FUND PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the 8th day of March, 2007, by and between Lord
Xxxxxx Series Fund, Inc. (the "Fund"), a Maryland Corporation, on its behalf
and on behalf of each separate investment series thereof, whether existing as
of the date above or established subsequent thereto, (each a "Portfolio" and
collectively, the "Portfolios"), Lord Xxxxxx Distributor LLC, a New York
limited liability company (the "Distributor"), and Genworth Life and Annuity
Insurance Company (the "Company"), a life insurance company organized under the
laws of the Commonwealth of Virginia, on its own behalf and on behalf of each
separate account of the Company ("Separate Accounts").
WHEREAS, the Fund is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended (the "'40 Act"),
as an open-end, diversified management investment company; and
WHEREAS, the Fund is organized as a series fund comprised of separate
investment series, namely the Portfolios; and
WHEREAS, the Fund was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable
Contracts") offered by life insurance companies through separate accounts of
such life insurance companies and also offers its shares to certain qualified
pension and retirement plans; and
WHEREAS, the Fund has filed and obtained approval of an application with the
SEC requesting an order granting relief from various provisions of the '40 Act
and the rules thereunder to the extent necessary to permit Fund shares to be
sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated participating insurance companies
accounts ("Participating Companies") and qualified pension and retirement plans
outside the separate account context (including, without limitation, those
trusts, plans, accounts contracts or annuities described in Sections 401(a),
403(a), 403(b), 408(a), 408(b), 414(d), 457(b), 408(k), 501(c)(18) of the
Internal Revenue Code of 1986, as amended (the "Code") and any other trust,
plan, account, contract or annuity trust that is determined to be within the
scope of Treasury Regulation (S)1.817.5(f)(3)(iii) ("Plans"); and
WHEREAS, the Company has established or will establish one or more Separate
Accounts to offer Variable Contracts and is desirous of having the Fund as one
of the underlying funding vehicles for such Variable Contracts; and
WHEREAS, the Distributor is registered with the SEC as a broker-dealer under
the Securities Exchange Act of 1934, as amended and acts as the Fund's
principal underwriter; and
1
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Fund to fund the
aforementioned Variable Contracts and the Fund is authorized to sell such
shares to the Company at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, and the Distributor agree as follows:
Article I. SALE OF FUND SHARES
1.1 The Fund agrees to make Variable Contract Class shares ("Shares") of the
Fund available to the Separate Accounts of the Company for investment of
purchase payments of Variable Contracts allocated to the designated Separate
Accounts as provided in the Fund's then current prospectus and statement of
additional information. The Company agrees to purchase and redeem the Shares of
the Portfolios offered by the then current prospectus and statement of
additional information of the Fund in accordance with the provisions of such
prospectus and statement of additional information. The Company shall not
permit any person other than a Variable Contract owner (or its lawful delegate)
to give instructions to the Company which would require the Company to redeem
or exchange Shares of the Fund.
1.2 The Fund agrees to sell to the Company those Shares of the selected
Portfolios of the Fund which the Company orders, executing such orders on a
daily basis at the net asset value next computed after receipt by the Fund or
its designee of the order for the Shares of the Fund. For purposes of this
Section 1.2, the Company shall be the designee of the Fund for receipt of such
orders from the designated Separate Account and receipt by such designee shall
constitute receipt by the Fund; provided, to the extent not inconsistent with
regulatory requirements, that the Company receives the order by 4:00 p.m.
Eastern time and the Fund receives notice from the Company by telephone,
facsimile (orally confirmed) or by such other means as the Fund and the Company
may mutually agree of such order by 9:00 a.m. Eastern time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the SEC.
1.3 The Fund agrees to redeem on the Company's request, any full or
fractional Shares of the Fund held by the Company, executing such requests on a
daily basis at the net asset value next computed after receipt by the Fund or
its designee of the request for redemption, in accordance with the provisions
of this agreement and the Fund's then current registration statement. For
purposes of this Section 1.3, the Company shall be the designee of the Fund for
receipt of requests for redemption from the designated Separate Account and
receipt by such designee shall constitute receipt by the Fund; provided, to the
extent not inconsistent with regulatory requirements, that the Company receives
the request for redemption by 4:00 p.m. Eastern time and the Fund receives
notice from the Company by telephone, facsimile (orally confirmed) or by such
other means as the Fund and the Company may mutually agree of such request for
redemption by 9:00 a.m. Eastern time on the next following Business Day.
2
1.4 The Fund shall furnish, on or before the ex-dividend date, notice to the
Company of any income dividends or capital gain distributions payable on the
Shares of any Portfolios of the Fund. The Company hereby elects to receive all
such income dividends and capital gain distributions as are payable on a
Portfolio's Shares in additional Shares of the Portfolio. The Fund shall notify
the Company or its designee of the number of Shares so issued as payment of
such dividends and distributions.
