EXHIBIT 1.A(8)(a)(viii)
FORM OF
PARTICIPATION AGREEMENT
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AMONG
SECURITY LIFE OF DENVER INSURANCE COMPANY,
THE GCG TRUST,
AND
DIRECTED SERVICES, INC.
THIS AGREEMENT, dated as of the 1st day of May, 2001, by and among Security
Life of Denver Insurance Company (the "Company"), a life insurance company
organized under the laws of the State of Colorado, on its own behalf and on
behalf of each separate account of the Company set forth on Schedule A hereto as
may be amended from time to time (such accounts hereinafter collectively
referred to as the "Accounts"), The GCG Trust (the "Trust"), a management
investment company and business trust organized under the laws of the
Commonwealth of Massachusetts, and Directed Services, Inc.(the "Adviser" and the
"Distributor), a corporation organized under the laws of the State of New York.
WHEREAS, the Trust engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance and variable annuity contracts (the
"Variable Insurance Products") to be offered by insurance companies which have
entered into participation agreements with the Trust, Adviser and Distributor
("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Trust are divided into
several series of shares, each designated a "Portfolio" and representing the
interest in a particular managed portfolio of securities and other assets;
WHEREAS, the Trust has obtained an order from the Securities and Exchange
Commission (the "SEC") granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts 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, if and 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
(the "Mixed and Shared Trusting Exemptive Order"), and the parties to this
Agreement agree to comply with the conditions or undertakings specified in the
Mixed and Shared Trusting Exemptive Order to the extent applicable to each such
party;
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, the Adviser, which serves as investment adviser to the Trust, is
duly registered as an investment adviser under the federal Investment Advisers
Act of 1940, as amended;
WHEREAS, the Company has registered or will register certain variable life
insurance contracts (the "Contracts") under the 1933 Act;
WHEREAS, the Account is a duly organized, validly existing segregated asset
account, established by the Company under the insurance laws of the State of
Colorado, to set aside and invest assets attributable to the Contracts;
WHEREAS, the Company has registered the Account as a unit
investment trust under the 1940 Act;
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WHEREAS, the Company has issued or will issue certain variable life
insurance contracts supported wholly or partially by the
Account (the "Contracts"), and said Contracts are listed in Schedule A hereto,
as it may be amended from time to time by mutual written agreement;
WHEREAS, the Distributor, which serves as 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 the Portfolios listed in
Schedule B hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios") on behalf of the Account to fund the
aforesaid Contracts, and the Distributor is authorized to sell such shares to
the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Trust, the Adviser, and the Distributor agree as follows:
ARTICLE I. Sale of Trust Shares
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1.1. The Trust agrees to sell to the Company those shares of the Designated
Portfolios that each Account or the appropriate subaccount of each Account
orders, executing such orders on a daily basis at the net asset value next
computed after receipt and acceptance by the Trust or its designee of the order
for the shares of the Trust. For purposes of this Section 1.1, the Company will
be the designee of the Trust for receipt of such orders from each Account or the
appropriate subaccount of each Account and receipt by such designee will
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 ("T+1").
"Business Day" will 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.
1.2. The Company will pay for Trust shares on T+1 that an order to
purchase Trust shares is made in accordance with Section 1.1 above.
Payment will be in federal funds transmitted by wire. This wire
transfer will be initiated by 12:00 p.m. Eastern Time.
1.3. The Trust agrees to make shares of the Designated Portfolios available
indefinitely for purchase at the applicable net asset value per share by
Participating Insurance Companies and their separate accounts on those days on
which the Trust calculates its Designated Portfolio net-asset value pursuant to
rules of the SEC and the Trust shall use reasonable efforts to calculate such
net asset value on each day the New York Stock Exchange is open for trading;
provided, however, that the Board of Trustees of the Trust (the "Trust Board")
may refuse to sell shares of any Portfolio to any person, or suspend or
terminate the offering of shares of any Portfolio if such action is required by
law or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Trust Board, acting in good faith and in light of its
fiduciary duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of such Portfolio.
1.4. On each Business Day on which the Trust calculates its net asset
value, the Company will aggregate and calculate the net purchase or redemption
orders for each Account or the appropriate subaccount of each Account maintained
by the Trust in which contract owner assets are invested. Net orders will only
reflect orders that the Company has received prior to the close of regular
trading on the New York Stock Exchange, Inc. (the "NYSE") (currently 4:00 p.m.,
Eastern Time) on that Business Day. Orders that the Company has received after
the close of regular trading on the NYSE will be treated as though received on
the next Business Day. Each communication of orders by the Company will
constitute a representation that such orders were received by it prior to the
close of regular trading on the NYSE on the Business Day on which the purchase
or redemption order is priced in accordance with Rule 22c-1 under the 1940 Act.
Other procedures relating to the handling of orders will be in accordance with
the prospectus and statement of information of the relevant Designated Portfolio
or with oral or written instructions that the Distributor or the Trust will
forward to the Company from time to time.
