EXHIBIT 8.9
FUND PARTICIPATION AGREEMENT
SAFECO Resource Series Trust
TABLE OF CONTENTS
ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .4
ARTICLE II. Representations and Warranties. . . . . . . . . . .7
ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 11
ARTICLE IV. Sales Material and Information. . . . . . . . . . 13
ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 16
ARTICLE VI. Diversification and Qualification . . . . . . . . 17
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order . . . . 21
ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 24
ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 35
ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 35
ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 40
SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 44
SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 45
SCHEDULE C Administrative Services . . . . . . . . . . . . . 46
SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 47
SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 50
PARTICIPATION AGREEMENT
Among
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
SAFECO RESOURCE SERIES TRUST
SAFECO ASSET MANAGEMENT COMPANY
SAFECO SECURITIES, INC.,
and
XXXXXXX XXXXXX & CO., INC.
THIS AGREEMENT, made and entered into as of this ____ day of
_______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life
insurance
company, on its own behalf and on behalf of its Separate Account
Variable Annuity-1 Series
Account (the "Account"); SAFECO RESOURCE SERIES TRUST, a business
trust
organized under the laws of Delaware (hereinafter the "Fund");
SAFECO ASSET
MANAGEMENT COMPANY (hereinafter the "Adviser"), a corporation
organized under
the laws of Washington; SAFECO SECURITIES, INC., a corporation
organized under the
laws of Washington (hereinafter the "Distributor"); and XXXXXXX
XXXXXX & CO., INC.,
a California corporation (hereinafter "Schwab").
WHEREAS, the Fund engages in business as an open-end
management investment
company and is available to act as the investment vehicle for
separate accounts established
for variable life insurance policies and/or variable annuity
contracts (collectively, the
"Variable Insurance Products") to be offered by insurance
companies, including
FirstGWL&A, which have entered into participation agreements with
the Fund (hereinafter
"Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares,
each designated a "Portfolio" and representing the interest in a
particular managed portfolio
of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities
and Exchange
Commission (hereinafter the "SEC"), dated January 17, 1996 (File
No. 812-9658), granting
Participating Insurance Companies and variable annuity and variable
life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a),
15(a), and 15(b) of the
Investment Company Act of 1940, as amended, (hereinafter the "1940
Act") and Rules 6e-
2(a)(2), 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent
necessary to permit shares
of the Fund to be sold to and held by variable annuity and variable
life insurance separate
accounts of life insurance companies that may or may not be
affiliated with one another and
qualified pension and retirement plans ("Qualified Plans")
(hereinafter the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company
under the 1940 Act and shares of the Portfolio(s) are registered
under the Securities Act of
1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment
adviser under the
Investment Advisers Act of 1940, as amended, and any applicable
state securities laws; and
WHEREAS, the Distributor is duly registered as a broker-dealer
under the Securities
Exchange Act of 1934, as amended, (the "1934 Act") and is a member
in good standing of
the National Association of Securities Dealers, Inc. (the "NASD");
and
WHEREAS, FirstGWL&A has registered or will register certain
variable annuity
contracts supported wholly or partially by the Account (the
"Contracts") under the 1933 Act
and said Contracts are listed in Schedule A attached hereto and
incorporated herein by
reference, as such Schedule may be amended from time to time by
mutual written
agreement; and
WHEREAS, the Account is a duly organized, validly existing
segregated asset
account, established by resolution of the Board of Directors of
FirstGWL&A on January 15,
1997, under the insurance laws of the State of New York, to set
aside and invest assets
attributable to the Contracts; and
WHEREAS, FirstGWL&A has registered or will register the
Account as a unit
investment trust under the 1940 Act and has registered or will
register the securities deemed
to be issued by the Account under the 1933 Act; and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations,
FirstGWL&A intends to purchase shares in the Portfolio(s) listed in
Schedule B attached
hereto and incorporated herein by reference, as such Schedule may
be amended from time
to time by mutual written agreement (the "Designated
Portfolio(s)"), on behalf of the
Account to fund the Contracts, and the Fund is authorized to sell
such shares to unit
investment trusts such as the Account at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations,
the Account also intends to purchase shares in other open-end
investment companies or
series thereof not affiliated with the Fund (the "Unaffiliated
Funds") on behalf of the
Account to fund the Contracts; and
WHEREAS, Schwab will perform certain services for the Fund in
connection with
the Contracts;
NOW, THEREFORE, in consideration of their mutual promises,
FirstGWL&A,
Schwab, the Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund and Distributor agree to sell to FirstGWL&A
those shares of the
Designated Portfolio(s) which the Account orders, executing such
orders on each Business
Day at the net asset value next computed after receipt by the Fund
or its designee of the
order for the shares of the Portfolios. For purposes of this
Section 1.1, FirstGWL&A shall
be the designee of the Fund for receipt of such orders and receipt
by such designee shall
constitute receipt by the Fund, provided that the Fund receives
notice of any such order by
10:00 a.m. Eastern 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.
1.2. The Fund and Distributor agree to make shares of the
Designated Portfolio(s)
available for purchase at the applicable net asset value per share
by FirstGWL&A and the
Account on those days on which the Adviser calculates the
Designated Portfolio(s)' net asset
value pursuant to rules of the SEC, and the Adviser shall calculate
such net asset value on
each day which the New York Stock Exchange is open for trading.
Notwithstanding the
foregoing, the Board of Trustees of the Fund (hereinafter the
"Board") 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
is, in the sole discretion of the Board acting in good faith and in
light of its fiduciary duties
under federal and any applicable state laws, necessary in the best
interests of the
shareholders of such Portfolio.
1.3. The Fund will not sell shares of the Designated
Portfolio(s) to any other
Participating Insurance Company separate account unless an
agreement containing
provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7,
and Article VII of this
Agreement is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash, on FirstGWL&A's
request, any full or
fractional shares of the Fund held by FirstGWL&A, 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. Requests for redemption identified
by FirstGWL&A, or its
agent, as being in connection with surrenders, annuitizations, or
death benefits under the
Contracts, upon prior written notice, may be executed within seven
(7) calendar days after
receipt by the Fund or its designee of the requests for redemption.
This Section 1.4 may be
amended, in writing, by the parties consistent with the
requirements of the 1940 Act and
interpretations thereof. For purposes of this Section 1.4,
FirstGWL&A shall be the designee
of the Fund for receipt of requests for redemption and receipt by
such designee shall
constitute receipt by the Fund, provided that the Fund receives
notice of any such request
for redemption by 10:00 A.M. Eastern time on the next following
Business Day.
1.5. The Parties hereto acknowledge that the arrangement
contemplated by this
Agreement is not exclusive; the Fund's shares may be sold to other
Participating Insurance
Companies (subject to Section 1.3 and Article VI hereof) and the
cash value of the Con-
tracts may be invested in other investment companies.
1.6. FirstGWL&A shall pay for Fund shares by 2:00 p.m. Eastern
time on the next
Business Day after an order to purchase Fund shares is made in
accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal
funds transmitted by wire
and/or by a credit for any shares redeemed the same day as the
purchase.
1.7. The Fund shall pay and transmit the proceeds of
redemptions of Fund shares
by 2:00 p.m. Eastern Time on the next Business Day after a
redemption order is received
in accordance with Section 1.4 hereof. Payment shall be in federal
funds transmitted by wire
and/or a credit for any shares purchased the same day as the
redemption.
1.8. Issuance and transfer of the Fund's shares will be by
book entry only. Stock
certificates will not be issued to FirstGWL&A or the Account.
Shares ordered from the
Fund will be recorded in an appropriate title for the Account or
the appropriate sub-account
of the Account.
1.9. The Adviser shall furnish same day notice (by wire or
telephone, followed by
written confirmation) to FirstGWL&A of any income, dividends or
capital gain distributions
payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby
elects to receive all
such income dividends and capital gain distributions as are payable
on the Portfolio shares
in additional shares of that Portfolio. FirstGWL&A reserves the
right to revoke this election
and to receive all such income dividends and capital gain
distributions in cash. The Adviser
shall notify FirstGWL&A by the end of the next following Business
Day of the number of
shares so issued as payment of such dividends and distributions.
1.10.The Fund shall make the net asset value per share for
each Designated
Portfolio available to FirstGWL&A on each Business Day as soon as
reasonably practical
after the net asset value per share is calculated and shall use its
best efforts to make such
net asset value per share available by 6:00 p.m. Eastern time. In
the event of an error in
the computation of a Designated Portfolio's net asset value per
share ("NAV") or any
dividend or capital gain distribution (each, a "pricing error"),
the Adviser or the Fund shall
immediately notify FirstGWL&A as soon as possible after discovery
of any material error.
Such notification may be verbal, but shall be confirmed promptly in
writing in accordance
with Article XI of this Agreement. A pricing error shall be
corrected as follows: (a) if the
pricing error results in a difference between the erroneous NAV and
the correct NAV of
less than $0.01 per share, then no corrective action need be taken;
(b) if the pricing error
results in a difference between the erroneous NAV and the correct
NAV equal to or greater
than $0.01 per share, but less than 1/2 of 1% of the Designated
Portfolio's NAV at the time
of the error, then the Adviser shall reimburse the Designated
Portfolio for any loss, after
taking into consideration any positive effect of such error;
however, no adjustments to
Contractowner accounts need be made; and (c) if the pricing error
results in a difference
between the erroneous NAV and the correct NAV equal to or greater
than 1/2 of 1% of the
Designated Portfolio's NAV at the time of the error, then the
Adviser shall reimburse the
Designated Portfolio for any loss (without taking into
consideration any positive effect of
such error) and shall reimburse FirstGWL&A for the reasonable costs
of adjustments made
to correct Contractowner accounts in accordance with the provisions
of Schedule E. If an
adjustment is necessary to correct a material error which has
caused Contractowners to
receive less than the amount to which they are entitled, the
number of shares of the
applicable sub-account of such Contractowners will be adjusted and
the amount of any
underpayments shall be credited by the Adviser to FirstGWL&A for
crediting of such
amounts to the applicable Contractowners accounts. Upon
notification by the Adviser of
any overpayment due to a material error, FirstGWL&A or Schwab, as
the case may be, shall
promptly remit to Adviser any overpayment that has not been paid to
Contractowners;
however, Adviser acknowledges that Schwab and FirstGWL&A do not
intend to seek
additional payments from any Contractowner who, because of a
pricing error, may have
underpaid for units of interest credited to his/her account. In no
event shall Schwab or
FirstGWL&A be liable to Contractowners for any such adjustments or
underpayment
amounts. A pricing error within categories (b) or (c) above shall
be deemed to be
"materially incorrect" or constitute a "material error" for
purposes of this Agreement.
