PARTICIPATION AGREEMENT
Among
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO FUNDS GROUP, INC.
and
XXXXXXX XXXXXX & CO., INC.
THIS AGREEMENT, made and entered into as of this ____ day of ____________, 1996
by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "GWL&A"),
a Colorado life insurance company, on its own behalf and on behalf of its
Separate Account Variable Annuity-1 Series Account (the "Account"); INVESCO
VARIABLE INVESTMENT FUNDS, INC., a corporation organized under the laws of
Maryland (hereinafter the "Fund"); INVESCO FUNDS GROUP, INC. (hereinafter the
"Adviser"), a Delaware corporation; and XXXXXXX XXXXXX & CO., INC., a California
corporation (hereinafter "Schwab").
WHEREAS, the Fund 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 policies and/or variable annuity
contracts (collectively, the "Variable Insurance Products") to be offered by
insurance companies, including GWL&A, which have entered into participation
agreements similar to this Agreement (hereinafter "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several series of
shares, each designated a "Portfolio" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (hereinafter the "SEC"), dated December 29, 1993, File No. 812-8590,
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,
(hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(b)(15) thereunder,
to the extent necessary to permit shares of the Fund to be sold to and held by
variable annuity and variable life insurance separate accounts of life insurance
companies that may or may not be affiliated with one another (hereinafter the
"Mixed and Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment company
under the 1940 Act and shares of the Portfolio(s) are registered under the
Securities Act of 1933, as amended (hereinafter the " 1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws; and
WHEREAS, GWL&A has registered or will register certain variable annuity
contracts supported wholly or partially by the Account (the "Contracts") under
the 1933 Act and said Contracts are listed in Schedule A attached hereto and
incorporated herein by reference, as it may be amended from time to time by
mutual written agreement; and
WHEREAS, the Account is a duly organized, validly existing segregated asset
account, established by resolution of the Board of Directors of GWL&A on July
24, 1995, to set aside and invest assets attributable to the Contracts; and
WHEREAS, GWL&A has registered the Account as a unit investment trust under the
1940 Act and has registered the securities deemed to be issued by the Account
under the 1933 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
GWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B
attached hereto and incorporated herein by reference, as it may be amended from
time to time by mutual written agreement (the "Designated Portfolio(s)"), on
behalf of the Account to fund the Contracts, and the Fund is authorized to sell
such shares to unit investment trusts such as the Account at net asset value;
and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Account also intends to purchase shares in other open-end investment
companies or series thereof not affiliated with the Fund (the "Unaffiliated
Funds") on behalf of the Account to fund the Contracts; and
WHEREAS, Schwab will perform certain services for the Fund in connection with
the Contracts;
NOW, THEREFORE, in consideration of their mutual promises, GWL&A, Schwab, the
Fund and the Adviser agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1. The Fund agrees to sell to GWL&A those shares of the Designated
Portfolio(s). which the Account orders, executing such orders on each Business
Day at the net asset value next computed after receipt by the Fund or its
designee of the order for the shares of the Portfolios. For purposes of this
Section 1.1, GWL&A shall be the designee of the Fund for receipt of such orders
and receipt by such designee shall constitute receipt by the Fund, provided that
the Fund receives notice of any 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 is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the SEC.
1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for
purchase at the applicable net asset value per share by GWL&A and the Account on
those days on which the Fund calculates its Designated Portfolio(s)' net asset
value pursuant to rules of the SEC, and the Fund shall calculate such net asset
value on each day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Directors of the Fund (hereinafter
the "Board") may refuse to sell 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 Board acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of such Portfolio.
1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other
Participating Insurance Company or separate account unless an agreement
containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and
Article VII of this Agreement is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash, on GWL&A's request, any full or
fractional shares of the Fund held by GWL&A, executing such requests on each
Business Day at the net asset value next computed after receipt by the Fund or
its designee of the request for redemption. Requests for redemption identified
by GWL&A, or its agent, as being in connection with surrenders, annuitizations,
or death benefits under the Contracts, upon prior written notice, may be
executed within seven (7) calendar days after receipt by the Fund or its
designee of the requests for redemption. This Section 1.4 may be amended, in
writing, by the parties consistent with the requirements of the 1940 Act and
interpretations thereof. For purposes of this Section 1.4, GWL&A shall be the
designee of the Fund for receipt of requests for redemption and receipt by such
designee shall constitute receipt by the Fund, provided that the Fund receives
notice of any such request for redemption by 10:00 A.M. Eastern time on the next
following Business Day.
1.5. The Parties hereto acknowledge that the arrangement contemplated by this
Agreement is not exclusive; the Fund's shares may be sold to other Participating
Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash
value of the Contracts may be invested in other investment companies.
1.6. GWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next
Business Day after an order to purchase Fund shares is made in accordance with
the provisions of Section 1.1 hereof. Payment shall be in federal funds
transmitted by wire and/or by a credit for any shares redeemed the same day as
the purchase.
1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares
by 11:00 a.m. Eastern Time on the next Business Day after a redemption order is
received in accordance with Section 1.4 hereof. Payment shall be in federal
funds transmitted by wire and/or a credit for any shares purchased the same day
as the redemption.
1.8. Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to GWL&A or the Account. Shares ordered
from the Fund will be recorded in an appropriate title for the Account or the
appropriate sub-account of the Account.
1.9. The Fund shall furnish same day notice (by wire or telephone, followed by
written confirmation) to GWL&A of any income, dividends or capital gain
distributions payable on the Designated Portfolio(s)' shares. GWL&A hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio.
GWL&A reserves the right to revoke this election and to receive all such income
dividends and capital gain distributions in cash. The Fund shall notify GWL&A by
the end of the next following Business Day of the number of shares so issued as
payment of such dividends and distributions.
1.10. The Fund shall make the net asset value per share for each Designated
Portfolio available to GWL&A on each Business Day as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6:00 p.m.
