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EXHIBIT 8(c)
FUND PARTICIPATION AGREEMENT
IL Annuity and Insurance Company ("Insurance Company"), Xxx Xxx Worldwide
Insurance Trust ("Trust") and the Trust's investment adviser, Xxx Xxx
Associates Corporation ("Adviser") hereby agree that shares of the series of
the Trust as listed on Exhibit A, as it may from time to time be amended
("Portfolios"), shall be made available to serve as an underlying investment
medium for Individual Deferred Variable Annuity Contracts ("Contracts") to be
offered by Insurance Company subject to the following provisions:
1. Insurance Company represents that it has established the IL Annuity
and Insurance Co. Separate Account 1 (the "Variable Account") as a
separate account under Massachussetts law, and has registered it as a
unit investment trust under the Investment Company Act of 1940 ("1940
Act") to serve as an investment vehicle for the Contracts. The
Contracts provide for the allocation of net amounts received by
Insurance Company to separate series of the Variable Account for
investment in the shares of specified investment companies selected
among those companies available through the Variable Account to act as
underlying investment media. Selection of a particular investment
company is made by the Contract owner who may change such selection
from time to time in accordance with the terms of the applicable
Contract.
2. The Insurance Company represents and warrants that the Contracts are
or will be registered under the 1933 Act; and that the Contracts will
be issued and sold in compliance in all material respects will all
applicable Federal and State laws. The Insurance Company further
represents and warrants that it is an insurance company duly organized
and in good standing under applicable law.
3. The Trust represents and warrants that Portfolio shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold to the Insurance Company in
compliance with the laws of the Commonwealth of Massachusetts and the
laws of the Insurance Company's state of domicile and all applicable
federal and state securities laws, and that the Trust is and shall
remain, while Portfolio shares are offered for sale, registered under
the 0000 Xxx. The Trust shall amend the Registration Statement for
its shares under the 1933 Act and the 1940 Act from time to time as
required in order to effect the continuous offering of its shares.
The Trust shall register and qualify Portfolio shares for sale in
accordance with the laws of the various states if and to the extent
required by applicable law.
4. The Trust represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"), and that it will make every effort to
maintain such qualification (under Subchapter M or any successor or
similar provision), and that it will notify the Insurance Company
immediately in the event that there is a reasonable basis for
believing that the Trust has ceased to so qualify or that it might not
so qualify in the future.
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5. Subject to Section 20 hereof, the Insurance Company represents that
the Contracts are currently treated as endowment, life insurance, or
annuity contracts under applicable provisions of the Code, and that it
will make every effort to maintain such treatment, and that it will
notify the Trust immediately upon having a reasonable basis for
believing that the Contracts have ceased to be so treated or that they
might not be so treated in the future.
6. The Trust currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or
otherwise, although it may make such payments in the future. To the
extent that it decides to finance distribution expenses pursuant to a
Rule 12b-1 plan, the Trust undertakes to have the Board of Trustees, a
majority of whom are not interested persons of the Trust, formulate
and approve any plan under Rule 12b-1 to finance distribution
expenses. In the event that the Trust determines to finance
distribution expenses pursuant to a Rule 12b-1 plan, the Trust shall
immediately notify the Insurance Company.
7. The Trust and the Adviser have provided Insurance Company certain
written information requested by Insurance Company and represent that
the information is accurate in all material respects as of the date
provided; further the Trust represents and warrants that its
investment policies, fees and expenses are and shall at all times
remain in compliance with insurance and other applicable laws of
Insurance Company's state of domicile and any other applicable state,
to the extent such laws are specifically identified to Trust and
Adviser in writing by Insurance Company.
8. The Adviser represents and warrants that it is and shall remain duly
registered under all applicable federal and state securities laws and
that it shall perform its obligations to the Trust in compliance in
all material respects with the securities laws of the Commonwealth of
Massachusetts and any applicable state and federal securities laws.
9. The Trust represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that
it does and will comply in all material respects with the 1940 Act.
10. The Adviser represents and warrants that the Trust's principal
underwriter, Xxx Xxx Securities Corporation ("Underwriter"), is
registered as a broker-dealer with the SEC, and is a member in good
standing of the National Association of Securities Dealers, Inc. The
Adviser further represents and warrants that the Underwriter is and
shall remain duly registered in all material respects under all
applicable federal and state securities laws and that the Underwriter
shall perform its obligations to the Trust in compliance in all
material respects with the securities laws of the Insurance Company's
state of domicile and any applicable state and federal securities
laws.
