FORM OF
FUND PARTICIPATION AGREEMENT
TABLE OF CONTENTS
ARTICLE I. Sale of Fund Shares...........................................3
ARTICLE II. Representations and Warranties................................4
ARTICLE III. Prospectuses and Proxy Statements; Voting.....................7
ARTICLE IV. Sales Material and Information................................9
ARTICLE V. Fees and Expenses............................................11
ARTICLE VI. Diversification and Qualification............................12
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order ....................15
ARTICLE VIII. Indemnification .............................................18
ARTICLE IX. Applicable Law...............................................27
ARTICLE X. Termination..................................................27
ARTICLE XI. Notices......................................................30
ARTICLE XII. Miscellaneous................................................31
SCHEDULE A Designated Portfolios........................................35
SCHEDULE B Reports per Section 6.6......................................36
SCHEDULE C Expenses.....................................................38
SCHEDULE D Administrative Services......................................41
SCHEDULE E Non-Compete Provisions.......................................43
FORM OF
FUND PARTICIPATION AGREEMENT
Among
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
OCC ACCUMULATION TRUST,
OPCAP ADVISORS,
and
OCC DISTRIBUTORS
THIS AGREEMENT, made and entered into as of this ____ day of
_______________, 2001 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 COLI VUL - 7 Series Account (the "Account");
OCC ACCUMULATION TRUST, a business trust organized under the laws of
Massachusetts (hereinafter the "Fund"); OPCAP ADVISORS (hereinafter the
"Adviser"), a general partnership organized under the laws of Delaware; and OCC
DISTRIBUTORS, a general partnership organized under the laws of Delaware
(hereinafter the "Distributor").
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
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WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (hereinafter the "SEC"), dated February 23, 1995 (File No. 812-9290),
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(T)(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 and
qualified pension and retirement plans ("Qualified Plans") (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, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, GWL&A has certain unregistered variable life contracts
supported wholly or partially by the Account (the "Contracts"); and
WHEREAS, the Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of GWL&A,
under the insurance laws of the State of Colorado, to set aside and invest
assets attributable to the Contracts; and
2
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, GWL&A intends to purchase shares in the Portfolio(s) listed in
Schedule A attached hereto and incorporated herein by reference, as such
Schedule 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
NOW, THEREFORE, in consideration of their mutual promises, GWL&A, the
Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1 The Fund will not sell shares of the Designated Portfolio(s) to
any other Participating Insurance Company separate account unless an agreement
containing provisions substantially similar to Sections 2.4, 2.10, 3.5, 3.6,
5.1, and Article VII of this Agreement is in effect to govern such sales.
1.2. All purchases, redemptions and exchanges of Designated Portfolio
shares by GWL&A on behalf of the Account, in addition to the pricing and
correction thereof, of Designated Portfolio shares, shall be governed by and
subject to the terms of the Trading Agreement entered into by and between the
Distributor and BenefitsCorp Equities, Inc., October 9, 2001, as may be amended
from time to time.
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1.3. Notwithstanding Section 1.2 hereof, if an adjustment is
necessary to correct an error which has caused Contract owners to receive less
than the amount to which they are entitled, the number of shares of the
applicable sub-account of such Contract owners 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 Contract owners accounts. Upon notification by
the Adviser of any overpayment due to an error, GWL&A shall promptly remit to
Adviser any overpayment that has not been paid to Contract owners; however,
Adviser acknowledges that GWL&A does not intend to seek additional payments from
any Contract owner who, because of a pricing error, may have underpaid for units
of interest credited to his/her account. In no event shall GWL&A be liable to
Contract owners for any such adjustments or underpayment amounts that occur as a
result of a pricing error.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. GWL&A 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 Colorado insurance law. GWL&A also
warrants that the Contracts are either registered under the 1933 Act or are not
required to be so registered. GWL&A further represents and warrants that the
Contracts will be offered and sold materially in accordance with applicable
federal and state insurance and securities laws.
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.
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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. In any
event, the Fund and Adviser agree to comply with applicable provisions and SEC
staff interpretations of the 1940 Act to assure that the investment advisory or
management fees paid to the Adviser by the Fund are in accordance with the
requirements of the 1940 Act. 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 will make 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 state
insurance and other applicable laws 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 applicable state securities and insurance laws. 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 Massachusetts and that it
does and will comply in all material respects with the 1940 Act.
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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 Delaware and any applicable state and
federal securities laws.
2.7. The Distributor 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 Delaware and any applicable
state and federal securities laws.
2.8. 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 one or more blanket fidelity bonds 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 bonds shall include
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company.
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. 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 C attached hereto and incorporated
herein by reference.