1.5 The Fund shall make the net asset value per share for the selected
Portfolios available to the Company on a daily basis, via a mutually agreeable
form, as soon as reasonably practicable after the net asset value per share is
calculated but shall use its best efforts to make such net asset value
available by 6:30 p.m. Eastern time.
1.6 At the end of each Business Day, the Company shall use the information
described in Section 1.5 to calculate Separate Account unit values for the day.
Using these unit values, the Company shall process each such Business Day's
Separate Account transactions based on requests and premiums received by it by
the close of trading on the floor of the New York Stock Exchange (currently
4:00 p.m. Eastern time) to determine the net dollar amount of Fund Shares which
shall be purchased or redeemed at that day's closing net asset value per share.
To the extent not inconsistent with regulatory requirements, the net purchase
or redemption orders so determined shall be transmitted to the Fund by the
Company by 9:00 a.m. Eastern time on the Business Day next following the
Company's receipt of such requests and premiums in accordance with the terms of
Sections 1.2 and 1.3 hereof.
1.7 If the Company's order requests the purchase of Fund Shares, the Company
shall pay for such purchase by wiring federal funds to the Fund or its
designated custodial account on the day the order is transmitted by the
Company. If the Company's order requests a net redemption resulting in a
payment of redemption proceeds to the Company, the Fund shall use its best
efforts to wire the redemption proceeds to the Company by the next Business
Day, unless doing so would require the Fund to dispose of Portfolio securities
or otherwise incur additional costs. In any event, proceeds shall be wired to
the Company within three Business Days or such longer period permitted by the
'40 Act or the rules, orders or regulations thereunder and the Fund shall
notify the person designated in writing by the Company as the recipient for
such notice of such delay by 3:00 p.m. Eastern time the same Business Day that
the Company transmits the redemption order to the Fund.
1.8 The Fund agrees that all Shares of the Portfolios of the Fund will be
sold only to Participating Insurance Companies which have agreed to participate
in the Fund to fund their Separate Accounts and/or to Plans, all in accordance
with the requirements of Section 817(h) of the Code and Treasury Regulation
1.817-5. Shares of the Portfolios of the Fund will not be sold directly to the
general public.
1.9 The Fund may refuse to sell Shares of any Portfolios to any person, or
suspend or terminate the offering of the Shares of any Portfolios if such
action is required by law or by
3
regulatory authorities having jurisdiction or is, in the sole discretion of the
Board of Directors/Trustees of the Fund (the "Board"), deemed necessary,
desirable or appropriate. Without limiting the foregoing, the Fund may refuse
to sell Shares of any Portfolios, or suspend or terminate the offering of the
Shares of any Portfolios, if it determines or believes that there is a
significant risk that the Fund and its shareholders may be adversely affected
by short-term or excessive trading activity, particularly activity used to try
and take advantage of short-term swings in the market. Accordingly, the Fund
reserves right to reject any purchase order, including those purchase orders
with respect to shareholders or accounts whose trading has been or may be
disruptive to the Fund or that may otherwise adversely affect the Fund. The
Company agrees to use its reasonable best efforts to render assistance to, and
to cooperate with, the Fund to achieve compliance with the Fund's policies and
restrictions on short-term or excessive trading activity as they may be amended
from time to time, or to the extent required by applicable regulatory
requirements.
1.10 Issuance and transfer of Portfolio Shares will be by book entry only.
Stock certificates will not be issued to the Company or the Separate Accounts.
Shares ordered from Portfolios will be recorded in appropriate book entry
titles for the Separate Accounts.
Article II. FEES AND EXPENSES
2.1 Except as otherwise provided under this Agreement, the Fund and the
Distributor shall pay no fee or other compensation to the Company under this
Agreement, and the Company shall pay no fee or other compensation to the Fund
or the Distributor, except as made a part of this Agreement as it may be
amended from time to time with the mutual consent of the parties hereto. All
expenses incident to performance by each party of its respective duties under
this Agreement shall be paid by that party, unless otherwise specified in this
Agreement
Article III. REPRESENTATIONS AND WARRANTIES
3.1 The Company represents and warrants that it is an insurance company duly
organized and in good standing under the laws of the Commonwealth of Virginia
and that it has legally and validly established each Separate Account as a
segregated asset account under such laws.
3.2 The Company represents and warrants that it has registered or, prior to
any issuance or sale of the Variable Contracts, will register each Separate
Account as a unit investment trust ("UIT") in accordance with the provisions of
the '40 Act and cause each Separate Account to remain so registered to serve as
a segregated asset account for the Variable Contracts, unless an exemption from
registration is available.
