Exhibit (8)(h)
PARTICIPATION AGREEMENT
AMONG
THE UNITED STATES LIFE INSURANCE COMPANY
IN THE CITY OF NEW YORK,
AMERICAN GENERAL SECURITIES INCORPORATED,
SAFECO RESOURCE SERIES TRUST
AND
SAFECO SECURITIES, INC.
DATED AS OF
________________________________
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the ______ day of
_____________, 1999 ("Agreement"), by and among The United States Life Insurance
Company in the City of New York, a New York life insurance company ("USL") (on
behalf of itself and its "Separate Account," defined below), American General
Securities Incorporated, a Texas corporation ("AGSI"), the principal underwriter
and distributor with respect to the Policies referred to below, SAFECO Resource
Series Trust, an unincorporated business trust organized under the laws of the
state of Delaware, (the "Fund"), and SAFECO Securities, Inc., a Washington
corporation, (the "Distributor"), the Fund's principal underwriter
(collectively, the "Parties").
WITNESSETH THAT:
WHEREAS the Distributor and the Fund desire that shares of the Fund's
Equity Portfolio and Growth Portfolio (the "Series"; reference herein to the
"Fund" includes reference to each of the foregoing Series to the extent the
context requires) be made available by the Distributor to serve as underlying
investment media for those variable life insurance policies of USL that are the
subject of USL's Form S-6 registration statement filed with the Securities and
Exchange Commission (the "SEC"), File No. 333-________ and 811-________ (the
"Policies") and to be offered through AGSI.
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and the Distributor will make shares in the Series
available to USL for this purpose at net asset value and with no sales charges,
all subject to the following provisions:
Section 1. Introduction
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1.1 Availability of Separate Account Divisions.
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USL represents that Separate Account USL VL-R (the "Separate Account") is
and will continue to be available to serve as an investment vehicle for its
Policies. The Policies provide for the allocation of net amounts received by USL
to separate series (the "Divisions"; reference herein
to the "Separate Account" includes reference to each Division to the extent the
context requires) of the Separate Account for investment in the shares of
corresponding Series of the Fund that are made available through the Separate
Account to act as underlying investment media. Other series of the Fund may
become subject to this Agreement, upon mutual agreement of the parties. USL will
not unreasonably deny any request by the Distributor to create new Divisions
corresponding to such other Series.
1.2 Broker-Dealer Registration.
--------------------------
The Distributor and AGSI each represents and warrants that it is and will
remain duly registered as a broker-dealer with the SEC under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and is a member in good
standing of the National Association of Securities Dealers, Inc. (the "NASD").
Section 2. Processing Transactions
-----------------------------------
2.1 The Fund agrees, as provided in its Registration Statement, to
make available to the Separate Account, and any Division, shares of the Series
for investment of purchase payments of the Policies allocated to the Separate
Account.
2.2 The Fund agrees to sell to USL those shares of the Series which USL
orders. Orders which are sent by USL to the Fund and received by the Fund by
8:00 a.m. Pacific time, will be executed by the Fund at the net asset value
determined on the prior Business Day. Any orders received by the Fund after 8:00
a.m. and prior to 1:00 p.m. Pacific time, will be executed by the Fund at the
net asset value next computed pursuant to the rules of the SEC. For purposes of
this Section 2.2, the Fund hereby appoints USL as its designee for receipt of
such orders from the Separate Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice from USL
by telephone or facsimile (or by such other means as the Fund and USL may agree
in writing) of receipt of such orders by 8:00 a.m. Pacific time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock
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Exchange is open for trading and on which the Fund calculates its net asset
value pursuant to the rules of the SEC.
2.3 The Fund agrees to redeem, on USL's request, any full or fractional
shares of the Fund held by USL, executing such requests on each Business Day at
the net asset value next computed after receipt by the Fund or its designee of
the request for redemption, in accordance with the provisions of this Agreement
and the Fund's Registration Statement. For purposes of this Section 2.3, USL
hereby appoints the Fund as its designee for receipt of requests for redemption
from the Separate Account and receipt by such designee shall constitute receipt
by the Fund; provided that the Fund receives notice from USL by telephone or
facsimile (or by such other means as the Fund and USL may agree in writing) of
receipt of such request for redemption by 8:00 a.m. Pacific time on the next
following Business Day.
2.4 In the event that USL's order results in a net purchase of Series
shares, USL shall pay for Series shares on the same Business Day that the notice
of order to purchase the Fund shares is made in accordance with the provisions
of this section. If USL's order requests a net redemption resulting in a payment
of redemption proceeds to USL, the Fund shall normally pay and transmit the
proceeds of redemptions of Series shares on the same Business Day that the
notice of a redemption order is received in accordance with the provisions of
this Agreement, unless doing so would require the Fund to dispose of Series
securities or otherwise incur additional costs. In any event, proceeds shall be
wired to USL within three (3) Business Days or such longer period permitted by
the Investment Company Act of 1940, as amended (the "1940 Act") or the rules,
orders or regulations thereunder, and the Fund shall notify the person
designated in writing by USL as the recipient for such notice of such delay by
1:00 p.m. Pacific time the same Business Day that USL transmits the redemption
order to the Fund. If USL's order requests the application of redemption
proceeds from the redemption of shares to the purchase of shares of another fund
advised by Adviser (as defined below), the Fund shall so apply such proceeds the
same Business Day that USL transmits such order to the Fund. Any payment made
pursuant to this Section 2.4 shall be in federal funds transmitted by wire.
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2.5 The Fund will provide to USL closing net asset value per share for the
Series at the close of trading each Business Day. In any event, the Fund shall
use its best efforts to make the net asset value per share for each Series
available by 3:30 p.m. Pacific time each Business Day, and as soon as reasonably
practicable after the net asset value per share for each Series is calculated,
and shall calculate such net asset value in accordance with the Fund's
Registration Statement. Any material error in the calculation of the net asset
value of the Series shall be reported immediately to USL.
