PARTICIPATION AGREEMENT
as of April 1, 2003
among
Liberty Variable Investment Trust
Liberty Funds Distributor, Inc.
and
Golden American Life Insurance Company
CONTENTS
Section Subject Matter
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1. Parties and Purpose
2. Representations and Warranties
3. Purchase and Redemption of Trust Portfolio Shares
4. Fees, Expenses, Prospectuses, Proxy Materials and Reports
5. Voting
6. Sales Material, Information and Trademarks
7. Indemnification
8. Notices
9. Termination
10. Miscellaneous
SCHEDULES TO THIS AGREEMENT
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A. The Company
B. Accounts of the Company
C. Available Portfolios and Classes of Shares of the Trust
D. Contracts of the Company
E. Rule 12b-1 Plans of the Trust
F. Addresses for Notices
1. Parties and Purpose
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This agreement (the "Agreement") made and entered into this 1st day of April,
2003, is between certain portfolios, specified in Schedule C, of Liberty
Variable Investment Trust, an open-end management investment company organized
as a business trust under Massachusetts law (the "Trust"), Liberty Funds
Distributor, Inc., a Massachusetts corporation which is the principal
underwriter for the Trust (the "Underwriter," and together with the Trust, "we"
or "us") and the insurance company identified on Schedule A ("you"), on your own
behalf and on behalf of its Separate Accounts, each of which is a segregated
asset account maintained by you that is listed on Schedule B, as that schedule
may be amended from time to time ("Account" or "Accounts").
The purpose of this Agreement is to entitle you, on behalf of the Accounts, to
purchase the shares, and classes of shares, of portfolios of the Trust
("Portfolios") that are identified on Schedule C, solely for the purpose of
funding benefits of your variable life insurance policies or variable annuity
contracts ("Contracts") that are identified on Schedule D. This Agreement does
not authorize any other purchases or redemptions of shares of the Trust.
2. REPRESENTATIONS AND WARRANTIES
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2.1 REPRESENTATIONS AND WARRANTIES BY YOU
You represent and warrant that:
2.1.1 You are an insurance company duly organized and in good standing under the
laws of your state of incorporation.
2.1.2 All of your directors, officers, employees, investment advisors, and other
individuals or entities dealing with the money and/or securities of the
Trust are and shall be at all times covered by a blanket fidelity bond or
similar coverage in an amount not less than $5 million. Such bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable fidelity insurance company. You agree that any amounts received
under such bond or coverage in connection with claims that arise from the
arrangements described in this Agreement will be held by you for the
benefit of the Trust. You agree to make all reasonable efforts to see that
this bond or another bond containing such provisions is always in effect,
and you agree to notify us in the event that such coverage no longer
applies.
2.1.3 Each Account is a duly organized, validly existing segregated asset
account under applicable state insurance law and interests in each Account
are offered exclusively through the purchase of or transfer into a
"variable contract" within the meaning of such terms under Section 817 of
the Internal Revenue Code of 1986, as amended ("Code") and the regulations
thereunder. You will continue to meet such definitional requirements, and
will notify us immediately upon having a reasonable basis for believing
that such requirements have ceased to be met or that they might not be met
in the future.
2.1.4 Each Account either: (i) has been registered or, prior to any issuance or
sale of the Contracts, will be registered as a unit investment trust under
the Investment Company Act of 1940 ("1940 Act") to serve as a segregated
investment account for Contracts, to the extent required by the 1940 Act;
or (ii) has not been so registered in proper reliance upon an exemption
from registration under Section 3(c) of the 1940 Act; if the Account is
exempt from registration as an investment company under Section 3(c) of the
1940 Act, you will maintain such exemption and will notify us immediately
upon having a reasonable basis for believing that such exemption no longer
applies or might not apply in the future.
2.1.5 The Contracts or interests in the Accounts: (i) are or, prior to any
issuance or sale will be, registered as securities under the Securities Act
of 1933, as amended (the "1933 Act"), to the extent required by the 1933
Act; or (ii) are not registered because they are properly exempt from
registration under Section 3(a)(2) of the 1933 Act or will be offered
exclusively in transactions that are properly exempt from registration
under Section 4(2) or Regulation D of the 1933 Act, in which case you will
make every effort to maintain such exemption and will notify us immediately
upon having a reasonable basis for believing that such exemption no longer
applies or might not apply in the future.
2.1.6 The Contracts: (i) will be sold by broker/dealers, or their registered
representatives, who are registered with the Securities and Exchange
Commission ("SEC") under the Securities and Exchange Act of 1934, as
amended (the "1934 Act") and who are members in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and (ii)
will be issued in compliance in all material respects with all applicable
federal and state laws including without limitation the 1933 Act and the
0000 Xxx.
2.1.7 The Contracts currently are and will be treated as endowment contracts,
annuity contracts or life insurance contracts under applicable provisions
of the Code and you will use your best efforts to maintain such treatment;
you will notify us immediately upon having a reasonable basis for believing
that any of the Contracts have ceased to be so treated or that they might
not be so treated in the future.
