EXHIBIT (h)(4)(C)
PARTICIPATION AGREEMENT
Among
LSA VARIABLE SERIES TRUST,
LSA ASSET MANAGEMENT LLC,
and
GLENBROOK LIFE & ANNUITY COMPANY
THIS AGREEMENT (the "Agreement"), made and entered into as of the first day of
May, 2001 by and among Glenbrook Life & Annuity Company (hereinafter the
"Company"), on its own behalf and on behalf of each separate account of the
Company named in Schedule 1 to this Agreement (collectively, the "Accounts"),
LSA Variable Series Trust (the "Fund") and LSA Asset Management LLC (the
"Manager").
WHEREAS, the Fund is an open-end management investment company and is available
to act as the investment vehicle for separate accounts now in existence or to be
established in the future for variable life insurance policies, variable annuity
contracts and other tax-deferred products offered by insurance companies (the
"Participating Insurance Companies");
WHEREAS, the beneficial interest in the Fund is divided into several series of
shares, each designated a "Portfolio", (collectively, the "Portfolios") and each
representing the interests in a particular managed pool of securities and other
assets;
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (the "SEC"), dated October 4, 1999 (File No. 812-6324) (hereinafter,
the "Order") granting relief to the Fund, the Manager and any subsequently
registered open-end investment companies that in the future are advised by the
Manager, or by any entity controlling, controlled by, or under common control
with the Manager. Specifically, the Order provides exemptions from Section 15(a)
of the 1940 Act and Rule 18f-2 thereunder, subject to the conditions set forth
in the application, to permit investment advisers other than the Manager, to
serve and act as an investment subadviser to one or more portfolios of the Fund
(the "Adviser(s)") pursuant to written agreements between the Manager and each
Adviser that have been approved by the board of trustees of the Fund (the
"Trustees") but which have not been approved by a vote of a majority of the
outstanding voting securities of each portfolio. The Order also provides
exemptions from: certain registration statement disclosure requirements of Items
3, 6(a)(1)(ii) and 15(a)(3) of Form N1-A and Item 3 of Form N-14; certain proxy
statement disclosure requirements of Items 22(a)(3)(iv), (c)(1)(ii),
(c)(1)(iii), (c)(8) and (c)(9) of Schedule 14A under the Securities Exchange Act
of 1934, as amended; certain semi-annual reporting disclosure requirements of
Item 48 of Form N-SAR; and, certain financial statement disclosure requirements
of Sections 6-07(2)(a), (b), and (c) of Regulation S-X which may be deemed to
require various disclosures regarding advisory fees paid to the Advisers;
WHEREAS, the Fund is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act") and its
shares are registered under the Securities Act of 1933, as amended (the "1933
Act");
WHEREAS, the Manager is duly registered as an investment adviser under the
Investment Advisers Act of 1940;
WHEREAS, the Company has registered or will register certain variable annuity
and/or life insurance contracts under the 1933 Act (the "Contracts") (unless an
exemption from registration is available);
WHEREAS, the Accounts are or will be duly organized, validly existing segregated
asset accounts, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the Contracts and the
Accounts;
WHEREAS, the Company has registered or will register the Accounts as unit
investment trusts under the 1940 Act (unless an exemption from registration is
available);
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in the Portfolios (as named in Schedule 2
to this Agreement and as may be amended from time to time by mutual consent of
the parties) on behalf of the Accounts to fund the Contracts (as named in
Schedule 3 to this Agreement and as may be amended from time to time by mutual
consent of the parties) and the Fund is authorized to sell such shares to the
Accounts at net asset value; and
NOW, THEREFORE, in consideration of their mutual promises, the Fund, the Manager
and the Company agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to the Company those shares of the Fund which the
Company orders on behalf of the Account, executing such orders on a daily basis
at the net asset value next computed after receipt by the Fund or its designee
of the order for the shares of the Fund. For purposes of this Section 1.1, the
Company shall be the designee of the Fund for receipt of such orders from each
Account and receipt by such designee shall constitute receipt by the Fund;
provided that the Fund receives written (or facsimile) notice of such order by
9:30 a.m. Eastern Standard Time on the next following Business Day. "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Fund calculates its net asset value pursuant to the rules of
the SEC.
1.2. The Company shall pay for Fund shares on the next Business Day after it
places an order to purchase Fund shares in accordance with Section 1.1 hereof.
