EXHIBIT 8(g)
PARTICIPATION AGREEMENT
AMONG
AMERICAN GENERAL LIFE INSURANCE COMPANY,
AMERICAN GENERAL SECURITIES INCORPORATED,
SAFECO RESOURCE SERIES TRUST
AND
SAFECO SECURITIES, INC.
DATED AS OF
__________, 1998
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PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the day of , 199 8
("Agreement"), by and among American General Life Insurance Company, a Texas
life insurance company ("AGL") (on behalf of itself and its "Separate
Account," defined below), American General Securities Incorporated, a Texas
corporation ("AGSI"), the principal underwriter and distributor with respect
to the Policies referred to below, [SAFECO RESOURCE SERIES TRUST, AN
UNINCORPORATED BUSINESS TRUST ORGANIZED UNDER THE LAWS OF THE STATE OF
DELAWARE, (THE "FUND"), AND SAFECO SECURITIES, INC., A WASHINGTON CORPORATION,
(the "Distributor"), the Fund's principal underwriter (collectively, the
"Parties").
WITNESSETH THAT:
WHEREAS the Distributor and the Fund desire that shares of the Fund's
Equity Portfolio and Growth Portfolio (the "Series"; reference herein to the
"Fund" includes reference to each of the foregoingSeries to the extent the
context requires) be made available by the Distributor to serve as underlying
investment media for those variable life insurance policies of AGL that are
the subject of AGL's Form S-6 registration statement filed with the Securities
and Exchange Commission (the "SEC"), File No. 333-42567 and 811-08561 (the
"Policies") and to be offered through AGSI.
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and the Distributor will make shares in the Series
available to AGL for this purpose at net asset value and with no sales
charges, all subject to the following provisions:
SECTION 1. INTRODUCTION
1.1 AVAILABILITY OF SEPARATE ACCOUNT DIVISIONS.
AGL represents that American General Life Insurance Company Separate
Account VL-R (the "Separate Account") is and will continue to be available to
serve as an investment vehicle for its Policies. The Policies provide for the
allocation of net amounts received by AGL to separate series
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(the "Divisions"; reference herein to the "Separate Account" includes
reference to each Division to the extent the context requires) of the Separate
Account for investment in the shares of corresponding Series of the Fund that
are made available through the Separate Account to act as underlying
investment media. Other series of the Fund may become subject to this
Agreement, upon mutual agreement of the parties. AGL will not unreasonably
deny any request by the Distributor to create new Divisions corresponding to
such other Series.
1.2 BROKER-DEALER REGISTRATION.
The Distributor and AGSI each represents and warrants that it is and
will remain duly 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").
SECTION 2. PROCESSING TRANSACTIONS
2.1 The Fund agrees, as provided in its Registration Statement, to
make available to the Separate Account, and any Division, shares of the Series
for investment of purchase payments of the Policies allocated to the Separate
Account.
2.2 The Fund agrees to sell to AGL those shares of the Series which
AGL orders. Orders which are sent by AGL to the Fund and received by the Fund
by 8:00 a.m. Pacific time, will be executed by the Fund at the net asset value
determined on the prior Business Day. Any orders received by the Fund after
8:00 a.m. and prior to 1:00 p.m. Pacific time, will be executed by the Fund at
the net asset value next computed pursuant to the rules of the SEC. For
purposes of this Section 2.2, the Fund hereby appoints AGL as its designee for
receipt of such orders from the Separate Account and receipt by such designee
shall constitute receipt by the Fund; provided that the Fund receives notice
from AGL by telephone or facsimile (or by such other means as the Fund and AGL
may agree in writing) of receipt of such orders by 8:00 a.m. Pacific time on
the next following Business Day. "Business Day" shall mean any day on which
the New York Stock Exchange is open for trading and on which the Fund
calculates its net asset value pursuant to the rules of the SEC.
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2.3 The Fund agrees to redeem, on AGL's request, any full or
fractional shares of the Fund held by AGL, executing such requests on each
Business Day at the net asset value next computed after receipt by the Fund or
its designee of the request for redemption, in accordance with the provisions
of this Agreement and the Fund's Registration Statement. For purposes of this
Section 2.3, AGL hereby appoints the Fund as its designee for receipt of
requests for redemption from the Separate Account and receipt by such designee
shall constitute receipt by the Fund; provided that the Fund receives notice
from AGL by telephone or facsimile (or by such other means as the Fund and AGL
may agree in writing) of receipt of such request for redemption by 8:00 a.m.
Pacific time on the next following Business Day.
2.4 In the event that AGL's order results in a net purchase of Series
shares, AGL shall use its best efforts to pay for Series shares by 11:00 a.m.
Pacific time on the same Business Day that the notice of order to purchase the
Fund shares is made in accordance with the provisions of this section. If
AGL's order requests a net redemption resulting in a payment of redemption
proceeds to AGL, the Fund shall normally pay and transmit the proceeds of
redemptions of Series shares by 11:00 a.m. Pacific time on the same Business
Day that the notice of a redemption order is received in accordance with the
provisions of this Agreement, unless doing so would require the Fund to
dispose of Series securities or otherwise incur additional costs. In any
event, proceeds shall be wired to AGL within three (3) Business Days or such
longer period permitted by the Investment Company Act of 1940, as amended (the
"1940 Act") or the rules, orders or regulations thereunder, and the Fund shall
notify the person designated in writing by AGL as the recipient for such
notice of such delay by 1:00 p.m. Pacific time the same Business Day that AGL
transmits the redemption order to the Fund. If AGL's order requests the
application of redemption proceeds from the redemption of shares to the
purchase of shares of another fund advised by Adviser (as defined below), the
Fund shall so apply such proceeds the same Business Day that AGL transmits
such order to the Fund. Any payment made pursuant to this Section 2.4 shall be
in federal funds transmitted by wire.
