the
event the Fund ceases to so qualify, it will take all reasonable steps (a) to notify Company of such
event and (b) to adequately diversify the Fund so as to achieve compliance within the grace period afforded by Regulation 817-5.
ARTICLE VII. Potential Conflicts
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 owners and variable life insurance contract owners; or (f) a decision by a Participating Insurance Company to
disregard the voting instructions of contract owners. The Board shall promptly inform the Company if it determines that an irreconcilable material conflict exists and the implications thereof.
7.2. The
Company will report any potential or existing material irreconcilable conflict of which it is aware to the Board. The Company will assist the Board in
carrying out its responsibilities under the 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 the Company to inform the Board whenever contract owner voting instructions are disregarded.
7.3. If
it is determined by a majority of the Board, or a majority of its disinterested trustees, that a material irreconcilable conflict exists, the Company and other
Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the disinterested trustees), 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 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 policy 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. No charge or penalty will be imposed as a result of such withdrawal. The Company agrees that it bears the responsibility to
take remedial action in the event of a Board determination of an irreconcilable material conflict and the cost of such remedial action, and these responsibilities will be carried out with a view only
to the interests of Contract owners.
7.4. If
a material irreconcilable conflict arises because of a decision by the Company to disregard contract owner voting instructions and that decision represents a
minority position or would preclude a majority vote, the Company may be required, at the Fund's election, to withdraw the affected Account's investment in the Fund and terminate this Agreement with
respect to such Account (at the Company's expense); 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. No charge or penalty will be imposed as a result of such withdrawal. The Company agrees that it bears the responsibility to take
remedial action in the event of a Board determination of an irreconcilable material conflict and the cost of such remedial action, and these responsibilities will be carried out with a view only to
the interests of Contract owners.
7.5. For
purposes of Sections 7.3 through 7.4 of this Agreement, a majority of the disinterested members of the Board shall determine whether any proposed action
adequately remedies any
10
irreconcilable
material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. The Company shall not be required by Section 7.3 through 7.4 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 materially adversely affected by the irreconcilable material conflict.
7.6. 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 Shared Funding Exemptive Order) on terms and conditions materially different from
those contained in the Shared Funding Exemptive Order, then 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.
7.7 Each
of the Company and the Adviser shall at least annually submit to the Board such reports, materials or data as the Board may reasonably request so that the
Board may fully carry out the obligations imposed upon them by the provisions hereof and in the Shared Funding Exemptive Order, and said reports, materials and data shall be submitted more frequently
if deemed appropriate by the Board. All reports received by the Board of potential or existing conflicts, and all Board action with regard to determining the existence of a conflict, notifying
Participating Insurance Companies of a conflict, and determining whether any proposed action adequately remedies a conflict, shall be properly recorded in the minutes of the Board or other appropriate
records, and such minutes or other records shall be made available to the Securities and Exchange Commission upon request.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
8.1(a). The
Company agrees to indemnify and hold harmless the Fund, the Underwriter and each member of their respective Board and officers and each person, if any, who
controls the Fund 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, damages, liabilities
(including amounts paid in settlement with the written consent of the Company) 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 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 Contracts or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Company by
or on behalf of the Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii)arise
out of or as a result of statements or representations (other than statements or representations contained in the registration statement,
prospectus or sales literature of the Fund not supplied by the Company, or persons under its control and other than statements or representations authorized by the Fund or the Underwriter) or unlawful
conduct of the Company
11
or
persons under its control, with respect to the sale or distribution of the Contracts or Fund shares; or
(iii)arise
out of or as a result 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 statement or statements therein not misleading, if such a 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)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.
8.1(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.
8.1(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 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 the Indemnified Parties, the Company shall be entitled to participate, at its own expense, in the defense thereof. 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.
8.1(d). The
Indemnified Parties will promptly notify the Company of the commencement of any litigation or proceedings against them in connection with this Agreement,
the issuance or sale of the Fund shares or the Contracts, or the operation of the Fund.
8.2. Indemnification by Underwriter
8.2(a). The
Underwriter agrees, with respect to each Portfolio that it distributes, to indemnify and hold harmless the Company and each of its directors and officers
and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Underwriter) 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 that it distributes or the Contracts and:
12
(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 sales literature 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 Underwriter by or on behalf of the Company for use in the
registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Portfolio 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 for the Contracts not supplied by the Fund, the Underwriter or persons under their respective control and other than statements or representations authorized by the
Company) or unlawful conduct of the Fund or Underwriter or persons under their control, with respect to the sale or distribution of the Contracts or Portfolio shares; or(iii)arise out of or as a
result of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon and in conformity with information furnished to the Company by or on behalf of the Fund or the Underwriter; or
(iv)arise
as a result of any failure by the Fund or the Underwriter 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 Underwriter in this Agreement or arise out of or
result from any other material breach of this Agreement by the Underwriter
8.2(b). The
Underwriter 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.
