PARTICIPATION AGREEMENT
AMONG
PILGRIM VARIABLE PRODUCTS TRUST
AND
ING PILGRIM INVESTMENTS, LLC
AND
GOLDEN AMERICAN LIFE INSURANCE COMPANY
AND
ING PILGRIM SECURITIES, INC.
THIS AGREEMENT, made and entered into as of the 1st day of May, 2001,
among Pilgrim Variable Products Trust (the "Trust") an open-ended management
investment company and business trust organized under the laws of Massachusetts,
ING Pilgrim Investments, LLC, (the "Advisor") a limited liability company
organized under the laws the State of Delaware, Golden American Life Insurance
Company (the "Company"), a life insurance company organized under the laws of
the State of Delaware, on its own behalf and on behalf of each separate account
of the Company as set forth on Schedule A hereto, as such Schedule may be
amended from time to time (each such account hereinafter referred to as the
"Account"), and ING Pilgrim Securities, Inc. (the "Distributor"), a corporation
organized under the laws of the State of Delaware.
WHEREAS, the Trust is an open-end diversified management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
(collectively, the "Contracts") to be offered by insurance companies which have
entered into Participation Agreements with the Trust and the Distributor (the
"Participating Insurance Companies"); and
WHEREAS, the units of beneficial interest in the Trust are divided into
several series of shares, each designated a "Fund" and representing the interest
in a particular managed portfolio of securities and other assets; and
WHEREAS, the Trust may rely on an order ("ING Variable Insurance Trust,
et al., Investment Company Act Rel. No. 24439 (May 3, 2000)) from the Securities
and Exchange Commission ("SEC"), granting the variable annuity and variable life
insurance separate accounts participating in the Trust exemptions from the
provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the Investment Company
Act of 1940, as amended (the "1940 Act"), and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, 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 the Participating Insurance Companies (the "Mixed and Shared Funding
Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and the shares of each Fund are registered under the
Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Adviser, which serves as the investment adviser to the
Trust, is duly registered as an investment adviser under the Investment Advisers
Act of 1940, as amended;
WHEREAS, the Company represents herein that each Account is a duly
organized, validly existing separate account, which was established by
resolution of the Board of Directors of the Company; and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act (if such registration is required) and
has registered or will register certain of the Contracts under the 1933 Act and
the 1940 Act and has gained the approval of any applicable state securities and
insurance law authorities; and
WHEREAS, the Distributor, which serves as the distributor to the Trust,
is registered as a broker-dealer with the SEC under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in certain Funds listed in
Schedule B hereto, as such Schedule may be amended from time to time
("Authorized Funds"), on behalf of each Account to fund certain of the Contracts
and the Distributor is authorized to sell such shares to unit investment trusts
such as each Account at net asset value;
NOW, THEREFORE, in consideration of the promises herein, the Trust, the
Adviser, the Company, and the Distributor agree as follows:
ARTICLE I
SALE OF TRUST SHARES
1.1. The Distributor agrees, subject to the Trust's rights under
Section 1.2 and otherwise under this Agreement, to sell to the Company those
Trust shares representing interests in Authorized Funds which each Account
orders, executing such orders on a daily basis at the net asset value next
computed after receipt by the Trust or its designee of the order for the shares
of the Trust. For purposes of this Section 1.1, the Company shall be the
designee of the Trust for receipt of such orders from each Account and receipt
by such designee shall constitute receipt by the Trust; provided that the Trust
receives notice of such order by 10:00 a.m., Eastern time, on the next following
Business Day. "Business Day" shall mean any day on which the New York Stock
Exchange ("NYSE") is open for trading and on which the Trust calculates its net
asset value pursuant to the rules of the SEC. The initial Authorized Funds are
set forth in Schedule B as such schedule is amended from time to time.
1.2. The Trust agrees to make its shares available indefinitely
for purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Trust calculates its net asset value
pursuant to the rules of the SEC and the Trust shall use
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reasonable efforts to calculate such net asset value on each day the NYSE is
open for trading. Notwithstanding the foregoing, the Trustees of the Trust (the
"Trustees") may refuse to sell shares of any Authorized Fund to the Company or
any other person, or suspend or terminate the offering of shares of any
Authorized Fund if such action is required by law or by regulatory authorities
having jurisdiction over the Trust or if the Trustees determine, in the exercise
of their fiduciary responsibilities, that to do so would be in the best
interests of shareholders.
1.3. The Trust and the Distributor agree that shares of the Trust will be sold
only to Participating Insurance Companies and their separate accounts and other
persons who are permissible investors consistent with the Accounts meeting the
requirements of Treas. Reg. 1.817-5.
1.4. The Trust shall redeem its shares in accordance with the
terms of its then-current prospectus. For purposes of this Section 1.4, the
Company shall be the designee of the Trust for receipt of requests for
redemption from each Account and receipt by such designee shall constitute
receipt by the Trust; provided that the Trust receives notice of such request
for redemption by 10:00 a.m., Eastern time, on the next following Business Day.
1.5. The Company shall purchase and redeem the shares of Authorized Funds
offered by the then-current prospectus and statement of additional information
("SAI") of the Trust in accordance with the provisions of such prospectus and
SAI.
1.6. The Company shall pay for Trust shares on the next Business Day after an
order to purchase Trust shares is made in accordance with the provisions of
Article I hereof. Payment shall be in federal funds transmitted by wire.
1.7. Issuance and transfer of the Trust's shares will be by book entry only.
Share certificates will not be issued to the Company or to any Account. Shares
ordered from the Trust will be recorded as instructed by the Company to the
Distributor in an appropriate title for each Account or the appropriate
sub-account of each Account.