Payment shall be in federal funds transmitted by wire or by a credit for any
shares redeemed.
1.3. The Fund agrees to make Fund shares available for purchase at the
applicable net asset value per share by the Company for its Accounts (as named
in Schedule 1 to this Agreement and as may be amended from time to time by
mutual consent of the parties) on those days on which the Fund calculates its
net asset value pursuant to rules of the SEC; provided, however, that the
Trustees may refuse to sell shares of any Portfolio to any person, or suspend or
terminate the offering of shares of any Portfolio if such action is required by
law or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Trustees, acting in good faith and in light of their fiduciary
duties under federal and any applicable state laws, in the best interests of the
shareholders of any Portfolio.
1.4. The Fund agrees to redeem, upon the Company's request, any full or
fractional shares of the Fund held by the Company, executing such requests on a
daily basis at the net asset value next computed after receipt by the Fund or
its designee of the request for redemption. For purposes of this Section 1.4,
the Company shall be the designee of the Fund for receipt of
requests for redemption and receipt by such designee shall constitute receipt by
the Fund; provided that the Fund receives written (or facsimile) notice of such
request for redemption by 9:30 a.m. Eastern Standard Time on the next following
Business Day. Payment shall be made within the time period specified in the
Fund's prospectus or statement of additional information, in federal funds
transmitted by wire to the Company's account as designated by the Company in
writing from time to time.
1.5. The Company shall pay for the Fund shares on the next Business Day after an
order to purchase shares is made in accordance with the provisions of Section
1.4 hereof. Payment shall be in federal funds transmitted by wire pursuant to
the instructions of the Fund's treasurer or by a credit for any shares redeemed.
1.6. The Company agree to purchase and redeem the shares of the Portfolios named
in Schedule 2 offered by the Fund's then current prospectus and statement of
additional information in accordance with the provisions of such prospectus and
statement of additional information. The Company shall not permit any person
other than a Contract owner to give instructions to the Company which would
require the Company to redeem or exchange shares of the Fund.
1.7. Net Asset Value. The Fund shall use its best efforts to inform the Company
of the net asset value per share for each Portfolio available to the Company by
6:30 p.m. New York Time or as soon as reasonably practicable after the net asset
value per share for such Portfolio is calculated. The Fund shall calculate such
net asset value in accordance with the prospectus for such Portfolio. In the
event that net asset values are not made available to the Company by such time,
the Company agrees to use its best efforts to include the net asset value when
received in its next business cycle for purposes of calculating purchase orders
and requests for redemption. However, if net asset values are not available for
an inclusion in the next business cycle and purchase orders/redemptions are not
able to be calculated and available to the Company to execute within the
time-frame identified in Section 2.3 (a), the Company Trust shall reimburse and
make the Company whole for any losses incurred as a result of such delays.
1.8. Pricing Errors. Any material errors in the calculation of net asset value,
dividends or capital gain information shall be reported immediately upon
discovery to the Company. An error shall be deemed "material" based on our
interpretation of the SEC's position and policy with regard to materiality, as
it may be modified from time to time. Neither the Fund, the Manager, nor any of
their affiliates shall be liable for any information provided to the Company
pursuant to this Agreement which information is based on incorrect information
supplied by or on behalf of the Company or any other Participating Company to
the Trust or the Distributor. The Fund shall make the Company whole for any
payments or adjustments to the number of shares in the Account that are
reasonably demonstrated to be required as a result of pricing errors.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established each
Account prior to any issuance or sale thereof as a segregated asset account
under laws of the State of Nebraska and has registered or, prior to any issuance
or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts.
2.2. The Fund represents and warrants that Fund shares sold pursuant to this
Agreement shall be registered under the 1933 Act, duly authorized for issuance
and sold in compliance with the laws of the State of Illinois and all applicable
federal and state securities laws and that the Fund is and shall remain
registered under the ▇▇▇▇ ▇▇▇. The Fund shall amend the registration statement
for its shares under the 1933 Act and the 1940 Act from time to time as required
in order to effect the continuous offering of its shares. The Fund shall
register and qualify the shares for sale in accordance with the laws of the
various states only if and to the extent deemed advisable by the Fund.
2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and 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.
2.4. The Company represents 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 Fund 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.