1.5. The Trust agrees that shares of the Trust will be sold only to
Participating Insurance Companies and their separate accounts, qualified pension
and retirement plans or such other persons as are permitted under applicable
provisions of the Internal Revenue Code of 1986, as amended, (the "Internal
Revenue Code"), and
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regulations promulgated thereunder, the sale to which will not impair the tax
treatment currently afforded the Contracts. No shares of any Portfolio will be
sold to the general public except as set forth in this Section 1.5.
1.6. The Trust agrees to redeem for cash, upon the Company's request, any
full or fractional shares of the Trust held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt and
acceptance by the Trust or its agent of the request for redemption. For purposes
of this Section 1.6, the Company will be the designee of the Trust for receipt
of requests for redemption from each Account or the appropriate subaccount of
each Account and receipt by such designee will constitute receipt by the Trust,
provided the Trust receives notice of request for redemption by 10:00 a.m.
Eastern Time on the next following Business Day. Payment will be in federal
funds transmitted by wire to the Company's account as designated by the Company
in writing from time to time, on the same Business Day the Trust receives notice
of the redemption order from the Company. The Trust reserves the right to delay
payment of redemption proceeds, but in no event may such payment be delayed
longer than the period permitted by the 1940 Act. The Trust will not bear any
responsibility whatsoever for the proper disbursement or crediting of redemption
proceeds; the Company alone will be responsible for such action. If notification
of redemption is received after 10:00 a.m. Eastern Time, payment for redeemed
shares will be made on the next following Business Day.
1.7. The Company agrees to purchase and redeem the shares of the Designated
Portfolios offered by the then current prospectus of the Trust in accordance
with the provisions of such prospectus.
1.8. Issuance and transfer of the Trust's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Purchase and redemption orders for Trust shares will be recorded in an
appropriate title for each Account or the appropriate subaccount of each
Account.
1.9. The Trust will furnish same day notice (by telecopier, followed by
written confirmation) to the Company of the declaration of any income, dividends
or capital gain distributions payable on each Designated Portfolio's shares. The
Company hereby elects to receive all such dividends and distributions as are
payable on the Designated Portfolio shares in the form of additional shares of
that Designated Portfolio. The Trust will notify the Company of the number of
shares so issued as payment of such dividends and distributions. The Company
reserves the right to revoke this election upon reasonable prior notice to the
Trust and to receive all such dividends and distributions in cash.
1.10. The Trust will make the net asset value per share for each Designated
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and will use its
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.
1.11. 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 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 or the Adviser) to contractowners
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.
1.12.
(a) The parties hereto acknowledge that the arrangement contemplated
by this Agreement is not exclusive; the Trust's shares may be sold to other
insurance companies (subject to Section 1.8 hereof) and the cash value of
the Contracts may be invested in other investment companies, provided,
however, that until this Agreement is terminated pursuant to Article X, the
Company shall promote the Designated Portfolios on the same basis as other
funding vehicles available under the Contracts and funding vehicles
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other than those listed on Schedule B to this Agreement may be available
for the investment of the cash value of the Contracts.
(b) The Company shall not, without prior notice to the Advisor and the
Distributor (unless otherwise required by applicable law), take any action
to operate the Account as a management investment company under the 1940
Act.
(c) The Company shall not, without prior notice to the Advisor and the
Distributor (unless otherwise required by applicable law), induce Contract
owners to change or modify the Trust or change the Trust's distributor or
investment adviser.
(d) The Company shall not, without prior notice to the Trust, induce
Contract owners to vote on any matter submitted for consideration by the
shareholders of the Trust in a manner other than as recommended by the
Board of Trustees of the Trust.
ARTICLE II. Representations and Warranties
------------------------------
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act and that the Contracts will be issued and sold in
compliance with all applicable federal and state laws, including 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 as a separate
account under applicable state law and has registered each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as
a segregated investment account for the Contracts, and that it will maintain
such registration for so long as any Contracts are outstanding. The Company will
amend the registration statement under the 1933 Act for the Contracts and the
registration statement under the 1940 Act for the Account from time to time as
required in order to effect the continuous offering of the Contracts or as may
otherwise be required by applicable law. The Company will register and qualify
the Contracts for sale in accordance with the securities laws of the various
states only if and to the extent deemed necessary by the Company.
2.2. The Company represents that the Contracts are currently and at the
time of issuance will be treated as endowment or life insurance contracts under
applicable provisions of the Internal Revenue Code, and that it will make every
effort to maintain such treatment and that it will notify the Trust and the
Adviser 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.
2.3. The Company represents and warrants that it will not purchase shares
of the Designated Portfolios with assets derived from tax-qualified retirement
plans except, indirectly, through Contracts purchased in connection with such
plans.
2.4. The Trust and the Adviser represent and warrant that Trust shares of
the Designated Portfolios sold pursuant to this Agreement will be registered
under the 1933 Act and duly authorized for issuance in accordance with
applicable law and that the Trust is and will remain registered under the 1940
Act for as long as such shares of the Designated Portfolios are outstanding. The
Trust will 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 will register and qualify the shares of the
Designated Portfolios for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by the Trust.
