PARTICIPATION AGREEMENT Among SOGEN VARIABLE FUNDS, INC., and SOCIETE GENERALE SECURITIES CORPORATION
EXHIBIT 8(d)(i)
Among
IL ANNUITY AND INSURANCE COMPANY,
SOGEN VARIABLE FUNDS, INC.,
and
SOCIETE GENERALE SECURITIES CORPORATION
THIS AGREEMENT, dated as of the 1st day of September, 1997 by and among IL Annuity and
Insurance Company, (the “Company”), a Massachusetts insurance company, on its own behalf and on
behalf of each segregated asset account of the Company set forth on Schedule A hereto as may be
amended from time to time (each account hereinafter referred to as the “Account”), SoGen Variable
Funds, Inc. (the “Fund”), a corporation organized under the laws of Maryland, and Societe Generale
Securities Corporation (the “Underwriter”), a New York corporation.
WHEREAS, the Fund engages in business as an open-end management investment company and is or
will be available to act as the investment vehicle for separate accounts established for variable
life insurance and variable annuity contracts (the “Variable Insurance Products”) to be offered by
insurance companies which have entered into participation agreements with the Fund and Underwriter
(“Participating Insurance Companies”);
WHEREAS, the shares of common stock of the Fund are divided into several series of shares,
each designated a “Portfolio” and representing the interest in a particular managed portfolio of
securities and other assets;
WHEREAS, the Fund will, to the extent necessary, obtain an order from the Securities and
Exchange Commission (the “SEC”) granting Participating Insurance Companies and variable annuity and
variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a),
15(a), and 15(b) of the Investment Company Act of 1940, as amended, (the “1940 Act”) and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, if and to the extent necessary to permit shares of the
Fund to be sold to and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (the “Mixed and Shared Funding Exemptive
Order”);
WHEREAS, the Fund is registered as an open-end management investment company under the
1940 Act and shares of the Portfolios are registered under the Securities Act of 1933, as
amended (the “1933 Act”);
WHEREAS, Societe Generale Asset Management Corp. (the “Adviser”), which serves as
investment adviser to the Fund, is duly registered as an investment adviser under the federal
Investment Advisers Act of 1940, as amended, and any applicable state securities laws;
WHEREAS, the Company has issued or will issue certain variable life insurance and/or variable
annuity contracts supported wholly or partially by the Account (the “Contracts”), and said
Contracts are listed in Schedule A hereto, as it may be amended from time to time by mutual written
agreement;
WHEREAS, the Account is duly established and maintained as a segregated asset account, duly
established by the Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to the aforesaid Contracts;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is registered as a broker
dealer with the SEC under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and is
a member in good standing of the National Association of Securities Dealers, Inc. (the “NASD”); and
WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company
intends to purchase shares in the Portfolios listed in Schedule A hereto, as it may be amended from
time to time by mutual written agreement (the “Designated Portfolios”) on behalf of the Account to
fund the aforesaid Contracts, and the Underwriter is authorized to sell such shares to the Account
at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund and the
Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund has granted to the Underwriter exclusive authority to distribute the Fund’s
shares, and has agreed to instruct, and has so instructed, the Underwriter to make available to the
Company for purchase on behalf of the Account Fund shares of those Designated Portfolios selected
by the Underwriter. Pursuant to such authority and instructions, and subject to Article X hereof,
the Underwriter agrees to make available to the Company for purchase on behalf of the Account,
shares of those Designated Portfolios listed on Schedule A to this Agreement, such purchases to be
effected at net asset value in accordance with Section 1.3 of this Agreement. Notwithstanding the
foregoing, (i) Fund series (other than those listed on Schedule A) in existence now or that may be
established in the future will be made available to the Company only as the Underwriter may so
provide, and (ii) the Board of Directors of the Fund (the “Board”) may suspend or terminate the
offering of Fund shares of any Designated Portfolio or class thereof, if such action is required by
law or by regulatory authorities having jurisdiction or if, in the sole discretion of the Board
acting in good faith and in light of its fiduciary duties under federal and any applicable state
laws, suspension or termination is necessary in the best interests of the shareholders of such
Designated Portfolio.
1.2. The Fund shall redeem, at the Company’s request, any full or fractional Designated
Portfolio shares held by the Company on behalf of the Account, such redemptions to be effected at
net asset value in accordance with Section 1.3 of this Agreement. Notwithstanding the foregoing,
(i) the Company shall not redeem Fund shares attributable to Contract owners except in the circumstances permitted in Section 10.3 of this Agreement, and
(ii) the Fund may delay redemption of Fund shares of any Designated Portfolio to the extent
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permitted by the 1940 Act, any rules, regulations or orders thereunder, or the then current Fund
Prospectus.
