PARTICIPATION AGREEMENT
FORETHOUGHT LIFE INSURANCE COMPANY
This Participation Agreement ("Agreement"), dated as of the day of
, 2015, is made by and between FORETHOUGHT LIFE INSURANCE COMPANY
("Company"), on behalf of itself and each of the separate accounts identified on
Exhibit A, which is attached hereto, as the parties hereto may amend from time
to time ("Variable Accounts"), ▇▇▇▇▇▇▇ & ▇▇▇▇, INC. ("W&R"), distributor for Ivy
Funds Variable Insurance Portfolios, and IVY FUNDS VARIABLE INSURANCE PORTFOLIOS
("Ivy Funds VIP").
WHEREAS, Ivy Funds VIP is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended ("1940 Act"), and currently includes the
separately managed series identified on Exhibit B, which is attached hereto,
that are available to the Variable Accounts in accordance with this Agreement
(each a "Portfolio"); and
WHEREAS, the Portfolios are currently sold to one or more separate accounts of
life insurance companies to fund benefits under variable life insurance policies
and/or variable annuity contracts ("Participating Insurance Companies"); and
WHEREAS, Company, W&R and Ivy Funds VIP mutually desire the inclusion of the
Portfolios as underlying investment media for each of the variable life
insurance policies and/or variable annuity contracts issued by Company
identified on Exhibit A, which is attached hereto, as the parties hereto may
amend from time to time (collectively, the "Contracts"); and
WHEREAS, the Contracts allow for the allocation of net amounts received by
Company to separate sub-accounts of the Variable Accounts for investment in
shares of the Portfolios and other similar funds; and
WHEREAS, selection of a particular sub-account (corresponding to a particular
Portfolio) is made by the owner of a Contract ("Contract Owner") and such
Contract Owner may reallocate their investment options among the sub-accounts of
the Variable Accounts in accordance with the terms of the Contracts.
NOW THEREFORE, Company, W&R and Ivy Funds VIP, in consideration of the promises
and undertakings described herein, agree as follows:
1. SCOPE OF AGREEMENT. The scope of this Agreement is limited to the purchase
of Portfolio shares by the Variable Accounts on behalf of purchasers of the
Contracts.
2. REPRESENTATIONS OF COMPANY.
(a) Company represents and warrants that the Variable Accounts have been
established and are in good standing under the laws of their state of
organization; and the Variable Accounts have been registered as unit
investment trusts under the 1940 Act and will remain so registered, or
are exempt from registration pursuant to Section 3(c)(11) of the 1940
Act;
(b) Company represents and warrants that it is an insurance company duly
organized and in good standing under the laws of its state of
incorporation and that it has legally and validly established each
Variable Account as a segregated asset account under applicable state
insurance laws and the regulations thereunder.
(c) Company represents and warrants that (i) prior to and at the time of
any issuance or sale of Portfolio shares, the Contracts will be
registered under the Securities Act of 1933, as amended ("1933 Act"),
unless exempt from such registration, (ii) prior to and at the time of
any issuance or sale of Portfolio shares, the Contracts will be duly
authorized for issuance and sold in compliance with all applicable
federal and state laws, including, without limitation, the 1933 Act,
the Securities Exchange Act of 1934 ("1934 Act"), the 1940 Act and the
law(s) of Company's state(s) of organization and domicile, (iii) each
Variable Account does and will comply in all material respects with
the requirements of the 1940 Act and the rules thereunder, unless
exempt from such requirements, (iv) each Variable Account's 1933 Act
registration statement relating to the Contracts, together with any
amendments thereto, will at all times comply in all material respects
with the requirements of the 1933 Act and the rules thereunder, (v)
Company will amend the registration statement for its Contracts under
the 1933 Act and for its Variable Accounts under the 1940 Act from
time to time as required in order to effect the continuous offering of
its Contracts or as may otherwise be required by applicable law, and
(vi) each Variable Account prospectus, Statement of Additional
Information ("SAI"), and then-current stickers, will at all times
comply in all material respects with the applicable requirements of
the 1933 Act and the rules thereunder.
(d) Company represents that each Variable Account is a "segregated asset
account" and that interests in each Variable Account are offered
exclusively through the purchase of a "variable contract", within the
meaning of such terms under Section 817 of the Internal Revenue Code
of 1986, as amended ("Code"), and Section 1.817-5(f)(2) of the Federal
Tax Regulations, that it shall make every effort to continue to meet
such definitional requirements, and that it shall notify W&R and Ivy
Funds VIP immediately upon having a reasonable basis for believing
that such requirements have ceased to be met or that they may not be
met in the future.
(e) Company represents that the Contracts are currently, and at the time
of issuance will be, treated as annuity contracts or life insurance
policies, whichever is appropriate under applicable provisions of the
Code, and that it shall make every effort to maintain such treatment.
Company will promptly notify W&R and Ivy Funds VIP upon having a
reasonable basis for believing that the Contracts have ceased to be
treated as annuity contracts or life insurance polices, or that the
Contracts may not be so treated in the future.
(f) Company represents that it has established such rules and procedures
as are necessary to ensure compliance with applicable federal, state
and self-regulatory requirements relating to the offering of the
Contracts. W&R and Ivy Funds VIP explicitly disclaim any and all
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responsibility for the offer, sale, distribution and/or servicing of
the Contracts, except as otherwise specified in this Agreement.
(g) Company shall during the term of this Agreement comply with all laws,
rules and regulations applicable to it in connection with the
performance of each of its obligations under this Agreement or
applicable to the performance of its business, including, but not
limited to, the requirements of the USA Patriot Act of 2001 (the "AML
Act") and related laws, rules and regulations.
(h) To the extent one or more third parties are engaged by Company to
offer the Contracts and/or perform services that Company is
responsible for under this Agreement (such parties include, but are
not limited to, affiliates of Company) ("Agents"), Company shall
determine that each such Agent is capable of performing such services,
shall take measures as may be necessary to ensure that Agents perform
such services in accordance with the requirements of this Agreement
and applicable law and shall bear full responsibility for, and assume
all liability for (including any obligation for indemnification as
provided in Paragraph 13 hereof), the actions and inactions of such
Agents as if such services had been provided by Company.
(i) The Company agrees to use its best efforts to provide information to
Ivy Funds VIP solely for the purpose of facilitating its compliance
with Rule 22c-2 under the 1940 Act in accordance with the Rule 22c-2
Shareholder Information Agreement attached hereto as Exhibit C.
Nothing herein, nor any action by the Company, shall be construed as,
or infer that the Company has undertaken any duty or obligation,
whether express or implied, at law or in equity, to detect abusive
trading activity pursuant to any policies, procedures and/or
requirements implemented by W&R and/or Ivy Funds VIP.
(j) Company represents that, during the term of this Agreement, it will
have in force adequate insurance coverage insuring the Company against
potential liabilities associated with the underwriting and
distribution of the Contracts.
3. AUTHORITY OF COMPANY. Subject to the terms and conditions of this
Agreement, Company shall be authorized to, and agrees, to act as a limited
agent of W&R for purposes of Rule 22c-1 under the 1940 Act and to the
extent permitted by applicable law, for the sole purpose of receiving
instructions for the purchase and redemption of Portfolio shares (from
Contract Owners or participants making investment allocation decisions
under the Contracts) prior to the close of business of the New York Stock
Exchange ("NYSE"), normally 3:00 p.m. Central Time ("Pricing Time") each
Business Day. "Business Day" shall mean any day on which the NYSE is open
for trading and on which the Portfolios calculate their net asset value as
set forth in the Portfolios' most recent prospectuses and SAIs. Except as
particularly stated in this paragraph, Company shall have no authority to
act on behalf of W&R or Ivy Funds VIP or to incur any cost or liability on
its behalf.
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4. AVAILABLE PORTFOLIOS.
(a) AVAILABILITY. Ivy Funds VIP will make shares of the Portfolios
available to Company and its Variable Accounts for purchase and
redemption at the applicable net asset value and with no sales charges
on those days on which the Portfolios calculate their net asset value
pursuant to the rules of the SEC, subject to the terms and conditions
of this Agreement. Notwithstanding the foregoing, the Board of
Trustees of Ivy Funds VIP ("Board") may refuse to sell shares of any
Portfolio to any person or suspend or terminate the offering of shares
of any Portfolio (a) if such action is required by law or by
regulatory authorities having jurisdiction, (b) if, in the sole
discretion of the Board, acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, the
Board deems such action to be in the best interests of the
shareholders of such Portfolio, or (c) if such action is required by
any policies that the Board has adopted and that apply to all
Participating Insurance Companies. Further, it is acknowledged and
agreed that the availability of Portfolio shares shall be subject to
Ivy Funds VIP's current prospectus and SAI and to federal and state
laws, rules and regulations.
(b) ADDITION, DELETION OR MODIFICATION OF PORTFOLIOS. W&R and/or Ivy Funds
VIP may, from time to time, add other Portfolios to provide additional
funding media for the Contracts, or to delete, combine or modify
existing Portfolios, by amending Exhibit B hereto. W&R and/or Ivy
Funds VIP reserve the right to amend Exhibit B in their sole and
exclusive discretion upon 90 days' prior written notice to Company.
Upon such amendment to Exhibit B, any applicable reference to a
Portfolio, Ivy Funds VIP or its shares herein shall include a
reference to any such additional Portfolio.