The standards set forth in this Section 1.10 are based on the
Parties' understanding
of the views expressed by the staff of the SEC as of the date of
this Agreement. In the
event the views of the SEC staff are later modified or superseded
by SEC or judicial
interpretation, the parties shall amend the foregoing provisions of
this Agreement to
comport with the appropriate applicable standards, on terms
mutually satisfactory to all
Parties.
ARTICLE II. Representations and Warranties
2.1. FirstGWL&A represents and warrants that the Contracts and
the securities
deemed to be issued by the Account under the Contracts are or will
be registered under the
1933 Act, that the Contracts will be issued and sold in compliance
in all material respects
with all applicable federal and state laws and that the sale of the
Contracts shall comply in
all material respects with state insurance suitability
requirements. FirstGWL&A further
represents and warrants that it is an insurance company duly
organized and in good standing
under applicable law and that it has legally and validly
established the Account prior to any
issuance or sale of units thereof as a segregated asset account
under Section 4240 of the
New York Insurance Law and has registered the Account as a unit
investment trust in
accordance with the provisions of the 1940 Act to serve as a
segregated investment account
for the Contracts and that it will maintain such registration for
so long as any Contracts are
outstanding as required by applicable law.
2.2. The Adviser represents and warrants that Designated
Portfolio(s) shares sold
pursuant to this Agreement shall be registered under the 1933 Act,
duly authorized for
issuance and sold in compliance with all applicable federal
securities laws including without
limitation the 1933 Act, the 1934 Act, and the 1940 Act and that
the Fund is and shall
remain registered under the 0000 Xxx. The Fund shall amend the
registration statement for
its shares under the 1933 Act and the 1940 Act from time to time as
required in order to
effect the continuous offering of its shares.
2.3. The Fund reserves the right to adopt a plan pursuant to
Rule 12b-1 under the
1940 Act and to impose an asset-based or other charge to finance
distribution expenses as
permitted by applicable law and regulation. In any event, the Fund
and Adviser agree to
comply with applicable provisions and written SEC staff
interpretations of the 1940 Act to
assure that the investment advisory or management fees paid to the
Adviser by the Fund are
in accordance with the requirements of the 1940 Act. To the extent
that the Fund decides
to finance distribution expenses pursuant to Rule 12b-1, the Fund
undertakes to have its
Board, a majority of whom are not interested persons of the Fund,
formulate and approve
any plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses.
2.4. The Fund represents and warrants that it will make every
effort to ensure that
the investment policies, fees and expenses of the Designated
Portfolio(s) are and shall at all
times remain in compliance with the insurance and other applicable
laws of the State of New
York and any other applicable state to the extent the Fund is
notified of such applicable
insurance laws by FirstGWL&A and as required to perform this
Agreement. The
Distributor represents and warrants that it will make every effort
to ensure that Designated
Portfolio(s) shares will be sold in compliance with the insurance
laws of the State of New
York and all applicable state insurance laws, to the extent the
Distributor is notified of such
applicable insurance laws by FirstGWL&A, and applicable securities
laws. The Fund shall
register and qualify the shares for sale in accordance with the
laws of the various states if
and to the extent required by applicable law. FirstGWL&A and the
Fund will endeavor to
mutually cooperate with respect to the implementation of any
modifications necessitated by
any change in state insurance laws, regulations or interpretations
of the foregoing that affect
the Designated Portfolio(s) (a "Law Change"), and to keep each
other informed of any Law
Change that becomes known to either party. In the event of a Law
Change, the Fund
agrees that, except in those circumstances where the Fund has
advised FirstGWL&A that
its Board of Directors has determined that implementation of a
particular Law Change is
not in the best interest of all of the Fund's shareholders with an
explanation regarding why
such action is lawful, any action required by a Law Change will be
taken.
2.5. The Fund represents and warrants that it is lawfully
organized and validly
existing under the laws of the State of Delaware and that it does
and will comply in all
material respects with the 1940 Act.
2.6. The Adviser represents and warrants that it is and shall
remain duly registered
under all applicable federal and state securities laws and that it
shall perform its obligations
for the Fund in compliance in all material respects with the laws
of the State of Washington
and any applicable state and federal securities laws.
2.7. The Distributor represents and warrants that it is and
shall remain duly
registered under all applicable federal and state securities laws
and that it shall perform its
obligations for the Fund in compliance in all material respects
with the laws of the State of
Washington and any applicable state and federal securities laws.
2.8. The Fund and the Adviser represent and warrant that all
of their respective
officers, employees, investment advisers, and other individuals or
entities dealing with the
money and/or securities of the Fund are, and shall continue to be
at all times, covered by
one or more blanket fidelity bonds or similar coverage for the
benefit of the Fund in an
amount not less than the minimal coverage required by Rule 17g-1
under the 1940 Act or
related provisions as may be promulgated from time to time. The
aforesaid bonds shall
include coverage for larceny and embezzlement and shall be issued
by a reputable bonding
company.
2.9. Schwab represents and warrants that it has completed,
obtained and
performed, in all material respects, all registrations, filings,
approvals, and authorizations,
consents and examinations required by any government or
governmental authority as may
be necessary to perform this Agreement. Schwab does and will
comply, in all material
respects, with all applicable laws, rules and regulations in the
performance of its obligations
under this Agreement.
2.10.The Fund will provide FirstGWL&A with as much advance
notice as is
reasonably practicable of any material change affecting the
Designated Portfolio(s)
(including, but not limited to, any material change in the
registration statement or prospectus
affecting the Designated Portfolio(s)) and any proxy solicitation
affecting the Designated
Portfolio(s) and consult with FirstGWL&A in order to implement any
such change in an
orderly manner, recognizing the expenses of changes and attempting
to minimize such
expenses by implementing them in conjunction with regular annual
updates of the prospectus
for the Contracts. The Fund agrees to share equitably in expenses
incurred by FirstGWL&A
as a result of actions taken by the Fund, consistent with the
allocation of expenses contained
in Schedule E attached hereto and incorporated herein by reference.
2.11.FirstGWL&A represents and warrants, for purposes other
than investment
diversification of the Fund under Section 817 of the Internal
Revenue Code of 1986 as
amended ("the Code"), that the Contracts are currently and at the
time of issuance will be
treated as annuity contracts under applicable provisions of the
Code, including revenue
rulings and regulations issued by the Department of Treasury and/or
the Internal Revenue
Service, and that it will make every effort to maintain such
treatment and that it will notify
Schwab, the Fund, the Distributor and the Adviser immediately upon
having a reasonable
basis for believing that the Contracts have ceased to be so treated
or that they might not be
so treated in the future. In addition, FirstGWL&A represents and
warrants that the
Account is a "segregated asset account" and that interests in the
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. FirstGWL&A
will use every effort to continue to meet such definitional
requirements, and it will notify
Schwab, the Fund, the Distributor and the Adviser 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. FirstGWL&A represents and warrants that it will
not purchase Fund
shares with assets derived from tax-qualified retirement plans
except, indirectly, through
Contracts purchased in connection with such plans.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the Adviser or Distributor shall
provide FirstGWL&A and
Schwab with as many copies of the Fund's current prospectus for the
Designated Portfolio(s)
as FirstGWL&A and Schwab may reasonably request for marketing
purposes (including
distribution to Contractowners with respect to new sales of a
Contract), with expenses to be
borne in accordance with Schedule E hereof. If requested by
FirstGWL&A in lieu thereof,
the Adviser, Distributor or Fund shall provide such documentation
(including a camera-ready
copy and computer diskette of the current prospectus for the
Designated Portfolio(s)) and
other assistance as is reasonably necessary in order for FirstGWL&A
once each year (or
more frequently if the prospectuses for the Designated Portfolio(s)
are amended) to have
the prospectus for the Contracts and the Fund's prospectus for the
Designated Portfolio(s)
printed together in one document. The Fund and Adviser agree that
the prospectus (and
semi-annual and annual reports) for the Designated Portfolio(s)
will describe only the
Designated Portfolio(s) and will not name or describe any other
portfolios or series that may
be in the Fund unless required by law.
3.2. If applicable state or federal laws or regulations
require that the Statement of
Additional Information ("SAI") for the Fund be distributed to all
Contractowners, then the
Fund, Distributor and/or the Adviser shall provide FirstGWL&A with
copies of the Fund's
SAI or documentation thereof for the Designated Portfolio(s) in
such quantities, with
expenses to be borne in accordance with Schedule E hereof, as
FirstGWL&A may
reasonably require to permit timely distribution thereof to
Contractowners. The Adviser,
Distributor and/or the Fund shall also provide SAIs to any
Contractowner or prospective
owner who requests such SAI from the Fund (although it is
anticipated that such requests
will be made to FirstGWL&A or Schwab).
3.3. The Fund, Distributor and/or Adviser shall provide
FirstGWL&A and Schwab
with copies of the Fund's proxy material, reports to stockholders
and other communications
to stockholders for the Designated Portfolio(s) in such quantity,
with expenses to be borne
in accordance with Schedule E hereof, as FirstGWL&A may reasonably
require to permit
timely distribution thereof to Contractowners.