8.2(c). The
Underwriter 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 Underwriter 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 Underwriter of any such claim shall not relieve
the Underwriter 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 Underwriter will be entitled to participate, at its own expense, in the defense thereof. The Underwriter also shall be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Underwriter to such party of the Underwriter'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 Underwriter 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.
13
8.2(d). The
Company agrees promptly to notify the Underwriter of the commencement of any litigation or proceedings against it or any of its officers or directors in
connection with this Agreement, the issuance or sale of the Contracts or the operation of each Account.
8.3. Indemnification by the Adviser
8.3(a). The
Adviser agrees to indemnify and hold harmless the Company and its directors and officers and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act (hereinafter collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Adviser) 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 operations of the Adviser or the Fund 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 sales literature 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 Adviser, the Fund or the Underwriter by or on behalf of the Company for
use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Portfolio
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 for the Contracts not supplied by the Fund, the Adviser or persons under its control and other than statements or representations authorized by the Company) or unlawful
conduct of the Fund, the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Portfolio shares; or
(iii)arise
out of or as a result of any untrue statement or alleged untrue statement of a material fact contained in a registration statement,
prospectus, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Company by or on behalf of the
Fund or the Adviser; or
(iv)arise
as a result of any failure by the Adviser 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 Adviser in this Agreement or arise out
of or result from any other material breach of this Agreement by the Fund or the Adviser, including without limitation any failure by the Fund to comply with the conditions of Article VI
hereof.
8.3(b). The
Adviser 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 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.
14
8.3(c). The
Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party
shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the
Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs of investigation.
8.3(d). The
Company 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 this Agreement, the issuance or sale of the Contracts, with respect to the operation of each Account, or the sale or acquisition of shares of the Adviser.
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 Illinois.
9.2. This
Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Shared Funding Exemptive Order) and the terms
hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1. This
Agreement shall continue in full force and effect until the first to occur of:
(a) termination
by any party for any reason upon six-months advance written notice delivered to the other parties; or
(b) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter with respect to any Portfolio based upon the Company's determination that
shares of such Portfolio are not reasonably available to meet the requirements of the Contracts. Reasonable advance notice of election to terminate shall be furnished by the Company, said termination
to be effective ten (10) days after receipt of notice unless the Fund makes available a sufficient number of shares to reasonably meet the requirements of the Account within said ten
(10) day period; or
(c) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter with respect to any Portfolio in the event any of the Portfolio's shares
are not registered, issued or sold in accordance with applicable state and/or federal law or such law precludes the use of such shares as the underlying investment medium of the Contracts issued or to
be issued by the Company. The terminating party shall give prompt notice to the other parties of its decision to terminate; or
(d) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter with respect to any Portfolio in the event that such Portfolio ceases to
qualify as a Regulated Investment Company under Subchapter M of the Code or under any successor or similar provision; or
15
(e) termination
by the Company by written notice to the Fund and the Underwriter with respect to any Portfolio in the event that such Portfolio fails to meet the
diversification requirements specified in Article VI hereof; or
(f) termination
by either the Fund, the Adviser or the Underwriter by written notice to the Company, if either one or more of the Fund, the Adviser or the Underwriter,
shall determine, in its or their sole judgment exercised in good faith, that the Company and/or their affiliated life insurance companies has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this Agreement or is the subject of material adverse publicity, which is likely to have a material impact upon the business or operation
of the Fund, the Adviser or the Underwriter, provided that the Fund, the Adviser or the Underwriter will give the Company sixty (60) days' advance written notice of such determination of its intent to
terminate this Agreement, and provided further that after consideration of the actions taken by the Company and any other changes in circumstances since the giving of such notice, the determination of
the Fund, the Adviser or the Underwriter shall continue to apply on the 60th day since giving of such notice, then such 60th day shall be the effective date of termination; or
(g) termination
by the Company by written notice to the Fund, the Adviser and the Underwriter, if the Company shall determine, in its sole judgment exercised in good
faith, that either the Fund, the Adviser or the Underwriter has suffered a material adverse change in its business, operations, financial condition or prospects since the date of this Agreement or is
the subject of material adverse publicity, which is likely to have a material impact upon the business or operation of the Fund, the Adviser or the Underwriter, provided that the Company will give the
Fund, the Adviser and the Underwriter sixty (60) days' advance written notice of such determination of its intent to terminate this Agreement, and provided further that after consideration of the
actions taken by the Fund, the Adviser or the Underwriter and any other changes in circumstances since the giving of such notice, the determination of the Company shall continue to apply on the 60th
day since giving of such notice, then such 60th day shall be the effective date of termination; or
(h) termination
by any party upon the other party's breach of any representation in Section 2 or any material provision of this Agreement, which breach has not been
cured to the satisfaction of the terminating party within ten (10) days after written notice of such breach is delivered to the Fund or the Company, as the case may be; or
(i) termination
by the Fund, Adviser or Underwriter by written notice to the Company in the event an Account or Contract is not registered or sold in accordance with
applicable federal or state law or regulation, or the Company fails to provide pass-through voting privileges as specified in Section 3.4.