(c) NO SALES TO THE GENERAL PUBLIC. Ivy Funds VIP represents and warrants
that shares of the Portfolios will be sold only to insurance companies
and/or their separate accounts funding variable life insurance
policies and/or variable annuity contracts or to other persons or
entities permitted under Section 817 of the Code, or regulations
promulgated thereunder. Ivy Funds VIP represents and warrants that no
shares of any Portfolio have been or will be sold to the general
public.
5. PROCESSING OF PORTFOLIO PURCHASE AND REDEMPTION REQUESTS.
(a) PRICING INFORMATION. Ivy Funds VIP or its agents will use reasonable
best efforts to provide closing net asset value, change in net asset
value, dividend or daily accrual rate information and capital gain
information by 6:00 p.m. Central Time each Business Day to Company.
Company shall use this data to calculate unit values for its Variable
Accounts. Unit values shall be used to process that same Business
Day's Variable Account transactions. In the event adjustments to
transactions previously effected on behalf of a Variable Account are
required to correct any material error in the computation of the net
asset value of a Portfolio's shares, Ivy Funds VIP or its agent shall
notify Company as soon as practicable after discovering the need for
those adjustments which result in a reimbursement to a Variable
Account in accordance with Ivy Funds VIP's then current policies on
reimbursement, which Ivy Funds VIP represents are consistent with
applicable SEC standards. If an adjustment is to be made in accordance
with such policies to correct an error which has caused a Variable
Account to receive an amount different than that to which it is
entitled, Ivy Funds VIP or its agent shall make all
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necessary adjustments to the number of shares owned in the Variable
Account and distribute to the Variable Account the amount of such
underpayment for credit by the Company to affected Contract Owners. In
the event of any such material error W&R or Ivy Funds VIP shall
reimburse Company for administrative or other costs or losses incurred
for correcting underlying Contract Owner accounts in accordance with
Ivy Funds VIP's current policies on reimbursement. The Company agrees
to use its best efforts to minimize any costs incurred under this
paragraph and shall provide W&R with acceptable documentation of any
such costs incurred.
(b) PLACING OF ORDERS BY COMPANY. Orders for purchases or redemptions
shall be placed by Company with W&R or its specified agent in a manner
and format determined by W&R no later than 8:30 a.m. Central Time on
the following Business Day. The Company may place purchase and/or
redemption orders on the following Business Day for shares of the
Portfolios that it receives prior to the Pricing Time each Business
Day. The Company will not aggregate pre-Pricing Time trades with
post-Pricing Time trades. All orders shall be communicated by the
Company through the National Securities Clearing Corporation's
("NSCC") Fund/SERV system. The following information shall be supplied
by the Company at the time each order is placed: (i) total purchases
for each Portfolio (including all purchase, exchange and transfer
orders received by the Company resulting in purchases of Portfolio
shares); (ii) total redemptions for each Portfolio (including all
redemption, exchange and transfer orders received by the Company
resulting in redemptions of Portfolio shares); and (iii) such other
information required by NSCC or reasonably requested by W&R.
(c) PROCESSING OF ORDERS. To the extent permitted by applicable law,
orders for shares of Portfolios received by Company prior to the
Pricing Time on a Business Day and received by W&R by 8:30 a.m.
Central time on the following Business Day shall be executed at the
time they are received by W&R and at the net asset value price
determined as of the close of trading on the previous Business Day,
provided that Company represents it has received such orders prior to
the close of the NYSE on the previous Business Day. In connection with
this Section 5(c), Company represents and warrants that it will not
submit any order for shares of a Portfolio or engage in any practice,
nor will it allow any person acting on its behalf to submit any order
for shares of a Portfolio or engage in any practice, that would
violate or cause a violation of Section 22 of the 1940 Act or Rule
22c-1 thereunder. W&R will not accept any order made on a conditional
basis or subject to any delay or contingency. Company shall only place
purchase orders for shares of Portfolios on behalf of its customers
whose addresses recorded on Company's books are in a state or other
jurisdiction in which the Portfolios are registered or qualified for
sale, or are exempt from registration or qualification as confirmed in
writing by W&R.
(d) PAYMENT FOR SHARES. Payment for net purchases shall be wired to a
custodial account designated in writing by W&R and payment for net
redemptions will be wired to an account designated in writing by
Company. Company will wire payment for net purchases to a custodian
account designated by Ivy Funds VIP by 5:00 p.m. Central Time on the
same day as the order for Portfolio shares is placed, to the extent
practicable. Ivy
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Funds VIP will wire payment for net redemptions to an account
designated by Company by 5:00 p.m. Central Time on the day following
the day the order is settled, to the extent practicable, but in any
event within five (5) calendar days after the date the order is placed
in order to enable Company to pay redemption proceeds within the time
specified in Section 22(e) of the 1940 Act or such period of time as
may be required by law. Net purchase orders are subject to
cancellation at the option of W&R and/or Ivy Funds VIP in the event
that payment is not received within two (2) business days following
receipt of the order by Ivy Funds VIP. Company shall indemnify W&R and
Ivy Funds VIP for any losses incurred in connection with a cancelled
order.
(e) DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS. Dividends and capital gain
distributions shall be reinvested in additional Portfolio shares at
net asset value. Notwithstanding the above, W&R shall not be held
responsible for providing Company with ex-date net asset value, change
in net asset value, dividend or capital gain information when the NYSE
is closed, when an emergency exists making the valuation of net assets
not reasonably practicable, or during any period when the SEC has by
order permitted the suspension of pricing shares for the protection of
shareholders. Ivy Funds VIP shall furnish, on or before the
ex-dividend date, notice to Company of any income dividends or capital
gain distributions payable on the shares of the Portfolios. Company
hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional
shares of the Portfolio. Ivy Funds VIP shall notify Company of the
number of shares so issued as payment of such dividends and
distributions.
(f) MANUAL TRANSACTIONS. In the event that there are technical problems
with the NSCC Fund/SERV System or the parties are not able to transmit
or receive information through Fund/SERV, the following provisions
shall apply:
a. Purchase and Redemption Orders. On each Business Day, Company
shall calculate the net purchase and redemption Orders accepted
by Company for shares of a Portfolio that it received prior to
the close of that day's trading on the NYSE and shall communicate
to W&R or Ivy Funds VIP the net purchase or redemption Order (if
any) for each Variable Account for such Business Day (which is
also the Trade Date). This communication shall be by facsimile or
by such other means as the parties hereto may agree to in writing
and shall be received by W&R or Ivy Funds VIP prior to 8:30 a.m.
Central Time, on the next Business Day following the Trade Date.
All trades communicated to W&R or Ivy Funds VIP by this deadline
shall be treated as if they were received by W&R or Ivy Funds VIP
prior to the close of trading on the Trade Date. Orders received
after the close of that day's trading on the NYSE shall be
communicated by Company to W&R or Ivy Funds VIP prior to 8:30
a.m. Central Time, on the next Business Day following the Trade
Date.
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b. Settlement of Transactions.
i. Purchases. W&R shall provide Company written purchase
instructions for wire transfers to the custodian for the
applicable Portfolios. Company shall wire the purchase price
for each purchase order in accordance with said instructions
so that the funds are received by the applicable Portfolio's
custodian by no later than close of business on the next
Business Day following the Trade Date and Company shall use
its best efforts so that such funds are provided to the
Portfolio's custodian by 1:00 p.m. Central Time. Company
agrees that if it or its Agents fails to provide funds to
the Portfolio's custodian as set forth above, then at the
option of W&R or Ivy Funds VIP, (A) the transaction may be
cancelled, or (B) the transaction may be processed at the
next-determined net asset value for the applicable Portfolio
after purchase order funds are received. In such event,
Company shall indemnify and hold harmless W&R, Ivy Funds VIP
and the Portfolios from any liabilities, costs and damages
any may suffer as a result of such failure to provide funds
in accordance with such deadline.
ii. Redemptions. W&R and/or Ivy Funds VIP shall use its best
efforts to cause to be transmitted by wire transfer on the
Business Day immediately following the Trade Date, to such
account as Company shall direct in writing, the proceeds of
all redemption orders placed by Company no later than the
close of business on the Business Day immediately following
the Trade Date. Should W&R and/or Ivy Funds VIP need to
extend the settlement on a trade, it shall contact Company
to discuss the extension; provided, however, that any such
extension shall not relieve W&R and/or Ivy Funds VIP of its
settlement obligations under Applicable Law.
(g) ISSUANCE OF SHARES. Issuance and transfer of Portfolio shares will be
by book entry only. Share certificates will not be issued to Company
for any Variable Account. Portfolio shares will be recorded in the
appropriate title for each Variable Account.
(h) COMPANY REPORTING. When available, Company will provide W&R with
monthly reports in a manner and format as agreed upon between the
parties. Such reports shall be provided, following the end of each
month as agreed upon between the parties. Such reports will set forth
information as agreed upon between the parties, which may include but
not be limited to a listing of each order received from Contract
Owners during the month resulting in the purchase or sale of Portfolio
shares, including the following information with respect to each such
order and such additional information as W&R shall reasonably request:
(i) the transaction date, which shall be the Business Day the order
was received by the Company, if the order was received prior to the
Pricing Time, or the Business Day following the Business Day the order
was received by the Company, if the order was received after the
Pricing Time; (ii) the transaction type (e.g., purchase, redemption,
exchange, transfer, etc.); (iii) the Portfolio CUSIP number; (iv) the
dollar amount of the transaction; (v) the name of the agent assigned
to the Contract Owner's account/policy; and (vi) the agent's branch
office number, city, state and zip code. Company agrees to provide
W&R, upon request, written reports indicating the number of
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Contract Owners and such other information (including books and
records) and in such format as W&R may reasonably request or as may be
necessary or advisable to enable it to comply with any law, regulation
or order.