2.6 At the end of each Business Day, USL shall use the information
described in Section 2.5 to calculate Separate Account unit values for the day.
Using these unit values, USL shall process each such Business Day's Separate
Account transactions based on requests and premiums received by it by the close
of trading on the floor of the New York Stock Exchange (currently 4:00 p.m. New
York time) to determine the net dollar amount of the Fund shares which shall be
purchased or redeemed at that day's closing net asset value per share. The net
purchase or redemption orders so determined shall be transmitted to the Fund by
USL by 8:00 a.m. Pacific time on the Business Day next following USL's receipt
of such requests and premiums in accordance with the terms of Sections 2.2 and
2.3 hereof. Orders will be sent directly, via facsimile (or by such other means
as the Fund and USL may agree in writing), to the Fund or such other person as
the Fund may designate.
2.7 The Fund shall furnish, on or before the exdividend date, notice to
USL of any income dividends or capital gain distributions payable on the shares
of any Series. USL hereby elects to receive all such income dividends and
capital gain distributions as are payable on a Series' shares in additional
shares of the Series, but reserves the right to revoke the election and to
receive all such income dividends and capital gain distributions in cash. The
Fund shall notify USL or its designee of the number of shares so issued as
payment of such dividends and distributions.
2.8 The Fund may refuse to sell shares of any Series to any person or
suspend or terminate the offering of the shares of or liquidate any Series if
such action is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the Board of Trustees of the
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Fund (the "Board of Trustees"), acting in good faith and in light of its duties
under federal and any applicable state laws, deemed necessary, desirable or
appropriate and in the best interests of the shareholders of such Series. The
Fund further reserves the right to pay any portion of a redemption in kind of
portfolio securities of any Series if the Fund's Board of Trustees determines
that it would be detrimental to the best interests of the shareholders to make a
redemption wholly in cash.
2.9 Issuance and transfer of Series shares will be by book entry only.
Stock certificates will not be issued to USL or the Separate Account. Shares
ordered from the Series will be recorded in appropriate book entry titles for
the Separate Account.
2.10 Each Party has the right to rely on information or confirmations
provided by each other Party (or by any affiliate of each other Party) and shall
not be liable in the event that an error is a result of any misinformation
supplied by any other Party or any such affiliate. If a mistake is caused in
supplying such information or confirmations, which results in a reconciliation
with incorrect information, the amount required to make a Policy owner's or
participant's account whole shall be borne by the Party providing the incorrect
information.
Section 3. Costs and Expenses
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3.1 General.
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Except as otherwise specifically provided herein, each Party will bear
all expenses incident to its performance under this Agreement.
3.2 Expense allocations.
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(a) The Fund will pay the cost of keeping its registration of shares
under the Securities Act of 1933, as amended (the "1933 Act") and its
registration as a management investment company under the 1940 Act, current and
effective. USL will pay the cost of registering the Separate Account as a unit
investment trust under the 1940 Act and registering units of interest under the
Policies under the 1933 Act and keeping such registrations current and
effective.
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(b) At least annually, the Fund or its designee shall provide USL
with the current prospectus, statement of additional information and any
supplements thereto for the shares of the Series in the form of "camera ready"
copy as set in type or, at the request of USL, as a diskette in the form sent to
the financial printer. The prospectuses provided by the Fund shall be limited to
only those Series of the Fund that are made available through the Separate
Account to serve as underlying investments. The Fund shall be responsible for
providing the prospectus and/or statement of additional information in the
format (i.e., "camera ready" or diskette) in which it is accustomed to
formatting prospectuses and/or statements of additional information and shall
bear the expense of providing the prospectus and/or statement of additional
information, and any supplements thereto, in such format (e.g. typesetting
expenses), and USL shall bear the expense of adjusting or changing the format to
conform with any of its prospectuses and/or statements of additional
information. At USL's option and expense, once a year (or more frequently if the
prospectus and/or statement of additional information for the shares is
supplemented or amended), USL may cause the Fund's prospectus and/or statement
of additional information to be printed separately and/or together in one
document with the prospectus and/or statement of additional information for
other investment companies and/or for the Policies. USL shall be responsible for
the costs of printing the Fund's prospectus and/or statement of additional
information, either separately or in combination as aforesaid, and distribution
to existing Policy owners whose Policies are funded by such shares and to
prospective purchasers of Policies; provided that the Fund shall be responsible
for one-half of the cost of printing the Fund's prospectus in a quantity
sufficient to provide each existing Policy owner with a copy.
(c) The Fund and USL will each bear one-half of the costs of
preparing, filing with the SEC and setting for printing the Fund's periodic
reports to shareholders, the Fund proxy material and other shareholder
communications (collectively "Fund Reports") provided to existing owners under
the Policies (collectively, "Participants") and USL will bear the costs of
delivering the Fund Reports to Participants.
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(d) USL will bear the costs of preparing, filing with the SEC,
setting for printing, printing and delivering to Participants the Separate
Account's prospectus, statement of additional information and any supplements
thereto (collectively, the "Separate Account Prospectus"), periodic reports to
Participants, voting instruction solicitation material, and other Participant
communications.
3.3 Parties to Cooperate.
--------------------
The Fund, USL, AGSI and the Distributor each agrees to cooperate with the
others, as applicable, in arranging to print, mail and/or deliver combined or
coordinated prospectuses or other materials of the Fund and Separate Account.
Section 4. Legal Compliance
----------------------------
4.1 Tax Laws.
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(a) The Fund represents and warrants that each Series is currently
qualified as a regulated investment company ("RIC") under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), and represents that it
will make every effort to qualify and to maintain qualification of each Series
as a RIC. The Fund or the Distributor will notify USL immediately upon having a
reasonable basis for believing that a Series has ceased to so qualify or that it
might not so qualify in the future.
(b) USL represents and warrants that the Policies are currently and
at the time of issuance will be treated as life insurance policies under
applicable provisions of the Code and that it will make every effort to maintain
such treatment. USL will notify the Fund and the Distributor immediately upon
having a reasonable basis for believing that any of the Policies have ceased to
be so treated or that they might not be so treated in the future.
