EXHIBIT 1.(8)(g)
PARTICIPATION AGREEMENT
AMONG
GENERAL AMERICAN LIFE INSURANCE COMPANY SEI INSURANCE PRODUCTS
TRUST
AND
SEI INVESTMENTS DISTRIBUTION COMPANY
DATED AS OF APRIL 5, 2000
TABLE OF CONTENTS
Page
ARTICLE I. Sale and Redemption of Trust Shares 2
ARTICLE II. Representations and Warranties 4
ARTICLE III. Prospectuses, Reports to Shareholders and Proxy
Statements; Voting 6
ARTICLE IV. Sales Material, Information and Notifications 7
ARTICLE V. Diversification 9
ARTICLE VI. Potential Conflicts 9
ARTICLE VII. Indemnification 11
ARTICLE VIII. Applicable Law and Venue 15
ARTICLE IX. Termination 16
ARTICLE X. Notices 17
ARTICLE XI. Miscellaneous 18
ii
THIS AGREEMENT, dated as of the 5th day of April, 2000,
by and among GENERAL AMERICAN LIFE INSURANCE COMPANY (the
"Company"), a Missouri life insurance company, on its own
behalf and on behalf of each separate account of the Company
set forth on Schedule A hereto, as may be amended from time to
time (each such account hereinafter referred to as an
"Account"), SEI INSURANCE PRODUCTS TRUST (the "Trust"), a
Massachusetts business trust, and SEI INVESTMENTS DISTRIBUTION
COMPANY (the "Underwriter"), a Delaware corporation.
WHEREAS, the Trust engages in business as an open-end
management investment company and is available to act as (i)
the investment vehicle for separate accounts established by
insurance companies for variable life insurance policies and
variable annuity contracts and (ii) the investment vehicle for
certain qualified pension and retirement plans ("Qualified
Plans"); and
WHEREAS, insurance companies desiring to utilize the
Trust as an investment vehicle under their variable life
insurance policies and/or variable annuity contracts may enter
into participation agreements with the Trust and the
Underwriter (the "Participating Insurance Companies"); and
WHEREAS, shares of the Trust are divided into several
series of shares, each representing an interest in a particular
managed portfolio of securities and other assets, any one or
more of which may be made available under this Agreement (each
such series hereinafter referred to as a "Fund"); and
WHEREAS, the Trust has obtained an order from the
Securities and Exchange Commission, dated November 15, 1999
(File No.812-11722), granting Participating Insurance Companies
and their separate accounts exemptions from the provisions of
Sections 9(a), 13(a), 15(a), and 15(b) of the Investment
Company Act of 1940, as amended (the "1940 Act"), and Rules 6e-
2(b)(15) and 6e-3(T)(b)(l5) thereunder, to the extent necessary
to permit shares of the Trust to be sold to and held by (i)
separate accounts of both affiliated and unaffiliated life
insurance companies offering variable life insurance policies
and variable annuity contracts, (ii) Qualified Plans, and (iii)
SEI Investments Management Corporation ("SIMC"), investment
adviser to the Trust, or any of its affiliates (the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end
management investment company under the 1940 Act and its shares
are registered under the Securities Act of 1933, as amended
(the "1933 Act"); and
WHEREAS, the Underwriter is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") and serves
as principal underwriter of the shares of the Trust; and
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WHEREAS, each Account is a duly organized, validly
existing separate account, established by resolution or under
authority of the Board of Directors of the Company on the date
shown in Schedule A hereto, to fund variable life insurance
policies or variable annuity contracts; and
WHEREAS, to the extent permitted by applicable insurance
laws and regulations, the Company is authorized to purchase
shares of the Funds on behalf of each Account and the
Underwriter is authorized to sell such shares to the Company
for each such Account;
NOW, THEREFORE, in consideration of their mutual
promises, the Company, the Trust and the Underwriter agree as
follows:
ARTICLE I.
SALE AND REDEMPTION OF TRUST SHARES
1.1. The Trust agrees to sell shares of the Funds
listed in Schedule A (as may be amended from time to time) to
the Company for its Accounts on each Business Day. The Trust
or its designee shall execute purchase orders placed for Fund
shares at the net asset value of such shares next computed
after receipt of such order by the Trust or its designee. For
purposes of this Section 1.1, the Company shall be the designee
of the Trust for receipt of such orders; provided that the
Company receives the order prior to 4:00 p.m. Eastern time and
that the Trust receives notice of such order prior to 10:00 am.
Eastern time on the next following Business Day in accordance
with the procedures set forth in Schedule B, as may be amended
from time to time (the "Procedures"). "Business Day" shall
mean any day on which the Trust calculates its net asset value
pursuant to its then-current prospectus and the rules of the
Securities and Exchange Commission.
1.2. The Trust, so long as this Agreement is in
effect, agrees to make its shares available to the Company
indefinitely for purchase at the applicable net asset value per
share on each Business Day. Notwithstanding the foregoing, the
Board of Trustees of the Trust (the "Board") may refuse to
permit the Trust to sell shares of any Fund to any person, or
suspend or terminate the offering of shares of any Fund, if
such action is required by law or by regulatory authorities
having jurisdiction or if such action is, in the sole
discretion of the Board acting in good faith and in light of
its fiduciary duties under federal and any applicable state
laws, necessary and in the best interests of the shareholders
of such Fund.
