party shall fully cooperate with WRL in
defense of the action, regardless of whether WRL assumes or only participates in
the defense. After notice from WRL to such party of its election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and WRL will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation, unless (i) WRL and the Indemnified Party
shall have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impeded parties) include WRL and
the Indemnified Party and representation of these parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. WRL shall not be liable for any settlement of any proceeding effected
without its written consent but if settled with such consent or if there be a
final judgment for the plaintiff, WRL agrees to indemnify the Indemnified Party
from and against any loss or liability by reason of such settlement or judgment.
8.2(d). Each Indemnified Party will promptly notify WRL of the commencement of
any litigation or proceedings against it in connection with the issuance or sale
of the Shares or the Policies or the operation of the Fund and each Indemnified
Party will provide WRL with all relevant information and documents in its
possession or in the possession of a person within its control requested by WRL.
For purposes of this Section 8.2(d), the "commencement" of proceedings shall
include any informal or formal communications from the SEC or its staff (or the
receipt of information from any other persons or entities) indicating that
enforcement action by the SEC or staff may be contemplated or forthcoming; this
includes any information to the effect that any matter(s) has been referred to
the SEC'S Division of Enforcement, or that any matter(s) is being discussed with
that Division.
8.3. Indemnification by the Fund
----------------------------
8.3(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, and any agents or employees of
the foregoing (each an "Indemnified Party," or collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Fund) or litigation (including legal and other expenses) to which
any Indemnified Party may become sub5 eat under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Shares or the Policies and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or
prospectus or sales literature of the Fund (or any amendment or supplement
8.2(h) WRL 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 or the Account(s).
8.2(c). WRL 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 WRL 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 WRL of any such claim shall not relieve WRL 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 failure to notify results in the failure of actual
notice to WRL and WRL is damaged solely as a result of failure to give such
notice. In case any such action is brought against one or more of the
Indemnified Parties, WRL will be entitled to participate, at its own expense, in
the defense thereof. WRL also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the 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 reasonable and good faith
reliance upon and in conformity with information furnished to the Fund by or on
behalf of the Company for use in the registration statement or prospectus for
the Fund or in sales literature for the Fund (or any amendment or supplement) or
otherwise for use in connection with the sale of the Policies or Shares; or
(ii) arise out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or sales literature for the Policies not supplied by the Fund, or
persons under its control and on which the Fund has reasonably relied in good
faith) or wrongful conduct of the Fund or persons under its control, with
respect to the sale or distribution of the Policies or Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or sales
literature covering the Policies, 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
(iv) 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 (including a
failure, whether unintentional or in good faith or otherwise, to comply with the
requirements specified in Article VI of this Agreement); except to the extent
provided in Sections 8.3(b), 8.3(c) and 8.3(e) hereof.
8.3(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 or the Account(s).
8.3(c). The Fund shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified the Fund in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim
shall have been served upon such Indemnified Party (or after such Indemnified
Party shall have received notice of such service on any designated agent), but
failure to notify the Fund of any such claim shall not relieve 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 that failure to notify results in the failure of actual notice to the
Fund and the Fund is damaged solely as a result of failure to give such notice.
In case any such action is brought against one or more of 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. Each Indemnified
Party shall fully cooperate with the Fund in defense of the action, regardless
of whether the Fund assumes or only participates in the defense. After notice
from the Fund to such party of its 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, unless (i) the, Fund and the Indemnified Party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impeded parties) include the Fund and the
Indemnified Party and representation of these parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The Fund shall not be liable for any settlement of any proceeding effected
without its written consent but if settled with such consent or if there be a
final judgment for the plaintiff, the Fund agrees to indemnify the Indemnified
Party from and against any loss or liability by reason of such settlement or
judgment.
8.3(d). Each Indemnified Party will promptly notify the Fund of the commencement
of any litigation or proceedings against it in connection with the issuance or
sale of the Shares or the Policies or the operation of the Fund and each
Indemnified Party will provide the Fund with all relevant information and
documents in its possession or in the possession of a person within its control
requested by the Fund. For purposes of this Section 8.3(d), the commencement of
proceedings shall include any informal or formal communications from the SEC or
its staff (or the receipt of information from any other persons or entities)
indicating that enforcement action by the SEC or staff may be contemplated or
forthcoming; this includes any information to the effect that any matter(s) has
been referred to the SEC'S Division of Enforcement, or that any matter(s) is
being discussed with that Division.