6. EXPENSES. All expenses incident to the performance by Company, W&R and/or
Ivy Funds VIP of their respective obligations under this Agreement shall be
paid by the party subject to the obligation. W&R shall pay compensation to
Company under this Agreement as provided on Exhibit D.
7. PROSPECTUSES, SAIS, PROXIES AND REPORTS.
(a) DELIVERY TO COMPANY. W&R shall promptly provide Company (or its
designee), or cause Company (or its designee) to be provided with:
(1) a camera-ready copy of the Portfolios' prospectus and any
supplements, for use by Company in producing a combined
prospectus for each Contract incorporating both the Contract
prospectus and the Portfolios' prospectus;
(2) a Portable document Format (".pdf") version of the Portfolios'
SAI and any supplements; and
(3) periodic reports required under the 1940 Act ("Periodic Reports")
in such quantity as Company shall reasonably require for
distribution to Contract Owners, or in lieu thereof, a .pdf
version of Periodic Reports.
(b) DELIVERY TO CONTRACT OWNERS. Company assumes sole responsibility for
ensuring that such materials are delivered to Contract Owners in
accordance with applicable federal and state securities laws provided
such materials are promptly provided by W&R.
(c) DELIVERY TO W&R. Company shall promptly provide W&R the information
necessary for W&R (or its designee) to distribute proxy materials to
Contract Owners. W&R assumes sole responsibility for ensuring that
such materials are delivered to Contract Owners in accordance with
applicable federal and state securities laws provided such materials
are promptly provided by Company.
For purposes of clarity, see Schedule A, paragraph F, attached hereto,
which outlines each parties responsibility with respect to this
Section.
(1) In the event that Company desires to utilize summary
prospectuses, Company shall promptly notify W&R and at such
time, the parties agree to abide by Exhibit E with respect to
the use and delivery of summary prospectuses.
(c) USE OF PORTFOLIO MATERIALS BY COMPANY. If Company elects to include
any materials provided by W&R or Ivy Funds VIP, specifically
prospectuses, SAIs, Periodic Reports and proxy materials, on its web
site or in any other computer or
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electronic format, Company assumes sole responsibility for maintaining
such materials in the form provided by W&R or Ivy Funds VIP and for
promptly replacing such materials with all updates provided by W&R or
Ivy Funds VIP. W&R or Ivy Funds VIP agree to provide all such
materials requested by Company in a ".pdf" in a timely fashion at no
additional cost, together with such other formats at Company's cost as
may be mutually agreed upon.
(d) PROXY VOTING. Except to the extent prohibited by law, the Company
shall, at any time the provisions of Section 11 of the Agreement are
in effect: (i) solicit voting instructions from Contract Owners; (ii)
vote the Portfolio(s) shares in accordance with the instructions
received from Contract Owners; and (iii) vote Portfolio(s) shares for
which no instructions have been received in the same proportion as the
vote of all other holders of such shares, provided however, that the
Company reserves the right to vote Portfolio shares held in any
segregated asset account in its own right, to the extent permitted by
law. Company and its agents will in no way recommend action in
connection with or oppose or interfere with the solicitation of
proxies for the Portfolio shares held for the benefit of such Contract
Owners.
8. COMPANY'S USE OF PORTFOLIO INFORMATION. Company and its agents shall make
no representations concerning the Portfolios or Portfolio shares except
those contained in the Portfolios' then current prospectuses, SAIs or other
documents produced by W&R (or an entity on its behalf) which contain
information about the Portfolios. Company agrees to submit to W&R for prior
review and approval any communication with the public containing any
Portfolio information. Company agrees to allow at least ten (10) Business
Days for W&R to review any advertising and sales literature drafted by
Company (or agents on its behalf) with respect to the Portfolios prior to
using such material or submitting such material to any regulator.
9. REPRESENTATIONS OF W&R AND/OR IVY FUNDS VIP.
(a) W&R represents that the Portfolios are currently qualified as
regulated investment companies under Subchapter M of the Code and that
Ivy Funds VIP shall make every effort to maintain such qualification.
W&R shall promptly notify Company upon having a reasonable basis for
believing that any of the Portfolios has ceased to so qualify, or that
they may not qualify as such in the future.
(b) W&R represents that each of the Portfolios currently complies with the
diversification requirements pursuant to Section 817(h) of the Code
and Section 1.817-5(b) of the Federal Tax Regulations and that Ivy
Funds VIP will make every effort to maintain the Portfolios'
compliance with such diversification requirements, unless the
Portfolios are otherwise exempt from Section 817(h) and/or except as
otherwise disclosed in the Portfolios' prospectus. W&R will notify
Company promptly upon having a reasonable basis for believing that a
Portfolio has ceased to so qualify, or that a Portfolio might not so
qualify in the future. In the event a Portfolio ceases to qualify, W&R
will take all steps necessary to adequately diversify the Portfolio to
achieve compliance within the grace period afforded by Treasury
Regulation Section 1.817-5. If a Portfolio fails to
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achieve compliance with Section 817(h) within the grace period W&R
will reimburse the Company for all damages resulting to the Company.
(c) W&R represents and warrants that Ivy Funds VIP is duly organized and
validly existing under the laws of Delaware and that each Portfolio
does and will comply in all material respects with the 1940 Act and
the rules and regulations thereunder.
(d) W&R represents and warrants that the Portfolio shares offered and sold
pursuant to this Agreement will be registered under the 1933 Act and
each Portfolio shall be registered under the 1940 Act prior to and at
the time of any issuance or sale of such shares. W&R shall amend the
Portfolios' registration statement under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous
offering of Portfolio shares. Ivy Funds VIP shall register and qualify
its shares for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by Ivy Funds VIP or W&R.
(e) Ivy Funds VIP represents and warrants that it, its trustees, officers,
employees and others dealing with the money or securities, or both, of
a Portfolio shall at all times be covered by a blanket fidelity bond
or similar coverage for the benefit of the Portfolio in an amount not
less than the minimum coverage required by Rule 17g-1 or other
regulations under the 1940 Act. Such bond shall include coverage for
larceny and embezzlement and be issued by a reputable bonding company.
(f) W&R represents and warrants that it is currently and will continue to
be a registered-broker dealer and member in good standing with the
Financial Industry Regulatory Authority ("FINRA").
10. MONTHLY CONFIRMATIONS. Ivy Funds VIP or its agent shall provide Company a
monthly statement of account or electronic access to account information,
which shall confirm all transactions in Portfolio shares made during that
particular month by a Variable Account.
11. MIXED AND SHARED FUNDING.
(a) GENERAL. The SEC has granted an order to Ivy Funds VIP exempting it
from certain provisions of the 1940 Act and rules thereunder ("Order")
so that Ivy Funds VIP may be available for investment by the Variable
Accounts and by certain other entities, including, without limitation,
separate accounts funding variable annuity contracts or variable life
insurance policies, separate accounts of insurance companies
unaffiliated with Company, and qualified pension and retirement plans
(collectively, "Mixed and Shared Funding"). The parties recognize that
the SEC has imposed terms and conditions for such orders that are
substantially identical to many of the provisions of this Section 11.
Sections 11(b) through 11(h) below shall apply pursuant to the Order
granted to Ivy Funds VIP. Ivy Funds VIP hereby notifies Company that
it may be appropriate to include in the prospectus pursuant to which a
Contract is offered disclosure regarding the potential risks of Mixed
and Shared Funding.
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(b) MATERIAL IRRECONCILABLE CONFLICTS. Company agrees to inform the Board
of the existence of any potential or existing material irreconcilable
conflicts of which it is aware. The concept of a "material
irreconcilable conflict" is not defined by the 1940 Act or the rules
thereunder, but the parties recognize that such a conflict may arise
for a variety of reason, including without limitation:
(1) an action by any state insurance or other regulatory
authority;
(2) 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;
(3) an administrative or judicial decision in any relevant
proceeding;
(4) the manner in which the investments of any Portfolios are
being managed;
(5) a difference in voting instructions given by variable
annuity contract participants, variable life insurance
policy participants to Participating Insurance Companies (as
that term is defined in the Order) and trustees of
Participating Plans (as that term is defined in the Order);
(6) a decision by a Participating Insurance Company to disregard
the voting instructions of participants; or
(7) a decision by a Participating Plan to disregard the voting
instructions of plan participants.
Consistent with the SEC's requirements in connection with exemptive
orders of the type referred to in Section 11(a) hereof, Company will
assist the Board in carrying out its responsibilities under the Order
by providing the Board with all information reasonably necessary for
the Board to consider any issue raised, including information as to a
decision by Company to disregard voting instructions of Contract
Owners. Company's responsibilities in connection with the foregoing
shall be carried out with a view only to the interests of Contract
Owners.
(c) CONFLICT REMEDIES.