1.3. The Trust agrees that shares of the Trust will
be sold only to: (i) Participating Insurance Companies and
their separate accounts, (ii) Qualified Plans, and (iii) such
other persons permitted under the Internal Revenue Code of I
986, as amended. No shares of any Fund will be sold to the
general public.
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1.4. The Trust will not make its shares available for
purchase by any insurance company or separate account unless an
agreement containing provisions substantially the same as in
Section 1.3 of Article I, Section 3.5 of Article III, Article V
and Article VI of this Agreement is in effect to govern such
sales.
1.5. The Trust agrees to redeem for cash, on the
Company's request, any full or fractional share of a Fund held
by the Company in an Account, at the net asset value of such
share next computed after receipt by the Trust or its designee
of the request for redemption. Subject to and in accordance
with applicable laws and the prospectus and statement of
additional information of the Trust, and subject to the consent
of the Company, the Trust may redeem shares for assets other
than cash. For purposes of this Section 1.5, the Company shall
be the designee of the Trust for receipt of such requests for
redemptions; provided that the Company receives the request
prior to 4:00 p.m. Eastern time and that the Trust receives
notice of such request prior to 10:00 a.m. Eastern time on the
next following Business Day in accordance with the Procedures.
1.6. The Company agrees that purchases and
redemptions of Fund shares shall be made in accordance with the
provisions of the then-current prospectus of the Trust. The
variable life insurance policies and/or variable annuity
contracts issued by the Company, under which amounts may be
invested in the Trust (the "Contracts"), are listed on Schedule
A attached hereto, as may be amended from time to time.
1.7. The Company shall pay for Trust shares on the
next Business Day after an order to purchase Trust shares is
made in accordance with the provisions of Section 1.1 hereof
and the Procedures. Payment shall be in federal fluids
transmitted by wire. For purposes of Section 2.10 and 2.11,
upon receipt by the Trust of the federal fluids so wired, such
fluids shall cease to be the responsibility of the Company and
shall become the responsibility of the Trust.
1.8. Issuance and transfer of the Trust's shares will
be by book entry only. Stock certificates will not be issued
to the Company or any Account. Shares ordered from the Trust
will be recorded in an appropriate title for each Account or
the appropriate subaccount of each Account.
1.9. The Trust shall furnish same day notice (by
electronic mail, by facsimile transmission or by telephone
followed by written confirmation) to the Company of any income
dividends or capital gain distributions payable on the Trust's
shares. The Company hereby elects to receive all such income
dividends and capital gain distributions as are payable on the
Fund shares in additional shares of that Fund. The Company
reserves the right to revoke this election and to receive all
such income dividends and capital gain distributions in cash.
Any such revocation must be in writing. The Trust shall notify
the Company of the number of shares so issued as payment of
such dividends and distributions.
1.10. The Trust shall make the net asset value per
share for each Fund available to the Company on a daily basis
as soon as reasonably practical after the net asset value
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per share is calculated, and the Trust shall use its best
efforts to make such net asset value per share available no
later than 7:00 p.m. Eastern time in accordance with the
Procedures.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that it is
an insurance company duly organized and in good standing under
the insurance laws and regulations of the State of Missouri
(and other laws and regulations of Missouri to the extent
applicable to Missouri insurance companies), that each Account
is legally and validly established as a separate account under
applicable law, that the Company has registered each Account as
a unit investment trust under the 1940 Act (unless exempt
therefrom), and that the Company will maintain such
registration for each Account (unless exempt therefrom) for as
long as any Contract under that Account is outstanding.
2.2. The Company further represents and warrants that
the Contracts will be issued and sold in compliance in all
material respects with all applicable federal and state
insurance and securities laws and regulations. The Company
further represents and warrants that the Contracts are or will
be registered under the 1933 Act or are or will be exempt from
or not subject to registration thereunder. The Company shall
amend the registration statements under the 1933 Act for the
Contracts and the registration statements under the 1940 Act
for the Accounts from time to time as required in order to
effect the continuous offering of the Contracts or as may
otherwise be required by applicable law (unless the Contracts
and Accounts are exempt from or not subject to the registration
requirements of the 1933 Act and the 1940 Act).
2.3. The Company represents and warrants that each
principal underwriter of the Contracts is registered as a
broker-dealer under the 1934 Act and is a member in good
standing of the NASD.
2.4. The Company represents and warrants that the
shares held in each Account or division thereof are the only
securities held in the Account or division thereof and that the
Company, on behalf of the Account or division thereof will (i)
vote such shares in the same proportion as shares of voted by
all other holders of shares (in accordance with Section 3.4)
and (ii) refrain from substituting another security for such
shares unless the Commission has approved such substitution in
the manner provided in Section 26 of the ▇▇▇▇ ▇▇▇.