2.5. The Trust and the Adviser represent that the Trust is currently
qualified as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code, and that it will make every effort to maintain such qualification
(under Subchapter M or any successor or similar provision) and that it will
notify the Company 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.
2.6. The Trust and the Adviser represent and warrant that in performing the
services described in this Agreement, the Trust will comply with all applicable
laws, rules and regulations. The Trust and the Adviser make no representation as
to whether any aspect of the Trust's operations (including, but not limited to,
fees and expenses
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and investment policies, objectives and restrictions) complies with the
insurance laws and regulations of any state. The Trust and the Distributor agree
that upon request they will use their best efforts to furnish the information
required by state insurance laws so that the Company can obtain the authority
needed to issue the Contracts in the various states.
2.7. The Trust currently does not intend nor does the Distributor currently
intend for the Trust to make any payments to finance distribution expenses
pursuant to Rule 12b-1 under the 1940 Act, although it reserves the right to
make such payments in the future. To the extent that a decision is made to
finance distribution expenses pursuant to Rule 12b-1 the Trust and the
Distributor undertake to have the Trust Board formulate and approve any plan
under Rule 12b-1 to finance distribution expenses in accordance with the 1940
Act.
2.8. The Distributor represents and warrants that it will distribute the
Trust shares of the Designated Portfolios in accordance with all applicable
federal and state securities laws including, without limitation, the 1933 Act,
the 1934 Act and the 0000 Xxx.
2.9. The Trust and the Adviser represent that 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
applicable provisions of the 0000 Xxx.
2.10. The Distributor represents and warrants that it is and will remain
duly registered under all applicable federal and state securities laws and that
it will perform its obligations for the Trust in accordance in all material
respects with any applicable state and federal securities laws.
2.11. 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
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3.1. The Trust or the Distributor will provide the Company, at the Trust's
or its affiliate's expense, with as many copies of the current Trust prospectus
for the Designated Portfolios as the Company may reasonably request for
distribution, at the Company's expense, to prospective contractowners and
applicants. The Trust or the Distributor will provide, at the Trust's or its
affiliate's expense, as many copies of said prospectus as necessary for
distribution, at the Company's expense, to existing contractowners. The Trust or
the Distributor will provide the copies of said prospectus to the Company or to
its mailing agent. If requested by the Company in lieu thereof, the Trust or the
Distributor will provide such documentation, including a computer diskette or a
final copy of a current prospectus set in type at the Trust's or its affiliate's
expense, and such other assistance as is reasonably necessary in order for the
Company at least annually (or more frequently if the Trust prospectus is amended
more frequently) to have the Trust's prospectus and the prospectuses of other
mutual funds in which assets attributable to the Contracts may be invested
printed together in one document, in which case the Trust or its affiliate will
bear its reasonable share of expenses as described above, allocated based on the
proportionate number of pages of the Trust's and other fund's respective
portions of the document.
3.2. The Trust or the Distributor will provide the Company, at the Trust's
or its affiliate's expense, with as many copies of the statement of additional
information as the Company may reasonably request for distribution, at the
Company's expense, to prospective contractowners and applicants. The Trust or
the Distributor will provide, at the Trust's or its affiliate's expense, as many
copies of said statement of additional information as necessary for
distribution, at the Company's expense, to any existing contractowner who
requests such statement or whenever state or federal law otherwise requires that
such statement be provided. The Trust or the Distributor will provide the copies
of said statement of additional information to the Company or to its mailing
agent.
3.3. The Trust or the Distributor, at the Trust's or its affiliate's
expense, will provide the Company or its mailing agent with copies of its proxy
material, if any, reports to shareholders and other communications
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to shareholders in such quantity as the Company will reasonably require. The
Company will distribute this proxy material, reports and other communications to
existing contract owners and tabulate the votes.
3.4. If and to the extent required by law the Company will:
(a) solicit voting instructions from contractowners;
(b) vote the shares of the Designated Portfolios held in the
Account in accordance with instructions received from
contractowners; and
(c) vote shares of the Designated Portfolios held in the Account for
which no timely instructions have been received, as well as shares it owns,
in the same proportion as shares of such Designated Portfolio for which
instructions have been received from the Company's contractowners;
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contractowners. Except as
set forth above, the Company reserves the right to vote Trust shares held in any
segregated asset account in its own right, to the extent permitted by law. The
Company will 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, including the Mixed and Shared Trusting Exemptive
Order.
3.5. The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular, the Trust either will provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the 1940
Act not to require such meetings) or, as the Trust currently intends to comply
with Section 16(c) of the 1940 Act (although the Trust is not one of the trusts
described in Section 16(c) of that Act) as well as with Sections 16(a) and, if
and when applicable, 16(b). Further, the Trust will act in accordance with the
SEC's interpretation of the requirements of Section 16(a) with respect to
periodic elections of trustees and with whatever rules the SEC may promulgate
with respect thereto.