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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 and at the time of
issuance will be treated as life insurance contracts under applicable provisions
of the Code, and that it will make every effort to maintain such treatment and
that it will notify the Fund, the Distributor 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
the Fund, the Distributor 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. GWL&A represents and warrants that it will not
purchase Fund shares with assets derived from tax-qualified retirement plans
except, indirectly, through Contracts purchased in connection with such plans.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. If applicable state or federal laws or regulations require that
prospectuses for the Fund be distributed to all Contract owners, then at least
annually, the Adviser or Distributor shall provide GWL&A with as many copies of
the Fund's current prospectus for the Designated Portfolio(s) as GWL&A may
reasonably request for marketing purposes (including distribution to Contract
owners with respect to new sales of a Contract), with expenses to be borne in
accordance with Schedule C hereof. If requested by GWL&A in lieu thereof, the
Advisor, Distributor 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 any 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
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prospectus (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 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 Contract owners, then the Fund, Distributor 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 C hereof, as GWL&A may reasonably require to permit timely distribution
thereof to Contract owners. The Adviser, Distributor and/or the Fund shall also
provide SAIs to any Contract owner or prospective owner who requests such SAI
from the Fund (although it is anticipated that such requests will be made to
GWL&A).
3.3. The Fund, Distributor and/or Adviser shall provide GWL&A 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 C hereof, as GWL&A may
reasonably require to permit timely distribution thereof to Contract owners if
and as required by applicable law.
3.4. It is understood and agreed that, except with respect to
information regarding GWL&A provided in writing by that party, GWL&A is not
responsible for the content of the prospectus or SAI for the Designated
Portfolio(s).
3.5. If and to the extent required by law GWL&A shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Designated Portfolio(s) shares held in the
Account in accordance with instructions received from
Contract owners: and
(iii) vote Designated Portfolio shares held in the Account for
which no instructions have been received in the same
proportion as Designated
8
Portfolio(s) shares for which instructions have been
received from Contract owners, so long as and to the
extent that the SEC continues to interpret the 1940 Act
to require pass-through voting privileges for 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 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, respectively, develops or proposes to use and in which the
Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the
Distributor 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.
9
4.2. GWL&A 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, prospectus or SAI for the Fund shares, as the same may be amended or
supplemented from time to time, or in sales literature or other promotional
material approved by the Fund, Distributor or Adviser, except with the
permission of the Fund, Distributor or Adviser.
4.3. The Fund or the Adviser shall furnish, or shall cause to be
furnished, to GWL&A, a copy of each piece of sales literature or other
promotional material in which GWL&A and/or its separate account(s), is named at
least ten (10) business days prior to its use. No such material shall be used if
GWL&A objects to such use within five (5) business days after receipt of such
material.
4.4. The Fund, the Distributor 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 sales literature or other promotional material approved by GWL&A or
its designee, except with the permission of GWL&A.
4.5. The Fund will provide to GWL&A at least one complete copy of all
registration statements, prospectuses, SAIs, sales literature and other
promotional materials, 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. Applications
for exemptions and requests for no-action letters shall be provided upon the
date they become available to the general public.
4.7. GWL&A will provide to the Fund at least one complete copy of any
registration statements, prospectuses, SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, 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
10
regulatory authority. Applications for exemptions and requests for no-action
letters shall be provided upon the date they become available to the general
public.
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 shareholder reports, and proxy
materials (including solicitations for voting instructions) and any other
material constituting sales literature or advertising under the NASD rules, the
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. Neither the Fund, the Distributor nor the Adviser shall pay any
fee or other compensation to GWL&A under this Agreement, other than pursuant to
Schedule D attached hereto and incorporated by reference herein. In addition,
the parties will bear certain expenses in accordance with Schedule C, Articles
III, V, and other provisions of this Agreement.
11
5.2. All expenses incident to performance by the Fund, the
Distributor and the Adviser under this Agreement shall be paid by the
appropriate party, as further provided in Schedule C. 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 any 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 C.
5.4. The Fund, the Distributor and the Adviser acknowledge that a
principal feature of the Contracts is the Contract owner'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, the
Distributor and the Adviser agree to cooperate with GWL&A 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 between Unaffiliated Funds.
ARTICLE VI. DIVERSIFICATION AND QUALIFICATION
6.1. The Fund, the Distributor 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 life insurance
contracts under the Code, and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Fund, Distributor 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, the Distributor and the
Adviser agree that shares of the
12
Designated Portfolio(s) will be sold only to Participating Insurance Companies
and their separate accounts and to Qualified Plans.
6.2. No shares of any Designated Portfolio of the Fund will be sold
to the general public.
6.3. The Fund, the Distributor 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, Distributor or 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 8.2, 8.3 and
8.4 hereof and without in any way limiting or restricting any other remedies
available to GWL&A, the Adviser or Distributor 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 or anticipated or
reasonably foreseeable failure.