3.4. It is understood and agreed that, except with respect to
information regarding
FirstGWL&A or Schwab provided in writing by that party, neither
FirstGWL&A nor Schwab
are responsible for the content of the prospectus or SAI for the
Designated Portfolio(s).
It is also understood and agreed that, except with respect to
information regarding the Fund,
the Distributor, the Adviser or the Designated Portfolio(s)
provided in writing by the Fund,
the Distributor or the Adviser, neither the Fund, the Distributor
nor Adviser are responsible
for the content of the prospectus or SAI for the Contracts.
3.5. If and to the extent required by law FirstGWL&A shall:
(i) solicit voting instructions from Contractowners;
(ii) vote the Designated Portfolio(s) shares held in the
Account in
accordance with instructions received from
Contractowners: and
(iii)vote Designated Portfolio shares held in the Account
for which no
instructions have been received in the same
proportion as Designated
Portfolio(s) shares for which instructions have been
received from
Contractowners, so long as and to the extent that
the SEC continues
to interpret the 1940 Act to require pass-through
voting privileges for
variable contract owners. FirstGWL&A reserves the
right to vote
Fund shares held in any segregated asset account in
its own right, to
the extent permitted by law.
3.6. FirstGWL&A shall be responsible for assuring that each of
its separate
accounts holding shares of a Designated Portfolio calculates voting
privileges as directed by
the Fund and agreed to by FirstGWL&A and the Fund. The Fund agrees
to promptly notify
FirstGWL&A of any changes of interpretations or amendments of the
Mixed and Shared
Funding Exemptive Order.
3.7. The Fund will comply with all provisions of the 1940 Act
requiring voting by
shareholders. Further, the Fund will act in accordance with the
SEC's interpretation of the
requirements of Section 16(a) with respect to periodic elections of
directors or trustees and
with whatever rules the Commission may promulgate with respect
thereto.
ARTICLE IV. Sales Material and Information
4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be
furnished, to the
Fund or its designee, a copy of each piece of sales literature or
other promotional material
that FirstGWL&A or Schwab, respectively, develops or proposes to
use and in which the
Fund (or a Portfolio thereof), its Adviser or one of its
sub-advisers or the Distributor is
named in connection with the Contracts, at least ten (10) Business
Days prior to its use. No
such material shall be used if the Fund objects to such use within
five (5) Business Days
after receipt of such material.
4.2. FirstGWL&A and Schwab shall not give any information or
make any
representations or statements on behalf of the Fund in connection
with the sale of the Con-
tracts other than the information or representations contained in
the registration statement,
prospectus or SAI for the Fund shares, as the same may be amended
or supplemented from
time to time, or in sales literature or other promotional material
approved by the Fund,
Distributor or Adviser, except with the permission of the Fund,
Distributor or Adviser.
4.3. The Fund or the Adviser shall furnish, or shall cause to
be furnished, to
FirstGWL&A and Schwab, a copy of each piece of sales literature or
other promotional
material in which FirstGWL&A and/or its separate account(s), or
Schwab is named at least
ten (10) Business Days prior to its use. No such material shall be
used if FirstGWL&A or
Schwab objects to such use within five (5) Business Days after
receipt of such material.
4.4. The Fund, the Distributor and the Adviser shall not give
any information or
make any representations on behalf of FirstGWL&A or concerning
FirstGWL&A, the
Account, or the Contracts other than the information or
representations contained in a
registration statement, prospectus or SAI for the Contracts, as the
same may be amended
or supplemented from time to time, or in sales literature or other
promotional material
approved by FirstGWL&A or its designee, except with the permission
of FirstGWL&A.
4.5. FirstGWL&A, the Fund, the Distributor and the Adviser
shall not give any
information or make any representations on behalf of or concerning
Schwab, or use
Xxxxxx'x name except with the permission of Schwab.
4.6. The Fund will provide to FirstGWL&A and Schwab at least
one complete
copy of all registration statements, prospectuses, SAIs, sales
literature and other promotional
materials, applications for exemptions, requests for no-action
letters, and all amendments
to any of the above, that relate to the Designated Portfolio(s)
(but excluding sales literature
and other promotional materials relating to other Participating
Insurance Companies) con-
temporaneously with the filing of such document(s) with the SEC or
NASD or other
regulatory authorities.
4.7. FirstGWL&A or Schwab will provide to the Fund at least
one complete copy
of all registration statements, prospectuses, SAIs, sales
literature and other promotional
materials, applications for exemptions, requests for no-action
letters, and all amendments
to any of the above, that relate to the Contracts or the Account
and include references to
the Fund, the Adviser, the Distributor or the Designated
Portfolios, contemporaneously with
the filing of such document(s) with the SEC, NASD, or other
regulatory authority.
4.8. For purposes of Articles IV and VIII, the phrase "sales
literature and 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
media), 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, and shareholder
reports, and proxy materials (including solicitations for voting
instructions) and any other
material constituting sales literature or advertising under the
NASD rules, the 1933 Act or
the 0000 Xxx.
4.9. At the request of any party to this Agreement, each other
party will make
available to the other party's independent auditors and/or
representative of the appropriate
regulatory agencies, all records, data and access to operating
procedures that may be
reasonably requested in connection with compliance and regulatory
requirements related to
this Agreement or any party's obligations under this Agreement.
ARTICLE V. Fees and Expenses
5.1. The Fund and the Adviser shall pay no fee or other
compensation to
FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or
other
compensation to the Fund or Adviser under this Agreement, although
the parties hereto will
bear certain expenses in accordance with Schedule E, Articles III,
V, and other provisions
of this Agreement.
5.2. All expenses incident to performance by the Fund, the
Distributor and the
Adviser under this Agreement shall be paid by the appropriate
party, as further provided
in Schedule E. The Fund shall see to it that all shares of the
Designated Portfolio(s) are
registered and authorized for issuance in accordance with
applicable federal law and, if and
to the extent required, in accordance with applicable state laws
prior to their sale.
5.3. The parties shall bear the expenses of routine annual
distribution (mailing
costs) of the Fund's prospectus and distribution (mailing costs) of
the Fund's proxy materials
and reports to owners of Contracts offered by FirstGWL&A, in
accordance with Schedule
E.
5.4. The Fund, the Distributor and the Adviser acknowledge
that a principal fea-
ture of the Contracts is the Contractowner's ability to choose from
a number of unaffiliated
mutual funds (and portfolios or series thereof), including the
Designated Portfolio(s) and the
Unaffiliated Funds, and to transfer the Contract's cash value
between funds and portfolios.
The Fund, the Distributor and the Adviser agree to periodically
consult with FirstGWL&A
and Schwab as necessary or appropriate to facilitate the operation
of the Account and the
Contracts as described in the prospectus for the Contracts,
including but not limited to
facilitating transfers between the Fund and Unaffiliated Funds, and
further agree to take all
mutually agreeable steps necessary or appropriate to give effect to
the same.
5.5. Schwab agrees to provide certain administrative services,
specified in Schedule
C attached hereto and incorporated herein by reference, in
connection with the
arrangements contemplated by this Agreement. The parties
acknowledge and agree that the
services referred to in this Section 5.5 are recordkeeping,
shareholder communication, and
other transaction facilitation and processing, and related
administrative services only and are
not the services of an underwriter or a principal underwriter of
the Fund, and that Schwab
is not an underwriter for the shares of the Designated
Portfolio(s), within the meaning of
the 1933 Act or the 0000 Xxx.
5.6. As compensation for the services specified in Schedule C
hereto, the Adviser
agrees to pay Schwab a monthly Administrative Service Fee based on
the percentage per
annum on Schedule C hereto applied to the average daily value of
the shares of the
Designated Portfolio(s) held in the Account with respect to
Contracts sold by Schwab. This
monthly Administrative Service Fee is due and payable before the
15th (fifteenth) day
following the last day of the month to which it relates.
ARTICLE VI. Diversification and Qualification
6.1. The Fund, the Distributor and the Adviser represent and
warrant that the
Fund will at all times sell its shares and invest its assets in
such a manner as to ensure that
the Contracts will be treated as annuity contracts under the Code,
and the regulations issued
thereunder. Without limiting the scope of the foregoing, the Fund,
Distributor and Adviser
represent and warrant that the Fund and each Designated Portfolio
thereof will at all times
comply with Section 817(h) of the Code and Treasury Regulation
1.817-5, as amended from
time to time, and any Treasury interpretations thereof, relating to
the diversification
requirements for variable annuity, endowment, or life insurance
contracts and any
amendments or other modifications or successor provisions to such
Section or Regulations.
The Fund, the Distributor and the Adviser agree that shares of the
Designated Portfolio(s)
will be sold only to Participating Insurance Companies and their
separate accounts and to
Qualified Plans.
6.2. No shares of any Designated Portfolio of the Fund will be
sold to the general
public.
6.3. The Fund, the Distributor and the Adviser represent and
warrant that the
Fund and each Designated Portfolio is currently qualified as a
Regulated Investment
Company under Subchapter M of the Code, and that each Designated
Portfolio will maintain
such qualification (under Subchapter M or any successor or similar
provisions) as long as this
Agreement is in effect.
6.4. The Fund, Distributor or Adviser will notify FirstGWL&A
immediately upon
having a reasonable basis for believing that the Fund or any
Designated Portfolio has ceased
to comply with the aforesaid Section 817(h) diversification or
Subchapter M qualification
requirements or might not so comply in the future.
