AMENDMENT NO. 1 TO
PARTICIPATION AGREEMENT AMONG
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK,
RYDEX VARIABLE TRUST, AND
PADCO ADVISORS II, INC.
WHEREAS, GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK on behalf of itself and
its separate accounts, RYDEX VARIABLE TRUST and PADCO ADVISORS II, INC. have
previously entered into a Participation Agreement dated May 1, 2000 (the
"Agreement");
NOW, THEREFORE, the parties hereby agree as follows:
1. SCHEDULE A, is replaced in its entirety with the attached. (AMENDMENT
NO. 1 to SCHEDULE A.)
2. The Agreement, as supplemented by this AMENDMENT NO. 1 and the
AMENDMENT NO. 1 to SCHEDULE A attached hereto, is ratified and
confirmed effective April 29, 2005.
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK on behalf of itself and its
separate accounts
By:
--------------------------------
Xxxxxxxx X. Stiff
Senior Vice President
RYDEX VARIABLE TRUST
By:
-------------------------------
Name:
------------------------------
Title:
-----------------------------
PADCO ADVISORS II, INC.
By:
-------------------------------
Name:
------------------------------
Title:
-----------------------------
AMENDMENT NO. 1 TO SCHEDULE A
PORTFOLIOS AVAILABLE UNDER THE CONTRACTS
RYDEX VARIABLE TRUST
OTC Fund
SEPARATE ACCOUNTS UTILIZING THE FUNDS
GE Capital Life Separate Account II
GE Capital Life Separate Account III
CONTRACTS FUNDED BY THE SEPARATE ACCOUNTS UTILIZING THE PORTFOLIOS
GE Choice NY
GE Selections NY
GE Accumulator NY
FORM OF
PARTICIPATION AGREEMENT
BY AND AMOUNG
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
COMPANY
ON BEHALH OF ITSELF AND
ITS SEPARATE ACCOUNTS
AND
RYDEX VARIABLE TRUST
AND
PADCO ADVISORS II, INC.
THIS AGREEMENT, made and entered into as of May 1, 2000("Agreement"), by
and among Rydex Variable Trust, a Delaware business trust (the "Trust"), Padco
Advisors II, Inc., a Maryland corporation (the "Adviser") and GE Capital Life
Assurance Company, a New York life insurance company ("LIFE COMPANY"), on behalf
of itself and each of its segregated asset accounts listed in Schedule A hereto,
as the parties hereto may amend from time to time (each, an "Account," and
collectively, the "Accounts").
WITNESSETH THAT:
WHEREAS, the Trust 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 (the "1940 Act");
WHEREAS, the Trust is available to the extent set forth herein to act as
the investment vehicle for separate accounts established for variable life
insurance policies and variable annuity contracts to be offered by insurance
companies which have entered into participation agreements with the Trust and
the Adviser ("Participating Insurance Companies");
WHEREAS, the Trust currently consists of seven separate investment
portfolios, shares ("Shares") of each of which are registered under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, the Trust will make Shares of each investment portfolio of the
Trust listed on Schedule A hereto (each, a "Portfolio" and collectively, the
"Portfolios") as the Parties hereto may amend from time to time available for
purchase by the Accounts;
WHEREAS, the Trust has received an order (the "Order") from the SEC to
permit 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 1940 Act and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Trust
to be sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated life insurance companies;
WHEREAS, LIFE COMPANY will be the issuer of certain variable annuity
contracts and variable life insurance policies (collectively, the "Contracts")
as set forth on Schedule A hereto, as the Parties hereto may amend from time to
time, which Contracts will be registered under the 1933 Act;
WHEREAS, LIFE COMPANY will, to the extent set forth herein, Trust the
variable life insurance policies and variable annuity contracts through the
Accounts, each of which may be divided into two or more subaccounts
("Subaccounts"; reference herein to an "Account" includes reference to each
Subaccount thereof to the extent the context requires);
WHEREAS, LIFE COMPANY will serve as the depositor of the Accounts, each of
which is registered as a unit investment trust under the 1940 Act (or exempt
therefrom), and the security interests deemed to be issued by the Accounts under
the Contracts will be registered as securities under the 1933 Act (or exempt
therefrom);
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase Shares in one or more of the
Portfolios on behalf of the Accounts to Trust the Contracts; and
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
Section 1. Available Portfolios
1.1 Available Portfolios
The Trust will make Shares of each Portfolio listed on Schedule A available
to LIFE COMPANY for purchase and redemption at net asset value next computed
after the Trust's receipt of a purchase or redemption order and with no sales
charges, in accordance with the Trust's then current prospectus and subject to
the terms and conditions of this Agreement. The Board of Directors of the Trust
may refuse to sell Shares of any Portfolio to any person, or suspend or
terminate the offering of Shares of any Portfolio if such action is required by
law or by regulatory authorities having jurisdiction or if, in the sole
discretion of the Directors acting in good faith and in light of their fiduciary
duties under federal and any applicable state laws, such action is deemed in the
best interests of the shareholders of such Portfolio.
1.2 Addition, Deletion or Modification of Portfolios.
The Parties hereto may agree, from time to time, to add other Portfolios to
provide additional funding alternatives for the Contracts, or to delete or
modify existing Portfolios, by amending Schedule A hereto. Upon such amendment
to Schedule A, any applicable reference to a Portfolio, the Trust, or its Shares
herein shall include a reference to all Portfolios set forth on Schedule A as
then amended. Schedule A, as amended from time to time, is incorporated herein
by reference and is a part hereof.
1.3 No Sales to the General Public.
The Trust represents that shares of the Portfolios will be sold only to
Participating Insurance Companies, their separate accounts and qualified pension
and retirement plans ("Plans") and that no Shares of any Portfolio have been or
will be sold to the general public. The Trust will not sell Trust shares to any
Participating Insurance Companies or Plans unless such Participating Insurance
Companies or Plans have entered into an agreement containing provisions
materially similar to Sections 5 and 10 hereof.
Section 2. Processing Transactions
2.1 Placing Orders.
(a) The Trust or its designated agent shall determine the net asset value
per share for each Portfolio available each Business Day and will use its best
effort to provide LIFE COMPANY with the net asset value per Share for each
Portfolio by 6:30 p.m. Eastern Time on each Business Day. As used herein,
"Business Day" shall mean any day on which (i) the New York Stock Exchange is
open for regular trading, and (ii) the Trust calculates the Portfolios' net
asset value. The Trust will notify LIFE COMPANY as soon as possible if on any
Business Day it is determined that the calculation of net asset value per share
will be available after 6:30 p.m. Eastern Time.