Eastern time. In the event of an error in the computation of a Designated
Portfolio's net asset value per share ("NAV") or any dividend or capital gain
distribution (each, a "pricing error"), the Adviser or the Fund shall
immediately notify GWL&A as soon as possible after discovery of the error. Such
notification may be verbal, but shall be confirmed promptly in writing in
accordance with Article XI of this Agreement. A pricing error shall be corrected
as follows: (a) if the pricing error results in a difference between the
erroneous NAV and the correct NAV of less than $0.01 per share, then no
corrective action need be taken; (b) if the pricing error results in a
difference between the erroneous NAV and the correct NAV equal to or greater
than $0.01 per share, but less than 1/2 of 1 % of the Designated Portfolio's
NAV at the time of the error, then the Adviser shall reimburse the Designated
Portfolio for any loss, after taking into consideration any positive effect of
such error; however, no adjustments to Contractowner accounts need be made; and
(c) if the pricing error results in a difference between the erroneous NAV and
the correct NAV equal to or greater than 1/2 of 1 % of the Designated
Portfolio's NAV at the time of the error, then the Adviser shall reimburse the
Designated Portfolio for any loss (without taking into consideration any
positive effect of such error) and shall reimburse GWL&A for the costs of
adjustments made to correct Contractowner accounts in accordance with the
provisions of Schedule E. If an adjustment is necessary to correct a material
error which has caused Contractowners to receive less than the amount to which
they are entitled, the number of shares of the applicable sub-account of such
Contractowners will be adjusted and the amount of any underpayments shall be
credited by the Adviser to GWL&A for crediting of such amounts to the applicable
Contractowners accounts. Upon notification by the Adviser of any overpayment due
to a material error, GWL&A or Schwab, as the case may be, shall promptly remit
to Adviser any overpayment that has not been paid to Contractowners; however,
Adviser acknowledges that Schwab and GWL&A do not intend to seek additional
payments from any Contractowner who, because of a pricing error, may have
underpaid for units of interest credited to his/her account. In no event shall
Schwab or GWL&A be liable to Contractowners for any such adjustments or
underpayment amounts. A pricing error within categories (b) or (c) above shall
be deemed to be "materially incorrect" or constitute a "material error" for
purposes of this Agreement.
The standards set forth in this Section 1.10 are based on the Parties'
understanding of the views expressed by the staff of the Securities and Exchange
Commission ("SEC") as of the date of this Agreement. In the event the views of
the SEC staff are later modified or superseded by SEC or judicial
interpretation, the parties shall amend the foregoing provisions of this
Agreement to comport with the appropriate applicable standards, on terms
mutually satisfactory to all Parties.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. GWL&A represents and warrants that the securities deemed to be issued by
the Account under the Contracts are or will be registered under the 1933 Act;
that the Contracts will be issued and sold in compliance in all material
respects with all applicable federal and state laws and that the sale of the
Contracts shall comply in all material respects with state insurance suitability
requirements. GWL&A further represents and warrants that it is an insurance
company duly organized and in good standing under applicable law and that it has
legally and validly established the Account prior to any issuance or sale of
units thereof as a segregated asset account under Section 10-7-401, et. seq. of
the Colorado Insurance Law and has registered the 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.
2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with all applicable federal
securities laws including without limitation the 1933 Act, the 1934 Act, and the
1940 Act and that the Fund is and shall remain registered under the 0000 Xxx.
The Fund shall amend the registration statement for its shares under the 1933
Act and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares.
2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under
the 1940 Act and to impose an asset-based or other charge to finance
distribution expenses as permitted by applicable law and regulation. To the
extent that the Fund decides to finance distribution expenses pursuant to Rule
12b-1, the Fund undertakes to have its Board, a majority of whom are not
interested persons of the Fund, formulate and approve any plan pursuant to Rule
12b-1 under the 1940 Act to finance distribution expenses.
2.4. The Fund represents and warrants that it willmake every effort to ensure
that the investment policies, fees and expenses of the Designated Portfolio(s)
are and shall at all times remain in compliance with the insurance and other
applicable laws of the State of -Colorado and any other applicable state to the
extent required to perform this Agreement. The Fund further represents and
warrants that it will make every effort to ensure that Designated Portfolio(s)
shares will be sold in compliance with all state and federal securities laws and
all state insurance laws specifically designated by GWL&A, in writing. The Fund
shall register and qualify the shares for sale in accordance with the laws of
the various states if and to the extent required by applicable law. GWL&A and
the Fund will endeavor to mutually cooperate with respect to the implementation
of any modifications necessitated by any change in state insurance laws,
regulations or interpretations of the foregoing that affect the Designated
Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change
that becomes known to either party. In the event of a Law Change, the Fund
agrees that, except in those circumstances where the Fund has advised GWL&A that
its Board of Directors has determined that implementation of a particular Law
Change is not in the best interest of all of the Fund's shareholders with an
explanation regarding why such action is lawful, any action required by a Law
Change will be taken.
2.5. The Fund represents and warrants that it is lawfully organized and validly
existing under the laws of the State of Maryland and that it does and will
comply in all material respects with the 1940 Act.
2.6. The Adviser represents and warrants that it is and shall remain duly
registered under all applicable federal and state securities laws and that it
shall perform its obligations for the Fund in compliance in all material
respects with the laws of the State of Colorado and any applicable state and
federal securities laws.
2.7. The Fund and the Adviser represent and warrant that all of their respective
officers, employees, investment advisers, and other individuals or entities
dealing with the money and/or securities of the Fund are, and shall continue to
be at all times, covered by a blanket fidelity bond or similar coverage for the
benefit of the Fund in an amount not less than the minimal coverage required by
Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from
time to time. The aforesaid bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.8. Schwab represents and warrants that it has completed, obtained and
performed, in all material respects, all registrations, filings, approvals, and
authorizations, consents and examinations required by any government or
governmental authority as may be necessary to perform this Agreement. Schwab
does and will comply, in all material respects, with all applicable laws, rules
and regulations in the performance of its obligations under this Agreement.
2.9. The Fund will provide GWL&A with as much advance notice as is reasonably
practicable of any material change affecting the Designated Portfolio(s)
(including, but not limited to, any material change in the registration
statement or prospectus affecting the Designated Portfolio(s)) and any proxy
solicitation affecting the Designated Portfolio(s) and consult with GWL&A in
order to implement any such change in an orderly manner, recognizing the
expenses of changes and attempting to minimize such expenses by implementing
them in conjunction with regular annual updates of the prospectus for the
Contracts. The Fund agrees to share equitably in expenses incurred by GWL&A as a
result of actions taken by the Fund, consistent with the allocation of expenses
contained in Schedule E attached hereto and incorporated herein by reference.
2.10. GWL&A represents and warrants, for purposes other than diversification
under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"),
that the Contracts are currently treated as annuity contracts under applicable
provisions of the Code, and that it will make every effort to maintain such
treatment and that it will notify Schwab, the Fund 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. In addition,
GWL&A represents and warrants that the Account is a "segregated asset account"
and that interests in the Account are offered exclusively through the purchase
of or transfer into a "variable contract" within the meaning of such terms under
Section 817 of the Code and the regulations thereunder. GWL&A will use every
effort to continue to meet such definitional requirements, and it will notify
Schwab, the Fund, and the Adviser immediately upon having a reasonable basis for
believing that such requirements have ceased to be met or that they might not be
met in the future.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS, VOTING
3.1. At least annually, the Adviser shall provide GWL&A and Schwab with as many
copies of the Fund's current prospectus for the Designated Portfolio(s) as GWL&A
and Schwab may reasonably request for marketing purposes (including distribution
to Contractowners with respect to new sales of a Contract). If requested by
GWL&A in lieu thereof, the Adviser or Fund shall provide such documentation
(including a camera-ready copy and computer diskette of the current prospectus
for the Designated Portfolio(s)) and other assistance as is reasonably necessary
in order for GWL&A once each year (or more frequently if the prospectuses for
the Designated Portfolio(s) are amended) to have the prospectus for the
Contracts and the Fund's prospectus for the Designated Portfolio(s) printed
together in one document. The Fund and Adviser agree that the prospectuses (and
semi-annual and annual reports) for the Designated Portfolio(s) will describe
only the Designated Portfolio(s) and will not name or describe any other
portfolios or series that may be in the Fund unless, in the reasonable judgment
of the Fund's counsel, such disclosure is required by law.
