FUND PARTICIPATION AGREEMENT
TABLE OF CONTENTS
ARTICLE I. Sale of Fund Shares......................................................
ARTICLE II. Representations and Warranties...........................................
ARTICLE III. Prospectuses and Proxy Statements; Voting................................
ARTICLE IV. Sales Material and Information...........................................
ARTICLE V. Fees and Expenses........................................................
ARTICLE VI. Diversification and Qualification........................................
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order ................................
ARTICLE VIII. Indemnification .........................................................
ARTICLE IX. Applicable Law...........................................................
ARTICLE X. Termination..............................................................
ARTICLE XI. Notices..................................................................
ARTICLE XII. Miscellaneous............................................................
SCHEDULE A Designated Portfolios....................................................
SCHEDULE B Reports per Section 6.6..................................................
SCHEDULE C Expenses.................................................................
SCHEDULE D Administrative Services..................................................
SCHEDULE E Non-Compete Provisions...................................................
FUND PARTICIPATION AGREEMENT
Among
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
XXXXX VARIABLE ACCOUNT FUND, INC.
XXXXX SELECTED ADVISERS, L.P.
and
XXXXX DISTRIBUTORS, LLC
THIS AGREEMENT, made and entered into as of this ____ day of _December,
2004 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-2 Series Account (the "Account"); XXXXX VARIABLE
ACCOUNT FUND, INC., a _corporation organized under the laws of _Maryland_
(hereinafter the "Fund"); XXXXX SELECTED ADVISERS, L.P. (hereinafter the
"Adviser"), a _limited partnership_ organized under the laws of _Colorado; and
XXXXX DISTRIBUTORS, LLC, a _limited liability company_ 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
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (hereinafter the "SEC"), dated November 19, 1999 (File No. 812-11572
), 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 registered certain variable life contracts supported
wholly or partially by the Account (the "Contracts") to be made available to
owners thereof, including any participants or employees of such owners as
applicable ("Contract Owners"); 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
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 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
WHEREAS, GWL&A intends to utilize its NSCC member broker/dealer
affiliate, GWFS Equities, Inc., formerly known as BenefitsCorp Equities, Inc.,
("GWFS") to transmit instructions for the purchase, redemption and transfer of
Fund shares on behalf of the Account, and GWFS, alone, or with the assistance of
a recordkeeping affiliate, to perform certain recordkeeping functions associated
with the transfer of Fund shares into and out of the Account in order to
recognize certain organizational economies; 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 agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts and to certain
Qualified Plans. No shares of any Designated Portfolio will be sold to the
general public. 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 and NSCC Networking Agreement, entered into
by and between _Davis Selected Advisers, L.P, _ and __BenefitsCorp Equities,
Inc.__ dated _April 2, 1998_, as amended from time to time.
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.
1.4 The Adviser shall promptly reimburse GWL&A for any and all costs or
expenses which GWL&A incurs that are associated with any failure of the Fund to
settle trades by the time specified on the Business Day following the Trade
Date, as specified and defined in the Trading and NSCC Networking Agreement.
ARTICLE II. Representations and Warranties
2.1. GWL&A represents and warrants that the Contracts and 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 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 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 and that it will maintain such registration for so long as any
Contracts are outstanding as required by applicable law.
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. 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 all 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 __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 __Maryland_ 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 __Maryland_ 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 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 C 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 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. 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
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 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
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). It is also understood and agreed
that, except with respect to information regarding the Fund, the
Distributor, the Adviser or the Designated Portfolio(s) provided
in writing by the Fund, the Distributor or the Adviser, neither
the Fund, the Distributor 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 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 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. Notwithstanding the foregoing, GWL&A shall not be required to furnish
to the Fund or its designee any sales literature or other promotional material
which GWL&A receives from the Fund or third party vendors and which is unaltered
by GWL&A.
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 a registration statement, prospectus or SAI for the Contracts, as
the same may be amended or supplemented from time to time, or 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 any
registration statements, prospectuses, SAIs, 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.
4.6. 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, 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.
4.7. 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.
4.8. 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.