2.5 The Fund will provide to AGL closing net asset value per share for
the Series at the close of trading each Business Day. In any event, the Fund
shall use its best efforts to make the net
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asset value per share for each Series available by 3:30 p.m. Pacific time each
Business Day, and as soon as reasonably practicable after the net asset value
per share for each Series is calculated, and shall calculate such net asset
value in accordance with the Fund's Registration Statement. Any material error
in the calculation of the net asset value of the Series shall be reported
immediately to AGL.
2.6 At the end of each Business Day, AGL shall use the information
described in Section 2.5 to calculate Separate Account unit values for the
day. Using these unit values, AGL shall process each such Business Day's
Separate Account transactions based on requests and premiums received by it by
the close of trading on the floor of the New York Stock Exchange (currently
4:00 p.m. New York time) to determine the net dollar amount of the Fund shares
which shall be purchased or redeemed at that day's closing net asset value per
share. The net purchase or redemption orders so determined shall be
transmitted to the Fund by AGL by 8:00 a.m. Pacific time on the Business Day
next following AGL's receipt of such requests and premiums in accordance with
the terms of Sections 2.2 and 2.3 hereof. Orders will be sent directly, via
facsimile (or by such other means as the Fund and AGL may agree in writing),
to the Fund or such other person as the Fund may designate.
2.7 The Fund shall furnish, on or before the exdividend date, notice
to AGL of any income dividends or capital gain distributions payable on the
shares of any Series. AGL hereby elects to receive all such income dividends
and capital gain distributions as are payable on a Series' shares in
additional shares of the Series, but reserves the right to revoke the election
and to receive all such income dividends and capital gain distributions in
cash. The Fund shall notify AGL or its designee of the number of shares so
issued as payment of such dividends and distributions.
2.8 The Fund may refuse to sell shares of any Series to any person or
suspend or terminate the offering of the shares of or liquidate any Series if
such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Board of Trustees of the
Fund (the "Board of Trustees"), acting in good faith and in light of its
duties under federal and any applicable state laws, deemed necessary,
desirable or appropriate and in the best interests of the shareholders
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of such Series. The Fund further reserves the right to pay any portion of a
redemption in kind of portfolio securities of any Series if the Fund's Board
of Trustees determines that it would be detrimental to the best interests of
the shareholders to make a redemption wholly in cash.
2.9 Issuance and transfer of Series shares will be by book entry only.
Stock certificates will not be issued to AGL or the Separate Account. Shares
ordered from the Series will be recorded in appropriate book entry titles for
the Separate Account.
2.10 Each Party has the right to rely on information or confirmations
provided by each other Party (or by any affiliate of each other Party) and
shall not be liable in the event that an error is a result of any
misinformation supplied by any other Party or any such affiliate. If a mistake
is caused in supplying such information or confirmations, which results in a
reconciliation with incorrect information, the amount required to make a
Policy owner's or participant's account whole shall be borne by the Party
providing the incorrect information.
SECTION 3. COSTS AND EXPENSES
3.1 GENERAL.
Except as otherwise specifically provided herein, each Party will bear
all expenses incident to its performance under this Agreement.
3.2 EXPENSE ALLOCATIONS.
(a) The Fund will pay the cost of keeping its registration of
shares under the Securities Act of 1933, as amended (the "1933 Act") and its
registration as a management investment company under the 1940 Act, current
and effective. AGL will pay the cost of registering the Separate Account as a
unit investment trust under the 1940 Act and registering units of interest
under the Policies under the 1933 Act and keeping such registrations current
and effective.
(b) At least annually, the Fund or its designee shall provide
AGL with the current
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prospectus, statement of additional information and any supplements thereto
for the shares of the Series in the form of "camera ready" copy as set in type
or, at the request of AGL, as a diskette in the form sent to the financial
printer. The prospectuses provided by the Fund shall be limited to only those
Series of the Fund that are made available through the Separate Account to
serve as underlying investments. The Fund shall be responsible for providing
the prospectus and/or statement of additional information in the format (i.e.,
"camera ready" or diskette) in which it is accustomed to formatting
prospectuses and/or statements of additional information and shall bear the
expense of providing the prospectus and/or statement of additional
information, and any supplements thereto, in such format (e.g. typesetting
expenses), and AGL shall bear the expense of adjusting or changing the format
to conform with any of its prospectuses and/or statements of additional
information. At AGL's option and expense, once a year (or more frequently if
the prospectus and/or statement of additional information for the shares is
supplemented or amended), AGL may cause the Fund's prospectus and/or statement
of additional information to be printed separately and/or together in one
document with the prospectus and/or statement of additional information for
other investment companies and/or for the Policies. AGL shall be responsible
for the costs of printing the Fund's prospectus and/or statement of additional
information, either separately or in combination as aforesaid, and
distribution to existing Policy owners whose Policies are funded by such
shares and to prospective purchasers of Policies; provided that the Fund shall
be responsible for one-half of the cost of printing the Fund's prospectus in a
quantity sufficient to provide each existing Policy owner with a copy.
(c) The Fund will bear the costs of preparing, filing with the
SEC and setting for printing the Fund's periodic reports to shareholders, the
Fund proxy material and other shareholder communications (collectively "Fund
Reports") and AGL will bear the costs delivering the Fund Reports to existing
owners under the Policies (collectively, "Participants").
(d) AGL will bear the costs of preparing, filing with the SEC,
setting for printing, printing and delivering to Participants the Separate
Account's prospectus, statement of additional information and any supplements
thereto (collectively, the "Separate Account Prospectus"), periodic
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reports to Participants, voting instruction solicitation material, and other
Participant communications.