2.5. The Trust represents and warrants that Trust
shares sold pursuant to this Agreement shall be registered
under the 1933 Act, and shall be duly authorized for
issuance and sold in compliance with the laws of the
Commonwealth of Massachusetts and all applicable federal and
state securities laws. The Trust represents and warrants that
it is and shall remain registered under the 1940 Act. The
Trust represents and warrants
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that it shall amend the registration statement for its shares
under the 1933 Act and the 1940 Act from time to time as
required in order to effect the continuous offering of its
shares and that it shall register and qualify the shares for
sale in accordance with the laws of the various states to the
extent required by applicable state law.
2.6. The Trust represents and warrants that it is
currently qualified as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar
provision), and that it will notify the Company immediately
upon having a reasonable basis for believing that it has ceased
to so qualify or that it might not so qualify in the future.
2.7. The Company represents and warrants that the
Contracts are currently treated as life insurance policies or
annuity contracts, under applicable provisions of the Code and
that it will make every effort to maintain such treatment and
that it will notify the Trust and the Underwriter immediately
upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so
treated in the future.
2.8. The Trust represents and warrants that it is
lawfully organized and validly existing under the laws of
Commonwealth of Massachusetts and that it does and will comply
in all material respects with the 1940 Act.
2.9. The Trust represents and warrants that the
Trust's investment policies, fees and expenses are and shall at
all times remain in compliance with the laws of the
Commonwealth of Massachusetts and that its operations are and
shall at all times remain in material compliance with the laws
of the Commonwealth of Massachusetts to the extent required to
perform this Agreement.
2.10. The Trust represents and warrants that its
Trustees, officers, employees, and other individuals and
entities dealing with the money and/or securities of the Trust
are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Trust
in an amount not less than the minimum coverage as required
currently by Rule 17g-I of the 1940 Act or related provisions
as may be promulgated from time to time. The Trust represents
and warrants that the blanket fidelity bond shall include
coverage for larceny and embezzlement and shall be issued by a
reputable bonding company; that the Trust shall make all
reasonable efforts to see that this bond or another bond
containing these provisions is always in effect; and that the
Trust shall notify the Company in the event that such coverage
no longer applies.
2.11. The Company represents and warrants that all of
its Directors, officers, employees, investment advisers, and
other individuals and affiliates dealing with the money and/or
securities of the Trust are covered by a blanket fidelity bond
or similar coverage, in an amount not less than $10 million;
that the bond includes coverage for larceny and embezzlement
and is issued by a reputable bonding company; that the
Company shall make all reasonable efforts to see that this bond
or another bond
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containing these provisions is always in effect; and that the
Company shall notify the Trust and the Underwriter in the event
that such coverage no longer applies.
ARTICLE III.
PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS;
VOTING
3.1. The Trust or its designee shall provide the
Company with a camera ready copy of the Trust's current
prospectus and statement of additional information ("SAI"),
including any prospectus or SAI supplements. If requested by
the Company, in lieu of providing printed camera ready copies,
the Trust shall provide documents in computer form.
3.2. The Trust or its designee, shall provide the
Company with a camera ready copy of its proxy materials,
shareholder reports and other communications to shareholders.
If requested by the Company, in lieu of providing printed
camera ready copies, the Trust shall provide documents in
computer form.
3.3. The Company shall bear the expenses of
distributing to Contract owners and to prospective Contract
owners the documents of the Trust listed in Sections 3.1 and
3.2.
3.4. So long as and to the extent that the Securities
and Exchange Commission continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract
owners, the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote Trust shares in accordance with instructions
received from Contract owners; and
(iii) vote Trust shares for which no instructions
have been received in the same proportion as
Trust shares of such Fund for which
instructions have been received.
The Company reserves the right to vote Trust shares held in any
Account in its own right to the extent permitted by law.
Participating Insurance Companies shall be responsible for
ensuring that each of their Accounts calculates voting
privileges in a manner consistent with the Mixed and Shared
Funding Exemptive Order; provided, however, that the Trust or
its designee shall provide each shareholder, including the
Company and each Account, with the information necessary for
the shareholder meeting, including each Account's respective
ownership in each Fund.
3.5. The Trust will comply with all provisions of the
1940 Act requiring voting by shareholders. Further, the Trust
will act in accordance with the Securities and Exchange Commission's
interpretation of the requirements of Section 16(a) with respect
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to periodic elections of Trustees and with whatever rules the
Commission may promulgate with respect thereto.
3.6. The Trust shall use reasonable efforts to
provide Trust documents listed in Section 3.1 and 3.2 to the
Company sufficiently in advance of the Company's mailing dates
to enable the Company to complete, at reasonable cost, the
printing, assembling and distribution of the documents in
accordance with applicable laws and regulations.
ARTICLE IV.
SALES MATERIAL, INFORMATION AND NOTIFICATIONS
4.1. The Company shall furnish, or shall cause to be
furnished, to the Trust or its designee, each piece of sales
literature or other promotional material in which the Trust is
named, at least ten (10) Business Days prior to submission to
the NASD. No such material shall be used if the Trust or its
designee reasonably objects to such use within ten (10)
Business Days after receipt of such material.