(b) LIFE COMPANY will place orders to purchase or redeem Shares with the
Trust by 9:00 a.m. Eastern Time the following Business Day after receipt of such
orders from the Accounts.
(c) With respect to payment of the purchase price by LIFE COMPANY and of
redemption proceeds by the Trust, LIFE COMPANY and the Trust shall net purchase
and redemption orders with respect to each Portfolio and shall transmit one net
payment per Portfolio in accordance with Section 2.2, below.
(d) If the Trust provides materially incorrect Share net asset value
information (as determined under SEC guidelines), LIFE COMPANY shall be entitled
to an adjustment to the number of Shares purchased or redeemed to reflect the
correct net asset value per Share. Any material error in the calculation or
reporting of net asset value per Share, dividend or capital gain information
shall be reported promptly upon discovery to LIFE COMPANY.
2.2 Payments
(a) LIFE COMPANY shall pay for Shares of each Portfolio on the same day
that it notifies the Trust of a purchase request for such Shares. Payment for
Shares shall be made in federal funds transmitted to the Trust by wire to be
received by the Trust by 5:00 P.M. Eastern Time on the day the Trust is notified
of the purchase request for Shares.
(b) The Trust will wire payment in federal funds for net redemption's to an
account designated by LIFE COMPANY by 5:00 p.m. Eastern Time on the Business Day
the order is placed. The Trust shall not bear any responsibility whatsoever for
the proper disbursement or crediting of redemption proceeds by LIFE COMPANY.
2.3 Applicable Price
(a) Share purchase payments and redemption orders that result from purchase
payments, premium payments, surrenders and other transactions under Contracts
(collectively, "Contract transactions") and that LIFE COMPANY receives prior to
the close of regular trading on the New York Stock Exchange on a Business Day
will be executed at the net asset values of the
appropriate Portfolios next computed after receipt by the Trust or its
designated agent of the orders. For purposes of this Section 2.3(a), LIFE
COMPANY shall be the designated agent of the Trust for receipt of orders
relating to Contract transactions on each Business Day and receipt by such
designated agent shall constitute receipt by the Trust; provided that the Trust
receives notice of such orders by 9:00 a.m. Eastern Time on the following
Business Day.
(b) All other Share purchases and redemptions by LIFE COMPANY will be
effected at the net asset values of the appropriate Portfolios next computed
after receipt by the Trust or its designated agent of the order therefor, and
such orders will be irrevocable.
2.4 Dividends and Distributions
The Trust will furnish notice by wire or telephone (followed by written
confirmation) on or prior to the payment date to LIFE COMPANY of any income
dividends or capital gain distributions payable on the Shares of any Portfolio.
LIFE COMPANY hereby elects to reinvest all dividends and capital gains
distributions in additional Shares of the corresponding Portfolio at the
ex-dividend date net asset values until LIFE COMPANY otherwise notifies the
Trust in writing, it being agreed by the Parties that the ex-dividend date and
the payment date with respect to any dividend or distribution will be the same
Business Day. LIFE COMPANY reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash. Any
such revocation will take effect with respect to the next income dividend or
capital gain distribution following receipt by the Trust of such notification
from LIFE COMPANY.
2.5 Book Entry
Issuance and transfer of Portfolio Shares will be by book entry only. Stock
certificates will not be issued to LIFE COMPANY. Shares ordered from the Trust
will be recorded in an appropriate title for LIFE COMPANY, on behalf of its
Accounts.
Section 3. Costs and Expenses
3.1 General
(a) Except as otherwise specifically provided herein, each party will bear
all expenses incident to its performance under this Agreement.
(b) The Trust shall pay no fee or other compensation to the LIFE COMPANY
under this agreement, except that if the Trust or any Portfolio adopts and
implements a plan pursuant to Rule 12b-1 to finance distribution expenses, then
the Trust may make payments to the LIFE COMPANY or to the underwriter for the
Contracts if and in amounts agreed to by the Trust in writing. Presently, no
such payments are contemplated.
3.2 Registration
(a) The Trust will bear the cost of its registering as a management
investment company under the 1940 Act and registering its Shares under the 1933
Act, and keeping such registrations current and effective;
including, without limitation, the preparation of and filing with the SEC of
Forms N-SAR and Rule 24f-2 Notices with respect to the Trust and its Shares and
payment of all applicable registration or filing fees with respect to any of the
foregoing.
(b) LIFE COMPANY will bear the cost of registering, to the extent required,
each Account as a unit investment trust under the 1940 Act and registering units
of interest under the Contracts under the 1933 Act and keeping such
registrations current and effective; including, without limitation, the
preparation and filing with the SEC of Forms N-SAR and Rule 24f-2 Notices with
respect to each Account and its units of interest and payment of all applicable
registration or filing fees with respect to any of the foregoing.
3.3 Distribution Expenses
LIFE COMPANY will bear the expenses of distribution. These expenses would
include by way of illustration, but are not limited to, the costs of
distributing to Contract owners, annuitants, insureds or participants (as
appropriate) under the Contracts (collectively, "Participants") the following
documents, whether they relate to the Account or the Trust: prospectuses,
statements of additional information, proxy materials and periodic reports.
These costs would also include the costs of preparing, printing, and
distributing sales literature and advertising relating to the Portfolios (all of
which require the prior written consent of the Trust) to the extent such
materials are distributed in connection with the Contracts, and, except for
advertising materials prepared by the Trusts, filing such materials with, and
obtaining approval from, the SEC, NASD, any state insurance regulatory
authority, and any other appropriate regulatory authority, to the extent
required by law.
3.4 Other Expenses
(a) The Trust will bear, or arrange for others to bear, the costs of
preparing, filing with the SEC and setting for printing the Trust's prospectus,
statement of additional information and any amendments or supplements thereto
(collectively, the "Trust Prospectus"), periodic reports to shareholders, the
Trust proxy material and other shareholder communications to the extent required
by federal or state law or as deemed appropriate by the Trust. The Trust will
bear all taxes required to be paid by the Trust on the issuance or transfer of
Trust shares. In addition, the Trust will bear the cost of printing and
delivering the Trust Prospectus to existing Participants who have directed LIFE
COMPANY to purchase Shares of the Trust, and will bear the cost of preparing and
printing any supplements or amendments to the Trust Prospectus to the extent
that such supplements or amendments were not required by LIFE COMPANY.