3.3 PARTIES TO COOPERATE.
The Fund, AGL, AGSI and the Distributor each agrees to cooperate with
the others, as applicable, in arranging to print, mail and/or deliver combined
or coordinated prospectuses or other materials of the Fund and Separate
Account.
SECTION 4. LEGAL COMPLIANCE
4.1 TAX LAWS.
(a) The Fund represents and warrants that each Series is
currently qualified as a regulated investment company ("RIC") under Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"), and
represents that it will make every effort to qualify and to maintain
qualification of each Series as a RIC. The Fund or the Distributor will notify
AGL immediately upon having a reasonable basis for believing that a Series has
ceased to so qualify or that it might not so qualify in the future.
(b) AGL represents and warrants that the Policies are currently
and at the time of issuance will be treated as life insurance policies under
applicable provisions of the Code and that it will make every effort to
maintain such treatment. AGL will notify the Fund and the Distributor
immediately upon having a reasonable basis for believing that any of the
Policies have ceased to be so treated or that they might not be so treated in
the future.
(c) The Fund represents and warrants that each Series is
currently in compliance with the diversification requirements set forth in
Section 817(h) of the Code and Section 1.817-5 of the regulations under the
Code, and the Fund represents that it will make every effort to maintain each
Series' compliance with such diversification requirements. The Fund or the
Distributor will notify AGL immediately upon having a reasonable basis for
believing that a Series has ceased to so comply or that a Series might not so
comply in the future.
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(d) AGL represents and warrants that that the Separate Account
is a "segregated asset account" and that interests in the Separate Account are
offered exclusively through the purchase of or transfer into a "variable
contract," within the meaning of such terms under Section 817(h) of the Code
and the regulations thereunder. AGL will make every effort to continue to meet
such definitional requirements, and it will notify the Fund and the
Distributor 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. quarter.
(e) The Fund represents that, under the terms of its investment
advisory agreements with SAFECO Asset Management Company (the "Adviser"), the
Adviser is and will be responsible for managing the Fund in compliance with
the Fund's investment objectives, policies and restrictions as set forth in
the Fund Prospectus. The Fund represents that these objectives, policies and
restrictions do and will include operating as a RIC in compliance with
Subchapter M of the Code and Section 817(h) of the Code and regulations
thereunder. The Fund has adopted and will maintain procedures for ensuring
that the Fund is managed in compliance with Subchapter M and Section 817(h)
and regulations thereunder. On request, the Fund shall also provide AGL with
such materials, cooperation and assistance as may be reasonably necessary for
AGL or any appropriate person designated by AGL to review from time to time
the procedures and practices of the Adviser or each sub-investment adviser to
the Fund for ensuring that the Fund is managed in compliance with Subchapter M
and Section 817(h) and regulations thereunder.
In the event of any noncompliance regarding its status as a RIC, the Fund will
pursue those efforts necessary to enable each affected Series to qualify once
again for treatment as a RIC in compliance with Subchapter M, including
cooperation in good faith with AGL. If the Fund does not so cure the
noncompliance regarding its status under Section 817(h), the Fund will
cooperate in good faith with AGL's efforts to obtain a ruling and closing
agreement, as provided in Revenue Procedure 92-25 issued by the Internal
Revenue Service (or any applicable ruling or procedure subsequently issued by
the Internal Revenue Service), that the Series satisfies Section 817(h) for
the period or periods of
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non-compliance.
4.2 INSURANCE AND CERTAIN OTHER LAWS.
(a) The Distributor and the Fund make no representation as to
whether any aspect of the Fund's operations complies with the insurance laws
or regulations of the various states. The Fund will use reasonable efforts to
comply with any applicable state insurance laws or regulations, to the extent
specifically requested in writing by AGL.
(b) AGL represents and warrants that (i) it is an insurance
company duly organized, validly existing and in good standing under the laws
of the State of Texas 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 the Separate Account as a segregated asset account under Article
3.75 of the Texas Insurance Code, and (iii) the Policies comply in all
material respects with all other applicable federal and state laws and
regulations.
(c) AGL and AGSI represent and warrant that AGSI is a business
corporation duly organized, validly existing, and in good standing under the
laws of the State of Texas and has full corporate power, authority and legal
right to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.
(d) The Distributor represents and warrants that it is a
business corporation duly organized, validly existing, and in good standing
under the laws of the State of Washington and has full corporate power,
authority and legal right to execute, deliver, and perform its duties and
comply with its obligations under this Agreement.
(e) The Distributor and the Fund represent and warrant that the
Fund is a business trust duly organized, validly existing, and in good
standing under the laws of the state of Delaware and has full power,
authority, and legal right to execute, deliver, and perform its duties and
comply
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with its obligations under this Agreement.
4.3 SECURITIES LAWS.
(a) AGL represents and warrants that (i) it has registered the
Separate Account as a unit investment trust in accordance with the provisions
of the 1940 Act to serve as a segregated investment account for its variable
life insurance policies, including the Policies, (ii) the Separate Account
does and will comply in all material respects with the requirements of the
1940 Act and the rules thereunder, (iii) the Separate Account's 1933 Act
registration statement relating to the Policies, 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,(iv) the Separate
Account Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder; and (v) interests in
the Separate Account pursuant to the Policies will be registered under the
1933 Act to the extent required by the 1933 Act and the Policies will be duly
authorized for issuance and sold in compliance with all applicable federal and
state laws and that the sale of the Policies will comply in all material
respects with state insurance suitability requirements.
(b) The Fund and the Distributor represent and warrant that (i)
Fund shares sold pursuant to this Agreement will be registered under the 1933
Act to the extent required by the 1933 Act and duly authorized for issuance
and sold in compliance with Washington law, (ii) the Fund is and will remain
registered under the 1940 Act to the extent required by the 1940 Act, and
(iii) the Fund will amend the registration statement for its shares under the
1933 Act and itself under the 1940 Act from time to time as required in order
to effect the continuous offering of its shares.