2.5. The Fund represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the Fund
undertakes to have a board of directors, a majority of whom are not interested
persons of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
2.6. The Fund makes no representation as to whether any aspect of its operations
(including, but not limited to, fees and expenses and investment policies)
complies with the insurance laws or regulations of the various states except
that the Fund represents that the Fund's investment policies, fees and expenses
are and shall at all times remain in compliance with the laws of the State of
Illinois and the Fund represents that their respective operations are and shall
at all times remain in material compliance with the laws of the State of
Illinois to the extent required to perform this Agreement.
2.7. The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Illinois and that it does and will comply in all
material respects with the 1940 Act.
2.8. The Manager represents and warrants that it is and shall remain duly
registered in all material respects under all applicable federal and state
securities laws and that it will perform its obligations for the Fund in
compliance in all material respects with the laws of its state of domicile and
any applicable state and federal securities laws. The Manager further represents
that it will make reasonable efforts to verify that all subadvisers are
similarly registered.
2.9. The Fund represents and warrants that its directors, officers, employees,
and other individuals/entities dealing with the money and/or securities of the
Fund are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund in an amount not less than
the minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid
blanket fidelity bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company.
2.10. The Company represents and warrants that all of its directors, officers,
employees, investment advisers, and other individuals/entities dealing with the
money and/or securities of the Fund are covered by a blanket fidelity bond or
similar coverage, in an amount not less $5 million. The aforesaid includes
coverage for larceny and embezzlement is issued by a reputable bonding company.
The Company agrees to make all reasonable efforts to see that this bond or
another bond containing these provisions is always in effect, and agrees to
notify the Fund and the Underwriter in the event that such coverage no longer
applies.
ARTICLE III. Sales Material, Prospectuses and Other Reports
3.1. The Company shall furnish, or shall cause to be furnished, to the Fund or
its designee, each piece of sales literature or other promotional material in
which the Fund or the Manager is named, at least five Business Days prior to its
use. No such material shall be used if the Fund or its designee reasonably
objects to such use within five Business Days after receipt of such material.
"Business Day" shall mean any day in which the New York Stock Exchange is open
for trading and in which the Fund calculates its net asset value pursuant to the
rules of the SEC.
3.2. Except with the express permission of the Fund, the Company shall not give
any information or make any representations or statements on behalf of the Fund
or concerning the Fund in connection with the sale of the Contracts other than
the information or representations contained in the registration statement or
prospectus for the Fund shares, as such registration statement and prospectus
may be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other promotional material
approved by the Fund or its designee.
3.3. For purposes of this Article II, the phrase "sales literature or other
promotional material" shall mean 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 billboard
or electronic media), and sales literature (such as brochures, circulars, market
letters and form letters), distributed or made generally available to customers
or the public.
3.4. The Fund shall provide a copy of its current prospectus within a reasonable
period of its effective filing date, and provide other assistance as is
reasonably necessary in order for the Company once each year (or more frequently
if the prospectus for the Fund is supplemented or amended) to have the
prospectus for the Contracts and the prospectus for the Fund printed together in
one document (such printing to be at the Company's expense). The Manager shall
be permitted to review and approve the typeset form of the Fund's prospectus
prior to such printing.
3.5. The Fund or the Manager shall provide the Company with either: (i) a copy
of the Fund's proxy material, reports to shareholders, other information
relating to the Fund necessary to prepare financial reports, and other
communications to shareholders for printing and distribution to Contract owners
at the Company's expense, or (ii) camera ready and/or printed copies, if
appropriate, of such material for distribution to Contract owners at the
Company's expense, within a reasonable period of the filing date for definitive
copies of such material. The Manager shall be permitted to review and approve
the typeset form of such proxy material, shareholder reports and communications
prior to such printing.
ARTICLE IV. Fees and Expenses
4.1. The Fund and Manager shall pay no fee or other compensation to the Company
under this Agreement, and the Company shall pay no fee or other compensation to
the Fund or Manager, except as provided herein.
4.2. All expenses incident to performance by each party of its respective duties
under this Agreement shall be paid by that party. The Fund shall ensure that all
its shares are registered and authorized for issuance in accordance with
applicable federal law and, if and to the extent advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, and the preparation of all statements
and notices required by any federal or state law.