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. The Fund does not allow market timing,
short-term trading, or other excessive trading into and out of the Fund. GWLA&A
agrees to cooperate with the Fund, the Adviser, and the Distributor to prevent
Contract Owners from market timing the Fund.
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 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.
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 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 independent 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 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 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 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
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 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 registration
statement or prospectus for 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 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 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
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, 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 a registration statement,
prospectus, SAI, or 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
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 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.
8.2(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).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.
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 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 the
registration statement, prospectus, SAI, 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 a registration statement,
prospectus, SAI, 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
(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 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 twelve (12)
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
(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
(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.
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:
Xxxxx Variable Account Fund, Inc.
0000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxx, 00000
Attention: Xxxxxxx Xxxx, Executive Vice President
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:
Xxxxx Selected Advisers, L.P..
0000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxx, 00000
Attention: Xxxxxxx Xxxx, Chief Operating Officer
If to the Distributor:
Xxxxx Distributors, LLC
0000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxx, 00000
Attention: Xxxxxxx Xxxx, President
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. Further, Fund,
Distributor and Adviser agree to maintain and enforce procedures for the
safeguarding and protection of such nonpublic personal information at least as
rigorous as those required to be used by GWL&A under applicable law. 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 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 life
operations of GWL&A are being conducted in a manner consistent with the
applicable 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.
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.
12.12. None of the parties hereto shall be liable to the other for any
and all losses, damages, costs, charges, counsel fees, payments, expenses or
liability due to any failure, delay or interruption in performing its
obligations under this Agreement, and without the fault or negligence of such
party, due to causes or conditions beyond its control including, without
limitation, labor disputes, strikes (whether legal or illegal), lock outs
(whether legal or illegal), civil commotion, riots, war and war-like operations
including acts of terrorism, embargoes, epidemics, invasion, rebellion,
hostilities, insurrections, explosions, floods, unusually severe weather
conditions, earthquakes, military power, sabotage, governmental regulations or
controls, failure of power, fire or other casualty, accidents, national or local
emergencies, boycotts, picketing, slow-downs, work stoppages, acts of God or
natural disasters.
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: /s/ Xxx Xxxxxxxxxxxx
Title: Xxx Xxxxxxxxxxxx, Vice President
Date: 12/16/04
XXXXX VARIABLE ACCOUNT FUND, INC.
By its authorized officer,
By: /s/ Xxxxxxx Xxxx
Title: Xxxxxxx Xxxx, Executive Vice President
Date: 12/16/04
XXXXX SELECTED ADVISERS, L.P.
By its authorized officer,
By: /s/ Xxxxxxx Xxxx
Title: Xxxxxxx Xxxx, Chief Operating Officer
Date: 12/16/04
XXXXX DISTRIBUTORS, LLC
By its authorized officer,
By: /s/ Xxxxxxx Xxxx
Title: Xxxxxxx Xxxx, President
Date: 12/16/04
SCHEDULE A
Designated Portfolios
XXXXX VALUE PORTFOLIO
XXXXX FINANCIAL PORTFOLIO
XXXXX REAL ESTATE PORTFOLIO
And any other portfolios of the Fund that are available and open to new
investors on or after the effective date of this Agreement.
SCHEDULE B
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 B1 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 business 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) Less than fifty percent of the value of total assets consists of
assets specified in Section 851(b)(3)(A); and
(c) 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)(3)(B).