6.5. Without in any way limiting the effect of Sections 8.3,
8.4 and 8.5 hereof and
without in any way limiting or restricting any other remedies
available to FirstGWL&A or
Schwab, the Adviser or Distributor will pay all costs associated
with or arising out of any
failure, or any anticipated or reasonably foreseeable failure, of
the Fund or any Designated
Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof,
including all costs associated with
reasonable and appropriate corrections or responses to any such
failure; such costs may
include, but are not limited to, the costs involved in creating,
organizing, and registering a
new investment company as a funding medium for the Contracts and/or
the costs of
obtaining whatever regulatory authorizations are required to
substitute shares of another
investment company for those of the failed Portfolio (including but
not limited to an order
pursuant to Section 26(b) of the 1940 Act); such costs are to
include, but are not limited to,
fees and expenses of legal counsel and other advisors to FirstGWL&A
and any federal
income taxes or tax penalties and interest thereon (or "toll
charges" or exactments or
amounts paid in settlement) incurred by FirstGWL&A with respect to
itself or owners of its
Contracts in connection with any such failure or anticipated or
reasonably foreseeable
failure.
6.6. The Fund at the Fund's expense shall provide FirstGWL&A
or its designee
with reports certifying compliance with the aforesaid Section
817(h) diversification and
Subchapter M qualification requirements, at the times provided for
and substantially in the
form attached hereto as Schedule D and incorporated herein by
reference; provided,
however, that providing such reports does not relieve the Fund of
its responsibility for such
compliance or of its liability for any non-compliance.
6.7. FirstGWL&A agrees that if the Internal Revenue Service
("IRS") asserts in
writing in connection with any governmental audit or review of
FirstGWL&A or, to
FirstGWL&A's knowledge, or any Contractowner that any Designated
Portfolio has failed
to comply with the diversification requirements of Section 817(h)
of the Code or
FirstGWL&A otherwise becomes aware of any facts that could give
rise to any claim against
the Fund, Distributor or Adviser as a result of such a failure or
alleged failure:
(a) FirstGWL&A shall promptly notify the Fund, the
Distributor and the Adviser of
such assertion or potential claim;
(b) FirstGWL&A shall consult with the Fund, the Distributor
and the Adviser as to
how to minimize any liability that may arise as a result of
such failure or alleged
failure;
(c) FirstGWL&A shall use its best efforts to minimize any
liability of the Fund, the
Distributor and the Adviser resulting from such failure,
including, without limitation,
demonstrating, pursuant to Treasury Regulations, Section
1.817-5(a)(2), to the
commissioner of the IRS that such failure was inadvertent;
(d) any written materials to be submitted by FirstGWL&A to
the IRS, any
Contractowner or any other claimant in connection with any of
the foregoing
proceedings or contests (including, without limitation, any
such materials to be
submitted to the IRS pursuant to Treasury Regulations, Section
1.817-5(a)(2)) shall
be provided by FirstGWL&A to the Fund, the Distributor and the
Adviser (together
with any supporting information or analysis) at least five (5)
business days prior to
submission unless facts and circumstances do not reasonably
permit FirstGWL&A to
give such advance notice, in which case FirstGWL&A shall
endeavor to give as much
advance notice as is reasonably practicable;
(e) FirstGWL&A shall provide the Fund, the Distributor and the
Adviser with such
cooperation as the Fund, the Distributor and the Adviser shall
reasonably request
(including, without limitation, by permitting the Fund, the
Distributor and the Adviser
to review the relevant books and records of FirstGWL&A) in
order to facilitate
review by the Fund, the Distributor and the Adviser of any
written submissions
provided to it or its assessment of the validity or amount of
any claim against it
arising from such failure or alleged failure;
(f) FirstGWL&A shall not with respect to any claim of the IRS
or any Contractowner
that would give rise to a claim against the Fund, the
Distributor and the Adviser (i)
compromise or settle any claim, (ii) accept any adjustment on
audit, or (iii) forego
any allowable administrative or judicial appeals, without the
express written consent
of the Fund, the Distributor and the Adviser, which shall not
be unreasonably
withheld; provided that, FirstGWL&A shall not be required to
appeal any adverse
judicial decision unless the Fund and the Adviser shall have
provided an opinion of
independent counsel to the effect that a reasonable basis
exists for taking such
appeal; and further provided that the Fund, the Distributor
and the Adviser shall
bear the costs and expenses, including reasonable attorney's
fees, incurred by
FirstGWL&A in complying with this clause (f).
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order
7.1. The Board will monitor the Fund for the existence of any
material
irreconcilable conflict between the interests of the contract
owners of all separate accounts
investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons,
including: (a) an action by any state insurance regulatory
authority; (b) a change in
applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any
similar action by insurance, tax,
or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant
proceeding; (d) the manner in which the investments of any
Portfolio are being managed;
(e) a difference in voting instructions given by variable annuity
contract and variable life
insurance contract owners or by contract owners of different
Participating Insurance
Companies; or (f) a decision by a Participating Insurance Company
to disregard the voting
instructions of contract owners. The Board shall promptly inform
FirstGWL&A if it
determines that an irreconcilable material conflict exists and the
implications thereof.
7.2. FirstGWL&A will report any potential or existing
conflicts of which it is aware
to the Board. FirstGWL&A will assist the Board in carrying out its
responsibilities under
the Mixed and Shared Funding Exemptive Order, by providing the
Board with all
information reasonably necessary for the Board to consider any
issues raised. This includes,
but is not limited to, an obligation by FirstGWL&A to inform the
Board whenever contract
owner voting instructions are to be disregarded. Such
responsibilities shall be carried out
by FirstGWL&A with a view only to the interests of its
Contractowners.
7.3. If it is determined by a majority of the Board, or a
majority of its trustees who
are not interested persons of the Fund, the Distributor, the
Adviser or any sub-adviser to
any of the Designated Portfolios (the "Independent Trustees"), that
a material irreconcilable
conflict exists, FirstGWL&A and other Participating Insurance
Companies shall, at their
expense and to the extent reasonably practicable (as determined by
a majority of the
Independent Trustees), take whatever steps are necessary to remedy
or eliminate the
irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to
some or all of the separate accounts from the Fund or any
Designated Portfolio and
reinvesting such assets in a different investment medium, including
(but not limited to)
another portfolio of the Fund, or submitting the question whether
such segregation should
be implemented to a vote of all affected contract owners and, as
appropriate, segregating
the assets of any appropriate group (i.e., annuity contract owners,
life insurance contract
owners, or variable contract owners of one or more Participating
Insurance Companies) that
votes in favor of such segregation, or offering to the affected
contract owners the option of
making such a change; and (2) establishing a new registered
management investment
company or managed separate account.
7.4. If a material irreconcilable conflict arises because of
a decision by
FirstGWL&A to disregard contract owner voting instructions and that
decision represents
a minority position or would preclude a majority vote, FirstGWL&A
may be required, at the
Fund's election, to withdraw the Account's investment in the Fund
and terminate this
Agreement; provided, however that such withdrawal and termination
shall be limited to the
extent required by the foregoing material irreconcilable conflict
as determined by a majority
of the Independent Trustees and no charge or penalty will be
imposed as a result of such
withdrawal. Any such withdrawal and termination must take place
within six (6) months
after the Fund gives written notice that this provision is being
implemented, and until the
end of that six month period the Adviser, the Distributor and the
Fund shall continue to
accept and implement orders by FirstGWL&A for the purchase (and
redemption) of shares
of the Fund.
7.5. If a material irreconcilable conflict arises because a
particular state insurance
regulator's decision applicable to FirstGWL&A conflicts with the
majority of other state
regulators, then FirstGWL&A will withdraw the Account's investment
in the Fund and
terminate this Agreement within six months after the Board informs
FirstGWL&A in writing
that it has determined that such decision has created an
irreconcilable material conflict;
provided, however, that such withdrawal and termination shall be
limited to the extent
required by the foregoing material irreconcilable conflict as
determined by a majority of the
disinterested members of the Board. Until the end of the foregoing
six month period, the
Fund shall continue to accept and implement orders by FirstGWL&A
for the purchase (and
redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this
Agreement, a majority of the
disinterested members of the Board shall determine whether any
proposed action adequately
remedies any irreconcilable material conflict, but in no event will
the Fund be required to
establish a new funding medium for the Contracts. FirstGWL&A shall
not be required by
Section 7.3 to establish a new funding medium for the Contracts if
an offer to do so has
been declined by vote of a majority of Contractowners affected by
the irreconcilable material
conflict. In the event that the Board determines that any proposed
action does not
adequately remedy any irreconcilable material conflict, then
FirstGWL&A will withdraw the
Account's investment in the Fund and terminate this Agreement
within six (6) months after
the Board informs FirstGWL&A in writing of the foregoing
determination; provided,
however, that such withdrawal and termination shall be limited to
the extent required by any
such material irreconcilable conflict as determined by a majority
of the Independent
Trustees.
7.7. If and to the extent the SEC amends Rule 6e-2 and Rule
6e-3(T) or adopts
Rule 6e-3, or takes any other action, to provide exemptive relief
from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed
or shared funding (as
defined in the Mixed and Shared Funding Exemptive Order) on terms
and conditions
materially different from those contained in the Mixed and Shared
Funding Exemptive
Order, then (a) the Fund and/or FirstGWL&A, as appropriate, shall
take such steps as may
be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and
Rule 6e-3, as
adopted, to the extent such rules are applicable: and (b) Sections
3.5, 3.6, 3.7, 7.1, 7.2, 7.3,
7.4, and 7.5 of this Agreement shall continue in effect only to the
extent that terms and con-
ditions substantially identical to such Sections are contained in
such Rule(s) as so amended
or adopted, or are otherwise required by the SEC.