(b) LIFE COMPANY will bear the costs of preparing, filing with the SEC and
printing each Account's prospectus, statement of additional information and any
amendments or supplements thereto (collectively, the "Account Prospectus"), any
periodic reports to Participants, voting instruction solicitation material and
the Trust prospectus, except as provided in paragraph (a) above, and other
Participant communications to the extent required by federal or state law or as
deemed appropriate by LIFE COMPANY.
(c) LIFE COMPANY will, to the extent required by law, print in
quantity and deliver to existing Participants the documents described in Section
3.4(b) above and will deliver to such Participants the prospectuses as provided
by the Trust. LIFE COMPANY may elect to receive such prospectuses in camera
ready and/or computer diskette format and the Trust will make reasonable effort
to use computer formatting requested by LIFE COMPANY, including but not limited
to, HTML. The Trust will print the Trust statement of additional information,
proxy materials relating to the Trust and periodic reports of the Trust.
3.5 Parties To Cooperate
Each party agrees to cooperate with the other, in arranging to print, mail
and/or deliver, in a timely manner, combined or coordinated prospectuses or
other materials of the Trust and the Accounts.
Section 4. Legal Compliance
4.1 Tax Laws
(a) The Trust represents and warrants that it is qualified as a regulated
investment company ("RIC") under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code") or any successor or similar provision, and
represents that it is qualified and will maintain its qualification as a RIC and
to comply with the diversification requirements set forth in Section 817(h) of
the Code and the regulations thereunder or any successor or similar provision.
The Trust will notify LIFE COMPANY immediately upon having a reasonable basis
for believing that it has ceased to so qualify or so comply, or that it might
not so qualify or so comply in the future.
(b) Subject to Section 4.1(a) above, LIFE COMPANY represents and warrants
that the Contracts currently are and will be treated as annuity contracts or
life insurance contracts under applicable provisions of the Code and that it
will maintain such treatment; LIFE COMPANY will notify the Trust immediately
upon having a reasonable basis for believing that any of the Contracts have
ceased to be so treated or that they might not be so treated in the future.
(c) LIFE COMPANY represents and warrants that each Account is a "segregated
asset account" and that interests in each Account are offered exclusively
through the purchase of or transfer into a "variable contract," within the
meaning of such terms under Section 817 of the Code and the regulations
thereunder. LIFE COMPANY will continue to meet such definitional requirements,
and it will notify the Trust immediately upon having a reasonable basis for
believing that such requirements have ceased to be met or that they might not be
met in the future.
4.2 Insurance and Certain Other Laws
(a) LIFE COMPANY represents and warrants that (i) it is an insurance
company duly organized, validly existing and in good standing under all
applicable laws and has full corporate power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under
this Agreement, (ii) it has legally and validly established and maintains each
Account as a segregated asset account under all applicable laws and regulations,
and (iii) the Contracts comply in all material respects with all applicable
federal and state laws and regulations.
(b) The Trust represents and warrants that it is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Maryland and has full corporate power, authority, and legal right to execute,
deliver, and perform its duties and comply with its obligations under this
Agreement. Notwithstanding the foregoing, the Trust, makes no representations as
to whether any aspect of its operations (including, but not limited to, fees and
expenses and investment policies) otherwise complies with the insurance laws or
regulations of any state.
(c) The Adviser represents that it is and warrants that it shall remain
duly registered as an investment adviser under all applicable federal and state
securities laws and agrees that it shall perform its obligations to the Trust in
accordance in all material respects with such laws.
(d) LIFE COMPANY acknowledges and agrees that it is the responsibility of
LIFE COMPANY and other Participating Insurance Companies to determine investment
restrictions under state insurance law applicable to any Portfolio, and that the
Trust shall bear no responsibility to LIFE COMPANY for any such determination or
the correctness of such determination. LIFE COMPANY has determined that the
investment restrictions set forth in the current Trust Prospectus are sufficient
to comply with all investment restrictions under state insurance laws that are
currently applicable to the Portfolios as a result of the Accounts' investment
therein. LIFE COMPANY shall inform the Trust of any additional investment
restrictions imposed by state insurance law after the date of this agreement
that may become applicable to the Trust or any Portfolio from time to time as a
result of the Accounts' investment therein. Upon receipt of any such information
from LIFE COMPANY or any other Participating Insurance Company, the Trust shall
determine whether it is in the best interests of shareholders to comply with any
such restrictions. If the Trust determines that it is not in the best interests
of shareholders to comply with a restriction determined to be applicable by the
LIFE COMPANY, the Trust shall so inform LIFE COMPANY, and the Trust and LIFE
COMPANY shall discuss alternative accommodations in the circumstances.
4.3 Securities Laws
(a) LIFE COMPANY represents and warrants that (i) interests in each Account
pursuant to the Contracts will be registered under the 1933 Act to the extent
required by the 1933 Act, (ii) 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 1934 Act, the 1940 Act and
applicable state law, (iii) each Account is and will remain registered under the
1940 Act, to the extent required by the 1940 Act, (iv) each Account does and
will comply in all material respects with the requirements of the 1940 Act and
the rules thereunder, to the extent required, (v) each 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, (vi) LIFE COMPANY will amend the
registration statement for its Contracts under the 1933 Act and for its 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 (vii) each Account Prospectus will at all times comply in
all material respects with the requirements of the 1933 Act and the rules
thereunder.
(b) The Trust represents and warrants that (i) Shares sold pursuant to this
Agreement will be registered under the 1933 Act to the extent required by the
1933 Act and will be duly authorized for issuance and sold in
compliance with Maryland law, (ii) the Trust is and will remain registered under
the 1940 Act to the extent required by the 1940 Act, (iii) the Trust will amend
the registration statement under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its Shares, (iv) the
Trust does and will comply in all material respects with the requirements of the
1940 Act and the rules thereunder, (v) the Trust's 1933 Act registration
statement, together with any amendments thereto, will at all times comply in all
material respects with the requirements of the 1933 Act and rules thereunder,
(vi) the Trust's Prospectus will at all times comply in all material respects
with the requirements of the 1933 Act and the rules thereunder and (vii) all of
its directors, officers, employees, investment advisers, and other
individuals/entities having access to the Trusts and/or securities of any
Portfolio are and continue to be at all times covered by a blanket fidelity bond
or similar coverage for the benefit of the Trust in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid bond
includes coverage for larceny and embezzlement and is issued by a reputable
bonding company.