3.2. If applicable state or federal laws or regulations require that the
Statement of Additional Information ("SAI") for the Fund be distributed to all
Contractowners, then the Fund and/or the Adviser shall provide GWL&A with copies
of the Fund's SAI or documentation thereof for the Designated Portfolio(s) in
such quantities, with expenses to be borne in accordance with Schedule E hereof,
as GWL&A may reasonably require to permit timely distribution thereof to
Contractowners. The SAIs may name or describe portfolios or series other than
the Designated Portfolio(s) that may be in the Fund. The Adviser and/or the Fund
shall also provide SAIs to any Contractowner or prospective owner who requests
such SAI from the Fund (although it is anticipated that such requests will be
made to GWL&A or Schwab).
3.3. The Fund and/or the Adviser shall provide GWL&A and Schwab with copies of
the Fund's proxy material, reports to stockholders and other communications to
stockholders for the Designated Portfolio(s) in such quantity, with expenses to
be borne in accordance with Schedule E hereof, as GWL&A may reasonably require
to permit timely distribution thereof to Contractowners.
3.4. It is understood and agreed that, except with respect to information
regarding GWL&A or Schwab provided in writing by that party, neither GWL&A nor
Schwab are responsible for the content of the prospectus or SAI for the
Designated Portfolio(s). It is also understood and agreed that, except with
respect to information regarding the Fund, the Adviser or the Designated
Portfolio(s) provided in writing by the Fund or the Adviser, neither the Fund
nor Adviser are responsible for the content of the prospectus or SAI for the
Contracts.
3.5. If and to the extent required by law GWL&A shall:
(i) solicit voting instructions from Contractowners;
(ii) vote the Designated Portfolio(s) shares in accordance with instructions
received from Contractowners: and
(iii)vote Designated Portfolio shares for which no instructions have been
received in the same proportion as Designated Portfolio(s) shares for which
instructions have been received from 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 contract owners. GWL&A reserves
the right to vote Fund shares held in any segregated asset account in its
own right, to the extent permitted by law.
3.6. GWL&A shall be responsible for assuring that each of its separate accounts
holding shares of a Designated Portfolio calculates voting privileges as
directed by the Fund and agreed to by GWL&A and the Fund. The Fund agrees to
promptly notify GWL&A of any changes of interpretations or amendments of the
Mixed and Shared Funding Exemptive Order.
3.7. The Fund will comply with all provisions of the 1940 Act requiring voting
by shareholders, and in particular the Fund will either 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 Fund currently intends, comply with Section
16(c) of the 1940 Act (although the Fund 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 Fund will act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of directors or trustees and with whatever rules the Commission may
promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. GWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund
or its designee, a copy of each piece of sales literature or other promotional
material that GWL&A or Schwab, respectively, develops or proposes to use and in
which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers
is named in connection with the Contracts, at least ten (10) Business Days prior
to its use. No such material shall be used if the Fund objects to such use
within five (5) Business Days after receipt of such material.
4.2. GWL&A and Schwab shall not give any information or make any representations
or statements on behalf of the Fund in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or prospectus for the Fund shares, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports or
proxy statements for the Fund, or in sales literature or other promotional
material approved by the Fund or by the Adviser, except with the permission of
the Fund or the Adviser.
4.3. The Fund shall furnish, or shall cause to be furnished, to GWL&A and
Schwab, a copy of each piece of sales literature or other promotional material
in which GWL&A and/or its separate account(s), or Schwab is named at least ten
(10) Business Days prior to its use. No such material shall be used if GWL&A or
Schwab objects to such use within five (5) Business Days after receipt of such
material.
4.4. The Fund and the Adviser shall not give any information or make any
representations on behalf of GWL&A or concerning GWL&A, the 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
reports for the Account, or in sales literature or other promotional material
approved by GWL&A or its designee, except with the permission of GWL&A.
4.5. GWL&A, the Fund and the Adviser shall not give any information or make any
representations on behalf of or concerning Schwab, or use Xxxxxx'x name except
with the permission of Schwab.
4.6. The Fund will provide to GWL&A and Schwab at least one complete copy of all
registration statements, prospectuses, SAls, 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 Designated Portfolio(s), contemporaneously with the filing of such
document(s) with the SEC or NASD or other regulatory authorities.
4.7. GWL&A or Schwab will provide to the Fund at least one complete copy of all
registration statements, prospectuses, SAls, 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 the Account, contemporaneously with the
filing of such document(s) with the SEC, NASD, or other regulatory authority.
4.8. For purposes of Articles IV and VIII, the phrase "sales literature and
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 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 agents or employees, and registration statements,
prospectuses, SAls, shareholder reports, and proxy materials and any other
material constituting sales literature or advertising under the NASD rules, 1933
Act or the 0000 Xxx.
4.9. At the request of any party to this Agreement, each other party will make
available to the other party's independent auditors and/or representative of the
appropriate regulatory agencies, all records, data and access to operating
procedures that may be reasonably requested in connection with compliance and
regulatory requirements related to this Agreement or any party's obligations
under this Agreement.
ARTICLE V. FEES AND EXPENSES
5.1. The Fund shall pay no fee or other compensation to GWL&A under this
Agreement, and GWL&A shall pay no fee or other compensation to the Fund or
Adviser under this Agreement, although the parties hereto will bear certain
expenses in accordance with Schedule E, Articles III, V, and other provisions of
this Agreement.
5.2. All expenses incident to performance by the Fund and the Adviser under this
Agreement shall be paid by the appropriate party, as further provided in
Schedule E. The Fund shall see to it that all shares of the Designated
Portfolio(s) are registered and authorized for issuance in accordance with
applicable federal law and, if and to the extent required, in accordance with
applicable state laws prior to their sale.
5.3. The parties shall bear the expenses of routine annual distribution (mailing
costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's
proxy materials and reports to owners of Contracts offered by GWL&A, in
accordance with Schedule E.
5.4. The Fund and the Adviser acknowledge that a principal feature of the
Contracts is the Contractowner's ability to choose from a number of unaffiliated
mutual funds (and portfolios or series thereof), including the Designated
Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash
value between funds and portfolios. The Fund and the Adviser agree to cooperate
with GWL&A and Schwab in facilitating the operation of the Account and the
Contracts as described in the prospectus for the Contracts, including but not
limited to cooperation in facilitating transfers within a Contract(s).
