DREYFUS
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the ___ day of August, 1999, between Great
American Life Insurance Company of New York ("Insurance Company"), a life
insurance company organized under the laws of the State of New York, DREYFUS
VARIABLE INVESTMENT FUND, an unincorporated business trust organized under the
laws of the Commonwealth of Massachusetts, DREYFUS LIFE AND ANNUITY INDEX FUND,
INC. (d/b/a Dreyfus Stock Index Fund), a corporation organized under the laws of
the State of Maryland, and THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. a
corporation organized under the laws of the State of Maryland (each a "Fund" and
collectively the "Fund").
ARTICLE I
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Trustees of the Fund having the
responsibility for management and control of the Fund.
1.3 "Business Day" shall mean any day for which the Fund calculates net
asset value per share as described in the Fund's Prospectus.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean a variable annuity contract that uses the Fund as
an underlying investment medium. Individuals who participate under a
group Contract are "Participants".
1.6 "Contractholder" shall mean any entity that is a party to a Contract
with a Participating Company.
1.7 "Disinterested Board Members" shall mean those members of the Board
that are not deemed to be "interested persons" of the Fund, as defined
by the Act.
1.8 "Dreyfus" shall mean The Dreyfus Corporation and its affiliates,
including Dreyfus Service Corporation.
1.9 "Participating Companies" shall mean any insurance company (including
Insurance Company), which offers variable annuity and/or variable life
insurance contracts to the public and which has entered into an
agreement with the Fund for the purpose of making Fund shares available
to serve as an underlying investment medium for the aforesaid
Contracts.
1.10 "Prospectus" shall mean the Fund's current prospectus and statement of
additional information, as most recently filed with the Commission.
1.11 "Separate Account" shall mean GALIC of New York Separate Account I, a
separate account established by Insurance Company in accordance with
the laws of the State of New York.
1.12 "Software Program" shall mean the software program used by the Fund for
providing Fund and account balance information including net asset
value per share. Such Program may include the Lion System. In
situations where the Lion System or any other Software Program used by
the Fund is not available, such information may be provided by
telephone and confirmed by facsimiles. The Lion System shall be
provided to Insurance Company at no charge.
ARTICLE II
REPRESENTATIONS
2.1 Insurance Company represents and warrants that (a) it is an insurance
company duly organized and in good standing under applicable law; (b)
it has legally and validly established the Separate Account pursuant to
the laws of the State of New York for the purpose of offering to the
public certain individual and group variable annuity contracts; (c) it
has registered or will register the Separate Account as a unit
investment trust under the Act to serve as the segregated investment
account for the Contracts; and (d) each Separate Account is eligible to
invest in shares of the Fund without such investment disqualifying the
Fund as an investment medium for insurance company separate accounts
supporting variable annuity contracts or variable life insurance
contracts.
2.2 Insurance Company represents and warrants that (a) the Contracts will
be described in a registration statement filed under the Securities Act
of 1933, as amended ("1933 Act"); (b) the Contracts will be issued and
sold in compliance in all material respects with all applicable federal
and state laws; and (c) the sale of the Contracts shall comply in all
material respects with state insurance law requirements. Insurance
Company agrees to inform the Fund promptly of any investment
restrictions imposed by state insurance law and applicable to the Fund.
2.3 Insurance Company represents and warrants that the income, gains and
losses, whether or not realized, from assets allocated to the Separate
Account are, in accordance with the applicable Contracts, to be
credited to or charged against such Separate Account without regard to
other income, gains or losses from assets allocated to any other
accounts of Insurance Company. Insurance Company represents and
warrants that the assets of the Separate Account are and will be kept
separate from Insurance Company's General Account and any other
separate accounts Insurance Company may have, and will not be charged
with liabilities from any business that Insurance Company may conduct
or the liabilities of any companies affiliated with Insurance Company.
2.4 Fund represents that the Fund is registered with the Commission under
the Act as an open-end, diversified management investment company and
possesses, and shall maintain, all legal and regulatory licenses,
approvals, consents and/or exemptions required for Fund to operate and
offer its shares as an underlying investment medium for Participating
Companies. The Fund has established eight series of shares (each, a
"Series") and may in the future establish other series of shares.
2.5 Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"), and that it will make every effort to
maintain such qualification (under Subchapter M or any successor or
similar provision) and that it will notify Insurance Company
immediately upon having a reasonable basis for believing that it has
ceased to so qualify or that it might not so qualify in the future.
2.6 Insurance Company represents and agrees that the Contracts are
currently, and at the time of issuance will be, treated as life
insurance policies or annuity contracts, whichever is appropriate,
under applicable provisions of the Code, and that it will make every
effort to maintain such treatment and that it will notify the Fund and
Dreyfus 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. Insurance Company agrees that any prospectus
offering a Contract that is a "modified endowment contract," as that
term is defined in Section 7702A of the Code, will identify such
Contract as a modified endowment contract (or policy).
2.7 Fund agrees that the Fund's assets shall be managed and invested in a
manner that complies with the requirements of Section 817(h) of the
Code.
2.8 Insurance Company agrees that the Fund shall be permitted (subject to
the other terms of this Agreement) to make Series' shares available to
other Participating Companies and contractholders.
2.9 Fund represents and warrants that any of its trustees, officers,
employees, investment advisers, and other individuals/entities who deal
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
for the benefit of the Fund in an amount not less than that required by
Rule 17g-1 under the Act. The aforesaid Bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company.
2.10 Insurance Company represents and warrants that all of its employees and
agents who deal 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 coverage required to be
maintained by the Fund. The aforesaid Bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company.
2.11 Insurance Company agrees that Dreyfus shall be deemed a third party
beneficiary under this Agreement and may enforce any and all rights
conferred by virtue of this Agreement.
ARTICLE III
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide for the
investment of certain amounts in
the Series' shares.
3.2 Fund agrees to make the shares of its Series available for purchase at
the then applicable net asset value per share by the Separate Account
on each Business Day pursuant to rules of the Commission.
Notwithstanding the foregoing, the Fund may refuse to sell the shares
of any Series to any person, or suspend or terminate the offering of
the shares of any Series 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
and in the best interests of the shareholders of such Series.
3.3 Fund agrees that shares of the Fund will be sold only to Participating
Companies and their separate accounts and to the general accounts of
those Participating Companies and their affiliates. No shares of any
Series will be sold to the general public.
3.4 Fund shall use its best efforts to provide closing net asset value,
dividend and capital gain (loss) information for each Series available
on a per-share and Series basis to Insurance Company by 6:00 p.m.
Eastern Time on each Business Day. Any material errors in the
calculation of net asset value, dividend and capital gain (loss)
information shall be reported immediately upon discovery to Insurance
Company. Non-material errors will be corrected in the next Business
Day's net asset value per share for the Series in question.
3.5 At the end of each Business Day, Insurance Company will use the
information described in Sections 3.2 and 3.4 to calculate the Separate
Account unit values for the day. Using this unit value, Insurance
Company will process the day's Separate Account transactions received
by it by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m. Eastern time) to determine the net dollar
amount of Series shares which will be purchased or redeemed at that
day's closing net asset value per share for such Series. The net
purchase or redemption orders will be transmitted to the Fund by
Insurance Company by 11:00 a.m. Eastern Time on the Business Day next
following Insurance Company's receipt of that information.
3.6 Fund appoints Insurance Company as its agent for the limited purpose of
accepting orders for the purchase and redemption of shares of each
Series for the Separate Account. Fund will execute orders for any
Series at the applicable net asset value per share determined as of the
close of trading on the day of receipt of such orders by Insurance
Company acting as agent ("effective trade date"), provided that the
Fund receives notice of such orders by 11:00 a.m. Eastern Time on the
next following Business Day and, if such orders request the purchase of
Series shares, the conditions specified in Section 3.8, as applicable,
are satisfied. A redemption or purchase request for any Series that
does not satisfy the conditions specified in this Section and in
Section 3.8, as applicable, will be effected at the net asset value
computed for such Series on the Business Day immediately preceding the
Business Day upon which such conditions have been satisfied in
accordance with the requirements of this Section and Section 3.8.
3.7 Insurance Company will use its best efforts to notify Fund in advance
of any unusually large purchase or redemption orders.