3.3 The Company represents and warrants that the income, gains and losses,
whether or not realized, from assets allocated to each Separate Account are, in
accordance with the applicable
4
Variable Contracts, to be credited to or charged against such Separate Account
without regard to other income, gains or losses from assets allocated to any
other accounts of the Company. The Company represents and warrants that the
assets of the Separate Account are and will be kept separate from the General
Account of the Company and any other separate accounts the Company may have,
and will not be charged with liabilities from any business that the Company may
conduct or the liabilities of any companies affiliated with the Company.
3.4 The Company represents and warrants that the Variable Contracts will be
registered under the Securities Act of 1933 (the "'33 Act") unless an exemption
from registration is available prior to any issuance or sale of the Variable
Contracts and that the Variable Contracts will be issued and sold in compliance
in all material respects with all applicable federal and state laws. The
Company agrees to notify the Fund promptly of any investment restrictions
imposed by state insurance law applicable to the Fund.
3.5 The Company represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify the Fund immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.
3.6 The Fund represents and warrants that the Portfolio Shares offered and
sold pursuant to this Agreement will be registered under the '33 Act and sold
in accordance with all applicable federal and state laws, and the Fund shall be
registered under the '40 Act prior to and at the time of any issuance or sale
of such Shares. The Fund, subject to Section 1.9 above, shall amend its
registration statement under the '33 Act and the '40 Act from time to time as
required in order to effect the continuous offering of its Shares. The Fund
shall register and qualify its Shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Fund.
3.7 The Fund represents and warrants that each Portfolio will comply with
the diversification requirements set forth in Section 817(h) of the Code, and
the rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify the Company immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately
diversify the Portfolio to achieve compliance.
3.8 The Fund represents and warrants that each Portfolio invested in by the
Separate Account intends to elect to be treated as a "regulated investment
company" under Subchapter M of the Code, and to qualify for such treatment for
each taxable year and will notify the Company immediately upon having a
reasonable basis for believing it has ceased to so qualify or might not so
qualify in the future.
3.9 The Distributor represents and warrants that it is and will be a member
in good standing of the National Association of Securities Dealers, Inc.
("NASD") and is and will be
5
registered as a broker-dealer with the SEC. The Distributor further represents
that it will sell and distribute Portfolio Shares in accordance with all
applicable state and federal laws and regulations, including without limitation
the '33 Act, the '34 Act and the '40 Act.
3.10 The Distributor represents and warrants that it will remain duly
registered and licensed in all material respects under all applicable federal
and state securities laws and shall perform its obligations hereunder in
compliance in all material respects with any applicable state and federal laws.
3.11 The Fund represents and warrants that all its directors, trustees,
officers, employees, and other individuals/entities who deal with the money
and/or securities of the Fund are and shall continue to be at all times covered
by a blanket fidelity bond or similar coverage for the benefit of the Fund in
an amount not less than that required by Rule 17g-1 under the '40 Act. The
aforesaid bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company. The Fund shall make all reasonable
efforts to see that this bond or another bond containing these same provisions
is always in effect, and each agrees to notify the Company in the event such
coverage no longer applies.
3.12 The Company represents and warrants that all of its employees and
agents who deal with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage in an amount not less than that required to be maintained by entities
subject to the requirements of Rule 17g-1 of the '40 Act . The aforesaid bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Company shall make all reasonable efforts to see
that this bond or another bond containing these same provisions is always in
effect, and each agrees to notify the Fund in the event such coverage no longer
applies.
Article IV. PROSPECTUS AND PROXY STATEMENTS
4.1 The Fund shall prepare and be responsible for filing with the SEC and
any state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of the Fund.
4.2 At least annually, the Fund or its designee shall provide the Company,
free of charge, with as many copies of the current prospectus for the Shares of
the Portfolios as the Company may reasonably request for distribution to
existing Variable Contract owners whose Variable Contracts are funded by such
Shares. The Fund or its designee shall provide the Company, at the Company's
expense, with as many more copies of the current prospectus for the Shares as
the Company may reasonably request for distribution to prospective purchasers
of Variable Contracts. If requested by the Company in lieu thereof, the Fund or
its designee shall provide such documentation in a mutually agreeable form and
such other assistance as is reasonably necessary in order for the parties
hereto once a year (or more frequently if the
6
prospectus for the Shares is supplemented or amended) to have the prospectus
for the Variable Contracts and the prospectus for the Fund Shares and any other
fund shares offered as investments for the Variable Contracts printed together
in one document (at the Company's expense, except that the Fund will bear the
commercially reasonable, prorated cost of printing the Fund's prospectus in
this format for existing Variable Contract owners up to an amount the Funds
would pay on a per copy basis for its own prospectuses), provided however that
the Company shall ensure that, except as expressly authorized in writing by the
Fund, no alterations, edits or changes whatsoever are made to prospectuses or
other Fund documentation after such documentation has been furnished to the
Company or its designee, and the Company shall assume liability for any and all
alterations, errors or other changes that occur to such prospectuses or other
Fund documentation after it has been furnished to the Company or its designee.