(1) It is agreed that if it is determined by a majority of the
members of the Board or a majority of the Disinterested Trustees
that a material irreconcilable conflict exists, Company will, if
it is a Participating Insurance Company involved in the material
irreconcilable conflict, at its own expense and to the extent
reasonably practicable (as determined by a majority of the
Disinterested
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Trustees), take whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, which steps may
include, but are not limited to:
(i) withdrawing the assets allocable to some or all of the
Variable Accounts from Ivy Funds VIP or any Portfolio and
reinvesting such assets in a different investment medium,
including another Portfolio, or submitting the question
whether such segregation should be implemented to a vote of
all affected participants and, as appropriate, segregating
the assets of any particular group (e.g., annuity
participants, life insurance participants or all
participants) that votes in favor of such segregation, or
offering to the affected participants the option of making
such a change; and
(ii) establishing a new registered investment company of
the type defined as a "management company" in Section 4(3)
of the 1940 Act or a new separate account that is operated
as a management company.
(2) If the material irreconcilable conflict arises because of
Company's decision to disregard Contract Owner voting
instructions and that decision represents a minority position or
would preclude a majority vote, Company may be required at Ivy
Funds VIP's election, to withdraw each Variable Account's
investment in Ivy Funds VIP or any Portfolio. No charge or
penalty will be imposed as a result of such withdrawal. Any such
withdrawal must take place within six (6) months after Ivy Funds
VIP gives notice to Company that this provision is being
implemented, and until such withdrawal Ivy Funds VIP shall
continue to accept and implement orders by Company for the
purchase and redemption of shares of Ivy Funds VIP.
(3) If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to
Company conflicts with the majority of other state regulators,
then Company will withdraw each Variable Account's investment in
Ivy Funds VIP within six (6) months after the Board informs
Company that it has determined that such decision has created a
material irreconcilable conflict, and until such withdrawal Ivy
Funds VIP shall continue to accept and implement orders by
Company for the purchase and redemption of shares of Ivy Funds
VIP. No charge or penalty will be imposed as a result of such
withdrawal.
(4) Company agrees that any remedial action taken by it in
resolving any material irreconcilable conflict will be carried
out at its expense and with a view only to the interests of
participants.
(5) For purposes hereof, a majority of the Disinterested
Trustees will determine whether or not any proposed action
adequately remedies any material irreconcilable conflict. In no
event, however, will Ivy Funds VIP or any of its affiliates be
required to establish a new funding medium for any Contracts.
12
Company will not be required by the terms hereof to establish a
new funding medium for any Contracts if an offer to do so has
been declined by vote of a majority of participants materially
adversely affected by the material irreconcilable conflict.
(d) NOTICE TO COMPANY. Ivy Funds VIP will promptly make known in writing
to Company the Board's determination of the existence of a material
irreconcilable conflict, a description of the facts that give rise to
such conflict and the implications of such conflict.
(e) INFORMATION REQUESTED BY BOARD. Company and W&R (or W&R's affiliate)
will at least annually submit to the Board such reports, materials or
data as the Board may reasonably request so that the Board may fully
carry out the obligations imposed upon it by the provisions hereof the
Order or any other exemptive order granted by the SEC to permit Mixed
and Shared Funding, and said reports, materials and data will be
submitted at any reasonable time deemed appropriate by the Board.
(f) COMPLIANCE WITH SEC RULES. If, at any time during which Ivy Funds VIP
is serving as an investment medium for variable life insurance
policies, 1940 Act Rules 6e-3(T) or, if applicable 6e-2 are amended or
Rule 6e-3 is adopted to provide exemptive relief with respect to Mixed
and Shared Funding, Ivy Funds VIP agrees that it will comply with the
terms and conditions thereof and that the terms of this Section 11
shall be deemed modified if and only to the extent required in order
also to comply with the terms and conditions of such exemptive relief
that is afforded by any of said rules that are applicable.
(g) OTHER REQUIREMENTS. Ivy Funds VIP will require that each other
Participating Insurance Company and each Participating Plan enter into
an agreement with Ivy Funds VIP that contains in substance the same
provisions as are set forth in Sections 2(c), 2(d), 7(d), 9(b) and 11
of this Agreement.
12. TERMINATION.
(a) EVENTS OF TERMINATION. This Agreement shall terminate as to the sale
and issuance of Portfolio(s) shares:
(1) at the option of Company, W&R or Ivy Funds VIP upon at least
sixty (60) days advance written notice to the other;
(2) at any time with respect only to an applicable Portfolio(s), upon
W&R's election, if Ivy Funds VIP determines that liquidation of
the Portfolio(s) is in the best interest of the Portfolio(s) and
its (their) beneficial owners. At least 90 days' notice of
election to liquidate shall be furnished by W&R to permit the
substitution of Portfolio shares with the shares of another
investment company;
(3) if the Contracts are not treated as annuity contracts or life
insurance policies by the applicable regulators or under
applicable rules or regulations;
13
(4) if the Variable Accounts are not deemed "segregated asset
accounts" by the applicable regulators or under applicable rules
or regulations;
(5) with respect only to the applicable Portfolio(s), upon a decision
by Company based on reasonable cause, in accordance with
applicable law, to substitute such Portfolio shares with the
shares of another investment company for Contracts for which the
Portfolio shares have been selected to serve as the underlying
investment medium. Company shall give at least sixty (60) days
written notice to Ivy Funds VIP and W&R of any decision to
substitute Portfolio shares;
(6) upon sixty (60) days notice upon assignment of this Agreement
unless such assignment is made with the written consent of each
other party;
(7) in the event Portfolio shares are not registered, issued or sold
pursuant to Federal law, or such law precludes the use of
Portfolio shares as an underlying investment medium of Contracts
issued or to be issued by Company. Prompt written notice shall be
given by either party to the other in the event the conditions of
this provision occur; and
(8) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement.
(b) NOTICE REQUIREMENT. In the event of any termination of this Agreement
at the option of one of the parties, prompt written notice of the
election to terminate this Agreement shall be furnished by the party
terminating the Agreement to the non-terminating parties.
(c) PORTFOLIOS TO REMAIN AVAILABLE; EFFECT OF TERMINATION. Notwithstanding
any termination of this Agreement by Company, Ivy Funds VIP will, at
the option of Company, continue to make available additional shares of
any Portfolio offered under a Contract pursuant to the terms and
conditions of this Agreement, for any Contract that is in effect on
the effective date of termination of this Agreement and that offers
the particular Portfolio(s) as an investment option under the Contract
as of that date (hereinafter referred to as "Existing Contracts"),
unless W&R or the Board determines that doing so would not serve the
best interests of the shareholders of the affected Portfolio(s) or
would be inconsistent with applicable law or regulation. Specifically,
without limitation, the owners of the Existing Contracts will be
permitted to reallocate investments in the Portfolio(s) (as in effect
on such date), redeem investments in the Portfolio(s) and/or invest in
the Portfolio(s) upon the making of additional purchase payments under
the Existing Contracts. The parties agree that this Section 12 will
not apply to any (i) actions taken pursuant to Section 11 and the
effect of such actions will be governed by Section 11 of this
Agreement or (ii) any rejected purchase and/or redemption order as
described in Section 2(i) hereof. If Company elects to continue to
make available Portfolio shares to Contract Owners after the effective
date of termination of this Agreement in accordance with this Section
12(c), all provisions of this Agreement
14
will survive any termination of this Agreement solely with respect to
transactions in such Portfolio shares under the Existing Contracts.
(d) Sections 6, 12(c), 14 and 16 and this Section 12(d) shall survive
termination of this Agreement.
(e) Notwithstanding the termination of this Agreement for any reason
whatsoever, W&R (and its successors in interest) will continue to be
obligated to pay the applicable fees or other compensation in
accordance with Exhibit D so long as net assets of the Separate
Accounts remain in a Portfolio.
(f) In the event of the insolvency or liquidation of the Company,
applicable fees or other compensation in accordance with Exhibit D
shall continue to be payable directly to the Company or to its
liquidator, receiver, conservator or statutory successor, without
diminution and reasonable provision for verification by the Company or
its liquidator, receiver, conservator or statutory successor.
13. NOTICES.
(a) DELIVERY. All notices sent under this Agreement shall be given in
writing, and shall be delivered personally, or sent by fax, or by a
nationally-recognized overnight courier, postage prepaid. All such
notices shall be deemed to have been duly given when so delivered
personally or sent by fax, with receipt confirmed, or one (1) business
day after the date of deposit with such nationally-recognized
overnight courier. All such notices to Company, W&R or Ivy Funds VIP
shall be delivered to:
Forethought Life Insurance Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇, EVP, Chief Investment Officer
▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Ivy Funds Variable Insurance Portfolios
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
All such notices to Company, W&R and Ivy Funds VIP shall be delivered to
their respective addresses as listed above, or such other address as
Company, W&R and/or Ivy Funds VIP may have furnished in writing to the
other parties in accordance herewith.
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(b) NOTICE OF CERTAIN PROCEEDINGS AND OTHER CIRCUMSTANCES.