1.8. The Trust or the Distributor shall furnish prompt notice (by
wire or telephone, followed by written confirmation) to the Company of the
declaration of any income, dividends or capital gain distributions payable on
the Trust's shares. The Company hereby elects to receive all such income
dividends and capital gain distributions as are payable on the Authorized Fund
shares in additional shares of that Authorized Fund. The Company reserves the
right to revoke this election and to receive all such income dividends and
capital gain distributions in cash. The Distributor shall notify the Company of
the number of shares so issued as payment of such dividends and distributions.
1.9. The Distributor shall make the net asset value per share for each
Authorized Fund available to the Company on a daily basis as soon as reasonably
practical after the Trust calculates its net asset value per share, and each of
the Trust and the Distributor shall use its reasonable best efforts to make such
net asset value per share available by 6:00 p.m., Eastern time, but in no event
later than 7:00 p.m., Eastern time, each Business Day.
1.10. Any error in the calculation of the net asset value, dividend and capital
gain information greater than or equal to $0.01 per share of the Trust's shares,
shall be reported
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immediately upon discovery to the Company. Any error of a lesser amount shall be
corrected in the next Business Day's net asset value per share for the Trust.
Any such notice will state for each day for which an error occurred, the
incorrect price, the correct price and, to the extent communicated to the
Trust's shareholders, the reason for the price change. The Company may send this
notice or a derivation thereof (so long as such derivation is approved in
advance by the Distributor) to contract owners or participants whose accounts
are affected by the price change. The parties will negotiate in good faith to
develop a reasonable method for effecting such adjustments. The Trust shall
provide the Company, on behalf of the Account or the appropriate subaccount of
each Account, with a prompt adjustment to the number of shares purchased or
redeemed to reflect the correct share net asset value.
For purposes of this Section 1.10, the Trust or the Distributor shall be liable
to the Company for any amount the Company is required to pay to Contract owners
or participants due to (i) an incorrect calculation of a Fund's daily net asset
value, dividend rate, or capital gain distribution rate, in accordance with the
Trust's procedures or (ii) incorrect or late reporting of the daily net asset
value or capital gain distribution rate of an Authorized Fund, in accordance
with the Trust's procedures, upon written notification by the Company, with
supporting data, to the Trust, provided, however, that neither the Trust nor the
Distributor shall be liable for any information provided to the Company pursuant
to this Agreement which information is based on inaccurate information supplied
by the Company to the Trust or any of its affiliates, or for any incorrect or
late reporting because of acts of God or systems or mechanical failures over
which the Trust, or the Distributor or the investment adviser to the Trust have
no reasonable control; and provided further that the Distributor and Officers of
the Trust shall in good faith discuss with the Company the bearing of any
expenses described in (i) and (ii) above for which the Trust or Distributor are
not liable under this provision. In addition, the Trust or the Distributor shall
be liable to the Company for systems and out of pocket costs incurred by the
Company in making a Contract owner's or a participant's account whole, if such
costs or expenses are a result of the Trust's failure to provide timely or
correct net asset values, dividend and capital gains or financial information,
and if such information is not corrected by 4:00 p.m. Eastern time of the next
business day after releasing such incorrect information. If a mistake is caused
in supplying such information or confirmations, which results in a
reconciliation with incorrect information, the amount required to make a
Contract owner's or a participant's account whole shall be borne by the party
providing the incorrect information, regardless of when the error is corrected.
1.11. The parties may agree to provide pricing information,
execute orders and wire payments for purchases and redemptions through National
Securities Clearing Corporation's Fund/SERV system in which case such activities
will be governed by the provisions set forth in an Exhibit to this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that
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(a) at all times during the term of this Agreement, the
Contracts are or will be registered (except those Contracts which are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 0000 Xxx) under the 1933 Act and the 1940 Act; the
Contracts will be issued and sold in compliance in all material respects with
all applicable laws and the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established each Account prior to any issuance or sale thereof as a separate
account under applicable law and has registered or, prior to any issuance or
sale of the Contracts, will register each Account (except those Accounts which
have not been registered in proper reliance upon an exclusion from registration
under the 0000 Xxx) as a unit investment trust in accordance with the provisions
of the 1940 Act to serve as a segregated investment account for the Contracts;
(b) the Contracts are currently treated as endowment, annuity or
life insurance contracts, under applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), and that it will make every effort to
maintain such treatment and that it will notify the Trust and the Underwriter
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.
(c) the Company will use its best efforts to provide accurate and complete
notices to the Trust of the purchase and/or redemption of Trust shares by each
Account.
2.2. The Trust and the Adviser represent and warrant that
(a) at all times during the term of this Agreement, Trust shares
sold pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold by the Trust to the Company in compliance with
all applicable laws, subject to the terms of Section 2.4 below, and the Trust is
and shall remain registered under the 1940 Act. 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 or the Adviser shall register and qualify the shares for sale
in accordance with the laws of the various states only if and to the extent
deemed advisable by the Trust or the Distributor in connection with their sale
by the Trust to the Company and only as required by Section 2.4;
(a) (b) each Authorized Fund is currently qualified as a Regulated
Investment Company under Subchapter M of the Code, and that the Adviser will use
its best efforts to maintain such qualification (under Subchapter M or any
successor provision) and that it will notify the Company immediately upon having
a reasonable basis for believing that an Authorized Fund has ceased to so
qualify or that it might not so qualify in the future; and
(c) in connection with payments by the Trust to finance
distribution expenses of the Trust , such payments will be made only
pursuant to a plan of distribution formulated under and in compliance
with Rule 12b-1 under the 1940 Act and approved by the Trust's Board of
Trustees.; and
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(d) the Trust 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.