4.3 The Fund shall provide the Company with copies of the Fund's proxy
statements, Fund reports to shareholders, and other Fund communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Variable Contract owners. Alternatively and in lieu thereof,
the Company may elect to print at its own expense any of the Fund's proxy
statements, Fund reports to shareholders, and other Fund communications to
shareholders.
4.4 The Fund will provide the Company with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, and all amendments or supplements to any of the
above that relate to the Portfolios promptly after the filing of each such
document with the SEC or other regulatory authority. The Company will provide
the Fund with at least one complete copy of all prospectuses, statements of
additional information, annual and semi-annual reports, proxy statements, and
all amendments or supplements to any of the above promptly after the filing of
each such document with the SEC or other regulatory authority provided that the
document relates to a Separate Account and Variable Contract that include the
Fund as one of the underlying funding vehicles for such Variable Contract.
Article V. SALES MATERIALS
5.1 The Company will furnish, or will cause to be furnished, to the Fund or
the Distributor, each piece of sales literature or other promotional material
in which the Fund, the Distributor or any affiliate thereof is named, at least
ten (10) Business Days prior to its intended use. No such material shall be
used unless the Fund or the Distributor approves such material. Such approval
shall be presumed given if notice to the contrary is not received by the
Company within fifteen Business Days after receipt by the Fund or the
Distributor of such material.
5.2 The Fund or the Distributor will furnish, or will cause to be furnished,
to the Company, each piece of sales literature or other promotional material in
which the Company or its Separate Accounts are named, at least ten
(10) Business Days prior to its intended use. No such material shall be used
unless the Company approves such material. Such approval shall be presumed
given if notice to the contrary is not received by the Fund or within fifteen
Business Days after receipt
7
by the Company of such material.
5.3 Except with the permission of the Company, neither the Fund nor the
Distributor shall give any information or make any representations on behalf of
the Company or concerning the Company, the Separate Accounts, or the Variable
Contracts other than the information or representations contained in the
registration statement or prospectus for such Variable Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in reports of the Separate Accounts for distribution to owners of
such Variable Contracts, or in sales literature or other promotional material
approved by the Company or its designee. Neither the Fund nor the Distributor
shall give such information or make such representations or statements in a
context that causes the information, representations or statements to be false
or misleading.
5.4 Except with the permission of the Fund or the Distributor, neither the
Company nor its affiliates or agents shall give any information or make any
representations or statements on behalf of the Fund, the Distributor or any
affiliate thereof or concerning the Fund, the Distributor or any affiliate
thereof, other than the information or representations contained in the
registration statements or prospectuses for the Fund, as such registration
statements and prospectuses may be amended or supplemented from time to time,
or in reports to shareholders or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or the
Distributor or designee thereof. Neither the Company nor its affiliates or
agents shall give such information or make such representations or statements
in a context that causes the information, representations or statements to be
false or misleading.
5.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a
newspaper, magazine or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures or other
public media), sales literature (such as any written communication distributed
or made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts, or
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, registration
statements, prospectuses, statements of additional information, shareholder
reports and proxy materials, and any other material constituting sales
literature or advertising under NASD rules, the '40 Act or the '33 Act.
Article VI. POTENTIAL CONFLICTS
6.1 The parties acknowledge that the Fund has received an exemptive order
from the SEC granting relief from various provisions of the '40 Act and the
rules thereunder to the extent necessary to permit the Fund Shares to be sold
to and held by variable annuity and variable life insurance separate accounts
of Participating Companies and Plans. The terms of such exemptive order (the
"Mixed and Shared Funding Exemptive Order") require the Fund and each
8
Participating Company and Plan to comply with conditions and undertakings
substantially as provided in this Article. In the event of any inconsistencies
between the terms of the Mixed and Shared Funding Exemptive Order and those
provided for in this Article, the conditions and undertakings imposed by the
Mixed and Shared Funding Exemptive Order shall govern this Agreement.