3.8 If Insurance Company's order requests the purchase of Series shares,
Insurance Company will pay for such purchases by wiring Federal Funds
to Fund or its designated custodial account on the day the order is
transmitted. Insurance Company shall make all reasonable efforts to
transmit to the Fund payment in Federal Funds by 12:00 noon Eastern
Time on the Business Day the Fund receives the notice of the order
pursuant to Section 3.5. Fund will execute such orders at the
applicable net asset value per share determined as of the close of
trading on the effective trade date if Fund receives payment in Federal
Funds by 12:00 midnight Eastern Time on the Business Day the Fund
receives the notice of the order pursuant to Section 3.5. If payment in
Federal Funds for any purchase is not received or is received by the
Fund after 12:00 noon Eastern Time on such Business Day, Insurance
Company shall promptly upon the Fund's request, reimburse the Fund for
any charges, costs, fees, interest or other expenses incurred by the
Fund in connection with any advances to, or borrowings or overdrafts
by, the Fund, or any similar expenses incurred by the Fund, as a result
of portfolio transactions effected by the Fund based upon such purchase
request. Payment for Series shares redeemed by the Separate Account or
the Insurance Company shall be made in Federal Funds transmitted by
wire to the Insurance Company or any other designated person on the
next Business Day after the Fund is properly notified of the redemption
order of Series shares (unless redemption proceeds are to be applied to
the purchase of Fund shares of other Series), except that the Fund
reserves the right to delay payment of redemption proceeds to the
extent permitted under Section 22(e) of the 0000 Xxx. The Fund shall
not bear any responsibility whatsoever for the proper disbursement or
crediting of redemption proceeds by the Insurance Company; the
Insurance Company alone shall be responsible for such action.
3.9 Fund has the obligation to ensure that Series shares are registered
with applicable federal agencies at all times.
3.10 Fund will confirm each purchase or redemption order made by Insurance
Company. Transfer of Series shares will be by book entry only. No share
certificates will be issued to Insurance Company. Insurance Company
will record shares ordered from Fund in an appropriate title for the
corresponding account.
3.11 Fund shall credit Insurance Company with the appropriate number of
shares.
3.12 On each ex-dividend date of the Fund or, if not a Business Day, on the
first Business Day thereafter, Fund shall communicate to Insurance
Company the amount of dividend and capital gain, if any, per share of
each Series. All dividends and capital gains of any Series shall be
automatically reinvested in additional shares of the relevant Series at
the applicable net asset value per share of such Series on the payable
date. Fund shall, on the day after the payable date or, if not a
Business Day, on the first Business Day thereafter, notify Insurance
Company of the number of shares so issued.
3.13 This Agreement does not cover the sale of any Fund shares to the
Insurance Company general account.
ARTICLE IV
STATEMENTS AND REPORTS
4.1 Fund shall provide monthly statements of account as of the end of each
month for all of Insurance Company's accounts by the fifteenth (15th)
Business Day of the following month.
4.2 Fund shall distribute to Insurance Company copies of the Fund's
Prospectuses, proxy materials, notices, periodic reports and other
printed materials (which the Fund customarily provides to its
shareholders) in quantities as Insurance Company may reasonably request
for distribution to each Contractholder and Participant.
4.3 Fund will provide to Insurance Company at least one complete copy of
all registration statements, Prospectuses, reports, proxy statements,
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 Fund or its shares, contemporaneously
with the filing of such document with the Commission or other
regulatory authorities.
4.4 Insurance Company will provide to the Fund at least one copy of all
registration statements, Prospectuses, reports, proxy statements, 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 Separate Account,
contemporaneously with the filing of such document with the Commission.
ARTICLE V
EXPENSES
5.1 The charge to the Fund for all expenses and costs of the Series,
including but not limited to management fees, administrative expenses
and legal and regulatory costs, will be made in the determination of
the relevant Series' daily net asset value per share so as to
accumulate to an annual charge at the rate set forth in the Fund's
Prospectus. Excluded from the expense limitation described herein shall
be brokerage commissions and transaction fees and extraordinary
expenses.
5.2 Except as provided in this Article V and, in particular in the next
sentence, Insurance Company shall not be required to pay directly any
expenses of the Fund or expenses relating to the distribution of its
shares. Insurance Company shall pay the following expenses or costs:
a. Such amount of the production expenses of any Fund materials,
including the cost of printing the Fund's Prospectus, or
marketing materials for prospective Insurance Company
Contractholders and Participants as Dreyfus and Insurance
Company shall agree from time to time.
b. Distribution expenses of any Fund materials or marketing
materials for prospective Insurance Company Contractholders
and Participants.
c. Distribution expenses of Fund materials or marketing materials
for Insurance Company Contractholders and Participants.
Except as provided herein, all other Fund expenses shall not be borne
by Insurance Company.
ARTICLE VI
EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of the order dated December 23,
1987 of the Securities and Exchange Commission under Section 6(c) of
the Act and, in particular, has reviewed the conditions to the relief
set forth in the related Notice. As set forth therein, Insurance
Company agrees to report any potential or existing conflicts promptly
to the Board, and in particular whenever contract voting instructions
are disregarded, and recognizes that it will be responsible for
assisting the Board in carrying out its responsibilities under such
application. Insurance Company agrees to carry out such
responsibilities with a view to the interests of existing
Contractholders.
6.2 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists with
regard to Contractholder investments in the Fund, the Board shall give
prompt notice to all Participating Companies. If the Board determines
that Insurance Company is responsible for causing or creating said
conflict, Insurance Company shall at its sole cost and expense, and to
the extent reasonably practicable (as determined by a majority of the
Disinterested Board Members), take such action as is necessary to
remedy or eliminate the irreconcilable material conflict.
Such necessary action may include, but shall not be limited to:
a. Withdrawing the assets allocable to the Separate Account from
the Series and reinvesting such assets in a different
investment medium, or submitting the question of whether such
segregation should be implemented to a vote or all affected
Contractholders; and/or
b. Establishing a new registered management investment company.
6.3 If a material irreconcilable conflict arises as a result of a decision
by Insurance Company to disregard Contractholder voting instructions
and said decision represents a minority position or would preclude a
majority vote by all Contractholders having an interest in the Fund,
Insurance Company may be required, at the Board's election, to withdraw
the Separate Account's investment in the Fund.
6.4 For the purpose of this Article, a majority of the Disinterested Board
Members shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no event will the
Fund be required to bear the expense of establishing a new funding
medium for any Contract. Insurance Company shall not be required by
this Article to establish a new funding medium for any Contract if an
offer to do so has been declined by vote of a majority of the
Contractholders materially adversely affected by the irreconcilable
material conflict.
6.5 No action by Insurance Company taken or omitted, and no action by the
Separate Account or the Fund taken or omitted as a result of any act or
failure to act by Insurance Company pursuant to this Article VI shall
relieve Insurance Company of its obligations under, or otherwise affect
the operation of, Article V.
ARTICLE VII
VOTING OF FUND SHARES
7.1 Fund shall provide Insurance Company with copies at no cost to
Insurance Company, of the Fund's proxy material, annual and semi-annual
reports to shareholders and other communications to shareholders in
such quantity as Insurance Company shall reasonably require for
distributing to Contractholders or Participants.
Insurance Company shall:
a. solicit voting instructions from Contractholders or
Participants on a timely basis and in accordance with
applicable law;
b. vote the Series shares in accordance with instructions
received from Contractholders or Participants; and
c. vote Series shares for which no instructions have been
received in the same proportion as Series shares for which
instructions have been received.
Insurance Company agrees to be responsible for assuring that voting
Fund shares for the Separate Account is conducted in a manner
consistent with other Participating Companies.
7.2 Insurance Company agrees that it shall not, without the prior written
consent of the Fund and Dreyfus, solicit, induce or encourage
Contractholders to (a) change or supplement the Fund's current
investment adviser or (b) change, modify, substitute, add to or delete
the Fund from the current investment media for the Contracts.
ARTICLE VIII
MARKETING AND REPRESENTATIONS
8.1 The Fund or its underwriter shall periodically furnish Insurance
Company with the following documents, in quantities as Insurance
Company may reasonably request:
a. Current Prospectus and any supplements thereto;
b. other marketing materials.
Expenses for the production of such documents shall be borne by
Insurance Company in accordance with Section 5.2 of this Agreement.
8.2 Insurance Company shall designate certain persons or entities which
shall have the requisite licenses to solicit applications for the sale
of Contracts. No representation is made as to the number or amount of
Contracts that are to be sold by Insurance Company. Insurance Company
shall make reasonable efforts to market the Contracts and shall comply
with all applicable federal and state laws in connection therewith.
8.3 Insurance Company shall furnish, or shall cause to be furnished, to the
Fund, each piece of sales literature or other promotional material in
which the Fund, its investment adviser or the administrator is named,
at least fifteen Business Days prior to its use. No such material shall
be used unless the Fund approves such material. Such approval (if
given) must be in writing and shall be presumed not given if not
received within ten Business Days after receipt of such material. The
Fund shall use all reasonable efforts to respond within ten days of
receipt.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the
Fund or any Series in connection with the sale of the Contracts other
than the information or representations contained in the registration
statement or Prospectus, as may be amended or supplemented from time to
time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund.
8.5 Fund shall furnish, or shall cause to be furnished, to Insurance
Company, each piece of the Fund's sales literature or other promotional
material in which Insurance Company or the Separate Account is named,
at least fifteen Business Days prior to its use. No such material shall
be used unless Insurance Company approves such material. Such approval
(if given) must be in writing and shall be presumed not given if not
received within ten Business Days after receipt of such material.