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2.1.8 The fees and charges deducted under each Contract, in the aggregate, are
reasonable in relation to the services rendered, the expenses expected to
be incurred, and the risks assumed by you.
2.1.9 You will use shares of the Trust only for the purpose of funding benefits
of the Contracts through the Accounts.
2.1.10 Contracts will not be sold outside of the United States.
2.1.11 With respect to any Accounts which are exempt from registration under the
1940 Act in reliance on 3(c)(1) or Section 3(c)(7) thereof:
2.1.11.1 the principal underwriter for each such Account and any
subaccounts thereof is a registered broker/dealer with the SEC
under the 1934 Act and a member in good standing of the NASD; and
2.1.11.2 with regard to each Portfolio, you, on behalf of the corresponding
subaccount, will:
(a) Vote such shares held by it in the same proportion as the vote of
all other holders of such shares; and
(b) refrain from substituting shares of another security for such
shares unless the SEC has approved such substitution in the
manner provided in Section 26 of the 1940 Act.
2.2 REPRESENTATIONS AND WARRANTIES BY THE TRUST
The Trust represents and warrants that
2.2.1 It is duly organized and in good standing under the laws of the
Commonwealth of Massachusetts and the shares of the Portfolios of the Trust
are duly authorized for issuance and sold in compliance with the laws of
the Commonwealth of Massachusetts and all applicable federal and any state
securities laws.
2.2.2 All of its trustees, officers, employees and other individuals/entities
dealing with the money and/or securities of a Portfolio are and shall be at
all times covered by a joint fidelity bond or similar coverage for the
benefit of the Trust in an amount not less that the minimum coverage
required by Rule 17g-1 or other regulations under the 1940 Act. Such bond
shall include coverage for larceny and embezzlement with no deductible and
be issued by a reputable fidelity insurance company. The Trust agrees to
make all reasonable efforts to see that this bond or another bond
containing such provisions is always in effect, and agrees to notify you in
the event that such coverage no longer applies.
2.2.3 It is registered as an open-end management investment company under the
0000 Xxx.
2.2.4 Each class of shares of the Portfolios of the Trust is registered under
the 0000 Xxx.
2.2.5 It will amend its registration statement under the 1933 Act and the 1940
Act from time to time as required in order to effect the continuous
offering of its shares.
2.2.6 It will comply, in all material respects, with the 1933 and 1940 Acts and
the rules and regulations thereunder.
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2.2.7 It is currently qualified as a "regulated investment company" under
Subchapter M of the Code, it will maintain such qualification under
Subchapter M (or any successor or similar provision), and will notify you
immediately upon having a reasonable basis for believing that it has ceased
to so qualify or that it might not so qualify in the future.
2.2.8 The Trust will comply with the diversification requirements for variable
annuity, endowment or life insurance contracts set forth in Section 817(h)
of the Code, and the rules and regulations thereunder, including without
limitation Treasury Regulation 1.817-5. Upon having a reasonable basis for
believing any Portfolio has ceased to comply with Regulation 1.817-5, the
Trust will notify you immediately and will take all reasonable steps to
adequately diversify the Portfolio to achieve compliance.
2.2.9(a)With respect to Class A shares, 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.
(b)With respect to Class B shares, the Trust has adopted a Rule 12b-1
Plan under which it makes payments to finance distribution expenses.
The Trust represents and warrants that it has a Board of Trustees, a
majority of whom are not interested persons of the Trust, which has
formulated and approved its Rule 12b-1 Plans to finance distribution
expenses of the Trust and that any changes to the Trust's Rule 12b-1
Plans will be approved by a similarly constituted Board of Trustees.
To the extent that any Class of the Trust finances its distribution
expenses pursuant to a Plan adopted under rule 12b-1, the Trust
undertakes to comply with any then current SEC interpretations
concerning rule 12b-1 or any successor provisions.
2.2.10 Each investment adviser or subadviser to any Portfolio of the Trust is
and shall remain duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable federal and
state securities law and that they shall perform their obligations for the
Trust in compliance with the applicable Laws of the Commonwealth of
Massachusetts any applicable federal and state securities laws.
2.2.11 The Trust makes no representations as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of any state.
2.3 REPRESENTATIONS AND WARRANTIES BY THE UNDERWRITER
The Underwriter represents and warrants that:
2.3.1 It is registered as a broker/dealer with the SEC under the 1934 Act, and
is a member in good standing of the NASD.