(c) The Fund represents and warrants that each Series is currently in
compliance with the diversification requirements set forth in Section 817(h) of
the Code and Section 1.817-5 of the regulations under the Code, and the Fund
represents that it will make every effort to maintain
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each Series' compliance with such diversification requirements. The Fund or the
Distributor will notify USL immediately upon having a reasonable basis for
believing that a Series has ceased to so comply or that a Series might not so
comply in the future.
(d) USL represents and warrants that the Separate Account is a
"segregated asset account" and that interests in the Separate Account are
offered exclusively through the purchase of or transfer into a "variable
contract," within the meaning of such terms under Section 817(h) of the Code and
the regulations thereunder. USL will make every effort to continue to meet such
definitional requirements, and it will notify the Fund and the Distributor
immediately upon having a reasonable basis for believing that such requirements
have ceased to be met or that they might not be met in the future.
quarter.
(e) The Fund represents that, under the terms of its investment
advisory agreements with SAFECO Asset Management Company (the "Adviser"), the
Adviser is and will be responsible for managing the Fund in compliance with the
Fund's investment objectives, policies and restrictions as set forth in the Fund
Prospectus. The Fund represents that these objectives, policies and restrictions
do and will include operating as a RIC in compliance with Subchapter M of the
Code and Section 817(h) of the Code and regulations thereunder. The Fund has
adopted and will maintain procedures for ensuring that the Fund is managed in
compliance with Subchapter M and Section 817(h) and regulations thereunder. On
request, the Fund shall also provide USL with such materials, cooperation and
assistance as may be reasonably necessary for USL or any appropriate person
designated by USL to review from time to time the procedures and practices of
the Adviser or each sub-investment adviser to the Fund for ensuring that the
Fund is managed in compliance with Subchapter M and Section 817(h) and
regulations thereunder.
In the event of any noncompliance regarding its status as a RIC, the Fund will
pursue those efforts necessary to enable each affected Series to qualify once
again for treatment as a RIC in compliance with Subchapter M, including
cooperation in good faith with USL. If the Fund does not so cure the
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noncompliance regarding its status under Section 817(h), the Fund will cooperate
in good faith with USL's efforts to obtain a ruling and closing agreement, as
provided in Revenue Procedure 92-25 issued by the Internal Revenue Service (or
any applicable ruling or procedure subsequently issued by the Internal Revenue
Service), that the Series satisfies Section 817(h) for the period or periods of
non-compliance.
4.2 Insurance and Certain Other Laws.
--------------------------------
(a) The Distributor and the Fund make no representation as to whether
any aspect of the Fund's operations complies with the insurance laws or
regulations of the various states. The Fund will use reasonable efforts to
comply with any applicable state insurance laws or regulations, to the extent
specifically requested in writing by USL.
(b) USL represents and warrants that (i) it is an insurance company
duly organized, validly existing and in good standing under the insurance laws
of the State of New York and the regulations thereunder, and has full corporate
power, authority and legal right to execute, deliver and perform its duties and
comply with its obligations under this Agreement, (ii) it has legally and
validly established and maintains the Separate Account as a segregated asset
account under Article 3.75 of the Texas Insurance Code, and (iii) the Policies
comply in all material respects with all other applicable federal and state laws
and regulations.
(c) USL and AGSI represent and warrant that AGSI is a business
corporation duly organized, validly existing, and in good standing under the
laws of the State of Texas and has full corporate power, authority and legal
right to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.
(d) The Distributor represents and warrants that it is a business
corporation duly organized, validly existing, and in good standing under the
laws of the State of Washington and has full corporate power, authority and
legal right to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.
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(e) The Distributor and the Fund represent and warrant that the Fund
is a business trust duly organized, validly existing, and in good standing
under the laws of the state of Delaware and has full power, authority, and legal
right to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.
4.3 Securities Laws.
---------------
(a) USL represents and warrants that (i) it has registered the
Separate Account as a unit investment trust in accordance with the provisions of
the 1940 Act to serve as a segregated investment account for its variable life
insurance policies, including the Policies, (ii) the Separate Account does and
will comply in all material respects with the requirements of the 1940 Act and
the rules thereunder, (iii) the Separate Account's 1933 Act registration
statement relating to the Policies, together with any amendments thereto, will
at all times comply in all material respects with the requirements of the 1933
Act and the rules thereunder,(iv) the Separate Account Prospectus will at all
times comply in all material respects with the requirements of the 1933 Act and
the rules thereunder; and (v) interests in the Separate Account pursuant to the
Policies will be registered under the 1933 Act to the extent required by the
1933 Act and the Policies will be duly authorized for issuance and sold in
compliance with all applicable federal and state laws and that the sale of the
Policies will comply in all material respects with state insurance suitability
requirements.
(b) The Fund and the Distributor represent and warrant that (i) Fund
shares sold pursuant to this Agreement will be registered under the 1933 Act to
the extent required by the 1933 Act and duly authorized for issuance and sold in
compliance with Washington law, (ii) the Fund is and will remain registered
under the 1940 Act to the extent required by the 1940 Act, and (iii) the Fund
will amend the registration statement for its shares under the 1933 Act and
itself under the 1940 Act from time to time as required in order to effect the
continuous offering of its shares.
(c) The Fund represents and warrants that (i) the Fund does and will
comply in all material respects with the requirements of the 1940 Act and the
rules thereunder, (ii) its 1933 Act registration statement, together with any
amendments thereto, will at all times comply in all material
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respects with the requirements of the 1933 Act and rules thereunder, and (iii)
the Fund Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(d) The Fund will register and qualify its shares for sale in
accordance with the laws of any state or other jurisdiction only if and to the
extent reasonably deemed advisable by the Fund, USL or any other life insurance
company utilizing the Fund.