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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 B 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 Contract owner 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, Distributor or Adviser as a result of such a failure
or alleged failure:
(a) GWL&A shall promptly notify the Fund, the Distributor and the
Adviser of such assertion or potential claim;
(b) GWL&A shall consult with the Fund, the Distributor 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, the Distributor 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
Contract owner 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
14
Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by GWL&A
to the Fund, the Distributor 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, the Distributor and the Adviser with
such cooperation as the Fund, the Distributor and the Adviser shall
reasonably request (including, without limitation, by permitting the
Fund, the Distributor and the Adviser to review the relevant books and
records of GWL&A) in order to facilitate review by the Fund, the
Distributor 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 Contract
owner that would give rise to a claim against the Fund, the Distributor
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, the
Distributor 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 private counsel to the effect that a reasonable basis exists
for taking such appeal; and further provided that the Fund, the
Distributor and the Adviser shall bear the costs and expenses, including
reasonable attorney's fees, incurred by GWL&A in complying with this
clause (f).
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
15
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 Contract owners.
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 Distributor, 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
16
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, the
Distributor 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 disinterested members of the Board 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
17
of Contract owners 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, the
Distributor and the Adviser and each of their respective officers and directors
or trustees and each person, if any, who controls the Fund, Distributor or
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 and 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 or liabilities (or actions in respect
18
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
Contracts or sales literature or other promotional material
for the Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated 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 by or on behalf of the Adviser, Distributor or
Fund for use in the Contracts or sales literature or other
promotional material (or any amendment or supplement to any of
the foregoing) 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 or other
promotional material 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, SAI, or sales literature or other promotional
material 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
19
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 THE ADVISER
8.2(a). The Adviser agrees to indemnify and hold harmless GWL&A and its
directors and officers and each person, if any, who controls GWL&A within the
meaning of Section 15 of the
20
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
8.2) against any and all losses, claims, expenses, damages, liabilities
(including amounts paid in settlement with the written consent of the Adviser)
or litigation (including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute 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,
the Distributor 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, the Distributor or the Fund
by or on behalf of GWL&A for use in the registration statement,
prospectus or SAI for the Fund or in sales literature or other
promotional material (or any amendment or supplement to any of
the foregoing) 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 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, the Distributor 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 sales literature or other
promotional material 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 by or on
behalf of the Adviser, the Distributor or the Fund; or
(iv) arise as a result of any failure by the Fund, the Distributor 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
21
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, the Distributor
or the Adviser in this Agreement or arise out of or result from
any other material breach of this Agreement by the Adviser, the
Distributor or the Fund; or
(vi) arise out of or result from the incorrect or untimely
calculation or reporting by the Fund, the Distributor or the
Adviser 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 8.2(b) and
8.2(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Adviser specified in Article VI hereof.
8.2(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.
8.2(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
22
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.
23
8.2(d). GWL&A agrees to promptly 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.
8.3. INDEMNIFICATION BY THE FUND
8.3(a). To the extent permitted by applicable law, the Fund agrees to
indemnify and hold harmless GWL&A and its directors and officers and each
person, if any, who controls GWL&A 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 and 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;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(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.
24
8.3(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.
8.3(d). GWL&A each agrees to promptly 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.
8.4. INDEMNIFICATION BY THE DISTRIBUTOR
8.4(a). The Distributor agrees to indemnify and hold harmless GWL&A and
its directors and officers and each person, if any, who controls GWL&A 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 and liabilities (including amounts paid in settlement with the
written consent of the Distributor) or litigation (including reasonable legal
and other expenses) to
25
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,
Adviser or Distributor (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, PROVIDED that this Agreement
to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information
furnished in writing to the Adviser, the Distributor or Fund by
or on behalf of GWL&A for use in the registration statement or
SAI or prospectus for the Fund or in sales literature or other
promotional material (or any amendment or supplement to any of
the foregoing) 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 sales
literature or other promotional material for the Contracts not
supplied by the Distributor or persons under its control) or
wrongful conduct of the Fund, the Distributor or 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 sales literature or other
promotional material 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 by or on
behalf of the Adviser, the Distributor or Fund; or
(iv) arise as a result of any failure by the Fund, Adviser or
Distributor to provide the services and furnish the materials
under the terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with the
diversification and other qualification requirements specified
in Article VI of this Agreement); or
26
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, Adviser or
Distributor in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund, Adviser or
Distributor; or
(vi) arise out of or result from the 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 8.4(b) and
8.4(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Distributor specified in Article VI
hereof.
