FUND PARTICIPATION AGREEMENT
Golden American Life Insurance Company (the "Company"), and Aetna
Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna
Balanced VP, Inc., Aetna GET Fund, on behalf of each of its series, and
Aetna Variable Portfolios, Inc., on behalf of each of its series (each a
"Fund" or in the aggregate "Funds"), and Aeltus Investment Management, Inc.
("Aeltus" or "Adviser") hereby agree to an arrangement whereby the Funds
shall be made available to serve as underlying investment media for
Variable Annuity Contracts ("Contracts") to be issued by the Company.
1. Establishment of Account.
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The Company represents that it has established Variable Annuity Account B
and may establish such other accounts as may be set forth in Schedule A
attached hereto (as may be amended from time to time with the mutual
consent of the parties hereto) (the "Accounts"), each of which is a
separate account registered under the Investment Company Act of 1940
(except for such accounts for which no registration is required), to serve
as investment vehicles for the Contracts. Each Contract provides for the
allocation of net amounts received by the Company to an Account for
investment in the shares of one of more specified open-end management
investment companies available through that Account as underlying
investment media. Selection of a particular investment management company
and changes therein from time to time are made by the participant or
Contract owner, as applicable under a particular Contract.
2. Pricing Information; Orders; Settlement.
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(a) Each Fund will make shares available to be purchased by the Company,
and will accept redemption orders from the Company, on behalf of each
Account at the net asset value applicable to each order on those days
on which the Fund calculates its net asset value (a "Business Day").
Fund shares shall be purchased and redeemed in such quantity and at
such times as determined by the Company to be necessary to meet the
requirements of those Contracts for which the Fund serves as
underlying investment media, provided, however, that the Board of
Directors of the Fund (hereinafter the "Directors") may, upon
reasonable notice to the Company, refuse to sell shares of any Fund to
any person, or suspend or terminate the offering of shares of any Fund
if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Directors acting in
good faith and in light of their fiduciary duties under federal and/or
any applicable state laws, necessary in the best interests of the
shareholders of such Fund.
(b) Each Fund will provide to the Company closing net asset value,
dividend and capital gain information at the close of trading each day
that the New York Stock Exchange (the "Exchange") is open (each such
day a "Business Day"), and in no event later than
6:30 p.m. eastern time on such Business Day. The Company will send via
facsimile or electronic transmission to each Fund or its specified
agent orders to purchase and/or redeem Fund shares by 9:30 a.m.
eastern time the following business day. Payment for net purchases
will be wired by the Company to an account designated by the Fund.
(c) Each Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund shares
relating to the Contracts from Contract owners. Orders from Contract
owners received by the Company, acting as agent for the Fund, from any
distributor of the Contracts (including affiliates of the Company),
prior to the close of the Exchange on any given business day will be
executed by the Fund at the net asset value determined as of the close
of the Exchange on such Business Day, provided that the Fund receives
written (or facsimile) notice of such order by 9:30 a.m. eastern time
on the next following Business Day. Any orders received by the Company
acting as agent on such day but after the close of the Exchange will
be executed by the Fund at the net asset value determined as of the
close of the Exchange on the next business day following the day of
receipt of such order, provided that the Fund receives written (or
facsimile) notice of such order by 9:30 a.m. eastern time within two
days following the day of receipt of such order.
(d) Payments for net redemptions of shares of a Fund will be wired by the
Fund to an account designated by the Company. Payments for net
purchases of the Fund will be wired by the Company to an account
designated by the Fund on the same Business Day the Company places an
order to purchase Fund shares. Payments shall be in federal funds
transmitted by wire.
(e) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other party),
and shall not be liable in the event that an error is a result of any
misinformation supplied by the other party. The Company shall assume
responsibility as herein described for any loss to a Fund caused by a
cancellation or correction made to an Instruction by a Contract owner
or person authorized to act on his or her behalf subsequent to the
date as of which such Instruction has been received by the Company and
originally relayed to Aeltus, and the Company will immediately pay
such loss to such Fund upon the Company's receipt of written
notification, with supporting data. Aeltus shall indemnify and hold
the Company harmless, from the effective date of this Agreement,
against any amount the Company is required to pay to a Contract owner
due to: (i) an incorrect calculation of a Fund's daily net asset
value, dividend rate, or capital gains distribution rate or (ii)
incorrect or unreasonably late reporting of the daily net asset value
deemed material in accordance with the Fund's error correction policy,
dividend rate, or capital gain distribution rate, upon written
notification by the Company, with supporting data, to Aeltus.
(f) The Company agrees to purchase and redeem the shares of the Funds
named in this Agreement or in Schedule B hereof in accordance with the
provisions of each Fund's
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then-current prospectus and statement of additional information. The
Company shall not permit any person other than a Contract owner or
person authorized to act on his or her behalf to give instructions to
the Company which would require the Company to redeem or exchange
shares of a Fund. This provision shall not be construed to prohibit
the Company from substituting shares of another fund, as permitted by
law.