(c) The Fund represents and warrants that (i) the Fund does and
will comply in all material respects with the requirements of the 1940 Act and
the rules thereunder, (ii) its 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, and (iii) the Fund
Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(d) The Fund will register and qualify its shares for sale in
accordance with the laws of any state or other jurisdiction only if and to the
extent reasonably deemed advisable by the
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Fund, AGL or any other life insurance company utilizing the Fund.
(e) AGL represents and warrants that its directors, officers,
and employees, if any, 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 in an amount not less than $2 million. The aforesaid bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
(f) The Fund represents and warrants that its directors,
officers, and employees, if any, 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 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 shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Fund agrees that any amounts received under
such bond that arise from the arrangements contemplated by this Agreement
shall be held by them for the benefit of the Fund.
4.4 NOTICE OF CERTAIN PROCEEDINGS AND OTHER CIRCUMSTANCES.
(a) The Distributor or the Fund shall promptly notify AGL 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 Fund's registration
statement under the 1933 Act or the Fund Prospectus, (ii) any request by the
SEC for any amendment to such registration statement or Fund Prospectus, (iii)
the initiation of any proceedings for that purpose or for any other purpose
relating to the registration or offering of the Fund's shares, or (iv) any
other action or circumstances that may prevent the lawful offer or sale of
Fund shares in any state or jurisdiction, including, without limitation, any
circumstances in which (x) the Fund's shares are not registered and, in all
material respects, issued and sold in accordance with applicable state and
federal law or (y) such law precludes the use of such shares as an underlying
investment medium of the Policies issued or to be issued by AGL. The
Distributor and the Fund will make every reasonable effort to prevent the
issuance of any stop order, cease and desist order or similar order and, if
any such order is issued, to obtain the lifting thereof at
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the earliest possible time.
(b) AGL or AGSI shall promptly notify the Fund 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 Separate Account's
registration statement under the 1933 Act relating to the Policies or the
Separate Account Prospectus, (ii) any request by the SEC for any amendment to
such registration statement or Separate Account prospectus, (iii) the
initiation of any proceedings for that purpose or for any other purpose
relating to the registration or offering of the Separate Account interests
pursuant to the Policies, (iv) any other action or circumstances that prevent
the lawful offer or sale of said interests in any state or jurisdiction,
including without limitation, any circumstances in which said interests are
not registered and in all material respects issued and sold in accordance with
applicable state and federal law. AGL and AGSI will make every reasonable
effort to prevent the issuance of any 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 AGL TO PROVIDE DOCUMENTS.
AGL will provide to the Fund one complete copy of all SEC registration
statements, Separate Account Prospectuses, annual and semi-annual 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 the Separate Account or the Policies,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
4.6 FUND TO PROVIDE DOCUMENTS.
The Fund will provide to AGL one complete copy of all SEC registration
statements, Fund Prospectuses, annual and semi-annual 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 Fund or
its shares, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.
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4.7 SALES LITERATURE
(a) AGL will furnish, or will cause to be furnished, to the Fund
and Distributor for review, each piece of sales literature or other
promotional material in which the Fund, or any Series thereof, or Adviser is
named, before such material is submitted to any regulatory body for review,
and in any event, at least fifteen (15) Business Days prior to its use. No
such material will be used if the Fund or Distributor objects to its use in
writing within fifteen (15) Business Days after receipt of such material.
(b) Advertising and sales literature with respect to AGL, the
Separate Account and/or the Policies prepared by the Fund, Distributor or any
affiliate thereof will be submitted to AGL for review before such material is
submitted to any regulatory body for review, and in any event, at least
fifteen (15) Business Days prior to its use. No such material will be used if
AGL objects to its use in writing within fifteen (15) Business Days after
receipt of such material.
(c) The Fund and its affiliates and agents shall not give any
information or make any representations on behalf of AGL or concerning AGL,
the Separate Account or the Policies issued by AGL, other than the information
or representations contained in a registration statement or prospectus for
such Policies, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports of the Separate Account or
reports prepared for distribution to owners of such Policies, or in sales
literature or other promotional material approved by AGL or its designee,
without the written permission of AGL.
(d) AGL and its affiliates and agents shall not give any
information or make any representations on behalf of the Fund or concerning
the Fund other than the information or representations contained in a
Registration Statement or prospectus for the Fund, as such Registration
Statement and prospectus may be amended or supplemented from time to time, or
in reports of the Fund or reports prepared for distribution to owners of
shares of the Fund or for owners of the Policies, or in sales literature or
other promotional material approved by the Fund or its designee, without the
written permission of the Fund.
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(e) For purposes of this Agreement, the phrase "sales literature
or other promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for use,
in a newspaper, magazine or other periodical, radio, television, electronic
media, telephone or tape recording, videotape display, signs or billboards,
motion pictures or other public media), sales literature (such as any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, seminar texts, or 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 National
Association of Securities Dealers, Inc. ("NASD") rules, the 1940 Act or the
1933 Act.
(f) AGL will bear the cost of printing and delivering to
prospective purchasers of the Policies Fund and Separate Account sales
literature or other promotional material and the cost of filing any such
materials with, and obtaining approval from, any state insurance regulatory
authorities.