5.5. Schwab agrees to provide certain administrative services, specified in
Schedule C attached hereto and incorporated herein by reference, in connection
with the arrangements contemplated by this Agreement. The parties acknowledge
and agree that the services referred to in this Section 5.5 are recordkeeping,
shareholder communication, and other transaction facilitation and processing,
and related administrative services only and are not the services of an
underwriter or a principal underwriter of the Fund and that Schwab is not an
underwriter for the shares of the Designated Portfolio(s), within the meaning of
the 1933 Act or the 0000 Xxx.
5.6. As compensation for the services specified in Schedule C hereto, the
Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the
percentage per annum on Schedule C hereto applied to the average daily value of
the shares of the Designated Portfolio(s) held in the Account with respect to
Contracts sold by Schwab. This monthly Administrative Service Fee is due and
payable before the 15th (fifteenth) day following the last day of the month to
which it relates.
ARTICLE VI. DIVERSIFICATION AND QUALIFICATION
6.1. The Fund and the Adviser represent and warrant that the Fund will at all
times sell its shares and invest its assets in such a manner as to ensure that
the Contracts will be treated as annuity contracts under the Code, and the
regulations issued thereunder. Without limiting the scope of the foregoing, the
Fund and Adviser represent and warrant that the Fund and each Designated
Portfolio thereof will at all times comply with Section 817(h) of the Code and
Treasury Regulation ss.1.817-5, as amended from time to time, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts and any amendments or
other modifications or successor provisions to such Section or Regulations. The
Fund and the Adviser agree that shares of the Designated Portfolio(s) will be
sold only to Participating Insurance Companies and their separate accounts.
6.2. No shares of any Designated Portfolio of the Fund will be sold to the
general public.
6.3. The Fund and the Adviser represent and warrant that the Fund and each
Designated Portfolio is currently qualified as a Regulated Investment Company
under Subchapter M of the Code, and that each Designated Portfolio will maintain
such qualification (under Subchapter M or any successor or similar provisions)
as long as this Agreement is in effect.
6.4. The Fund or the Adviser will notify GWL&A immediately upon having a
reasonable basis for believing that the Fund or any Designated Portfolio has
ceased to comply with the aforesaid Section 817(h) diversification or Subchapter
M qualification requirements or might not so comply in the future.
6.5. Without in any way limiting the effect of Sections 8.3 and 8.4 hereof and
without in any way limiting or restricting any other remedies available to GWL&A
or Schwab, the Adviser will pay all costs associated with or arising out of any
failure, or any anticipated or reasonably foreseeable failure, of the Fund or
any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof,
including all costs associated with reasonable and appropriate corrections or
responses to any such failure; such costs may include, but are not limited to,
the costs involved in creating, organizing, and registering a new investment
company as a funding medium for the Contracts and/or the costs of obtaining
whatever regulatory authorizations are required to substitute shares of another
investment company for those of the failed Portfolio (including but not limited
to an order pursuant to Section 26(b) of the 1940 Act); such costs are to
include, but are not limited to, fees and expenses of legal counsel and other
advisors to GWL&A and any federal income taxes or tax penalties and interest
thereon (or "toll charges" or exactments or amounts paid in settlement) incurred
by GWL&A with respect to itself or owners of its Contracts in connection with
any such failure.
6.6. The Fund at the Fund's expense shall provide GWL&A or its designee with
reports certifying compliance with the aforesaid Section 817(h) diversification
and Subchapter M qualification requirements, at the times provided for and
substantially in the form attached hereto as Schedule D and incorporated herein
by reference; provided, however, that providing such reports does not relieve
the Fund of its responsibility for such compliance or of its liability for any
non-compliance.
6.7. GWL&A agrees that if the Internal Revenue Service ("IRS") asserts in
writing in connection with any governmental audit or review of GWL&A or, to
GWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed
to comply with the diversification requirements of Section 817(h) of the Code or
GWL&A otherwise becomes aware of any facts that could give rise to any claim
against the Fund or the Adviser as a result of such a failure or alleged
failure:
(a) GWL&A shall promptly notify the Fund and the Adviser of such assertion or
potential claim;
(b) GWL&A shall consult with the Fund and the Adviser as to how to minimize any
liability that may arise as a result of such failure or alleged failure;
(c) GWL&A shall use its best efforts to minimize any liability of the Fund and
the Adviser resulting from such failure, including, without limitation,
demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the
commissioner of the IRS that such failure was inadvertent;
(d) any written materials to be submitted by GWL&A to the IRS, any Contractowner
or any other claimant in connection with any of the foregoing proceedings or
contests (including, without limitation, any such materials to be submitted to
the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be
provided by GWL&A to the Fund and the Adviser (together with any supporting
information or analysis) within at least two (2) business days prior to
submission;
(e) GWL&A shall provide the Fund and the Adviser with such cooperation as the
Fund and the Adviser shall reasonably request (including, without limitation, by
permitting the Fund and the Adviser to review the relevant books and records of
GWL&A) in order to facilitate review by the Fund and the Adviser of any written
submissions provided to it or its assessment of the validity or amount of any
claim against it arising from such failure or alleged failure,
(f) GWL&A shall not with respect to any claim of the IRS or any Contractowner
that would give rise to a claim against the Fund and the Adviser (i) compromise
or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any
allowable administrative or judicial appeals, without the express written
consent of the Fund and the Adviser, which shall not be unreasonably withheld;
provided that, GWL&A shall not be required to appeal any adverse judicial
decision unless the Fund and the Adviser shall have provided an opinion of
independent counsel to the effect that a reasonable basis exists for taking such
appeal; and further provided that the Fund and the Adviser shall bear the costs
and expenses, including reasonable attorney's fees, incurred by GWL&A in
pursuing such judicial appeals.
ARTICLE VII. POTENTIAL CONFLICTS AND COMPLIANCE WITH
MIXED AND SHARED FUNDING EXEMPTIVE ORDER
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. 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 annuity contract and variable life insurance contract owners or by
contract owners of different Participating Insurance Companies; or (f) a
decision by a Participating Insurance Company to disregard the voting
instructions of contract owners. The Board shall promptly inform GWL&A if it
determines that an irreconcilable material conflict exists and the implications
thereof.
7.2. GWL&A will report any potential or existing conflicts of which it is aware
to the Board. GWL&A will assist the Board in carrying out its responsibilities
under the Mixed and Shared Funding Exemptive Order, by providing the Board with
all information reasonably necessary for the Board to consider any issues
raised. This includes, but is not limited to, an obligation by GWL&A to inform
the Board whenever contract owner voting instructions are to be disregarded.
Such responsibilities shall be carried out by GWL&A with a view only to the
interests of its Contractowners.