ARTICLE VIII. Indemnification
8.1. Indemnification By FirstGWL&A
8.1(a). FirstGWL&A agrees to indemnify and hold harmless the
Fund, the
Distributor and the Adviser and each of their respective officers
and directors or trustees
and each person, if any, who controls the Fund, Distributor or
Adviser within the meaning
of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this
Section 8.1) against any and all losses, claims, expenses, damages
and liabilities (including
amounts paid in settlement with the written consent of FirstGWL&A)
or litigation (including
reasonable legal and other expenses) to which the Indemnified
Parties may become subject
under any statute or regulation, at common law or otherwise,
insofar as such losses, claims,
expenses, damages or liabilities (or actions in respect thereof) or
settlements are related to
the sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue
statements of any material fact contained in the
registration statement or pro-
spectus or SAI covering the Contracts or contained in the
Contracts or sales
literature or other promotional material for the
Contracts (or any amendment
or supplement to any of the foregoing), or arise out of
or are based upon the
omission or the alleged omission to state therein a
material fact required to
be stated therein or necessary to make the statements
therein not misleading,
provided that this Agreement to indemnify shall not apply
as to any
Indemnified Party if such statement or omission or such
alleged statement or
omission was made in reliance upon and in conformity with
information
furnished in writing to FirstGWL&A or Schwab by or on
behalf of the
Adviser, Distributor or Fund for use in the registration
statement or
prospectus for the Contracts or in the Contracts or sales
literature or other
promotional material (or any amendment or supplement) or
otherwise for use
in connection with the sale of the Contracts or Fund
shares; or
(ii) arise out of or as a result of statements or
representations (other than
statements or representations contained in the
registration statement, pro-
spectus or sales literature or other promotional material
of the Fund not sup-
plied by FirstGWL&A or persons under its control) or
wrongful conduct of
FirstGWL&A or persons under its control, with respect to
the sale or
distribution of the Contracts or Fund Shares; or
(iii)arise out of any untrue statement or alleged untrue
statement of a material
fact contained in a registration statement, prospectus,
SAI, or sales literature
or other promotional material of the Fund, or any
amendment thereof or
supplement thereto, or the omission or alleged omission
to state therein a
material fact required to be stated therein or necessary
to make the
statements therein not misleading, if such a statement or
omission was made
in reliance upon information furnished in writing to the
Fund by or on behalf
of FirstGWL&A; or
(iv) arise as a result of any failure by FirstGWL&A to provide
the services and
furnish the materials under the terms of this Agreement;
or
(v) arise out of or result from any material breach of any
representation and/or
warranty made by FirstGWL&A in this Agreement or arise
out of or result
from any other material breach of this Agreement by
FirstGWL&A, including
without limitation Section 2.11 and Section 6.7 hereof,
as limited by and in accordance with the provisions of Sections
8.1(b) and 8.1(c) hereof.
8.1(b). FirstGWL&A shall not be liable under this
indemnification provision with
respect to any losses, claims, expenses, damages, liabilities or
litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful
misfeasance, bad faith, or negligence in the performance of such
Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of
obligations or duties under this
Agreement or to any of the Indemnified Parties.
8.1(c). FirstGWL&A shall not be liable under this
indemnification provision with
respect to any claim made against an Indemnified Party unless such
Indemnified Party shall
have notified FirstGWL&A in writing within a reasonable time after
the summons or other
first legal process giving information of the nature of the claim
shall have been served upon
such Indemnified Party (or after such Indemnified Party shall have
received notice of such
service on any designated agent), but failure to notify FirstGWL&A
of any such claim shall
not relieve FirstGWL&A 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, except to the extent that FirstGWL&A has been prejudiced
by such failure to give
notice. In case any such action is brought against the Indemnified
Parties, FirstGWL&A
shall be entitled to participate, at its own expense, in the
defense of such action.
FirstGWL&A also shall be entitled to assume the defense thereof,
with counsel satisfactory
to the party named in the action. After notice from FirstGWL&A to
such party of
FirstGWL&A's election to assume the defense thereof, the
Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and
FirstGWL&A will not be
liable to such party under this Agreement for any legal or other
expenses subsequently
incurred by such party independently in connection with the defense
thereof other than
reasonable costs of investigation.
8.1(d).The Indemnified Parties will promptly notify FirstGWL&A
of the
commencement of any litigation or proceedings against them in
connection with the issuance
or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2. Indemnification by Schwab
8.2(a).Schwab agrees to indemnify and hold harmless the Fund,
the Distributor
and the Adviser and each of their respective officers and directors
or trustees and each
person, if any, who controls the Fund, Distributor or Adviser
within the meaning of Section
15 of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 8.2)
against any and all losses, claims, expenses, damages and
liabilities (including amounts paid
in settlement with the written consent of Schwab) or litigation
(including reasonable legal
and other expenses), to which the Indemnified Parties may become
subject under any statute
or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are
related to the sale or acqu-
isition of the Fund's shares or the Contracts and:
(i) arise out of Xxxxxx'x dissemination of information
regarding the Fund that is
both (A) materially incorrect and (B) that was neither
contained in the Fund's
registration statement nor in the Fund's sales literature
and other promotional
material or provided in writing to Schwab, or approved in
writing, by or on
behalf of the Fund, Distributor or Adviser; or
(ii) arise out of or are based upon any untrue statements or
alleged untrue
statements of any material fact contained in sales
literature or other
promotional material prepared or approved by Schwab for
the Contracts 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 in writing to
FirstGWL&A or Schwab
by or on behalf of the Adviser, Distributor or the Fund
for use in the registra-
tion statement, prospectus or SAI for the Contracts or in
the Contracts or
sales literature or other promotional material (or any
amendment or
supplement to any of the foregoing) or otherwise for use
in connection with
the sale of the Contracts; or
(iii)arise out of or as a result of statements or
representations (other than
statements or representations contained in the
registration statement,
prospectus, SAI, or sales literature or other promotional
material of the Fund
not supplied by Schwab or persons under its control) or
wrongful conduct of
Schwab or persons under its control, with respect to the
sale or distribution
of the Contracts; or
(iv) arise as a result of any failure by Schwab to provide the
services and furnish
the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or
warranty made by Schwab in this Agreement or arise out of
or result from any
other material breach of this Agreement by Schwab;
as limited by and in accordance with the provisions of Sections
8.2(b) and 8.2(c) hereof.
8.2(b). Schwab shall not be liable under this indemnification
provision with respect
to any losses, claims, expenses, damages, liabilities or litigation
to which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, bad
faith, or negligence in the performance of such Indemnified Party's
duties or by reason of
such Indemnified Party's reckless disregard of obligations or
duties under this Agreement
or to any of the Indemnified Parties.
8.2(c). Schwab shall not be liable under this indemnification
provision with respect
to any claim made against an Indemnified Party unless such
Indemnified Party shall have
notified Schwab in writing within a reasonable time after the
summons or other first legal
process giving information of the nature of the claim shall have
been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service
on any designated agent), but failure to notify Schwab of any such
claim shall not relieve
Schwab 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, except to the
extent that Schwab has been prejudiced by such failure to give
notice. In case any such
action is brought against the Indemnified Parties, Schwab shall be
entitled to participate, at
its own expense, in the defense of such action. Schwab also shall
be entitled to assume the
defense thereof, with counsel satisfactory to the party named in
the action. After notice
from Schwab to such party of Xxxxxx'x election to assume the
defense thereof, the
Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it,
and Schwab will not be liable to such party under this Agreement
for any legal or other ex-
penses subsequently incurred by such party independently in
connection with the defense
thereof other than reasonable costs of investigation.
8.2(d). The Indemnified Parties will promptly notify Schwab
of the commencement
of any litigation or proceedings against them in connection with
the issuance or sale of the
Fund Shares or the Contracts or the operation of the Fund.
8.3. Indemnification by the Adviser
8.3(a). The Adviser agrees to indemnify and hold harmless
FirstGWL&A and
Schwab and each of their respective directors and officers and each
person, if any, who con-
trols FirstGWL&A or Schwab within the meaning of Section 15 of the
1933 Act (collectively,
the "Indemnified Parties" for purposes of this Section 8.3) against
any and all losses, claims,
expenses, damages, liabilities (including amounts paid in
settlement with the written consent
of the Adviser) or litigation (including reasonable legal and other
expenses) to which the
Indemnified Parties may become subject under any statute or
regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in
respect thereof) or settlements are related to the sale or
acquisition of the Fund's shares or
the Contracts and:
(i) 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 SAI of the Fund prepared by the Adviser (or
any amendment
or supplement to any of the foregoing), or arise out of
or are based upon the
omission or the alleged omission to state therein a
material fact required to
be stated therein or necessary to make the statements
therein not misleading,
provided that this Agreement to indemnify shall not apply
as to any
Indemnified Party if such statement or omission or such
alleged statement or
omission was made in reliance upon and in conformity with
information fur-
nished in writing to the Adviser, the Distributor or the
Fund by or on behalf
of FirstGWL&A or Schwab for use in the registration
statement or prospectus
or SAI for the Fund (or any amendment or supplement to
any of the
foregoing) or otherwise for use in connection with the
sale of the Contracts
or the Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than
statements or representations contained in the
registration statement,
prospectus, SAI or sales literature or other promotional
material for the
Contracts not supplied by the Adviser or persons under
its control) or
wrongful conduct of the Adviser or persons under its
control, with respect to
the sale or distribution of the Contracts or Fund shares;
or
(iii)arise out of any untrue statement or alleged untrue
statement of a material
fact contained in a registration statement, prospectus,
SAI, or sales literature
or other promotional material covering the Contracts, or
any amendment
thereof or supplement thereto, or the omission or alleged
omission to state
therein a material fact required to be stated therein or
necessary to make the
statement or statements therein not misleading, if such
statement or omission
was made in reliance upon information furnished in
writing to FirstGWL&A
or Schwab by or on behalf of the Adviser; or
(iv) arise as a result of any failure by the Adviser to
provide the services and
furnish the materials under the terms of this Agreement
(including a failure,
whether unintentional or in good faith or otherwise, to
comply with the
diversification and other qualification requirements
specified in Article VI of
this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or
warranty made by the Adviser in this Agreement or arise
out of or result from
any other material breach of this Agreement by the
Adviser; or
(vi) arise out of or result from the incorrect or untimely
calculation or reporting
by the Adviser of the daily net asset value per share or
dividend or capital
gain distribution rate;
as limited by and in accordance with the provisions of Sections
8.3(b) and 8.3(c) hereof.