2.3. The Distributor represents and warrants that
(a) it is a member in good standing of the NASD and is registered as a
broker-dealer with the SEC; and
(b) it will sell and distribute the Trust shares in accordance
in all material respects with all applicable federal securities laws applicable
to it, including without limitation the 1933 Act, the 1934 Act, and the 1940
Act; and
2.4. Notwithstanding any other provision of this Agreement, the
Trust shall be responsible for the registration and qualification of its shares
and of the Trust itself under the laws of any jurisdiction only in connection
with the sale of shares directly to the Company through the Distributor. The
Trust shall not be responsible, and the Company shall take full responsibility,
for determining any jurisdiction in which any qualification or registration of
Trust shares or the Trust by the Trust may be required in connection with the
sale of the Contracts or the indirect interest of any Contract in any shares of
the Trust and advising the Trust thereof at such time and in such manner as is
necessary to permit the Trust to comply.
2.5. The Trust makes no representation 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 the
various states.
2.6. The Trust and the Distributor represent and warrant that all
of their trustees, officers, employees, investment advisers, and other
individuals/entities having access to the funds and/or securities of the Trust
are and continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Trust in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid bond
includes coverage for larceny and embezzlement and is issued by a reputable
bonding company.
ARTICLE III
PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Trust shall provide the Company with a sufficient quantity of its
prospectus, SAI and any supplements to any of these materials once each year (or
more frequently if these materials are amended), to be used in connection with
the offerings and transactions contemplated by this Agreement. In addition, the
Trust shall provide the Company with a sufficient quantity of its proxy
materials that are required to be sent to Contract owners or participants. In
lieu of the Trust providing the Company with printed copies of its prospectus,
SAI, supplements and proxy materials, the Company shall have the right to
request that the Trust transmit a copy of such materials in an electronic format
(camera-ready copy), which the
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Company may use to have such materials printed together with similar materials
of other Account funding media that the Company or any distributor will
distribute to existing or prospective Contract owners or participants.
3.2. The Trust's prospectus shall state that the SAI for the
Trust is available from the Trust, and the Trust shall provide the SAI free of
charge to any owner of a Contract or to any prospective Contract owner who
requests the SAI. Distributor and Trust, as appropriate, agree to provide to
Company with as many copies of the SAI as reasonably requested by Company.
3.3. The Trust, at its expense, shall provide the Company with
copies of its reports to shareholders, proxy material and other communications
to shareholders in such quantity as the Company shall reasonably require for
distribution to the Contract owners or participants. The Company shall respond
to requests for documents regarding the Trust in a manner that is consistent
with SEC rules, including, but not limited to, Item 1(b) of Form N-1A, which
requires requested documents to be sent within three (3) business days from the
date of request.
3.4. The Company shall vote all Trust shares as required by law
and the Mixed and Shared Funding Exemptive Order. The Company reserves the right
to vote Trust shares held in any separate account in each Company's own right,
to the extent permitted by law and the Mixed and Shared Funding Exemptive Order.
The Company shall be responsible for assuring that each of its separate accounts
participating in the Trust calculates voting privileges in a manner consistent
with all legal requirements and the Mixed and Shared Funding Exemptive Order.
3.5. The Trust will comply with all applicable provisions of the 1940 Act
requiring voting by shareholders.
ARTICLE IV
SALES MATERIAL AND INFORMATION
4.1. Without limiting the scope or effect of Section 4.2 hereof,
the Company shall furnish, or shall cause to be furnished, to the Distributor
each piece of sales literature or other promotional material (as defined
hereafter) or a representative sample thereof in which the Trust, its investment
adviser or the Distributor is named at least 15 days prior to its use. No such
material shall be used if the Distributor objects to such use within five (5)
Business Days after receipt of such material.
4.2. The Company shall not give any information or make any representations or
statements on behalf of the Trust or concerning the Trust in connection with the
sale of the Contracts other than the information or representations contained in
the registration statement or prospectus for the Trust shares, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in annual or semi-annual reports or proxy statements for the Trust,
or in sales literature or other promotional material approved by the Trust or
its designee or by the Distributor, except with the written permission of the
Trust or the Distributor or the designee of either or as is required by law.
4.3. The Distributor or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material prepared by the Distributor in which the Company
and/or the Company's Account is named at least 15 days
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prior to its use. No such material shall be used if the Company or its designee
object to such use within five (5) Business Days after receipt of such material.
4.4. Neither the Trust nor the Distributor shall give any information or make
any representations on behalf of the Company or concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners or participants,
or in sales literature or other promotional material approved by the Company or
its designee, except with the written permission of the Company or as is
required by law.
4.5. For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, 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, 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 of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all registered representatives.
4.6 The Trust will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
notices and exemptive orders related to applications for exemptive relief from
the requirements of the federal securities laws, and all amendments to any of
the above, that relate to the Trust or its shares, promptly after the filing of
such document with the SEC, the NASD or other regulatory authority.
4.7 The Company will provide to the Trust at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
notices and exemptive orders related to applications for exemptive relief from
the requirements of the federal securities laws, and all amendments to any of
the above, that relate to the Trust or its shares, promptly after the filing of
such document with the SEC, the NASD, or other regulatory authority.