4.2. The Company shall not give any information or
make any representations or statements on behalf of the Trust
or concerning the Trust in connection with the sale of the
Contracts other than the information or representations
contained in the registration statement or prospectus for the
Trust shares, as such registration statement and prospectus may
be amended or supplemented from time to time, or in reports or
proxy statements for the Trust, or in sales literature or other
promotional material approved by the Trust or its designee,
except with the permission of the Trust.
4.3. The Trust or its designee shall furnish, or
shall cause to be furnished, to the Company or its designee,
each piece of sales literature or other promotional material in
which the Company or its Account(s) or Contracts are named at
least ten (10) Business Days prior to its use. No such
material shall be used if the Company or its designee
reasonably objects to such use within ten (10) Business Days
after receipt of such material.
4.4. The Trust and the Underwriter shall not give any
information or make any representations on behalf of the
Company or concerning the Company, the Accounts or the
Contracts, other than the information or representations
contained in a registration statement or prospectus for the
Contracts, as such registration statement and prospectus may be
amended or supplemented from time to time, or in published
reports for the Accounts or the Contracts which are in the
public domain or approved by the Company for distribution to
Contract owners, or in sales literature or other promotional
material approved by the Company or its designee, except with
the permission of the Company.
4.5. The Trust will provide to the Company at least
one complete copy of all registration statements, prospectuses,
SAIs, reports, proxy materials, sales literature and other
promotional materials, applications for exemptions, requests
for no-action letters, and all amendments to any of the above,
that relate to the sale of Trust shares to the
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Company and the Accounts, within ten (10) Business Days after
the filing of such document with the Securities and Exchange
Commission or other regulatory authority.
4.6. The Company will provide to the Trust at least
one complete copy of all registration statements, prospectuses,
SAIs, reports, proxy materials, solicitations for voting
instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters,
and all amendments to any of the above, that relate to the
investment in shares of the Trust under the Contracts, within
ten (10) Business Days after the earlier of the use of such
document or the filing of such document with the Securities and
Exchange Commission or other regulatory authority.
4.7. For purposes of this Article IV, the phrase
"sales literature or other promotional material" includes, but
is not limited to, any of the following: 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 (i.e., any
written communication distributed or made generally available
to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales
literature or published article), educational or training
materials or other communications distributed or made generally
available to some or all agents or employees, and registration
statements, prospectuses, SAIs, disclosure statements,
shareholder reports and proxy materials.
4.8. The Company shall furnish, or shall cause to be
furnished, to the Trust 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; and
(b) 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.
4.9. The Company will furnish to the Trust or the
Underwriter, upon the request of either, a list of all of the
broker-dealers with whom the Company has a distribution
agreement covering the Contracts. The Trust and the
Underwriter will treat as confidential any such information.
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ARTICLE V.
DIVERSIFICATION
5.1. The Trust will at all times invest money from
the Contracts in such a manner as to ensure that the Contracts
will be treated as variable contracts under the Code and the
regulations issued thereunder. Without limiting the scope of
the foregoing, the Trust will at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to
the diversification requirements for variable annuity,
endowment, or life insurance contracts and any amendments or
other modifications to such Section or Regulations.
ARTICLE VI.
POTENTIAL CONFLICTS
6.1. The Board will monitor the Trust for the
existence of any material irreconcilable conflict between the
interests of the owners of Contracts participating in the
Accounts and participants of all Qualified Plans investing in
the Trust, and determine what action, if any, should be taken
in response to such conflicts. A material irreconcilable
conflict may arise for a variety of reasons, including: (i) an
action by any state insurance regulatory authority; (ii) 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; (iii) an administrative or judicial decision in
any relevant proceeding; (iv) the manner in which the
investments of the Trust are being managed; (v) a difference in
voting instructions given by variable annuity Contract owners,
variable life insurance Contract owners, and trustees of the
Qualified Plans; (vi) a decision by a Participating Insurance
Company to disregard the voting instructions of Contract
owners; or (vii) if applicable, a decision by a Qualified Plan
to disregard the voting instructions of plan participants. The
Trust shall promptly inform the Company if the Board determines
that a material irreconcilable conflict exists and the
implications thereof.
6.2. The Company will report any potential or
existing conflicts of which it is aware to the Board.
The Company will assist the Board in carrying out its
responsibilities under the Mixed and Shared Funding Exemptive
Order by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. This
includes, but is not limited to, an obligation by the Company
to inform the Board whenever Contract owner voting instructions
are disregarded. The responsibility to report such information
and assist the Board will be carried out with a view only to
the interests of Contract owners.
6.3. If it is determined by a majority of the Board,
or a majority of its members who are not "interested persons"
of the Trust under the 1940 Act (the "Independent
Trustees"), that a material irreconcilable conflict exists, the
Company shall, at its expense and to the extent reasonably
practicable (as determined by a majority of the Independent
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Trustees), take whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, up to and
including: (i) withdrawing the assets allocable to some or all
of the Accounts from the Trust or any Fund and reinvesting such
assets in a different investment medium, including (but not
limited to) another Fund, or submitting the question whether
such segregation should be implemented to a vote of all
affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity Contract owners,
life insurance Contract owners, or variable Contract owners of
one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected Contract
owners the option of making such a change; and (ii)
establishing a new registered management investment company or
managed separate account. The responsibility of the Company to
take remedial action will be carried out with a view only to
the interests of Contract owners.