SECTION 5. MIXED AND SHARED FUNDING
5.1 GENERAL.
The order Fund has obtained, and AGL has received and reviewed, a copy
of the amended and restated application for exemptive relief filed by the Fund
and certain affiliates on December 20, 1995 with the SEC and the Exemptive
Order issued by the SEC on January 17, 1996 in response thereto (Securities
and Exchange Commission Release No. IC-21608 the "Mixed and Shared Funding
Order") exempting it from certain provisions of the 1940 Act and rules
thereunder so that the Fund may be available for investment by certain other
entities, including, without limitation, separate accounts funding variable
life insurance policies and variable annuity contracts, separate accounts of
insurance companies unaffiliated with AGL and trustees of qualified pension
and
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retirement plans ("Mixed and Shared Funding"). The Parties recognize that the
SEC has imposed terms and conditions for such orders that are substantially
identical to many of the provisions of this Section 5. The Parties represent
and warrant that they will comply with the terms and conditions of the SEC
order, whether or not recited in this Section 5.
5.2 DISINTERESTED DIRECTORS.
The Fund agrees that the Board of Trustees shall at all times consist of
Trustees, a majority of whom (the "Disinterested Directors") are not
interested persons of the Adviser or the Distributor within the meaning of
Section 2(a)(19) of the 1940 Act and the rules thereunder and as modified by
any applicable orders of the SEC, except that if this condition is not met by
reason of the death, disqualification, or bona fide resignation of any Trustee
or Trustees, then the operation of this condition shall be suspended (a) for a
period of 45 days if the vacancy or vacancies may be filled by the Board of
Trustees; (b) for a period of 60 days if a vote of shareholders is permitted
to fill the vacancy or vacancies; or (c) for such longer period as the SEC may
permit.
5.3 MONITORING FOR MATERIAL IRRECONCILABLE CONFLICTS.
The Fund agrees that the Board of Trustees will monitor for the
existence of any material irreconcilable conflict between the interests of the
Participants of all separate accounts of life insurance companies utilizing
the Fund, including the Separate Account. The concept of a "material
irreconcilable conflict" is not defined by the 1940 Act or the rules
thereunder, but the Parties recognize that such a conflict may arise for a
variety of reasons, including, without limitation:
(a) an action by any state insurance or other 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;
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(d) the manner in which the investments of any Series are being
managed;
(e) a difference in voting instructions given by variable
insurancelife insurance policy and variable annuity contract participants or
by participants of different life insurance companies utilizing the Fund; or
(f) a decision by a life insurance company utilizing the Fund to
disregard the voting instructions of participants. AGL will report any
potential or existing conflicts of which it becomes aware to the Fund's Board
of Trustees. AGL will assist the Board in carrying out its responsibilities
under the Mixed and Shared Funding Order by providing the Board with all
information reasonably necessary for the Board to consider any issues raised.
This assistance shall include, but is not limited to, an obligation by AGL to
(i) inform the Board whenever the voting instructions of the Policy owners or
Participants are disregarded, and (ii) to submit to the Board such reports,
materials or data as the Board may reasonably request so that the Board may
fully carry out the obligations imposed upon it by the Mixed and Shared
Funding Order, and such reports, materials and data shall be submitted more
frequently if deemed appropriate by the Board. AGL will carry out its
responsibilities under this paragraph with a view only to the interests of the
Policy owners and Participants.
5.4 CONFLICT REMEDIES.
(a) It is agreed that if it is determined by a majority of the
members of the Board of Trustees or a majority of the Disinterested Trustees
that a material irreconcilable conflict exists affecting AGL, AGL will, at
theirits own expense and to the extent reasonably practicable (as determined
by a majority of the Disinterested Trustees), take whatever steps are
necessary to remedy or eliminate the material irreconcilable conflict, which
steps may include, but are not limited to:
(i) withdrawing the assets allocable to the separate
account from the Fund or any series and reinvesting such assets in a different
investment medium, including another series of the Fund or another investment
company, or submitting the question whether such
16
segregation should be implemented to a vote of all affected Participants and,
as appropriate, segregating the assets of any particular group (E.G., variable
life insurance contract owners, variable annuity contract owners or all
variable contract owners and participants of one or more life insurance
companies utilizing the Fund) that votes in favor of such segregation, or
offering to the affected variable contract owners or participants the option
of making such a change; and
(ii) establishing a new registered investment company of
the type defined as a "Management Company" in Section 4(3) of the 1940 Act or
a new separate account that is operated as a Management Company.
(b) If the material irreconcilable conflict arises because of
AGL's decision to disregard Participant voting instructions and that decision
represents a minority position or would preclude a majority vote, AGL may be
required, at the Fund's election, to withdraw the Separate Account's
investment in the Fund. No charge or penalty will be imposed as a result of
such withdrawal. Any such withdrawal must take place within six months after
the Fund gives notice to AGL that this provision is being implemented, and
until such withdrawal the Distributor and Fund shall continue to accept and
implement orders by AGL for the purchase and redemption of shares of the Fund.
(c) If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to AGL conflicts
with the majority of other state regulators, then AGL will withdraw the
Separate Account's investment in the Fund within six months after the Fund's
Board of Directors informs AGL that it has determined that such decision has
created a material irreconcilable conflict, and until such withdrawal the
Distributor and Fund shall continue to accept and implement orders by AGL for
the purchase and redemption of shares of the Fund.
17
(d) AGL agrees that any remedial action taken by it in resolving
any material irreconcilable conflict will be carried out at its expense and
with a view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested
Directors will determine whether or not any proposed action adequately
remedies any material irreconcilable conflict. In no event, however, will the
Fund or the Distributor be required to establish a new funding medium for any
Policies. AGL will not be required by the terms hereof to establish a new
funding medium for any Policies if any offer to do so has been declined by
vote of a majority of Participants materially adversely affected by the
material irreconcilable conflict.
5.5 NOTICE TO AGL.
The Fund will promptly make known in writing to AGL the Board of
Trustees' determination of the existence of a material irreconcilable
conflict, a description of the facts that give rise to such conflict and the
implications of such conflict.