This indemnification is in addition to and apart from the
responsibilities and obligations of
the Adviser specified in Article VI hereof.
8.3(b). The Adviser shall not be liable under this
indemnification provision with
respect to any losses, claims, expenses, damages, liabilities or
litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful
misfeasance, bad faith, or negligence in the performance of such
Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of
obligations or duties under this
Agreement or to any of the Indemnified Parties.
8.3(c). The Adviser shall not be liable under this
indemnification provision with
respect to any claim made against an Indemnified Party unless such
Indemnified Party shall
have notified the Adviser in writing within a reasonable time after
the summons or other
first legal process giving information of the nature of the claim
shall have been served upon
such Indemnified Party (or after such Indemnified Party shall have
received notice of such
service on any designated agent), but failure to notify the Adviser
of any such claim 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
indemnification provision,
except to the extent that the Adviser has been prejudiced by such
failure to give notice. In
case any such action is brought against the Indemnified Parties,
the Adviser will be entitled
to participate, at its own expense, in the defense thereof. The
Adviser also shall be entitled
to assume the defense thereof, with counsel satisfactory to the
party named in the action.
After notice from the Adviser to such party of the Adviser's
election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of
any additional counsel
retained by it, and the Adviser will not be liable to such party
under this Agreement for any
legal or other expenses subsequently incurred by such party
independently in connection with
the defense thereof other than reasonable costs of investigation.
8.3(d). FirstGWL&A and Schwab agree promptly to notify the
Adviser of the
commencement of any litigation or proceedings against it or any of
its officers or directors
in connection with the issuance or sale of the Contracts or the
operation of the Account.
8.4. Indemnification By the Fund
8.4(a). The Fund agrees to indemnify and hold harmless
FirstGWL&A and Schwab
and each of their respective directors and officers and each
person, if any, who controls
FirstGWL&A or Schwab within the meaning of Section 15 of the 1933
Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.4) against any
and all losses, claims,
expenses, damages and liabilities (including amounts paid in
settlement with the written con-
sent of the Fund) or litigation (including reasonable legal and
other expenses) to which the
Indemnified Parties may be required to pay or become subject under
any statute or
regulation, at common law or otherwise, insofar as such losses,
claims, expenses, damages,
liabilities or expenses (or actions in respect thereof) or
settlements, are related to the
operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide
the services and furnish
the materials under the terms of this Agreement
(including a failure, whether
unintentional or in good faith or otherwise, to comply
with the diversification
and other qualification requirements specified in Article
VI of this Agree-
ment); or
(ii) arise out of or result from any material breach of any
representation and/or
warranty made by the Fund in this Agreement or arise out
of or result from
any other material breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections
8.4(b) and 8.4(c) hereof.
8.4(b). The Fund shall not be liable under this
indemnification provision with respect
to any losses, claims, expenses, damages, liabilities or litigation
to which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, bad
faith, or negligence in the performance of such Indemnified Party's
duties or by reason of
such Indemnified Party's reckless disregard of obligations or
duties under this Agreement
or to any of the Indemnified Parties.
8.4(c). The Fund shall not be liable under this
indemnification provision with respect
to any claim made against an Indemnified Party unless such
Indemnified Party shall have
notified the Fund in writing within a reasonable time after the
summons or other first legal
process giving information of the nature of the claim shall have
been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service
on any designated agent), but failure to notify the Fund of any
such claim shall not relieve
it 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, except to the extent
that the Fund has been prejudiced by such failure to give notice.
In case any such action
is brought against the Indemnified Parties, the Fund will be
entitled to participate, at its own
expense, in the defense thereof. The Fund shall also be entitled
to assume the defense
thereof, with counsel satisfactory to the party named in the
action. After notice from the
Fund to such party of the Fund's election to assume the defense
thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel
retained by it, and the Fund
will not be liable to such party under this Agreement for any legal
or other expenses
subsequently incurred by such party independently in connection
with the defense thereof
other than reasonable costs of investigation.
8.4(d). FirstGWL&A and Schwab each agree promptly to notify
the Fund of the
commencement of any litigation or proceeding against itself or any
of its respective officers
or directors in connection with the Agreement, the issuance or sale
of the Contracts, the
operation of the Account, or the sale or acquisition of shares of
the Fund.
8.5. Indemnification by the Distributor
8.5(a).The Distributor agrees to indemnify and hold harmless
FirstGWL&A and
Schwab and each of their respective directors and officers and each
person, if any, who
controls FirstGWL&A or Schwab within the meaning of Section 15 of
the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this
Section 8.5) against any and all
losses, claims, expenses, damages and liabilities (including
amounts paid in settlement with
the written consent of the Distributor) or litigation (including
reasonable legal and other
expenses) to which the Indemnified Parties may become subject under
any statute or
regulation, at common law or otherwise, insofar as such losses,
claims, expenses, damages
or liabilities (or actions in respect thereof) or settlements are
related to the sale or
acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue
statement of any material fact contained in the sales
literature or other
promotional material of the Fund prepared by the
Distributor (or any amend-
ment 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 in writing to the Adviser, the Distributor or
Fund by or on behalf
of FirstGWL&A or Schwab for use in the sales literature
or other promotional
material for the Fund or otherwise for use in connection
with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than
statements or representations contained in the
registration statement,
prospectus, SAI, sales literature or other promotional
material for the
Contracts not supplied by the Distributor or persons
under its control) or
wrongful conduct of the Distributor or persons under its
control, with respect
to the sale or distribution of the Contracts or Fund
shares; or
(iii)arise out of any untrue statement or alleged untrue
statement of a material
fact contained in a registration statement, prospectus,
SAI, sales literature or
other promotional material covering the Fund or the
Contracts, or any
amendment thereof or supplement thereto, or the omission
or alleged
omission to state therein a material fact required to be
stated therein or
necessary to make the statement or statements therein not
misleading, if such
statement or omission was made in reliance upon
information furnished in
writing to FirstGWL&A or Schwab by or on behalf of the
Distributor; or
(iv) arise as a result of any failure by the Distributor to
provide the services and
furnish the materials under the terms of this Agreement;
or
(v) arise out of or result from any material breach of any
representation and/or
warranty made by the Distributor in this Agreement or
arise out of or result
from any other material breach of this Agreement by the
Distributor;
as limited by and in accordance with the provisions of Sections
8.5(b) and 8.5(c) hereof.
This indemnification is in addition to and apart from the
responsibilities and obligations of
the Distributor specified in Article VI hereof.
8.5(b).The Distributor shall not be liable under this
indemnification provision with
respect to any losses, claims, expenses, damages, liabilities or
litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful
misfeasance, bad faith, or negligence in the performance or such
Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of
obligations or duties under this
Agreement or to any of the Indemnified Parties.
8.5(c)The Distributor shall not be liable under this
indemnification provision with
respect to any claim made against an Indemnified Party unless such
Indemnified Party shall
have notified the Distributor in writing within a reasonable time
after the summons or other
first legal process giving information of the nature of the claim
shall have been served upon
such Indemnified Party (or after such Indemnified Party shall have
received notice of such
service on any designated agent), but failure to notify the
Distributor of any such claim 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, except to the extent that the Distributor has been
prejudiced by such failure to
give notice. In case any such action is brought against the
Indemnified Parties, the
Distributor will be entitled to participate, at its own expense, in
the defense thereof. The
Distributor also shall be entitled to assume the defense thereof,
with counsel satisfactory to
the party named in the action. After notice from the Distributor
to such party of the
Distributor's election to assume the defense thereof, the
Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the
Distributor will not be
liable to such party under this Agreement for any legal or other
expenses subsequently
incurred by such party independently in connection with the defense
thereof other than
reasonable costs of investigation.
8.5(d)FirstGWL&A and Schwab agree to promptly notify the
Distributor of the
commencement of any litigation or proceedings against it or any of
its officers or directors
in connection with the issuance or sale of the Contracts or the
operation of the Account.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions
hereof interpreted under
and in accordance with the laws of the State of New York, without
regard to the New York
Conflict of Laws provisions.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940
Acts, and the rules and regulations and rulings thereunder,
including such exemptions from
those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the
Mixed and Shared Funding Exemptive Order) and the terms hereof
shall be interpreted and
construed in accordance therewith.