2.4 POTENTIAL CONFLICTS
We received an order from the SEC dated July 1,1988 (file no. 812-7044)
("Order"), which grants exemptions from certain provisions of the 1940 Act and
the regulations hereunder to the extent necessary to permit shares of the Trust
to be sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated life insurance companies and
qualified pension and retirement plans outside the separate account context. You
and we both warrant and agree that both you and we will comply with the Order,
including the following conditions that apply to you.
a. The Board of Trustees of the Trust will monitor for the existence of any
material irreconcilable conflict between the interests of the contract
owners of all separate accounts investing in the Trust. You acknowledge
that a material irreconcilable conflict may (but will not necessarily)
arise among Contract
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owners for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, 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 variable annuity contract owners and variable life
insurance policy owners; or (f) a decision by an insurer to disregard the
voting instructions of its policy owners or contract owners.
b. You will report any potential or existing conflicts of which you are aware
to us. You will assist us by providing us with all information reasonably
necessary for the Board of Trustees to consider any issues raised.
c. If the Board of Trustees determines that a material irreconcilable conflict
exists, you will, at your expense, take whatever steps are necessary to
remedy or eliminate the irreconcilable conflict, including: (a) withdrawing
the assets allocable to some or all of the Separate Accounts from the
affected Portfolio and reinvesting such assets in a different investment
medium, which may include another Portfolio, or submitting the question of
whether such segregation should be implemented to a vote of all affected
Contract owners and, as appropriate, segregating the assets of any
particular group (i.e. annuity contract owners, life insurance policy
owners of one or more insurer) that votes in favor of such segregation or
offering to the affected Contract owners the option of making such change;
and (b) establishing a new registered management investment company or
management separate account.
d. If a material irreconcilable conflict arises because of your decision to
disregard voting instructions and that decision represents a minority
position or would preclude a majority vote, you will at our election
withdraw your Separate Account's investment in the Portfolio. No charge or
penalty will be imposed against a Separate Account as a result of a
withdrawal due to any material irreconcilable conflict. You will be
responsible for seeking remedial action in the event that the Board
determines the existence of a material irreconcilable conflict and will
bear the cost of such remedial action. For purposes of this condition, a
majority of the disinterested members of the Trust shall determine whether
or not any proposed action adequately remedies any material irreconcilable
conflict, but in no event will any Trust be required to establish a new
funding medium for any variable contract. You will not be required by this
condition to establish a new funding medium for any variable annuity
contract or variable life insurance policy if an offer to do so has been
declined by vote of a majority of affected Contract owners.
e. We will notify you promptly in the event that the Board of Trustees
determines that a material irreconcilable conflict exists with respect to
any Portfolio of the Trust.
3. PURCHASE AND REDEMPTION OF TRUST PORTFOLIO SHARES
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3.1 We will make shares of the Portfolios available to the Accounts for
the benefit of the Contracts. The shares will be available for
purchase at the net asset value per share next computed after we (or
our agent) receive a purchase order, as established in accordance with
the provisions of the then current prospectus of the Trust.
Notwithstanding the foregoing, the Trust's Board of Trustees
("Trustees") may refuse to sell shares of any Portfolio to any person,
or may suspend or terminate the offering of shares of any Portfolio if
such action is required by law or by regulatory authorities having
jurisdiction or if, in the sole discretion of the Trustees, acting in
good faith and in light of their fiduciary duties under federal and
any applicable state laws, they deem such action to be in the best
interests of the shareholders of such Portfolio.
3.2 We agree that shares of the Trust will be sold only to life insurance
companies which have entered into fund participation agreements with
the Trust ("Participating Insurance Companies") and their separate
accounts or to qualified pension and retirement plans in accordance
with the terms of the Shared Funding Order. No shares of any Portfolio
will be sold to the general public.
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3.3 You shall be the designee for us for receipt of purchase orders and
requests for redemption resulting from investment in and payments
under the Contracts ("Instructions"). The Business Day on which such
Instructions are received in proper form by you by the close of
trading will be the date as of which Portfolio shares shall be deemed
purchased, exchanged, or redeemed as a result of such Instructions,
provided you transmit such instructions to us no later than 9:30 a.m.
Eastern Time on the next Business Day. Instructions received in proper
form by you after the close of trading on any given Business Day shall
be treated as if received on the next following Business Day.
Instructions we receive from you after 9:30 a.m. Eastern Time shall be
processed on the next Business Day. "Business Day" shall mean any day
on which the New York Stock Exchange is open for trading and on which
the Trust calculates its net asset value pursuant to the rules of the
SEC and its current prospectus.
3.4 We shall calculate the net asset value per share of each Portfolio on
each Business Day, and shall communicate these net asset values to you
or your designated agent on a daily basis as soon as reasonably
practical after the calculation is completed (normally by 6:30 p.m.
Eastern time).
3.5 You shall submit payment for the purchase of shares of a Portfolio on
behalf of an Account no later than 2 p.m. Eastern time on the Business
Day when you transmit the purchase order to us. Payment shall be made
in federal funds transmitted by wire to the Trust or to its designated
custodian.
3.6 We will redeem any full or fractional shares of any Portfolio, when
requested by you on behalf of an Account, at the net asset value next
computed after receipt by us (or our agent) of the request for
redemption, in accordance with Section 3.3 above. Payment will be made
in federal funds transmitted by wire to you or your agent by 2 p.m.