6.2 The Fund's Board will monitor the Fund for the existence of any material
irreconcilable conflict between and among the interests of the Variable
Contract owners of all Participating Companies and of Plan Participants and
Plans investing in the Fund, and determine what action, if any, should be taken
in response to such conflicts. An irreconcilable material conflict may arise
for a variety of reasons, which may include: (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 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 the Fund are being
managed; (e) a difference in voting instructions given by variable annuity and
variable life insurance contract owners; (f) a decision by a Participating
Insurance Company to disregard the voting instructions of Variable Contract
owners and (g) if applicable, a decision by a Plan to disregard the voting
instructions of plan participants.
6.3 The Company will report any potential or existing conflicts to the
Board. The Company will be obligated to assist the Board in carrying out its
duties and 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. The responsibility includes, but is not limited
to, an obligation by the Company to inform the Board whenever it has determined
to disregard Variable Contract owner voting instructions.
6.4 If a majority of the Board, or a majority of its disinterested Board
members, determines that a material irreconcilable conflict exists with regard
to contract owner investments in the Fund, the Board shall give prompt notice
of the conflict and the implications thereof to all Participating Companies and
Plans. If the Board determines that the Company is a relevant Participating
Company or Plan with respect to said conflict, the Company shall at its sole
cost and expense, and to the extent reasonably practicable (as determined by a
majority of the disinterested Board members), take such action as is necessary
to remedy or eliminate the irreconcilable material conflict. Such necessary
action may include but shall not be limited to: (a) withdrawing the assets
allocable to some or all of the Separate Accounts from the Fund or any
Portfolio thereof and reinvesting those assets in a different investment
medium, which may include another Portfolio of the Fund, or another investment
company; (b) submitting the question as to whether such segregation should be
implemented to a vote of all affected Variable Contract owners and as
appropriate, segregating the assets of any appropriate group (i.e., variable
annuity or variable life insurance contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to
the affected Variable Contract owners the option of making such a change; and
(c) establishing a new registered management investment company (or series
thereof) or managed separate account. If a material irreconcilable conflict
arises because of the
9
Company's decision to disregard Variable Contract owner voting instructions,
and that decision represents a minority position or would preclude a majority
vote, the Company may be required, at the election of the Fund to withdraw the
Separate Account's investment in the Fund, and no charge or penalty will be
imposed as a result of such withdrawal. The responsibility to take such
remedial action shall be carried out with a view only to the interests of the
Variable Contract owners.
For the purposes of this Article, a majority of the disinterested members of
the Board shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict but in no event will the Fund or
its investment adviser (or any other investment adviser of the Fund) be
required to establish a new funding medium for any Variable Contract. Further,
the Company shall not be required by this Article to establish a new funding
medium for any Variable Contracts if any offer to do so has been declined by a
vote of a majority of Variable Contract owners materially and adversely
affected by the irreconcilable material conflict.
6.5 The Board's determination of the existence of an irreconcilable material
conflict and its implications shall be made known promptly and in writing to
the Company.
6.6 No less than annually, the Company shall submit to the Board such
reports, materials or data as the Board may reasonably request so that the
Board may fully carry out its obligations. Such reports, materials, and data
shall be submitted more frequently if deemed appropriate by the Board.
6.7 If and to the extent that the SEC promulgates new rules or regulations
with respect to mixed or shared funding 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 such rules and
regulations, as adopted, to the extent such rules are applicable; and (b) this
Article VI shall be deemed to incorporate such new terms and conditions, and
any term or condition of this Article VI that is inconsistent therewith, shall
be deemed to be succeeded thereby.
6.8 The Company acknowledges it has been advised by the Fund that it may be
appropriate for the Company to disclose the potential risks of mixed and shared
funding in prospectuses or other applicable disclosure documents.
Article VII. VOTING
7.1 The Company will provide pass-through voting privileges to all Variable
Contract owners so long as the SEC continues to interpret the '40 Act as
requiring pass-through voting privileges for Variable Contract owners.
Accordingly, the Company, where applicable, will vote Shares of the Portfolio
held in its Separate Accounts in a manner consistent with voting instructions
timely received from its Variable Contract owners. The Company will be
responsible
10
for assuring that each of its Separate Accounts that participates in the Fund
calculates voting privileges in a manner consistent with other Participating
Insurance Companies. The Company will vote Shares for which it has not received
timely voting instructions, as well as Shares it owns, in the same proportion
as its votes those Shares for which it has received voting instructions. The
Company and its agents shall not oppose or interfere with the solicitation of
proxies for Fund Shares held for such Variable Contract owners.