1.3. Purchase and Redemption Procedures
(a) The Fund hereby appoints the Company as an agent of the Fund for the limited
purpose of receiving purchase and redemption requests on behalf of the Account (but not
with respect to any Fund shares that may be held in the general account of the Company)
for shares of those Designated Portfolios made available hereunder, based on allocations
of amounts to the Account or subaccounts thereof under the Contracts and other
transactions relating to the Contracts or the Account. Receipt of any such request (or
relevant transactional information therefor) on any day the New York Stock Exchange is
open for trading and on which the Fund calculates it net asset value pursuant to the
rules of the SEC (a “Business Day”) by the Company as such limited agent of the Fund
prior to the time that the Fund calculates its net asset value as described from time to
time in the Fund Prospectus (which as of the date of execution of this Agreement is 4:00
p.m. Eastern Time) shall constitute receipt by the Fund on that same Business Day,
provided that the Fund receives notice of such request by 9:30 a.m. Eastern Time on the
next following Business Day.
(b) The Company shall pay for shares of each Designated Portfolio on the same day
that it notifies the Fund of a purchase request for such shares. Payment for Designated
Portfolio shares shall be made in federal funds transmitted to the Fund by wire to be
received by the Fund by 4:00 p.m. Eastern Time on the day the Fund is notified of the
purchase request for Designated Portfolio shares (unless the Fund determines and so
advises the Company that sufficient proceeds are available from redemption of shares of
other Designated Portfolios effected pursuant to redemption requests tendered by the
Company on behalf of the Account). If federal funds are not received on time, such funds
will be invested, and Designated Portfolio shares purchased thereby will be issued, as
soon as practicable and the Company shall promptly, upon the Fund’s request, reimburse
the Fund for any charges, costs, fees, interest or other expenses incurred by the Fund
in connection with any advances to, or borrowing or overdrafts by, the Fund, or any
similar expenses incurred by the Fund, as a result of portfolio transactions effected by
the Fund based upon such purchase request. Upon receipt of federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become the
responsibility of the Fund.
(c) Payment for Designated Portfolio shares redeemed by the Account or the Company
shall be made in federal funds transmitted by wire to the Company or any other
designated person on the next Business Day after the Fund is properly notified of the
redemption order of such shares (unless redemption proceeds are to be applied to the
purchase of shares of other Designated Portfolio in accordance with Section 1.3(b) of
this Agreement), except that the Fund reserves the right to delay payment of redemption
proceeds to the extent permitted under Section 22(e) of the 1940 Act and any Rules thereunder, and in accordance with the procedures and
policies of the Fund as described in the then current prospectus. The Fund shall not
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bear any responsibility whatsoever for the proper disbursement or crediting of
redemption proceeds by the Company, the Company alone shall be responsible for such
action.
(d) Any purchase or redemption request for Designated Portfolio shares held or to
be held in the Company’s general account shall be effected at the net asset value per
share next determined after the Fund’s receipt of such request, provided that, in the
case of a purchase request, payment for Fund shares so requested is received by the Fund
in federal funds prior to close of business for determination of such value, as defined
from time to time in the Fund Prospectus.
1.4. The Fund shall use its best efforts to make the net asset value per share for each
Designated Portfolio available to the Company by 6:30 p.m. Eastern Time each Business Day, and in
any event, as soon as reasonably practicable after the net asset value per share for such
Designated Portfolio is calculated, and shall calculate such net asset value in accordance with the
Fund’s Prospectus. If the Fund provides the Company with materially incorrect share net asset value
information through no fault of the Company, the Company on behalf of the Account shall be
entitled, to the extent reasonably practicable, to an adjustment to the number of shares purchased
or redeemed to reflect the correct net asset value, and the Underwriter shall promptly, on request
of the Company, reimburse the Company, or cause the responsible party to reimburse the Company, for
any reasonable out-of-pocket charges, costs, fees or other expenses incurred by the Company in
implementing the steps determined by the Fund to be necessary to correct the pricing error. Neither
the Fund, any Designated Portfolio, the Underwriter, 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 the Company to the Fund or the Underwriter.
1.5. The Fund shall furnish notice (by wire or telephone followed by written confirmation) to
the Company as soon as reasonably practicable of any income dividends or capital gain distributions
payable on any Designated Portfolio shares. The Company, on its behalf and on behalf of the
Account, hereby elects to receive all such dividends and distributions as are payable on any
Designated Portfolio shares in the form of additional shares of that Designated Portfolio. The
Company reserves the right, on its behalf and on behalf of the Account, to revoke this election and
to receive all such dividends and capital gain distributions in cash. The Fund shall notify the
Company promptly of the number of Designated Portfolio shares so issued as payment of such
dividends and distributions.
1.6. Issuance and transfer of Fund shares shall be by book entry only. Stock certificates will
not be issued to the Company or the Account. Purchase and redemption orders for Fund shares shall
be recorded in an appropriate ledger for the Account or the appropriate subaccount of the Account.