7.3. If it is determined by a majority of the Board, or a majority of its
directors who are not interested persons of the Fund, the Adviser or any
sub-adviser to any of the Designated Portfolios (the "Independent Directors"),
that a material irreconcilable conflict exists, GWL&A and other Participating
Insurance Companies shall, at their expense and to the extent reasonably
practicable (as determined by a majority of the Independent Directors), 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 Fund or any Designated Portfolio and
reinvesting such assets in a different investment medium, including (but not
limited to) another portfolio of the Fund, 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 GWL&A
to disregard contract owner voting instructions and that decision represents a
minority position or would preclude a majority vote, GWL&A may be required, at
the Fund's election, to withdraw the Account's investment in the Fund and
terminate this Agreement; 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 Independent Directors. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Adviser and the Fund shall continue to accept and
implement orders by GWL&A for the purchase (and redemption) of shares of the
Fund.
7.5. If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to GWL&A conflicts with the majority
of other state regulators, then GWL&A will withdraw the Account's investment in
the Fund and terminate this Agreement within six months after the Board informs
GWL&A 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 Board. Until the end of the foregoing six month period, the Fund shall
continue to accept and implement orders by GWL&A for the purchase (and
redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of
the Independent Directors shall determine whether any proposed action adequately
remedies any irreconcilable material conflict, but in no event will the Fund be
required to establish a new funding medium for the Contracts. GWL&A shall not be
required by Section 7.3 to establish a new funding medium for the Contracts if
an offer to do so has been declined by vote of a majority of Contractowners
affected by the irreconcilable material conflict. In the event that the Board
determines that any proposed action does not adequately remedy any
irreconcilable material conflict, then GWL&A will withdraw the Account's
investment in the Fund and terminate this Agreement within six (6) months after
the Board informs GWL&A 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 Independent Directors.
7.7. 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 Fund 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, 3.7,.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
8.1. INDEMNIFICATION BY GWL&A
8.1(a). GWL&A agrees to indemnify and hold harmless the Fund and the
Adviser and each of their officers and directors or trustees and each person, if
any, who controls the Fund or the Adviser 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, expenses, damages, liabilities
(including amounts paid in settlement with the written consent of GWL&A) or
litigation (including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, expenses, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the registration statement or
prospectus or SAI covering 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 in writing to GWL&A or Schwab by or on behalf of the Adviser or
Fund for use in the registration statement or prospectus 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 Fund
shares; or
(ii) arise out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or sales literature of the Fund not supplied by GWL&A or persons
under its control) or wrongful conduct of GWL&A or persons under its
control, with respect to the sale or distribution of the Contracts or Fund
Shares; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or sales
literature of the Fund, or any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, if such a statement or omission was made in reliance upon
information furnished in writing to the Fund by or on behalf of GWL&A; or
(iv) arise as a result of any failure by GWL&A to provide the services and
furnish the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any representation
and/or warranty made by GWL&A in this Agreement or arise out of or result
from any other material breach of this Agreement by GWL&A, including
without limitation Section 2.10 and Section 6.7 hereof, as limited by and
in accordance with the provisions of Sections 8.1 (b) and 8.1(c) hereof.
8.1(b). GWL&A shall not be liable under this indemnification provision with
respect to any losses, claims, expenses, damages, liabilities or litigation to
which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
any of the Indemnified Parties.
8.1(c). GWL&A 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 GWL&A in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify GWL&A of any such claim shall not relieve GWL&A
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision,
except to the extent that GWL&A has been prejudiced by such failure to give
notice. In case any such action is brought against the Indemnified Parties,
GWL&A shall be entitled to participate, at its own expense, in the defense of
such action. GWL&A also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from GWL&A
to such party of GWL&A's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and GWL&A 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.
8.1(d). The Indemnified Parties will promptly notify GWL&A of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2. INDEMNIFICATION BY SCHWAB
8.2(a). Schwab agrees to indemnify and hold harmless the Fund and the
Adviser and each of their officers and directors or trustees and each person, if
any, who controls the Fund or Adviser within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
8.2) against any and all losses, claims, expenses, damages and liabilities
(including amounts paid in settlement with the written consent of Schwab) or
litigation (including reasonable legal and other expenses), to which the
Indemnified Parties may become subject under any statute or 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 Fund's shares or the Contracts and:
(i) arise out of Xxxxxx'x dissemination of information regarding the Fund that
is both (A) materially incorrect and (B) that was neither contained in the
Fund's registration statement or sales literature nor other promotional
material of the Fund prepared by the Fund or provided in writing to Schwab,
or approved in writing, by or on behalf of the Fund or the Adviser; or
(ii) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in sales literature or other
promotional material prepared by Schwab for the Contracts 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 in writing to GWL&A or Schwab
by or on behalf of the Adviser or the Fund or to Schwab by GWL&A for use in
the registration statement or prospectus 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
(iii)arise out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or sales literature of the Fund not supplied by Schwab or
persons under its control) or wrongful conduct of Schwab or persons under
its control, with respect to the sale or distribution of the Contracts; or
(iv) arise as a result of any failure by Schwab to provide the services and
furnish the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any representation
and/or warranty made by Schwab in this Agreement or arise out of or result
from any other material breach of this Agreement by Schwab;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). Schwab shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to any of the
Indemnified Parties.
8.2(c). Schwab 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 Schwab in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Schwab of any such claim shall not relieve Schwab
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision,
except to the extent that Schwab has been prejudiced by such failure to give
notice. In case any such action is brought against the Indemnified Parties,
Schwab shall be entitled to participate, at its own expense, in the defense of
such action. Schwab also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from Schwab
to such party of Xxxxxx'x election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and Schwab 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.
8.2(d). The Indemnified Parties will promptly notify Schwab of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.3. INDEMNIFICATION BY THE ADVISER
8.3(a). The Adviser agrees to indemnify and hold harmless GWL&A and Schwab
and each of their directors and officers and each person, if any, who controls
GWL&A or Schwab 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 Adviser) or litigation (including
reasonable legal and other expenses) to which the Indemnified Parties may become
subject under any statute or 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 Fund's
shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or
prospectus or SAI or sales literature or other promotional material of the
Fund prepared by the Fund or the Adviser (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 in writing to the Adviser or the Fund by or on behalf of GWL&A or
Schwab for use in the registration statement or prospectus for the Fund or
in sales literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or the Fund shares; or
(ii) arise out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus, SAI or sales literature or other promotional material for the
Contracts not supplied by the Adviser or persons under its control) or
wrongful conduct of the Fund or the Adviser or persons under their control,
with respect to the sale or distribution of the Contracts or Fund 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 in writing to
GWL&A or Schwab by or on behalf of the Adviser or the Fund; or
(iv) arise as a result of any failure by the Fund or the Adviser 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 and other qualification requirements
specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Fund or the Adviser in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Adviser or the Fund; or
(vi) arise out of or result from the materially incorrect or untimely
calculation or reporting of the daily net asset value per share or dividend
or capital gain distribution rate;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Adviser specified in Article VI hereof.