ARTICLE IV. Sales Material and Information
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4.1. The Distributor will provide the Company on a timely basis with
investment performance information for each Designated Portfolio in which the
Company maintains a subaccount of the Account, including total return for the
preceding calendar month and calendar quarter, the calendar year to date, and
the prior one-year, five-year, and ten year (or life of the Trust) periods. The
Company may, based on the SEC mandated information supplied by the Distributor,
prepare communications for contractowners ("Contractowner Materials"). The
Company will provide copies of all Contractowner Materials concurrently with
their first use for the Distributor's internal recordkeeping purposes. It is
understood that neither the Distributor nor any Designated Portfolio will be
responsible for errors or omissions in, or the content of, Contractowner
Materials except to the extent that the error or omission resulted from
information provided by or on behalf of the Distributor or the Designated
Portfolio. Any printed information that is furnished to the Company pursuant to
this Agreement other than each Designated Portfolio's prospectus or statement of
additional information (or information supplemental thereto), periodic reports
and proxy solicitation materials is the Distributor's sole responsibility and
not the responsibility of any Designated Portfolio or the Trust. The Company
agrees that the Portfolios, the shareholders of the Portfolios and the officers
and governing Board of the Trust will have no liability or responsibility to the
Company in these respects.
4.2. The Company will 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, prospectus or statement of additional
information for Trust shares, as such registration statement, prospectus and
statement of additional information may be amended or supplemented from time to
time, or in reports or proxy statements for the Trust, or in published reports
for the Trust which are in the public domain or approved by the Trust or the
Distributor for distribution, or in sales literature or other material provided
by the Trust, Adviser or by the Distributor, except with permission of the
Distributor. Any piece of sales literature or other promotional material
intended to be used by the Company which requires the permission of the
Distributor prior to use will be furnished by Company to the Distributor, or its
designee, at least ten (10) business days prior to its use. No such material
will be used if the Distributor reasonably objects to such use within five (5)
business days after receipt.
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Nothing in this Section 4.2 will be construed as preventing the Company or its
employees or agents from giving advice on investment in the Trust.
4.3. The Trust, the Adviser or the Distributor will furnish, or will cause
to be furnished, to the Company or its designee, each piece of sales literature
or other promotional material in which the Company or its Account is named, at
least ten (10) business days prior to its use. No such material will be used if
the Company reasonably objects to such use within five (5) business days after
receipt of such material.
4.4. The Trust, the Adviser and the Distributor will not give any
information or make any representations or statements 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, prospectus
or statement of additional information for the Contracts, as such registration
statement, prospectus and statement of additional information may be amended or
supplemented from time to time, or in published reports for each Account or the
Contracts which are in the public domain or approved by the Company for
distribution to contractowners, or in sales literature or other material
provided by the Company, except with permission of the Company. The Company
agrees to respond to any request for approval on a prompt and timely basis.
4.5. The Trust will provide to the Company at least one complete copy of
all registration statements, prospectuses, statements of additions information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Trust or its shares, contemporaneously
with the filing of such document with the SEC, the NASD or other regulatory
authority.
4.6. The Company will provide to the Trust at least one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the Contracts or
each Account, contemporaneously with the filing of such document with the SEC,
the NASD or other regulatory authority.
4.7. 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, (e.g., on-line
networks such as the Internet or other electronic messages), 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
advertisements sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials
and any other material constituting sales literature or advertising under the
NASD rules, the 1933 Act or the 0000 Xxx.
4.8. The Trust and the Distributor hereby consent to the Company's use of
the names The GCG Trust, Directed Services, Inc., the portfolio names designated
on Schedule B or other designated names as may be used from time to time in
connection with the marketing of the Contracts, subject to the terms of Sections
4.1 and 4.2 of this Agreement. Such consent will terminate with the termination
of this Agreement.
ARTICLE V. Fees and Expenses
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5.1. The Trust, the Adviser and the Distributor will pay no fee or other
compensation to the Company under this Agreement except if the Trust or any
Designated Portfolio adopts and implements a plan pursuant to Rule 12b-1 under
the 1940 Act to finance distribution expenses, then, subject to obtaining any
required exemptive orders or other regulatory approvals, the Trust may make
payments to the Company or to the underwriter for the Contracts if and in such
amounts agreed to by the Trust in writing.
5.2. All expenses incident to performance by the Trust of this Agreement
will be paid by the Trust to the extent permitted by law. The Trust will bear
the expenses for the cost of registration and qualification of the Trust's
shares; preparation and filing of the Trust's prospectus, statement of
additional information and registration statement, proxy materials and reports;
setting in type and printing the Trust's prospectus; setting in type and
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printing proxy materials and reports by it to contractowners (including the
costs of printing a Trust prospectus that constitutes an annual report); the
preparation of all statements and notices required by any federal or state law;
all taxes on the issuance or transfer of the Trust's shares; any expenses
permitted to be paid or assumed by the Trust pursuant to a plan, if any, under
Rule 12b-1 under the 1940 Act; and all other expenses set forth in Article III
of this Agreement. All expenses incident to the distribution and tabulation of
the Trust's proxy materials will be paid by the Trust, except postage which will
be paid by the Company.