1.7. (a) The parties hereto acknowledge that the arrangement contemplated by this
Agreement is not exclusive; the Fund’s shares may be sold to other insurance companies
(subject to Section 1.8 hereof) and the cash value of the Contracts may be invested in other investment companies, provided, however, that
until this Agreement is terminated pursuant to Article X, the Company shall give
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equivalent prominence to the Designated Portfolios as the Company provides to other
funding vehicles available under the Contracts in promotional materials that describe
funding vehicles available under the Contracts and are published by the Company.
(b) The Company shall not, without prior notice to the Underwriter (unless
otherwise required by applicable law) take any action to operate the Account as a
management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the Underwriter (unless
otherwise required by applicable law), induce Contract owners to change or modify the
Fund or change the Fund’s distributor or investment adviser.
1.8. The Underwriter and the Fund shall sell Fund shares only to Participating Insurance
Companies and their separate accounts and to persons or plans (“Qualified Persons”) that qualify to
purchase shares of the Fund under Section 817(h) of the Internal Revenue Code of 1986, as amended
(the “Code”) and the regulations thereunder without impairing the ability of the Account to
consider the portfolio investments of the Fund as constituting investments of the Account for the
purpose of satisfying the diversification requirements of Section 817(h). The Underwriter and the
Fund shall not sell Fund shares to any insurance company or separate account unless an agreement
complying with Article VI of this Agreement is in effect to govern such sales. Subject to Sections
6.1 and 6.2 hereof, the Company hereby represents and warrants that it and the Account are
Qualified Persons. The Fund reserves the right to cease offering shares of any Designated Portfolio
in the discretion of the Fund.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts (a) are or, prior to issuance,
will be registered under the 1933 Act or, alternatively (b) are not registered because they are
properly exempt from registration under the 1933 Act or will be offered exclusively in transactions
that are properly exempt from registration under the 1933 Act. The Company further represents and
warrants that the Contracts will be issued and sold in compliance in all material respects with all
applicable federal securities and state securities and insurance 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, that it has legally and validly established the Account prior to any
issuance or sale thereof as a segregated asset account under Massachusetts insurance laws, and that
it (a) has registered or, prior to any issuance or sale of the Contracts, will register the 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, or alternatively (b) has not registered the
Account in proper reliance upon an exclusion from registration under the 1940 Act. The Company
shall register and qualify the Contracts or interests therein as securities in accordance with the
laws of the various states only if and to the extent deemed advisable by the Company.
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 Commonwealth of Massachusetts and the State of
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Indiana and applicable federal 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 or the Underwriter.
2.3. The Fund intends to make payments to finance distribution expenses pursuant to Rule 12b-1
under the 1940 Act. In this regard, the Fund’s board of directors, a majority of whom are not
interested persons of the Fund, have formulated and approved the Fund’s plan adopted pursuant to
Rule 12b-1 under the 1940 Act to finance distribution expenses.
2.4. The Fund makes no representations as to whether any aspect of its operations, including,
but not limited to, investment policies, fees and expenses, complies with the insurance and other
applicable laws 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
Commonwealth of Massachusetts and the State of Indiana to the extent required to perform this
Agreement, provided, however, that the Company shall notify the Fund with respect to any additional
requirements that are specifically directed to the Company by state insurance departments.
2.5. The Fund represents that it is lawfully organized and validly existing under the laws of
the State of Maryland and that it does and will comply in all material respects with the 1940 Act.
2.6. The Underwriter represents and warrants that it is a member in good standing of the NASD
and is registered as a broker-dealer with the SEC. The Underwriter further represents that it will
sell and distribute the Fund shares in accordance with the laws of the Commonwealth of
Massachusetts and the State of Indiana and any applicable state and federal securities laws.
2.7. The Underwriter represents and warrants that the Adviser is and shall remain duly
registered under all applicable federal and state securities laws and that the Adviser shall
perform its obligations for the Fund in compliance in all material respects with the laws of the
Commonwealth of Massachusetts and the State of Indiana and any applicable state and federal
securities laws.
2.8. The Fund and the Underwriter represent and warrant that all of their directors, officers,
employees, investment advisers, and other individuals or 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 minimum 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 bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
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2.9. The Company represents and warrants that all of its directors, officers, employees,
investment advisers, and other individuals/entities employed or controlled by the Company dealing
with the money and/or securities of the Account are covered by a blanket fidelity bond or similar
coverage for the benefit of the Account, in an amount not less than $5 million. The aforesaid bond
includes coverage for larceny and embezzlement and is issued by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with as many copies of the Fund’s current
prospectus (describing only the Designated Portfolios listed on Schedule A) as the Company may
reasonably request. The Company shall bear the expense of printing copies of the-current
prospectus for the Contracts that will be distributed to existing Contract owners, and the Company
shall bear the expense of printing copies of the Fund’s prospectus that are used in connection with
offering the Contracts issued by the Company. If requested by the Company in lieu thereof, the Fund
shall provide such documentation (including a final copy of the new prospectus on diskette at the
Fund’s expense) and other assistance as is reasonably necessary in order for the Company once each
year (or more frequently if the prospectus for the Fund is amended) to have the prospectus for the
Contracts and the prospectus for the Designated Portfolios printed together in one document (such
printing to be at the Company’s expense).