Eastern time on the Business Day when you transmit the redemption
order to us. Payment shall not be delayed except in accordance with
the 1940 Act, and in no event shall payment be delayed for a greater
period than is permitted by the 1940 Act. Payments for the purchase or
redemption of shares by you may be netted against one another on any
Business Day for the purpose of determining the amount of any wire
transfer on that Business Day.
3.7 Issuance and transfer of the Portfolio shares will be by book entry
only. Stock certificates will not be issued to you or the Accounts.
Portfolio shares purchased from the Trust will be recorded in the
appropriate title for each Account or the appropriate subaccount of
each Account.
3.8 We shall furnish, on or before the ex-dividend date, notice to you of
any income dividends or capital gain distributions payable on the
shares of any Portfolio. You hereby elect to receive all such income
dividends and capital gain distributions as are payable on shares of a
Portfolio in additional shares of that Portfolio, and you reserve the
right to change this election in the future. We will notify you of the
number of shares so issued as payment of such dividends and
distributions.
4. FEES, EXPENSES, PROSPECTUSES, PROXY MATERIALS AND REPORTS
---------------------------------------------------------
4.1 We shall pay no fee or other compensation to you under this Agreement
except as provided on Schedule E, if attached.
4.2 We shall prepare and be responsible for filing with the SEC, and any
state regulators requiring such filing, all shareholder reports,
notices, proxy materials (or similar materials such as voting
instruction solicitation materials), prospectuses and statements of
additional information of the Trust. We shall bear the costs of
preparation and filing of the documents listed in the preceding
sentence, registration and qualification of the Trust's shares of the
Portfolios.
4.3 We shall provide you, on a timely basis, with such information about
the Trust, the Portfolios and each Adviser, in such form as you may
reasonably require, as you shall reasonably request in connection with
the preparation of disclosure documents and annual and semi-annual
reports pertaining to the Contracts.
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4.4 At your option, we shall provide you, at our expense, with either, (i)
for each Contract owner, one copy of each of the following documents
on each occasion that such document is required by law or regulation
to be delivered to such Contract owner: the Trust's current
prospectus, annual report, semiannual report and other shareholder
communications, including any amendments or supplements to any of the
foregoing, pertaining specifically to the Portfolios ("Designated
Portfolio Documents"); or (ii) a camera ready copy of such Designated
Portfolio Documents, in a form suitable for printing and from which
information relating to series of the Trust other than the Portfolios
had been deleted to the extent practicable. In connection with clause
(ii) of this paragraph, we will pay for proportional printing costs
for such Designated Portfolio documents in order to provide one copy
for each Contract owner on each occasion that such document is
required by law or regulation to be delivered to Contract owners. We
shall provide you with a copy of the Trust's current statement of
additional information (the "SAI"), including any amendments or
supplements, in a form suitable for you to duplicate. We shall bear
the expense of duplicating the SAI for distribution to Contract
owners. The expenses of furnishing, including mailing, the documents
referred to in this paragraph shall be borne by you, except that we
shall bear the expenses of furnishing such documents to Contract
owners. For each of the documents provided to you in accordance with
clause (i) of this paragraph 4.4, we shall provide you, upon your
request and at your expense, additional copies. In no event shall we
be responsible for the costs of printing or delivery of Designated
Portfolio Documents to potential Contract owners.
4.5 We shall provide you, at our expense, with copies of any
Trust-sponsored proxy materials in such quantity as you shall
reasonably require for distribution to Contract owners who are
invested in a designated subaccount. We shall bear the costs of
distributing proxy materials (or similar materials such as voting
solicitation instructions) to Contract owners.
5. VOTING
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If and to the extent required by law, you shall: (i) solicit voting instructions
from Contract owners; (ii) vote the Trust shares in accordance with the
instructions received from Contract owners; and (iii) vote Trust shares for
which no instructions have been received in the same proportion as Trust 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. You reserve the
right to vote Trust shares held in any Account in your own right, to the extent
permitted by law. You and your agents will in no way recommend or oppose or
interfere with the solicitation of proxies for Portfolio shares held to fund the
Contracts without our prior written consent, which consent may be withheld in
our sole discretion. You shall be responsible for assuring that each of your
Accounts participating in a Portfolio calculates voting privileges in a manner
consistent with all other separate accounts investing in the Portfolio.
6. SALES MATERIAL, INFORMATION AND TRADEMARKS
------------------------------------------
6.1 For purposes of this Section 6, "Sales literature or other Promotional
material" includes, but is not limited to, portions of the following
that use any logo or other trademark related to the Trust, or
Underwriter or its affiliates, or refer to the Trust: 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 billboards, motion pictures,
electronic communication or other public media), sales literature
(i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts,
reprints or excerpts or any other advertisement, sales literature or
published article or electronic communication), educational or
training materials or other communications distributed or made
generally available to some or all agents or employees in any media,
and prospectuses, statements of additional information, shareholder
reports and proxy materials.