ARTICLE VI. Diversification and Qualification
---------------------------------
6.1. The Adviser will ensure that the Trust will at all times invest money
from the Contracts in such a manner as to ensure that the Contracts will be
treated as variable insurance contracts under the Internal Revenue Code and the
regulations issued thereunder. Without limiting the scope of the foregoing, the
Trust will comply with Section 817(h) of the Internal Revenue Code and Treasury
Regulation 1.817-5, as amended from time to time, relating to the
diversification requirements for variable insurance endowment, or life insurance
contracts and any amendments or other modifications to such Section or
Regulation. 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.
6.2. The Trust and the Adviser represent that the Trust is or will be
qualified as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code, and that it will make every effort to maintain such qualification
(under Subchapter M or any successor or similar provisions) and that it will
notify the Company 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.
6.3. The Company represents that the Contracts are currently, and at the
time of issuance shall be, treated as life insurance contracts, under applicable
provisions of the Internal Revenue Code, and that it will make every effort to
maintain such treatment, and that it will notify the Trust and the Distributor
immediately upon having a reasonable basis for believing the Contracts have
ceased to be so treated or that they might not be so treated in the future. The
Company agrees that any prospectus offering a contract that is a "modified
endowment contract" as that term is defined in Section 7702A of the Internal
Revenue Code (or any successor or similar provision), shall identify such
contract as a modified endowment contract.
ARTICLE VII. Potential Conflicts
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7.1. The Trust Board will monitor the Trust for the existence of any
material irreconcilable conflict between the interests of the Contract owners of
all separate accounts investing in the Trust. An irreconcilable material
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 Portfolio are being managed; (e) a difference in voting
instructions given by variable life insurance contract owners; or (f) a decision
by an insurer to disregard the voting instructions of contract owners. The Trust
Board shall promptly inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which
it is aware to the Trust Board. The Company will assist the Trust Board in
carrying out its responsibilities under the Mixed and Shared Trusting Exemptive
Order, by providing the Trust Board with all information reasonably necessary
for the Trust Board to consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform the Trust Board whenever
Contract owner voting instructions are disregarded.
7.3. If it is determined by a majority of the Trust Board, or a majority of
its disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Trust Board members), take whatever steps are necessary to remedy
or eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Trust or any
-8-
Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Trust, or submitting the
question whether such segregation should be implemented to a vote of all
affected contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (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 Account's investment
in the Trust and terminate this Agreement with respect to each 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 members of the Trust Board. 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 Trust shall continue to accept and implement orders
by the Company for the purchase (and redemption) of shares of the Trust.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Trust and terminate this Agreement with
respect to such Account within six months after the Trust Board informs the
Company in writing that it has determined that such decision has created an
irreconcilable material conflict; 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 members
of the Trust Board. Until the end of the foregoing six month period, the Trust
shall continue to accept and implement orders by the Company for the purchase
(and redemption) of shares of the Trust.
7.6. For purposes of Section 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Trust Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Trust be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contract if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Trust Board determines
that any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Trust
and terminate this Agreement within six (6) months after the Trust Board informs
the Company in writing of the foregoing determination; 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 members of the Trust Board.
7.7. If and to the extent the Mixed and Shared Trusting Exemption Order or
any amendment thereto contains terms and conditions different from Sections 3.4,
3.5, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement, then the Trust and/or
the Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with the Mixed and Shared Trusting Exemptive Order,
and Sections 3.4, 3.5, 3.6, 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 Trusting
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
Trusting Exemptive Order) on terms and conditions materially different from
those contained in the Mixed and Shared Trusting 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 3.5, 3.6, 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.
ARTICLE VIII. Indemnification
---------------
-9-
8.1. Indemnification By The Company
------------------------------
(a) The Company agrees to indemnify and hold harmless the Trust, the
Adviser, the Distributor, and each person, if any, who controls or is
associated with the Trust, the Adviser or the Distributor within the
meaning of such terms under the federal securities laws and any director,
trustee, officer, partner, employee or agent of the foregoing
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, expenses, damages, liabilities
(including amounts paid in settlement with the written consent of the
Company) or litigation (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:
(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 statement of additional information for the
Contracts or contained in the Contracts or sales literature or other
promotional material 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 or necessary to make such statements not
misleading in light of the circumstances in which they were made;
provided that this agreement to indemnify will 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
written information furnished to the Company by the Trust, the Adviser
or the Distributor for use in the registration statement, prospectus
or statement of additional information 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
(2) arise out of or as a result of statements or representations
by or on behalf of the Company or wrongful conduct of the Company or
persons under its control, with respect to the sale or distribution of
the Contracts or Trust shares; or
(3) arise out of any untrue statement or alleged untrue statement
of a material fact contained in the Trust registration statement,
prospectus, statement of additional information or sales literature or
other promotional material of the Trust (or amendment or supplement)
or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make such statements not
misleading in light of the circumstances in which they were made, if
such a statement or omission was made in reliance upon and in
conformity with information furnished to the Trust by or on behalf of
the Company or persons under its control; or
(4) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms
of this Agreement; or
(5) arise out of any material breach of any representation and/or
warranty made by the Company in this Agreement or arise out of or
result from any other material breach by the Company of this
Agreement;
except to the extent provided in Sections 8.1(b) and 8.3 hereof. This
indemnification will be in addition to any liability that the Company
otherwise may have.