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11. Insurance Company agrees to make every reasonable effort to market its
Contracts. It will use its best efforts to give equal emphasis and
promotion to shares of the Trust as is given to other underlying
investments of the Variable Account. In marketing its Contracts,
Insurance Company will comply with all applicable state or Federal
laws.
12. The Trust or the Adviser will provide closing net asset value,
dividend and capital gain information at the close of trading each
business day (in any event, by 6:30 p.m. Eastern time) to Insurance
Company. Insurance Company will use this data to calculate unit
values, which will in turn be used to process that same business day's
Variable Account unit value. Any error in the calculation of the
Trust's net asset value per share shall be reported immediately to the
Insurance Company. The Variable Account processing will be done the
same evening, and orders will be placed the morning of the following
business day. Orders will be sent directly to the Trust or its
specified agent. The Trust will sell to Insurance Company those
shares of the Portfolios which the Variable Account orders at the
applicable net asset value next computed pursuant to the rules of the
Securities and Exchange Commission ("SEC"); provided, however, that
the Trust reserves the right to reject a purchase order if such action
is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Trust's officers, acting in good
faith and in light of their fiduciary duties under federal and any
applicable state laws, necessary in the best interests of the
shareholders of the Portfolio. For purposes of this section,
Insurance Company shall be the designee of the Trust for receipt of
purchase orders, and receipt by such designee shall constitute receipt
by the Trust. "Business day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Trust calculates
the net asset value of the Portfolios pursuant to the rules of the
SEC. Dividends and capital gains distributions shall be reinvested in
additional shares at the ex-date net asset value.
13. The Trust agrees to redeem for cash, on Insurance Company's request,
any full or fractional shares of the Portfolios, executing such
requests on a daily basis at the net asset value next computed after
receipt by the Trust or its designee of the request for redemption.
For purposes of this section, Insurance Company shall be the designee
of the Trust for receipt of requests for redemption and receipt by
such designee shall constitute receipt by the Trust.
14. Insurance Company shall pay for Portfolio shares on the next Business
Day after an order to purchase Trust shares is made in accordance with
the provisions of Section 12 hereof. Payment shall be in federal
funds transmitted by wire and/or by a credit for any shares redeemed
the same day as the purchase.
15. The Trust shall normally pay and transmit the proceeds of redemptions
of Portfolio shares on the next Business Day after a redemption order
is received in accordance with Section 13 hereof. Payment shall be in
federal funds transmitted by wire and/or a credit for any shares
purchased the same day as the redemption.
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16. All expenses incident to the performance by the Trust under this
Agreement shall be paid by the Trust. The Trust shall pay the cost of
registration of Trust shares with the Securities and Exchange
Commission ("SEC"). The Trust shall distribute, to the Variable
Account, sufficient quantities of Trust proxy material, periodic Trust
reports to shareholders and other material the Trust may require to be
sent to Contract owners. The Trust shall pay the cost of qualifying
Trust shares in states where required. The Trust shall provide to the
Insurance Company on printer-ready diskette the Trust's current
prospectus(es) describing only the Portfolios listed on Exhibit A
hereto (a "Stand-Alone Prospectus") in order for the Insurance Company
once each year (or more frequently if the prospectus for the Trust is
amended more frequently) to have the prospectus for the Contracts and
the Stand-Alone Prospectus printed together in one document. The
Trust shall provide the Insurance Company with a copy of the Trust's
Statement of Additional Information suitable for duplication. The
Trust or the Adviser shall bear the expense of printing or reproducing
copies of the Trust's prospectus(es) and statement of additional
information that will be distributed to existing Contract owners who
are also beneficial owners of the Trust's shares, and the Insurance
Company shall bear the expense of printing or reproducing copies of
the Trust's prospectus(es) and statement of additional information
that are used in connection with offering the Contracts.
17. Insurance Company and its agents shall make no representations
concerning the Trust or Trust shares except those contained in the
then current Registration Statement, prospectus(es), or statement of
additional information of the Trust, as such Registration Statement or
prospectus or statement of additional information may be amended or
supplemented from time to time, or in current printed sales literature
or promotional material (in accordance with any limitation contained
therein) approved by the Adviser, the Trust, or their respective
designee, except with the permission of the Adviser or the Trust.