(1) Ivy Funds VIP or W&R will immediately notify Company of (i)
the issuance by any court or regulatory body of any stop
order, cease and desist order, or other similar order with
respect to Ivy Funds VIP's registration statement under the
1933 Act or Ivy Funds VIP's prospectus, (ii) any request by
the SEC for any amendment to such registration statement or
Ivy Funds VIP prospectus that may affect the offering of
shares of Ivy Funds VIP, (iii) the initiation of any
proceedings for that purpose or for any other purpose
relating to the registration or offering of Ivy Funds VIP
Shares, or (iv) any other action or circumstances that may
prevent the lawful offer or sale of shares of any Portfolio
in any state or jurisdiction, including, without limitation,
any circumstances in which (a) such shares are not
registered and, in all material respects, issued and sold in
accordance with applicable state and federal law, or (b)
such law precludes the use of such shares as an underlying
investment medium of the Contracts issued or to be issued by
Company. Ivy Funds VIP and W&R will make every reasonable
effort to prevent the issuance, with respect to any
Portfolio, of any such stop order, cease and desist order or
similar order and, if any such order is issued, to obtain
the lifting thereof at the earliest possible time.
(2) Company will as soon as reasonably practicable notify Ivy
Funds VIP of (i) the issuance by any court or regulatory
body of any stop order, cease and desist order, or other
similar order with respect to each Variable Account's
registration statement under the 1933 Act relating to the
Contracts or each Variable Account prospectus that may
affect the offering of shares of IVY Funds VIP, (ii) any
request by the SEC for any amendment to such registration
statement or Variable Account prospectus that may affect the
offering of shares of Ivy Funds VIP, (iii) the initiation of
any proceedings for that purpose or for any other purpose
relating to the registration or offering of each Variable
Account's interests pursuant to the Contracts that may
affect the offering of shares of IVY Funds VIP, or (iv) any
other action or circumstances that may prevent the lawful
offer or sale of said interests in any state or
jurisdiction, including, without limitation, any
circumstances in which said interests are not registered
and, in all material respects, issued and sold in accordance
with applicable state and federal law.
14. INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY.
(1) Company agrees to reimburse and/or indemnify and hold
harmless W&R, Ivy Funds VIP, and each of their trustees,
officers, employees, agents and each person, if any, who
controls or is controlled by W&R within the meaning of the
1933 Act (collectively, "Affiliated Party") against any
losses, claims, damages or liabilities ("Losses") to which
W&R or any such Affiliated Party may become subject, under
the 1933 Act or otherwise, insofar as such Losses arise out
of or are based upon, but not limited to:
16
(i) any untrue statement or alleged untrue statement of any
material fact contained in information furnished by
Company;
(ii) the omission or the alleged omission to state in the
Registration Statements or prospectuses of the Variable
Accounts, or Contract, or in any sales literature or
other public communication generated by Company on
behalf of the Variable Accounts or Contracts, a
material fact required to be stated therein or
necessary to make the statements therein not
misleading;
(iii)statements or representations of Company or its agents
or third parties, with respect to the offer, sale or
distribution of Contracts for which Portfolio shares
are an underlying investment, or negligent or wrongful
conduct of Company or its agents or third parties with
respect to offers or sales of Contracts or Portfolio
shares;
(iv) the failure of Company to comply with applicable legal
or self-regulatory requirements to which it is subject;
(v) a material breach of this Agreement or of any of the
representations or warranties contained herein; or
(vi) any failure to register the Contracts or the Variable
Accounts under federal or state securities laws, state
insurance laws or to otherwise comply with such laws,
rules, regulations or orders.
(2) Provided however, that Company shall not be liable in any
such case to the extent any such Losses arise out of or are
based upon an act, statement, omission or representation or
alleged act, alleged statement, alleged omission or alleged
representation which was made in reliance upon and in
conformity with written information furnished to Company by
or on behalf of W&R specifically for its use.
(3) Company shall reimburse any legal or other expenses
reasonably incurred by W&R, Ivy Funds VIP, or any Affiliated
Party in connection with investigating or defending any such
Losses, provided, however, that Company shall have prior
approval of the use of said counsel or the expenditure of
said fees.
(4) This indemnity agreement shall be in addition to any
liability which Company may otherwise have and shall survive
termination of this Agreement.
(b) INDEMNIFICATION BY W&R AND/OR IVY FUNDS VIP.
(1) W&R and/or Ivy Funds VIP, as applicable, agree to indemnify
and hold harmless Company and each of its directors,
officers, employees, agents and each person, (collectively,
"Company Affiliated Party"), who controls Company within the
17
meaning of the 1933 Act against any Losses to which Company
or any such Company Affiliated Party may become subject,
under the 1933 Act or otherwise, insofar as such Losses
arise out of or are based upon; but not limited to:
(i) any untrue statement or alleged untrue statement of any
material fact contained in any information furnished by
W&R or Ivy Funds VIP, including but not limited to, the
Registration Statements, prospectuses or sales
literature of the Portfolios;
(ii) the omission or the alleged omission to state in the
Registration Statements or prospectuses of the
Portfolios or in any sales literature generated by W&R,
Ivy Funds VIP or their affiliates a material fact
required to be stated therein or necessary to make the
statements therein not misleading;
(iii)W&R's failure to keep the Portfolios fully diversified
and qualified as regulated investment companies as
required by the applicable provisions of the Code, the
1940 Act, and the applicable regulations promulgated
thereunder;
(iv) the failure of W&R or Ivy Funds VIP to comply with
applicable legal or self-regulatory requirements to
which they are subject;
(v) a material breach of this Agreement or of any of the
representations or warranties contained herein; or
(vi) any failure to register the Portfolios under federal or
state securities laws or to otherwise comply with such
laws, rules, regulations or orders.
(2) Provided however, that W&R and Ivy Funds VIP shall not be
liable in any such case to the extent that any such Losses
arise out of or are based upon an act, statement, omission
or representation or alleged act, alleged statement, alleged
omission or alleged representation which was made in
reliance upon or in conformity with written information
furnished to W&R or Ivy Funds VIP by Company specifically
for their use.
(3) W&R and/or Ivy Funds VIP, as applicable, shall reimburse any
reasonable legal or other expenses reasonably incurred by
Company or any Company Affiliated Party in connection with
investigating or defending any such Losses, provided,
however, that W&R and Ivy Funds VIP shall have prior
approval of the use of said counsel or the expenditure of
said fees.
(4) This indemnity agreement will be in addition to any
liability which W&R and/or Ivy Funds VIP, as applicable, may
otherwise have and shall survive termination of this
Agreement.
18
(c) NOTICE AND DEFENSE OF CLAIMS. Each party shall promptly notify the
other party(ies) in writing of any situation which presents or appears
to involve a claim which may be the subject of indemnification under
this Agreement and the indemnifying party shall have the option to
defend against any such claim. In the event the indemnifying party so
elects, it shall notify the indemnified party and shall assume the
defense of such claim, and the indemnified party shall cooperate fully
with the indemnifying party, at the indemnifying party's expense, in
the defense of such claim. Notwithstanding the foregoing, the
indemnified party shall be entitled to participate in the defense of
such claim at its own expense through counsel of its own choosing.
Neither party shall admit to wrong-doing nor make any compromise in
any action or proceeding which may result in a finding of wrongdoing
by the other party without the other party's prior written consent,
which shall not be unreasonably withheld. Any notice given by the
indemnifying party to an indemnified party or participation in or
control of the litigation of any such claim by the indemnifying party
shall in no event be deemed to be an admission by the indemnifying
party of culpability, and the indemnifying party shall be free to
contest liability among the parties with respect to the claim.
15. CONFIDENTIALITY.
(a) COMPANY. Ivy Funds VIP acknowledges that the identities of the
customers of Company or any of its affiliates (collectively, the "the
Company Protected Parties" for purposes of this Section 16),
information maintained regarding those customers, and all computer
programs and procedures or other information developed by the Company
Protected Parties or any of their employees or agents in connection
with Company's performance of its duties under this Agreement are the
valuable property of the Company Protected Parties. Ivy Funds VIP
agrees that if it comes into possession of any list or compilation of
the identities of or other information about the Company Protected
Parties' customers, or any other information or property of the
Company Protected Parties, other than such information as may be
independently developed or compiled by Ivy Funds VIP from information
supplied to it by the Company Protected Parties' customers who also
maintain accounts directly with Ivy Funds VIP, Ivy Funds VIP will hold
such information or property in confidence and refrain from using,
disclosing or distributing any of such information or other property
except: (a) with Company's prior written consent; or (b) as required
by law or judicial process.
(b) IVY FUNDS VIP. Company acknowledges that the identities of the
customers of Ivy Funds VIP or any of its affiliates (collectively, the
"Ivy Funds VIP Protected Parties" for purposes of this Section 16),
information maintained regarding those customers, and all computer
programs and procedures or other information developed by the Ivy
Funds VIP Protected Parties or any of their employees or agents in
connection with Ivy Funds VIP's performance of its duties under this
Agreement are the valuable property of the Ivy Funds VIP Protected
Parties. Company agrees that if it comes into possession of any list
or compilation of the identities of or other information about the Ivy
Funds VIP Protected Parties' customers or any other information or
property of the Ivy Funds VIP Protected Parties, other than such
information as may be independently developed or compiled by Company
from information supplied to it by the Ivy Funds VIP Protected
Parties'
19
customers who also maintain accounts directly with Company, Company
will hold such information or property in confidence and refrain from
using, disclosing or distributing any of such information or other
property except: (a) with Ivy Funds VIP's prior written consent; or
(b) as required by law or judicial process.
