EXHIBIT 99(h)(iv)
[AIG SUNAMERICA CAPITAL SERVICES, INC. LETTERHEAD]
June __, 2004
Prudential Global Funding, Inc.
Two Gateway Center
5th Floor
Newark, New Jersey 07102
Prudential Financial, Inc.
c/o Prudential Retirement
000 Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
This letter agreement ("Indemnification Agreement") sets forth the terms
of the indemnification by and between (i) AIG SunAmerica Capital Services, Inc.
(the "Underwriter"), the principal underwriter for the AIG Series Trust (the
"Fund") and (ii) Prudential Global Funding, Inc. ("PGF") and Prudential
Financial, Inc. ("Prudential Financial"). The Fund is an open-end management
investment company registered under the Investment Company Act of 1940, as
amended. It currently consists of the following series: 2010 High Watermark
Fund, 2015 High Watermark Fund, 2020 High Watermark Fund and 2025 High Watermark
Fund (each, a "Series"). PGF has entered into a Put Agreement with the Fund
whereby PGF has agreed pay to each Series any shortfall between the Protected
Share Price and the actual net asset value per share on the Fund's Protection
Termination Date (as those terms are defined in the Put Agreement), provided
certain conditions are met. PGF's obligations are guaranteed by its parent,
Prudential Financial.
1. INDEMNIFICATION OF PGF AND PRUDENTIAL FINANCIAL
(a) The Underwriter agrees to indemnify, defend and hold
harmless PGF, Prudential Financial, each of their respective shareholders,
partners, managers, members, trustees, directors and officers, and any person
who controls PGF, or is under common control with PGF, in each case within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "1933 Act")
or Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the successors and assigns of all of the foregoing persons (a "PGF
Indemnified Party") from and against any loss, damage, expense, liability or
claim (including attorney's fees and the reasonable cost of investigation) which
a PGF Indemnified Party jointly or severally may incur under any United States
federal securities laws or any applicable state laws (or similar laws of other
jurisdictions where an offer of the Fund's securities is made) relating to
securities in connection with any claims made by an investor of the Fund insofar
as such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement on Form N-1A of the Fund (or in the Registration
Statement as amended by any post-effective amendment thereto) or in a Prospectus
Prudential Global Funding, Inc.
Prudential Financial Corporation
June __, 2004
Page 2 of 5
(the term "Prospectus" for the purpose of this Indemnification Agreement being
deemed to include any sales materials, the Prospectus and the Prospectus as
amended or supplemented), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein (with respect to the Prospectus, in light of the circumstances under
which they were made) not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in information
furnished in writing by or on behalf of a PGF Indemnified Party and separately
acknowledged in paragraph 3 of this Indemnification Agreement as information
concerning PGF or PFI that has been provided expressly for use in such
Registration Statement or such Prospectus (such information hereinafter referred
to as "Prudential Information") or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus or
necessary to make such information (with respect to the Prospectus, in light of
the circumstances under which they were made) not misleading.
(b) If any claim, action, suit or proceeding ("Proceeding") is
brought against a PGF Indemnified Party pursuant to the foregoing paragraph,
such PGF Indemnified Party shall promptly notify the Underwriter in writing of
the institution of such Proceeding and the Underwriter shall assume the defense
of such Proceeding, including the employment of counsel reasonably satisfactory
to the PGF Indemnified Party and payment of all such counsel's fees and
expenses. Such PGF Indemnified Party shall have the right to employ its or their
own counsel in any such case, but the reasonable fees and expenses of such
counsel shall be at the expense of such PGF Indemnified Party unless (i) the
employment of such counsel shall have been authorized in writing by the
Underwriter in connection with the defense of such Proceeding; (ii) the
Underwriter shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to take charge of the defense of such
Proceeding; or (iii) the PGF Indemnified Parties shall have reasonably concluded
that there may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Underwriter in which
case the Underwriter shall not have the right to direct the defense of such
Proceeding on behalf of the PGF Indemnified Party, but the Underwriter may
employ counsel and participate in the defense thereof and such fees and expenses
of such counsel shall be at the expense of the Underwriter. In any events
described in (i)-(iii) above such reasonable fees and expenses shall be borne by
the Underwriter and paid as incurred (it being understood, however, that the
Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings representing the PGF Indemnified Parties who are parties to
such Proceeding).
(c) The Underwriter shall not be liable for any settlement of
any Proceeding effected without its written consent but if settled with the
written consent of the Underwriter, the Underwriter agrees to indemnify and hold
harmless any PGF Indemnified Party from and against any loss or liability by
reason of such settlement. The Underwriter shall not, without the prior written
consent of a PGF Indemnified Party, effect any settlement of any pending or
threatened Proceeding in respect of which the PGF Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by the PGF
Indemnified Party, unless such settlement includes an unconditional release of
the PGF Indemnified Party from all liability on claims that are the subject
matter of such Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of the PGF Indemnified Party.
Prudential Global Funding, Inc.