ARTICLE V
FEES AND EXPENSES
5.1. If the Trust or any Authorized Fund adopts and implements a
plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses,
or a plan under which the Trust or any Authorized Fund shall support services
rendered to shareholders or contract owners subject to obtaining any required
exemptive orders or other regulatory approvals, the Trust or Distributor may
make payments to the Company or to the underwriter for the Account if and in
such amounts agreed to by the parties in writing.
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5.2. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust to the extent permitted by law. The Trust
shall bear the expenses for the cost of registration and qualification of the
Trust's shares, preparation and filing of the Trust's prospectus and
registration statement, proxy materials and reports, setting the prospectus and
shareholder reports in type, setting in type and printing the proxy materials,
and the preparation of all statements and notices required by any federal or
state law, in each case as may reasonably be necessary for the performance by it
of its obligations under this Agreement. All expenses incident to the
solicitation and tabulation of the Trust's proxy materials will be paid by the
Trust, including postage.
5.3. The Trust shall pay for the cost of typesetting and printing
periodic fund reports to shareholders, prospectuses, prospectus supplements,
statements of additional information and other materials that are required by
law to be sent to Contract owners or participants, as well as the cost of
distributing such materials. The Company shall pay for the cost of printing the
Trust's prospectuses and statements of additional information and for the
distribution thereof for prospective Contract owners or participants. Each party
shall be provided with such supporting data as may reasonably be requested for
determining expenses under this Article V.
ARTICLE VI
DIVERSIFICATION
6.1 The Trust will invest its assets to cause each Authorized Fund to
maintain a diversified pool of investments that would, if such Fund were a
segregated asset account, satisfy the diversification requirements of Treasury
Reg. ss.1.817-5(b)(1) or (2). In the event of a breach of this Article VI by the
Trust, it will take all reasonable steps: (a) to notify the Company of such
breach; and (b) to adequately diversify the Trust so as to achieve compliance
within the grace period afforded by Treasury Regulation 1.817-5.
ARTICLE VII
POTENTIAL CONFLICTS
7.1. The Trustees will monitor the Trust for the existence of any
material irreconcilable conflict between the interests of the Contract owners or
participants 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 regulatory authority; (b) a change in applicable
federal or state insurance, tax, or securities laws or regulations, or a public
ruling, private letter ruling, no-action or interpretative letter, or any
similar action by insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding; (d) the manner
in which the investments of any Authorized Fund are being managed; (e) a
difference in voting instructions given by variable annuity contract and
variable life insurance contract owners or participants; or (f) a decision by an
insurer to disregard the voting instructions of Contract owners or participants.
The Trust shall promptly inform the Company if the Trustees determine that a
material irreconcilable conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which it is
aware to the Trustees. The Company will assist the Trustees in carrying out
their responsibilities under
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the Mixed and Shared Funding Exemptive Order, by providing the Trustees with all
information reasonably necessary for the Trustees to consider any issues raised.
This responsibility includes, but is not limited to, an obligation by the
Company to inform the Trustees whenever Contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Trustees, or a majority of the
disinterested Trustees, that a material irreconcilable conflict exists, the
Company shall to the extent reasonably practicable (as determined by a majority
of the disinterested Trustees), take, at the Company's expense (but only if the
Trustees determine that the Company is responsible for causing or creating said
conflict, said conflict is caused by operation of law or said conflict is the
result of some other cause outside the control of the Trust or any of the
Participating Insurance Companies), whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Trust or any Authorized Fund thereof and reinvesting such assets in a
different investment medium, including (but not limited to) another series of
the Trust, or submitting the question whether such segregation should be
implemented to a vote of all affected Contract owners or participants and, as
appropriate, segregating the assets of any appropriate group (i.e., annuity
contract owners or participants, life insurance contract owners or participants,
or variable contract owners or participants of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to the
affected Contract owners or participants the option of making such a change; and
(2) establishing a new registered management investment company or managed
separate account.
7.4. If a material irreconcilable conflict arises because of a decision by the
Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Account's
investment in one or more portfolios of the Trust and terminate this Agreement
with respect to such Account; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
Trustees. No charge or penalty shall be imposed as a result of such withdrawal.
Any such withdrawal and termination must take place within six (6) months after
the Trust gives written notice that this provision is being implemented, and
until the end of that six month period, the Distributor and Trust shall, to the
extent permitted by law and any exemptive relief previously granted to the
Trust, continue to accept and implement orders of the Company for the purchase
(and redemption) of shares of the Trust.
7.5. If a material irreconcilable conflict arises because of a particular state
insurance regulator's decision applicable to the Company to disregard Contract
owner voting instructions and that decision represents a minority position or
would preclude a majority vote, then the Company may be required, at the Trust's
direction, to withdraw the affected Account's investment in one or more
Authorized Funds of the Trust; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
Trustees. Any such withdrawal and termination must take place within six (6)
months after the Trust gives written notice that this provision is being
implemented, unless a shorter period is required by law, and until the end of
the foregoing six month period (or such shorter period if required by law), the
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Distributor and Trust shall, to the extent permitted by law and any exemptive
relief previously granted to the Trust, continue to accept and implement orders
by that Company for the purchase (and redemption) of shares of the Trust. No
charge or penalty will be imposed as a result of such withdrawal.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of
the disinterested Trustees shall determine whether any proposed action
adequately remedies any material irreconcilable conflict. Neither the Trust nor
the Distributor shall be required to establish a new funding medium for the
Contracts, nor shall the Company be required to do so, if an offer to do so has
been declined by vote of a majority of Contract owners or participants
materially adversely affected by the material irreconcilable conflict. In the
event that the Trustees determine that any proposed action does not adequately
remedy any material irreconcilable conflict, then the Company will withdraw the
Account's investment in one or more Authorized Funds of the Trust and terminate
this Agreement within six (6) months (or such shorter period as may be required
by law or any exemptive relief previously granted to the Trust) after the
Trustees inform the Company in writing of the foregoing determination; provided,
however, that such withdrawal and termination shall be limited to the extent
required by any such material irreconcilable conflict as determined by a
majority of the disinterested Trustees. No charge or penalty will be imposed as
a result of such withdrawal.