(b) No party will be entitled to indemnification under Section 8.1(a)
to the extent such loss, claim, damage, liability or litigation is due to
the willful misfeasance, bad faith, or gross negligence in the performance
of such party's duties under this Agreement, or by reason of such party's
reckless disregard of its obligations or duties under this Agreement by the
party seeking indemnification.
(c) The Indemnified Parties promptly will notify the Company of the
commencement of any litigation, proceedings, complaints or actions by
regulatory authorities against them in connection with the issuance or sale
of the Trust shares or the Contracts or the operation of the Trust.
-10-
8.2. Indemnification By the Adviser and the Distributor
--------------------------------------------------
(a) The Adviser and the Distributor, in each case solely to
the extent relating to such party's responsibilities hereunder, agree to
indemnify and hold harmless the Company and each person, if any, who
controls or is associated with the Company within the meaning of such terms
under the federal securities laws and any director, trustee, officer,
partner, employee or agent of the foregoing (collectively, the "Indemnified
Parties" for purposes of this Section 8.2) against any and all losses,
claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Adviser) or litigation
(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:
(1) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement, prospectus or statement of additional
information for the Trust or sales literature or other promotional
material of the Trust (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 or necessary to make such statements not misleading in light of
the circumstances in which they were made; provided that this
agreement to indemnify will 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 Adviser, the Distributor or the Trust by or on behalf of the
Company for use in the registration statement, prospectus or statement
of additional information for the Trust or in sales literature of the
Trust (or any amendment or supplement thereto) or otherwise for use in
connection with the sale of the Contracts or Trust shares; or
(2) arise out of or as a result of statements or representations
or wrongful conduct of the Adviser or the Distributor or persons under
the control of the Adviser or the Distributor respectively, with
respect to the sale of the Trust shares; or
(3) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus,
or statement of additional information or sales literature or other
promotional material covering the Contracts (or any amendment or
supplement thereto), or the omission or alleged omission to state
therein a material fact required to be stated or necessary to make
such statement or statements not misleading in light of the
circumstances in which they were made, if such statement or omission
was made in reliance upon and in conformity with written information
furnished to the Company by the Adviser, the Trust or the Distributor
or persons under the control of the Adviser or the Distributor; or
(4) arise as a result of any failure by the Adviser or the
Distributor 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
diversification requirements and procedures related thereto specified
in Article VI of this Agreement); or
(5) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser or the Distributor
in this Agreement, or arise out of or result from any other material
breach of this Agreement by the Adviser the Trust or the Distributor;
except to the extent provided in Sections 8.2(b) and 8.3 hereof. This
indemnification will be in addition to any liability that the Trust,
Adviser or the Distributor otherwise may have.
(b) No party will be entitled to indemnification under Section 8.2(a)
to the extent such loss, claim, damage, liability or litigation is due to
the willful misfeasance, bad faith, or gross negligence in the performance
of such party's duties under this Agreement, or by reason of such party's
reckless disregard of its obligations or duties under this Agreement by the
party seeking indemnification.
-11-
(c) The Indemnified Parties will promptly notify the Adviser
and the Distributor of the commencement of any litigation,
proceedings, complaints or actions by regulatory authorities against them
in connection with the issuance or sale of the Contracts or the operation
of the account.
8.3. Indemnification By the Trust
----------------------------
(a) The Trust agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who controls
the Company within the meaning of section 15 of the 1933 Act(collectively,
the "Indemnified Parties" for purposes of this section 8.3) against any
and all losses, claims, expenses, damages, liabilities (including amounts
paid in settlement with the written consent of the Trust's Board of
Trustees), or litigation (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:
(1) arise as a result of any failure by the Trust to provide the
services and furnish the materials required to be provided or
furnished by it under the terms of this Agreement (including a failure
to comply with the diversification and other qualification
requirements applicable to the Trust specified in Article VI); or
(2) 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.
(b) No party will be entitled to indemnification under Section 8.3(a)
to the extent such loss, claim, damage, liability or litigation is due to
the willful misfeasance, bad faith, or gross negligence in the performance
of such party's duties under this Agreement, or by reason of such party's
reckless disregard of its obligations or duties under this Agreement by the
party seeking indemnification.
(c) The Indemnified Parties will promptly notify the Trust of the
commencement of any litigation, proceedings, complaints or actions by
regulatory authorities against them in connection with the issuance or sale
of the Contracts or the operation of the account.