(e) USL represents and warrants that its directors, officers, and
employees, if any, dealing with the money and/or securities of the Fund are and
shall continue to be at all times covered by a blanket fidelity bond or similar
coverage in an amount not less than $2 million. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
(f) The Fund represents and warrants that its directors, officers,
and employees, if any, dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage in an amount not less than the minimal coverage as required
currently by Rule 17g-1 of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
4.4 Notice of Certain Proceedings and Other Circumstances.
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(a) The Distributor or the Fund shall promptly notify USL of (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to the Fund's registration statement
under the 1933 Act or the Fund Prospectus, (ii) any request by the SEC for any
amendment to such registration statement or Fund Prospectus, (iii) the
initiation of any proceedings for that purpose or for any other purpose relating
to the registration or offering of the Fund's shares, or (iv) any other action
or circumstances that may prevent the lawful offer or sale of Fund shares in any
state or jurisdiction, including, without limitation, any
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circumstances in which (x) the Fund's shares are not registered and, in all
material respects, issued and sold in accordance with applicable state and
federal law or (y) such law precludes the use of such shares as an underlying
investment medium of the Policies issued or to be issued by USL. The Distributor
and the Fund will make every reasonable effort to prevent the issuance of any
stop order, cease and desist order or similar order and, if any such order is
issued, to obtain the lifting thereof at the earliest possible time.
(b) USL or AGSI shall promptly notify the Fund of (i) the issuance by
any court or regulatory body of any stop order, cease and desist order, or other
similar order with respect to the Separate Account's registration statement
under the 1933 Act relating to the Policies or the Separate Account Prospectus,
(ii) any request by the SEC for any amendment to such registration statement or
Separate Account prospectus, (iii) the initiation of any proceedings for that
purpose or for any other purpose relating to the registration or offering of the
Separate Account interests pursuant to the Policies, (iv) any other action or
circumstances that prevent the lawful offer or sale of said interests in any
state or jurisdiction, including without limitation, any circumstances in which
said interests are not registered and in all material respects issued and sold
in accordance with applicable state and federal law. USL and AGSI will make
every reasonable effort to prevent the issuance of any stop order, cease and
desist order or similar order and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.
4.5 USL to Provide Documents.
------------------------
USL will provide to the Fund one complete copy of all SEC registration
statements, Separate Account Prospectuses, annual and semi-annual reports, any
preliminary and final voting instruction solicitation material, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Separate Account or the Policies, contemporaneously
with the filing of such document with the SEC or other regulatory authorities.
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4.6 Fund to Provide Documents.
-------------------------
The Fund will provide to USL one complete copy of all SEC registration
statements, Fund Prospectuses, annual and semi-annual reports, any preliminary
and final proxy material, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Fund or its
shares, contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
4.7 Sales Literature
----------------
(a) USL will furnish, or will cause to be furnished, to the Fund and
Distributor for review, each piece of sales literature or other promotional
material in which the Fund, or any Series thereof, or Adviser is named, before
such material is submitted to any regulatory body for review, and in any event,
at least fifteen (15) Business Days prior to its use. No such material will be
used if the Fund or Distributor objects to its use in writing within fifteen
(15) Business Days after receipt of such material.
(b) Advertising and sales literature with respect to USL, the Separate
Account and/or the Policies prepared by the Fund, Distributor or any affiliate
thereof will be submitted to USL for review before such material is submitted to
any regulatory body for review, and in any event, at least fifteen (15) Business
Days prior to its use. No such material will be used if USL objects to its use
in writing within fifteen (15) Business Days after receipt of such material.
(c) The Fund and its affiliates and agents shall not give any
information or make any representations on behalf of USL or concerning USL, the
Separate Account or the Policies issued by USL, other than the information or
representations contained in a registration statement or prospectus for such
Policies, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports of the Separate Account or reports
prepared for distribution to owners of such Policies, or in sales literature or
other promotional material approved by USL or its designee, without the written
permission of USL.
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(d) USL and its affiliates and agents shall not give any information
or make any representations on behalf of the Fund or concerning the Fund other
than the information or representations contained in a Registration Statement or
prospectus for the Fund, as such Registration Statement and prospectus may be
amended or supplemented from time to time, or in reports of the Fund or reports
prepared for distribution to owners of shares of the Fund or for owners of the
Policies, or in sales literature or other promotional material approved by the
Fund or its designee, without the written permission of the Fund.
(e) For purposes of this Agreement, the phrase "sales literature or
other promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for use, in
a newspaper, magazine or other periodical, radio, television, electronic media,
telephone or tape recording, videotape display, signs or billboards, motion
pictures or other public media), sales literature (such as any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, seminar texts, or reprints or excerpts of any other advertisement,
sales literature, or published article), educational or training materials or
other communications distributed or made generally available to some or all
agents or employees, registration statements, prospectuses, statements of
additional information, shareholder reports and proxy materials, and any other
material constituting sales literature or advertising under National Association
of Securities Dealers, Inc. ("NASD") rules, the 1940 Act or the 1933 Act.
(f) USL will bear the cost of printing and delivering to prospective
purchasers of the Policies Fund and Separate Account sales literature or other
promotional material and the cost of filing any such materials with, and
obtaining approval from, any state insurance regulatory authorities.
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Section 5. Mixed and Shared Funding
------------------------------------
5.1 General.
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The order Fund has obtained, and USL has received and reviewed, a copy
of the amended and restated application for exemptive relief filed by the Fund
and certain affiliates on December 20, 1995 with the SEC and the Exemptive Order
issued by the SEC on January 17, 1996 in response thereto (Securities and
Exchange Commission Release No. IC-21608 the "Mixed and Shared Funding Order")
exempting it from certain provisions of the 1940 Act and rules thereunder so
that the Fund may be available for investment by certain other entities,
including, without limitation, separate accounts funding variable life insurance
policies and variable annuity contracts, separate accounts of insurance
companies unaffiliated with USL and trustees of qualified pension and retirement
plans ("Mixed and Shared Funding"). The Parties recognize that the SEC has
imposed terms and conditions for such orders that are substantially identical to
many of the provisions of this Section 5. The Parties represent and warrant
that they will comply with the terms and conditions of the SEC order, whether or
not recited in this Section 5.