8.3(e) Notwithstanding any other provision of this Article VIII to the contrary,
any liability which the lurid may have under this indemnification provision
shall be the liability only of the particular Portfolio or Portfolios to which
such liability relates; any such liability of a Portfolio may be satisfied only
by and to the extent of the assets of that Portfolio.
8.4 A successor by law of the parties to this Agreement shall be entitled to the
benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
ARTICLE IX. Applicable Law
---------------
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of Florida.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and
1940 Acts, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant and
the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
------------
10.1. This Agreement shall terminate with respect to the Account(s), or one,
some, or all Portfolios:
(a) at the option of any party upon six months' advance written notice to the
other parties; or
(b) at the option of the Company to the extent that the Shares of Portfolios are
not reasonably available to meet the requirements of the Policies or are not
"appropriate funding vehicles" for the Policies, as
determined by the Company reasonably and in good faith. Without limiting the
generality of the foregoing, the Shares of a Portfolio would not be "appropriate
funding vehicles if, for example, such Shares did not meet the diversification
or other requirements referred to in Article VI hereof; or if the Portfolio did
not qualify under Subchapter N of the Code, as referred to in Section 2.4
hereof; or if the investments or investment policies, objectives, and/or
limitations of the Portfolio would impose unanticipated risks on the Company; or
if the Company would be permitted to disregard policyowner voting instructions
pursuant to Rules 6e-2 or 6e-3(T) under the 1940 Act; etc. Prompt notice of the
election to terminate for such cause and an explanation of such cause shall be
furnished by the Company; or (c) at the option of the Fund upon institution of
formal proceedings against the Company by the National Association of Securities
Dealers, Inc. (the "NASD"), the SEC, or any insurance department or any other
regulatory body regarding the Company's duties under this Agreement or related
to the sale of the Policies, the operation of the Account(s), or the purchase of
the Shares; or (d) at the option of the Company upon institution of formal
proceeding against the Fund by the NASO, the SEC, or any state securities or
insurance department or any other regulatory body; or (e) at the option of the
Company or the Fund upon receipt of any necessary regulatory approvals and/or
the vote of the Policy owners having an interest in the Account(s) (or any
subaccount) to substitute the shares of another investment company for the
corresponding Portfolio Shares in accordance with the terms of the Policies for
which those Portfolio Shares had been selected to serve as the underlying
investment media. The Company will give 30 days' prior written notice to the
Fund of the date of any proposed vote or other action taken to replace the
Shares; or
(f) at the option of any party to this Agreement, upon another party's material
breach of any provision of this Agreement.
10.2. The notice shall specify the Portfolio or Portfolios, Policies and, if
applicable, the Account(s) as to which the Agreement is to be terminated.
10.3. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 10.1(a) may be exercised for cause
or for no cause.
10.4. Except as necessary to implement Policy owner initiated transactions, or
as required by state insurance laws or regulations, the Company shall not redeem
the Shares attributable to the Policies (as opposed to the Shares attributable
to the Company's assets held in the Account(s)), and the Company shall not
prevent Policy owners from allocating payments to a Portfolio that was otherwise
available under the Policies, until 30 days after the Company shall have
notified the Fund and WRL of its intention to do so.
10.5. Notwithstanding any termination of this Agreement, the Fund shall, at the
option of the Company, continue to make available additional shares of the
Portfolios pursuant to the terms and conditions of this Agreement, for all
Policies in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Policies"), except as otherwise provided
under Article VII of this Agreement. Specifically, without limitation, the
owners of the Existing Policies shall be permitted to transfer or reallocate
investments under the Policies, redeem investments in any Portfolio and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Policies.
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:
WRL Series Fund, Inc.
20), ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to WRL:
Western Reserve Life Assurance Co.
of Ohio
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Company:
PFL Life Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
ARTICLE XII. Miscellaneous
--------------
12.1. Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Policies and all information reasonably identified as confidential
in writing by any other party hereto and, except as permitted by this Agreement
or as otherwise required by applicable law or regulation, 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 it may come into the public domain.
12.2. The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
12.4. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.5. The Schedules attached hereto, as modified from time to time, are
incorporated herein by reference and are part of this Agreement.
12.6. 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.
12.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
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 specified below.
Company:
PFL LIFE INSURANCE COMPANY
By its authorized officer,
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: VP, Asst. Secretary
Date: July 1, 1992
Fund:
WRL SERIES FUND, INC.