(c) BOTH PARTIES. Each party acknowledges that any breach of the
agreements in this Section 16 would result in immediate and
irreparable harm to the other parties for which there would be no
adequate remedy at law and agree that in the event of such a breach,
the other parties will be entitled to equitable relief by way of
temporary and permanent injunctions, as well as such other relief as
any court of competent jurisdiction deems appropriate.
16. TRADEMARKS AND FUND NAMES.
(a) Except as may otherwise be provided in a license agreement among Ivy
Funds VIP and Company, neither Company or any of its respective
affiliates, shall use any trademark, trade name, service ▇▇▇▇ or logo
of W&R, Ivy Funds VIP or any of their respective affiliates, or any
variation of any such trademark, trade name, service ▇▇▇▇ or logo,
without W&R's or Ivy Funds VIP's prior written consent, as applicable,
the granting of which shall be at the sole option of W&R or Ivy Funds
VIP, as applicable. Notwithstanding the foregoing, but subject to all
other provisions of this Agreement, Company is hereby granted a
limited nonexclusive, nontransferable license to use Ivy Funds VIP's
trade name and the trade names of the Portfolios in connection with
its performance of this Agreement. Company will cease using all or any
of such trade names upon written request of W&R.
(b) Except as otherwise expressly provided in this Agreement, neither Ivy
Funds VIP, its investment adviser, its principal underwriter, or any
affiliates thereof shall use any trademark, trade name, service ▇▇▇▇
or logo of Company or any of its affiliates, or any variation of any
such trademark, trade name, service ▇▇▇▇ or logo, without Company's
prior written consent, the granting of which shall be at Company's
sole option.
17. FORCE MAJEURE. Each party shall be excused from the performance of any of
its obligations to the other where such nonperformance is occasioned by any
event beyond its control which shall include, without limitation, any
applicable order, rule or regulation of any federal, state or local body,
agency or instrumentality with jurisdiction, work stoppage, accident,
natural disaster, war, acts of terrorism or civil disorder, provided that
the party so excused shall use all reasonable efforts to minimize its
nonperformance and overcome, remedy, cure or remove such event as soon as
is reasonably practicable, and such performance shall be excused only for
so long as, in any given case, the force or circumstances making
performance impossible shall exist.
18. NO WAIVER. The forbearance or neglect of any party to insist upon strict
compliance by another party with any of the provisions of this Agreement,
whether continuing or not, or to declare a forfeiture of termination
against the other parties, shall not be construed as a waiver of any of the
rights or privileges of any party hereunder. No waiver of any right or
privilege
20
of any party arising from any default or failure of performance by any
party shall affect the rights or privileges of the other parties in the
event of a further default or failure of performance.
19. GOVERNING LAW AND VENUE. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the laws of
Delaware, without respect to its choice of law provisions and in accordance
with the 1940 Act. In the case of any conflict, the 1940 Act shall control.
Any civil action commenced in connection with this Agreement shall be
brought, and venue shall only be proper, in District Court for ▇▇▇▇▇▇▇
County, Kansas.
20. AUTHORIZATION. Each party hereby represents and warrants to the other that
the persons executing this Agreement on its behalf are duly authorized and
empowered to execute and deliver the Agreement and that the Agreement
constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its terms. Except as particularly set forth herein,
neither party assumes any responsibility hereunder, and will not be liable
to the other for any damage, loss of data, delay or any other loss
whatsoever caused by events beyond its reasonable control.
21. RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed to
create a partnership or joint venture by and among the parties hereto.
22. ENTIRE AGREEMENT AND AMENDMENT. This Agreement, including all exhibits
hereto, constitutes the entire agreement and understanding between the
parties with respect to the matters addressed herein. Except to amend
Exhibits A or B, which may be amended unilaterally by W&R and/or Ivy Funds
VIP in its sole discretion, or as otherwise provided in this Agreement,
this Agreement may not be amended or modified except by a written amendment
executed by each of the parties.
23. COOPERATION. Each party shall cooperate with each other party and all
appropriate government authorities (including without limitation the SEC,
FINRA and state securities and insurance regulators) and shall permit such
authorities having jurisdiction reasonable access to its books and records
in connection with any investigation or inquiry relating to this Agreement
or the transactions contemplated hereby.
24. NON-EXCLUSIVE AGREEMENT. The parties of this Agreement acknowledge and
agree that this Agreement shall not be exclusive in any respect.
25. COUNTERPARTS. This Agreement may be executed by facsimile or other
electronic signature and it may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
FORETHOUGHT LIFE INSURANCE COMPANY
----------------------------------------
By:
Title: President
▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
----------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS
----------------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
22
EXHIBIT A
VARIABLE ACCOUNTS OF COMPANY
Name
-----------------------------------------------------
Forethought Life Insurance Company Separate Account A
Variable Annuity Contracts
Name
----------------------------------------------------
All Contracts Funded by the Separate Account
23
EXHIBIT B
All Portfolios of the Ivy Funds Variable Insurance Portfolios
24
EXHIBIT C
RULE 22C-2 SHAREHOLDER INFORMATION AGREEMENT
THIS AGREEMENT is entered into as of , 2015 by and between
(i) Forethought Life Insurance Company ("we" or "us") and (ii) ▇▇▇▇▇▇▇ & ▇▇▇▇,
Inc., ("you") in your capacity as the principal underwriter of the Ivy Funds
Variable Insurance Portfolios (each a "Fund" and together the "Funds").
WHEREAS, Rule 22c-2 under the Investment Company Act of 1940, as amended,
requires mutual funds to enter into "shareholder information agreements" with
financial intermediaries that hold fund shares on behalf of other investors in
"omnibus accounts" and submit orders to purchase or redeem fund shares on behalf
of such investors directly to the fund, its transfer agent or principal
underwriter; and
WHEREAS, the parties have entered into a Participation Agreement under
which shares of one or more of the Funds are purchased and redeemed on an
omnibus basis directly by our Accounts (as defined below) in connection with one
or more Contracts (as defined below).
NOW, THEREFORE, In consideration of the premises and mutual covenants
contained below, the parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings, unless a different meaning is clearly required by the
context:
(A) "ACCOUNT" means an insurance company separate account sponsored or
administered by us.
(B) "BUSINESS DAY" means any day that the New York Stock Exchange is
open for trading.
(C) "CONFIDENTIAL INFORMATION" includes, but is not limited to: (i)
"Nonpublic Personal Information" as defined in Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act of 1999 or any successor federal or state statute, and the rules and
regulations thereunder, all as may be amended or supplemented from time to time,
(ii) "Protected Health Information" as such term is defined in the Health
Insurance Portability and Accountability Act of 1996, or any successor federal
or state statute, and the rules and regulations thereunder, all as may be
amended or supplemented from time to time; and (iii) "Shareholder Information"
as such term is defined below.
(D) "CONTRACT" means a variable annuity contract, variable life
insurance policy or variable funding agreement issued through an Account.
(E) "FUND POLICIES" means policies established by the Fund and
communicated to us in writing for the purpose of eliminating or reducing
potentially harmful market timing or frequent trading in shares of the Fund as
described in the Fund's prospectus or statement of additional information as
amended from time to time. This term "Fund" does not include any "excepted
funds" as defined in Rule 22c-2(b), 17 C.F.R. 270.22c-2(b).
25
(F) "INDIRECT INTERMEDIARY" means a "financial intermediary" as defined
by Rule 22c-2(c)(5)(iii)(excluding any exempted financial intermediary pursuant
to Rule 22c-2(c)(1)(iv)) that transmits purchase and redemption orders directly
to us on behalf of Shareholders with respect to a Contract invested in a Fund
through an Account.
(G) "SHAREHOLDER" means (1) the holder of interests in a Contract or (2)
a participant in an employee benefit plan with a beneficial interest in a
Contract.
(H) "SHAREHOLDER-INITIATED TRANSFER PURCHASE" means a transaction that
is initiated or directed by a Shareholder that results in a transfer of assets
within a Contract to a Fund, but does not include transactions that are
executed: (i) automatically pursuant to contractual or systematic programs or
enrollments such as transfers of assets within a Contract to a Fund as a result
of "dollar cost averaging" programs, asset allocation programs and automatic
rebalancing programs; (ii) pursuant to a Contract death benefit; (iii) a
one-time step-up (or comparable benefit) in Contract value (or comparable
benefit base) pursuant to a Contract death benefit or guaranteed minimum
withdrawal benefit; (iv) allocation of assets to a Fund through a Contract as a
result of payments such as loan repayments, scheduled contributions, or
retirement plan salary reduction contributions, or planned premium payments to
the Contract; (v) step-ups in contract value pursuant to a Contract living
benefit; or (vi) pre-arranged transfers at the conclusion of a required free
look period.
(I) "SHAREHOLDER-INITIATED TRANSFER REDEMPTION" means a transaction that
is initiated or directed by a Shareholder that results in a transfer of assets
within a Contract out of a Fund, but does not include transactions that are
executed: (i) automatically pursuant to contractual or systematic programs or
enrollments such as transfers of assets within a Contract out of a Fund as a
result of annuity payouts, loans, systematic withdrawal programs, asset
allocation programs and automatic rebalancing programs; (ii) as a result of any
deduction of charges or fees under a Contract; (iii) within a Contract out of a
Fund as a result of scheduled withdrawals or surrenders from a Contract; or (iv)
as a result of the payment of a death benefit from a Contract.