ARTICLE VIII. CONTRACT HOLDER INFORMATION
8.1 Agreement to Provide Contract Holder Information Pursuant to Rule 22c-2
(a) To the extent required by Rule 22c-2 under the 1940 Act, the Company
agrees to provide the Fund, upon written request, the taxpayer identification
number ("TIN"), if known, of any or all Contract holders and the amount, date,
name or other identifier of any investment professional(s) associated with the
Contract holder(s) or account(s) (if known), and transaction type (purchase,
redemption, transfer or exchange) of every purchase, redemption, transfer or
exchange of shares of the Portfolio(s) held through one or more account(s)
maintained by the Company during the period covered by the request
("transaction information").
(b) Requests must set forth a specific period, not to exceed ninety
(90) business days from the date of the request, for which transaction
information is sought. The Fund may request transaction information older than
ninety (90) business days from the date of the request as it deems necessary to
investigate compliance with policies established by the Fund for the purpose of
eliminating or reducing any dilution of the value of the outstanding shares of
the Portfolio(s) issued by the Fund.
(c) The Company agrees to transmit the requested transaction information
that is on its books and records to the Fund or its designee promptly, but in
any event not later than five (5) business days after receipt of a request. If
the requested transaction information is not on the Company's books and
records, the Company agrees to: (i) provide or arrange to provide to the Fund
the requested transaction information from Contract holders who hold an account
with an indirect intermediary; or (ii) if directed by the Fund, block further
purchases of shares of the Portfolio(s) from such indirect intermediary. In
such instance, the Company agrees to inform the Fund whether it plans to
perform (i) or (ii). Responses required by this paragraph must be communicated
in writing and in a format mutually agreed upon by the parties. To the extent
practicable, the format for any transaction information provided to the Fund
should be consistent with the NSCC Standardized Data Reporting Format. For
purposes of this provision, an "indirect intermediary" has the same meaning as
in SEC Rule 22c-2 under the Investment Company Act.
8.2 Agreement to Restrict Trading; Instructions; Confirmations
(a) To the extent required by Rule 22c-2 the Company agrees to execute
written instructions from the Fund to restrict or prohibit further purchases or
exchanges of shares of the Portfolio(s) by a Contract holder that has been
identified by the Fund as having engaged in transactions of Portfolio shares
(directly or indirectly through the Company's account) that violate
11
market timing or frequent trading policies established by the Fund for the
purpose of eliminating or reducing any dilution of the value of the outstanding
Portfolio shares issued by the Fund.
(b) Instructions must include the TIN, if known, and the specific
restrictions(s) to be executed. If the TIN is not known, the instructions must
include an equivalent identifying number of the Contract holder(s) or
account(s) or other agreed upon information to which the instruction relates.
(c) The Company agrees to execute instructions as soon as reasonably
practicable, but not later than five (5) business days after receipt of the
instructions by the Company.
(d) The Company must provide written confirmation to the Fund that
instructions have been executed. The Company agrees to provide confirmation as
soon as reasonably practicable, but not later than ten (10) business days after
the instructions have been executed.
8.3 Limitations on Use of Information
The Fund agrees not to use any transaction information received from the
Company solely pursuant to this Agreement for marketing or any other similar
purpose without the prior written consent of the Company, except where it is
required to do so under law, rule, or regulation.
Article IX. INDEMNIFICATION
9.1 Indemnification by the Company.
(a) Subject to Section 9.3 below, the Company agrees to indemnify and hold
harmless the Fund and the Distributor, and each of their trustees, directors,
members, principals, officers, partners, employees and agents and each person,
if any, who controls the Fund or the Distributor within the meaning of
Section 15 of the '33 Act (collectively, the "Indemnified Parties" for purposes
of this Article) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company,
which consent shall not be unreasonably withheld) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
Shares or the Variable 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 for the Variable Contracts or contained in
the Variable 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
12
the statements therein not misleading, provided that this agreement
to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to the
Company by or on behalf of an Indemnified Party for use in the
registration statement or prospectus for the Variable Contracts or in
the Variable Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of the
Variable Contracts or Fund Shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration
statement, prospectus or sales literature of the Fund not supplied by
the Company, or persons under its control) or wrongful conduct of the
Company or persons under its control, with respect to the sale or
distribution of the Variable Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or
sales literature of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Fund by or on behalf of
the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement;
or
(v) arises out of information or instructions from the Company or its
agents concerning the purchase, redemption, transfer or other
transaction in Fund Shares; or
(vi) arise out of or result from any material breach of any representation
and/or warranty made by the Company in this Agreement or arise out of
or result from any other material breach of this Agreement by the
Company.
(b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
(c) The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified
13
the Company in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In case
any such action is brought against an Indemnified Party, the Company shall be
entitled to participate at its own expense in the defense of such action. The
Company also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Company to
such party of the Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company will not be liable to such 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.