(c) The Trust will at its expense register and qualify its Shares for sale
in accordance with the laws of any state or other jurisdiction if and to the
extent reasonably deemed advisable by the Trust.
4.4 Notice of Certain Proceedings and Other Circumstances.
(a) The Trust will immediately notify LIFE 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 the Trust's registration statement under the 1933
Act and the 1940 Act or the Trust Prospectus, (ii) any request by the SEC for
any amendment to such registration statement or the Trust Prospectus that may
affect the offering of Shares of any Portfolio, (iii) the initiation of any
proceedings for that purpose or for any other purpose relating to the
registration or offering of Shares of any Portfolio, 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 such Shares are not registered and are not, in all
material respects, issued and sold in accordance with applicable state and
federal law. The Trust will make every reasonable effort to prevent the issuance
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.
(b) LIFE COMPANY will immediately notify the Trust 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 Account's registration statement under the
1933 Act or 1940 Act relating to the Contracts or each Account Prospectus, (ii)
any request by the SEC for any amendment to such registration statement or
Account Prospectus that may affect the offering of Shares of any Portfolio,
(iii) the initiation of any proceedings for that purpose or for any other
purpose relating to the registration or offering of each Account's interests
pursuant to the Contracts, 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 are not, in all material respects, issued and sold in accordance
with applicable state and federal law. LIFE COMPANY will make every reasonable
effort to prevent the issuance 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.
4.5 Documents Provided by LIFE COMPANY; Information About the Trust.
(a) LIFE COMPANY will provide to the Trust or its designated agent at least
one (1) complete copy of all SEC registration statements, Account Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to each Account or the Contracts,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
(b) LIFE COMPANY will provide to the Trust or its designated agent at least
one (1) complete copy of each piece of sales literature or other promotional
material in which any Portfolio, the Trust or any of its affiliates is named, at
least ten (10) Business Days prior to its use or such shorter period as the
Parties hereto may, from time to time, agree upon. No such material shall be
used if the Trust or its designated agent reasonably objects to such use within
ten (10) Business Days after receipt of such material or such shorter period as
the Parties hereto may, from time to time, agree upon.
(c) Neither LIFE COMPANY nor any of its affiliates will give any
information or make any representations or statements on behalf of or concerning
any Portfolio, the Trust or its affiliates in connection with the sale of the
Contracts other than (i) the information or representations contained in the
then current registration statement, including the Trust Prospectus contained
therein, relating to Shares, as such registration statement and the Trust
Prospectus may be amended from time to time; (ii) in reports or proxy materials
for the Trust; (iii) in published reports for the Trust that are in the public
domain and approved by the Trust for distribution by LIFE COMPANY; or (iv) in
sales literature or other promotional material approved by the Trust for use by
LIFE COMPANY, except with the express written permission of the Trust.
(d) For the purposes of this Section 4.5, the phrase "sales literature or
other promotional material" includes, but is not limited to, 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 (e.g.,
on-line networks such as the Internet or other electronic messages)), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports, and
proxy materials and any other material constituting sales literature or
advertising under the NASD rules, the 1933 Act or the 0000 Xxx.
4.6 Documents Provided by Trust; Information About LIFE COMPANY.
(a) The Trust will provide to LIFE COMPANY at least one (1) complete copy
of all SEC registration statements, Trust Prospectuses, reports, any preliminary
and final proxy material, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Trust, the
Shares of a Portfolio, and to an Account and a Contract, promptly
after with the filing of such document with the SEC or other regulatory
authorities.
(b) The Trust will provide to LIFE COMPANY copies of all Trust
prospectuses, and printed copies of all statements of additional information,
proxy materials, periodic reports to shareholders and other materials required
by law to be sent to Participants who have allocated any Contract value to a
Portfolio. The Trust will provide such copies to LIFE COMPANY in a timely manner
so as to enable LIFE COMPANY to print and distribute such materials within the
time required by law to be furnished to Participants.
(c) The Trust will provide to LIFE COMPANY or its designated agent at least
one (1) complete copy of each piece of sales literature or other promotional
material in which LIFE COMPANY, or any of its respective affiliates is named, or
that refers to the Contracts, at least ten (10) Business Days prior to its use
or such shorter period as the Parties hereto may, from time to time, agree upon.
No such material shall be used if LIFE COMPANY or its designated agent
reasonably objects to such use within ten (10) Business Days after receipt of
such material or such shorter period as the Parties hereto may, from time to
time, agree upon.
(d) Neither the Trust nor any of its affiliates will give any information
or make any representations or statements on behalf of or concerning LIFE
COMPANY, each Account, or the Contracts other than (i) the information or
representations contained in the registration statement, including each Account
Prospectus contained therein, relating to the Contracts, as such registration
statement and Account Prospectus may be amended from time to time; (ii) in
published reports for the Account or the Contracts that are in the public domain
and approved by LIFE COMPANY for distribution; or (iii) in sales literature or
other promotional material approved by LIFE COMPANY or its affiliates, except
with the express written permission of LIFE COMPANY.
(e) For purposes of this Section 4.6, the phrase "sales literature or other
promotional material" includes, but is not limited to, 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 (i.e., any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published article)), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, statements of additional
information, shareholder reports, and proxy materials and any other material
constituting sales literature or advertising under the NASD rules, the 1933 Act
or the 1940 Act.
Section 5. Mixed and Shared Funding
LIFE COMPANY acknowledges that the Trust requested and received an order
from the SEC granting relief from various provisions of the 1940 Act and the
rules thereunder to the extent necessary to permit Trust shares to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated Participating Insurance Companies, as well as
by Plans (the "Order"). Any conditions or undertakings that may be imposed on
LIFE COMPANY and the Trust by virtue of the Order and the Trust's
application for the Order are incorporated herein by reference, as though set
forth herein in full, and the parties to this Agreement shall comply with such
conditions and undertakings to the extent applicable to each such party.