10.2. Effect of Termination. Notwithstanding any termination of this Agreement, the Fund shall at the
option of the Company, continue to make available additional shares of the Fund 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") unless such further sale of Fund shares is proscribed by law, regulation or applicable regulatory body, or unless the Fund
determines that liquidation of the Fund following termination of this Agreement is in the best interests of the Fund and its shareholders. Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to direct reallocation of investments in the Fund, redemption of investments in the Fund and/or investment in the Fund upon the making of additional purchase payments
under the Existing Contracts. The parties agree that this Section 10.2 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.
10.3. The
Company shall not redeem Fund shares attributable to the Contracts (as distinct from Fund shares attributable to the Company's assets held in the Account)
except (i) as necessary to implement Contract Owner initiated or approved transactions, or (ii) as required by state and/or federal laws or
16
regulations
or judicial or other legal precedent of general application (hereinafter referred to as a "Legally Required Redemption") or (iii) as permitted by an order of the SEC pursuant to
Section 26(b) of the 1940 Act. Upon request, the Company will promptly furnish to the Fund and the Underwriter the opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) to the effect that any redemption pursuant to clause (ii) above is a Legally Required Redemption. Furthermore, except in cases where permitted
under the terms of the Contracts, the Company shall not prevent Contract Owners from allocating payments to a Portfolio that was otherwise available under the Contracts without first giving the Fund
or the Adviser 90 days notice of its intention to do so.
ARTICLE XI. Notices
11.1 Any
notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other party.
If
to the Fund:
▇▇▇
▇▇▇▇▇▇ Life Investment Trust
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If
to Underwriter:
▇▇▇
▇▇▇▇▇▇ Funds Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If
to Adviser:
▇▇▇
▇▇▇▇▇▇ Asset Management Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If
to the Company:
Protective Life and Annuity Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
ARTICLE XII. Foreign Tax Credits
12.1. The
Fund and Adviser agree to consult in advance with the Company concerning whether any series of the Fund qualifies to provide a foreign tax credit pursuant to
Section 853 of the Code.
ARTICLE XIII. Miscellaneous
13.1. All
persons dealing with the Fund must look solely to the property of the Fund for the enforcement of any claims against the Fund as neither the Board, officers,
agents or shareholders assume any personal liability for obligations entered into on behalf of the Fund. Each of the Company, Adviser and Underwriter acknowledges and agrees that, as provided by
Article 8, Section 8.1, of the Fund's Agreement and Declaration of Trust, the shareholders, trustees, officers, employees and other agents of the Fund and its Portfolios shall not personally be
bound by or liable for matters set forth hereunder, nor shall resort be
17
had
to their private property for the satisfaction of any obligation or claim hereunder. A Certificate of Trust referring to the Fund's Agreement and Declaration of Trust is on file with the Secretary
of State of Delaware.
13.2. Subject
to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the
Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information until such time as it may come into the public domain without the express written consent of the affected party.
13.3. The
captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect
their construction or effect.
13.4. This
Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.
13.5. If
any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby.
13.6. Each
party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the Securities and Exchange
Commission, the National Association of Securities Dealers 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.
13.7. 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.
13.8. 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; provided,
however, that the Adviser may assign this Agreement or any rights or obligations hereunder to any affiliate of or company under common control with the Adviser if such assignee is duly licensed and
registered to perform the obligations of the Adviser under this Agreement.
13.9. The
Company shall furnish, or shall cause to be furnished, to the Fund or its designee copies of the following reports:
(a) the
Company's annual statement (prepared under statutory accounting principles) and annual report (prepared under generally accepted accounting principles ("GAAP"),
if any), as soon as practical and in any event within 90 days after the end of each fiscal year;
(b) the
Company's June 30th quarterly statements (statutory), as soon as practical and in any event within 45 days following such period;
(c) any
financial statement, proxy statement, notice or report of the Company sent to stockholders and/ or policyholders, as soon as practical after the delivery
thereof to stockholders;
(d) any
registration statement (without exhibits) and financial reports of the Company filed with the Securities and Exchange Commission or any state insurance
regulator, as soon as practical after the filing thereof;
(e) any
other public report submitted to the Company by independent accountants in connection with any annual, interim or special audit made by them of the books of the
Company, as soon as practical after the receipt thereof.