3.2. The Fund’s prospectus shall state that the current Statement of Additional Information
(“SAI”) for the Fund is available, and the Underwriter (or the Fund), at its expense, shall provide
a reasonable number of copies of such SAI free of charge to the Company for itself and for any
owner of a Contract who requests such SAI.
3.3. The Fund, at its expense, shall provide the Company with copies of its proxy material,
reports to shareholders, and other communications to shareholders in such quantity as the Company
shall reasonably require for distributing to Contract owners.
3.4. The Company shall:
| (i) | solicit voting instructions from Contract owners; | ||
| (ii) | vote the Fund shares in accordance with instructions received from Contract owners; and | ||
| (iii) | vote Fund shares for which no instructions have been received in the same proportion as Fund shares of such portfolio for which instructions have been received. |
The Company will vote Fund shares held in any segregated asset account in the same proportion
as Fund shares of such portfolio for which voting instructions have been received from
Contract owners, to the extent permitted by law.
3.5. Participating Insurance Companies shall be responsible for assuring that each of their
separate accounts participating in a Designated Portfolio calculates
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voting privileges as required by the Shared Funding Exemptive Order and consistent with any reasonable standards that the Fund
may adopt and provide in writing. The Fund hereby confirms that the manner in which the Company
currently calculates voting privileges is consistent with the manner in which other Participating
Insurance Companies are required to calculate voting privileges. The Fund and the Underwriter will
notify the Company if either becomes aware that another Participating Insurance Company has changed
the manner in which it so calculates voting privileges.
3.6. The Fund will comply with all provisions of the 1940 Act requiring voting by
shareholders, and in particular the fund will either provide for annual meetings or comply with
Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section
16(c) of that Act) as well as Sections 16(a) and, if and when applicable, 16(b). Further, the Fund
will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with
respect to periodic elections of trustees and with whatever rule the Commission may promulgate with
respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund or its designee,
at least fifteen business days prior to first use, each piece of sales literature or other
promotional material that the Company develops and in which the Fund (or a Designated Portfolio
thereof) or the Adviser or the Underwriter is named. No such material shall be used until approved
by the Fund or its designee, and the Fund will use its best efforts for it or its designee to
review such sales literature or promotional material within ten Business Days after receipt of such
material. The Fund or its designee reserves the right to reasonably object to the continued use of
any such sales literature or other promotional material in which the Fund (or a Designated
Portfolio thereof) or the Adviser or the Underwriter is named, and no such material shall be used
if the Fund or its designee so object.
4.2. 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 or SAI for
the Fund shares, as such registration statement and prospectus or SAI 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 or by the
Underwriter, except with the permission of the Fund or the Underwriter or the designee of either.
4.3. The Fund and the Underwriter, or their designee, shall furnish, or shall cause to be,
furnished, to the Company, at least fifteen business days prior to first use, each piece of sales
literature or other promotional material that it develops and in which the Company, and/or its
Account, or the Contracts, is named. No such material shall be used until approved by the Company,
and the Company will use its best efforts to review such sales literature or promotional material
within ten Business Days after receipt of such material. The Company reserves the right to
reasonably object to the continued use of any such sales literature or other promotional material in which the Company and/or its Account, or the Contracts, is
named, and no such material shall be used if the Company so objects.
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4.4. The Fund and the Underwriter shall not give any information or make any representations
on behalf of the Company or concerning the Company, the Account, or the Contracts other than the
information or representations contained in a registration statement, prospectus (which shall
include an offering memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), or SAI for the Contracts, as such registration statement,
prospectus, or SAI may be amended or supplemented from time to time, or in published reports for
the Account which are in the public domain or approved by the Company for distribution to Contract
owners, or in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of all registration
statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all amendments to any
of the above, that relate to the Fund or its shares, contemporaneously with the filing of such
document(s) with the SEC or other regulatory authorities. The Fund will provide to the Company any
complaints received that pertain to the Company, the Account, or the Contracts.
4.6. The Company will provide to the Fund at least one complete copy of all registration
statements, prospectuses (which shall include an offering memorandum, if any, if the Contracts
issued by the Company or interests therein are not registered under the 1933 Act), SAIs, reports,
solicitations for voting instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Contracts or the Account, contemporaneously with the filing of such
document(s) with the SEC or other regulatory authorities. The Company shall provide to the Fund and
the Underwriter any complaints received from the Contract owners pertaining to the Fund or the
Designated Portfolio.