Section 6. Termination
6.1 Events of Termination
Subject to Section 6.4 below, this Agreement will terminate as to a
Portfolio:
(a) at the option of any party, with or without cause, upon six (6) months
advance written notice to the other parties; or
(b) at the option of LIFE Company if shares of a Portfolio are not
reasonably available to meet the requirements of the Contracts as determined by
LIFE COMPANY provided, however, that such a termination shall apply only to the
Portfolio(s) not available. Prompt written notice of the election to terminate
for such cause shall be furnished by LIFE COMPANY to the Trust;
(c) at the option of the Trust upon institution of formal proceedings
against LIFE COMPANY by the NASD, the SEC, any state insurance regulator or any
other regulatory body regarding LIFE COMPANY's obligations under this Agreement
or related to the sale of the Contracts, the operation of each Account, or the
purchase of Shares, if, in each case, the Trust reasonably determines that such
proceedings, or the facts on which such proceedings would be based, have a
material likelihood of imposing material adverse consequences on the Portfolio
with respect to which the Agreement is to be terminated; or
(d) at the option of LIFE COMPANY upon institution of formal proceedings
against the Trust, its principal underwriter, or its investment adviser by the
NASD, the SEC, or any state insurance regulator or any other regulatory body
regarding the Trust's obligations under this Agreement or related to the
operation or management of the applicable Portfolio or the purchase of the
applicable Portfolios, if, in each case, LIFE COMPANY reasonably determines that
such proceedings, or the facts on which such proceedings would be based, have a
material likelihood of imposing material adverse consequences on LIFE COMPANY,
or the Subaccount corresponding to the Portfolio with respect to which the
Agreement is to be terminated; or
(e) at the option of any party in the event that (i) a Portfolio's Shares
are not registered and, in all material respects, issued and sold in accordance
with any applicable federal or state law, or (ii) such law precludes the use of
such Shares as an underlying investment medium of the Contracts issued or to be
issued by LIFE COMPANY; or
(f) subject to Section 4.1(a) above, at the option of LIFE COMPANY if the
applicable Portfolio ceases to qualify as a RIC under Subchapter M of the Code
or under successor or similar provisions or fails to comply with the
diversification requirements of Section 817(h) of the Code or such requirements
under successor or similar provisions or if Life Company reasonably believes the
applicable Portfolio may so cease to qualify or
(g) subject to Section 4.1(a) above, at the option of the
Trust if the Contracts issued by LIFE COMPANY cease to qualify as annuity
contracts or life insurance contracts under the Code or if Trust reasonably
believes the applicable Contracts may so cease to qualify, or if interests in an
Account under the Contracts are not registered, where required, and, in all
material respects, are not issued or sold in accordance with any applicable
federal or state law and, in each case, LIFE COMPANY upon written request fails
to provide reasonable assurance that it will take action to cure or correct such
failure; or
(h) at the option of the Trust by written notice to LIFE COMPANY, if the
Trust shall determine in its sole judgment exercised in good faith, that LIFE
COMPANY and/or its affiliated companies has suffered a material adverse change
in its business, operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity; or
(i) at the option of LIFE COMPANY by written notice to the Trust, if LIFE
COMPANY shall determine in its sole judgment exercised in good faith, that the
Trust and/or its affiliated companies has suffered a material adverse change in
its business, operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity; or
(j) at the option of LIFE COMPANY by written notice to the Trust, if LIFE
COMPANY shall determine in its sole judgment exercised in good faith, that the
Adviser and/or its affiliated companies has suffered a material adverse change
in its business operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity; or
(k) at the option of either party upon a determination by a majority of the
Trust's Board of Directors, or a majority of the Trust's disinterested
directors, that an irreconcilable material conflict exists among the interests
of: (1) all contract owners of variable insurance products of all separate
accounts; or (2) the interests of the Participating Insurance Companies
investing in the Trust; or
(l) at the option of any party upon another party's material breach of any
provision of this Agreement; or
(m) with respect to any Account, upon requisite vote of the Contract owners
having an interest in that Account (or any subaccount) or upon the receipt of a
substitution order by the SEC to substitute the shares of another investment
company for the corresponding Trust shares in accordance with the terms of the
Contracts for which those Trust shares had been selected to serve as the
underlying investment media. LIFE COMPANY will give at least 30 days' prior
written notice to the Trust of the date of any proposed vote to replace the
Trust's shares; or
(n) at the option of the Trust if it suspends or terminates the offering of
Shares of the applicable Portfolio to all Participating Insurance Companies or
only designated Participating Insurance Companies, if such action is required by
law or by regulatory authorities having jurisdiction or if, in the sole
discretion of the Trust acting in good faith, suspension or termination is
necessary in the best interests of the shareholders of the applicable Portfolio
(it being understood that "shareholders" for this purpose shall mean
Participants), such notice effective immediately upon receipt of
written notice, it being understood that a lack of Participating Insurance
Companies interest in the applicable Portfolio may be grounds for a suspension
or termination as to such Portfolio.
6.2 Notice Requirement for Termination
No termination of this Agreement will be effective unless and until the
party terminating this Agreement gives prior written notice to the other party
to this Agreement of its intent to terminate, and such notice shall set forth
the basis for such termination. Furthermore:
(a) in the event that any termination is based upon the provisions of
Section 6.1(a) hereof, such prior written notice shall be given at least six (6)
months in advance of the effective date of termination unless a shorter time is
agreed to by the Parties hereto;. It is understood and agreed that the right to
terminate this Agreement under Section 6.1(a) may be exercised for any reason or
for no reason;
(b) in the event that any termination is based upon the provisions of
Section 6.1(b), 6.1(c), 6.1(d), 6.1(f), 6.1(g) or 6.1(l) hereof, prompt written
notice of the election to terminate this Agreement for cause shall be furnished
by the party terminating the Agreement to the non-terminating parties, with said
termination effective upon receipt of such notice by the non-terminating
parties;
(c) in the event that any termination is based upon the provisions of
Section 6.1(e), 6.1(h), 6.1(i), 6.1(j), 6.1(k),6.1(m), or 6.1(n) hereof, such
prior written notice shall be given at least 30 days in advance of the effective
date of termination unless a shorter time is agreed to by the Parties hereto;
and
6.3 Trust To Remain Available
Notwithstanding any termination of this Agreement, the Trust will, at the
option of LIFE COMPANY, continue to make available additional shares of a
Portfolio pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, the owners of the Existing Contracts will be permitted to reallocate
investments in Portfolios of the Trust (as in effect on such date), redeem
investments in Portfolios of the Trust and/or invest in Portfolios of the Trust
upon the making of additional purchase payments under the Existing Contracts.