4.3. The Fund, at its expense, shall provide the Company with copies of its
proxy statements, reports to shareholders, and other communications (except for
prospectuses and statements of additional information, which are covered in
section 3.1) to shareholders in such quantity as the Company shall reasonably
require for distributing to Contract owners. The Fund shall bear the expense of
mailing such proxy materials in the event the proxy vote is a result of actions
initiated by the Fund.
4.4. In the event the Fund adds one or more additional Portfolios and the
parties desire to make such Portfolios available to the respective Contract
owners as an underlying investment medium, a new Schedule 3 which shall be an
amendment to this Agreement shall be executed by the parties authorizing the
issuance of shares of the new Portfolios to the particular Account. The
amendment may also provide for the sharing of expenses for the establishment of
new Portfolios among Participating Insurance Companies desiring to invest in
such Portfolios and the provision of funds as the initial investment in the new
Portfolios.
4.5 Except as provided in this Section 4.2., all expenses of preparing, setting
in type and printing and distributing Fund prospectuses and statements of
additional information shall be the expense of the Company. For prospectuses and
statements of additional information provided by the Company to its existing
owners of Contracts who currently own shares of one or more of the Fund's
Portfolios, in order to update disclosure as required by the 1933 Act and/or the
1940 Act, the cost of printing shall be borne by the Fund. If the Company
chooses to receive camera-ready film or computer diskettes in lieu of receiving
printed copies of the Fund's prospectus, the Fund shall bear the cost of
typesetting to provide the Fund's prospectus to the Company in the format in
which the Fund is accustomed to formatting prospectuses, and the Company shall
bear the expense of adjusting or changing the format to conform with any of its
prospectuses. In such event, the Fund will reimburse the Company in an amount
equal to the product of x and y where x is the number of such prospectuses
distributed to owners of the Contracts who currently own shares of one or more
of the Fund's Portfolios, and y is the Fund's per unit cost of typesetting and
printing the Fund's prospectus. The same procedures shall be followed with
respect to the Fund's statement of additional information. The Company agrees to
provide the Fund or its designee with such information as may be reasonably
requested by the Fund to assure that the Fund's expenses do not include the cost
of printing, typesetting, and distributing any prospectuses or statements of
additional information other than those actually distributed to existing owners
of the Contracts who currently own shares of one or more of the Fund's
Portfolios.
ARTICLE V. Conditions of the Order; Applicable Law
5.1. The Company has reviewed a copy of the Order, and in particular, has
reviewed the conditions to the requested relief set forth therein. The Company
agrees to be bound by the responsibilities of a Participating Insurance Company
as set forth in the Order.
5.2. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Illinois. 5.3. This
Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts,
and the rules and regulations and rulings thereunder, including such exemptions
from those statutes, rules and regulations as the SEC may grant (including, but
not limited to, the Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE VI. Diversification
6.1. The Fund 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 Fund 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. In the event of a breach of
this Article VI by the Fund, it will take all reasonable steps (a) to notify
Company of such breach and (b) to adequately diversify the Fund so as to achieve
compliance within the grace period afforded by Regulation 817-5. The Fund shall
provide the Company information reasonably requested in relation to Section
817(h) diversification requirements, including quarterly reports [and annual
certifications].
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 Insurance Product 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.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
8.1(a) The Company agrees to indemnify and hold harmless the Fund and each
member of the Board and officers, and each Adviser and each director and officer
of each Adviser, and each person, if any, who controls the Fund or the Adviser
within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" and individually, "Indemnified
Party," 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 an Adviser) or unlawful conduct of the Company 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 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, as limited by and in
accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof.
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 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.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares or the Contracts or the operation of the
Fund.
8.2. Indemnification by the Manager
8.2(a). Each Manager agrees, with respect to each Portfolio that it manages, 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" and individually,
"Indemnified Party," 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 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 sale or acquisition of shares of the Portfolio that it manages or
the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or
prospectus or 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 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 or
persons under its control and other than statements or representations
authorized by the Company) or unlawful conduct of the Fund, Manager(s) 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 information furnished to the
Company by or on behalf of the Fund; or
(iv) arise as a result of any failure by the Fund 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 Manager in this Agreement or arise out of or result from
any other material breach of this Agreement by the Manager; as limited by and in
accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The Manager 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 and duties under this Agreement.
8.2(c). The Manager 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.
8.2(d). The Company agrees promptly to notify the Manager of the commencement of
any litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of the Contracts or the operation of each
Account.