By its authorized officer,
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
Date: July 1, 1992
WESTERN RESERVE LIFE ASSURANCE CO.
By its authorized officer,
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
Date: July 1, 1992
SCHEDULE A
Account(s), Policy(ies) and Portfolio(s) Subject to the Participation Agreement
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Account: PFL Endeavor Variable Annuity Account
Policies: The Endeavor Variable Annuity
Portfolio: WRL Series Fund Growth Portfolio
SCHEDULE B
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Fund by WRL, the Fund and the Company. The
defined terms herein shall have the meanings assigned in the Participation
Agreement except that the term "Company" shall also include the department or
third party assigned by the Company to perform the steps delineated below.
1. The number of proxy proposals is given to the Company by WRL on a date a
early as possible before the date set by the Fund for the shareholder meeting
(the "Record Date") to facilitate the establishment of tabulation procedures. At
this time, RL will inform the Company of the Record, mailing and meeting dates.
This will be done orally approximately two months before the meeting.
2. Promptly after the Record Date, the Company will perform a "tape run", or
other activity, which will generate the names, addresses and number of shares in
each Portfolio which are attributed to each contractowner/policyholder (the
"Customer") as of the Record Date. Fractional shares will be counted. The number
of shares for which a Customer has the right to give voting instructions will be
calculated separately for each subaccount of the Account(s) and will be
determined by dividing the portion of the value allocable to the Customer's
Policy in the subaccount by $100. Allowance should be made for account
adjustments made after this date that could affect the status of the Customers o
accounts as of the Record Date.
Note: The number of voting instruction cards is determined by the activities
described in Step #2. If the proxy proposal only affects a particular Portfolio,
then only the shares of that Portfolio may be voted and only the Customers with
investment of all or a portion of their Policies in that Portfolio may vote on
the proposal to the extent of their investment. The Company will use its best
efforts to call in the number of Customers to WRL, as soon as possible, but no
later than two weeks after the Record Date.
3. The Fund's annual report must be sent to each customer by the Company either
before or together with the Customers' receipt of a proxy statement. The Fund or
WRL will provide to the Company as many copies of the last annual report as the
Company shall reasonably require for distribution to the Customers.
4. The voting instruction cards (the "Cards" or "Card") are produced arid paid
for by the Fund and sent to the Company. (This and related steps may occur later
in the chronological process due to possible uncertainties relating to the
proposals.)
5. The Company will, at its expense, print account information on the Cards.
6. Allow approximately 2-4 business days for printing information on the Cards.
Information commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding/which indicates number of shares of the Fund attributable to the
Customer and, if appropriate, of each applicable Portfolio (depends upon
tabulation process used by the computer system, i.e., whether or not system
knows number of shares held just by "reading" the account number)
e. individual Card number for use in tracking arid verification of votes
(already on Cards as printed by the Fund)
Note: When the Cards are printed by the Fund, each Card is numbered
individually to guard against potential Card/vote duplication.
f. spaces where the Customer can vote "yes" or "no" on each proxy proposal.
7. During this time, the Legal Department of WRL or its affiliate ("WRL Legal")
will develop, produce, and the Fund will pay for as many copies of the notice of
proxy and the proxy statement (one document)
for the Fund or, if appropriate, for 'the Portfolio (s) in which the Customer's
Policy is invested as the Company may reasonably require for distribution to
each Customer. Printed and folded notices and statements will be sent to Company
for insertion into envelopes (envelopes and return envelopes are provided and
paid for by the Company). Contents of envelope sent to each Customer by the
Company will include:
a. voting instruction card
b. proxy notice and statement (one document) (for the Fund or, if appropriate,
for the Portfolio(s) in which the Customer's Policy is invested)
c. the Fund's annual report (if not sent prior to this time)
d. return envelope (postage prepaid by the Company) addressed to the Company or
its tabulation agent
e. "urge buckslip" - optional, but recommended (This is a small, single sheet
of paper that requests Customers to vote as quickly as possible arid that their
vote is important. One copy will be supplied by the Fund.)
f. cover letter - optional, supplied by the Company and reviewed and orally
approved in advance by WRL Legal.
8. The above contents should be received by the Company approximately 3-5
business days before the date set for mailing. The individual in charge at the
Company reviews and approves in writing the contents of the mailing package
supplied by WRL Legal to ensure correctness arid completeness copy of this
approval must be sent to WRL Legal.