Insurance Company shall use all reasonable efforts to respond within
ten days of receipt.
8.6 Fund shall not, in connection with the sale of Series shares, give any
information or make any representations on behalf of Insurance Company
or concerning Insurance Company, the Separate Account, or the Contracts
other than the information or representations contained in a
registration statement or prospectus for the Contracts, as may be
amended or supplemented from time to time, or in published reports for
the Separate Account which are in the public domain or approved by
Insurance Company for distribution to Contractholders or Participants,
or in sales literature or other promotional material approved by
Insurance Company.
8.7 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,
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. rules, the Act or the
1933 Act.
ARTICLE IX
INDEMNIFICATION
9.1 Insurance Company agrees to indemnify and hold harmless the Fund,
Dreyfus, any sub-investment adviser of a Series, and their affiliates,
and each of their directors, trustees, officers, employees, agents and
each person, if any, who controls or is associated with any of the
foregoing entities or persons within the meaning of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of Section 9.1),
against any and all losses, claims, damages or liabilities joint or
several (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amounts paid in
settlement of, any action, suit or proceeding or any claim asserted)
for which the Indemnified Parties may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect to thereof) (i) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in information furnished by Insurance Company
for use in the registration statement or Prospectus or sales literature
or advertisements of the Fund or with respect to the Separate Account
or 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;
(ii) arise out of or as a result of conduct, statements or
representations (other than statements or representations contained in
the Prospectus and sales literature or advertisements of the Fund) of
Insurance Company or its agents, with respect to the sale and
distribution of Contracts for which Series' shares are an underlying
investment; (iii) arise out of the wrongful conduct of Insurance
Company or persons under its control with respect to the sale or
distribution of the Contracts or Series' shares; (iv) arise out of
Insurance Company's incorrect calculation and/or untimely reporting of
net purchase or redemption orders; or (v) arise out of any breach by
Insurance Company of a material term of this Agreement or as a result
of any failure by Insurance Company to provide the services and furnish
the materials or to make any payments provided for in this Agreement.
Insurance Company will reimburse any Indemnified Party in connection
with investigating or defending any such loss, claim, damage, liability
or action; provided, however, that with respect to clauses (i) and (ii)
above Insurance Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon any untrue statement or omission or alleged omission made
in such registration statement, prospectus, sales literature, or
advertisement in conformity with written information furnished to
Insurance Company by the Fund specifically for use therein. This
indemnity agreement will be in addition to any liability which
Insurance Company may otherwise have.
9.2 The Fund agrees to indemnify and hold harmless Insurance Company and
each of its directors, officers, employees, agents and each person, if
any, who controls Insurance Company within the meaning of the 1933 Act
against any losses, claims, damages or liabilities to which Insurance
Company or any such director, officer, employee, agent or controlling
person may become subject, under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) (1) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or Prospectus or sales literature or
advertisements of the Fund; (2) arise out of or are based upon the
omission to state in the registration statement or Prospectus or sales
literature or advertisements of the Fund any material fact required to
be stated therein or necessary to make the statements therein not
misleading; or (3) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the
registration statement or Prospectus or sales literature or
advertisements with respect to the Separate Account or the Contracts
and such statements were based on information provided to Insurance
Company by the Fund; and the Fund will reimburse any legal or other
expenses reasonably incurred by Insurance Company or any such director,
officer, employee, agent or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Fund will not be liable in any such
case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or omission or
alleged omission made in such Registration Statement, Prospectus, sales
literature or advertisements in conformity with written information
furnished to the Fund by Insurance Company specifically for use
therein. This indemnity agreement will be in addition to any liability
which the Fund may otherwise have.
9.3 The Fund shall indemnify and hold Insurance Company harmless against
any and all liability, loss, damages, costs or expenses which Insurance
Company may incur, suffer or be required to pay due to the Fund's (1)
incorrect calculation of the daily net asset value, dividend rate or
capital gain (loss) distribution rate of a Series; (2) incorrect
reporting of the daily net asset value, dividend rate or capital gain
(loss) distribution rate; and (3) untimely reporting of the net asset
value, dividend rate or capital gain (loss) distribution rate; provided
that the Fund shall have no obligation to indemnify and hold harmless
Insurance Company if the incorrect calculation or incorrect or untimely
reporting was the result of incorrect information furnished by
Insurance Company or information furnished untimely by Insurance
Company or otherwise as a result of or relating to a breach of this
Agreement by Insurance Company.
9.4 Promptly after receipt by an indemnified party under this Article of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Article, notify the indemnifying party of the
commencement thereof. The omission to so notify the indemnifying party
will not relieve the indemnifying party from any liability under this
Article IX, except to the extent that the omission results in a failure
of actual notice to the indemnifying party and such indemnifying party
is damaged solely as a result of the failure to give such notice. In
case any such action is brought against any indemnified party, and it
notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, assume the defense thereof, with counsel
satisfactory to such indemnified party, and to the extent that the
indemnifying party has given notice to such effect to the indemnified
party and is performing its obligations under this Article, the
indemnifying party shall not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof, other than reasonable costs of investigation.
Notwithstanding the foregoing, in any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent.
A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article IX.
9.5 Insurance Company shall indemnify and hold the Fund, Dreyfus and any
sub-investment adviser of a Series harmless against any tax liability
incurred by the Fund under Section 851 of the Code arising from
purchases or redemptions by Insurance Company's General Accounts or the
account of its affiliates.
ARTICLE X
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions
herein.
10.2 This Agreement shall terminate without penalty as to one or more Series
at the option of the terminating party:
a. At the option of Insurance Company or the Fund at any time
from the date hereof upon 180 days' notice, unless a shorter
time is agreed to by the parties;
b. At the option of Insurance Company, if shares of any Series
are not reasonably available to meet the requirements of the
Contracts as determined by Insurance Company. Prompt notice of
election to terminate shall be furnished by Insurance Company,
said termination to be effective ten days after receipt of
notice unless the Fund makes available a sufficient number of
shares to meet the requirements of the Contracts within said
ten-day period;
c. At the option of Insurance Company, upon the institution of
formal proceedings against the Fund by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in Insurance Company's reasonable
judgment, materially impair the Fund's ability to meet and
perform the Fund's obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by
Insurance Company with said termination to be effective upon
receipt of notice;
d. At the option of the Fund, upon the institution of formal
proceedings against Insurance Company by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in the Fund's reasonable judgment,
materially impair Insurance Company's ability to meet and
perform Insurance Company's obligations and duties hereunder.
Prompt notice of election to terminate shall be furnished by
the Fund with said termination to be effective upon receipt of
notice;
e. At the option of the Fund, if the Fund shall determine, in its
sole judgment reasonably exercised in good faith, that
Insurance Company has suffered a material adverse change in
its business or financial condition or is the subject of
material adverse publicity and such material adverse change or
material adverse publicity is likely to have a material
adverse impact upon the business and operation of the Fund or
Dreyfus, the Fund shall notify Insurance Company in writing of
such determination and its intent to terminate this Agreement,
and after considering the actions taken by Insurance Company
and any other changes in circumstances since the giving of
such notice, such determination of the Fund shall continue to
apply on the sixtieth (60th) day following the giving of such
notice, which sixtieth day shall be the effective date of
termination;
f. Upon termination of the Investment Advisory Agreement between
the Fund and Dreyfus or its successors unless Insurance
Company specifically approves the selection of a new Fund
investment adviser. The Fund shall promptly furnish notice of
such termination to Insurance Company;
g. In the event the Fund's shares are not registered, issued or
sold in accordance with applicable federal law, or such law
precludes the use of such shares as the underlying investment
medium of Contracts issued or to be issued by Insurance
Company. Termination shall be effective immediately upon such
occurrence without notice;
h. At the option of the Fund upon a determination by the Board in
good faith that it is no longer advisable and in the best
interests of shareholders for the Fund to continue to operate
pursuant to this Agreement. Termination pursuant to this
Subsection (h) shall be effective upon notice by the Fund to
Insurance Company of such termination;
i. At the option of the Fund if the Contracts cease to qualify as
annuity contracts or life insurance policies, as applicable,
under the Code, or if the Fund reasonably believes that the
Contracts may fail to so qualify;
j. At the option of either party to this Agreement, upon the
breach by a party of any material provision of this Agreement,
which breach has not been cured to the reasonable satisfaction
of the other party within 10 days after written notice of such
breach is delivered to such other party;
k. At the option of the Fund, if the Contracts are not
registered, issued or sold in accordance with applicable
federal and/or state law; or
l. Upon assignment of this Agreement, unless made with the
written consent of the non-assigning party.
Any such termination pursuant to Section 10.2a, 10.2d, 10.2e, 10.2f or
10.2k herein shall not affect the operation of Article V of this
Agreement. Any termination of this Agreement shall not affect the
operation of Article IX of this Agreement.