FORM B1
CERTIFICATE OF COMPLIANCE
For the quarter ended:
---------------------------
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, 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 C
EXPENSES
The Fund and/or the Distributor and/or Adviser, and GWL&A will coordinate the
functions and pay the costs of 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
for Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Mutual Fund Prospectus Printing of GWL&A Fund,
prospectuses Distributor or
Adviser, as
applicable
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Fund, Distributor or GWL&A Fund,
Adviser shall supply Distributor or
GWL&A with such Adviser, as
numbers of the applicable
Designated
Portfolio(s)
prospectus(es) as
GWL&A shall
reasonably request
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Distribution to New GWL&A GWL&A
and Inforce Contract
Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Distribution to GWL&A GWL&A
Prospective Contract
Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Distribution to GWL&A Fund,
Contract Owners in Distributor, or
connection with Adviser, as
initial rollout of applicable
Fund in connection
with the Contracts
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Contract Prospectus Printing for Inforce GWL&A GWL&A
Contract Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Printing for GWL&A GWL&A
Prospective Contract
Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Distribution to New GWL&A GWL&A
and Inforce Contract
Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Distribution to GWL&A GWL&A
Prospective Contract
Owners
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Mutual Fund Prospectus If Required by Fund, Fund, Distributor or Fund,
Update & Distribution Distributor or Adviser Distributor or
Adviser Adviser
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
If Required by GWL&A GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Contract Prospectus If Required by Fund, GWL&A Fund,
Update & Distribution Distributor or Distributor or
Adviser Adviser
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
If Required by GWL&A GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
Mutual Fund SAI Printing Fund, Distributor or Fund,
Adviser Distributor or
Adviser
------------------------- ---------------------- ---------------------- ------------------
Distribution GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
Product SAI Printing GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
Distribution GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
Proxy Material for Printing if proxy Fund, Distributor or Fund,
Mutual Fund: required by Law Adviser Distributor or
Adviser
------------------------- ---------------------- ---------------------- ------------------
Distribution GWL&A Fund,
(including labor) if Distributor or
proxy required by Law Adviser
------------------------- ---------------------- ---------------------- ------------------
Printing & GWL&A GWL&A
distribution if
required by GWL&A
========================= ====================== ====================== ==================
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
Mutual Fund Annual & Printing of combined GWL&A Fund,
Semi-Annual Report reports Distributor or
Adviser
------------------------- ---------------------- ---------------------- ------------------
Distribution GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
Other communication to If Required by the GWL&A Fund,
New and Prospective Fund, Distributor or Distributor or
clients Adviser Adviser
------------------------- ---------------------- ---------------------- ------------------
If Required by GWL&A GWL&A GWL&A
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible for Party
Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
Other communication to Distribution GWL&A Fund,
Inforce (including labor and Distributor or
printing) if Adviser required by the Fund, Distributor
or Adviser
------------------------- ---------------------- ---------------------- ------------------
Distribution GWL&A GWL&A
(including labor and
printing)if required
by GWL&A
========================= ====================== ====================== ==================
------------------------- ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------- ---------------------- ---------------------- ------------------
Errors in Share Price Cost of error to GWL&A Fund or Adviser
calculation pursuant to Contract
Section 1.3 Owners/participants
------------------------- ---------------------- ---------------------- ------------------
Cost of GWL&A Fund or Adviser
administrative work
to correct error
------------------------- ---------------------- ---------------------- ------------------
Substitution Orders Application for, and GWL&A Fund or Adviser
implementation of
(including necessary
printing and
mailings),
substitution orders
required as a result
of Fund action
------------------------- ---------------------- ---------------------- ------------------
Operations of the Fund All operations and Fund, Distributor or Fund or Adviser
related expenses, Adviser
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 GWL&A GWL&A
Account of units of separate
account (24f-2 fees)
------------------------- ---------------------- ---------------------- ------------------
SCHEDULE D
ADMINISTRATIVE SERVICES
A. GWL&A, or an affiliate, will provide the properly registered and licensed
personnel and systems needed for all customer servicing and support - for
both Designated Portfolio and life insurance information and questions -
including:
responding to Contract Owner inquiries; delivery of prospectus -
Designated Portfolio(s); entry of initial and subsequent orders;
transfer of cash to GWL&A and/or Designated Portfolio(s);
explanations of Designated Portfolio objectives and characteristics;
entry of transfers between funds; Designated Portfolio balance and
allocation inquiries; mail Designated Portfolio prospectus.
B. GWL&A, or an affiliate, will communicate all purchase, withdrawal, and
exchange orders it receives from its customers to each Designated Portfolio.
Administrative Service Fee
For the services, GWL&A or its affiliate shall receive a fee of 0.25% per annum
of the average aggregate monthly net asset value of shares of the Designated
Portfolio(s) held in the Account, including through Profile or other fund of
funds arrangements, payable by the Adviser directly to GWL&A or its affiliate.