8.3(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
any of the Indemnified Parties.
8.3(c). The Adviser 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 in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision, except to the extent that the Adviser
has been prejudiced by such failure to give notice. In case any such action is
brought against the Indemnified Parties, the Adviser will be entitled to
participate, at its own expense, in the defense thereof. The Adviser also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Adviser to such party of the
Adviser'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 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.
8.3(d). GWL&A and Schwab agree promptly to notify the Adviser 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 the Account.
8.4. INDEMNIFICATION BY THE FUND
8.4(a). The Fund agrees to indemnify and hold harmless GWL&A and Schwab and
each of their directors and officers and each person, if any, who controls GWL&A
or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.4) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation (including
reasonable legal and other expenses) to which the Indemnified Parties may be
required to pay or become subject under any statute or regulation, at common law
or otherwise, insofar as such losses, claims, expenses, damages, liabilities or
expenses (or actions in respect thereof) or settlements, are related to the
operations of the Fund and:
(i) arise as a result of any failure by the Fund 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 and other qualification requirements specified in
Article VI of this Agreement); or
(ii) arise out of or result from any material breach of any representation
and/or warranty made by the Fund in this Agreement or arise out of or
result from any other material breach of this Agreement by the Fund;
8.4(b). The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
any of the Indemnified Parties.
8.4(c). The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve it from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this indemnification
provision, except to the extent that the Fund has been prejudiced by such
failure to give notice. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund shall also be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of the Fund'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 Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.
8.4(d). GWL&A and Schwab each agree promptly to notify the Fund of the
commencement of any litigation or proceeding against itself or any of its
respective officers or directors in connection with the Agreement, the issuance
or sale of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Fund.
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 Colorado, without regard
to the Colorado Conflict of Laws provisions.
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 Securities and
Exchange Commission may grant (including, but not limited to, the Mixed and
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 or without cause, with respect to some or
all Portfolios, upon six (6) months advance written notice delivered to the
other parties; provided, however, that such notice shall not be given earlier
than six (6) months following the date of this Agreement; or
(b) at the option of GWL&A or Schwab by written notice to the other parties with
respect to any Portfolio based upon GWL&A's or Xxxxxx'x reasonable determination
that shares of such Portfolio are not reasonably available to meet the
requirements of the Contracts; or
(c) at the option of GWL&A or Schwab by written notice to the other parties with
respect to any Portfolio in the event any of the 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 GWL&A; or
(d) at the option of the Fund in the event that formal administrative
proceedings are instituted against GWL&A or Schwab by the NASD, the SEC, the
Insurance Commissioner or like official of any state or any other regulatory
body regarding GWL&A's or Xxxxxx'x duties under this Agreement or related to the
sale of the Contracts, the operation of any Account, or the purchase of the Fund
shares, if, in each case, the Fund reasonably determines in its sole judgment
exercised in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of GWL&A or Schwab to perform its
obligations under this Agreement or related to the Contracts; or
(e) at the option of GWL&A or Schwab in the event that formal administrative
proceedings are instituted against the Fund or the Adviser by the NASD, the SEC,
or any state securities or insurance department or any other regulatory body, if
Schwab or GWL&A reasonably 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 Fund or the Adviser to perform their obligations
under this Agreement; or
(f) at the option of GWL&A by written notice to the Fund with respect to any
Portfolio if GWL&A reasonably believes that the Portfolio will fail to meet the
Section 817(h) diversification requirements or Subchapter M qualifications
specified in Article VI hereof, or
(g) at the option of either the Fund or the Adviser, if (i) the Fund or Adviser,
respectively, shall determine, in their sole judgment reasonably exercised in
good faith, that either GWL&A or Schwab has suffered a material adverse change
in their business or financial condition or is the subject of material adverse
publicity and that material adverse change or publicity will have a material
adverse impact on GWL&A's or Xxxxxx'x ability to perform its obligations under
this Agreement, (ii) the Fund or the Adviser notifies GWL&A or Schwab, as
appropriate, of that determination and its intent to terminate this Agreement,
and (iii) after considering the actions taken by GWL&A or Schwab and any other
changes in circumstances since the giving of such a notice, the determination of
the Fund or the Adviser shall continue to apply on the sixtieth (60th) day
following the giving of that notice, which sixtieth day shall be the effective
date of termination; or
(h) at the option of either GWL&A or Schwab, if (i) GWL&A or Schwab,
respectively, shall determine, in its sole judgment reasonably exercised in good
faith, that either the Fund or the Adviser has suffered a material adverse
change in its business or financial condition or is the subject of material
adverse publicity and that material adverse change or publicity will have a
material adverse impact on the Fund's or the Adviser's ability to perform its
obligations under this Agreement, (ii) GWL&A or Schwab notifies the Fund or the
Adviser, as appropriate, of that determination and its intent to terminate this
Agreement, and (iii) after considering the actions taken by the Fund or the
Adviser and any other changes in circumstances since the giving of such a
notice, the determination of GWL&A or Schwab shall continue to apply on the
sixtieth (60th) day following the giving of that notice, which sixtieth day
shall be the effective date of termination; or
(i) at the option of GWL&A in the event that formal administrative proceedings
are instituted against Schwab by the NASD, the Securities and Exchange
Commission, or any state securities or insurance department or any other
regulatory body regarding Xxxxxx'x duties under this Agreement or related to the
sale of the Fund's shares or the Contracts, the operation of any Account, or the
purchase of the Fund shares, provided, however, that GWL&A determines in its
sole judgment exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of Schwab to perform its
obligations related to the Contracts; or
(j) at the option of Schwab in the event that formal administrative proceedings
are instituted against GWL&A by the NASD, the Securities and Exchange
Commission, or any state securities or insurance department or any other
regulatory body regarding GWL&A's duties under this Agreement or related to the
sale of the Fund's shares or the Contracts, the operation of any Account, or the
purchase of the Fund shares, provided, however, that Schwab determines in its
sole judgment exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of GWL&A to perform its
obligations related to the Contracts; or
(k) at the option of any non-defaulting party hereto in the event of a material
breach of this Agreement by any party hereto (the "defaulting party") other than
as described in 10.I(a)-(j); provided, that the non-defaulting party gives
written notice thereof to the defaulting party, with copies of such notice to
all other non-defaulting parties, and if such breach shall not have been
remedied within thirty (30) days after such written notice is given, then the
non-defaulting party giving such written notice may terminate this Agreement by
giving thirty (30) days written notice of termination to the defaulting party.
10.2. NOTICE REQUIREMENT. No termination of this Agreement shall 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 shall set forth
the basis for the termination. Furthermore,
(a) in the event any termination is based upon the provisions of Article VII or
the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the
prior written notice shall be given in advance of the effective date of
termination as required by those provisions unless such notice period is
shortened by mutual written agreement of the parties;
(b) in the event any termination is based upon the provisions of Section
10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice
shall be given at least sixty (60) days before the effective date of
termination; and
(c) in the event any termination is based upon the provisions of Section
10.1(b), 10.1(c) or 10.I(f), the prior written notice shall be given in advance
of the effective date of termination, which date shall be determined by the
party sending the notice.