10.3 Notwithstanding any termination of this Agreement pursuant to Section
10.2 hereof, the Fund and Dreyfus may, at the option of the Fund,
continue to make available additional Series shares for so long as the
Fund desires pursuant to the terms and conditions of this Agreement as
provided below, for all Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, if the Fund or Dreyfus
so elects to make additional Series shares available, the owners of the
Existing Contracts or Insurance Company, whichever shall have legal
authority to do so, shall be permitted to reallocate investments in the
Series, redeem investments in the Fund and/or invest in the Fund upon
the making of additional purchase payments under the Existing
Contracts, if permitted by the terms of the Existing Contracts. In the
event of a termination of this Agreement pursuant to Section 10.2
hereof, the Fund and Dreyfus, as promptly as is practicable under the
circumstances, shall notify Insurance Company whether Dreyfus and the
Fund will continue to make Series shares available after such
termination. If Series shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect
and thereafter either the Fund or Insurance Company may terminate the
Agreement, as so continued pursuant to this Section 10.3, upon prior
written notice to the other party, such notice to be for a period that
is reasonable under the circumstances but, if given by the Fund, need
not be for more than six months.
ARTICLE XI
AMENDMENTS
11.1 Any other changes in the terms of this Agreement shall be made by
agreement in writing between Insurance Company and Fund.
ARTICLE XII
NOTICE
12.1 Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate parties at the
following addresses:
Insurance Company: Great American Life Insurance Company of New York
10th Floor, Xxxxxxxx Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxxxx
Fund: Dreyfus Variable Investment Fund
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Fund: Dreyfus Life and Annuity Index Fund, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Fund: The Dreyfus Socially Responsible Growth Fund, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
with copies to: Stroock & Stroock & Xxxxx
0 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx X. Xxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Notice shall be deemed to be given on the date of receipt by the
addresses as evidenced by the return receipt.
ARTICLE XIII
MISCELLANEOUS
13.1 This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the
Fund. The obligations of this Agreement shall only be binding upon the
assets and property of the Fund and shall not be binding upon any
Trustee, officer or shareholder of the Fund individually.
ARTICLE XIV
LAW
14.1 This Agreement shall be construed in accordance with the internal laws
of the State of New York, without giving effect to principles of
conflict of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be duly
executed and attested as of the date first above written.
GREAT AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By:
Its:
Attest:
DREYFUS VARIABLE INVESTMENT FUND
By:
Its:
Attest:
DREYFUS LIFE AND ANNUITY INDEX FUND, INC.
(d/b/a DREYFUS STOCK INDEX FUND)
By:
Its:
Attest:
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH
FUND, INC.
By:
Its:
Attest:
AGREEMENT
AGREEMENT made as of the _____ day of ______, 1999 by and between (i)
The Dreyfus Corporation ("Dreyfus"), a New York corporation; and (ii) Great
American Life Insurance Company of New York ("Client"), a New York corporation.
WITNESSETH:
WHEREAS, each of the investment companies listed on Schedule A hereto as such
Schedule may be amended from time to time (collectively the "Dreyfus Funds,"
each a "Fund") are investment companies registered under the Investment Company
Act of 1940, as amended (the "Act"); and
WHEREAS, Client has entered into a Fund Participation Agreement (the
"Participation Agreement") with each of the Dreyfus Funds listed on Schedule A
hereto; and
WHEREAS, Dreyfus provides investment advisory and/or administrative services to
the Dreyfus Funds; and
WHEREAS, Premier Mutual Fund Services, Inc. ("Premier") is the distributor for
the Dreyfus Funds; and
WHEREAS, the parties hereto have agreed to arrange separately for the
performance of sub-accounting services for owners of shares of the Dreyfus Funds
who maintain their shares in a variable annuity account with Client; and
WHEREAS, Dreyfus desires Client to perform such services and Client is willing
and able to furnish such services on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, each party hereto severally agrees as follows:
1. Client agrees to perform the administrative services specified in
Exhibit A hereto (the "Administrative Services") for the benefit of the
shareholders of the Dreyfus Funds who maintain their shares of any such
Dreyfus Funds in variable annuity and variable life insurance accounts
with Client and whose shares are included in the master account
("Master Account") referred to in paragraph 1 of Exhibit A
(collectively, the "Client Customers").
2. Client represents and agrees that it will maintain and preserve all
records as required by law to be maintained and preserved in connection
with providing the Administrative Services, and will otherwise comply
with all laws, rules and regulations applicable to the Administrative
Services. Upon the request of Dreyfus or its representatives, Client
shall provide copies of all the historical records relating to
transactions between the Dreyfus Funds and Client Customers, and
written communications regarding the Fund(s) to or from such Customers
and other materials, in each case as may reasonably be requested to
enable Dreyfus or its representatives, including without limitation its
auditors, legal counsel or distributor, to monitor and review the
Administrative Services, or to comply with any request of the board of
directors, or trustees or general partners (collectively, the
"Directors") of any Fund or of a governmental body, self-regulatory
organization or a shareholder. Client agrees that it will permit
Dreyfus, the Dreyfus Funds or their representatives to have reasonable
access to its personnel and records in order to facilitate the
monitoring of the quality of the services.
3. Client may, with the consent of Dreyfus, contract with or establish
relationships with other parties for the provision of the
Administrative Services or other activities of Client required by the
Agreement, provided that Client shall be fully responsible for the acts
and omissions of such other parties.
4. Client hereby agrees to notify Dreyfus promptly if for any reason it is
unable to perform fully and promptly any of its obligations under this
Agreement.
5. Client hereby represents and covenants that it does not, and will not,
own or hold or control with power to vote any shares of the Dreyfus
Funds which are registered in the name of Client or the name of its
nominee and which are maintained in Client variable annuity accounts.
Client represents further that it is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and any applicable state securities laws, and as a transfer agent under
the 1934 Act, or is not required to be so registered, including as a
result of entering into this Agreement and performing the
Administrative Services.
6. The provisions of the Agreement shall in no away limit the authority of
Dreyfus, or any Dreyfus Fund or Premier to take such action as any of
such parties may deem appropriate or advisable in connection with all
matters relating to the operations of any of such Funds and/or sale of
its shares.
7. In consideration of the performance of the Administrative Services by
Client, Dreyfus agrees to pay Client a monthly fee at an annual rate
which shall equal .20 of 1% of the value of each Fund's (except Dreyfus
Stock Index Fund) average daily net assets maintained in the Master
Account for Client Customers. The payments by Dreyfus to Client relate
solely to administrative services only and do not constitute payment in
any manner for administrative services provided by Client to Client
Customers or any separate account organized by Client, for any
investment advisory services or for costs of distribution of any
variable insurance contracts.
8. Client shall indemnify and hold harmless the Dreyfus Funds, The Dreyfus
Corporation, Dreyfus Service Corporation ("DSC"), Premier, and each of
their respective officers, directors, employees and agents from and
against any and all losses, claims, damages, expenses, or liabilities
that any one or more of them may incur including without limitation
reasonable attorneys' fees, expenses and costs arising out of or
related to the performance or non-performance of Client of its
responsibilities under this Agreement.
9. This Agreement may be terminated without penalty at any time by Client
or by Dreyfus as to all of the Dreyfus Funds collectively, upon 180
days written notice to the other party. The provisions of paragraphs 2,
8 and 10 shall continue in full force and effect after termination of
this Agreement. Notwithstanding the foregoing, this Agreement shall not
require Client to preserve any records (in any medium or format)
relating to this Agreement beyond the time periods otherwise required
by the laws to which Client or the Dreyfus Funds are subject provided
that such records shall be offered to the Dreyfus Funds in the event
Client decides to no longer preserve such records following such time
periods.
10. After the date of any termination of this Agreement in accordance with
paragraph 9, no fee will be due with respect to any amounts first
placed in the Master Account for Client Customers after the date of
such termination. However, notwithstanding any such termination,
Dreyfus will remain obligated to pay Client the fee specified in
paragraph 7 with respect to the value of each Fund's average daily net
assets maintained in the Master Account as of the date of such
termination, for so long as such amounts are held in the Master Account
and Client continues to provide the Administrative Services with
respect to such amounts in conformity with this Agreement. This
Agreement, or any provision hereof, shall survive termination to the
extent necessary for each party to perform its obligations with respect
to amounts for which a fee continues to be due subsequent to such
termination.
11. Client understands and agrees that the obligations of Dreyfus under
this Agreement are not binding upon any of the Dreyfus Funds, upon any
of their Board members or upon any shareholder of any of the Funds.
12. It is understood and agreed that in performing the services under this
Agreement Client, acting in its capacity described herein, shall at no
time be acting as an agent for Dreyfus, or DSC, or Premier or any of
the Dreyfus Funds. Client agrees, and agrees to cause its agents, not
to make any representations concerning a Fund except those contained in
the Fund's then-current prospectus, in current sales literature
furnished by the Fund, Dreyfus or Premier to Client, or in the then
current prospectus for a variable annuity contract or variable life
insurance policy issued by Client, or then current sales literature
with respect to such variable annuity contract or variable life
insurance policy, approved by Dreyfus.