6.4. 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 Trust's election, to withdraw
the affected Account's investment in the Trust and terminate
this Agreement with respect to such Account (at the Company's
expense); provided that no charge or penalty will be imposed as
a result of such withdrawal.
6.5. For purposes of this Article VI, a majority of
the Independent Trustees shall determine whether any proposed
action adequately remedies any material irreconcilable
conflict, but in no event will the Trust, the Underwriter, the
Trust's adviser or any affiliate be required to establish a new
funding medium for the Contracts. The Company shall not be
required by the Article VI to establish a new funding medium
for any Contract if an offer to do so has been declined by vote
of a majority of Contract owners materially and adversely
affected by the material irreconcilable conflict.
6.6. If and to the extent that Rule 6e-2 and Rule 6e-
3(T) are amended, or proposed Rule 6e-3 is adopted, to provide
exemptive relief from any provision of the 1940 Act or the
rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Mixed and Shared Funding Exemptive
Order) on terms and conditions materially different from those
contained in the Mixed and Shared Funding Exemptive Order, then
(a) the Trust and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to
comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such rules are applicable; and (b)
Sections 3.4, 3.5 and Article VI of this Agreement shall
continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
6.7. The Trust hereby notifies the Company that
account prospectus disclosure regarding potential risks of
mixed and shared funding may be appropriate.
6.8. The Company, at least annually, will submit to
the Board such reports, materials or data as the Board
reasonably may request so that the Board may fully
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carryout the obligations imposed upon it by the mixed and
shared funding exemptive order, and such reports, materials and
data will be submitted more frequently if deemed appropriate by
the Board.
ARTICLE VII.
INDEMNIFICATION
7.1 Indemnification by the Company
------------------------------
7.1(a) The Company agrees to indemnify and hold
harmless the Trust and each member of the Board and each
officer and employee of the Trust, the Underwriter and each
director, officer and employee of the Underwriter, and each
person, if any, who controls the Trust or the Underwriter
within the meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" and individually, an "Indemnified
Party," for purposes of this Section 7.1) against any and all
losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or expenses
(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 alleged to be or are determined to
be related to the sale or acquisition of the Trust'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 disclosure statement 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 Trust for use in any disclosure statement 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 Trust
shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus,
SAI or sales literature of the Trust not supplied by the
Company, or persons under its control and other than
statements or representations authorized by the Trust or
the Underwriter) or unlawful conduct of the Company or
persons under its control, with respect to the sale or
distribution of the Contracts or Trust shares; or
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(iii) arise out of or result from any untrue
statement or alleged untrue statement of a material fact
contained in a registration statement, prospectus, SAI or
sales literature of the Trust or any amendment thereof or
supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, if such a statement or omission was made in
reliance upon and in conformity with information
furnished to the Trust 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 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.
7.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or expenses 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.
7.1(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 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.
7.1(d). The Trust and/or the Underwriter will promptly
notify the Company of the commencement of any litigation or
proceedings against them or their trustees, directors or
officers in connection with the issuance or sale of the Trust
shares, the Contracts or the operation of the Trust.
12
7.2 Indemnification by the Underwriter
----------------------------------
7.2(a). The Underwriter agrees to indemnify and hold
harmless the Company and each of its directors, officers and
employees and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively,
"Indemnified Parties" and individually, "Indemnified Party,"
for purposes of this Section 7.2) against any and all losses,
claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Underwriter) or
expenses (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 alleged to be or are determined to be
related to the sale or acquisition of shares of a Fund or the
Contracts and:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in the registration statement, prospectus, SAI
or sales literature of the Trust (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 Trust by or on behalf of the
Company for use in the registration statement,
prospectus, statement of additional information for the
Trust or in 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, SAI
or sales literature for the Contracts not supplied by the
Trust or persons under its control and other than
statements or representations authorized by the Company)
or unlawful conduct of the Trust or the Underwriter or
persons under their 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, SAI or
sales literature covering the Contracts, or any amendment
thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statement or
statements therein not misleading, if such statement or
omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of
the Trust; or
13
(iv) 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.
7.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities, or expenses 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
and duties under this Agreement.
7.2(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 any Indemnified Party, 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.
7.2(d). The Company will promptly notify the Underwriter
of the commencement of any litigation or proceedings against it
or any of its officers or directors in connection with the
issuance or sale of the Contracts, the operation of the
Accounts or the Trust.
7.3 Indemnification by the Trust
----------------------------
7.3(a). The Trust agrees to indemnify and hold harmless
the Company, and each of its directors, officers, and employees
and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act (hereinafter
collectively, the "Indemnified Parties" and individually,
"Indemnified Party," for purposes of this Section 7.3) against
any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the
Trust) or expenses (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 alleged to or are
14
determined to result from the gross negligence, bad faith or
willful misconduct of the Board or any member thereof; and are
related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to
provide the services and furnish the materials under the
terms of this Agreement; or
(ii) arise out of or result from any material breach
of any representation and/or warranty made by the Trust in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Trust.