8.4(b). The Distributor 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 or 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 Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Distributor 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 Distributor of
any such claim shall not relieve the Distributor from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision, except to the extent that the
Distributor has been prejudiced by such failure to give notice. In case any such
action is brought against the Indemnified Parties, the Distributor will be
entitled to participate, at its own expense, in the defense thereof. The
Distributor also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Distributor
to such party of the Distributor's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of
27
any additional counsel retained by it, and the Distributor 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 agrees to promptly notify the Distributor 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.
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 SEC
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 Designated 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 by written notice to the other
parties with respect to any Designated Portfolio based upon
GWL&A's determination that shares of such Designated Portfolio
are not reasonably available to meet the requirements of the
Contracts; or
28
(c) at the option of GWL&A by written notice to the other
parties with respect to any Designated Portfolio in the event
any of the Designated Portfolio's shares are not registered,
issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as the
underlying investment media of the Contracts issued or to be
issued by GWL&A; or
(d) at the option of the Fund, Distributor or Adviser in the
event that formal administrative proceedings are instituted
against GWL&A by the NASD, the SEC, the Insurance Commissioner
or like official of any state or any other regulatory body
regarding GWL&A's 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,
Distributor or Adviser, as the case may be, 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 to perform its obligations
under this Agreement; or
(e) at the option of GWL&A in the event that formal
administrative proceedings are instituted against the Fund, the
Distributor or the Adviser by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body,
if 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, the
Distributor 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, the Distributor or the
Adviser, if (i) the Fund, Distributor or Adviser, respectively,
shall determine, in its sole judgment reasonably exercised in
good faith, that GWL&A 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 GWL&A's ability
to perform its obligations under this Agreement, (ii) the Fund,
Distributor or Adviser notifies GWL&A of that determination and
its intent to terminate this Agreement, AND (iii) after
considering the actions taken by GWL&A and any other changes in
circumstances since the giving of such a notice, the
determination of the Fund, Distributor or 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
29
(h) at the option of either GWL&A, if (i) GWL&A shall determine,
in its sole judgment reasonably exercised in good faith, that
the Fund, Distributor or 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,
Distributor's or Adviser's ability to perform its obligations
under this Agreement, (ii) GWL&A notifies the Fund, Distributor
or Adviser, as appropriate, of that determination and its intent
to terminate this Agreement, AND (iii) after considering the
actions taken by the Fund, Distributor or Adviser and any other
changes in circumstances since the giving of such a notice, the
determination of GWL&A 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 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 10.1(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 10.1(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.
30
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, the
Distributor and the Adviser shall, at the option of GWL&A, continue to make
available additional shares of the Designated Portfolio(s) 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
Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in
the Designated Portfolio(s) 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.
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:
OCC Accumulation Trust
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
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If to GWL&A:
Great-West Life & Annuity Insurance Company
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxxxxx, Vice President, Life Insurance Markets
PC: Xxxxxxx Xxxxx, Vice President and Counsel
If to the Adviser:
OpCap Advisors
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
If to the Distributor:
OCC Distributors
1345 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
ARTICLE XII. MISCELLANEOUS
12.1. The parties hereto acknowledge that any nonpublic personal
information (as defined by applicable law or regulation promulgated under Title
V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (the "Act")) of Contract owners (and any
participants thereof, as applicable) will be disclosed or utilized solely to
carry out the terms of this Agreement or pursuant to an exception contained in
any applicable law or regulation promulgated under the Act. 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.
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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 furnish 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
insurance 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, shall 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, 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 not be assigned by any party without the prior written consent of all
parties hereto.
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12.9. GWL&A is hereby expressly put on notice of the limitation of
liability as set forth in the Declarations of Trust of the Fund and agree that
the obligations assumed by the Fund, Distributor and the Adviser pursuant to
this Agreement shall be limited in any case to the Fund, Distributor and Adviser
and their respective assets and GWL&A shall not seek satisfaction of any such
obligation from the shareholders of the Fund, Distributor or the Adviser, the
Trustees, officers, employees or agents of the Fund, Distributor or Adviser, or
any of them.
12.10. The Fund, the Distributor and the Adviser agree that the
obligations assumed by GWL&A pursuant to this Agreement shall be limited in any
case to GWL&A and its assets and neither the Fund, Distributor nor Adviser shall
seek satisfaction of any such obligation from the shareholders of GWL&A, the
directors, officers, employees or agents of GWL&A, 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, and the Distributor 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 as specified below.
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By its authorized officer,
By:______________________________
Title:
Date:
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OCC ACCUMULATION TRUST
By its authorized officer,
By:______________________________
Title:
Date:
OPCAP ADVISORS
By its authorized officer,
By:____________________________
Title:
Date:
OCC DISTRIBUTORS
By its authorized officer,
By:____________________________
Title:
Date:
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