13. This Agreement, including the provisions set forth herein in Section 7,
may only be amended pursuant to a written instrument signed by the
party to be charged. This Agreement may not be assigned by a party
hereto, by operation of law or otherwise, without the prior, written
consent of the other party.
14. This Agreement shall be governed by the laws of the State of New York,
without giving effect to the principles of conflicts of law of such
jurisdiction.
15. This Agreement, including its Exhibit and Schedule, constitutes the
entire agreement between the parties with respect to the matters dealt
with herein, and supersedes any previous agreements and documents with
respect to such matters.
IN WITNESS HEREOF, the parties hereto have executed and delivered this Agreement
as of the date first above written.
GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
By:
Authorized Signatory
Print or Type Name
THE DREYFUS CORPORATION
By:
Authorized Signatory
Print or Type Name
SCHEDLUE A
GALIC of New York Separate Account I (May 7, 1999)
Fund Code Fund Name
112 Dreyfus Variable Investment Fund, Capital Appreciation Portfolio
108 Dreyfus Variable Investment Fund, Growth and Income Portfolio
121 Dreyfus Variable Investment Fund, Small Cap Portfolio
117 Dreyfus Variable Investment Fund, Money Market Portfolio
111 The Dreyfus Socially Responsible Growth Fund, Inc.
763 Dreyfus Stock Index Fund
EXHIBIT A
Pursuant to the Agreement by and among the parties hereto, Client shall perform
the following Administrative Services:
1. Maintain separate records for each Client Customer, which records shall
reflect shares purchased and redeemed and share balances. Client shall
maintain the Master Account with the transfer agent of the Fund on
behalf of Client Customers and such Master Account shall be in the name
of Client or its nominee as the record owner of the shares owned by
such Client Customers.
2. For each Fund, disburse or credit to Client Customers all proceeds of
redemptions of shares of the Fund and all dividends and other
distributions not reinvested in shares of the Fund.
3. Prepare and transmit to Client Customers periodic account statements
showing the total number of shares owned by the Customer as of the
statement closing date, purchases and redemptions of Fund shares by the
Customer during the period covered by the statement, and the dividends
and other distributions paid to the Customer during the statement
period (whether paid in cash or reinvested in Fund shares).
4. Transmit to Client Customers proxy materials and reports and other
information received by Client from any of the Funds and required to be
sent to shareholders under the federal securities laws and, upon
request of the Fund's transfer agent, transmit to Client Customers
material fund communications deemed by the Fund, through its Board of
Directors or other similar governing body, to be necessary and proper
for receipt by all fund beneficial shareholders.
5. Transmit to the Fund's transfer agent purchase and redemption orders on
behalf of Client Customers.
6. Provide to the Funds, or to the transfer agent for any of the Funds, or
any of the agents designated by any of them, such periodic reports as
shall reasonably be concluded to be necessary to enable each of the
Funds and its distributor to comply with State Blue Sky requirements.
JANUS ASPEN SERIES
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made this ____ day of __________, 1999, between JANUS
ASPEN SERIES, an open-end management investment company organized as a Delaware
business trust (the "Trust"), and GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW
YORK, a life insurance company organized under the laws of the State of New York
(the "Company"), on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule A, as may be amended from time to
time (the "Accounts").
W I T N E S S E T H:
WHEREAS, the Trust has registered with the Securities and Exchange
Commission as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and has registered the offer
and sale of its shares under the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Trust desires to act as an investment vehicle for separate
accounts established for variable life insurance policies and variable annuity
contracts to be offered by insurance companies that have entered into
participation agreements with the Trust (the "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each series representing an interest in a particular managed
portfolio of securities and other assets (the "Portfolios"); and
WHEREAS, the Trust has received an order from the Securities and
Exchange Commission granting Participating Insurance Companies and their
separate accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a)
and 15(b) of the 1940 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder,
to the extent necessary to permit shares of the Trust to be sold to and held by
variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans (the "Exemptive Order"); and
WHEREAS, the Company has registered or will register certain variable
life insurance policies and/or variable annuity contracts under the 1933 Act
(the "Contracts"); and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Company desires to utilize shares of one or more
Portfolios as an investment vehicle of the Accounts;
NOW THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE I.
Sale of Trust Shares
1.1 The Trust shall make shares of its Portfolios available to the
Accounts at the net asset value next computed after receipt of such purchase
order by the Trust (or its agent), as established in accordance with the
provisions of the then current prospectus of the Trust. Shares of a particular
Portfolio of the Trust shall be ordered in such quantities and at such times as
determined by the Company to be necessary to meet the requirements of the
Contracts. The Trustees of the Trust (the "Trustees") 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 Trustees acting in good
faith and in light of their fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders of such
Portfolio.
1.2 The Trust will redeem any full or fractional shares of any
Portfolio when requested by the Company on behalf of an Account at the net asset
value next computed after receipt by the Trust (or its agent) of the request for
redemption, as established in accordance with the provisions of the then current
prospectus of the Trust. The Trust shall make payment for such shares in the
manner established from time to time by the Trust, but in no event shall payment
be delayed for a greater period than is permitted by the 0000 Xxx.
1.3 For the purposes of Sections 1.1 and 1.2, the Trust hereby appoints
the Company as its agent for the limited purpose of receiving and accepting
purchase and redemption orders resulting from investment in and payments under
the Contracts. Receipt by the Company shall constitute receipt by the Trust
provided that i) such orders are received by the Company in good order prior to
the time the net asset value of each Portfolio is priced in accordance with its
prospectus and ii) the Trust receives notice of such orders by 11:00 a.m. New
York 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 Trust
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission.
1.4 Purchase orders that are transmitted to the Trust in accordance
with Section 1.3 shall be paid for no later than 12:00 noon New York time on the
same Business Day that the Trust receives notice of the order.
Payments shall be made in federal funds transmitted by wire.
1.5 Issuance and transfer of the Trust's shares will be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Shares ordered from the Trust will be recorded in the appropriate title for each
Account or the appropriate subaccount of each Account.
1.6 The Trust shall furnish prompt notice to the Company of any income
dividends or capital gain distributions payable on the Trust's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares of
that Portfolio. The Trust shall notify the Company of the number of shares so
issued as payment of such dividends and distributions by the close of the
following Business Day.
1.7 The Trust shall make the net asset value per share for each
Portfolio available to the Company on a daily basis 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 p.m. New York
time. When available, the net asset value will be communicated to the Company by
telephone and confirmed by facsimile.
1.8 The Trust agrees that its shares will be sold only to Participating
Insurance Companies and their separate accounts and to certain qualified pension
and retirement plans to the extent permitted by the Exemptive Order. No shares
of any Portfolio will be sold directly to the general public. The Company agrees
that Trust shares will be used only for the purposes of funding the Contracts
and Accounts listed in Schedule A, as amended from time to time.
1.9 The Trust agrees that all Participating Insurance Companies shall
have the obligations and responsibilities regarding pass-through voting and
conflicts of interest corresponding to those contained in Section 2.8 and
Article IV. of this Agreement.
ARTICLE II.
Obligations of the Parties
2.1 The Trust shall prepare and be responsible for filing with the
Securities and Exchange Commission and any state regulators requiring such
filing all shareholder reports, notices, proxy materials (or similar materials
such as voting instruction solicitation materials), prospectuses and statements
of additional information of the Trust. The Trust shall bear the costs of
registration and qualification of its shares, preparation and filing of the
documents listed in this Section 2.1 and all taxes to which an issuer is subject
on the issuance and transfer of its shares.
2.2 At the option of the Company, the Trust shall either (a) provide
the Company (at the Company's expense) with as many copies of the Trust's
current prospectus, annual report, semi-annual report and other shareholder
communications, including any amendments or supplements to any of the foregoing,
as the Company shall reasonably request; or (b) provide the Company with a
camera ready copy of such documents in a form suitable for printing. The Trust
shall provide the Company with a copy of its statement of additional information
in a form suitable for duplication by the Company. The Trust (at its expense)
shall provide the Company with copies of any Trust-sponsored proxy materials in
such quantity as the Company shall reasonably require for distribution to
Contract owners.
2.3 The Company shall bear the costs of printing and distributing the
Trust's prospectus, statement of additional information, shareholder reports and
other shareholder communications to owners of and applicants for policies for
which the Trust is serving or is to serve as an investment vehicle. The Company
shall bear the costs of distributing proxy materials (or similar materials such
as voting solicitation instructions) to Contract owners. The Company assumes
sole responsibility for ensuring that such materials are delivered to Contract
owners in accordance with applicable federal and state securities laws.