18. The Trust, the Adviser, and their respective agents shall make no
representations concerning the Insurance Company, the Variable
Account, or the Contracts, except those contained in the then-current
Registration Statement, prospectus(es), or statement of additional
information for the Contracts and the Variable Account, as such
Registration Statement or prospectus or statement of additional
information may be amended or supplemented from time to time, or in
current printed sales literature or promotional material (in
accordance with any limitation contained therein) approved by the
Insurance Company or its respective designee, except with the
permission of the Insurance Company or its designee.
19. Administrative services to Contract owners shall be the responsibility
of Insurance Company, and shall not be the responsibility of the Trust
or the Adviser. The Trust and Adviser recognize that Insurance
Company will be the sole shareholder of Trust shares issued pursuant
to the Contracts. Such arrangement will result in multiple share
orders.
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20. The Trust and the Adviser represent and warrant that each Portfolio of
the Trust complies, and shall continue to comply, with Sections 817(h)
and 851 of the Internal Revenue Code of 1986, if applicable,
Subchapter M of the Code, and the regulations thereunder, and the
applicable provisions of the 1940 Act relating to the diversification
requirements for variable annuity, endowment, and life insurance
contracts. Upon request, the Trust shall provide Insurance Company
with a letter from the appropriate Trust officer certifying the
Trust's compliance with the diversification requirements and
qualification as a regulated investment company.
21. The Trust or Adviser will notify Insurance Company immediately upon
having a reasonable basis for believing that the Trust or any
Portfolio has ceased to comply with the aforesaid Section 817(h)
diversification or Subchapter M qualification requirements or might
not so comply in the future.
22. Insurance Company agrees to inform the Board of Trustees of the Trust
of the existence of, or any potential for, any material irreconcilable
conflict of interest between the interests of the Contract owners of
the Variable Account investing in the Trust and/or any other separate
account of any other insurance company investing in the Trust.
The Board of Trustees of the Trust shall monitor the Trust for the
existence of any material irreconcilable conflict between the
interests of the Contract owners of all separate accounts investing in
the Trust. A material irreconcilable conflict may arise for a variety
of reasons, including:
(a) an action by any state insurance or other regulatory
authority;
(b) a change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private
letter ruling, or any similar action by insurance, tax or
securities regulatory authorities;
(c) an administrative or judicial decision in any relevant
proceeding;
(d) the manner in which the investments of any Portfolio are being
managed;
(e) a difference in voting instructions given by the Contract
owners and variable annuity insurance contract owners or by
variable annuity or life insurance contract owners of
different life insurance companies utilizing the Trust; or
(f) a decision by Insurance Company to disregard the voting
instructions of contract owners.
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Insurance Company will be responsible for assisting the Board of Trustees of
the Trust in carrying out its responsibilities by providing the Board with all
information reasonably necessary for the Board to consider any issue raised,
including information as to a decision by Insurance Company to disregard voting
instructions of Contract owners.
It is agreed that if it is determined by a majority of the members of the Board
of Trustees of the Trust or a majority of its disinterested Trustees that a
material irreconcilable conflict exists affecting Insurance Company , Insurance
Company shall, at its own expense, take whatever steps are necessary to remedy
or eliminate the irreconcilable material conflict, which steps may include, but
are not limited to,
(a) withdrawing the assets allocable to some or all of the
separate accounts from the Trust or any Portfolio and
reinvesting such assets in a different investment medium,
including another Portfolio of the Trust or submitting the
questions of whether such segregation should be implemented to
a vote of all affected Contract owners and, as appropriate,
segregating the assets of any particular group (i.e., annuity
Contract owners, life insurance Contract owners or qualified
Contract owners) that votes in favor of such segregation, or
offering to the affected Contract owners the option of making
such a change;
(b) establishing a new registered management investment company
or managed separate account.
If a material irreconcilable conflict arises because of Insurance Company's
decision to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, Insurance
Company may be required, at the Trust's election, to withdraw the Variable
Account's investment in the Trust. No charge or penalty will be imposed
against the Variable Account as a result of such withdrawal. Insurance Company
agrees that any remedial action taken by it in resolving any material conflicts
of interest will be carried out with a view only to the interests of Contract
owners.
For purposes hereof, a majority of the disinterested members of the Board of
Trustees of the Trust shall determine whether any proposed action adequately
remedies any material irreconcilable conflict. In no event will the Trust be
required to establish a new funding medium for any Contracts. Insurance
Company shall not be required by the terms hereof to establish a new funding
medium for any Contracts if an offer to do so has been declined by vote of
majority of Contract owners adversely affected by the irreconcilable material
conflict.