ARTICLE X. Termination
10.1.This Agreement shall terminate:
(a) at the option of any party, with or without cause,
with respect to some or
all Portfolios, upon six (6) months advance written
notice delivered to the
other parties; provided, however, that such notice shall
not be given earlier
than six (6) months following the date of this Agreement;
or
(b) at the option of FirstGWL&A or Schwab by written
notice to the other
parties with respect to any Portfolio based upon
FirstGWL&A's or Xxxxxx'x
determination that shares of such Portfolio are not
reasonably available to
meet the requirements of the Contracts; or
(c) at the option of FirstGWL&A or Schwab by written
notice to the other
parties with respect to any Portfolio in the event any of
the Portfolio's shares
are not registered, issued or sold in accordance with
applicable state and/ or
federal law or such law precludes the use of such shares
as the underlying
investment media of the Contracts issued or to be issued
by FirstGWL&A; or
(d) at the option of the Fund, Distributor or Adviser in
the event that formal
administrative proceedings are instituted against
FirstGWL&A or Schwab by
the NASD, the SEC, the Insurance Commissioner or like
official of any state
or any other regulatory body regarding FirstGWL&A's or
Xxxxxx'x duties
under this Agreement or related to the sale of the
Contracts, the operation
of any Account, or the purchase of the Fund shares, if,
in each case, the Fund,
Distributor or Adviser, as the case may be, reasonably
determines in its sole
judgment exercised in good faith, that any such
administrative proceedings will
have a material adverse effect upon the ability of
FirstGWL&A or Schwab to
perform its obligations under this Agreement; or
(e) at the option of FirstGWL&A or Schwab in the event
that formal
administrative proceedings are instituted against the
Fund, the Distributor or
the Adviser by the NASD, the SEC, or any state securities
or insurance
department or any other regulatory body, if Schwab or
FirstGWL&A
reasonably determines in its sole judgment exercised in
good faith, that any
such administrative proceedings will have a material
adverse effect upon the
ability of the Fund, the Distributor or the Adviser to
perform their obligations
under this Agreement; or
(f) at the option of FirstGWL&A by written notice to the
Fund with respect
to any Portfolio if FirstGWL&A reasonably believes that
the Portfolio will fail
to meet the Section 817(h) diversification requirements
or Subchapter M
qualifications specified in Article VI hereof; or
(g) at the option of either the Fund, the Distributor or
the Adviser, if (i) the
Fund, Distributor or Adviser, respectively, shall
determine, in its sole judgment
reasonably exercised in good faith, that either
FirstGWL&A or Schwab has
suffered a material adverse change in its business or
financial condition or is
the subject of material adverse publicity and that
material adverse change or
publicity will have a material adverse impact on
FirstGWL&A's or Xxxxxx'x
ability to perform its obligations under this Agreement,
(ii) the Fund,
Distributor or Adviser notifies FirstGWL&A or Schwab, as
appropriate, of
that determination and its intent to terminate this
Agreement, and (iii) after
considering the actions taken by FirstGWL&A or Schwab and
any other
changes in circumstances since the giving of such a
notice, the determination
of the Fund, Distributor or Adviser shall continue to
apply on the sixtieth
(60th) day following the giving of that notice, which
sixtieth day shall be the
effective date of termination; or
(h) at the option of either FirstGWL&A or Schwab, if (i)
FirstGWL&A or
Schwab, respectively, shall determine, in its sole
judgment reasonably exercised
in good faith, that the Fund, Distributor or Adviser has
suffered a material
adverse change in its business or financial condition or
is the subject of
material adverse publicity and that material adverse
change or publicity will
have a material adverse impact on the Fund's,
Distributor's or Adviser's ability
to perform its obligations under this Agreement, (ii)
FirstGWL&A or Schwab
notifies the Fund, Distributor or Adviser, as
appropriate, of that determination
and its intent to terminate this Agreement, and (iii)
after considering the
actions taken by the Fund, Distributor or Adviser and any
other changes in
circumstances since the giving of such a notice, the
determination of
FirstGWL&A or Schwab shall continue to apply on the
sixtieth (60th) day
following the giving of that notice, which sixtieth day
shall be the effective date
of termination; or
(i) at the option of FirstGWL&A in the event that formal
administrative
proceedings are instituted against Schwab by the NASD,
the SEC, or any state
securities or insurance department or any other
regulatory body regarding
Xxxxxx'x duties under this Agreement or related to the
sale of the Fund's
shares or the Contracts, the operation of any Account, or
the purchase of the
Fund shares, provided, however, that FirstGWL&A
determines in its sole
judgment exercised in good faith, that any such
administrative proceedings will
have a material adverse effect upon the ability of Schwab
to perform its
obligations related to the Contracts; or
(j) at the option of Schwab in the event that formal
administrative
proceedings are instituted against FirstGWL&A by the
NASD, the SEC, or
any state securities or insurance department or any other
regulatory body
regarding FirstGWL&A's duties under this Agreement or
related to the sale
of the Fund's shares or the Contracts, the operation of
any Account, or the
purchase of the Fund shares, provided, however, that
Schwab determines in
its sole judgment exercised in good faith, that any such
administrative
proceedings will have a material adverse effect upon the
ability of
FirstGWL&A to perform its obligations related to the
Contracts; or
(k) at the option of any non-defaulting party hereto in
the event of a material
breach of this Agreement by any party hereto (the
"defaulting party") other
than as described in 10.1(a)-(j); provided, that the
non-defaulting party gives
written notice thereof to the defaulting party, with
copies of such notice to all
other non-defaulting parties, and if such breach shall
not have been remedied
within thirty (30) days after such written notice is
given, then the non-
defaulting party giving such written notice may terminate
this Agreement by
giving thirty (30) days written notice of termination to
the defaulting party.
10.2.Notice Requirement. No termination of this Agreement
shall be effective
unless and until the party terminating this Agreement gives prior
written notice to all other
parties of its intent to terminate, which notice shall set forth
the basis for the termination.
Furthermore,
(a) in the event any termination is based upon the provisions
of Article VII, or the
provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this
Agreement, the prior written
notice shall be given in advance of the effective date of
termination as required by
those provisions unless such notice period is shortened by
mutual written agreement
of the parties;
(b) in the event any termination is based upon the provisions
of Section 10.1(d),
10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior
written notice shall be given
at least sixty (60) days before the effective date of
termination; and
(c) in the event any termination is based upon the provisions
of Section 10.1(b),
10.1(c) or 10.1(f), the prior written notice shall be given in
advance of the effective
date of termination, which date shall be determined by the
party sending the notice.
10.3.Effect of Termination. Notwithstanding any termination
of this Agreement,
other than as a result of a failure by either the Fund or
FirstGWL&A to satisfy the
applicable provisions of Section 817 of the Code, the Fund, the
Distributor and the Adviser
shall, at the option of FirstGWL&A or Schwab, continue to make
available additional shares
of the Designated Portfolio(s) pursuant to the terms and conditions
of this Agreement, for
all Contracts in effect on the effective date of termination of
this Agreement (hereinafter
referred to as "Existing Contracts") unless such further sale of
shares of the Designated
Portfolios is proscribed by law or the SEC or any other regulatory
body. Specifically, without
limitation, the owners of the Existing Contracts shall be permitted
to reallocate investments
in the Designated Portfolio(s), redeem investments in the
Designated Portfolio(s) and/or
invest in the Designated Portfolio(s) upon the making of additional
purchase payments
under the Existing Contracts. The parties agree that this Section
10.3 shall not apply to any
terminations under Article VII and the effect of such Article VII
terminations shall be
governed by Article VII of this Agreement.
10.4.Surviving Provisions. Notwithstanding any termination of
this Agreement, each
party's obligations under Article VIII to indemnify other parties
shall survive and not be
affected by any termination of this Agreement. In addition, with
respect to Existing
Contracts, all provisions of this Agreement shall also survive and
not be affected by any
termination of this Agreement.
10.5.Survival of Agreement. A termination by Schwab shall
terminate this
Agreement only as to Schwab, and this Agreement shall remain in
effect as to the other par-
ties; provided, however, that in the event of a termination by
Schwab the other parties shall
have the option to terminate this Agreement upon 60 (sixty) days
notice, rather than the six
(6) months specified in Section 10.1(a).
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered
or certified mail to the
other party at the address of such party set forth below or at such
other address as such
party may from time to time specify in writing to the other party.
If to the Fund:
SAFECO Resource Series Trust
0000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Vice President
If to FirstGWL&A:
First Great-West Life & Annuity Insurance Company
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention:Assistant Vice President, Savings Products
If to the Adviser:
SAFECO Asset Management Company
0000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention:Xxxxxx Xxxxxxxxx, Vice President - Retirement
Services
If to the Distributor:
SAFECO Securities, Inc.
0000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Compliance Officer
If to Schwab:
Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention:General Counsel
ARTICLE XII. Miscellaneous
12.1.Subject to the requirements of legal process and
regulatory authority, each
party hereto shall treat as confidential the names and addresses of
the owners of the
Contracts and all information reasonably identified as confidential
in writing by any other
party hereto and, except as permitted by this Agreement, shall not
disclose, disseminate or
utilize such names and addresses and other confidential information
without the express
written consent of the affected party until such time as such
information may come into the
public domain. Without limiting the foregoing, no party hereto
shall disclose any
information that another party has designated as proprietary.
12.2.The captions in this Agreement are included for
convenience of reference only
and in no way define or delineate any of the provisions hereof or
otherwise affect their
construction or effect.
12.3.This Agreement may be executed simultaneously in two or
more counterparts,
each of which taken together shall constitute one and the same
instrument.
12.4.If any provision of this Agreement shall be held or made
invalid by a court
decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected
thereby.
12.5.Each party hereto shall cooperate with each other party
and all appropriate
governmental authorities (including without limitation the SEC, the
NASD and state
insurance regulators) and shall permit such authorities reasonable
access to its books and
records in connection with any investigation or inquiry relating to
this Agreement or the
transactions contemplated hereby. Notwithstanding the generality
of the foregoing, each
party hereto further agrees to furnish the New York Insurance
Commissioner with any
information or reports in connection with services provided under
this Agreement which such
Commissioner may request in order to ascertain whether the variable
annuity operations of
FirstGWL&A are being conducted in a manner consistent with the New
York Variable
Annuity Regulations and any other applicable law or regulations.
12.6.Any controversy or claim arising out of or relating to
this Agreement, or
breach thereof, shall be settled by arbitration in a forum jointly
selected by the relevant
parties (but if applicable law requires some other forum, then such
other forum) in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association,
and judgment upon the award rendered by the arbitrators may be
entered in any court
having jurisdiction thereof.
12.7.The rights, remedies and obligations contained in this
Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in
equity, which the parties hereto are entitled to under state and
federal laws.
12.8.This Agreement or any of the rights and obligations
hereunder may not be
assigned by any party without the prior written consent of all
parties hereto.