(J) "WRITTEN" means any communication other than an oral communication
transmitted in paper, electronically or by facsimile.
2. AGREEMENT TO PROVIDE REQUESTED SHAREHOLDER INFORMATION. We agree to use our
best efforts to provide the following information to you solely for the purpose
of facilitating your compliance with Rule 22c-2. Nothing herein, nor any action
by us, shall be construed as, or infer that we have undertaken any duty or
obligation, whether express or implied, at law or in equity, to detect abusive
trading activities pursuant to the Fund Policies. We agree to provide to you,
upon prior written request, the following information that is on our books and
records (collectively, "Shareholder Information") for all Shareholders that
engaged in any purchase, redemption, transfer or exchange transactions in the
Fund shares through an Account during the period covered by the request, if
known:
(A) the taxpayer identification number ("TIN"), Individual/International
Taxpayer Identification Number ("ITIN") or other government issued identifier
("GII");
(B) the individual Contract number or participant account number
associated with the Shareholder;
26
(C) the amount and date(s) and transaction type (purchase, redemption,
transfer, or exchange); and
(D) any other data mutually agreed upon in writing.
Unless otherwise specifically requested by you, this Paragraph 2 shall be
understood to require us to provide only Shareholder Information relating to
Shareholder-Initiated Transfer Purchases and Shareholder-Initiated Transfer
Redemptions.
All requests must contain the relevant fund account number, CUSIP, trade amount
and date. Requests must be made to us directly via e-mail at:
▇▇▇▇▇▇▇▇▇▇-▇@▇▇▇.▇▇▇
or such other address we may communicate to you in writing from time to time.
3. PERIOD COVERED BY REQUEST AND FREQUENCY OF REQUESTS. Requests to provide
Shareholder Information shall set forth the specific period for which it is
sought, not to exceed 90 calendar days from the date of the request for which
Shareholder Information is sought. Frequency of requests for Shareholder
Information shall not be so frequent as to be unreasonable, and shall not
typically request information older than 90 calendar days from the date of the
request, except as you deem reasonably necessary to investigate compliance with
Fund Policies.
4. FORM AND TIMING OF RESPONSE; PROCEDURES REGARDING INDIRECT INTERMEDIARIES.
(a) We agree to provide the requested Shareholder Information that is on our
books and records to you promptly, but in any event not later than 5 Business
Days after receipt of a good order request given in accordance with Paragraph 2
above, which shall contain the fund account number, CUSIP, trade amount and
date. If you so request, we agree to use best efforts to promptly determine
whether any specific person, identified by you from the requested Shareholder
Information, is itself an Indirect Intermediary. Upon your further request,
which must be given in accordance with Paragraph 2 above, we agree to use best
efforts either to: (i) provide (or arrange to have provided) the requested
Shareholder Information from the Indirect Intermediary; or (ii) if the Indirect
Intermediary refuses to provide the requested Shareholder Information and you so
direct us in writing, restrict or prohibit further purchases of Fund shares by
such Indirect Intermediary through the Account. We agree to inform you whether
we plan to perform (i) or (ii).
(B) Responses required by this paragraph must be communicated in writing and in
a format mutually agreed upon by the parties.
(C) To the extent reasonably practicable, the format for any Shareholder
Information provided to you will be consistent with the NSCC Standardized Data
Reporting Format.
5. LIMITATION ON USE OF INFORMATION. You agree that you shall not use the
information received pursuant to this Agreement, including any Confidential
Information, for any purpose other than to comply with Rule 22c-2. You and your
affiliates shall observe applicable state and federal privacy laws, rules and
regulations with respect to Confidential Information. You shall safeguard all
Confidential Information and promptly notify us of any voluntary or involuntary
dissemination thereof. Neither you nor any of your affiliates or subsidiaries
may use any information provided pursuant to this Agreement for marketing or
solicitation purposes.
6. AGREEMENT TO RESTRICT TRADING. We agree to execute clear and unequivocal
written instructions from you given on behalf of the Fund to restrict or
prohibit further purchases or
27
exchanges of Fund shares by a Shareholder that has been identified by you as
having engaged in transactions of the Fund's shares (directly or indirectly
through an Account) that violate Fund Policies. Unless you specifically direct
us otherwise, such restrictions and prohibitions shall apply only to
Shareholder-Initiated Transfer Purchases and Shareholder-Initiated Transfer
Redemptions. We will execute such restrictions with respect to the Shareholder,
but only for the Contract through which such transactions in the Fund's shares
occurred. We will not impose any restriction, and nothing in this Agreement
shall require that we impose any restriction, on a Shareholder based on any
transactions other than transactions in the Fund's shares through an Account.
Instructions must be received by us via email at the following address:
▇▇▇▇▇▇▇▇▇▇-▇@▇▇▇.▇▇▇ , or such other address that we may communicate to you in
writing from time to time. Other correspondence may be sent to us at the
following address, or such other address that we may communicate to you in
writing from time to time:
se2
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
7. FORM OF INSTRUCTIONS. Instructions given in accordance with Paragraph 6
shall be given to us via e-mail in a mutually agreed upon file format. The
instructions in the file must include:
(A) the fund account number;
(B) the Shareholder's TIN, ITIN or GII, if known;
(C) the specific individual Contract owner number or participant account
number (if known) associated with the Shareholder;
(D) the specific restriction(s) to be executed with respect to such
Shareholder, including how long such restriction(s) are to remain in place.
If the TIN is not known, the instructions must include an equivalent identifying
number of the Shareholder(s) or account(s) or other agreed upon information to
which the instruction relates.
8. TIMING OF RESPONSE. We agree to use reasonable efforts to execute
instructions given in accordance with Paragraphs 6 and 7 promptly, but in any
event not later than 5 Business Days after receipt of such instructions. We will
provide written confirmation to you or your designee as soon as reasonably
practicable but not later than 10 Business Days that instructions have been
executed.
9. CONSTRUCTION OF THE AGREEMENT; FUND PARTICIPATION AGREEMENTS. The parties
have entered into one or more Fund Participation Agreements between or among
them for the purchase and redemption of shares of the Funds by the Accounts in
connection with the Contracts. This Agreement supplements those Fund
Participation Agreements. To the extent the terms of this Agreement conflict
with the terms of a Fund Participation Agreement, the terms of this Agreement
shall control.
10. DISPUTE RESOLUTION. The parties agree to use their best efforts to seek an
amicable solution to any controversy or dispute arising under this Agreement.
Any unresolved controversy, claim or dispute arising under this Agreement shall
be submitted to nonbinding arbitration in accordance with the Commercial Rules
of the American Arbitration Association and judgment upon any such award may be
entered in and enforced in any court of competent jurisdiction. Arbitration
shall be conducted by a single arbitrator who shall have the authority to
28
grant any and all appropriate relief, including, but not limited to, injunctive
relief or specific performance; provided, however, the arbitrator shall have no
power to award punitive, consequential or statutory damages and the parties
shall not seek such relief in any other forum. The arbitrator may make an
initial determination of the location of the arbitration or whether proceedings
may ensue based entirely upon documentary evidence. Arbitration costs and
expenses shall be borne equally by the parties. Each party hereby agrees to
waive and suspend enforcement of any and all rights pursuant to this and all
related agreements during the pendency of such arbitration proceedings.
11. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state indicated in the Participation Agreement's
choice of law provision, without giving effect to principles of conflicts of
laws.
12. TERMINATION. This Agreement will terminate upon the termination of the Fund
Participation Agreements.
13. AMENDMENT. This Agreement may be modified or amended, and the terms of this
Agreement may be waived, only by a writing signed by the parties.
14. BINDING EFFECT. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns.
15. FORCE MAJUERE. We shall be excused from performance under this Agreement
and shall have no liability to any other party hereof or any third person for
any period that we are prevented, hindered or unable to perform any of our
obligations, in whole or in part, as a result of acts of God, strikes, terrorist
activities, power outages (including so-called ▇▇▇▇▇ outs), material changes in
circumstances or laws, regulations or interpretations of the same affecting any
of our obligations hereunder, or other causes beyond our reasonable control; and
such non-performance shall not be a default under this Agreement; provided,
however, that if any of the above-enumerated circumstances prevent, hinder or
delay performance of our obligations for more than sixty (60) Business Days, the
Fund may, at its option, terminate this Agreement in accordance with Paragraph
11, above.
16. COUNTERPARTS. This Agreement may be executed in one or more counterparts
each of which, when taken together, shall constitute a single instrument.
17. CONSTRUCTION. The parties mutually acknowledge that this Agreement
represents the collective drafting efforts of each party and therefore any
ambiguity shall not be interpreted against the interests of any party.
29
FORETHOUGHT LIFE INSURANCE COMPANY
FOR AND ON BEHALF OF ITSELF AND THE ACCOUNTS
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Address for communications:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
30
EXHIBIT D
FEES OR OTHER COMPENSATION
Company shall provide the administrative services set out in Schedule A hereto
and made a part hereof, as the same may be amended from time to time. For such
services, W&R agrees to pay to Company as follows:
(a) ASSETS UNDER MANAGEMENT. Each quarter, W&R shall calculate and pay to
Company a fee that shall be equal to fifty (0.50%) basis points, on an
annualized basis, of the average daily account value of all assets in the
Portfolios in connection with the Contracts ("Aggregated Assets"), provided,
however, that the fee is subject to change pursuant to Paragraph (b) below.