10.3. EFFECT OF TERMINATION. Notwithstanding any termination of this Agreement,
other than as a result of a failure by either the Fund or GWL&A to meet Section
817(h) of the Code diversification requirements, the Fund and the Adviser shall,
at the option of GWL&A or Schwab, continue to make available additional shares
of the Designated Portfolios 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 shall be permitted to
reallocate investments in the Designated Portfolios, redeem investments in the
Designated Portfolios and/or invest in the Designated Portfolios upon the making
of additional purchase payments under the Existing Contracts. The parties agree
that this Section 10.3 shall not apply to any terminations under Article VII and
the effect of such Article VII terminations shall be governed by Article VII of
this Agreement.
10.4. SURVIVING PROVISIONS. Notwithstanding any termination of this Agreement,
each party's obligations under Article VIII to indemnify other parties shall
survive and not be affected by any termination of this Agreement. In addition,
with respect to Existing Contracts, all provisions of this Agreement shall also
survive and not be affected by any termination of this Agreement.
10.5. SURVIVAL OF AGREEMENT. A termination by Schwab shall terminate this
Agreement only as to Schwab, and this Agreement shall remain in effect as to the
other parties; provided, however, that in the event of a termination by Schwab
the other parties shall have the option to terminate this Agreement upon 60
(sixty) days notice, rather than the six (6) months specified in Section
10.1(a).
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or certified mail
to the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
party.
If to the Fund:
INVESCO Variable Investment Funds, Inc.
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: General Counsel
If to GWL&A:
Great-West Life & Annuity Insurance Company
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Assistant Vice President, Savings Products
If to the Adviser:
INVESCO Funds Group, Inc.
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: General Counsel
If to Schwab:
Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: General Counsel
ARTICLE XII. MISCELLANEOUS
12.1. Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain. Without limiting the foregoing, no party hereto shall disclose
any information that another party has designated as proprietary.
12.2. The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
12.4. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.5. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furish the Colorado Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable annuity
operations of GWL&A are being conducted in a manner consistent with the Colorado
Variable Annuity Regulations and any other applicable law or regulations.
12.6. Any controversy or claim arising out of or relating to this Agreement, or
breach thereof, may be settled by arbitration in a forum jointly selected by the
relevant parties (but if applicable law requires some other forum, then such
other forum) in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, or other arbitration rules as mutually agreed upon by
the relevant parties, and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.
12.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may assigned
by any party without the prior written consent of all parties hereto.
12.9. Schwab and GWL&A are hereby expressly put on notice of the limitation of
liability as set forth in the Articles of Incorporation of the Fund and the
Adviser and agree that the obligations assumed by the Fund and the Adviser
pursuant to this Agreement shall be limited in any case to the Fund and Adviser
and their respective assets and neither Schwab nor GWL&A shall seek satisfaction
of any such obligation from the shareholders of the Fund or the Adviser, the
Trustees, officers, employees or agents of the Fund or Adviser, or any of them,
except to the extent permitted under this Agreement.
12.10. The Fund and the Adviser agree that the obligations assumed by GWL&A and
Schwab pursuant to this Agreement shall be limited in any case to GWL&A and
Schwab and their respective assets and neither the Fund nor the Adviser shall
seek satisfaction of any such obligation from the shareholders of the GWL&A or
Schwab, the directors, officers, employees or agents of the GWL&A or Schwab, or
any of them, except to the extent permitted under this Agreement.
12.11. No provision of this Agreement may be deemed or construed to modify or
supersede any contractual rights, duties, or indemnifications, as between the
Adviser and the Fund.
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.
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By its authorized officer,
By: /s/ X. Xxxx
------------
Title: Vice President, Marketing and
Product Development
Date: October 25, 1996
INVESCO VARIABLE INVESTMENT FUNDS, INC.
By its authorized officer,
By /s/ Xxxxxx X. Xxxxxx
--------------------
Title: Treasurer
Date: 10/22/96
INVESCO FUNDS GROUP, INC.:
By its authorized officer,
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Title: Senior Vice President & Treasurer
Date: 10/12/96
XXXXXXX XXXXXX & CO., INC.
By its authorized officer,
By /s/ X. Xxxxxx
-------------
Title: VP, Annuities & Life Insurance
Date: 10/24/96
SCHWAB VARIABLE ANNUITY
SCHEDULE A
Contracts Form Numbers
--------- ------------
Great-West Life & Annuijy Insurance Company
-------------------------------------------
Group Variable/Fixed Annuity Contract J434
Individual Variable/Fixed Annuity Contract J434IND
SCHEDULE B
Designated Portfolios
---------------------
INVESCO VIF-Industrial Income Portfolio
INVESCO VIF-Total Return Portfolio
INVESCO VIF-High Yield Portfolio
SCHEDULE C
ADMINISTRATIVE SERVICES
To be performed by Xxxxxxx Xxxxxx & Co., Inc.
X. Xxxxxx will provide the properly registered and licensed personnel and
systems needed for all customer servicing and support - for both fund and
annuity information and questions - including:
respond to Contractowner inquiries
delivery of prospectus - both fund and annuity;
entry of initial and subsequent orders;
transfer of cash to insurance company and/or funds;
explanations of fund objectives and characteristics;
entry of transfers between funds;
fund balance and allocation inquiries;
mail fund prospectus.
B. For the services, Schwab shall receive a fee of 0.25% per annum. applied to
the average daily value of the shares of the fund held by Xxxxxx'x customers,
payable by the Adviser directly to Schwab, such payments being due and payable
within 15 (fifteen) days after the last day of the month to which such payment
relates.
C. The Fund will calculate and Schwab will verify with GWL&A the asset balance
for each day on which the fee is to be paid pursuant to this Agreement with
respect to each Designated Portfolio.
X. Xxxxxx will communicate all purchase, withdrawal, and exchange orders it
receives from its customers to GWL&A who will retransmit them to each fund.
SCHEDULE D
REPORTS PER SECTION 6.6
With regard to the reports relating to the quarterly testing of compliance with
the requirements of Section 817(h) and Subchapter M under the Internal Revenue
Code (the "Code") and the regulations thereunder, the Fund shall provide within
twenty (20) Business Days of the close of the calendar quarter a report to GWL&A
in the Form D1 attached hereto and incorporated herein by reference, regarding
the status under such sections of the Code of the Designated Portfolio(s), and
if necessary, identification of any remedial action to be taken to remedy
non-compliance.
With regard to the reports relating to the year-end testing of compliance with
the requirements of Subchapter M of the Code, referred to hereinafter as "RIC
status," the Fund will provide the reports on the following basis: (i) the last
quarter's quarterly reports can be supplied within the 20-day period, and (ii) a
year-end report will be provided 45 days after the end of the calendar year.