5.2 Disinterested Directors.
-----------------------
The Fund agrees that the Board of Trustees shall at all times consist
of Trustees, a majority of whom (the "Disinterested Directors") are not
interested persons of the Adviser or the Distributor within the meaning of
Section 2(a)(19) of the 1940 Act and the rules thereunder and as modified by any
applicable orders of the SEC, except that if this condition is not met by reason
of the death, disqualification, or bona fide resignation of any Trustee or
Trustees, then the operation of this condition shall be suspended (a) for a
period of 45 days if the vacancy or vacancies may be filled by the Board of
Trustees; (b) for a period of 60 days if a vote of shareholders is permitted to
fill the vacancy or vacancies; or (C) for such longer period as the SEC may
permit.
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5.3 Monitoring for Material Irreconcilable Conflicts.
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The Fund agrees that the Board of Trustees will monitor for the
existence of any material irreconcilable conflict between the interests of the
Participants of all separate accounts of life insurance companies utilizing the
Fund, including the Separate Account. The concept of a "material irreconcilable
conflict" is not defined by the 1940 Act or the rules thereunder, but the
Parties recognize that such a conflict may arise for a variety of reasons,
including, without limitation:
(a) an action by any state insurance or other regulatory
authority;
(b) a change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private letter ruling, no-
action or interpretative letter, or any similar action by insurance, tax or
securities regulatory authorities;
(c) an administrative or judicial decision in any relevant
proceeding;
(d) the manner in which the investments of any Series are being
managed;
(e) a difference in voting instructions given by variable
insurance life insurance policy and variable annuity contract participants or by
participants of different life insurance companies utilizing the Fund; or
(f) a decision by a life insurance company utilizing the Fund to
disregard the voting instructions of participants.
USL will report any potential or existing conflicts of which it becomes
aware to the Fund's Board of Trustees. USL will assist the Board in carrying
out its responsibilities under the Mixed and Shared Funding Order by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This assistance shall include, but is not limited to, an
obligation by USL to (i) inform the Board whenever the voting instructions of
the Policy owners or Participants are disregarded, and (ii) to submit to the
Board such reports, materials or data as the Board may
16
reasonably request so that the Board may fully carry out the obligations imposed
upon it by the Mixed and Shared Funding Order, and such reports, materials and
data shall be submitted more frequently if deemed appropriate by the Board. USL
will carry out its responsibilities under this paragraph with a view only to the
interests of the Policy owners and Participants.
5.4 Conflict Remedies.
-----------------
(a) It is agreed that if it is determined by a majority of the members
of the Board of Trustees or a majority of the Disinterested Trustees that a
material irreconcilable conflict exists affecting USL, USL will, at its own
expense and to the extent reasonably practicable (as determined by a majority of
the Disinterested Trustees), take whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, which steps may include, but are
not limited to:
(i) withdrawing the assets allocable to the separate account from
the Fund or any series and reinvesting such assets in a
different investment medium, including another series of the
Fund or another investment company, or submitting the
question whether such segregation should be implemented to a
vote of all affected Participants and, as appropriate,
segregating the assets of any particular group (e.g.,
variable life insurance contract owners, variable annuity
contract owners or all variable contract owners and
participants of one or more life insurance companies
utilizing the Fund) that votes in favor of such segregation,
or offering to the affected variable contract owners or
participants the option of making such a change; and
(ii) establishing a new registered investment company of the type
defined as a "Management Company" in Section 4(3) of the
1940 Act or a new separate account that is operated as a
Management Company.
17
(b) If the material irreconcilable conflict arises because of USL's
decision to disregard Participant voting instructions and that decision
represents a minority position or would preclude a majority vote, USL may be
required, at the Fund's election, to withdraw the Separate Account's investment
in the Fund. No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal must take place within six months after the
Fund gives notice to USL that this provision is being implemented, and until
such withdrawal the Distributor and Fund shall continue to accept and implement
orders by USL for the purchase and redemption of shares of the Fund.
(c) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to USL conflicts with the
majority of other state regulators, then USL will withdraw the Separate
Account's investment in the Fund within six months after the Fund's Board of
Directors informs USL that it has determined that such decision has created a
material irreconcilable conflict, and until such withdrawal the Distributor and
Fund shall continue to accept and implement orders by USL for the purchase and
redemption of shares of the Fund.
(d) USL agrees that any remedial action taken by it in resolving any
material irreconcilable conflict will be carried out at its expense and with a
view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors
will determine whether or not any proposed action adequately remedies any
material irreconcilable conflict. In no event, however, will the Fund or the
Distributor be required to establish a new funding medium for any Policies. USL
will not be required by the terms hereof to establish a new funding medium for
any Policies if any offer to do so has been declined by vote of a majority of
Participants materially adversely affected by the material irreconcilable
conflict.
18
5.5 Notice to USL.
-------------
The Fund will promptly make known in writing to USL the Board of
Trustees' determination of the existence of a material irreconcilable conflict,
a description of the facts that give rise to such conflict and the implications
of such conflict.
5.6 Information Requested by Board of Trustees.
------------------------------------------
USL will at least annually submit to the Board of Trustees of the Fund
such reports, materials or data as the Board of Trustees may reasonably request
so that the Board of Trustees may fully carry out the obligations imposed upon
it by the provisions hereof, and said reports, materials and data will be
submitted at any reasonable time deemed appropriate by the Board of Trustees.
All reports received by the Board of Trustees of potential or existing
conflicts, and all Board of Trustees actions with regard to determining the
existence of a conflict, notifying life insurance companies utilizing the Fund
of a conflict, and determining whether any proposed action adequately remedies a
conflict, will be properly recorded in the minutes of the Board of Trustees or
other appropriate records, and such minutes or other records will be made
available to the SEC upon request.