3. Expenses.
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(a) Except as otherwise provided in this Agreement, all expenses incident
to the performance by each respective Fund under this Agreement shall
be paid by that Fund, including the cost of registration of its shares
with the Securities and Exchange Commission (the "SEC") and in states
where required. All expenses incident to performance by each party of
its respective duties under this Agreement shall be paid by that
party, unless otherwise specified in this Agreement.
(b) The Funds or the Adviser shall provide to the Company periodic fund
reports to shareholders and other materials that are required by law
to be sent to Contract owners. In addition, the Funds or the Adviser
shall provide the Company with a sufficient quantity of prospectuses,
statements of additional information and any supplements to any of
these materials, to be used in connection with the offerings and
transactions contemplated by this Agreement. In addition, the Funds
shall provide the Company with a sufficient quantity of proxy material
that is required to be sent to Contract owners. The Adviser shall be
permitted to review and approve the typeset form of such material
prior to such printing provided such material has been provided by the
Adviser to the Company within a reasonable period of time prior to
typesetting.
(c) In lieu of the Funds' or Adviser's providing printed copies of
prospectuses, statements of additional information and any supplements
to any of these materials, and periodic fund reports to shareholders,
the Company shall have the right to request that the Funds transmit a
copy of such materials in an electronic format, which the Company may
use to have such materials printed together with similar materials of
other Account funding media that the Company or any distributor will
distribute to existing or prospective Contract owners.
4. Representations.
---------------
The Company agrees that it and its agents shall not, without the written
consent of a Fund or the Adviser, make representations concerning the Fund,
or its shares except those contained in the then current prospectuses and
in current printed sales literature approved by or deemed approved by the
Fund or the Adviser.
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5. Termination.
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This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Adviser or with respect to
any Fund, upon sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice to
the Adviser and to any Fund, if Fund shares are not available for any
reason to meet the requirement of Contracts as determined by the
Company. Reasonable advance notice of election to terminate shall be
furnished by the Company;
(c) at the option of either the Company, the Adviser or any Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the Account,
the Company, the Fund or the Adviser by the National Association of
Securities Dealers, Inc. (the "NASD"), the SEC or any other regulatory
body;
(d) upon the determination of the Accounts to substitute for the shares of
a Fund the shares of another investment company in accordance with the
terms of the applicable Contracts. The Company will give sixty days
written notice to the Fund and the Adviser of any decision to replace
the shares of that Fund;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if shares of a Fund are not registered, issued or sold in conformance
with Federal law or such law precludes the use of such shares as an
underlying investment medium for Contracts issued or to be issued by
the Company. Prompt notice shall be given by the appropriate party
should such situation occur.
6. Continuation of Agreement.
-------------------------
Termination as the result of any cause listed in Section 5 shall not affect
the Funds' obligation to furnish shares to Contracts then in force for
which such shares serve or may serve as the underlying medium unless such
further sale of Fund shares is prohibited by law or the SEC or other
regulatory body.
7. Advertising Materials; Filed Documents.
--------------------------------------
(a) Advertising and sales literature with respect to any Fund prepared by
the Company or its agents for use in marketing its Contracts will be
submitted to that Fund or its designee for review before such material
is submitted to any regulatory body for review. No such material shall
be used if the Fund or its designee reasonably objects
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to such use in writing, transmitted by facsimile within two business
days after receipt of such material.
(b) Each Fund will provide additional copies of its financials as soon as
available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and all
amendments or supplements to any of the above that relate to the Fund
promptly after the filing of such document with the SEC or other
regulatory authorities. At the Adviser's request, the Company will
provide to the Adviser at least one complete copy of all registration
statements, prospectuses, statements of additional information, annual
and semi-annual reports, proxy statements, and all amendments or
supplements to any of the above that relate to the Accounts promptly
after the filing of such document with the SEC or other regulatory
authority.
(c) Each Fund or the Adviser will provide via Excel spreadsheet diskette
format or in electronic transmission to the Company at least quarterly
portfolio information necessary to update Fund profiles within seven
business days following the end of each quarter.
8. Proxy Voting.
------------
(a) The Company shall provide pass-through voting privileges on shares of
a Fund held by the separate accounts to all Contract owners.
(b) The Company will distribute to Contract owners all proxy material
furnished by any Fund and will vote shares of the Fund in accordance
with instructions received from such Contract owners. The Company and
its agents shall not oppose or interfere with the solicitation of
proxies for shares of a Fund held for such Contract owners.
9. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each Fund and the
Adviser, and their directors, officers, employees, agents and each
person, if any, who controls any Fund or its Adviser within the
meaning of the Securities Act of 1933 (the "1933 Act") against any
losses, claims, damages or liabilities to which the Fund or any such
director, officer, employee, agent, or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, prospectus or sales literature of the Company 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, or arise out of or as a
result of conduct, statements or representations (other than
statements or representations contained in the prospectuses or sales
literature of the Fund) of the Company or its agents, with respect to
the sale and distribution of Contracts for which
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shares of the Fund are the underlying investment. The Company will
reimburse any legal or other expenses reasonably incurred by a Fund or
any such director, officer, employee, agent, investment adviser, or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that
the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon
(i) an untrue statement or omission or alleged omission made in such
Registration Statement or prospectus in conformity with written
materials furnished to the Company by the Fund specifically for use
therein or (ii) the willful misfeasance, bad faith, or gross
negligence by the Fund or Adviser in the performance of their duties
or the Fund's or Adviser's reckless disregard of obligations or duties
under this Agreement or to the Company, whichever is applicable. This
indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Fund and the Adviser agree to indemnify and hold harmless the
Company and its directors, officers, employees, agents and each
person, if any, who controls the Company within the meaning of the
1933 Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Registration Statement, prospectuses or sales literature of the
Fund 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 material fact required to be stated therein or necessary to
make the statements therein not misleading. Each Fund, as appropriate,
will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, employee, agent, or controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, that the Fund
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in such Registration
Statement or prospectuses which are in conformity with written
materials furnished to the Fund by the Company specifically for use
therein.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
otherwise than under this Section 9. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish to, assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to
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such indemnified party under this Section 9 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
10. Miscellaneous.
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(a) AMENDMENT AND WAIVER. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally, but
only by an instrument in writing signed by all parties hereto.
(b) NOTICES. All notices and other communications hereunder shall be given
or made in writing and shall be delivered personally, or sent by
telex, facsimile or registered or certified mail, postage prepaid,
return receipt requested, or recognized overnight courier service to
the party or parties to whom they are directed at the following
addresses, or at such other addresses as may be designated by notice
from such party to all other parties.
TO THE COMPANY: TO THE ADVISER:
Golden American Life Insurance Company Aeltus Investment Management, Inc.
0000 Xxxxxxxx Xxxxx 00 Xxxxx Xxxxx Xxxxxx, XX00
Xxxx Xxxxxxx, XX 00000 Hartford, Connecticut 06103-3602
Attn: Attn: Chief Compliance
Officer
TO ANY FUND:
00 Xxxxx Xxxxx Xxxxxx, XX00
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attn: President
Any notice, demand or other communication given in a manner prescribed in this
subsection (b) shall be deemed to have been delivered on receipt.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted
successors and assigns.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by signing
any such counterpart.
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(e) SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
(f) ENTIRE AGREEMENT. This Agreement constitutes the entire agreements and
understanding between the parties hereto and supersedes all prior
agreement and understandings relating to the subject matter hereof.
(g) GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) NON-EXCLUSIVE AGREEMENT. It is understood by the parties that this
Agreement is not an exclusive arrangement in any respect.
(i) CONFIDENTIALITY. The terms of this Agreement and the Schedules thereto
will be held confidential by each party except to the extent that
either party or its counsel may deem it necessary to disclose such
terms.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 16th day of July, 2001.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
By: /s/Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: Executive Vice President
--------------------------------
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AETNA VARIABLE FUND
AETNA VARIABLE ENCORE FUND
AETNA INCOME SHARES
AETNA BALANCED VP, INC.
AETNA GET FUND
AETNA VARIABLE PORTFOLIOS, INC.
By: /s/Xxxxxxx X. XxXxxxx
--------------------------------
Name: Xxxxxxx X. XxXxxxx
--------------------------------
Title: Treasurer
--------------------------------
AELTUS INVESTMENT MANAGEMENT, INC.
By: /s/J. Xxxxx Xxx
--------------------------------
Name: J. Xxxxx Xxx
--------------------------------
Title: President
--------------------------------
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SCHEDULE A
(For any future separate accounts - See Section 1)
SCHEDULE B
AETNA VARIABLE FUND
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d/b/a Aetna Growth and Income VP
--------------------------------
AETNA VARIABLE ENCORE FUND
--------------------------
d/b/a Aetna Money Market VP
---------------------------
AETNA INCOME SHARES
-------------------
d/b/a/Aetna Bond VP
-------------------
AETNA BALANCED VP, INC.
-----------------------
AETNA GET FUND
--------------
Series N and all subsequent series
AETNA VARIABLE PORTFOLIOS, INC.
-------------------------------
Aetna Index Plus Large Cap VP
Aetna Value Opportunity VP
Aetna Index Plus Mid Cap VP
Aetna Index Plus Small Cap VP