8.3. Indemnification by the Fund
8.3(a). The Fund agrees 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 (hereinafter collectively, the
"Indemnified Parties" and individually, "Indemnified Party," 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 Fund) 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 result from the gross negligence (except for
failure to comply with Section 6.1 of this Agreement for which
the standard is negligence), bad faith or willful misconduct of the Board or any
member thereof, are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide the services and
furnish the materials under the terms of this Agreement (including any failure
to comply with Section 6.1 of this Agreement); or
(ii) arise out of or result from any material breach of any representation
and/or warranty made by the Fund in this Agreement or arise out of or result
from any other material breach of this Agreement by the Fund;
8.3(b). The Fund 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 and duties under this Agreement.
8.3(c). The Fund shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified the Fund in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify the Fund of any such claim shall not relieve the
Fund from any liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified Parties,
the Fund will be entitled to participate, at its own expense, in the defense
thereof. The Fund also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Fund to such party of the Fund's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Fund will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.3(d). The Company agrees promptly to notify the Fund of the commencement of
any litigation or proceedings against it or any of its respective officers or
directors in connection with this Agreement, the issuance or sale of the
Contracts, with respect to the operation of either Account, or the sale or
acquisition of shares of the Fund.
ARTICLE IX. Termination
9.1 This Agreement shall terminate with respect to some or all Portfolios:
(a) at the option of any party upon six month's advance written notice to the
other parties at the addresses specified in Section VI of this Agreement; or
(b) at the option of the Company to the extent that shares of Portfolios are not
reasonably available to meet the requirements of its Contracts or are not
appropriate funding vehicles for the Contracts, as determined by the Company
reasonably and in good faith. Prompt written notice of the election to terminate
for such cause and an explanation of such cause shall be
furnished by the Company. 9.2. It is understood and agreed that the right of any
party hereto to terminate this Agreement pursuant to Section 5.1(a) may be
exercised for cause or for no cause.
ARTICLE X. Notices Any notice shall be sufficiently given when sent by
registered or certified mail to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other parties to this Agreement. If to the Fund: LSA Variable
Series Trust ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attn: Legal Department
If to the Fund:
LSA Variable Series Trust
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Law Department, J5B
If to the Manager:
LSA Asset Management LLC
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Law Department, J5B
If to the Company:
Glenbrook Life & Annuity Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Law Department, J5B
ARTICLE XI. Miscellaneous
11.1. 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 without the express written consent
of the affected party until such time as it may come into the public domain.
11.2. The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
11.3. This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
11.4. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
11.5. Each party hereto shall cooperate with all appropriate governmental
authorities (including without limitation the SEC, the National Association of
Securities Dealers, Inc. 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. Each party hereto shall promptly notify the other parties
to this Agreement, by written notice to the addresses specified in Section V, of
any such investigation or inquiry.
11.6. 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.
11.7. It is understood by the parties that this Agreement is not an exclusive
arrangement.
11.8. The Company and the Manager each understand and agree that the obligations
of the Fund under this Agreement are not binding upon any shareholder of the
Fund personally, but bind only the Fund and the Fund's property; the Company and
the Manager separately represent that each has notice of the provisions of the
Declaration of Trust of the Fund disclaiming shareholder liability for acts or
obligations of the Fund.
11.9. This Agreement shall not be assigned by any party hereto without the prior
written consent of all the parties.
11.10. This Agreement sets forth the entire agreement between the parties and
supercedes all prior communications, agreements and understandings, oral or
written, between the parties regarding the subject matter hereof.
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 as of the date specified below.
GLENBROOK LIFE & ANNUITY COMPANY
By: __________________________________
Title: _______________________________
Date: ________________________________
LSA VARIABLE SERIES TRUST
By: __________________________________
Title: _______________________________
Date: ________________________________
LSA ASSET MANAGEMENT LLC
By: __________________________________
Title: _______________________________
Date: ________________________________
SCHEDULE 1
SEPARATE ACCOUNTS
Glenbrook Life Multi-Manager Variable Account
SCHEDULE 2
AUTHORIZED PORTFOLIOS
LSA Variable Series Trust Focused Equity Fund
LSA Variable Series Trust Growth Equity Fund
SCHEDULE 3
CONTRACTS
Glenbrook Provider Ultra Variable Annuity
Glenbrook Provider Advantage Variable Annuity
Glenbrook Provider Extra Variable Annuity