7.3(b). The Trust shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or expenses 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 and
duties under this Agreement.
7.3(c). The Trust 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 Trust 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 Trust of any such claim shall
not relieve the Trust 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 any Indemnified
Party, the Trust will be entitled to participate, at its own
expense, in the defense thereof. The Trust also shall be
entitled to assume the defense thereof; with counsel
satisfactory to the party named in the action. After notice
from the Trust to such party of the Trust'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
Trust 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.
7.3(d). The Company will promptly notify the Trust of
the commencement of any litigation or proceedings against it or
any of its officers or directors in connection with the
issuance or sale of the Contracts, the operation of the
Accounts, or the Trust.
ARTICLE VIII. APPLICABLE LAW AND VENUE
8.1. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the
substantive laws of the Commonwealth of Massachusetts without
regard to principles of conflict of laws.
15
8.2. This Agreement shall be subject to the
provisions of the 1933 Act, the 1934 Act and the 1940 Act, and
the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as
the Securities and Exchange Commission may grant (including,
but not limited to, the Mixed and Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed
in accordance therewith.
ARTICLE IX. TERMINATION
9.1. This Agreement shall continue in full force and
effect until the first to occur of:
(a) termination by any party for any reason by sixty (60)
days advance written notice delivered to the
other parties; or
(b) termination by the Company by written notice to the
Trust and the Underwriter with respect to any Fund
in the event any of the Fund's shares are not
registered, issued or sold in accordance with
applicable state and/or federal law or such law
precludes the use of such shares as the
underlying investment media of the Contracts
issued or to be issued by the Company; or
(c) termination by the Company by written notice to
the Trust and the Underwriter with respect to any Fund
in the event that such Fund ceases to qualify as a
regulated investment company under Subchapter M
of the Code or under any successor or similar
provision, or if the Company reasonably believes
that the Trust may fail to so qualify; or
(d) termination by the Company by written notice to the
Trust and the Underwriter with respect to any Fund in
the event that such Fund falls to meet the diversification
requirements specified in Article V hereof; or
(e) termination by the Trust by written notice to
the Company if the Trust shall determine, in its
sole judgment exercised in good faith, that the
Company and/or its affiliated 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; or
(f) termination by the Company by written notice to
the Trust and the Underwriter, if the Company shall
determine, in its sole judgment exercised in good
faith, that either the Trust or the Underwriter has
suffered a material adverse change in its business,
operations, financial
16
condition or prospects since the date of this
Agreement or is the subject of material adverse
publicity.
9.2. Notwithstanding any termination of this
Agreement, the Trust shall, at the option of the Company,
continue to make available additional shares of the Trust
pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of
this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of
the Existing Contracts shall be permitted to direct
reallocation of investments in the Trust, redemption of
investments in the Trust and investment in the Trust upon the
making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 9.2 shall not
apply to any terminations under Article VI, and the effect of
such Article VI terminations shall be governed by Article VI of
this Agreement.
9.3. Notwithstanding anything in this Agreement to
the contrary, the parties agree that the Trust may terminate
and liquidate any Fund at any time the Board determines, in its
sole judgment, that it is not in the interest of shareholders
to continue the Fund. The Trust agrees that it shall give the
Company reasonable advance notice of its intention to conduct
any such Fund termination or liquidation and that any such Fund
termination or liquidation shall comply with all applicable
laws and regulations.
ARTICLE X. NOTICES
10.1. Any notice shall be sufficiently given when sent
by registered or certified mail (or through a nationally
recognized overnight courier that provides evidence of receipt)
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 Company:
General American Life Insurance Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to the Trust:
SEI Insurance Products Trust
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Secretary
17
If to Underwriter:
SEI Investments Distribution Co.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Secretary
ARTICLE XI.
MISCELLANEOUS
11.1. The Company and the Underwriter understand and
acknowledge that: (i) the Trust is a registered investment
company organized under Massachusetts law consisting of
separate investment portfolios; (ii) no Fund of the Trust shall
have any liability for the obligations of any other Fund of the
Trust; (iii) under Massachusetts law, shareholders of a
Massachusetts business trust could, under certain
circumstances, be held personally liable for the Trust's
obligations; and (iv) the Trust's declaration of trust,
however, disclaims the shareholder liability set forth in (iii)
above, for the Trust's acts or obligations.
11.2. 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.
11.3. Each of the parties acknowledges and agrees that
this Agreement and the arrangement described herein are
intended to be non-exclusive and that each of the parties is
free to enter into similar agreements and arrangements with
other entities.
11.4. 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.
11.5. This Agreement may be executed simultaneously in
two or more counterparts, each of which taken together shall
constitute one and the same instrument.
11.6. 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.
11.7. Each party hereto shall cooperate with each
other party and all appropriate governmental authorities
(including without limitation the Securities and Exchange
Commission, 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.
18
11.8. 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.
11.9. 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 Underwriter may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company
under common control with the Underwriter, if such assignee is
duly licensed and registered to perform the obligations of the
Underwriter under this Agreement.
11.10. This Agreement may be amended only by written
agreement of the parties to the Agreement.