4.7. The Fund will provide the Company with as much notice as is reasonably practicable of any
proxy solicitation for any Designated Portfolio, and of any material change in the Fund’s
registration statement, particularly any change resulting in a change to the registration statement
or prospectus for any Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or registration
statement, in an orderly manner. The Fund will make reasonable efforts to attempt to have changes
affecting Contract prospectuses become effective simultaneously with the annual updates for such
prospectuses.
4.8. For purposes of this Article IV, the phrase “sales literature and other promotional
materials” includes, but is not limited to, any of the following that refer to the Fund or any
affiliate of the Fund: advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), and sales literature
(i.e., any written or electronic communication distributed or made generally available
to customers or the public, including brochures, circulars, reports, market letters, form
letters, telemarketing scripts, seminar texts, reprints or excerpts of any other advertisement,
sales literature, or published article), distributed or made generally available to customers or to
the
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public, educational or training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements, prospectuses, SAIs,
shareholder reports, proxy materials, and any other communications distributed or made generally
available with regard to the Fund.
ARTICLE V. Fees and Expenses
5.1. The Fund and the Underwriter shall pay no fee or other compensation to the Company under
this Agreement, except that, the Underwriter may, to the extent permitted under the Fund’s
distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act, make payments to the Company
or to the underwriter for the Contracts if and in amounts agreed to by the Underwriter in writing,
and such payments will be made out of existing fees otherwise payable to the Underwriter, past
profits of the Underwriter, or other resources available to the Underwriter. No such payments shall
be made directly by the Fund.
5.2. All expenses incident to performance by the Fund under this Agreement shall be paid by
the Fund. The Fund shall see to it that all its shares are registered and authorized for issuance
in accordance with applicable federal law and, if and to the extent deemed 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, setting the prospectus
in type, setting in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the preparation of all
statements and notices required by any federal or state law, and all taxes on the issuance or
transfer of the Fund’s shares.
5.3. The Company shall bear the expenses of distributing the Fund’s prospectus to owners of
Contracts issued by the Company and of distributing the Fund’s proxy materials and reports to such
Contract owners.
ARTICLE VI. Diversification and Qualification
6.1. The Fund will invest its assets in such a manner as to ensure that the Contracts will be
treated as annuity or life insurance contracts, whichever is appropriate, under the Code and the
regulations issued thereunder (or any successor provisions). Without limiting the scope of the
foregoing, each Designated Portfolio has complied and will continue to comply with Section 817(h)
of the Code and Treasury Regulation §1.817-5, and any Treasury interpretations thereof, relating to
the diversification requirements for variable annuity, endowment, or life insurance contracts, and
any amendments or other modifications or successor provisions 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 the 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.
6.2. The Fund represents that it is or will be qualified as a Regulated Investment Company
under Subchapter M of the Code, and that it will make every effort to maintain such qualification
(under Subchapter M or any successor or similar provisions)
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and that it will notify the Company immediately upon having a reasonable basis for believing that it has ceased to so qualify or that
it might not so qualify in the future.
6.3. Subject to Sections 6.1 and 6.2 hereof, the Company represents that the Contracts are
currently, and at the time of issuance shall be, treated as life insurance or annuity insurance
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 and the Underwriter immediately upon having a
reasonable basis for believing the Contracts have ceased to be so treated or that they might not be
so treated in the future. The Company agrees that any prospectus offering a contract that is a
“modified endowment contract” as that term is defined in Section 7702A of the Code (or any
successor or similar provision), shall identify such contract as a modified endowment contract.
ARTICLE VII. Potential Conflicts,
The following provisions shall apply only upon issuance of the Mixed and Shared Funding Order and
the sale of shares of the Fund to variable life insurance separate accounts.
7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict
between the interests of the Contract owners of all separate accounts investing in the Fund. An
irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by
any state insurance regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities regulatory
authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner
in which the investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract owners. The Board shall
promptly inform the Company if it determines that an irreconcilable material conflict exists and
the implications thereof.
7.2. The Company will report any potential or existing conflicts of which it is aware to the
Board. The Company will assist the Board in carrying out its responsibilities under the Mixed and
Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary
for the Board to consider any issues raised. This includes, but is not limited to, an obligation by
the Company to inform the Board whenever Contract owner voting instructions are disregarded.