9.2 Indemnification by the Fund and the Distributor.
(a) Subject to Section 9.3 below, the Fund and the Distributor agree to
indemnify and hold harmless the Company and each of its directors, officers,
employees, and agents and each person, if any, who controls the Company within
the meaning of Section 15 of the '33 Act (collectively, the "Indemnified
Parties" for the purposes of this Article) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Fund and the Distributor, which consent shall not be
unreasonably withheld) or litigation (including 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 Variable
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 of the Fund (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Fund or the
Distributor by or on behalf of the Company for use in the
registration statement or prospectus for the Fund (or any amendment
or supplement) or otherwise for use in connection with the sale of
the Variable 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,
14
prospectus or sales literature for the Variable Contracts not
supplied by the Fund or the Distributor or persons under its control)
or wrongful conduct of the Fund or the Distributor or persons under
its control, with respect to the sale or distribution of the Variable
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 or prospectus
covering the Variable 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 statements therein not misleading if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Company for
inclusion therein by or on behalf of the Fund or the Distributor; or
(iv) arise as a result of a failure by the Fund or the Distributor 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 the Fund or the Distributor in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Fund or the Distributor; or
(vi) arise out of the failure of the Fund or any Portfolio to comply with
the diversification requirements set forth in Section 817(h) of the
Code or to qualify as a "regulated investment company" under
Subchapter M of the Code.
(b) The Fund or the Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement.
(c) The Fund or the Distributor, as the case may be, 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 or
the Distributor, as the case may be, in writing within a reasonable time after
the summons or other first legal process giving information of the nature of
the claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify the Fund or the Distributor of any such claim
shall not relieve the Fund or 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. In case any such action is
brought against the Indemnified Parties, the Fund or the Distributor shall be
entitled to participate at its
15
own expense in the defense thereof. The Fund or 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 Fund or the Distributor to such
party of the Fund's or 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 Fund or 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.
9.3 Indemnification for Errors. In the event of any error or delay with
respect to information regarding the purchase, redemption, transfer or
registration of Shares of the Fund, the parties agree that each is obligated to
make the Separate Accounts and/or the Fund, respectively, whole for any error
or delay that it causes, subject in the case of pricing errors to the Funds'
policies on materiality of pricing errors. In addition, each party agrees that
neither will receive compensation from the other for the costs of any
reprocessing necessary as a result of an error or delay. Each party agrees to
provide the other with prompt notice of any errors or delays of the type
referred to in this Section.
Article X. TERM; TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
10.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of the Company or the Fund at any time from the date
hereof upon one hundred eighty (180) days notice, unless a shorter time
is agreed to by the parties;
(b) At the option of the Company, if Fund Shares are not reasonably
available to meet the requirements of the Variable Contracts as
determined by the Company. Prompt notice of election to terminate shall
be furnished by the Company, said termination to be effective ten days
after receipt of notice unless the Fund makes available a sufficient
number of Shares to reasonably meet the requirements of the Variable
Contracts within said ten-day period;
(c) At the option of the Company, upon the institution of formal proceedings
against the Fund or the Distributor by the SEC, the National Association
of Securities Dealers, Inc., or any other regulatory body, the expected
or anticipated ruling, judgment or outcome of which would, in the
Company's reasonable judgment, materially impair the Fund's or the
Distributor's ability to meet and perform their respective obligations
and duties hereunder. Prompt notice of election to terminate shall be
furnished by the Company with said termination to be effective upon
receipt of notice;
16
(d) At the option of the Fund, upon the institution of formal proceedings
against the Company by the SEC, the NASD, or any other regulatory body,
the expected or anticipated ruling, judgment or outcome of which would,
in the Fund's reasonable judgment, materially impair the Company's
ability to meet and perform its obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by the Fund with said
termination to be effective upon receipt of notice;
(e) In the event the Fund's Shares are not registered, issued or sold in
accordance with applicable state or federal law, or such law precludes
the use of such Shares as the underlying investment medium of Variable
Contracts issued or to be issued by the Company. Termination shall be
effective upon such occurrence without notice;
(f) At the option of the Fund if the Variable Contracts cease to qualify as
annuity contracts or life insurance contracts, as applicable, under the
Code, or if the Fund reasonably believes that the Variable Contracts may
fail to so qualify. Termination shall be effective upon receipt of
notice by the Company;
(g) At the option of the Company, upon the Fund's and/or Distributor's
breach of any material provision of this Agreement, which breach has not
been cured to the satisfaction of the Company within ten days after
written notice of such breach is delivered to the Fund;
(h) At the option of the Fund, upon the Company's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of the Fund within ten days after written notice of such
breach is delivered to the Company;
(i) At the option of the Fund, if the Variable Contracts are not registered,
issued or sold in accordance with applicable federal and/or state law.