Notwithstanding any termination of this Agreement, LIFE COMPANY agrees to
distribute to holders of Existing Contracts all materials required by law to be
distributed to such holders (including, without limitation, prospectuses,
statements of additional information, proxy materials and periodic reports). The
parties agree that this Section 6.3 will not apply to any terminations under the
conditions of the Order and the effect of such terminations will be governed by
the Order.
6.4 Survival of Warranties and Indemnifications
All warranties and indemnifications will survive the termination of this
Agreement.
Section 7. Parties To Cooperate Respecting Termination
Subject to the provisions of Section 6.3 hereof, the Parties hereto agree
to cooperate and give reasonable assistance to one another in taking all
necessary and appropriate steps for the purpose of ensuring that an Account owns
no Shares of the applicable Portfolio after the Final Termination Date with
respect thereto, or, in the case of a termination pursuant to Section 6.1(a),
the termination date specified in the notice of termination. Such steps may
include combining the affected Account with another Account, substituting other
mutual Trust shares for those of the affected Portfolio, or otherwise
terminating participation by the Contracts in such Portfolio.
Section 8. Assignment
This Agreement may not be assigned by any party, except with the prior
written consent of all the Parties.
Section 9. Notices
Notices and communications required or permitted by Section 9 hereof will
be given by means mutually acceptable to the Parties concerned. Each other
notice or communication required or permitted by this Agreement will be given to
the following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the party receiving such
notices or communications may subsequently direct in writing:
GE Capital Life Assurance Company of New York
0000 Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attn.: General Counsel
Rydex Variable Trust
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn.: Xxxx Xxxxxxxxxxx
Padco Advisors II, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn.: Xxxx Xxxxxxxxxxx
Section 10. Voting Procedures
Subject to the cost allocation procedures set forth in Section 3 hereof,
LIFE COMPANY will distribute all proxy material furnished by the Trust to
Participants to whom pass-through voting privileges are required to be extended
and will solicit voting instructions from Participants. LIFE COMPANY will vote
Shares in accordance with timely instructions received from Participants. LIFE
COMPANY will vote Shares that are (a) not attributable to
Participants to whom pass-through voting privileges are extended, or (b)
attributable to Participants, but for which no timely instructions have been
received, in the same proportion as Shares for which said instructions have been
received from Participants, so long as and to the extent that the 1940 Act
requires pass through voting privileges for Participants. Neither LIFE COMPANY
nor any of its affiliates will in any way recommend action in connection with or
oppose or interfere with the solicitation of proxies for the Shares held for
such Participants. LIFE COMPANY reserves the right to vote shares held in any
Account in its own right, to the extent permitted by law. LIFE COMPANY shall be
responsible for assuring that each of its Accounts holding Shares calculates
voting privileges in the manner required by the Order obtained by the Trust. The
Trust will notify LIFE COMPANY of any amendments to the Order it has obtained.
Section 11. Indemnification
11.1 Of the Trust by LIFE COMPANY
(a) Except to the extent provided in Sections 11.1(b) and 11.1(c), below,
LIFE COMPANY agrees to indemnify and hold harmless the Trust, its affiliates,
and each person, if any, who controls the Trust or its affiliates within the
meaning of Section 15 of the 1933 Act and each of their respective directors and
officers (collectively, the "Indemnified Parties" for purposes of this Section
11.1) against any and all losses, claims, damages, costs, expenses, liabilities
(including amounts paid in settlement with the written consent of LIFE
COMPANY)or actions in respect thereof (including, to the extent reasonable,
legal and other expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise insofar as such
losses, claims, damages, costs, expenses, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Account's
1933 Act registration statement, any Account Prospectus, the
Contracts, or sales literature or advertising 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 written information furnished to LIFE
COMPANY by or on behalf of the Trust for use in any Account's
1933 Act registration statement, any Account Prospectus, the
Contracts, or sales literature or advertising (or any amendment
or supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in the Trust's 1933 Act registration statement, the
Trust Prospectus, sales literature or advertising of the Trust,
or any amendment or supplement to any of the foregoing, not
supplied for use therein by or on behalf of LIFE COMPANY or its
affiliates and on which
such persons have reasonably relied) or the negligent, illegal or
fraudulent conduct of LIFE COMPANY or its respective affiliates
or persons under their control, in connection with the sale,
marketing or distribution of the Contracts or Shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Trust's
1933 Act registration statement, the Trust Prospectus, sales
literature or advertising of the Trust, or any amendment or
supplement to any of the foregoing, or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance
upon and in conformity with information furnished in writing to
the Trust or its affiliates by or on behalf of LIFE COMPANY for
use in the Trust's 1933 Act registration statement, the Trust
Prospectus, sales literature or advertising of the Trust, or any
amendment or supplement to any of the foregoing; or
(iv) arise as a result of any failure by LIFE COMPANY or persons under
its control or any third party with which LIFE COMPANY has
contractually delegated administration responsibilities for the
Contracts to perform the obligations, provide the services and
furnish the materials required under the terms of this Agreement,
or any material breach of any representation and/or warranty made
by LIFE COMPANY or persons under its control in this Agreement or
arise out of or result from any other material breach of this
Agreement by LIFE COMPANY or persons under its control; or
(v) arise as a result of failure to transmit a request for purchase
or redemption of Shares or payment therefor within the time
period specified herein and otherwise in accordance with the
procedures set forth in this Agreement; or
(vi) arise as a result of any unauthorized use of the trade names of
the Trust to the extent such use is not required by applicable
law or regulation.
(b) This indemnification is in addition to any liability that LIFE COMPANY
may otherwise have. LIFE COMPANY shall not be liable under this Section 11.1
with respect to any losses, claims, damages, costs, expenses, liabilities or
actions to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of that Indemnified Party's
reckless disregard of obligations or duties (i) under this Agreement, or (ii) to
the Trust.