The fee (the "Total Fee") shall include and not be in addition to the
payment by W&R of the 12b-1 fees received by W&R from Ivy Funds VIP relating
to the Aggregated Assets.
(b) CHANGES IN LAW. If a change in the law or the Board of Trustees of Ivy Funds
VIP requires a reduction in the fees paid by a pooled investment vehicle
pursuant to Rule 12b-1 of the Investment Company Act of 1940 (or its
functional equivalent), and if Ivy Funds VIP is required to reduce the 12b-1
fees it pays that are based upon the value of the Aggregated Assets as a
result of such change in the law or Board action, then there shall be a
corresponding reduction in the amount of the Total Fee due pursuant to
above.
The parties to this Agreement recognize and agree that W&R's payments hereunder
are for administrative services and personal Contract Owner services (as
described in Schedule A) only and do not constitute payment in any manner for
investment advisory services or for costs of distribution of Contracts or of
Portfolio shares, and are not otherwise related to investment advisory or
distribution services or expenses. The Company represents and warrants that the
fees to be paid by W&R for services to be rendered by Company pursuant to the
terms of this Agreement are to compensate Company for providing administrative
services to Ivy Funds VIP and for providing personal services to Contract Owners
as described in Schedule A, and are not designed to reimburse or compensate
Company for providing any other services with respect to the Contracts or any
Variable Account.
31
EXHIBIT E
For purposes of this Exhibit, the terms summary prospectus and statutory
prospectus shall have the same meanings as set forth in Rule 498 under the 1933
Act.
Ivy Funds VIP and W&R agree to provide each Portfolio's summary prospectus
in formats suitable for print and electronic delivery purposes. Ivy Funds VIP
and W&R agree that the hosting of such current summary prospectuses and other
current documents required by Rule 498(e)(1) ("Fund Documents"), at the url
website address designated by Ivy Funds VIP and W&R on each summary prospectus
("Fund Documents Site"), is designed to lead directly to the Fund Documents Site
and complies with all applicable requirements of Rule 498(e) and (f)(3). Ivy
Funds VIP and W&R, as applicable, also agree to be responsible for compliance
with the provisions of Rule 498 (f)(1) involving requests for additional Fund
Documents made directly to Ivy Funds VIP or W&R. Ivy Funds VIP and W&R are not
required to provide the summary prospectus delivery option for any Portfolio and
should Ivy Funds VIP and W&R decide to discontinue such option, W&R agrees to
give the Company no less than sixty (60) days' advance written notice of such
discontinuance and agrees to continue the hosting of the current Fund Documents
Site only as long as required by Rule 498(e)(1).
The parties hereto agree that the Company is not required to use the
summary prospectus delivery option for any Portfolio. If the Company elects to
use a portfolio's summary prospectus, the Company agrees to do so in compliance
with the Agreement and Rule 498. The Company also agrees that any binding
together of summary prospectuses or statutory prospectuses with other materials
will be done in compliance with Rule 498(c), consistent with industry standards.
The Company further agrees that the Company will be responsible for compliance
with the provisions of Rule 498(f)(1) involving requests for Fund Documents made
directly to the Company's distribution of any Portfolio's summary prospectuses.
The Company acknowledges that the Fund Documents Site is transmitted over the
Internet on a best-efforts basis but that neither Ivy Funds VIP nor W&R warrants
or guarantees its reliability. The Company agrees that it will comply with any
policies concerning the Fund Documents Site usage that Ivy Funds VIP or W&R
provides to the Company, including any posted website Terms of Use.
32
SCHEDULE A
ADMINISTRATIVE SERVICES FOR
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS
Company shall provide certain administrative services respecting the operations
of Ivy Funds VIP and certain personal services to Contract Owners investing in
Ivy Funds VIP, as set forth below. This Schedule, which may be amended from time
to time as mutually agreed upon by Company and W&R, constitutes an integral part
of the Agreement to which it is attached. Capitalized terms used herein shall,
unless otherwise noted, have the same meaning as the defined terms in the
Agreement to which this Schedule relates.
A. RECORDS OF PORTFOLIO SHARE TRANSACTIONS; MISCELLANEOUS RECORDS.
1. Company shall maintain master accounts with Ivy Funds VIP, on behalf of
each Portfolio, which accounts shall bear the name of Company as the
record owner of Portfolio shares on behalf of each Variable Account
investing in the Portfolio.
2. Company shall provide assistance reasonably requested by W&R, Ivy Funds
VIP and Ivy Funds VIP's transfer agent as may be necessary to track and
record Portfolio share transactions and facilitate the computation of each
Portfolio's net asset value per share.
3. In addition to the foregoing records, and without limitation, Company
shall maintain and preserve all records as required by law to be
maintained and preserved in connection with providing administrative
services hereunder.
B. ORDER PLACEMENT AND PAYMENT.
1. Company shall determine the net amount to be transmitted to the Variable
Accounts as a result of redemptions of each Portfolio's shares based on
Contract Owner redemption requests and shall disburse or credit to the
Variable Accounts all proceeds of redemptions of Portfolio shares. Company
shall notify Ivy Funds VIP of the cash required to meet redemption
payments.
2. Company shall determine the net amount to be transmitted to Ivy Funds VIP
as a result of purchases of Portfolio shares based on Contract Owner
purchase payments and transfers allocated to the Variable Accounts
investing in each Portfolio. Company shall transmit net purchase payments
to Ivy Funds VIP's custodian.
C. ACCOUNTING SERVICES. Company shall perform miscellaneous accounting services
as may be reasonably requested from time to time by W&R, which services shall
relate to the business contemplated by this Agreement, as amended from time
to time. Such services shall include, without limitation, periodic
reconciliation and balancing of Company's books and records with those of Ivy
Funds VIP with respect to such matters as cash accounts, Portfolio share
purchase and redemption orders placed with Ivy Funds VIP, dividend and
distribution
33
payments by Ivy Funds VIP, and such other accounting matters that may arise
from time to time in connection with the operations of Ivy Funds VIP as
related to the business contemplated by this Agreement.
D. BOARD REPORTS. Company acknowledges that W&R may, from time to time, be
called upon by the Board, to provide various types of information pertaining
to the operations of Ivy Funds VIP and related matters, and that W&R also
may, from time to time, decide to provide such information to the Board in
its own discretion. Accordingly, Company agrees to provide W&R with such
assistance as W&R may reasonably request so that W&R can report such
information to the Ivy Funds VIP's Board in a timely manner. Company
acknowledges that such information and assistance shall be in addition to the
information and assistance required of Company pursuant to Ivy Funds VIP's
mixed and shared funding SEC exemptive order, described in Section 11 of this
Agreement.
Company further agrees to provide W&R with such assistance as W&R may
reasonably request with respect to the preparation and submission of reports
and other documents pertaining to Ivy Funds VIP to appropriate regulatory
bodies and third party reporting services.
▇. ▇▇▇ FUNDS VIP-RELATED CONTRACT OWNER SERVICES. Company agrees to print and
distribute, in a timely manner, prospectuses, SAIs, supplements thereto,
Periodic Reports and any other materials of Ivy Funds VIP required by law or
otherwise to be given to its shareholders, including, without limitation,
Contract Owners investing in Portfolio shares, and to bear the expenses
associated with such printing and distribution. In addition, Company shall
bear the expenses associated with (i) printing, mailing, distributing, and
tabulating proxy materials, including voting instruction solicitation
materials, sent to Contract Owners with respect to proxy solicitations
related to the Variable Account or related to matters requested by Company
and agreed to by Ivy Funds VIP, (ii) making typesetting and other
customization changes to Ivy Funds VIP proxy materials, which changes are
requested by Company and agreed to by Ivy Funds VIP. Company further agrees
to provide telephonic support for Contract Owners, including, without
limitation, advice with respect to inquiries about Ivy Funds VIP and each
Portfolio (not including information about performance or related to sales),
communicating with Contract Owners about Ivy Funds VIP (and Variable Account)
performance, and assisting with proxy solicitations, specifically with
respect to soliciting voting instructions from Contract Owners.
34
F. For convenience purposes, the chart below details the party responsible for
the cost of delivering, printing and mailing prospectuses, SAIs, proxies and
reports:
PARTY RESPONSIBLE FOR
ITEM FUNCTION EXPENSE
--------------------------------------- ------------------------------------ ---------------------------------------
VIP Prospectus & Annual Mailing Typesetting, Layout, Proofing Funds
Printing Existing* Funds
Printing Prospect Company
Mailing Existing* W&R
Mailing Prospect Company
VIP Prospectus Sticker Typesetting, Layout, Proofing Funds
Printing Existing* Funds
Mailing Existing* W&R
Printing Prospect Company
VIP SAI Typesetting, Layout, Proofing Funds
Printing Existing* W&R
Printing Prospect Company
Mailing Existing* W&R
Mailing Prospect Company
Proxy Material for VIP required by Law Printing W&R/Funds
Mailing W&R/Funds
VIP Annual & Semi-Annual Report Typesetting, Layout, Proofing Funds
Printing Existing* Funds
Printing Prospect Company
Mailing Existing* W&R
Mailing Prospect Company
----------
* Including contract owners making an initial investment in a Portfolio.
35