Such fee shall be paid in arrears quarterly. Each quarter's fee shall be
determined based on assets in the Account at the end of each quarter and each
quarterly fee will be independent of every other quarterly fee. Such fee shall
be due and payable automatically within 30 (thirty) days after the last day of
the quarter to which such payment relates. In the event such fee is not paid by
such time, interest, in addition to the amount due, at the rate of six (6)%
annually (or 1/2 of one (1) percent per month outstanding pro rated for any
applicable period if less than one year) shall be payable and owed until payment
is made.
The Fund will calculate the asset balance for each day on which the fee is to be
paid pursuant to this Amendment with respect to each applicable portfolio of the
Fund. GWL&A shall have the right to reasonably audit the preparation of such
calculation.
The administrative service fee described herein shall remain payable and due so
long as there remain any assets invested in the Fund, regardless of any
termination of the Agreements, in any manner by the Accounts as contemplated by
the Agreements, as amended herein. The Fund may modify the rate of the
administrative service fee only with 120 days' written notice to GWL&A prior to
the end of any calendar year, with any such revised rate becoming effective as
of the 1st of January following any such calendar year.
SCHEDULE E
NON-COMPETE PROVISIONS
GWL&A intends to offer Fund, _Adviser_ and _Distributor_, as applicable, access
to its, or its affiliates' or its parent company's (each, a "Company,"
collectively, the "Companies") current and prospective customers (hereinafter
"Customers") so that Customers will have the option of purchasing the Designated
Portfolio shares of the Fund. Fund, _Adviser_ and _Distributor_, as applicable,
desires to make the Designated Portfolio(s) available to Customers, yet
acknowledges that under certain circumstances, the ability of Fund, _Adviser_ or
_Distributor , as applicable, to solicit business from Customers should be
subject to special limitations in exchange for the increased ability to offer
its product through a Company's introduction. An introduction will consist of a
Company's inclusion of the Designated Portfolio(s) in the Retirement Plan
Product offered to a Customer for that Customer's consideration.
1. In the scenario where any one of the Companies introduces Fund, _Adviser_ or
_Distributor, as applicable, in any manner to a Customer which ultimately
purchases a Retirement Plan Product from one of the Companies, and one of
the Companies includes the Designated Portfolio(s) in the products offered
to that Customer, Fund, _Adviser_ and _Distributor , as applicable, agree
not to utilize any confidential information (which shall include, but not be
limited to, all facts, circumstances, information, data, plans, projects and
technical or commercial knowledge gained in relation to a Company, or
received from a Company, including, but not limited to, information
regarding customers (such as retirement plans and plan participants),
employees, suppliers servicing methods, programs, fees, strategies and
related information) received in connection with offering its product to
Customer in any solicitation of Retirement Plan Product Business from that
Customer. Further, Fund, _Adviser_ and _Distributor , as applicable, will
not attempt to contact Customers regularly nor attempt to sell its mutual
funds directly to Customer on a stand-alone basis while the Designated
Portfolio(s) are included in a Company's arrangement with the Customer. For
purposes of this Amendment "Retirement Plan Product" includes, but is not
limited to, group or individual annuity contracts, GIC's, separate accounts
and wrapped or unwrapped mutual funds whether sold separately or in
conjunction-with each other.
2. In the scenario where any one of the Companies introduces the Fund,
_Adviser_ or _Distributor_ in any manner to a Customer which ultimately
purchases a Retirement Plan Product from a Company and the Customer does not
select the Fund, the Fund, _Adviser_ or _Distributor may directly
communicate with Customer about Retirement Plan Product business and may
sell product directly to Customer provided it does not utilize the
confidential information referred to above.
3. In the scenario where any one of the Companies introduces Fund, Adviser _ or
_Distributor in any manner to a Customer which does not purchase a
Retirement Plan Product from a Company, the Fund, _Adviser_ and
_Distributor_ are not subject to any prohibitions regarding sales to and
communications with that Customer. Likewise, there are no prohibitions where
none of the Companies provides an introduction.
A Company may decide in its discretion when it desires to provide an
introduction to one of its Customers. A Company has no obligation to provide
introductions to its Customers.