5.7 Compliance with SEC Rules.
-------------------------
If, at any time during which the Fund is serving an investment medium
for variable life insurance policies, 1940 Act Rules 6e-3(T) or, if applicable,
6e-2 are amended or Rule 6e-3 is adopted to provide exemptive relief with
respect to mixed and shared funding, the Parties agree that they will comply
with the terms and conditions thereof and that the terms of this Section 5 shall
be deemed modified if and only to the extent required in order also to comply
with the terms and conditions of such exemptive relief that is afforded by any
of said rules that are applicable.
Section 6. Termination
-----------------------
6.1 Events of Termination.
---------------------
Subject to Section 6.4 below, this Agreement will terminate as to a
Series:
19
(a) at the option of USL, the Distributor or the Fund upon (i)
at least six months' advance written notice to the other Parties unless a
shorter time period is agreed to by the parties,
(b) at the option of the Fund upon
(i) at least sixty days advance written notice to the other
parties, and
(ii) the approval by (x) a majority of the Disinterested
Directors or (y) a majority vote of the shares of the
affected Series that are held in the corresponding Divisions
of the Separate Account (pursuant to the procedures set
forth in Section 10 of this Agreement for voting Series
shares in accordance with Participant instructions);or
(c) at the option of the Fund upon written notice upon institution of
formal proceedings against USL or AGSI by the SEC, the NASD, any state insurance
regulator or any other regulatory body regarding USL's duties under this
Agreement or related to the sale of the Policies, the operation of the Separate
Account, or the purchase of the Fund shares, if, in each case, the Fund
reasonably determines that such proceedings, or the facts on which such
proceedings may be based, have a material likelihood of imposing material
adverse consequences on the Series to be terminated; or
(d) at the option of USL upon written notice upon institution of
formal proceedings against the Fund, the Adviser or any sub-investment adviser
to the Fund, or the Distributor by the NASD, the SEC, or any state securities or
insurance department or any other regulatory body, if, in each case, USL
reasonably determines that such proceedings, or the facts on which such
proceedings may be based, have a material likelihood of imposing material
adverse consequences on USL, AGSI or the Division corresponding to the Series to
be terminated; or
(e) at the option of any Party upon occurrence without written notice
in the event that (i) the Series's shares are not registered and, in all
material respects, issued and sold in accordance with applicable state and
federal law or (ii) such law precludes the use of such shares as an underlying
investment medium of the Policies issued or to be issued by USL; or
20
(f) upon termination of the corresponding Division's investment in the
Series pursuant to Section 5 hereof; or
(g) at the option of USL upon written notice if the Series ceases to
qualify as a RIC under Subchapter M of the Code or under successor or similar
provisions, or if USL reasonably believes that the Series may fail to so
qualify; or
(h) at the option of USL upon written notice if the Series fails to
comply with Section 817(h) of the Code or with successor or similar provisions,
or if USL reasonably believes that the Series may fail to so comply.
(i) at the option of the Fund upon written notice if the Policies
cease to qualify as annuity contracts or life insurance contracts, as
applicable, under the Code, or if the Fund reasonably believes that the Policies
may fail to so qualify; or
(j) at the option of the Fund, upon USL's breach of any material
provision of this Agreement, which breach has not been cured to the satisfaction
of the Fund within thirty (30) days after written notice of such breach is
delivered to USL; or
(k) at the option of USL, upon the Fund's breach of any material
provision of this Agreement, which breach has not been cured to the satisfaction
of USL within thirty (30) days after written notice of such breach is delivered
to the Fund; or
(l) at the option of the Fund upon written notice, if the Policies are
not registered, issued or sold in accordance with applicable federal and/or
state law and any applicable rules and regulations thereunder; or
(m) effective immediately in the event the agreement is assigned
without the prior written consent of all parties.
21
6.2 Series to Remain Available.
--------------------------
Except (i) as necessary to implement Participant initiated transactions,
(ii) as required by state insurance laws or regulations, (iii) as required
pursuant to Section 5 of this Agreement, or (iv) with respect to any Series as
to which this Agreement has terminated, USL shall not (x) redeem Fund shares
attributable to the Policies (as opposed to Fund shares attributable to USL's
assets held in the Separate Account), or (y) prevent Participants from
allocating payments to or transferring amounts from a Series that was otherwise
available under the Policies, until, in either case, 90 calendar days after USL
shall have notified the Fund or Distributor of its intention to do so.
6.3 Survival of Warranties and Indemnifications.
-------------------------------------------
All warranties and indemnifications will survive the termination of this
Agreement.
6.4 Continuance of Agreement for Certain Purposes.
---------------------------------------------
If any Party terminates this Agreement with respect to any Series pursuant
to Section 6.1 hereof, this Agreement shall nevertheless continue in effect as
to any shares of that Series that are outstanding as of the date of such
termination (the "Initial Termination Date"). This continuation shall extend to
the earlier of the date as of which the Separate Account owns no shares of the
affected Series or a date (the "Final Termination Date") six months following
the Initial Termination Date, except that (i) USL may, by written notice to the
other Parties, shorten said six month period in the case of a termination
pursuant to Sections 6.1(d), 6.1(e) 6.1(g) 6.1(k) or 6.1(m) and (ii) the Fund
may, by written notice to the other Parties, shorten said 6 month period in the
case of a termination pursuant to Sections 6.1(b), 6.1(c), 6.1(f), 6.1(h),
6.1(i), 6.1(j) 6.1(l) or 6.1(m).
22
Section 7. Parties to Cooperate Respecting Termination
-------------------------------------------------------
The Parties agree to cooperate and give reasonable assistance to one
another in taking all necessary and appropriate steps for the purpose of
ensuring that the Separate Account owns no shares of a Series after the Final
Termination Date with respect thereto, or, in the case of a termination pursuant
to Section 6.1(a), the termination date specified in the notice of termination.
Section 8. Assignment
----------------------
This Agreement may not be assigned, except with the written consent of each
other Party.