7.7. The responsibility to take remedial action in the event of the Trustees'
determination of a material irreconcilable conflict and the obligation of the
Company set forth in this Article VII shall be carried out with a view only to
the interests of Contract owners or participants.
7.8. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act
or the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Mixed and Shared Funding
Exemptive Order, then (a) the Trust and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4
and 7.5 of this Agreement shall continue in effect only to the extent that terms
and conditions substantially identical to such Sections are contained in the
Mixed and Shared Funding Exemptive Order or any amendment thereto. If and to the
extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to
provide exemptive relief from any provision of the 1940 Act or the rules
promulgated thereunder with respect to mixed or shared funding (as defined in
the Mixed and Shared Funding Exemptive Order) on terms and conditions materially
different from those contained in the Mixed and Shared Funding Exemptive Order,
then (a) the Trust and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, , 7.1., 7.2, 7.3, 7.4, and 7.5 of this Agreement
shall continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as so
amended or adopted.
11
ARTICLE VIII
INDEMNIFICATION
The Company has reviewed the Mixed and Shared Funding Exemption Order and hereby
assumes all obligations referred to therein which are required, including,
without limitation, the obligation to provide reports, material or data as the
Trustees may request, as conditions to such order, to be assumed or undertaken
by the Company.
8.1. Indemnification by the Company
8.1. (a).The Company shall indemnify and hold harmless the Trust,
the Distributor and the Adviser, and each of the Trustees, directors of the
Distributor or the Adviser, officers, employees or agents of the Trust, the
Distributor or the Adviser, and each person, if any, who controls the Trust,
Adviser or the Distributor within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company which consent may not be
unreasonably withheld) or litigation expenses (including reasonable legal and
other expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Trust's shares or the Contracts or
the performance by the parties of their obligations hereunder and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
a registration statement, prospectus or SAI for the
Contracts or contained in the Contracts or sales literature
for the Contracts (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished to the Company by or
on behalf of the Trust for use in the registration
statement, prospectus or SAI for the Contracts or in the
Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale
of the Contracts or Trust shares; or
(ii) arise out of or as a result of written statements or
representations (other than statements or representations
contained in the Trust's registration statement or
prospectus, or in sales literature for Trust shares not
supplied by the Company, or persons under its control) or
wrongful conduct of the Company or its agents or employees
or persons under its control, with respect to the sale or
distribution of the Contracts or Trust shares; or
12
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the Trust or
any amendment thereof or supplement thereto or the omission
or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was made in reliance upon information furnished to
the Trust or the Distributor by or on behalf of the Company;
or
(iv) arise out of or result from any breach of any material
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company, as limited by and
in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1. (b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party to the extent such may arise from 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 or duties under this Agreement or to
the Trust, whichever is applicable.
8.1. (c) The Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), on the basis of which the Indemnified
Party should reasonably know of the availability of indemnity hereunder in
respect of such claim but failure to notify the Company of any such claim shall
not relieve the Company from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Company shall be entitled to participate, at the
Company's expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the
Indemnified Party named in the action. After notice from the Company to such
Indemnified Party of the Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company will not be liable to such Indemnified Party
under this Agreement for any legal or other expenses subsequently incurred by
such Indemnified Party independently in connection with the defense thereof
other than reasonable costs of investigation.
8.1. (d) The Distributor shall promptly notify the Company of the commencement
of any litigation or proceedings against the Trust or the Distributor in
connection with the issuance or sale of the Trust Shares or the Contracts or the
operation of the Trust.
8.1. (e) The provisions of this Section 8.1 shall survive any termination of
this Agreement.
8.2. Indemnification by the Adviser and Distributor
13
8.2. (a) The Adviser and the Distributor (as between them, in relation to each
party's responsibilities hereunder) shall indemnify and hold harmless the
Company and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act and any director, officer, employee or agent of the
foregoing (collectively, the "Indemnified Parties" for purposes of this Section
8.2) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Adviser or Distributor which
consent may not be unreasonably withheld) or litigation expenses (including
reasonable legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Trust's shares or the
Contracts or the performance by the parties of their obligations hereunder and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in a registration statement,
prospectus, or SAI for the Trust or the sales literature for the Trust prepared
by the Trust or Distributor (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Distributor or Trust by
or on behalf of the Company for use in sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of the Contracts or
Trust shares; or
(ii) arise out of or as a result of written statements or representations (other
than statements or representations contained in the registration statement,
prospectus, SAI or sales literature for the Contracts not supplied by the
Distributor or persons under its control) of the Adviser, the Distributor or
persons under its control, with respect to the sale or distribution of the
Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, SAI or sales
literature covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the Distributor; or
(iv) arise out of or result from any breach of any material representation
and/or warranty made by the Adviser, the Distributor or the Trust in this
Agreement or arise out of or result from any other material breach of this
Agreement by the Adviser, the Distributor or the Trust; as limited by and in
accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof.
14
8.2. (b) The Adviser and Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party as
such may arise from such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company or the Account, whichever is applicable.