7.3. If it is determined by a majority of the Board, or a majority of its disinterested
members, that a material irreconcilable conflict exists, the Company and other Participating
Insurance Companies shall, at their expense (to be allocated as near as practicable in proportion
to such parties’ respective responsibilities for such conflict) and to the extent reasonably
practicable (as determined by a majority of the disinterested Board members), take whatever steps
are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts
from the Fund or any Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Fund, or submitting the question whether
-11-
such segregation should be implemented to a vote of all affected contract owners and, as
appropriate, segregating the assets of any appropriate group (i.e., annuity contract
owners, life insurance contract owners, or variable contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to the affected contract
owners the option of making such a change; and (2) establishing a new registered management
investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision by the Company to
disregard Contract owner voting instructions and that decision represents a minority position or
would preclude a majority vote, the Company may be required, at the Fund’s election, to withdraw
the Account’s investment in the Fund and terminate this Agreement with respect to each Account;
provided, however, that such withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a majority of the disinterested
members of the Board. Any such withdrawal and termination must take place within six (6) months
after the Fund gives written notice that this provision is being implemented, and until the end of
that six month period the Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund,
7.5. If a material irreconcilable conflict arises because a particular state insurance
regulator’s decision applicable to the Company conflicts with the majority of other state
regulators, then the Company will withdraw the affected Account’s investment in the Fund and
terminate this Agreement with respect to such Account within six months after the Board informs the
Company in writing that it has determined that such decision has created an irreconcilable material
conflict; provided, however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall
continue to accept and implement orders by the Company for the purchase (and redemption) of shares
of the Fund.
7.6. For purposes of Section 7.3 through 7.6 of this Agreement, a majority of the
disinterested members of the Board shall determine whether any proposed action adequately remedies
any irreconcilable material conflict, but in no event will the Fund be required to establish a new
funding medium for the Contracts. The Company shall not be required by Section 7.3 to establish a
new funding medium for the Contract if an offer to do so has been declined by vote of a majority of
Contract owners materially adversely affected by the irreconcilable material conflict. In the event
that the Board determines that any proposed action does not adequately remedy any irreconcilable
material conflict, then the Company will withdraw the Account’s investment in the Fund and
terminate this Agreement within six (6) months after the Board informs the Company in writing of
the foregoing determination; provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as determined by a
majority of the disinterested members of the Board.
7.7. If and to the extent the Mixed and Shared Funding Exemption Order or any amendment
thereto contains terms and conditions different from Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4,
and 7.5 of this Agreement, then the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with the Mixed
-12-
and Shared Funding Exemptive Order, and Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially identical to such
Sections are contained in the Mixed and Shared Funding Exemptive Order or any amendment thereto. If
and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide
exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with
respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on
terms and conditions materially different from those contained in the Mixed and Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such rules are applicable; and (b) Sections 3.4, 3.5, 7.1.,
7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such Rule(s) as so amended or
adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By the Company
8.1(a). The Company agrees to indemnify and hold harmless the Fund, the
Underwriter, the Adviser and each of its directors and officers, and each person, if
any, who controls the Fund or Underwriter within the meaning of Section 15 of the 1933
Act (collectively, the “Indemnified Parties” for purposes of this Section 8.1) against
any and all losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements:
| (i) | arise out of or are based upon any untrue statement or alleged untrue statements of any material fact contained in the registration statement, prospectus (which shall include an offering memorandum, if any), or SAI 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, prospectus or SAI for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or |
-13-
| otherwise for use in connection with the sale of the Contracts or Fund shares; or | |||
| (ii) | arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, or sales literature of the Fund not supplied by the Company or persons under its control) or wrongful conduct of the Company or its agents or persons under the Company’s authorization or control, with respect to the sale or distribution of the Contracts or Fund Shares; or | ||
| (iii) | arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, 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 information furnished to the Fund by or on behalf of the Company; or | ||
| (iv) | arise as a result of any material failure by the Company to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the qualification requirements specified in Article VI 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 to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party’s willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s
reckless disregard of its obligations or duties under this Agreement.
-14-
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 an Indemnified
Party, the Company shall be entitled to participate, at its own expense, in the defense
of such action. The Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the Company to
such party of the Company’s election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
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 Underwriter
8.2(a). The Underwriter agrees to indemnify and hold harmless the Company and each
of it directors and officer and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for
purposes of this Section 8.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Underwriter) or
litigation (including legal and other expenses) to which the Indemnified Parties may
become subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements:
| (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 SAI 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 |
-15-
| statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Underwriter or Fund by or on behalf of the Company for use in the registration statement, prospectus or SAI 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 Fund shares; or | |||
| (ii) | arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature for the Contracts not supplied by the Underwriter or persons under its control) or wrongful conduct of the Fund or Underwriter or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or | ||
| (iii) | arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Company by or on behalf of the Fund or the Underwriter; or | ||
| (iv) | arise as a result of any failure by the Fund or the Underwriter to provide the services and furnish the materials under the terms of this Agreement (including a failure of the Fund, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or | ||
| (v) | arise out of or result from any material breach of any representation and/or warranty made by the Underwriter in this Agreement or arise out of or result from any other material breach of this Agreement by the Underwriter; |
as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c)
hereof.
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8.2(b). The Underwriter shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which an
Indemnified Party would otherwise be subject by reason of such Indemnified Party’s
willful misfeasance, bad faith, or gross negligence in the performance or such
Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard
of obligations and duties under this Agreement or to the Company or the Account,
whichever is applicable.