The Trust will undertake to promptly make known to Insurance Company the Board
of Trustees' determination of the existence of a material irreconcilable
conflict and its implications.
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23. (a) This Agreement may be terminated as to the sale and issuance
of new Contracts:
(1) at the option of Insurance Company, the Adviser or
the Trust, upon six months' advance written notice to
the other parties;
(2) at the option of Insurance Company, if Trust shares
are not available for any reason to meet the
requirements of Contracts as determined by Insurance
Company. Reasonable advance notice of election to
terminate shall be furnished by Insurance Company;
(3) at the option of Insurance Company, the Adviser or
the Trust, upon institution of formal proceedings
against the Broker-Dealer or Broker-Dealers marketing
the Contracts, the Variable Account, the Insurance
Company, the Adviser or the Trust by the National
Association of Securities Dealers ("NASD"), the SEC
or any other regulatory body;
(4) upon a decision by Insurance Company, in accordance
with regulations of the SEC, to substitute such Trust
shares with the shares of another investment company
for Contracts for which the Trust shares have been
selected to serve as the underlying investment
medium. Insurance Company will give 60 days' written
notice to the Trust and the Adviser of any proposed
action to replace Trust shares;
(5) upon assignment of this Agreement unless made with
the written consent of each other party;
(6) in the event Trust shares are not registered, issued
or sold in conformance with Federal law or such law
precludes the use of Trust shares as an underlying
investment medium of Contracts issued or to be issued
by Insurance Company. Prompt notice shall be given
by either party to the other in the event the
conditions of this provision occur.
(7) at the option of Insurance Company by written notice
to the Trust and Adviser with respect to any
Portfolio in the event that such Portfolio fails to
meet the Section 817(h) diversification requirements
or Subchapter M qualifications specified in Section
20 hereof or if Insurance Company reasonably believes
that the Portfolio may fail to meet either of those
requirements;
(8) at the option of Insurance Company by written notice
to the Trust and Adviser, if Insurance Company shall
determine, in its sole judgment exercised in good
faith, that the Trust or Adviser has suffered a
material adverse change in its business, operations,
financial condition or prospects
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since the date of this Agreement or is the subject
of material adverse publicity; or
(9) at the option of the Trust or Adviser by written
notice to Insurance Company, if the Trust or Adviser
shall determine, in its sole judgment exercised in
good faith, that the Insurance Company 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.
(b) This Agreement may be terminated as to existing Contracts:
(1) at the option of Insurance Company, the Adviser, or
the Trust, upon six months' advance written notice to
the other parties, provided that such termination
shall not be effective unless and until all
regulatory approvals necessary in light of such
termination, including any necessary order of the SEC
pursuant to Section 26(b) of the 1940 Act have been
obtained.
(2) in accordance with the terms of Section 22 of this
Agreement; or
(3) as required by state and/or federal laws or
regulations or judicial or other legal precedent of
general application.
24. (a) Termination of this Agreement with respect to the sale and
issuance of new Contracts only shall not affect the Trust's
obligation to furnish Trust shares for Contracts then in force
for which the shares of the Trust serve or may serve as an
underlying medium. Specifically, and without limitation, the
owners of Contracts then in force shall be permitted to
reallocate investments in the Trust, redeem investments in the
Trust and/or invest in the Trust upon the making of additional
purchase payments under the Contracts then in force. The
purchase and redemption of Trust shares pursuant to this
Section 24 shall be effected in accordance with the terms of
this Agreement. The parties agree that this section shall not
apply to any terminations under Section 22 and the effect of
such Section 22 terminations shall be governed by Section 22
of this Agreement. Termination of this Agreement with respect
to existing Contracts shall not affect the Trust's obligation
to furnish shares in connection with the reinvestment of
dividends and other distributions with respect to existing
Portfolio shares.
(b) Notwithstanding any termination of this Agreement, each
party's obligation under Section 28 to indemnify other parties
shall survive and not be affected by any termination of this
Agreement. A successor by law of the parties to this
Agreement shall be entitled to the benefits of the
indemnification contained in Section 28.