8.2. (c) The Adviser and Distributor 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 Adviser or
Distributor, as the case may be, 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) on the basis of which the Indemnified Party should reasonably know of the
availability of indemnity hereunder in respect of such claim, but failure to
notify the Adviser or Distributor of any such claim shall not relieve the
Adviser or Distributor 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 Adviser and Distributor will be entitled to
participate, at its own expense, in the defense thereof. The Adviser or
Distributor also shall be entitled to assume the defense thereof, with counsel
satisfactory to the Indemnified Party named in the action. After notice from the
Adviser or Distributor to such Indemnified Party of the Adviser's or
Distributor'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 Adviser or Distributor will not be liable to such Indemnified Party under
this Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof other
than reasonable costs of investigation.
8.2. (d) The Company shall promptly notify the Distributor, the Adviser, and the
Trust of the commencement of any litigation or proceedings against it or any of
its officers or directors, in connection with the issuance or sale of the
Contracts or the operation of each Account.
8.2. (e) The provisions of this Section 8.2 shall survive any termination of
this Agreement.
ARTICLE IX
APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Delaware.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and
1940 acts, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Mixed and
15
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X
TERMINATION
10.1. This Agreement shall terminate:
(a) at the option of any party, with respect to some or all of the Authorized
Funds, upon sixty (60) days' advance written notice to the other parties; or
(b) at the option of the Company, upon receipt of the Company's
written notice by the other parties, with respect to any Authorized Portfolio if
shares of the Designated Portfolio are not reasonably available to meet the
requirements of the Contracts as reasonably determined in good faith by the
Company; or
(c) at the option of the Company, upon receipt of the Company's
written notice by the other parties, with respect to any Authorized Portfolio in
the event any of the Authorized Portfolio's shares are not registered, issued or
sold in accordance with applicable state and/or Federal law or such law
precludes the use of such shares as the underlying investment media of the
Contracts issued or to be issued by Company; or
(d) at the option of the Trust or the Distributor in the event
that formal administrative proceedings are instituted against the Company by the
NASD, the SEC, any State Insurance Commissioner or any other regulatory body
regarding the Company's duties under this Agreement or related to the sales of
the Contracts, with respect to the operation of any Account, or the purchase of
the Trust shares, provided, however, that the Trust or the Distributor
determines in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon the ability
of the Company to perform its obligations under this Agreement; or
(e) at the option of the Company in the event that formal
administrative proceedings are instituted against the Trust, the Adviser, or
Distributor by the NASD, the SEC, or any state securities or insurance
department or any other regulatory body in respect of the sale of shares of the
Trust to the Company, provided, however, that the Company determines in its sole
judgment exercised in good faith, that any such administrative proceedings will
have a material adverse effect upon the ability of the Trust, the Adviser, or
Distributor to perform its obligations under this Agreement; or
(f) with respect to any Account, upon requisite vote of the
Contract owners or participants having an interest in such Account (or any
subaccount) or by order of the SEC to substitute the shares of another
investment company for the corresponding Authorized Fund shares of the Trust in
accordance with the terms of the Contracts for which those Authorized Fund
shares had been selected to serve as the underlying investment media. The
Company will give 60 days' prior written notice to the Trust of the date of any
proposed vote or order of substitution to replace the Trust's shares;
16
(g) with respect to any Authorized Fund, upon 30 days' advance
written notice from the Distributor to the Company, upon a decision by the
Distributor to cease offering shares of the Trust for sale; or
(h) at the option of any party to this Agreement, upon written
notice to the other parties, upon another party's material breach of any
provision of this Agreement which material breach is not cured within thirty
(30) days of said notice.
10.2. It is understood and agreed that the right of any party
hereto to terminate this Agreement pursuant to Section 10.1 (a) may be exercised
for any reason or for no reason.
10.3. No termination of this Agreement shall be effective unless
and until the party terminating this Agreement gives prior written notice to all
other parties to this Agreement of its intent to terminate, which notice shall
set forth the basis for such termination. Such prior written notice shall be
given in advance of the effective date of termination as required by this
Article X.
10.4. Notwithstanding any termination of this Agreement, subject
to Sections 1.2 and 10.5 of this Agreement, the Trust and the Distributor shall,
at the option of the Company, continue to make available additional shares of
the Trust pursuant to the terms and conditions of this Agreement, for all
Contracts in effect as of the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, subject to
Sections 1.2 and 10.5 of this Agreement, the owners or participants of the
Existing Contracts 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 Existing Contracts. The parties agree
that this Section 10.4 shall not apply to any termination under Article VII and
the effect of such Article VII termination shall be governed by Article VII of
this Agreement.
10.5. If any party terminates this Agreement with respect to any
Authorized Fund pursuant to the provisions under Article X, the Agreement shall
nevertheless continue in effect as to any shares of the Trust that are
outstanding as of the date of such termination (the "Initial Termination Date").
This continuation shall extend to the earlier of (a) the date as of which an
Account no longer owns shares of the affected Authorized Fund or (b) the date
(the "Final Termination Date") as of 180 days following the Initial Termination
Date, or, at the Distributor's option, such later date as is necessary for the
Company to obtain a substitution order from the SEC, the application for which
the Company will diligently pursue.
ARTICLE XI
NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
17
If to the Trust:
Pilgrim Variable Products Trust
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxxx X. Xxxxxxxx
If to the Adviser:
ING Pilgrim Investments, LLC
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxxxxx
If to the Distributor:
ING Pilgrim Securities, Inc.