12.9.Schwab and FirstGWL&A are hereby expressly put on notice
of the limitation
of liability as set forth in the Trust Instrument of the Fund and
agree that the obligations
assumed by the Fund, the Distributor and the Adviser pursuant to
this Agreement shall be
limited in any case to the Fund, Distributor and Adviser and their
respective assets and
neither Schwab nor FirstGWL&A shall seek satisfaction of any such
obligation from the
shareholders of the Fund, the Distributor or the Adviser, the
Trustees, officers, employees
or agents of the Fund, Distributor or Adviser, or any of them.
12.10.The Fund, the Distributor and the Adviser agree that the
obligations assumed
by FirstGWL&A and Schwab pursuant to this Agreement shall be
limited in any case to
FirstGWL&A and Schwab and their respective assets and neither the
Fund, Distributor nor
Adviser shall seek satisfaction of any such obligation from the
shareholders of FirstGWL&A
or Schwab, the directors, officers, employees or agents of the
FirstGWL&A or Schwab, or
any of them, except to the extent permitted under this Agreement.
00.00.Xx provision of this Agreement may be deemed or
construed to modify or
supersede any contractual rights, duties, or indemnifications, as
between the Adviser and the
Fund, and the Distributor and the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to
be executed in its name and on its behalf by its duly authorized
representative and its seal
to be hereunder affixed hereto as of the date specified below.
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By its authorized officer,
By:/s/ Xxxxxx X. Xxxx
Title: Vice President, Marketing and Product
Development
Date: April 8, 1997
SAFECO RESOURCE SERIES TRUST
By its authorized officer,
By:/s/ Xxxxx X. Xxxx
Title:President
Date:April 4, 1997
SAFECO ASSET MANAGEMENT COMPANY
By its authorized officer,
By:/s/ Xxxxxx Xxxxxxxxx
Title:Vice President
Date:April 4, 1997
SAFECO SECURITIES, INC.
By its authorized officer,
By:/s/ Xxxx X. Xxxxxx
Title: Vice President
Date: April 4, 1997
XXXXXXX XXXXXX & CO., INC.
By its authorized officer,
By:/s/ Xxxx Xxxxxx
Title: Vice President, Annuities and Life Insurance
Date: April 7, 1997
Schwab
Variable Annuity
SCHEDULE A
Contracts Form Numbers
First Great-West Life & Annuity Insurance Company
Group Variable/Fixed Annuity Contract J434NY
SCHEDULE B
Designated Portfolios
Equity Portfolio
SCHEDULE C
Administrative Services
To be performed by Xxxxxxx Xxxxxx & Co., Inc.
X. Xxxxxx will provide the properly registered and licensed
personnel and systems
needed for all customer servicing and support - for both Fund and
Contract information
and questions - including:
respond to Contractowner inquiries;
delivery of prospectus - both Fund and Contract;
entry of initial and subsequent orders;
transfer of cash to insurance company and/or Fund;
explanations of Fund objectives and characteristics;
entry of transfers between Unaffiliated Funds, including the
Designated Portfolios;
Contract balance and allocation inquiries;
communicate all purchase, withdrawal, and exchange orders it
receives from its
customers to FirstGWL&A which will transmit them to each
Fund;
mail Fund prospectus.
B. For the services, Schwab shall receive a fee of 0.25% per
annum applied to the
average daily value of the shares of the Fund held by Xxxxxx'x
customers, payable by the
Adviser directly to Schwab, such payments being due and payable
within 15 (fifteen) days
after the last day of the month to which such payment relates.
C. The Fund will calculate and Schwab will verify with FirstGWL&A
the asset
balance for each day on which the fee is to be paid pursuant to
this Agreement with
respect to each Designated Portfolio.
SCHEDULE D
Reports per Section 6.6
With regard to the reports relating to the quarterly testing
of compliance with the
requirements of Section 817(h) and Subchapter M under the Internal
Revenue Code (the
"Code") and the regulations thereunder, the Fund shall provide
within twenty (20)
Business Days of the close of the calendar quarter a report to
FirstGWL&A in the Form
D1 attached hereto and incorporated herein by reference, regarding
the status under
such sections of the Code of the Designated Portfolio(s), and if
necessary, identification
of any remedial action to be taken to remedy non-compliance.
With regard to the reports relating to the year-end testing of
compliance with the
requirements of Subchapter M of the Code, referred to hereinafter
as "RIC status," the
Fund will provide the reports on the following basis: (i) the last
quarter's quarterly
reports can be supplied within the 20-day period, and (ii) a
year-end report will be
provided 45 days after the end of the calendar year. However, if
a problem with regard
to RIC status, as defined below, is identified in the third quarter
report, on a weekly
basis, starting the first week of December, additional interim
reports will be provided
specially addressing the problems identified in the third quarter
report. If any interim
report memorializes the cure of the problem, subsequent interim
reports will not be
required.
A problem with regard to RIC status is defined as any
violation of the following
standards, as referenced to the applicable sections of the Code:
(a) Less than ninety percent of gross income is derived from
sources of income
specified in Section 851(b)(2);
(b) Thirty percent or greater gross income is derived from
the sale or disposition
of assets specified in Section 851(b)(3);
(c) Less than fifty percent of the value of total assets
consists of assets specified in
Section 851(b)(4)(A); and
(d) No more than twenty-five percent of the value of total
assets is invested in the
securities of one issuer, as that requirement is set forth in
Section 851(b)(4)(B).
FORM D1
CERTIFICATE OF COMPLIANCE
I, , a duly authorized officer,
director or agent of
Fund hereby swear and affirm that Fund is in
compliance with all
requirements of Section 817(h) and Subchapter M of the Internal
Revenue Code (the
"Code") and the regulations thereunder as required in the Fund
Participation Agreement
among First Great-West Life & Annuity Insurance Company, Xxxxxxx
Xxxxxx & Co., Inc.
and other than the exceptions discussed below:
Exceptions Remedial Action
If no exception to report, please indicate "None."
Signed this day of
, .
(Signature)
By:
(Type or Print Name and
Title/Position)
SCHEDULE E
EXPENSES
The Fund and/or the Distributor and/or Adviser, and FirstGWL&A will
coordinate the functions and pay the costs of the completing these
functions based
upon an allocation of costs in the tables below. Costs shall be
allocated to reflect
the Fund's share of the total costs determined on a pro rata basis
according to the
number of pages of the Fund's respective portions of the documents.
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
Mutual Fund
Prospectus
Printing of combined
prospectuses
FirstGWL&A
Fund, Distributor
or Adviser, as
applicable
Fund, Distributor or
Adviser shall supply
FirstGWL&A with
such numbers of the
Designated Portfolio(s)
prospectus(es) as
FirstGWL&A shall
reasonably request
FirstGWL&A
Fund, Distributor
or Adviser, as
applicable
Distribution to New
and Inforce Clients
FirstGWL&A
FirstGWL&A
Distribution to
Prospective Clients
Schwab
Schwab
Product Prospectus
Printing for Inforce
Clients
FirstGWL&A
FirstGWL&A
Printing for Prospective
Clients
FirstGWL&A
Schwab
Distribution to New
and Inforce Clients
FirstGWL&A
FirstGWL&A
Distribution to
Prospective Clients
Schwab
Schwab
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
Mutual Fund
Prospectus Update &
Distribution
If Required by Fund,
Distributor or Adviser
Fund, Distributor or
Adviser
Fund, Distributor
or Adviser
If Required by
FirstGWL&A
FirstGWL&A
FirstGWL&A
If Required by Schwab
Schwab
Schwab
Product Prospectus
Update & Distribution
If Required by Fund,
Distributor or Adviser
FirstGWL&A
Fund, Distributor
or Adviser
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
If Required by
FirstGWL&A
FirstGWL&A
FirstGWL&A
If Required by Schwab
Schwab
Schwab
Mutual Fund SAI
Printing
Fund, Distributor or
Adviser
Fund, Distributor
or Adviser
Distribution
FirstGWL&A
FirstGWL&A
Product SAI
Printing
FirstGWL&A
FirstGWL&A
Distribution
FirstGWL&A
FirstGWL&A
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
Proxy Material for
Mutual Fund:
Printing if proxy
required by Law
Fund, Distributor or
Adviser
Fund, Distributor
or Adviser
Distribution (including
labor) if proxy required
by Law
FirstGWL&A
Fund, Distributor
or Adviser
Printing & distribution
if required by
FirstGWL&A
FirstGWL&A
FirstGWL&A
Printing & distribution
if required by Schwab
FirstGWL&A
Schwab
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
Mutual Fund Annual &
Semi-Annual Report
Printing of combined
reports
FirstGWL&A
Fund, Distributor
or Adviser
Distribution
FirstGWL&A
FirstGWL&A and
Schwab
Other communication
to New and Prospective
clients
If Required by the
Fund, Distributor or
Adviser
Schwab
Fund, Distributor
or Adviser
If Required by
FirstGWL&A
Schwab
FirstGWL&A
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
If Required by Schwab
Schwab
Schwab
Other communication
to inforce
Distribution (including
labor and printing) if
required by the Fund,
Distributor or Adviser
FirstGWL&A
Fund, Distributor
or Adviser
Distribution (including
labor and printing) if
required by
FirstGWL&A
FirstGWL&A
FirstGWL&A
Distribution (including
labor and printing) if
required by Schwab
FirstGWL&A
Schwab
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
Errors in Share Price
calculation pursuant to
Section 1.10
Cost of error to
participants, if any
FirstGWL&A
Fund or Adviser
Cost of administrative
work to correct error, if
any
FirstGWL&A
Fund or Adviser
Operations of the Fund
All operations and
related expenses,
including the cost of
registration and
qualification of shares,
taxes on the issuance or
transfer of shares, cost
of management of the
business affairs of the
Fund, and expenses
paid or assumed by the
fund pursuant to any
Rule 12b-1 plan
Fund, Distributor or
Adviser
Fund or Adviser
Operations of the
Account
Federal registration of
units of separate
account (24f-2 fees)
FirstGWL&A
FirstGWL&A