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25. Each notice required by this Agreement shall be given by wire and
confirmed in writing to:
IL Annuity and Insurance Company
0000 Xxxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx X. XxXxxxxx, Esq.
Van Eck Worldwide Insurance Trust
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
Xxx Xxx Associates Corporation
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
26. Advertising and sales literature with respect to the Trust prepared by
Insurance Company or its agents for use in marketing its Contracts
will be submitted to the Trust for review before such material is
submitted to the SEC or NASD for review. Advertising and sales
literature that refers to the Insurance Company, the Variable Account,
or the Contracts that is prepared by the Trust, the Adviser, or any
affiliate thereof, will be submitted to the Insurance Company for
review and approval before such material is submitted to the NASD or
SEC for review.
27. Insurance Company will distribute all proxy material furnished by the
Trust and will vote Trust shares in accordance with instructions
received from the Contract owners of such Thrust shares. Insurance
Company shall vote the Trust shares for which no instructions have
been received in the same proportion as Trust shares for which said
instructions have been received from Contract owners so long as and to
the extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for Contract owners. The Insurance
Company reserves the right to vote Trust shares held in any segregated
asset account in its own right, if and to the extent permitted by law.
Subject to any legal requirements, Insurance Company and its agents
will in no way recommend action in connection with or oppose or
interfere with the solicitation of proxies for the Trust shares held
for such Contract owners.
28. (a) Insurance Company agrees to indemnify and hold harmless the
Trust, the Adviser, and each of its trustees, directors,
officers, employees, agents and each person, if any, who
controls the Trust within the meaning of the Securities Act of
1933 (the "Act") (the Trust and such persons collectively,
"Trust Indemnified Person")
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against any such losses, claims, damages or liabilities to
which a Trust Indemnified Person may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon
(i) any untrue statement or alleged untrue statement of
any material fact contained in written information
furnished by Insurance Company specifically for use
in the Registration Statement or prospectus of the
Trust, or in the Registration Statement or prospectus
for the Variable Account, 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; or
(ii) arise out of or as a result of conduct, statement or
representations (other than statements or
representations contained in the Trust's registration
statement or prospectus, or sales literature of the
Trust prepared by the Trust or its designee) of
Insurance Company or its agents with respect to the
sale and distribution of contracts for which Trust
shares are an underlying investment; or
(iii) arise out of Insurance Company's material breach of
this Agreement;
and Insurance Company will reimburse any legal or other
expenses reasonably incurred by a Trust Indemnified Person in
connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that
the Insurance Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or omission
or alleged omission made in the Registration Statement or
prospectus for the Contracts and the Variable Account in
conformity with written information furnished to the Insurance
Company by the Trust or its designee specifically for use
therein or in Insurance Company-prepared sales literature.
This indemnity agreement will be in addition to any liability
which Insurance Company may otherwise have.
(b) The Trust agrees to indemnify and hold harmless Insurance
Company and each of its directors, officers, employees, agents
and each person, if any, who controls Insurance Company within
the meaning of the Act (Insurance Company and such persons
collectively, "Insurance Company Indemnified Person") against
any losses, claims, damages or liabilities to which an
Insurance Company Indemnified Person may become subject, under
the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or
are based upon
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(i) any untrue statement or alleged untrue statement of
any material fact contained in written information
furnished by the Trust or its designee specifically
for use in the Registration Statement or prospectus
for the Contracts and the Variable Account, or in the
Registration Statement or prospectus or sales
literature of the Trust, 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; or
(ii) arise out of or as a result of conduct, statements or
representations of the Trust or its agents with
respect to the sales of Trust shares; or
(iii) arise out of or are based upon the failure to keep
the Trust and each of the Portfolios fully
diversified and qualified as a regulated investment
company as required by the applicable provision of
the Internal Revenue Code, the Investment Company Act
of 1940, and any other law or regulation; or
(iv) arise out of Trust's material breach of this
Agreement;
and the Trust will reimburse any legal or other expenses
reasonably incurred by an Insurance Company Indemnified Person
in connection with investigating or defending any such loss,
claim, damage liability or action; provided, however, that the
Trust will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or omission or alleged omission
made in the Registration Statement or prospectus for the Trust
in conformity with written information furnished to the Trust
by Insurance Company specifically for use therein or in
Trust-prepared sales literature. This indemnity agreement will
be in addition to any liability which the Trust may otherwise
have.