Termination shall be effective immediately upon such occurrence without
notice;
(j) In the event this Agreement is assigned without the prior written
consent of the Company, the Fund, and the Distributor, termination shall
be effective immediately upon such occurrence without notice.
10.3 Notwithstanding any termination of this Agreement pursuant to
Section 10.2 hereof, the Fund at the option of the Company will continue to
make available additional Fund Shares, as provided below, pursuant to the terms
and conditions of this Agreement, for all Variable 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 or the Company, whichever shall have legal authority to do
so, shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the payment of
additional premiums under the Existing Contracts.
17
Article XI. NOTICES
Any notice hereunder shall be given by registered or certified mail return
receipt requested 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:
Lord Xxxxxx Family of Funds
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
with a copy to:
Lord, Xxxxxx & Co. LLC
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
If to the Distributor:
Lord Xxxxxx Distributor LLC
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
If to the Company:
Genworth Life and Annuity Insurance Company
0000 Xxxx Xxxxx Xxxxxx, Xxxx. #0
Xxxxxxxx, XX 00000
Attention: General Counsel, Securities
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article XII. MISCELLANEOUS
12.1 Privacy. Each party hereto acknowledges that, by reason of its
performance under this Agreement, it shall have access to, and shall receive
from the other party (and its affiliates, partners and employees), the
confidential information of the other party (and its affiliates, partners and
employees), including but not limited to the "nonpublic personal information"
of their consumers within the meaning of SEC Regulation S-P (collectively,
18
"Confidential Information"). Each party shall hold all such Confidential
Information in the strictest confidence and shall use such Confidential
Information solely in connection with its performance under this Agreement and
for the business purposes set forth in this Agreement. Under no circumstances
may a party cause any Confidential Information of the other party to be
disclosed to any third party or reused or redistributed without the other
party's prior written consent.
12.2 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
12.3 Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.4 Governing Law. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the State of New
York. It shall also be subject to the provisions of the federal securities laws
and the rules and regulations thereunder and to any orders of the SEC granting
exemptive relief therefrom and the conditions of such orders.
12.5 Liability. This Agreement has been executed on behalf of the Fund by
the undersigned officer of the Fund in his or her capacity as an officer of the
Fund. The obligations of this Agreement shall be binding upon the assets and
property of the Fund and each respective Portfolio thereof only and shall not
be binding on any Director/Trustee, officer or shareholder of the Fund
individually. In addition, notwithstanding any other provision of this
Agreement, no Portfolio shall be liable for any loss, expense, fee, charge or
liability of any kind relating to or arising from the actions or omissions of
any other Portfolio or from the application of this Agreement to any other
Portfolio. It is also understood that each of the Portfolios shall be deemed to
be entering into a separate Agreement with the Company so that it is as if each
of the Portfolios had signed a separate Agreement with the Company and that a
single document is being signed simply to facilitate the execution and
administration of the Agreement.
12.6 Inquiries and Investigations. Each party 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.
12.7 Subcontractors, Agents or Affiliates. The Company may hire or make
arrangements for subcontractors, agents or affiliates to perform the services
set forth in this Agreement. The Company shall provide the Fund with written
notice of the names of any subcontractors, agents or affiliates the Company
hires or arranges to perform such services, and any specific operational
requirements that arise as a result of such arrangement. The Company agrees
that it is and will be responsible for the acts and omissions of its
subcontractors, affiliates,
19
and agents and that the indemnification provided by the Company in Section 9 of
this Agreement shall be deemed to cover the acts and omissions of such
subcontractors, affiliates, and agents to the same extent as if they were the
acts or omissions of the Company.
12.8 Client Lists. The Company hereby consents to the Distributor's, the
Fund's, or its investment adviser's use or reference to the Company's name in
connection with any full, partial or representative list of clients.
12.9 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior agreement and
understandings relating to the subject matter hereof.
12.10 Amendment, Waiver and Other Matters. Neither this Agreement, nor any
provision hereof, may be amended, waived, modified or terminated in any manner
except by a written instrument properly authorized and executed by all parties
hereto. 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.
SIGNATURES ON NEXT PAGE
20
IN WITNESS WHEREOF, the parties have caused their duly authorized officers to
execute this Fund Participation Agreement as of the date and year first above
written.
LORD XXXXXX SERIES FUND, INC.
By:
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President and Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: Lord, Xxxxxx & Co. LLC, its Managing
Member
By:
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Member and General Counsel
GENWORTH LIFE AND ANNUITY INSURANCE
COMPANY
By:
---------------------------------
Name: Xxxxxxxx X. Stiff
Title: Senior Vice President
21