5.6 INFORMATION REQUESTED BY BOARD OF TRUSTEES.
AGL will at least annually submit to the Board of Trustees of the Fund
such reports, materials or data as the Board of Trustees may reasonably
request so that the Board of Trustees may fully carry out the obligations
imposed upon it by the provisions hereof, and said reports, materials and data
will be submitted at any reasonable time deemed appropriate by the Board of
Trustees. All reports received by the Board of Trustees of potential or
existing conflicts, and all Board of Trustees actions with regard to
determining the existence of a conflict, notifying life insurance companies
utilizing the Fund of a conflict, and determining whether any proposed action
adequately remedies a conflict, will be properly recorded in the minutes of
the Board of Trustees or other appropriate records, and such minutes or other
records will be made available to the SEC upon request.
5.7 COMPLIANCE WITH SEC RULES.
18
If, at any time during which the Fund is serving an investment medium
for variable life insurance policies, 1940 Act Rules 6e-3(T) or, if
applicable, 6e-2 are amended or Rule 6e-3 is adopted to provide exemptive
relief with respect to mixed and shared funding, the Parties agree that they
will comply with the terms and conditions thereof and that the terms of this
Section 5 shall be deemed modified if and only to the extent required in order
also to comply with the terms and conditions of such exemptive relief that is
afforded by any of said rules that are applicable.
SECTION 6. TERMINATION
6.1 EVENTS OF TERMINATION.
Subject to Section 6.4 below, this Agreement will terminate as to a
Series:
(a) at the option of AGL, the Distributor or the Fund upon (i)
at least six months' advance written notice to the other Parties unless a
shorter time period is agreed to by the parties, (b) at the option of the Fund
upon
(i) at least sixty days advance written notice to the
other parties, and
(ii) the approval by (x) a majority of the Disinterested
Directors or (y) a majority vote of the shares of the affected Series that are
held in the corresponding Divisions of the Separate Account (pursuant to the
procedures set forth in Section 10 of this Agreement for voting Series shares
in accordance with Participant instructions);or
(c) at the option of the Fund upon written notice upon
institution of formal proceedings against AGL or AGSI by the SEC, the NASD,
any state insurance regulator or any other regulatory body regarding AGL's
duties under this Agreement or related to the sale of the Policies, the
operation of the Separate Account, or the purchase of the Fund shares, if, in
each case, the Fund reasonably determines that such proceedings, or the facts
on which such proceedings may be based, have a material likelihood of imposing
material adverse consequences on the Series to be terminated; or
19
(d) at the option of AGL upon written notice upon institution of
formal proceedings against the Fund, the Adviser or any sub-investment adviser
to the Fund, or the Distributor by the NASD, the SEC, or any state securities
or insurance department or any other regulatory body, if, in each case, AGL
reasonably determines that such proceedings, or the facts on which such
proceedings may be based, have a material likelihood of imposing material
adverse consequences on AGL, AGSI or the Division corresponding to the Series
to be terminated; or
(e) at the option of any Party upon occurrence without written
notice in the event that (i) the Series's shares are not registered and, in
all material respects, issued and sold in accordance with applicable state and
federal law or (ii) such law precludes the use of such shares as an underlying
investment medium of the Policies issued or to be issued by AGL; or
(f) upon termination of the corresponding Division's investment
in the Series pursuant to Section 5 hereof; or
(g) at the option of AGL upon written notice if the Series
ceases to qualify as a RIC under Subchapter M of the Code or under successor
or similar provisions, or if AGL reasonably believes that the Series may fail
to so qualify; or
(h) at the option of AGL upon written notice if the Series fails
to comply with Section 817(h) of the Code or with successor or similar
provisions, or if AGL reasonably believes that the Series may fail to so
comply.
(i) at the option of the Fund upon written notice if the
Policies cease to qualify as annuity contracts or life insurance contracts, as
applicable, under the Code, or if the Fund reasonably believes that the
Policies may fail to so qualify; or
(j) at the option of the Fund, upon AGL's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of the Fund within thirty (30) days
20
after written notice of such breach is delivered to AGL; or
(k) at the option of AGL, upon the Fund's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of AGL within thirty (30) days after written notice of such
breach is delivered to the Fund; or
(l) at the option of the Fund upon written notice, if the
Policies are not registered, issued or sold in accordance with applicable
federal and/or state law and any applicable rules and regulations thereunder;
or
(m) effective immediately in the event the agreement is assigned
without the prior written consent of all parties.
6.2 SERIES TO REMAIN AVAILABLE.
Except (i) as necessary to implement Participant initiated transactions,
(ii) as required by state insurance laws or regulations, (iii) as required
pursuant to Section 5 of this Agreement, or (iv) with respect to any Series as
to which this Agreement has terminated, AGL shall not (x) redeem Fund shares
attributable to the Policies (as opposed to Fund shares attributable to AGL's
assets held in the Separate Account), or (y) prevent Participants from
allocating payments to or transferring amounts from a Series that was
otherwise available under the Policies, until, in either case, 90 calendar
days after AGL shall have notified the Fund or Distributor of its intention to
do so.
6.3 SURVIVAL OF WARRANTIES AND INDEMNIFICATIONS.
All warranties and indemnifications will survive the termination of this
Agreement.
6.4 CONTINUANCE OF AGREEMENT FOR CERTAIN PURPOSES.
If any Party terminates this Agreement with respect to any Series
pursuant to Section 6.1 hereof, this Agreement shall nevertheless continue in
effect as to any shares of that Series that are
21
outstanding as of the date of such termination (the "Initial Termination
Date"). This continuation shall extend to the earlier of the date as of which
the Separate Account owns no shares of the affected Series or a date (the
"Final Termination Date") six months following the Initial Termination Date,
except that (i) AGL may, by written notice to the other Parties, shorten said
six month period in the case of a termination pursuant to Sections 6.1(d),
6.1(e) 6.1(g) 6.1(k) or 6.1(m) and (ii) the Fund may, by written notice to the
other Parties, shorten said 6 month period in the case of a termination
pursuant to Sections 6.1(b), 6.1(c), 6.1(f), 6.1(h), 6.1(i), 6.1(j) 6.1(l) or
6.1(m).