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6.2 You shall furnish, or cause to be furnished to us or our designee, at
least one complete copy of each registration statement, prospectus,
statement of additional information, private placement memorandum,
retirement plan disclosure information or other disclosure documents
or similar information, as applicable (collectively "Disclosure
Documents"), as well as any report, solicitation for voting
instructions, Sales literature or other Promotional materials, and all
amendments to any of the above that relate to the Contracts or the
Accounts prior to its first use. You shall furnish, or shall cause to
be furnished, to us or our designee each piece of Sales 'literature or
other Promotional material in which the Trust or an Adviser is named,
at least three (3) Business Days prior to its proposed use. No such
material shall be used unless we or our designee approve such material
and its proposed use,
6.3 We shall promptly inform you of the results of any examination by the
SEC or other regulatory authority that relates to the Trust or its
Shares, and shall provide you with a written report regarding any such
examination. You and your agents shall not give any information or
make any representations or statements on behalf of the Trust or
concerning the Trust, the Underwriter or an Adviser, other than
information or representations contained in and accurately derived
from the registration statement or prospectus for the Trust shares (as
such registration statement and prospectus may be amended or
supplemented from time to time), annual and semi-annual reports of the
Trust, Trust-sponsored proxy statements, or in Sales literature or
other Promotional material approved by the Trust or its designee,
except as required by legal process or regulatory authorities or with
the written permission of the Trust or its designee.
6.4 We shall not give any information or make any representations or
statements on behalf of you or concerning you, the Accounts or the
Contracts other than information or representations contained in and
accurately derived from Disclosure Documents for the Contracts (as
such Disclosure Documents may be amended or supplemented from time to
time), or in materials approved by you for distribution, including
Sales literature or other Promotional materials, except as required by
legal process or regulatory authorities or with your written
permission,
6.5 Except as provided in Section 6.2, you shall not use any designation
comprised in whole or part of the name or xxxx "Xxxxx Xxx" or any logo
or other trademark relating to the Trust or the Underwriter without
prior written consent, and upon termination of this Agreement for any
reason, you shall cease all use of any such name or xxxx as soon as
reasonably practicable.
7. INDEMNIFICATION
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7.1 INDEMNIFICATION BY YOU
7.1.1 You agree to indemnify and hold harmless the Underwriter, the Trust and
each of its Trustees, officers, employees and agents and each person, if
any, who controls the Trust within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" and individually the
"Indemnified Party" for purposes of this Section 7.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with your written consent, which consent shall not be unreasonably
withheld) or expenses (including the reasonable costs of investigating or
defending any alleged loss, claim, damage, liability or expense and
reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses") to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise,
insofar as such Losses are related to the sale or acquisition of shares of
the Trust or the Contracts and
7.1.1.1 arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in a Disclosure
Document for the Contracts or in the Contracts themselves or in
sales literature generated or approved by you on behalf of the
Contracts or Accounts (or any amendment or supplement to any of
the foregoing)(collectively, "Company
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Documents" for the purposes of this Section 7), 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 indemnity shall not apply as to any Indemnified Party
if such statement or omission or such alleged statement or
omission was made in reliance upon and was accurately derived
from written information furnished to you by or on behalf of us
for use in Company Documents or otherwise for use in connection
with the sale of the Contracts or Trust shares; or
7.1.1.2 arise out of or result from statements or representations
(other than statements or representations contained in and
accurately derived from Trust Documents as defined below in
Section 7.2) or wrongful conduct of you or persons under your
control, with respect to the sale or acquisition of the Contracts
or Trust shares; or
7.1.1.3 arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Trust Documents
as defined below in Section 7.2 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 and accurately derived from written information furnished to
the Trust by or on behalf of you; or
7.1.1.4 arise out of or result from any failure by you to provide the
services or furnish the materials required under the terms of
this Agreement;
7.1.1.5 arise out of or result from any material breach of any
representation and/or warranty made by you in this Agreement or
arise out of or result from any other material breach of this
Agreement by you, as limited by and in accordance with the
provisions of Sections 7.1.2 and 7.1.3 hereof; or
7.1.1.6 arise out of or result from a Contract failing to be considered a
life insurance policy or an annuity Contract, whichever is
appropriate, under applicable provisions of the Code thereby
depriving the Trust of its compliance with Section 817(h) of the
Code.
7.1.2 You shall not be liable under this indemnification provision with respect
to any Losses 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 Trust or Underwriter, whichever is
applicable.
7.1.3 You 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 you 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 you of any such claim shall not
relieve you from any liability which you may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, you shall be entitled to participate, at your own
expense, in the defense of such action. Unless the Indemnified Party
releases you from any further obligations under this Section 7.1, you also
shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from you to such party of
your election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and
you 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.