(c) LIFE COMPANY shall not be liable under this Section 11.1 with respect
to any action against an Indemnified Party unless the Trust shall have notified
LIFE COMPANY in writing promptly after the summons or other first legal process
giving information of the nature of the action 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 LIFE COMPANY shall
be relieved of liability under this Section 11.1 only to the extent the
indemnifying party is damaged solely by reason of such party's failure to so
notify and failure to notify LIFE COMPANY of any such action shall not relieve
LIFE COMPANY from any liability which they may have to the Indemnified Party
against whom such action is brought otherwise than on account of this Section
11.1. Except as otherwise provided herein, in case any such action is brought
against an Indemnified Party, LIFE COMPANY shall be entitled to participate, at
its own expense, in the defense of such action and also shall be entitled to
assume the defense thereof, (which shall include, without limitation, the
conduct of any ruling request and closing agreement or other settlement
proceeding with the IRS), with counsel approved by the Indemnified Party named
in the action, which approval shall not be unreasonably withheld. After notice
from LIFE COMPANY to such Indemnified Party of LIFE COMPANY's election to assume
the defense thereof, the Indemnified Party will cooperate fully with LIFE
COMPANY and shall bear the fees and expenses of any additional counsel retained
by it, and LIFE COMPANY will not be liable to such Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof, other
than reasonable costs of investigation.
11.2 Of LIFE COMPANY by the Trust
(a) Except to the extent provided in Sections 11.2(b) and 11.2(c) below,
the Trust agrees to indemnify and hold harmless LIFE COMPANY, its affiliates,
and each person, if any, who controls LIFE COMPANY or its affiliates within the
meaning of Section 15 of the 1933 Act and each of their respective directors and
officers (collectively, the "Indemnified Parties" for purposes of this Section
11.2) against any and all losses, claims, damages, costs, expenses, liabilities
(including amounts paid in settlement with the written consent of the Trust) or
actions in respect thereof (including, to the extent reasonable, legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law, or otherwise; insofar as such losses,
claims, damages, costs, expenses, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Trust's
1933 Act registration statement, Prospectus or sales literature
or advertising of the Trust (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, that this agreement to
indemnify shall not apply to any Indemnified Party if such
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with written information
furnished to the Trust or its affiliates by or on behalf of LIFE
COMPANY or its affiliates for use in the Trust's 1933 Act
registration statement, the Trust Prospectus, or in sales
literature or advertising or otherwise for use in connection with
the sale of Contracts or Shares (or any amendment or supplement
to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in any Account's 1933 Act registration statement, any
Account Prospectus, sales literature or advertising for the
Contracts, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of the
Trust or its affiliates and on which such persons have reasonably
relied) or the negligent, illegal or fraudulent conduct of the
Trust or its affiliates, in connection with the sale, marketing
or distribution of Trust Shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Account's
1933 Act registration statement, any Account Prospectus, sales
literature or advertising covering the Contracts, or any
amendment or supplement to any of the foregoing, 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 statement or omission was made in reliance
upon and in conformity with written information furnished to LIFE
COMPANY, or its affiliates by or on behalf of the Trust for use
in any Account's 1933 Act registration statement, any Account
Prospectus, sales literature or advertising covering the
Contracts, or any amendment or supplement to any of the
foregoing; or
(iv) arise as a result of any failure by the Trust to perform the
obligations, provide the services and furnish the materials
required of it under the terms of this Agreement, including,
without limitation, any failure of the Trust or its designated
agent to inform LIFE COMPANY of the correct net asset values per
share for each Portfolio on a timely basis sufficient to ensure
the timely execution of all purchase and redemption orders at the
correct net asset value per share, or any material breach of any
representation and/or warranty made by the Trust in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Trust.
(b) This indemnification is in addition to any liability that the Trust may
otherwise have. The Trust shall not be liable under this Section 11.2 with
respect to any losses, claims, damages, costs, expenses, liabilities or actions
to which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of such Indemnified Party's
reckless disregard of its obligations and duties (i) under this Agreement, or
(ii) to LIFE COMPANY, each Account or Participants.
(c) The Trust shall not be liable under this Section 11.2 with respect to
any action against an Indemnified Party unless the Indemnified Party shall have
notified the Trust in writing promptly after the summons or other first legal
process giving information of the nature of the action 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 the Trust
shall be relieved of liability under this Section 11.2 only to the extent the
indemnifying party is damaged solely by reason of such party's failure to so
notify and failure to notify the Trust of any such action shall not relieve the
Trust from any liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this Section 11.2. Except as
otherwise provided herein, in case any such action is brought against an
Indemnified Party, the Trust will be entitled to participate, at its own
expense, in the defense of such action and also shall be entitled to assume the
defense thereof (which shall include, without limitation, the conduct of any
ruling request and closing agreement or other settlement proceeding with the
IRS), with counsel approved by the Indemnified Party named in the action, which
approval shall not be unreasonably withheld. After notice from the Trust to such
Indemnified Party of the Trust's election to assume the defense thereof, the
Indemnified Party will cooperate fully with the Trust and shall bear the fees
and expenses of any additional counsel retained by it, and the Trust will not be
liable to such Indemnified Party under this Agreement for any legal or other
expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof, other than reasonable costs of
investigation.
11.3 Of LIFE COMPANY by the Adviser
(a) Except to the extent provided in Sections 11.3(b) and 11.3(c) below,
the Adviser agrees to indemnify and hold harmless LIFE COMPANY, its affiliates,
and each person, if any, who controls LIFE COMPANY or its affiliates within the
meaning of Section 15 of the 1933 Act and each of their respective directors and
officers (collectively, the "Indemnified Parties" for purposes of this Section
11.23) against any and all losses, claims, damages, costs, expenses, liabilities
(including amounts paid in settlement with the written consent of the Trust) or
actions in respect thereof (including, to the extent reasonable, legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law, or otherwise; insofar as such losses,
claims, damages, costs, expenses, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Trust's
1933 Act registration statement, Prospectus or sales literature
or advertising of the Trust (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, that this agreement to
indemnify shall not apply to any Indemnified Party if such
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with written information
furnished to the Adviser, the Trust or their affiliates by or on
behalf of LIFE COMPANY or its affiliates for use in the Trust's
1933 Act registration statement, the Trust Prospectus, or in
sales literature or advertising or otherwise for use in
connection with the sale of Contracts or Shares (or any amendment
or supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in any Account's 1933 Act registration statement, any
Account Prospectus, sales literature or advertising for the
Contracts, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of the
Adviser, the Trust or their affiliates and on which such persons
have reasonably relied) or the negligent, illegal or fraudulent
conduct of the Adviser, the Trust or their affiliates or persons
under their control, in connection with the sale, marketing or
distribution of Trust Shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Account's
1933 Act registration statement, any Account Prospectus, sales
literature or advertising covering the Contracts, or any
amendment or supplement to any of the foregoing, 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 statement or omission was made in reliance
upon and in conformity with written information furnished to LIFE
COMPANY, or its affiliates by or on behalf of the Adviser or the
Trust for use in any Account's 1933 Act registration statement,
any Account Prospectus, sales literature or advertising covering
the Contracts, or any amendment or supplement to any of the
foregoing; or
(iv) arise as a result of any failure by the Adviser or the Trust to
perform the obligations, provide the services and furnish the
materials required of it under the terms of this Agreement,
including, without limitation, any failure of the Trust or its
designated agent to inform LIFE COMPANY of the correct net asset
values per share for each Portfolio on a timely basis sufficient
to ensure the timely execution of all purchase and redemption
orders at the correct net asset value per share, or any material
breach of any representation and/or warranty made by the Adviser
or the Trust in this Agreement or arise out of or result from any
other material breach of this Agreement by the Adviser.