8.4. Indemnification Procedure
-------------------------
Any person obligated to provide indemnification under this Article VIII
("Indemnifying Party" for the purpose of this Section 8.4) will not be liable
under the indemnification provisions of this Article VIII with respect to any
claim made against a party entitled to indemnification under this Article VIII
("Indemnified Party" for the purpose of this Section 8.4) unless such
Indemnified Party will have notified the Indemnifying Party in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim will have been served upon such
Indemnified Party (or after such party will have received notice of such service
on any designated agent), but failure to notify the Indemnifying Party of any
such claim will not relieve the Indemnifying Party from any liability which it
may have to the Indemnified Party against whom such action is brought otherwise
than on account of the indemnification provision of this Article VIII, except to
the extent that the failure to notify results in the failure of actual notice to
the Indemnifying Party and such Indemnifying Party is damaged solely as a result
of failure to give such notice. In case any such action is brought against the
Indemnified Party, the Indemnifying Party will be entitled to participate, at
its own expense, in the defense thereof. The Indemnifying Party also will be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Indemnifying Party to the Indemnified
Party of the Indemnifying Party's election to assume the defense thereof, the
Indemnified Party will bear the fees and expenses of any additional counsel
retained by it, and the Indemnifying Party will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation, unless: (a) the Indemnifying Party and the
Indemnified Party will have mutually agreed to the retention of such counsel; or
(b) the named parties to any such proceeding (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The Indemnifying Party will not be
liable for any settlement of any proceeding effected without its written consent
but if
-12-
settled with such consent or if there is a final judgment for the
plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from
and against any loss or liability by reason of such settlement or judgment. A
successor by law of the parties to this Agreement will be entitled to the
benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII will 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, any Mixed and Shared Trusting Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
If, in the future, the Mixed and Shared Trusting Exemptive Order should no
longer be necessary under applicable law, then Article VII shall no longer
apply.
ARTICLE X. Termination
-----------
10.1. This Agreement will terminate:
(a) at the option of any party, with or without cause, with respect to
some or all of the Designated Portfolios, upon sixty (60) days' advance
written notice to the other parties or, if later, upon receipt of any
required exemptive relief or orders from the SEC, unless otherwise agreed
in a separate written agreement among the 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 Designated
Portfolio if shares of the Designated Portfolio are not reasonably
available to meet the requirements of the Contracts as 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 Designated
Portfolio in the event any of the Designated 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, upon receipt of the Trust's written
notice by the other parties, upon institution of formal proceedings against
the Company by the NASD, the SEC, the insurance commission of any state or
any other regulatory body regarding the Company's duties under this
Agreement or related to the sale of the Contracts, the administration of
the Contracts, the operation of the Account, or the purchase of the Trust
shares, provided that the Trust determines in its sole judgment, exercised
in good faith, that any such proceeding would have a material adverse
effect on the Company's ability to perform its obligations under this
Agreement; or
(e) at the option of the Company, upon receipt of the Company's
written notice by the other parties, upon institution of formal
proceedings against the Trust, Adviser or the Distributor by the NASD,
the SEC, or any state securities or insurance department or any other
regulatory body, provided that the Company determines in its sole
judgment, exercised in good faith, that any such proceeding would have a
material adverse effecton the Trust's or the Distributor's ability to
perform itsobligations under this Agreement; or
(f) at the option of the Company, upon receipt of the Company's
written notice by the other parties, if the Trust ceases to qualify as a
Regulated Investment Company under Subchapter M of the Internal Revenue
Code, or under any successor or similar provision, or if the Company
reasonably and in good faith believes that the Trust may fail to so
qualify; or
(g) at the option of the Company, upon receipt of the Company's
written notice by the other parties, with respect to any Designated
Portfolio if the Trust fails to meet the diversification requirements
-13-
specified in Article VI hereof or if the Company reasonably and in good
faith believes the Trust may fail to meet such requirements; 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; or
(i) at the option of the Company, if the Company determines in its
sole judgment exercised in good faith, that either the Trust, the Adviser
or the Distributor has suffered a material adverse change in its business,
operations or financial condition since the date of this Agreement or is
the subject of material adverse publicity which is likely to have a
material adverse impact upon the business and operations of the Company,
such termination to be effective sixty (60) days' after receipt by the
other parties of written notice of the election to terminate; or
(j) at the option of the Trust or the Distributor, if the Trust or the
Distributor respectively, determines in its sole judgment exercised in good
faith, that the Company has suffered a material adverse change in its
business, operations or financial condition since the date of this
Agreement or is the subject of material adverse publicity which is likely
to have a material adverse impact upon the business and operations of the
Trust or the Adviser, such termination to be effective sixty (60) days'
after receipt by the other parties of written notice of the election to
terminate; or
(k) at the option of the Company or the Trust upon receipt of any
necessary regulatory approvals and/or the vote of the contractowners having
an interest in the Account (or any subaccount) to substitute the shares of
another investment company for the corresponding Designated Portfolio
shares of the Trust in accordance with the terms of the Contracts for which
those Designated Portfolio shares had been selected to serve as the
underlying investment media.
The Company will give sixty (60) days' prior written notice to the Trust of
the date of any proposed vote or other action taken to replace the Trust's
shares; or
(l) at the option of the Company or the Trust upon a determination by
a majority of the Trust Board, or a majority of the disinterested Trust
Board members, that an irreconcilable material conflict exists among the
interests of: (1) all contractowners of variable insurance products of all
separate accounts; or (2) the interests of the Participating Insurance
Companies investing in the Trust as set forth in Article VII of this
Agreement; or
(m) at the option of the Trust in the event any of the Contracts are
not issued or sold in accordance with applicable federal and/or state law.