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7.1.4 The Indemnified Parties will promptly notify you of the commencement of
any litigation or proceedings against them in connection with the issuance or
sale of the Trust shares or the Contracts or the operation of the Trust.
7.2 INDEMNIFICATION BY THE UNDERWRITER
7.2.1 The Underwriter agrees to indemnify and hold harmless you, and each of
your directors and officers and each person, if any, who controls you
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually the "Indemnified Party" for purposes
of this Section 7.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent
of the Underwriter, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal
counsel fees incurred in connection therewith) (collectively, "Losses") to
which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such Losses are related
to the sale or acquisition of the shares of the Trust or the Contracts and:
7.2.1.1 arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement, prospectus or sales literature of the
Trust (or any amendment or supplement to any of the foregoing)
(collectively, the "Trust Documents" for purposes of this Section
7) 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 indemnity shall not apply as to
any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and was
accurately derived from written information furnished to us by or
on behalf of you for use in Trust Documents or otherwise for use
in connection with the sale of the Contracts or Trust shares; or
7.2.1.2 arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived from
Company Documents or wrongful conduct of the Trust, Adviser or Underwriter
or persons under their control, with respect to the sale or distribution of
the Contracts or Trust shares; or
7.2.1.3 arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Company Documents, 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 and
accurately derived from written information furnished to you by or on
behalf of the Trust; or
7.2.1.4 arise out of or result from any failure by us to provide the services
and furnish the materials under the terms of this Agreement (including a
failure, whether unintentional or in good faith or otherwise, to comply
with the qualification representation specified above in Section 2.2.7 and
the diversification requirements specified above in Section 2.2.8; or
7.2.1.5 arise out of or result from any material breach of any representation
and/or warranty made by the Underwriter in this Agreement or arise out of
or result from any other material breach of this Agreement by the
Underwriter; as limited by and in accordance with the provisions of
Sections 7.2.2 and 7.2.3 hereof.
7.2.2 The Underwriter shall not be liable under this indemnification provision
with respect to any Losses 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
10
reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to you or the Accounts, whichever is
applicable.
7.2.3 The Underwriter shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify the
Underwriter of any such claim shall not relieve the Underwriter from any
liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified
Parties, the Underwriter shall be entitled to participate, at its own
expense, in the defense of such action. Unless the Indemnified Party
releases the Underwriter from any further obligations under this Section
7.2, the Underwriter also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice
from the Underwriter to such party of the Underwriter's election to assume
the defense thereof, the Indemnified Party shall bear the fees and expenses
of any additional counsel retained by it, and the Underwriter will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
7.2.4 You agree promptly to notify the Underwriter of the commencement of any
litigation or proceedings against you or the Indemnified Parties in
connection with the issuance or sale of the Contracts or the operation of
each Account.
7.3 INDEMNIFICATION BY THE TRUST
7.3.1 The Trust agrees to indemnify and hold harmless you, and each of your
directors and officers and each person, if any, who controls you within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" and individually the "Indemnified Party" for purposes of this
Section 7.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Trust, which consent shall not be unreasonably withheld) or expenses
(including the reasonable costs of investigating or defending any alleged
loss, claim, damage, liability or expense and reasonable legal counsel fees
incurred in connection therewith) (collectively, "Losses") to which the
Indemnified Parties may become subject under any statute or regulation, at
common law or otherwise, insofar as such Losses result from the gross
negligence, bad faith or willful misconduct of the Board of Trustees or any
member thereof, are related to the operations of the Trust, and arise out
of or result from any material breach of any representation and/or warranty
made by the Trust in this Agreement or arise out of or result from any
other material breach of this Agreement by the Trust; as limited by and in
accordance with the provisions of Sections 7.3.2 and 7.3.3 hereof. It is
understood and expressly stipulated that neither the holders of shares of
the Trust nor any Trustee, officer, agent or employee of the Trust shall be
personally liable hereunder, nor shall any resort be had to other private
property for the satisfaction of any claim or obligation hereunder, but the
Trust only shall be liable.
7.3.2 The Trust shall not be liable under this indemnification provision with
respect to any Losses 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 you, the Trust, the
Underwriter or each Account, whichever is applicable.
7.3.3 The Trust 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 Trust in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have
11
received notice of such service on any designated agent), but failure to notify
the Trust of any such claim shall not relieve the Trust from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Trust shall be entitled
to participate, at its own expense, in the defense of such action. Unless the
Indemnified Party releases the Trust from any further obligations under this
Section 7.3, the Trust also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice from
the Trust to such party of the Trust's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Trust 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.
7.3.4 You and the Underwriter agree promptly to notify the Trust of the
commencement of any litigation or proceedings against the Indemnified
Parties in connection with this Agreement, the issuance or sale of the
Contracts, the operation of each Account, or the issuance or sale or
acquisition of the Trust shares or the operation of the Trust.
8. 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 in Schedule F below or
at such other address as such party may from time to time specify in writing to
the other party.