18
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 of the date specified
above.
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PROTECTIVE LIFE AND ANNUITY INSURANCE COMPANY
on behalf of itself and each of its Accounts named in
Schedule A hereto, as amended from time to time
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By:
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| ▇▇▇▇▇▇▇ ▇▇▇▇
Senior Vice President
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▇▇▇ ▇▇▇▇▇▇ LIFE INVESTMENT TRUST
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By:
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| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President
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▇▇▇ ▇▇▇▇▇▇ FUNDS INC.
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By:
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| ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
First Vice President
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▇▇▇ ▇▇▇▇▇▇ ASSET MANAGEMENT INC.
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By:
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President
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19
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
Name of Separate Account and
Date Established by Board of Directors
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| Form Numbers and Names of Contracts
Funded by Separate Account
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| Variable Annuity Account A of Protective Life
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| Protective Variable Annuity FORM AF-2014
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| (formerly Variable Annuity Account A
of American Foundation Life Insurance Company (12/5/1997)
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20
SCHEDULE B
PARTICIPATING LIFE INVESTMENT TRUST PORTFOLIOS
Emerging Growth
Enterprise
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Growth and Income
Strategic Stock
Asset Allocation
21
SCHEDULE C
PROXY VOTING PROCEDURES
The following is a list of procedures and corresponding responsibilities for the handling of proxies and voting instructions relating to the Fund. The defined terms herein
shall have the meanings assigned in the Participation Agreement except that the term "Company" shall also include the department or third party assigned by the Company to perform the steps delineated
below.
1.The
proxy proposals are given to the Company by the Fund as early as possible before the date set by the Fund for the shareholder meeting to enable
the Company to consider and prepare for the solicitation of voting instructions from owners of the Contracts and to facilitate the establishment of tabulation procedures. At this time the Fund will
inform the Company of the Record, Mailing and Meeting dates. This will be done verbally approximately two months before meeting.
2.Promptly
after the Record Date, the Company will perform a "tape run," or other activity, which will generate the names, address and number of units
which are attributed to each contractowner/ policyholder (the "Customer") as of the Record Date. Allowance should be made for account adjustments made after this date that could affect the status of
the Customers' accounts as of the Record Date.
Note:
The number of proxy statements is determined by the activities described in Step #2. The Company will use its best efforts to call in the number of Customers to the Fund, as soon as possible,
but no later than two weeks after the Record Date.
3.The
Fund's Annual Report must be sent to each Customer by the Company either before or together with the Customers' receipt of voting instruction
solicitation material. The Fund will provide the last Annual Report to the Company pursuant to the terms of Section 3.3 of the Agreement to which this Schedule relates.
4.The
text and format for the Voting Instruction Cards ("Cards" or "Card") is provided to the Company by the Fund. The Company, at its expense, shall
produce and personalize the Voting Instruction Cards. The Fund or its affiliate must approve the Card before it is printed. Allow approximately 2-4 business days for printing information on the Cards.
Information commonly found on the Cards includes:
▇.▇▇▇▇
(legal name as found on account registration)
b.address
▇.▇▇▇▇
or account number
d.coding
to state number of units (or equivalent shares)
e.individual
Card number for use in tracking and verification of votes (already on Cards as printed by the Fund).
(This
and related steps may occur later in the chronological process due to possible uncertainties relating to the proposals.)
5.During
this time, the Fund will develop, produce, and the Fund will pay for the Notice of Proxy and the Proxy Statement (one document). Printed and
folded notices and statements will be sent to Company for insertion into envelopes (envelopes and return envelopes are provided and paid for by the Company). Contents of envelope sent to Customers by
the Company will include:
▇.▇▇▇▇▇▇
Instruction Card(s)
▇.▇▇▇
proxy notice and statement (one document)
22
c.return
envelope (postage pre-paid by Company) addressed to the Company or its tabulation agent
d."urge
buckslip" — optional, but recommended. (This is a small, single sheet of paper that requests Customers to vote as quickly as possible and that their vote is
important. One copy will be supplied by the Fund.)
e.cover
letter — optional, supplied by Company and reviewed and approved in advance by the Fund.
6.The
above contents should be received by the Company approximately 3-5 business days before mail date. Individual in charge at Company reviews and
approves the contents of the mailing package to ensure correctness and completeness. Copy of this approval sent to the Fund.
7.Package
mailed by the Company.
*The
Fund must allow at least a 15-day solicitation time to the Company as the shareowner. (A 5-week period is recommended.) Solicitation time is calculated as calendar days from (but not including,) the
meeting, counting backwards.
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