2.4 The Company agrees and acknowledges that the Trust's adviser, Janus
Capital Corporation ("Janus Capital"), is the sole owner of the name and xxxx
"Xxxxx" and that all use of any designation comprised in whole or part of Janus
(a "Xxxxx Xxxx") under this Agreement shall inure to the benefit of Janus
Capital. Except as provided in Section 2.5, the Company shall not use any Xxxxx
Xxxx on its own behalf or on behalf of the Accounts or Contracts in any
registration statement, advertisement, sales literature or other materials
relating to the Accounts or Contracts without the prior written consent of Janus
Capital. Upon termination of this Agreement for any reason, the Company shall
cease all use of any Xxxxx Xxxx(s) as soon as reasonably practicable.
2.5 The Company shall furnish, or cause to be furnished, to the Trust
or its designee, a copy of each Contract prospectus or statement of additional
information in which the Trust or its investment adviser is named prior to the
filing of such document with the Securities and Exchange Commission. The Company
shall furnish, or shall cause to be furnished, to the Trust or its designee,
each piece of sales literature or other promotional material in which the Trust
or its investment adviser is named, at least ten Business Days prior to its use.
No such material shall be used if the Trust or its designee reasonably objects
to such use within ten Business Days after receipt of such material.
2.6 The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust or
its investment adviser in connection with the sale of the Contracts other than
information or representations contained in and accurately derived from the
registration statement or prospectus for the Trust shares (as such registration
statement and prospectus may be amended or supplemented from time to time),
reports of the Trust, Trust-sponsored proxy statements, or in sales literature
or other promotional material approved by the Trust or its designee, except as
required by legal process or regulatory authorities or with the written
permission of the Trust or its designee.
2.7 The Trust shall not give any information or make any
representations or statements on behalf of the Company or concerning the
Company, the Accounts or the Contracts other than information or representations
contained in and accurately derived from the registration statement or
prospectus for the Contracts (as such registration statement and prospectus may
be amended or supplemented from time to time), or in materials approved by the
Company for distribution including sales literature or other promotional
materials, except as required by legal process or regulatory authorities or with
the written permission of the Company.
2.8 So long as, and to the extent that the Securities and Exchange
Commission interprets the 1940 Act to require pass-through voting privileges for
variable policyowners, the Company will provide pass-through voting privileges
to owners of policies whose cash values are invested, through the Accounts, in
shares of the Trust. The Trust shall require all Participating Insurance
Companies to calculate voting privileges in the same manner and the Company
shall be responsible for assuring that the Accounts calculate voting privileges
in the manner established by the Trust. With respect to each Account, the
Company will vote shares of the Trust held by the Account and for which no
timely voting instructions from policyowners are received as well as shares it
owns that are held by that Account, in the same proportion as those shares for
which voting instructions are received. The Company and its agents will in no
way recommend or oppose or interfere with the solicitation of proxies for Trust
shares held by Contract owners without the prior written consent of the Trust,
which consent may be withheld in the Trust's sole discretion.
ARTICLE III.
Representations and Warranties
3.1 The Company represents and warrants that it is an insurance company
duly organized and in good standing under the laws of the State of New York and
that it has legally and validly established each Account as a segregated asset
account under such law on the date set forth in Schedule A.
3.2 The Company represents and warrants that it has registered or,
prior to any issuance or sale of the Contracts, will register each 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.
3.3 The Company represents and warrants that the Contracts will be
registered under the 1933 Act prior to any issuance or sale of the Contracts;
the Contracts will be issued and sold in compliance in all material respects
with all applicable federal and state laws; and the sale of the Contracts shall
comply in all material respects with state insurance suitability requirements.
3.4 The Trust represents and warrants that it is duly organized and
validly existing under the laws of the State of Delaware.
3.5 The Trust represents and warrants that the Trust shares offered and
sold pursuant to this Agreement will be registered under the 1933 Act and the
Trust shall be registered under the 1940 Act prior to any issuance or sale of
such shares. The Trust shall amend its registration statement under the 1933 Act
and the 1940 Act from time to time as required in order to effect the continuous
offering of its shares. The Trust shall register and qualify its shares for sale
in accordance with the laws of the various states only if and to the extent
deemed advisable by the Trust.
3.6 The Trust represents and warrants that the investments of each
Portfolio will comply with the diversification requirements set forth in Section
817(h) of the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder.
ARTICLE IV.
Potential Conflicts
4.1 The parties acknowledge that the Trust's shares may be made
available for investment to other Participating Insurance Companies. In such
event, the Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
Participating Insurance Companies. 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 (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Trustees shall promptly inform the Company if they determine that an
irreconcilable material conflict exists and the implications thereof.
4.2 The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Trustees. The Company will assist the
Trustees in carrying out their responsibilities under the Exemptive Order by
providing the Trustees with all information reasonably necessary for the
Trustees to consider any issues raised including, but not limited to,
information as to a decision by the Company to disregard Contract owner voting
instructions.
4.3 If it is determined by a majority of the Trustees, or a majority of
its disinterested Trustees, that a material irreconcilable conflict exists that
affects the interests of Contract owners, the Company shall, in cooperation with
other Participating Insurance Companies whose contract owners are also affected,
at its expense and to the extent reasonably practicable (as determined by the
Trustees) take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (a) withdrawing the
assets allocable to some or all of the Accounts from the Trust or any Portfolio
and reinvesting such assets in a different investment medium, including (but not
limited to) another Portfolio of the Trust, or submitting the question of
whether or not 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 (b) establishing a new registered
management investment company or managed separate account.
4.4 If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect to such
Account; 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 Trustees. Any such withdrawal and
termination must take place within six (6) months after the Trust gives written
notice that this provision is being implemented. Until the end of such six (6)
month period, the Trust shall continue to accept and implement orders by the
Company for the purchase and redemption of shares of the Trust.
4.5 If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Trust and terminate this Agreement with
respect to such Account within six (6) months after the Trustees inform the
Company 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
Trustees. Until the end of such six (6) month period, the Trust shall continue
to accept and implement orders by the Company for the purchase and redemption of
shares of the Trust.
4.6 For purposes of Sections 4.3 through 4.6 of this Agreement, a
majority of the disinterested Trustees shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Company be required to establish a new funding medium for the Contracts
if an offer to do so has been declined by vote of a majority of Contract owners
materially adversely affected by the irreconcilable material conflict. In the
event that the Trustees determine that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Trust and terminate this Agreement within six (6)
months after the Trustees inform the Company 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 disinterested Trustees.
4.7 The Company shall at least annually submit to the Trustees such
reports, materials or data as the Trustees may reasonable request so that the
Trustees may fully carry out the duties imposed upon them by the Exemptive
Order, and said reports, materials and data shall be submitted more frequently
if deemed appropriate by the Trustees.
4.8 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, 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 Exemptive Order) on terms and conditions materially
different from those contained in the Exemptive Order, then the Trust and/or the
Participating Insurance Companies, 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.
ARTICLE V.
Indemnification
5.1 Indemnification By the Company. The Company agrees to indemnify and
hold harmless the Trust and each of its Trustees, officers, employees and agents
and each person, if any, who controls the Trust within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Article V.) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Company) or expenses
(including the reasonable costs of investigating or defending any alleged loss,
claim, damage, liability or expense and reasonable legal counsel fees incurred
in connection therewith) (collectively, "Losses"), to which the Indemnified
Parties may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in a
registration statement or prospectus for the Contracts or in the
Contracts themselves or in sales literature generated or approved by
the Company on behalf of the Contracts or Accounts (or any amendment or
supplement to any of the foregoing) (collectively, "Company Documents"
for the purposes of this Article V.), 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 indemnity 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 was accurately
derived from written information furnished to the Company by or on
behalf of the Trust for use in Company Documents or otherwise for use
in connection with the sale of the Contracts or Trust shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately
derived from Trust Documents as defined in Section 5.2(a)) or wrongful
conduct of the Company or persons under its control, with respect to
the sale or acquisition of the Contracts or Trust shares; or
(c) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in Trust
Documents as defined in Section 5.2(a) 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 accurately derived
from written information furnished to the Trust by or on behalf of the
Company; or
(d) arise out of or result from any failure by the Company to
provide the services or furnish the materials required under the terms
of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Company.
5.2 Indemnification By the Trust. The Trust agrees to indemnify and
hold harmless the Company and each of its directors, officers, employees and
agents and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Article V.) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Trust) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal counsel
fees incurred in connection therewith) (collectively, "Losses"), to which the
Indemnified Parties may become subject under any statute or regulation, or at
common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement or prospectus for the Trust or in sales
literature generated or approved by the Trust or on behalf of the Trust
(or any amendment or supplement thereto), (collectively, "Trust
Documents" for the purposes of this Article V.), 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 indemnity 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 was
accurately derived from written information furnished to the Trust by
or on behalf of the Company for use in Trust Documents or otherwise for
use in connection with the sale of the Contracts or Trust shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately
derived from Company Documents) or wrongful conduct of the Trust or
persons under its control, with respect to the sale or acquisition of
the Contracts or Trust shares; or
(c) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in Company
Documents 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 accurately derived from written information
furnished to the Company by or on behalf of the Trust; or
(d) arise out of or result from any failure by the Trust to
provide the services or furnish the materials required under the terms
of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Trust.