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxxx X. Xxxxxxxx
If to the Company:
Xxxxx X. Xxxxxxx, Executive Vice President, General Counsel and
Secretary
Golden American Life Insurance Company
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
ARTICLE XII
MISCELLANEOUS
12.1. A copy of the Agreement and Declaration of Trust is on file
with the Secretary of State of the State of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of or arising out of this
instrument, including without limitation Article VI, are not binding upon any of
the Trustees or shareholders individually but binding only upon the assets and
property of the Trust.
12.2. The Trust, the Adviser and the Distributor acknowledge that
the identities of the customers of the Company or any of its affiliates
(collectively the "Company Protected Parties" for purposes of this Section
12.2), information maintained regarding those customers, and all computer
programs and procedures or other information developed or used by the Company
Protected Parties or any of their employees or agents in connection with the
Company's performance of its duties under this Agreement are the valuable
property of the Company Protected Parties. The Trust, the Adviser and the
Distributor agree that if they come into possession of any list or compilation
of the identities of or other information about the Company Protected Parties'
customers, or any other information or property of the Company Protected
Parties, other than such information as is publicly available or as may be
independently developed or compiled by the Trust, the Adviser or the Distributor
from information supplied to them by the Company Protected Parties' customers
who also maintain accounts directly with the Trust, the Adviser or the
Distributor, the Trust, the Adviser and the Distributor will hold such
18
information or property in confidence and refrain from using, disclosing or
distributing any of such information or other property except: (a) with the
Company's prior written consent; or (b) as required by law or judicial process.
The Company acknowledges that the identities of the customers of the Trust, the
Adviser, the Distributor or any of their affiliates (collectively the "Adviser
Protected Parties" for purposes of this Section 12.2), information maintained
regarding those customers, and all computer programs and procedures or other
information developed or used by the Adviser Protected Parties or any of their
employees or agents in connection with the Trust's, the Adviser's or the
Distributor's performance of their respective duties under this Agreement are
the valuable property of the Adviser Protected Parties. The Company agrees that
if it comes into possession of any list or compilation of the identities of or
other information about the Adviser Protected Parties' customers, or any other
information or property of the Adviser Protected Parties, other than such
information as is publicly available or as may be independently developed or
compiled by the Company from information supplied to them by the Adviser
Protected Parties' customers who also maintain accounts directly with the
Company, the Company will hold such information or property in confidence and
refrain from using, disclosing or distributing any of such information or other
property except: (a) with the Trust's, the Adviser's or the Distributor's prior
written consent; or (b) as required by law or judicial process. Each party
acknowledges that any breach of the agreements in this Section 12.2 would result
in immediate and irreparable harm to the other parties for which there would be
no adequate remedy at law and agree that in the event of such a breach, the
other parties will be entitled to equitable relief by way of temporary and
permanent injunctions, as well as such other relief as any court of competent
jurisdiction deems appropriate.
12.1. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
12.2. This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
12.3. 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.
12.4. This Agreement will not be assigned by any party hereto without the prior
written consent of all the parties.
12.5. Each party to this Agreement will maintain all records required by law,
including records detailing the services it provides. Such records will be
preserved, maintained and made available to the extent required by law and in
accordance with the 1940 Act and the rules thereunder. Each party hereto shall
cooperate with each other party and all appropriate governmental authorities
(including without limitation the Securities and Exchange Commission, the NASD
and state insurance regulators) and shall permit such authorities reasonable
access to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby. Upon request
by the Trust or the Distributor, the Company agrees to promptly make copies or,
if required, originals of all records pertaining to the performance of services
under this Agreement available to the Trust or the Distributor, as the case may
be. The Trust agrees that the Company will have the right to inspect, audit and
copy
19
all records pertaining to the performance of services under this Agreement
pursuant to the requirements of any state insurance department. Each party also
agrees to promptly notify the other parties if it experiences any difficulty in
maintaining the records in an accurate and complete manner. This provision will
survive termination of this Agreement.
12.6. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.7. Notwithstanding any other provision of this Agreement, the
obligations of the Trust and the Distributor are several and, without limiting
in any way the generality of the foregoing, neither such party shall have any
liability for any action or failure to act by the other party, or any person
acting on such other party's behalf.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
PILGRIM VARIABLE PRODUCTS TRUST
BY ITS AUTHORIZED OFFICER,
/s/ Xxxxxxx Xxxxxx
--------------------------------------------
NAME: Xxxxxxx Xxxxxx
TITLE: Senior Vice President
ING PILGRIM INVESTMENTS, LLC
BY ITS AUTHORIZED OFFICER,
/s/ Xxxxxxx Xxxxxx
--------------------------------------------
NAME: Xxxxxxx Xxxxxx
TITLE:
GOLDEN AMERICAN LIFE INSURANCE COMPANY
BY ITS AUTHORIZED OFFICER,
/s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
NAME: Xxxxx X. Xxxxxxxx
TITLE: Senior Vice President
ING PILGRIM SECURITIES, INC.