(c) The Adviser agrees to indemnify and hold harmless each
Insurance Company Indemnified Person against any losses,
claims, damages or liabilities to which an Insurance Company
Indemnified Person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon
(i) any untrue statement or alleged untrue statement of
any material fact contained in written information
furnished by the Trust or its designee specifically
for use in the Registration Statement or prospectus
for the Contracts and the Variable Account, or in the
Registration Statement or prospectus or sales
literature of the Trust, or arise out of or are based
upon the omission or the alleged omission to state
therein a material fact
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required to be stated therein or necessary to make
the statements therein not misleading; or
(ii) arise out of or as a result of conduct, statements or
representations of the Adviser or its agents with
respect to the sales of Trust shares; or
(iii) arise out of or are based upon the failure of the
Trust and each Portfolio to remain fully diversified
and qualified as a regulated investment company as
required by the applicable provision of the Internal
Revenue Code, the 1940 Act, and any other law or
regulation; or
(iv) arise out of Adviser's material breach of this
Agreement;
and the Adviser will reimburse any legal or other expenses
reasonably incurred by each Insurance Company Indemnified
Person in connection with investigating or defending any such
loss, claim, damage liability or action; provided, however,
that the Adviser will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or omission or
alleged omission made in the Registration Statement or
prospectus for the Trust in conformity with written
information furnished to the Adviser by Insurance Company
specifically for use therein or in Trust- or Adviser-prepared
sales literature. This indemnity agreement will be in addition
to any liability which the Adviser may otherwise have.
(d) The Trust and the Adviser shall indemnify and hold Insurance
Company harmless against any and all liability, loss, damages,
costs or expenses which Insurance Company may incur, suffer or
be required to pay directly due to the Trust's or Adviser's
(or their designated agent's) (i) incorrect calculation of the
daily net asset value, dividend rate or capital gain
distribution rate; (ii) incorrect reporting of the daily net
asset value, dividend rate or capital gain distribution rate;
or (iii) untimely reporting of the net asset value, dividend
rate or capital gain distribution rate. Any gain accruing to
the Insurance Company attributable to the Trust's or Adviser's
(or their designated agent's) incorrect calculation or
reporting of the daily net asset value shall be returned to
the Trust by the Insurance Company upon receipt of notice from
the Trust or the Adviser regarding such incorrect calculation
or reporting.
(e) Promptly after receipt by an indemnified party under this
paragraph of notice of the commencement of action, such
indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this paragraph,
notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any
indemnified party otherwise than under this paragraph. In
case any
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such action is brought against any indemnified party, and it
notified the indemnifying party of the commencement thereof,
the indemnifying party at its expense will be entitled to
participate therein and, to the extent that it may wish,
assume the defense thereof, with counsel satisfactory to such
indemnified party. After notice from the indemnifying party
to such indemnified party of indemnifying party's election to
assume the defense thereof, the indemnified party shall bear
the fees and expense of any additional counsel retained by it,
and the indemnifying party will not be liable to such party
under this paragraph for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of
investigation.
(f) The indemnifying party 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 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 indemnifying party,
whichever is applicable.
(g) Each indemnified party will promptly notify the indemnifying
party of the commencement of any litigation or proceedings
against it in connection with the issuance or sale of the
Trust shares or the Contracts or the operation or existence of
the Trust or the Variable Account.
(h) Nothing herein shall entitle an indemnified party to special,
consequential or exemplary damages or damages of like kind or
nature, and with respect to section 28(d) hereof, all
liability, loss and damages shall be limited to the amount
required to correct the value of the account as if there had
been no incorrect calculation or reporting or untimely
reporting of net asset value, dividend rate or capital gain
distribution rate.
29. If, in the course of future marketing of the Contracts, Insurance
Company or its agents shall request the continued assistance of the
Trust's sales personnel, compensation (which will be negotiated by the
Trust and Insurance Company) shall be paid by Insurance Company to the
Trust.
30. The term "Xxx Xxx Worldwide Insurance Trust" means and refers to the
Trustees from time to time serving under the Master Trust Agreement of
the Trust dated January 7, 1986 as the same may subsequently thereto
have been, or subsequently hereto be, amended. It is expressly agreed
that the obligations of the Trust hereunder shall not be binding upon
any Trustees, shareholders, nominees, officers, agents or employees of
the Trust, personally, but bind only the assets and property of the
Trust, as provided in the Amended and Restated Master Trust Agreement
of the Trust.
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IL ANNUITY AND INSURANCE COMPANY
By
------------------------- -----------------------------
Date
XXX XXX WORLDWIDE INSURANCE TRUST
By
------------------------- -----------------------------
Date
XXX XXX ASSOCIATES CORPORATION
By
------------------------- -----------------------------
Date
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EXHIBIT A
Xxx Xxx Gold and Natural Resource Fund
Xxx Xxx Worldwide Balanced Fund
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