9. TERMINATION
-----------
9.1 This Agreement may be terminated by any party in its entirety or with
respect to one, some or all Portfolios for any reason by sixty (60) days
advance written notice delivered to the other parties. This Agreement shall
terminate immediately in the event of its assignment by any party without
the prior written approval of the other parties, or as otherwise required
by law.
9.2 This Agreement may be terminated immediately by us upon written notice to
you if:
9.2.1 you notify the Trust or the Underwriter that the exemption from
registration under Section 3(c) of the 1940 Act no longer applies, or
might not apply in the future, to the unregistered Accounts, or that
the exemption from registration under Section 4(2) or Regulation D
promulgated under the 1933 Act no longer applies or might not apply in
the future, to interests under the unregistered Contracts; or
9.2.2 either one or both of the Trust or the Underwriter respectively,
shall determine, in their sole judgment exercised in good faith, that
you have suffered a material adverse change in your business,
operations, financial condition or prospects since the date of this
Agreement or are the subject of material adverse publicity.
9.3 This Agreement may be terminated immediately by you upon written notice to
us if you shall determine, in your sole judgment exercised in good faith,
that either one or both of the Trust or the Underwriter have suffered a
material adverse change in their business, operations, financial condition
or prospects since the date of this Agreement or are the subject of
material adverse publicity.
9.4 If this Agreement is terminated for any reason, except as required by the
Shared Funding Order or pursuant to Section 9.2.1, above, we shall, at your
option, continue to make available additional shares of any Portfolio and
redeem shares of any Portfolio pursuant to all of the terms and conditions
of this Agreement for all Contracts in effect on the effective date of
termination of this Agreement. If this Agreement is terminated as required
by the Shared Funding Order, its provisions shall govern.
12
9.5 The provisions of Sections 2 (Representations and Warranties) and 7
(Indemnification) shall survive the termination of this Agreement. All
other applicable provisions of this Agreement shall survive the termination
of this Agreement, as long as shares of the Trust are held on behalf of
Contract owners in accordance with Section 9.3, except that we shall have
no further obligation to sell Trust shares with respect to Contracts issued
after termination.
9.6 You shall not redeem Trust shares attributable to the Contracts (as opposed
to Trust shares attributable to your assets held in the Account) except:
(i) as necessary to implement Contract owner initiated or approved
transactions; (ii) as required by state and/or federal laws or regulations
or judicial or other legal precedent of general application (hereinafter
referred to as a illegally Required Redemption"); or (iii) as permitted by
an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, you shall promptly furnish to us the opinion of your counsel
(which counsel shall be reasonably satisfactory to us) to the effect that
any redemption pursuant to clause (ii) above is a Legally Required
Redemption.
10. MISCELLANEOUS
-------------
10.1 The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions of this
Agreement or otherwise affect their construction or effect.
10.2 This Agreement may be executed simultaneously in two or more counterparts,
all of which taken together shall constitute one and the same instrument.
10.3 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.
10.4 This Agreement shall be construed and its provisions interpreted under and
in accordance with the laws of the Commonwealth of Massachusetts. It shall
also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder, to any orders of the SEC on behalf of the
Trust granting it exemptive relief, and to the conditions of such orders.
We shall promptly forward copies of any such orders to you.
10.5 The parties to this Agreement agree that the assets and liabilities of each
Portfolio of the Trust are separate and distinct from the assets and
liabilities of each other Portfolio. No Portfolio shall be liable or shall
be charged for any debt, obligation or liability of any other Portfolio.
10.6 Each party to this Agreement shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD, the Internal Revenue Service, 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.
10.7 Each party to this Agreement shall treat as confidential all information
reasonably identified as confidential in writing by any other party to this
Agreement, and, except as permitted by this Agreement or as required by
legal process or regulatory authorities, shall not disclose, disseminate,
or use such names and addresses and other confidential information until
such time as they may come into the public domain, without the express
written consent of the affected party to this Agreement. Without limiting
the foregoing, no party to this Agreement shall disclose any information
that such party has been advised is proprietary, except such information
that such party is required to disclose by any appropriate governmental
authority (including, without limitation, the SEC, the NASD, and state
securities and insurance regulators).
13
10.8 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties to this Agreement are
entitled to under state and federal laws.
10.9 Neither this Agreement nor any rights or obligations created by it may be
assigned by any party without the prior written approval of the other
parties.
10.10 No provisions of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by both
parties.
IN WITNESS WHEREOF, each of the parties has caused their duly authorized
officers to execute this Agreement.
The Company: Golden American Life Insurance Company
--------------------------------------
By:/s/ Xxxxx X. Xxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
The Trust: Liberty Variable Investment Trust
Only on behalf of each ---------------------------------
Portfolio listed on
Schedule C hereof.
By:/s/ Xxxxxxx Xxxxxxxxxxx
------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Assistant Secretary
The Underwriter Columbia Funds Distributor, Inc.