8.2(c). The Underwriter shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified the Underwriter in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to notify the
Underwriter of any such claim shall not relieve the Underwriter from any liability which
it may have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought against
the Indemnified Party, the Underwriter will be entitled to participate, at its own
expense, in the defense thereof. The Underwriter also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action. After
notice from the Underwriter to such party of the Underwriter’s election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Underwriter will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of the commencement
of any litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of the Contracts or the operation of the Account.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof interpreted under and in
accordance with the laws of the State of New York.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and
the rules and regulations and rulings thereunder, including such exemptions from those statutes,
rules and regulations as the SEC may grant (including, but not limited to, any Mixed and Shared Funding Exemptive Order) and the terms hereof shall be
interpreted and construed in accordance therewith. If, in the future, the Mixed and Shared Funding
Exemptive Order should no longer be necessary under applicable law, then Article VII shall no
longer apply.
-17-
ARTICLE X. Termination
10.1. This Agreement shall continue in full force and effect until the first to occur of:
| (a) | termination by any party, for any reason with respect to some or all Designated Portfolios, by 120 days advance written notice delivered to the other parties; or | ||
| (b) | termination by the Company by written notice to the Fund and the Underwriter based upon the Company’s determination that shares of the Fund are not reasonably available to meet the requirements of the Contracts; or | ||
| (c) | termination by the Company by written notice to the Fund and the Underwriter in the event any of the Designated Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts issued or to be issued by the Company; or | ||
| (d) | termination by the Fund or Underwriter in the event that formal administrative proceedings are instituted against the Company by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding the Company’s duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund’s shares; provided, however, that the Fund or Underwriter determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Company to perform its obligations under this Agreement; or | ||
| (e) | termination by the Company in the event that formal administrative proceedings are instituted against the Fund or Underwriter by the NASD, the SEC, or any state securities or insurance department or any other regulatory body; provided, however, that the Company determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Fund or Underwriter to perform its obligations under this Agreement; or | ||
| (f) | termination by the Company by written notice to the Fund and the Underwriter with respect to any Designated Portfolio in the event that such Portfolio ceases to qualify as a Regulated Investment Company under Subchapter M or fails to comply |
-18-
| with the Section 817(h) diversification requirements specified in Article VI hereof, or if the Company reasonably believes that such Portfolio may fail to so qualify or comply; or | |||
| (g) | termination by the Fund or Underwriter by written notice to the Company in the event that the Contracts fail to meet the qualifications specified in Article VI hereof; or | ||
| (h) | termination by either the Fund or the Underwriter by written notice to the Company, if either one or both of the Fund or the Underwriter respectively, shall determine, in their sole judgment exercised in good faith, that the Company has suffered a material adverse change in its business, operations, financial condition, or prospects since the date of this Agreement or is the subject of material adverse publicity; or | ||
| (i) | termination by the Company by written notice to the Fund and the Underwriter, if the Company shall determine, in its sole judgment exercised in good faith, that the Fund, Adviser, or the Underwriter has suffered a material adverse change in its business, operations, financial condition or prospects since the date of this Agreement or is the subject of material adverse publicity; or | ||
| (j) | termination by the Company upon any substitution of the shares of another investment company or series thereof for shares of a Designated Portfolio of the Fund in accordance with the terms of the Contracts, provided that the Company has given at least 45 days prior written notice to the Fund and Underwriter of the date of substitution; or | ||
| (k) | termination by any party in the event that the Fund’s Board of Directors determines that a material irreconcilable conflict exists as provided in Article VII. |
10.2. Notwithstanding any termination of this Agreement, the Fund and the Underwriter shall,
at the option of the Company, continue to make available additional shares of the Fund pursuant to
the terms and conditions of this Agreement, for all Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as “Existing Contracts”), unless the
Underwriter elects to compel a substitution of other securities for the shares of the Designated
Portfolios as may be required under Article VII. Specifically, the owners of the Existing Contracts
may be permitted to reallocate investments in the Fund, redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments under the Existing Contracts (subject to any such election by the Underwriter). The
parties agree that this Section 10.2 shall not apply to any terminations under Article VII and the
effect of such Article VII terminations shall be governed by Article VII of this Agreement. The
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parties further agree that this Section 10.2 shall not apply to any terminations under Section
10.1(f) or (g) of this Agreement.
10.3. The Company shall not redeem Fund shares attributable to the Contracts (as opposed to
Fund shares attributable to the Company’s assets held in the Account) except (i) as necessary to
implement Contract owner initiated or approved transactions, (ii) as required by state and/or
federal laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a “Legally Required Redemption”), (iii) as permitted by an order of the
SEC pursuant to Section 26(b) of the 1940 Act, but only if a substitution of other securities for
the shares of the Designated Portfolios is consistent with the terms of the Contracts, or (iv) as
permitted under the terms of the Contract. Upon request, the Company will promptly furnish to the
Fund and the Underwriter reasonable assurance that any redemption pursuant to clause (ii) above is
a Legally Required Redemption. Furthermore, except in cases where permitted under the terms of the
Contracts, the Company shall not prevent Contract owners from allocating payments to a Portfolio
that was otherwise available under the Contracts without first giving the Fund or the Underwriter
45 days notice of its intention to do so.