Termination will be effective immediately upon such occurrence without
notice.
10.2. Notice Requirement. No termination of this Agreement
-------------------
will be effective unless and until the party terminating this Agreement gives
prior written notice to all other parties of its intent to terminate, which
notice will set forth the basis for the termination.
10.3. Effect of Termination. Notwithstanding any termination
----------------------
of this Agreement, the Trust and the Distributor will, 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 on the
effective date of termination of this Agreement ( hereinafter referred to as
"Existing Contracts.") . Specifically, without limitation, the owners of the
Existing Contracts will be permitted to reallocate investments in the Portfolios
(as in effect on such date), redeem investments in the Portfolios and/or invest
in the Portfolios upon the making of additional purchase payments under the
Existing Contracts.
10.4. Surviving Provisions. Notwithstanding any termination of
---------------------
this Agreement, each party's obligations under Article VIII to indemnify other
parties will survive and not be affected by any termination of this Agreement.
In addition, each party's obligations under Section 12.7 will survive and not be
affected by any termination of this
-14-
Agreement. Finally, with respect to Existing Contracts, all provisions of this
Agreement also will survive and not be affected by any termination of this
Agreement.
ARTICLE XI. Notices
-------
11.1. Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust: The GCG Trust
c/o Xxxxx Xxxxxxx
Secretary
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000-0000
If to the Company: ING Life Companies
ATTN: Variable Counsel
0000 Xxxxxxxx
Xxxxxx, XX 00000
If to Adviser: Directed Services, Inc.
c/o Xxxxx Xxxxxxx
Executive Vice President and General Counsel
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000-0000
If to Distributor: ING America Equities, Inc.
c/o Chief Legal Officer
0000 Xxxxxxxx
Xxxxxx, XX 00000-0000
ARTICLE XII. Miscellaneous
-------------
12.1. All persons dealing with the Trust must look solely to the property
of the Trust for the enforcement of any claims against the Trust as neither the
directors, trustees, officers, partners, employees, agents or shareholders
assume any personal liability for obligations entered into on behalf of the
Trust. No Portfolio or series of the Trust will be liable for the obligations or
liabilities of any other Portfolio or series.
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
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,
-15-
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.
12.3. 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.
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
12.5. If any provision of this Agreement will be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement will
not be affected thereby.
12.6. This Agreement will not be assigned by any party hereto without the
prior written consent of all the parties.
12.7. 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 to this
Agreement will cooperate with each other party and all appropriate governmental
authorities (including without limitation the SEC, the NASD and state insurance
regulators) and will permit each other and 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 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.
12.8. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or board action, as applicable, by
such party and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.
12.9. The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating to the Contracts,
the Accounts or the Designated Portfolios of the Trust or other applicable terms
of this Agreement.
12.10. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights.
12.11. If Trust is a Massachusetts Business Trust - The parties to this
Agreement acknowledge and agree that all liabilities of the Trust arising,
directly or indirectly, under this agreement, will be satisfied solely out of
the
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assets of the Trust and that no trustee, officer, agent or holder of shares
of beneficial interest of the Trust will be personally liable for any such
liabilities.
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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:
SECURITY LIFE OF DENVER INSURANCE
COMPANY:
By: /s/ Xxx Xxxxxxxxxx
Title: Executive Vice President
Date: May 1, 2001
THE GCG TRUST:
By: Xxxxxxx Xxxxxx
Title: Vice President & Assistant Sec'y
Date: April 30, 2001
DIRECTED SERVICES, INC :
By: Xxxxxxx Xxxxxx
Title: Vice President & Assistant Sec'y
Date: April 30, 2001
ING AMERICA EQUITIES, INC.
By: Xxxx X. Xxxxxxxx
Title: Chief Legal Officer
Date: May 1, 2001
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SCHEDULE A
SECURITY LIFE OF DENVER INSURANCE COMPANY
CONTRACTS AND SEPARATE ACCOUNT(S)
SEPARATE ACCOUNT(S):
Security Life of Denver Insurance
Company Separate Account L1
CONTRACT(S):
Asset Portfolio Manager Variable Universal Life
Corporate Benefits Variable Universal Life
Estate Designer Variable Universal Life
FirstLine Variable Universal Life
FirstLine II Variable Universal Life
Strategic Advantage Variable Universal Life
Strategic Advantage II Variable Universal Life
Strategic Benefit Variable Universal Life
Variable Survivorship Variable Universal Life
-A1-
SCHEDULE B
THE GCG TRUST
DESIGNATED PORTFOLIOS
PORTFOLIOS:
Equity Income Series
Fully Managed Series
Limited Maturity Bond Series
Hard Assets Series
Real Estate Series
Liquid Asset Series
Capital Appreciation Series
Rising Dividends Series
Emerging Markets Series
Value Equity Series
Strategic Equity Series
Small Cap Series Mid-Cap Growth Series
Total Return Series
Research Series
Capital Growth Series
Growth Series
Global Fixed Income Series
Developing World Series
All Cap Series
Investors Series
Managed Global Series
Large Cap Value Series
International Series
-B1-