BY ITS AUTHORIZED OFFICER,
/s/ Xxxxxxx Xxxxxx
--------------------------------------------
NAME: Xxxxxxx Xxxxxx
TITLE:
20
Schedule A
----------
Separate Accounts
Accounts:
---------
Separate Account B of Golden American Life Insurance Company
A-1
Schedule B
----------
PILGRIM VARIABLE PRODUCTS TRUST
Authorized Funds
----------------
Pilgrim VP MagnaCap Portfolio
Pilgrim VP Research Enhanced Index Portfolio
Pilgrim VP Growth Opportunities Portfolio
Pilgrim XX XxxXxx Opportunities Portfolio
Pilgrim VP Growth + Value Portfolio
Pilgrim VP SmallCap Opportunities Portfolio
Pilgrim VP International Value Portfolio
Pilgrim VP High Yield Bond Portfolio
Pilgrim VP Worldwide Growth Portfolio
Pilgrim VP International SmallCap Growth Portfolio
Pilgrim VP International Portfolio
Pilgrim VP Emerging Countries Portfolio
Pilgrim VP Growth and Income Portfolio
Pilgrim VP LargeCap Growth Portfolio
Pilgrim VP Financial Services Portfolio
Pilgrim VP Convertible Portfolio
B-1
NSCC EXHIBIT
------------
Effective Date: May 1, 2001
PROCEDURES FOR PRICING AND ORDER/SETTLEMENT THROUGH NATIONAL SECURITIES CLEARING
CORPORATION'S MUTUAL FUND PROFILE SYSTEM AND MUTUAL FUND SETTLEMENT, ENTRY AND
REGISTRATION VERIFICATION SYSTEM
1. As provided in Section 1.11 of the Participation Agreement,
the parties hereby agree to provide pricing information, execute orders and wire
payments for purchases and redemptions of Fund shares through National
Securities Clearing Corporation ("NSCC") and its subsidiary systems as follows:
(a) Distributor or the Funds will furnish to the Company or its
affiliate through NSCC's Mutual Fund Profile System ("MFPS") (1) the most
current net asset value information for each Fund, (2) a schedule of
anticipated dividend and distribution payment dates for each Fund, which is
subject to change without prior notice, ordinary income and capital gain
dividend rates on the Fund's ex-date, and (4) in the case of fixed income
funds that declare daily dividends, the daily accrual or the interest rate
factor. All such information shall be furnished to the Company or its
affiliate by 6:30 p.m. Eastern Time on each business day that the Fund is
open for business (each a "Business Day") or at such other time as that
information becomes available. Changes in pricing information will be
communicated to both NSCC and the Company or its affiliate.
(b) Upon receipt of Fund purchase, exchange and redemption instructions
for acceptance as of the time at which a Fund's net asset value is
calculated as specified in such Fund's prospectus ("Close of Trading") on
each Business Day ("Instructions"), and upon its determination that there
are good funds with respect to Instructions involving the purchase of
Shares, the Company or its affiliate will calculate the net purchase or
redemption order for each Fund. Orders for net purchases or net redemptions
derived from Instructions received by the Company or its affiliate prior to
the Close of Trading on any given Business Day will be sent to the Defined
Contribution Interface of NSCC's Mutual Fund Settlement, Entry and
Registration Verification System ("Fund/SERV") by 5:00 a.m. Eastern Time on
the next Business Day. Subject to the Company's or its affiliate's
compliance with the foregoing, the Company or its affiliate will be
considered the agent of the Distributor and the Funds, and the Business Day
on which Instructions are received by the Company or its affiliate in
proper form prior to the Close of Trading will be the date as of which
shares of the Funds are deemed purchased, exchanged or redeemed pursuant to
such Instructions. Instructions received in proper form by the Company or
its affiliate after the Close of Trading on any given Business Day will be
treated as if received on the next following Business Day. Dividends and
capital gains distributions will be automatically reinvested at net asset
value in accordance with the Fund's then current prospectuses.
(c) The Company or its affiliate will wire payment for net purchase orders by
the Fund's NSCC
1 of 2
Firm Number, in immediately available funds, to an NSCC settling bank
account designated by the Company or its affiliate no later than 5:00 p.m.
Eastern time on the same Business Day such purchase orders are communicated
to NSCC. For purchases of shares of daily dividend accrual funds, those
shares will not begin to accrue dividends until the day the payment for
those shares is received.
(d) NSCC will wire payment for net redemption orders by Fund, in
immediately available funds, to an NSCC settling bank account designated by
the Company or its affiliate, by 5:00 p.m. Eastern Time on the Business Day
such redemption orders are communicated to NSCC, except as provided in a
Fund's prospectus and statement of additional information.
(e) With respect to (c) or (d) above, if Distributor does not send a
confirmation of the Company's or its affiliate's purchase or redemption
order to NSCC by the applicable deadline to be included in that Business
Day's payment cycle, payment for such purchases or redemptions will be made
the following Business Day.
(f) If on any day the Company or its affiliate or Distributor is unable
to meet the NSCC deadline for the transmission of purchase or redemption
orders, it may at its option transmit such orders and make such payments
for purchases and redemptions directly to Distributor or to the Company or
its affiliate, as applicable, as is otherwise provided in the Agreement.
(g) These procedures are subject to any additional terms in each Fund's
prospectus and the requirements of applicable law. The Funds reserve the
right, at their discretion and without notice, to suspend the sale of
shares or withdraw the sale of shares of any Fund.
2. The Company or its affiliate, Distributor and clearing agents (if
applicable) are each required to have entered into membership agreements with
NSCC and met all requirements to participate in the MFPS and Fund/SERV systems
before these procedures may be utilized. Each party will be bound by the terms
of their membership agreement with NSCC and will perform any and all duties,
functions, procedures and responsibilities assigned to it and as otherwise
established by NSCC applicable to the MFPS and Fund/SERV system and the
Networking Matrix Level utilized.
3. Except as modified hereby, all other terms and conditions of the
Agreement shall remain in full force and effect. Unless otherwise indicated
herein, the terms defined in the Agreement shall have the same meaning as in
this Exhibit.
2 of 2