10.4. Notwithstanding any termination of this Agreement, each party’s obligation under Article
VIII to indemnify the other parties shall survive.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified mail, postage
prepaid, return receipt requested, or by nationally recognized overnight courier, charges prepaid,
with evidence of delivery, 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, and
such notice shall be effective upon delivery.
If to the Fund:
SoGen Variable Funds, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If to the Company:
IL Annuity and Insurance Company
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to the Underwriter:
Societe Generale Securities
Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Fund must look solely to the property of the Fund, and in
the case of a series company, the respective Designated Portfolios listed on Schedule A hereto as
though each such Designated Portfolio had separately contracted with the Company and the
Underwriter for the enforcement of any claims against the Fund. The parties agree that neither the
Board, officers, agents or shareholders of the Fund assume any personal liability or responsibility
for obligations entered into by or on behalf of the Fund.
12.2. Subject to the requirements of legal process and regulatory authority, each party hereto
shall treat as confidential the names and addresses of the owners of the Contracts and all
information reasonably identified as confidential in writing by any other party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses
and other confidential information without the express written consent of the affected party until
such time as such information has come into the public domain.
12.3. The captions in this Agreement are included for convenience of reference only and in no
way define or delineate any of the provisions hereof or otherwise affect their construction or
effect.
12.4. This Agreement may be executed simultaneously in two or more counterparts, each of which
taken together shall constitute one and the same instrument.
12.5. If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and all appropriate governmental
authorities (including without limitation the SEC, the NASD, and state insurance regulators) and
shall permit such authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the
Massachusetts and Indiana Insurance Commissioner with any information or reports in connection with
services provided under this Agreement which such Commissioner may request in order to ascertain
whether the variable annuity operations of the Company are being conducted in a manner consistent
with the Massachusetts and Indiana variable annuity laws and regulations and any other applicable
law or regulations.
12.7. The rights, remedies and obligations contained in this Agreement are cumulative and are
in addition to any and all rights, remedies, and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may not be assigned by any
party without the prior written consent of all parties hereto.
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12.9. The Company shall furnish, or shall cause to be furnished, to the Fund or its designee
copies of the following reports:
| (a) | the Company’s annual statement (prepared under statutory accounting principles) and annual report (prepared under generally accepted accounting principles) filed with any state or federal regulatory body or otherwise made available to the public, as soon as practicable and in any event, within 90 days after the end of each fiscal year; and | ||
| (b) | any registration statement (without exhibits) and financial reports of the Company filed with the Securities and Exchange Commission or any state insurance regulatory, as soon as practicable after the filing thereof. |
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its
name and on its behalf by its duly authorized representative and its seal to be hereunder affixed
hereto as of the date specified below.
| COMPANY: | IL ANNUITY AND INSURANCE COMPANY By its authorized officer |
|||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: President | ||||
| Date: 6/27/96 | ||||
| FUND: | SOGEN VARIABLE FUNDS, INC. By its authorized officer |
|||
| By: | /s/ ▇▇▇▇▇▇▇ [ILLEGIBLE] | |||
| Title: Vice President | ||||
| Date: 7/5/97 | ||||
| UNDERWRITER: | SOCIETE GENERALE SECURITIES CORPORATION By its authorized officer |
|||
| By: | /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| Title: First Vice President | ||||
| Date: 7/8/97 | ||||
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SCHEDULE A
Segregated Asset Accounts of the Company
IL Annuity and Insurance Company Separate Account I
Contracts to be Issued by the Company.
VCA — 97
Designated Portfolio Shares to be Purchased,
SoGen Overseas Variable Fund
Other Funding Vehicles Available Under the Contracts
The ▇▇▇▇▇ American Fund
Fidelity Variable Insurance Products Fund
Fidelity Variable Insurance Products Fund II
OCC Accumulation Trust
▇. ▇▇▇▇ Price Fixed Income Series, Inc.
▇. ▇▇▇▇ Price International Series, Inc,
▇▇▇ ▇▇▇ Worldwide Insurance Trust
Royce Capital Fund
Safeco Resource Series Trust
Fidelity Variable Insurance Products Fund
Fidelity Variable Insurance Products Fund II
OCC Accumulation Trust
▇. ▇▇▇▇ Price Fixed Income Series, Inc.
▇. ▇▇▇▇ Price International Series, Inc,
▇▇▇ ▇▇▇ Worldwide Insurance Trust
Royce Capital Fund
Safeco Resource Series Trust
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