19
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed in its name and on its behalf by
its duly authorized representative and its seal to be hereunder
affixed hereto as of the date specified above.
GENERAL AMERICAN LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Executive Vice President
------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
SEI INSURANCE PRODUCTS TRUST
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President and Assistant Secretary
SEI INVESTMENTS DISTRIBUTORS COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
20
SCHEDULE A
----------
PARTICIPATION AGREEMENT
AMONG
GENERAL AMERICAN LIFE INSURANCE COMPANY
SEI INSURANCE PRODUCTS TRUST
AND
SEI INVESTMENTS DISTRIBUTION COMPANY
------------------------------------
Shares of the following Funds are available:
Equity Funds
SEI VP Large Cap Value Fund
SEI VP Large Cap Growth Fund
SEI VP Small Cap Value Fund
SEI VP Small Cap Growth Fund
SEI VP International Equity Fund
SEI VP Emerging Markets Equity Fund Fixed Income Funds
SEI VP Core Fixed Income Fund
SEI VP High Yield Bond Fund
SEI VP International Fixed Income Fund
SEI VP Emerging Markets Debt Fund
Shares of the Funds listed above shall be made available
as investments for the following Accounts and Contracts funded
by the Accounts:
NAME OF ACCOUNT AND DATE ESTABLISHED FORM NUMBER AND NAME OF CONTRACT
BY BOARD OF DIRECTORS: FUNDED BY ACCOUNT:
---------------------- ------------------
Separate Account Eleven (Jan. 25, 1985) 100003 Variable Universal Life (VGSP)
100016 Variable Universal Life (VUL98)
100019 Variable Universal Life (VUL98)
Pension Version
100018 Joint & Survivor Variable
Universal Life (JSVUL98)
100020 Joint & Survivor Variable
Universal Life (JSVUL98) Pension
Version
100030 Variable Universal Life \
(Destiny)
Dated as of April 5, 2000.
A-1
SCHEDULE B
----------
PARTICIPATION AGREEMENT
AMONG
GENERAL AMERICAN LIFE INSURANCE COMPANY
SEI INSURANCE PRODUCTS TRUST
AND
SEI INVESTMENTS DISTRIBUTION COMPANY
------------------------------------
PROCEDURES
----------
(a) On each day the Funds calculate their net asset
value pursuant to the requirements of their then current
prospectus and the rules of the Securities and Exchange
Commission (each a "Business Day"), the Company may receive
Instructions from the Contract owners of Contracts specified in
Exhibit A for the purchase or redemption of shares of the Funds
based solely upon each Company's receipt of Instructions from
Contract owners, prior to the Close of Trading on that Business
Day. Instructions in good order received by the Company prior
to 4:00 p.m. Eastern time ("ET") on any given Business Day, or
earlier if the New York Stock Exchange ("Exchange") closes
earlier than 4:00 p.m. ET on any given Business Day (the "Trade
Date") and transmitted to SEI Investments Fund Management or
other SEI entity serving as the Funds' transfer agent (the
"Transfer Agent") by no later than 10:00 a.m. ET on the
Business Day following the Trade Date ("Trade Date plus One" or
"TD+1"), will be executed at the NAV ("Share Price") of each
applicable Fund, determined as of the Close of Trading on the
prior Business Day ("Effective Trade Date").
(b) By no later than 7:00 p.m. ET on each Business
Day ("Price Communication Time"), SEI Investments Fund
Management or other SEI entity serving as fund administrator
(the "Administrator") will use its best efforts to communicate
to the Company via a mutually agreed upon format, the Share
Price of each applicable Fund, as well as dividend and capital
gain information and, in the case of income Funds, the daily
accrual for interest rate factor (mil rate), determined at the
Close of Trading on that Business Day. The Administrator will
notify the Company when and if the Administrator does not
communicate the required Share Price information by 7:00 p.m.
ET on any Business Day. It is understood and agreed that, in
the context of Section 22 of the 1940 Act and the rules and
public interpretations thereunder by the staff of the
Securities and Exchange Commission ("SEC Staff"), receipt by
the Company of any Instructions from the Contract owners in a
timely manner shall be deemed to be receipt by the Funds of
such Instructions solely for pricing purposes and shall cause
purchases and sales for the Contract owners to be deemed to
occur at the Share Price for such Business Day.
(c) As noted in Paragraph (a) above, by 10:00 a.m.
ET on TD+l ("Instruction Cutoff Time") and after the Company
has processed all approved Contract owner activity, the Company
will transmit to the Funds' Transfer Agent, by a method
acceptable to the Company and the Funds' Transfer Agent, a
report (the "Instruction Report") detailing the Instructions
that were received by the Company prior to the Funds' daily
determination of Share Price for each Fund (i.e., the Close of
Trading) on each Business Day. The Company shall transmit a
report on each Business Day, even if there are no Contract
owner instructions to report. If the Transfer Agent does not
receive an Instruction Report on any Business Day, it will
notify the Company.