(b) This indemnification is in addition to any liability that the Adviser
may otherwise have. The Adviser shall not be liable under this Section 11.3 with
respect to any losses, claims, damages, costs, expenses, liabilities or actions
to which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of such Indemnified Party's
reckless disregard of its obligations and duties (i) under this Agreement, or
(ii) to LIFE COMPANY, each Account or Participants.
(c) The Adviser shall not be liable under this Section 11.3 with respect to
any action against an Indemnified Party unless the Indemnified Party shall have
notified the Adviser in writing promptly after the summons or
other first legal process giving information of the nature of the action 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 the
Adviser shall be relieved of liability under this Section 11.3 only to the
extent the indemnifying party is damaged solely by reason of such party's
failure to so notify and failure to notify the Adviser of any such action shall
not relieve the Adviser from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
Section 11.3. Except as otherwise provided herein, in case any such action is
brought against an Indemnified Party, the Adviser will be entitled to
participate, at its own expense, in the defense of such action and also shall be
entitled to assume the defense thereof (which shall include, without limitation,
the conduct of any ruling request and closing agreement or other settlement
proceeding with the IRS), with counsel approved by the Indemnified Party named
in the action, which approval shall not be unreasonably withheld. After notice
from the Adviser to such Indemnified Party of the Adviser's election to assume
the defense thereof, the Indemnified Party will cooperate fully with the Adviser
and shall bear the fees and expenses of any additional counsel retained by it,
and the Adviser will not be liable to such Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof, other
than reasonable costs of investigation.
11.4 Effect of Notice
Any notice given by the indemnifying party to an Indemnified Party referred
to in Sections 11.1(c), 11.2(c) or 11.3(c) above of participation in or control
of any action by the indemnifying party will in no event be deemed to be an
admission by the indemnifying party of liability, culpability or responsibility,
and the indemnifying party will remain free to contest liability with respect to
the claim among the Parties or otherwise.
11.5 Successors
A successor by law of any party shall be entitled to the benefits of the
indemnification contained in this Section 11.
11.6 Obligations of the Trust.
All persons dealing with the Trust must look solely to the property of the
applicable Portfolio for the enforcement of any claims against the Trust as
neither the Board, Officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Trust.
Section 12. Applicable Law
(a) This Agreement will be construed and the provisions hereof interpreted
under and in accordance with Virginia law, without regard for that state's
principles of conflict of laws.
(b) This Agreement shall be subject to the provisions of the 1933 Act, 1934
and 1940 acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Order) and the terms hereof shall be
interpreted and construed in accordance therewith.
Section 13. Execution in Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together with constitute one and the same instrument.
Section 14. Severability
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 15. Rights Cumulative
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, that the Parties are entitled to under federal and state
laws.
Section 16. Headings
The Table of Contents and headings used in this Agreement are for purposes
of reference only and shall not limit or define the meaning of the provisions of
this Agreement.
Section 17. Confidentiality
Subject to the requirements of legal process and regulatory authority, each
party hereto shall treat as confidential the names and addresses of customers of
the other party and all information reasonably identified as confidential in
writing by any other party hereto and, except as permitted by this Agreement,
shall not, without the express written consent of the affected party, disclose,
disseminate or utilize such names and addresses and other confidential
information until such time as it may come into the public domain.
Section 18. Trademarks and Trust Names
(a) Padco Advisors, Inc. and Padco Advisors II, Inc., the adviser to the
Trust and its affiliates, own all right, title and interest in and to the
tradenames, trademarks and service marks as may be identified to LIFE COMPANY
from time to time (the "Trust licensed marks"). Upon termination of this
Agreement LIFE COMPANY and its affiliates shall cease to use the Trust licensed
marks, except to the extent required by law or regulation.
(b) GE Life and Annuity Assurance Company and its affiliates, own all
right, title and interest in and to the tradenames, trademarks and service marks
as may be identified to the Adviser and/or the Trust from time to time (the
"Life Company licensed marks"). Upon termination of this Agreement the Trust,
the Adviser and their affiliates shall cease to use the Life Company licensed
marks, except to the extent required by law or regulation.
Section 19. Parties to Cooperate
Each party to this Agreement will cooperate with each other party and all
appropriate governmental authorities (including, without limitation, the SEC,
the NASD and state insurance regulators) and will permit each other and such
authorities reasonable access to its books and records (including copies
thereof) in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
Rydex Variable Trust
Attest: By:
---------------------- -----------------------------------------
Name: Name: Xxxxxx X. Xxxxxx
------------------------
Title: Title: President
-----------------------
XXX
Attest: By:
---------------------- -----------------------------------------
Name: Name: Xxxxxx X. Xxxxxx
------------------------
Title: Title: President
-----------------------
GE Capital Life Assurance Company of New York
on behalf of itself and its separate accounts
Attest: By:
---------------------- -----------------------------------------
Name: Name:
------------------------ ---------------------------------------
Title: Title:
----------------------- --------------------------------------
SCHEDULE A
PORTFOLIOS AVAILABLE UNDER THE CONTRACTS
Rydex OTC Fund
SEPARATE ACCOUNTS UTILIZING THE TRUSTS
Separate Account II
Separate Account 4
CONTRACTS UTILIZING TRUST BY THE SEPARATE ACCOUNTS
GE Choice Variable Annuity