--------------------------------
By:/s/ Xxxxx X. Xxxxxx, Xx.
------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: Vice President
14
SCHEDULE A
THE COMPANY
Golden American Life Insurance Company
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Organized as a corporation under Delaware law
15
SCHEDULE B
ACCOUNTS OF THE COMPANY
----|---------------------------------------|-----------------------------------
1. |Name: |Golden American Separate Account B
----|---------------------------------------|-----------------------------------
|Date Established: |July 14, 1988
----|---------------------------------------|-----------------------------------
|SEC Registration Number: |811-5626
----|---------------------------------------|-----------------------------------
16
SCHEDULE C
AVAILABLE PORTFOLIOS AND CLASSES OF SHARES OF THE TRUST
Liberty Variable Investment Trust
---------------------------------
Colonial Small Cap Value Fund, Class B
17
SCHEDULE D
Contracts of the Company
-------------------------------------------------------------------------------------------------------------------------
CONTRACT 1 CONTRACT 2 CONTRACT 3
-------------------------------------------------------------------------------------------------------------------------
CONTRACT/PRODUCT Access One DVA Plus ESII
NAME
-------------------------------------------------------------------------------------------------------------------------
REGISTERED (Y/N) Y Y Y
-------------------------------------------------------------------------------------------------------------------------
SEC REGISTRATION 333-33914 033-59261 333-28679
NUMBER
-------------------------------------------------------------------------------------------------------------------------
REPRESENTATIVE
FORM NUMBERS
-------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT Golden American Separate Golden American Separate Golden American Separate
NAME/DATE Account B Account B Account B
ESTABLISHED
-------------------------------------------------------------------------------------------------------------------------
SEC REGISTRATION 811-5626 811-5626 811-5626
NUMBER
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
CONTRACT 4 CONTRACT 5 CONTRACT 6
-------------------------------------------------------------------------------------------------------------------------
CONTRACT/PRODUCT Generations Landmark Opportunities
NAME
-------------------------------------------------------------------------------------------------------------------------
REGISTERED (Y/N) Y Y Y
-------------------------------------------------------------------------------------------------------------------------
SEC REGISTRATION 333-28679 333-30180 333-28679
NUMBER
-------------------------------------------------------------------------------------------------------------------------
REPRESENTATIVE
FORM NUMBERS
-------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT Golden American Separate Golden American Separate Golden American Separate
NAME/DATE Account B Account B Account B
ESTABLISHED
-------------------------------------------------------------------------------------------------------------------------
SEC REGISTRATION 811-5626 811-5626 811-5626
NUMBER
-------------------------------------------------------------------------------------------------------------------------
18
--------------------------------------------------------------------------------
CONTRACT 7 CONTRACT CONTRACT
--------------------------------------------------------------------------------
CONTRACT/PRODUCT Premium Plus
NAME
--------------------------------------------------------------------------------
REGISTERED (Y/N) Y
--------------------------------------------------------------------------------
SEC REGISTRATION 333-28755
NUMBER
--------------------------------------------------------------------------------
REPRESENTATIVE
FORM NUMBERS
--------------------------------------------------------------------------------
SEPARATE ACCOUNT Golden American Separate
NAME/DATE Account B
ESTABLISHED
--------------------------------------------------------------------------------
SEC REGISTRATION 811-5626
NUMBER
--------------------------------------------------------------------------------
19
SCHEDULE E
RULE 12B-1 PLANS
COMPENSATION SCHEDULE
---------------------
Each Portfolio named below shall pay the following amounts pursuant to the terms
and conditions referenced below under its Class BRule 12b-1 Distribution Plan,
stated as a percentage per year of Class B's average daily net assets
represented by shares of Class B.
Portfolio Name Maximum Annual Payment Rate
-------------- ---------------------------
Colonial Small Cap Fund, Variable Series 0.25%
Agreement Provisions
--------------------
If the Company, on behalf of any Account, purchases Trust Portfolio shares
("Eligible Shares") that are subject to a Rule 12b-1 plan adopted under the 1940
Act (the "Plan"), the Company may participate in the Plan.
Any obligation assumed by the Trust pursuant to this Agreement shall be limited
in all cases to the assets of the Trust and no person shall seek satisfaction
thereof from shareholders of the Trust. The provisions of the Plans shall
control over the provisions of the Participation Agreement, including this
Schedule E, in the event of any inconsistency.
You agree to provide complete disclosure as required by all applicable statutes,
rules and regulations of all rule 12b-1 fees received from us in the prospectus
of the Contracts.
20
SCHEDULE F
ADDRESSES FOR NOTICES
To the Company: Golden American Life Insurance Company
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
To the Trust: Liberty Variable Investment Trust
One Financial Center
Boston, Massachusetts
Attention: President
CC: Legal Counsel
To the Underwriter: Liberty Funds Distributors, Inc.
One Financial Center
Boston, Massachusetts
Attention: Co-President/CC: Legal Counsel
21