9. Package mailed by the Company at its expense to the Customers.
* The Fund must allow at least a 15-day solicitation time to the Company as the
shareowner. (A 5-week period is recommended, but not necessary, to receive a
proper response percentage.) Solicitation time is calculated as days from (but
not including) the meeting, counting backwards.
** If the Customers were actually the shareholders, at least 50% of the
outstanding shares must be represented and 66 2/3% of that 50% must have voted
affirmatively on the proposals to have an effective vote. However, since the
Company is the shareholder, the Customers' votes will (except in certain limited
circumstances) be used to dictate how the Company will vote.
10. Collection and tabulation of the Cards begins. Tabulation usually takes
place in another department or another vendor depending on process used. An
often used procedure is to sort the Cards on arrival into vote categories of all
yes, no, or mixed replies, and to begin data entry.
* Postmarks are not generally needed. A need for postmark information would be
due to an insurance company's internal procedure and has not been required by
WRL in the past.
11. Signatures on the Card checked against legal name on account registration
which was printed on the Card.
* This verifies whether an individual has signed correctly with the sane name as
is on the account registration.
For Example:
If the account registration is under "▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee," then that is
the exact legal name to be printed on the Card and is the signature needed on
the Card.
12. If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter, a new Card
and return envelope. The mutilated, illegible or improperly signed Card is
disregarded and considered to be not received for purposes of vote tabulation.
(If the vote on any one proxy proposal on a Card with more than one proxy
proposal is legible and the Card is properly signed, then that vote shall be
counted, and the remainder of the Card which is illegible shall be disregarded
and shall be considered to be not received for purposes of vote tabulation.) Any
Cards that
have "kicked out" (e.g. mutilated, illegible) of the procedure are
"hand verified," i.e., examined as to why they did not complete the proxy
process. Any questions on those Cards are usually remedied individually.
13. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the Cards
as they first arrive into categories depending upon their vote; an estimate of
how the vote is progressing may be calculated. If the initial estimates and the
actual vote do not coincide, then an internal audit of that vote should occur.
This may entail a recount.
14. The actual tabulation of votes is done in shares. (It is very important that
the Fund receives the tabulations stated in terms of a percentage and the number
of shares.)
15. Final tabulation in shares is orally given by the Company to WRL Legal on
the morning of the meeting by 10:00 a.m. E.S.T.
16. The vote is verified by the Company and is sent to WRL Legal.
17. The Company then votes its proxy in accordance with the votes received from
the Customers the morning of the meeting (except as provided in the
Participation Agreement or in limited circumstances as may be otherwise required
by law). Voting instructions to abstain on any item to be voted upon reduces the
votes eligible to be cast by the Company. A letter documenting the Company's
vote is supplied by WRL Legal and is sent to officer of the Company for his
signature. This letter is normally sent after the meeting has taken place.
Note: Shares do not have cumulative voting rights and the holders of more than
50% of the shares of the Fund voting for the election of directors of the Board
can elect all of the directors if they choose to do so, and in such event
holders of the remaining shares would not be able to elect any directors.
18. The Company will be required to box and archive the Cards received from the
Customers. In the event that any vote is challenged or if otherwise necessary
for legal, regulatory, or accounting purposes, WRL will be permitted reasonable
access to such Cards.
19. All approvals and "signing off" may be done orally, but must always be
followed up in writing.
20. During tabulation procedures, the Fund and the Company determine if a
resolicitation is advisable and what form that resolicitation should take,
whether it should be by a mailing, or by a recorded telephone call. A
resolicitation may be considered, for example, when the vote response is slow
and a judgment is made that the number of votes is too low under the
circumstances. The meeting could be adjourned to leave enough time for the
resolicitation.
A determination is made by the Company and. the Fund to find the most cost
effective candidates for resolicitation. These are Customers who have not yet
voted, but whose balances are large enough that their vote would significantly
increase the number of votes with minimal costs.
a. By mail: WRL Legal amends the voting instruction cards, if necessary, arid
writes a resolicitation letter. The Fund supplies these to the Company. The
Company generates a mailing list etc., as per step #2 onward.
b. By phone: Rarely used. This must be done on a recorded line. WRL Legal and
the Fund will supply the necessary procedures and script if a phone
resolicitation were to be required.