SECTION 7. PARTIES TO COOPERATE RESPECTING TERMINATION
The Parties agree to cooperate and give reasonable assistance to one
another in taking all necessary and appropriate steps for the purpose of
ensuring that the Separate Account owns no shares of a Series 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.
SECTION 8. ASSIGNMENT
This Agreement may not be assigned, except with the written consent of
each other Party.
SECTION 9. NOTICES
Notices and communications required or permitted by Section 2 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:
22
American General Life
Insurance Company
0000-X Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
FAX: 000-000-0000
American General Securities
Incorporated
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
FAX: 000-000-0000
SAFECO Resource Series Trust
0000 Xxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
FAX: 206-548- 7150
SAFECO Securities, Inc.
0000 Xxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
FAX: 206-548- 7150
SECTION 10. VOTING PROCEDURES
Subject to the cost allocation procedures set forth in Section 3 hereof,
AGL will distribute all proxy material furnished by the Fund to Participants
and will vote Fund shares in accordance with instructions received from
Participants. AGL will vote Fund shares that are (a) not attributable to
Participants or (b) attributable to Participants, but for which no
instructions have been received, in the same proportion as Fund shares for
which said instructions have been received from Participants. AGL agrees that
it will disregard Participant voting instructions only to the extent (i) it
would be permitted to do so pursuant to Rule 6e-3(T)(b)(15)(iii) under the
1940 Act if the Policies were variable life insurance policies subject to that
rule or (ii) it is permitted under applicable state
23
insurance laws affecting the Fund. AGL will be responsible for assuring that
the Separate Account calculates voting privileges in a manner consistent with
that of other participating life insurance companies that utilize the Fund.
SECTION 11. FOREIGN TAX CREDITS
The Fund agrees to consult in advance with AGL concerning any decision
to elect or not to elect pursuant to Section 853 of the Code to pass through
the benefit of any foreign tax credits to its shareholders.
SECTION 12. INDEMNIFICATION
12.1 OF FUND AND DISTRIBUTOR BY AGL.
(a) Except to the extent provided in Sections 12.1(b) and
12.1(c), below, AGL agrees to indemnify and hold harmless the Fund and the
Distributor, each of their respective affiliates, and each of their directors
and officers, employees and agents, and each person, if any, who controls the
Fund or the Distributor within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 12.1)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of AGL) 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, liabilities, actions, or settlements are related to the sale or
acquisition of the Fund's shares or the Policies and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Separate
Account's 1933 Act registration statement, the Separate Account Prospectus,
the Policies or, to the extent prepared by AGL or AGSI, or agents thereof,
sales literature or advertising for the Policies (or any
24
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 AGL or AGSI, or agents thereof by or on behalf of the Fund, the
Distributor or the Adviser for use in the Separate Account's 1933 Act
registration statement, the Separate Account Prospectus, the Policies, or
sales literature or advertising (or any amendment or supplement to any of the
foregoing) or otherwise for use in connection with the sale of the Policies or
Fund shares; or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations contained in the
Fund's 1933 Act registration statement, Fund Prospectus, sales literature or
advertising of the Fund, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of AGL or AGSI) or
wrongful conduct of AGL or AGSI or persons under their control (including,
without limitation, their employees and "Associated Persons," as that term is
defined in paragraph (m) of Article I of the NASD's By-Laws), in connection
with the sale or distribution of the Policies or Fund shares; or
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Fund's 1933 Act
registration statement, Fund Prospectus, sales literature or advertising of
the Fund, or any amendment or supplement to any of the foregoing,
25
or the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance upon and in
conformity with information furnished to the Fund by or on behalf of AGL or
AGSI for use in the Fund's 1933 Act registration statement, Fund Prospectus,
sales literature or advertising of the Fund, or any amendment or supplement to
any of the foregoing; or
(iv) arise as a result of any failure by AGL or AGSI to
perform the obligations, provide the services and furnish the materials
required of them under the terms of this Agreement, or any material breach of
any representation and/or warranty made by the AGL or AGSI in this Agreement
or arise out of or result from any other material breach of this Agreement by
AGL or AGSI.
(b) AGL shall not be liable under this indemnification provision
with respect to any losses, claims, damages, 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 its reckless disregard of
obligations or duties under this Agreement or to the Distributor or to the
Fund.
(c) AGL shall not be liable under this indemnification provision
with respect to any action against an Indemnified Party unless such
Indemnified Party shall have notified AGL in writing within a reasonable time
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 failure to notify AGL of any such action shall not
relieve AGL 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.
26
In case any such action is brought against an Indemnified Party, AGL shall be
entitled to participate, at its own expense, in the defense of such action.
AGL also shall be entitled to assume the defense thereof, with counsel
approved by the Indemnified Party named in the action, which approval shall
not be unreasonably withheld. After notice from AGL to such Indemnified Party
of AGL's election to assume the defense thereof, the Indemnified Party will
cooperate fully with AGL and shall bear the fees and expenses of any
additional counsel retained by it, and AGL 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.