Prudential Financial Corporation
June __, 2004
Page 3 of 5
2. INDEMNIFICATION OF THE UNDERWRITER
(a) PGF and Prudential Financial jointly and severally agree to
indemnify, defend and hold harmless the Underwriter, each of its shareholders,
partners, managers, members, trustees, directors and officers, and any person
who controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the Exchange Act and the successors and assigns of all of the
foregoing persons (an "Underwriter Indemnified Party") from and against any
loss, damage, expense, liability or claim (including attorney's fees and the
reasonable cost of investigation) which the Underwriter Indemnified Party may
incur jointly or severally under any United States federal securities laws or
any applicable state laws (or similar laws of other jurisdictions where an offer
of the Fund's securities is made) relating to securities in connection with any
claims made by an investor of the Fund insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Prudential
Information, or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with the Prudential Information required
to be stated in such Registration Statement or such Prospectus or necessary to
make such information not misleading (with respect to the Prospectus, in light
of the circumstances under which they were made).
(b) If any Proceeding is brought against an Underwriter
Indemnified Party pursuant to the foregoing paragraph, the Underwriter
Indemnified Party shall promptly notify PGF in writing of the institution of
such Proceeding and PGF and Prudential Financial shall assume the defense of
such Proceeding, including the employment of counsel reasonably satisfactory to
such Underwriter Indemnified Party and payment of all fees and expenses. Such
Underwriter Indemnified Party shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of the Underwriter Indemnified Person unless (i) the employment of
such counsel shall have been authorized in writing by PGF and Prudential
Financial in connection with the defense of such Proceeding; (ii) PGF and
Prudential Financial shall not have, within a reasonable period of time in light
of the circumstances, employed counsel to have charge of the defense of such
Proceeding; or (iii) the Underwriter Indemnified Party shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to or in conflict with those available to PGF or Prudential
Financial in which case PGF or Prudential Financial shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties, but PGF or Prudential Financial may employ counsel and participate in
the defense thereof and such fees and expenses of such counsel shall be at the
expense of PGF or Prudential Financial. In any events described in (i)-(iii)
above, such reasonable fees and expenses shall be borne by PGF and Prudential
Financial and paid as incurred (it being understood, however, that PGF and
Prudential Financial shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings above representing the Underwriter Indemnified
Parties who are parties to such Proceeding).
(c) Neither PGF nor Prudential Financial shall be liable for
any settlement of any such Proceeding effected without the written consent of
such party but if settled with the written consent of PGF or Prudential
Financial, such party agrees to indemnify and hold harmless the Underwriter
Indemnified Party from and against any loss or liability by reason of such
settlement. Neither PGF nor Prudential Financial shall, without the prior
written consent of an Underwriter Indemnified Party, effect any settlement of
any pending or threatened Proceeding in respect of which the Underwriter
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by the Underwriter Indemnified Party, unless such settlement
includes an unconditional release of the Underwriter Indemnified Party from all
liability on claims that are the subject matter of such Proceeding and does not
include an admission of fault, culpability or a failure to act, by or on behalf
of the Underwriter Indemnified Party.
Prudential Global Funding, Inc.
Prudential Financial Corporation
June __, 2004
Page 4 of 5
3. INFORMATION IN REGISTRATION STATEMENT PROVIDED BY PGF AND
PRUDENTIAL FINANCIAL
PGF and Prudential Financial represent and warrant that the
information in the Prospectus in the section captioned "Prudential Financial and
PGF" and the financial statements of Prudential Financial included in the Fund's
Statement of Additional Information forming a part of the Registration
Statement, have been provided expressly for use in the Prospectus and the
Registration Statement by these parties.
4. LIMITATIONS TO EACH PARTY'S INDEMNIFICATION OBLIGATION
Notwithstanding any other provisions in this Indemnification
Agreement, no party shall be entitled to indemnification under this
Indemnification Agreement against any loss, claim, liability, expense or damage
arising by reason of such person's willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties in the performance of its duties
in respect of the Fund.
5. MISCELLANEOUS
(a) This Agreement may not be assigned by either party without
the prior written consent of the other parties.
(b) This Agreement shall be governed and construed in
accordance with the laws of the State of New York without giving effect to the
conflict of law provisions thereof.
(c) This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed and original, but all of which
together shall constitute only one instrument.
(d) This Agreement, including any attachments or exhibits
hereto, constitutes the entire agreement between us concerning the subject
matter hereof, and supersedes any and all prior written or oral agreements.
Prudential Global Funding, Inc.
Prudential Financial Corporation
June __, 2004
Page 5 of 5
If you are in agreement with the foregoing, please sign the form
of acceptance on the accompanying counterpart of this letter and return such
counterpart to my attention whereupon this letter shall become a binding
contract.
Very truly yours,
AIG SunAmerica Capital Services, Inc.
By:
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Name:
Title:
The foregoing Agreement is hereby accepted as of the date
thereof.
Prudential Global Funding, Inc.
By:
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Name:
Title:
Prudential Financial, Inc.
By:
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Name:
Title:
Date: ___________________