5.3 Neither the Company nor the Trust shall be liable under the
indemnification provisions of Sections 5.1 or 5.2, as applicable, with respect
to any Losses incurred or assessed against an Indemnified Party that arise from
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.
5.4 Neither the Company nor the Trust shall be liable under the
indemnification provisions of Sections 5.1 or 5.2, as applicable, with respect
to any claim made against an Indemnified Party unless such Indemnified Party
shall have notified the other party in writing within a reasonable time after
the summons, or other first written notification, giving information of the
nature of the claim shall have been served upon or otherwise received by such
Indemnified Party (or after such Indemnified Party shall have received notice of
service upon or other notification to any designated agent), but failure to
notify the party against whom indemnification is sought of any such claim shall
not relieve that party from any liability which it may have to the Indemnified
Party in the absence of Sections 5.1 and 5.2.
5.5 In case any such action is brought against the Indemnified Parties,
the indemnifying party shall be entitled to participate, at its own expense, in
the defense of such action. The indemnifying party also shall be entitled to
assume the defense thereof, with counsel reasonably satisfactory to the party
named in the action. After notice from the indemnifying party to the Indemnified
Party of an election to assume such defense, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it, and the
indemnifying party will not be liable to the Indemnified 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.
ARTICLE VI.
Termination
6.1 This Agreement may be terminated by either party for any reason by
ninety (90) days advance written notice delivered to the other party.
6.2 Notwithstanding any termination of this Agreement, the Trust shall,
at the option of the Company, continue to make available additional shares of
the Trust (or any Portfolio) pursuant to the terms and conditions of this
Agreement for all Contracts in effect on the effective date of termination of
this Agreement, provided that the Company continues to pay the costs set forth
in Section 2.3.
6.3 The provisions of Article V. shall survive the termination of this
Agreement, and the provisions of Article IV. and Section 2.8 shall survive the
termination of this Agreement as long as shares of the Trust are held on behalf
of Contract owners in accordance with Section 6.2.
ARTICLE VII.
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 Trust:
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
If to the Company:
00xx Xxxxx, Xxxxxxxx Xxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
ARTICLE VIII.
Miscellaneous
8.1 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.
8.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
8.3 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.
8.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of State of Colorado.
8.5 The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising, directly or indirectly, under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the assets
of the Trust and that no Trustee, officer, agent or holder of shares of
beneficial interest of the Trust shall be personally liable for any such
liabilities.
8.6 Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the National Association of Securities
Dealers, Inc., 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.
8.7 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.
8.8 The parties to this Agreement acknowledge and agree that this
Agreement shall not be exclusive in any respect.
8.9 Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the prior written approval of the other
party.
8.10 No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Participation Agreement as of the date and year first
above written.
GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
By: --------------------------------------
Name:--------------------------------------
Title: ------------------------------------
JANUS ASPEN SERIES
By: ---------------------------------------
Name: Xxxxxx X. Xxxx
Title: Assistant Vice President
Schedule A
Separate Accounts and Associated Contracts
Name of Separate Account and Contracts Funded
Date Established by Board of Directors By Separate Account
GALIC of NY Separate Account I The Commodore Navigator Individual
May 7, 1999 and Group Deferred Variable Annuities
The Commodore Advantage Individual
and Group Deferred Variable Annuities
The Commodore Independence Individual
and Group Deferred Variable Annuities
May 19, 1999
Xx. Xxxx X. Xxxxxxxx
Senior Vice President
Annuity Investors Life Insurance Company
00xx Xxxxx, Xxxxxxxx Xxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Dear Xx. Xxxxxxxx:
This letter sets forth the agreement between Great American Life
Insurance Company of New York (the "Company"), and Janus Capital Corporation
(the "Adviser"), concerning certain administrative services.
1. Administrative Services and Expenses. Administrative services for the
separate accounts of the Company (the "Accounts") which invest in one
or more portfolios (collectively, the "Portfolios") of Janus Aspen
Series (the "Trust") pursuant to the Participation Agreement between
the Company and the Trust dated ______________ (the "Participation
Agreement"), and for purchasers of variable annuity or life insurance
contracts (the "Contracts") issued through the Accounts are the
responsibility of the Company. Administrative services for the
Portfolios, in which the Accounts invest, and for purchasers of shares
of the Portfolios, are the responsibility of the Trust. These
administrative services the Company intends to provide to the Trust and
its Portfolios are set forth in Schedule A attached to this letter
agreement, which may be amended from time to time.
2. Service Fee. In consideration of the anticipated administrative expense
savings resulting to the Trust from the Company's services, the Adviser
agrees to pay the Company a fee ("Service Fee"), computed daily and
paid monthly in arrears, at an annual rate equal to fifteen (15) basis
points (0.15%) of the average monthly value of the shares of the
Portfolios held in the Accounts, such payments to commence following
the month in which the average monthly value of investments by the
Accounts (together with the average monthly value of investments by the
separate accounts of Annuity Investors Life Insurance Company) reach
$50 million. The Service Fee will be correspondingly suspended if the
average monthly value of such investments drops below $50 million in
any month. For purposes of this Paragraph 2, the average monthly value
of the shares of the Portfolios will be based on the sum of the daily
net asset values calculated by the Portfolios in a month divided by the
number of days in the month.
3. Nature of Payments. The parties to this letter agreement recognize and
agree that the Adviser's payments to the Company relate to
administrative services only and do not constitute payment in any
manner for administrative services provided by the Company to the
Account or to the Contracts, for investment advisory services or for
costs of distribution of Contracts or of shares of the Portfolios, and
that these payments are not otherwise related to investment advisory or
distribution services or expenses.
4. Representations and Warranties.
a. The Adviser represents and warrants that in the event the
Trustees of the Trust approve the payment of all or any
portion of the Service Fee by the Trust, the Trust will
calculate in the same manner the Service Fee to all insurance
companies that have entered into Service Fee arrangements with
the Adviser and/or the Trust (the "Participating Insurance
Companies").
b. The Company represents and warrants that: (1) it and its
employees and agents meet the requirements of applicable law,
including but not limited to federal and state securities law
and state insurance law, for the performance of services
contemplated herein; and (2) it will not purchase Trust shares
of the Portfolios with Account assets derived from
tax-qualified retirement plans except indirectly, through
Contracts purchased in connection with such plans and that the
Service Fee does not include any payment to the Company that
is prohibited under the Employee Retirement Income Securities
Act of 1974 ("ERISA") with respect to any assets of a Contract
owner invested in a Contract using the Portfolios as
investment vehicles.
c. The Company represents, warrants and agrees that: (1) the
payment of the Service Fee by the Adviser is designed to
reimburse the Company for providing administrative services to
the Trust that the Trust would customarily pay and does not
represent reimbursement to the Company for providing
administrative services to the Contract or Account as
described in Section 26 of the Investment Company Act of 1940
(the "1940 Act") and the rules and regulations thereunder; (2)
no portion of the Service Fee will be rebated by the Company
to any Contract owner; and (3) if required by applicable law,
the Company will disclose to each Contract owner the existence
of the Service Fee received by the Company pursuant to this
letter agreement in a form consistent with the requirements of
applicable law and will disclose the amount of the Service
Fee, if any, that is paid by the Trust.
5. Indemnification
a. The Company agrees to indemnify and hold harmless the Adviser
and its directors, officers, and employees from any and all
loss, liability and expense resulting from any gross
negligence or willful wrongful act of the Company in
performing its services under this letter agreement, from the
inaccuracy or breach of any representation made in this letter
agreement, or from a breach of a material provision of this
letter agreement, except to the extent such loss, liability or
expense is the result of the Adviser's willful misfeasance,
bad faith or gross negligence in the performance of its
duties.
b. The Adviser agrees to indemnify and hold harmless the Company
and its directors, officers, agents and employees from any and
all loss, liability and expense resulting from any gross
negligence or willful wrongful act of the Adviser in
performing its services under this letter agreement, from the
inaccuracy or breach of any representation made in this letter
agreement, or from a breach of a material provision of this
letter agreement, except to the extent such loss, liability or
expense is the result of the Company's willful misfeasance,
bad faith or gross negligence in the performance if its
duties.
6. Termination.
a. Either party may terminate this letter agreement, without
penalty, on sixty (60) days' written notice to the other
party.
b. This letter agreement will terminate at the option of either
party in the event of the termination of the Participation
Agreement.
c. This letter agreement will terminate immediately upon the
determination of either party, with the advice of counsel,
that the payment of the Service Fee is in conflict with
applicable law.
7. Amendment. This letter agreement may be amended only upon mutual
agreement of the parties hereto in writing.
8. Confidentiality. The terms of this letter agreement will be treated as
confidential and will not be disclosed to the public or any outside
party except with each party's prior written consent, as required by
law or judicial process or as provided in paragraph 4c herein.