However, if a problem with regard to RIC status, as defined below, is identified
in the third quarter report, on a weekly basis, starting the first week of
December, additional interim reports will be provided specially addressing the
problems identified in the third quarter report. If any interim report
memorializes the cure of the problem, subsequent interim reports will not be
required.
A problem with regard to RIC status is defined as any violation of the following
standards, as referenced to the applicable sections of the Code:
(a) Less than ninety percent of gross income is derived from sources of income
specified in Section 851(b)(2);
(b) Thirty percent or greater gross income is derived from the sale or
disposition of assets specified in Section 851(b)(3);
(c) Less than fifty percent of the value of total assets consists of assets
specified in Section 851(b)(4)(A); and
(d) No more than twenty-five percent of the value of total assets is invested in
the securities of one issuer, as that requirement is set forth in Section
851(b)(4)(B).
FORM D1
CERTIFICATE OF COMPLIANCE
I, ______________, a duly authorized officer, director or agent of
_________________ Fund hereby swear and affirm that _______________Fund is in
compliance with all requirements of Section 817(h) and Subchapter M of the
Internal Revenue Code (the "Code") and the regulations thereunder as required in
the Fund Participation Agreement among Great-West Life & Annuity Insurance
Company, Xxxxxxx Xxxxxx & Co., Inc. and __________________ other than the
exceptions discussed below:
Exceptions Remedial Action
---------- ---------------
_____________________________ _______________________________
_____________________________ _______________________________
_____________________________ _______________________________
_____________________________ _______________________________
_____________________________ _______________________________
_____________________________ _______________________________
_____________________________ _______________________________
_____________________________ _______________________________
_____________________________ _______________________________
If no exception to report, please indicate "None."
Signed this __ day of __________, ______.
____________________
(Signature)
By: ____________________________________
(Type or Print Name and Title/Position)
SCHEDULE E
EXPENSES
The Fund and/or Adviser, and GWL&A will coordinate the functions and pay the
costs of the completing these functions based upon an allocation of costs in the
tables below. Costs shall be allocated to reflect the Fund's share of the total
costs determined according to the number of pages of the Fund's respective
portions of the documents.
--------------------------------------------------------------------------------------------
Item Function Party Responsible Party Responsible
for Coordination for Expense
--------------------------------------------------------------------------------------------
Mutual Fund Printing of combined GWL&A Fund or Adviser,
Prospectus prospectuses as applicable
--------------------------------------------------------------------------------------------
Fund or Adviser shall GWL&A Fund or Adviser,
supply GWL&A with as applicable
such numbers of the
Designatied Portfolio(s)
prospectus(es) as
GWL&A shall
reasonably request
--------------------------------------------------------------------------------------------
Distribution to New GWL&A GWL&A
and Inforce Clients
--------------------------------------------------------------------------------------------
Distribution to Schwab Schwab
Prospective Clients
--------------------------------------------------------------------------------------------
Product Prospectuses Printing for Inforce GWL&A GWL&A
Clients
--------------------------------------------------------------------------------------------
Printing for Prospective GWL&A Schwab
Clients
--------------------------------------------------------------------------------------------
Distribution to New GWL&A GWL&A
and Infore Clients
--------------------------------------------------------------------------------------------
Distribution to Schwab Schwab
Prospective Clients
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Item Function Party Responsible Party Responsible
for Coordination for Expense
--------------------------------------------------------------------------------------------
Mutual Fund If Required by Fund or Fund or Adviser Fund or Adviser
Prospecutus Update & Adviser
Distribution
--------------------------------------------------------------------------------------------
If Required by GWL&A GWL&A GWL&A
--------------------------------------------------------------------------------------------
If Required by Schwab Schwab Schwab
--------------------------------------------------------------------------------------------
Product Prospectus If Required by Fund or GWL&A Fund or Adviser
Update & Distribution Adviser
--------------------------------------------------------------------------------------------
If Required by GWL&A GWL&A GWL&A
--------------------------------------------------------------------------------------------
If Required by Schwab Schwab Schwab
--------------------------------------------------------------------------------------------
Mutual Fund SAI Printing Fund or Adviser Fund or Adviser
--------------------------------------------------------------------------------------------
Distribution GWL&A GWL&A
--------------------------------------------------------------------------------------------
Product SAI Printing GWL&A GWL&A
--------------------------------------------------------------------------------------------
Distribution GWL&A GWL&A
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Item Function Party Responsible Party Responsible
for Coordination for Expense
--------------------------------------------------------------------------------------------
Proxy Material for Printing if proxy Fund or Adviser Fund or Adviser
Mutual Fund: Required by Law
--------------------------------------------------------------------------------------------
Distribution (including GWL&A Fund or Adviser
Labor) if proxy required
by Law
--------------------------------------------------------------------------------------------
Printing & Distribution GWL&A GWL&A
if required by GWL&A
--------------------------------------------------------------------------------------------
Printing & Distribution GWL&A Schwab
if required by Schwab
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Item Function Party Responsible Party Responsible
for Coordination for Expense
--------------------------------------------------------------------------------------------
Mutual Fund Annual & Printing of combined GWL&A Fund or adviser
Semi-Annual Report Reports
--------------------------------------------------------------------------------------------
Distribution GWL&A GWL&A and Schwab
--------------------------------------------------------------------------------------------
Other commuinication If Required by the Schwab Fund or Adviser
to New and Prospective Fund or Adviser
Clients
--------------------------------------------------------------------------------------------
If Required by GWL&A Schwab GWL&A
--------------------------------------------------------------------------------------------
If Required by Schwab Schwab Schwab
--------------------------------------------------------------------------------------------
Other communication Distribution (including GWL&A Fund or Adviser
to inforce labor) if required by
the Fund or Adviser
--------------------------------------------------------------------------------------------
If Required by GWL&A GWL&A GWL&A
--------------------------------------------------------------------------------------------
If Required by Schwab GWL&A Schwab
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Item Function Party Responsible Party Responsible
for Coordination for Expense
--------------------------------------------------------------------------------------------
Errors in Share Price Cost of error to GWL&A Fund or Adviser
calculation pursuant participants
to Section 1.10
--------------------------------------------------------------------------------------------
Cost of administrative GWL&A Fund or Adviser
work to correct error
--------------------------------------------------------------------------------------------
Operations of the Fund All operations and Fund or Adviser Fund or Adviser
related expenses,
including the cost of
registration and
qualification of shares,
taxes on the issuance or
transfer of shares, cost
of management of the
business affairs of the
Fund, and expenses
paid or assumed by the
fund pursuant to any
Rule 12b-1 plan
--------------------------------------------------------------------------------------------
Operations of the Federal registration of GWL&A GWL&A
Account units of separate
account (24f-2 fees)
--------------------------------------------------------------------------------------------