Section 9. Notices
-------------------
Notices and communications required or permitted by Section 2 hereof will
be given by means mutually acceptable to the Parties concerned. Each other
notice or communication required or permitted by this Agreement will be given to
the following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
The United States Life
Insurance Company
In the City of New York
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
FAX: 000-000-0000
American General Securities
Incorporated
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: F. Xxxx Xxxxxx, Xx.
FAX: 000-000-0000
23
SAFECO Resource Series Trust
0000 Xxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
FAX: 206-548- 7150
SAFECO Securities, Inc.
0000 Xxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
FAX: 206-548- 7150
Section 10. Voting Procedures
------------------------------
Subject to the cost allocation procedures set forth in Section 3 hereof,
USL will distribute all proxy material furnished by the Fund to Participants and
will vote Fund shares in accordance with instructions received from
Participants. USL will vote Fund shares that are (a) not attributable to
Participants or (b) attributable to Participants, but for which no instructions
have been received, in the same proportion as Fund shares for which said
instructions have been received from Participants. USL agrees that it will
disregard Participant voting instructions only to the extent (i) it would be
permitted to do so pursuant to Rule 6e-3(T)(b)(15)(iii) under the 1940 Act if
the Policies were variable life insurance policies subject to that rule or (ii)
it is permitted under applicable state insurance laws affecting the Fund. USL
will be responsible for assuring that the Separate Account calculates voting
privileges in a manner consistent with that of other participating life
insurance companies that utilize the Fund.
Section 11. Foreign Tax Credits
--------------------------------
The Fund agrees to consult in advance with USL concerning any decision to
elect or not to elect pursuant to Section 853 of the Code to pass through the
benefit of any foreign tax credits to its shareholders.
Section 12. Indemnification
----------------------------
12.1 Of Fund and Distributor by USL.
------------------------------
24
(a) Except to the extent provided in Sections 12.1(b) and 12.1(c),
below, USL agrees to indemnify and hold harmless the Fund and the Distributor,
each of their respective affiliates, and each of their directors and officers,
employees and agents, and each person, if any, who controls the Fund or the
Distributor within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 12.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of USL) or actions in respect thereof (including, to the
extent reasonable, legal and other expenses), to which the Indemnified Parties
may become subject under any statute, regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities, actions, or settlements
are related to the sale or acquisition of the Fund's shares or the Policies and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the Separate Account's 1933 Act registration statement, the
Separate Account Prospectus, the Policies or, to the extent
prepared by USL or AGSI, or agents thereof, sales literature
or advertising for the Policies (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon
and in conformity with information furnished to USL or AGSI,
or agents thereof by or on behalf of the Fund, the
Distributor or the Adviser for use in the Separate Account's
1933 Act registration statement, the Separate Account
Prospectus, the Policies, or sales literature or advertising
(or any amendment or supplement to any of the foregoing) or
otherwise for use in connection with the sale of the
Policies or Fund shares; or
25
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in the Fund's 1933 Act registration statement,
Fund Prospectus, sales literature or advertising of the
Fund, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of
USL or AGSI) or wrongful conduct of USL or AGSI or persons
under their control (including, without limitation, their
employees and "Associated Persons," as that term is defined
in paragraph (m) of Article I of the NASD's By-Laws), in
connection with the sale or distribution of the Policies or
Fund shares; or
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the Fund's 1933 Act registration statement, Fund Prospectus,
sales literature or advertising of the Fund, or any
amendment or supplement to any of the foregoing, or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was made in reliance upon and in conformity with
information furnished to the Fund by or on behalf of USL or
AGSI for use in the Fund's 1933 Act registration statement,
Fund Prospectus, sales literature or advertising of the
Fund, or any amendment or supplement to any of the
foregoing; or
(iv) arise as a result of any failure by USL or AGSI to perform
the obligations, provide the services and furnish the
materials required of them under the terms of this
Agreement, or any material breach of any representation
and/or warranty made by the USL or AGSI in this
26
Agreement or arise out of or result from any other material
breach of this Agreement by USL or AGSI.
(b) USL shall not be liable under this indemnification provision with
respect to any losses, claims, damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of its reckless disregard of obligations or duties under
this Agreement or to the Distributor or to the Fund.
(c) USL shall not be liable under this indemnification provision with
respect to any action against an Indemnified Party unless such Indemnified
Party shall have notified USL in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify USL of any such action shall not relieve USL from
any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against an Indemnified Party, USL shall be
entitled to participate, at its own expense, in the defense of such action. USL
also shall be entitled to assume the defense thereof, with counsel approved by
the Indemnified Party named in the action, which approval shall not be
unreasonably withheld. After notice from USL to such Indemnified Party of USL's
election to assume the defense thereof, the Indemnified Party will cooperate
fully with USL and shall bear the fees and expenses of any additional counsel
retained by it, and USL will not be liable to such Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof, other
than reasonable costs of investigation.