12.2 OF AGL AND AGSI BY DISTRIBUTOR.
(a) Except to the extent provided in Sections 12.2(b) and
12.2(c) hereof, the Distributor agrees to indemnify and hold harmless AGL,
AGSI, each of their respective affiliates, and each of their directors and
officers, employees and agents, and each person, if any, who controls AGL or
AGSI, within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 12.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Distributor) 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, liabilities,
actions, or settlements are related to the sale or acquisition of the Fund's
shares or the Policies and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Fund's 1933 Act
registration statement, Fund Prospectus, sales literature or advertising of
the Fund or, to the extent not prepared by AGL or AGSI or agents thereof,
sales literature or advertising for the Policies (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
27
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 Distributor or Fund or agents thereof by or
on behalf of AGL or AGSI for use in the Fund's 1933 Act registration
statement, Fund Prospectus, or in sales literature or advertising (or any
amendment or supplement to any of the foregoing) or otherwise for use in
connection with the sale of the Policies or Fund shares; or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations contained in the
Separate Account's 1933 Act registration statement, Separate Account
Prospectus, sales literature or advertising for the Policies, or any amendment
or supplement to any of the foregoing, not supplied for use therein by or on
behalf of the Distributor, Fund or Adviser) or the wrongful conduct of the
Fund or Distributor, or persons under their control (including, without
limitation, their employees and Associated Persons), in connection with the
sale or distribution of the Policies or Fund shares; or
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Separate
Account's 1933 Act registration statement, Separate Account Prospectus, sales
literature or advertising covering the Policies, 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
28
statement or omission was made in reliance upon and in conformity with
information furnished to AGL or AGSI by or on behalf of the Fund, the Adviser
or the Distributor for use in the Separate Account's 1933 Act registration
statement, Separate Account Prospectus, sales literature or advertising
covering the Policies, or any amendment or supplement to any of the foregoing;
or arise as a result of any failure by the Fund or the Distributor to perform
the obligations, provide the services and furnish the materials required of
them under the terms of this Agreement, or any material breach of any
representation and/or warranty made by the Fund or the Distributor in this
Agreement or arise out of or result from any other material breach of this
Agreement by the Fund or the Distributor;
(b) Except to the extent provided in Sections 12.2(c) and
12.2(d) hereof, the Distributor agrees to indemnify and hold harmless the
Indemnified Parties from and against any and all losses, claims, damages,
liabilities (including amounts paid in settlement thereof with the written
consent of the Fund) or actions in respect thereof (including, to the extent
reasonable, legal and other expenses) to which the Indemnified Parties may
become subject directly or indirectly under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or actions
directly or indirectly result from or arise out of the failure of any Series
to operate as a regulated investment company in compliance with (i) Subchapter
M of the Code and regulations thereunder or (ii) Section 817(h) of the Code
and regulations thereunder, including without limitation, any income taxes and
related penalties, rescission charges, liability under state law to
Participants asserting liability against AGL or AGSI pursuant to the Policies,
the costs of any ruling and closing agreement or other settlement with the
IRS, and the cost of any substitution by AGL of shares of another investment
company or portfolio for those of any adversely affected Series as a funding
medium for each Separate Account that AGL reasonably deems necessary or
appropriate as a result of the noncompliance.
29
(c) The Fund and the Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
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 its
reckless disregard of obligations and duties under this Agreement or to AGL,
AGSI or the Separate Account.
(d) The Fund and the Distributor shall not be liable under this
indemnification provision with respect to any action against an Indemnified
Party unless such Indemnified Party shall have notified the Fund and the
Distributor in writing within a reasonable time 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 failure to
notify the Distributor of any such action shall not relieve the Distributor
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 Distributor will be entitled to participate, at its own expense, in the
defense of such action. The Distributor also shall be entitled to assume the
defense thereof, with counsel approved by the Indemnified Party named in the
action, which approval shall not be unreasonably withheld. After notice from
the Distributor to such Indemnified Party of the Distributor's election to
assume the defense thereof, the Indemnified Party will cooperate fully with
the Distributor and shall bear the fees and expenses of any additional counsel
retained by it, and the Distributor 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.
12.3 EFFECT OF NOTICE.
Any notice given by the indemnifying Party to an Indemnified Party
referred to in Section 12.1 or 12.2 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
30
or otherwise.
12.4 SUCCESSORS.
A successor by law of any Party shall be entitled to the benefits of the
indemnification contained in this Section 12.
SECTION 13. APPLICABLE LAW
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with Delaware law, without regard for that state's
principles of conflict of laws.
SECTION 14. EXECUTION IN COUNTERPARTS
This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
SECTION 15. 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 16. 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 17. HEADINGS
31
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 18. LIMITATION OF LIABILITY
It is understood and expressly stipulated that neither the shareholders of
shares of any Series nor the Trustees or officers of the Fund or any Series
shall be personally liable hereunder. No Series shall be liable for the
liabilities of any other Series. All persons dealing with the Fund or a Series
must look solely to the property of the Fund or that Series, respectively, for
enforcement of any claims against the Fund or that Series. It is also
understood that each of the Series shall be deemed to be entering into a
separate Agreement with AGL so that it is as if each of the Series had signed
a separate Agreement with AGL and that a single document is being signed
simply to facilitate the execution and administration of the Agreement.
SECTION 19
No provision of this Agreement may be amended or modified in any manner except
by a written agreement properly authorized and executed by all Parties.
32
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.
AMERICAN GENERAL LIFE INSURANCE COMPANY
By __________________________________
Xxx X. Xxxx
Title SENIOR VICE PRESIDENT-VARIABLE PRODUCTS
AMERICAN GENERAL SECURITIES INCORPORATED
By __________________________________
F. Xxxx Xxxxxx
Title PRESIDENT
SAFECO RESOURCE SERIES TRUST
By __________________________________
Xxxx X. Xxxxxx
Title VICE PRESIDENT & CONTROLLER
SAFECO SECURITIES, INC.
By __________________________________
Xxxx X. Xxxxxx
Title VICE PRESIDENT & CONTROLLER