(i) It is understood by the parties that all
Instructions from the Contract owners
shall be received and processed by the
Company in accordance with its standard
transaction processing procedures that
apply to all investment options offered
B-1
under the Contract. The Company shall
maintain records sufficient to identify
the date and time of receipt of all
Contract owner transactions involving the
Funds and shall make such records
available upon reasonable request for
examination by the Funds or its designated
representative or, at the request of the
Funds, by appropriate governmental
authorities. Under no circumstances shall
the Company change, alter or modify any
Instructions received by it in good order.
(ii) The Instruction Report shall state whether the
Instructions received by the Company from
the Contract owners by the Close of
Trading on such Business Day resulted in
the Accounts being a net purchaser or net
seller of shares in each of the Funds and
shall indicate the net dollar value
purchased or net dollar value redeemed by
each Account in each of the Funds and the
date of the transaction. On Business Days
where there are no Instructions in a Fund
for an Account or all the Accounts, the
Instruction Report will so indicate. Each
transmission of Instructions by the
Company of a net purchase or redemption
Instruction relating to a particular Fund
and a Business Day shall constitute a
representation and covenant by the Company
that such net purchase or redemption
Instruction was based on Contract owner
transactions received by the Company prior
to the Close of Trading (and prior to the
time the Share Price for each Fund) was
determined on such Business Day, and that
each net purchase or redemption
Instruction included all such Contract
owner transactions so received by the
Company. All Instructions will be
communicated in U.S. dollars.
(d) As set forth below, upon the timely receipt from
the Company of the Instruction Report, the Funds will execute
the purchase or redemption transactions (as the case may be) at
the Share Price for each Fund computed as of the Close of
Trading on the Effective Trade Date.
(i) Except as otherwise provided herein, all
purchase and redemption transactions will settle
on TD+1. Settlements will be through net
Federal Wire transfers between the Company
and a custodial account designated by the
Funds. In the case of Instructions which
constitute a net purchase order,
settlement shall occur by the Company
initiating a wire transfer to the
custodian for the Funds for receipt by the
Funds' custodian by no later than the
Close of Business at the New York Federal
Reserve Bank on TD+1, causing the
remittance of the requisite Funds to cover
such net purchase order. In the case of
Instructions which constitute a net
redemption order, settlement shall occur
by the Funds' Transfer Agent instructing
the Funds' custodian to initiate a wire
transfer from the Funds' custodial
accounts to the Company's custodial
account for its receipt by no later than
the Close of Business at the New York
Federal Reserve Bank on TD+l, causing the
remittance of the requisite Funds to cover
such net redemption order. On any
Business Day when the Federal Reserve Wire
Transfer System is closed, all
communication and processing rules will be
suspended for the settlement of
Instructions. Instructions will be
settled on the next Business Day on which
the Federal Reserve Wire Transfer System
is open. The original TD+1 Settlement
Date will not apply. Rather, for purposes
of this Paragraph only, the Settlement
Date will be the date on which the
Instruction settles. The Funds reserve
the right to (i) delay settlement of
redemptions for up to five (5) Business
Days after receiving a net redemption
order in accordance with Section 22 of the
1940 Act and Rule 22c-I thereunder, or
(ii) suspend redemptions pursuant to the
1940 Act or as otherwise required by law.
Settlements shall be in U.S. dollars.
(ii) The Trust will verify, for each Fund, the
NAY, the total dollar amount of transactions,
and the number of shares transacted listed on
the Instruction Report. The
B-2
Trust will contact the Company on or
before 1:00 p.m. Eastern time on TD+1 if
any of the information to be verified is
incorrect. The Trust will give the
Company access to its system to verify its
transactions. The Company and the Trust
will cooperate to resolve any
discrepancies as soon as reasonably
practicable. This process will be
reviewed periodically by both parties to
make sure that the needs of both the Trust
and the Company are being met.
(e) In the event of any error or delay with respect
to the Procedures outlined in Schedule B herein: (i) which is
caused by the Funds, the Funds' Transfer Agent or the adviser,
the Funds or its agents (as appropriate) shall make any
adjustments on the Funds' accounting system necessary to
correct such error or delay and the responsible party or
parties shall reimburse the Company for any losses or
reasonable costs incurred directly as a result of the error or
delay but specifically excluding any and all consequential
punitive or other indirect damages; or (ii) which is caused by
the Company or by any Contract owner, the Funds or its agent
shall make any adjustment on the Funds' accounting system
necessary to correct such error or delay and the affected party
or parties shall be reimbursed by the Company for any losses or
reasonable costs incurred directly as a result of the error or
delay (or the Company shall make any adjustments on its
recordkeeping system, if appropriate), but specifically
excluding any and all consequential punitive or other indirect
damages. In the event of any such adjustments on the Funds'
accounting system, the Company shall make the corresponding
adjustments on its internal recordkeeping system. In the event
that errors or delays with respect to the Procedures are
contributed to by more than one party hereto, each party shall
be responsible for that portion of the loss or reasonable cost
which results from its error or delay. The portion of any loss
or cost for which the Funds is responsible may be adjusted
between the Funds and its agents in accordance with the
agreement between the Funds and such agent whereby the agency
is created. All parties agree to provide the other parties
prompt notice of any errors or delays of the type referred to
herein and to use reasonable efforts to take such action as may
be appropriate to avoid or mitigate any such costs or losses.
B-3