12.2 Of USL and AGSI by Distributor.
------------------------------
(a) Except to the extent provided in Sections 12.2(b) and 12.2(C)
hereof, the Distributor agrees to indemnify and hold harmless USL, AGSI, each of
their respective affiliates,
27
and each of their directors and officers, employees and agents, and each person,
if any, who controls USL or AGSI, within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" for purposes of this Section 12.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Distributor) or actions in respect
thereof (including, to the extent reasonable, legal and other expenses) to which
the Indemnified Parties may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities,
actions, or settlements are related to the sale or acquisition of the Fund's
shares or the Policies and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the Fund's 1933 Act registration statement, Fund Prospectus,
sales literature or advertising of the Fund or, to the
extent not prepared by USL or AGSI or agents thereof, sales
literature or advertising for the Policies (or any amendment
or supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the
Distributor or Fund or agents thereof by or on behalf of USL
or AGSI for use in the Fund's 1933 Act registration
statement, Fund Prospectus, or in sales literature or
advertising (or any amendment or supplement to any of the
foregoing) or otherwise for use in connection with the sale
of the Policies or Fund shares; or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in the Separate
28
Account's 1933 Act registration statement, Separate Account
Prospectus, sales literature or advertising for the
Policies, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of
the Distributor, Fund or Adviser) or the wrongful conduct of
the Fund or Distributor, or persons under their control
(including, without limitation, their employees and
Associated Persons), in connection with the sale or
distribution of the Policies or Fund shares; or
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the Separate Account's 1933 Act registration statement,
Separate Account Prospectus, sales literature or advertising
covering the Policies, or any amendment or supplement to any
of the foregoing, or the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading,
if such statement or omission was made in reliance upon and
in conformity with information furnished to USL or AGSI by
or on behalf of the Fund, the Adviser or the Distributor for
use in the Separate Account's 1933 Act registration
statement, Separate Account Prospectus, sales literature or
advertising covering the Policies, or any amendment or
supplement to any of the foregoing; or arise as a result of
any failure by the Fund or the Distributor to perform the
obligations, provide the services and furnish the materials
required of them under the terms of this Agreement, or any
material breach of any representation and/or warranty made
by the Fund or the Distributor in this Agreement or arise
out of or result from any other material breach of this
Agreement by the Fund or the Distributor;
(b) Except to the extent provided in Sections 12.2(C) and 12.2(d)
hereof, the Distributor agrees to indemnify and hold harmless the Indemnified
Parties from and against any and
29
all losses, claims, damages, liabilities (including amounts paid in settlement
thereof with the written consent of the Fund) or actions in respect thereof
(including, to the extent reasonable, legal and other expenses) to which the
Indemnified Parties may become subject directly or indirectly under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or actions directly or indirectly result from or arise out of the failure of any
Series to operate as a regulated investment company in compliance with (i)
Subchapter M of the Code and regulations thereunder or (ii) Section 817(h) of
the Code and regulations thereunder, including without limitation, any income
taxes and related penalties, rescission charges, liability under state law to
Participants asserting liability against USL or AGSI pursuant to the Policies,
the costs of any ruling and closing agreement or other settlement with the IRS,
and the cost of any substitution by USL of shares of another investment company
or portfolio for those of any adversely affected Series as a funding medium for
each Separate Account that USL reasonably deems necessary or appropriate as a
result of the noncompliance.
(c) The Fund and the Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or actions to which an Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance by that Indemnified Party of its duties or by reason of its reckless
disregard of obligations and duties under this Agreement or to USL, AGSI or the
Separate Account.
(d) The Fund and the Distributor shall not be liable under this
indemnification provision with respect to any action against an Indemnified
Party unless such Indemnified Party shall have notified the Fund and the
Distributor in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the action shall have been
served upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to notify
the Distributor of any such action shall not relieve the Distributor from any
liability which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In case
any such action is brought against an Indemnified Party, the Distributor will be
entitled to
30
participate, at its own expense, in the defense of such action. The Distributor
also shall be entitled to assume the defense thereof, with counsel approved by
the Indemnified Party named in the action, which approval shall not be
unreasonably withheld. After notice from the Distributor to such Indemnified
Party of the Distributor's election to assume the defense thereof, the
Indemnified Party will cooperate fully with the Distributor and shall bear the
fees and expenses of any additional counsel retained by it, and the Distributor
will not be liable to such Indemnified Party under this Agreement for any legal
or other expenses subsequently incurred by such Indemnified Party independently
in connection with the defense thereof, other than reasonable costs of
investigation.
12.3 Effect of Notice.
----------------
Any notice given by the indemnifying Party to an Indemnified Party
referred to in Section 12.1 or 12.2 above of participation in or control of any
action by the indemnifying Party will in no event be deemed to be an admission
by the indemnifying Party of liability, culpability or responsibility, and the
indemnifying Party will remain free to contest liability with respect to the
claim among the Parties or otherwise.
12.4 Successors.
-----------
A successor by law of any Party shall be entitled to the benefits of
the indemnification contained in this Section 12.
Section 13. Applicable Law
---------------------------
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with Delaware law, without regard for that state's
principles of conflict of laws.
Section 14. Execution in Counterparts
--------------------------------------
This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
Section 15. Severability
-------------------------
31
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 16. Rights Cumulative
------------------------------
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, that the Parties are entitled to under federal and state
laws.
Section 17. Headings
--------------------
The Table of Contents and headings used in this Agreement are for
purposes of reference only and shall not limit or define the meaning of the
provisions of this Agreement.
Section 18. Limitation of Liability
-----------------------------------
It is understood and expressly stipulated that neither the shareholders of
shares of any Series nor the Trustees or officers of the Fund or any Series
shall be personally liable hereunder. No Series shall be liable for the
liabilities of any other Series. All persons dealing with the Fund or a Series
must look solely to the property of the Fund or that Series, respectively, for
enforcement of any claims against the Fund or that Series. It is also
understood that each of the Series shall be deemed to be entering into a
separate Agreement with USL so that it is as if each of the Series had signed a
separate Agreement with USL and that a single document is being signed simply to
facilitate the execution and administration of the Agreement.
Section 19
----------
No provision of this Agreement may be amended or modified in any manner except
by a written agreement properly authorized and executed by all Parties.
32
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
THE UNITED STATES LIFE INSURANCE COMPANY
IN THE CITY OF NEW YORK
By ______________________________________
Xxxxx X. Xxxxx
Title President and Chief Executive Officer
--------------------------------------
AMERICAN GENERAL SECURITIES INCORPORATED
By ______________________________________
F. Xxxx Xxxxxx, Xx.
Title President and Chief Executive Officer
--------------------------------------
SAFECO RESOURCE SERIES TRUST
By ______________________________________
Xxxx X. Xxxxxx
Title Vice President & Controller
--------------------------------------
SAFECO SECURITIES, INC.
By ______________________________________
Xxxx X. Xxxxxx
Title Vice President & Controller
--------------------------------------
33