9. Assignment. This letter agreement may not be assigned (as that term is
defined in the 0000 Xxx) by either party without the prior written
approval of the other party, which approval will not be unreasonably
withheld, except that the Adviser may assign its obligations under this
letter agreement, including the payment of all or any portion of the
Service Fee, to the Trust upon thirty (30) days' written notice to the
Company.
10. Governing Law. This letter agreement will be construed and the
provisions hereof interpreted under and in accordance with the laws of
the State of Colorado.
11. Counterparts. This letter agreement may be executed in counterparts,
each of which will be deemed an original but all of which will together
constitute one and the same instrument.
If this letter agreement is consistent with your understanding of the matters we
discussed concerning administrative expense payments, kindly sign below and
return a signed copy to us.
Very truly yours,
JANUS CAPITAL CORPORATION
By: _______________________________
Name: _______________________________
Title: _______________________________
GREAT AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By: _______________________________
Name: _______________________________
Title: _______________________________
Attachment: Schedule A
Schedule A
Pursuant to the letter agreement to which this Schedule is attached, the Company
will perform administrative services including, but not limited to, the
following:
1. Print and mail to Contract owners copies of the Portfolios'
prospectuses, proxy materials, periodic fund reports to shareholders and other
materials that the Trust is required by law or otherwise to provide to its
shareholders.
2. Provide Contract owner services including, but not limited to,
financial consultants' advice with respect to inquiries related to the
Portfolios (not including information about performance or related to sales) and
communicating with Contract owners about Portfolio (and subaccount) performance.
3. Provide other administrative support for the Trust as mutually
agreed to by the Company and the Adviser and relieve the Trust of other usual or
incidental administrative services provided to individual Contract owners.
PARTICIPATION AGREEMENT
THIS AGREEMENT, is made as of _____________, 1999, by and
among Great American Life Insurance Company of New York ("Company"), on its own
behalf and on behalf of GALIC of New York Separate Account I, a segregated asset
account of the Company ("Account"), Strong Variable Insurance Funds, Inc.
("Strong Variable") on behalf of the Portfolios of Strong Variable listed on the
attached Exhibit A as such Exhibit may be amended from time to time (the
"Designated Portfolios"), Strong Opportunity Fund II, Inc. ("Opportunity Fund
II"), Strong Capital Management, Inc. (the "Adviser"), the investment adviser
and transfer agent for the Opportunity Fund II and Strong Variable, and Strong
Investments, Inc. ("Distributors"), the distributor for Strong Variable and the
Opportunity Fund II (each, a "Party" and collectively, the "Parties").
PRELIMINARY STATEMENTS
A. Beneficial interests in Strong Variable are divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets (each, a "Portfolio").
B. To the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of Opportunity Fund II and
the Designated Portfolios ("Fund" or "Funds" shall be deemed to refer to each
Designated Portfolio and to the Opportunity Fund II to the extent the context
requires), on behalf of the Account to fund the variable annuity contracts that
use the Funds as an underlying investment medium (the "Contracts").
C. The Company, Adviser and Distributors desire to facilitate the
purchase and redemption of shares of the Funds by the Company for the Account
through one or more accounts, which number shall be as mutually agreed upon by
the parties, in each Fund (each an "Omnibus Account"), to be maintained of
record by the Company, subject to the terms and conditions of this Agreement.
D. The Company desires to provide administrative services and functions
(the "Services") for purchasers of Contracts ("Owners") who are beneficial
owners of shares of the Funds on the terms and conditions set forth in this
Agreement.
AGREEMENTS
The parties to this Agreement agree as follows:
1. Performance of Services. Company agrees to perform the administrative
functions and services specified in Exhibit B attached to this Agreement with
respect to the shares of the Funds beneficially owned by the Owners and included
in the Account. Nothing in this Agreement shall limit Company's right to engage
one or more of its wholly owned subsidiaries (each, a "Designee") to provide all
or any portion of the Services, but no such engagement shall relieve Company of
its duties, responsibilities or liabilities under this Agreement.
2. The Omnibus Accounts.
2.1 Each Omnibus Account will be opened based upon the information
contained in Exhibit C to this Agreement. In connection with each Omnibus
Account, Company represents and warrants that it is authorized to act on behalf
of each Owner effecting transactions in the Omnibus Account and that the
information specified on Exhibit C to this Agreement is correct.
2.2 Each Fund shall designate each Omnibus Account with an account
number. These account numbers will be the means of identification when the
Parties are transacting in the Omnibus Accounts. The assets in the Accounts are
segregated from the Company's own assets. The Adviser agrees to cause the
Omnibus Accounts to be kept open on each Fund's books, as applicable, regardless
of a lack of activity or small position size except to the extent the Company
takes specific action to close an Omnibus Account or to the extent a Fund's
prospectus reserves the right to close accounts which are inactive or of a small
position size. In the latter two cases, the Adviser will give prior notice to
the Company before closing an Omnibus Account.
2.3 The Company agrees to provide Adviser such information as Adviser
or Distributors may reasonably request concerning Owners as may be necessary or
advisable to enable Adviser and Distributors to comply with applicable laws,
including state "Blue Sky" laws relating to the sales of shares of the Funds to
the Accounts.
3. Fund Shares Transactions.
3.1 In General. Shares of the Funds shall be sold on behalf of the
Funds by Distributors and purchased by Company for the Account and, indirectly
for the appropriate subaccount thereof at the net asset value next computed
after receipt by Distributors of each order of the Company or its Designee, in
accordance with the provisions of this Agreement, the then current prospectuses
of the Funds, and the Contracts. Company may purchase shares of the Funds for
its own account subject to (a) receipt of prior written approval by
Distributors; and (b) such purchases being in accordance with the then current
prospectuses of the Fund and the Contracts. The Board of Directors of each Fund
("Directors") may refuse to sell shares of the applicable Fund to any person, or
suspend or terminate the offering of shares of the Fund if such action is
required by law or by regulatory authorities having jurisdiction. Company agrees
to purchase and redeem the shares of the Funds in accordance with the provisions
of this Agreement, of the Contracts and of the then current prospectuses for the
Contracts and Funds. Except as necessary to implement transactions initiated by
Owners, or as otherwise permitted by state or federal laws or regulations,
Company shall not redeem shares of Funds attributable to the Contracts.
3.2 Purchase and Redemption Orders. On each day that a Fund is open for
business (a "Business Day"), the Company or its Designee shall aggregate and
calculate the net purchase or redemption order it receives for the Account from
the Owners for shares of the Fund that it received prior to the close of trading
on the New York Stock Exchange (the "NYSE") (i.e. 3:00 p.m., Central time,
unless the NYSE closes at an earlier time in which case such earlier time shall
apply) and communicate to Distributors, by telephone or facsimile (or by such
other means as the Parties to this Agreement may agree to in writing), the net
aggregate purchase or redemption order (if any) for the Omnibus Account for such
Business Day (such Business Day is sometimes referred to herein as the "Trade
Date"). The Company or its Designee will communicate such orders to Distributors
prior to 8:00 a.m., Central time, on the next Business Day following the Trade
Date. All trades communicated to Distributors by the foregoing deadline shall be
treated by Distributors as if they were received by Distributors prior to the
close of trading on the Trade Date.
3.3 Settlement of Transactions.
(a) Purchases. Company or its Designee will wire, or arrange
for the wire of, the purchase price of each purchase order to the custodian for
the Fund in accordance with written instructions provided by Distributors to the
Company so that either (i) such funds are received by the custodian for the Fund
prior to 12:00 (noon), Central time, on the next Business Day following the
Trade Date, or (ii) Distributors is provided with a Federal Funds wire system
reference number prior to such 12:00 noon deadline evidencing the entry of the
wire transfer of the purchase price to the applicable custodian into the Federal
Funds wire system prior to such time. Company agrees that if it fails to provide
funds to the Fund's custodian by the close of business on the next Business Day
following the Trade Date, then, at the option of Distributors, (A) the
transaction may be canceled, or (B) the transaction may be processed at the
next-determined net asset value for the applicable Fund after purchase order
funds are received. In such event, the Company shall indemnify and hold harmless
Distributors, Adviser and the Funds from any liabilities, costs and damages
either may suffer as a result of such failure.
(b) Redemptions. The Adviser will use its best efforts to
cause to be transmitted to such custodial account as Company shall direct in
writing, the proceeds of all redemption orders placed by Company or its Designee
by 8:00 a.m., Central time, on the Business Day immediately following the Trade
Date, by wire transfer on that Business Day. Should Adviser need to extend the
settlement on a trade, it will contact Company to discuss the extension. For
purposes of determining the length of settlement, Adviser agrees to treat the
Account no less favorably than other shareholders of the Funds. Each wire
transfer of redemption proceeds shall indicate, on the Federal Funds wire
system, the amount thereof attributable to each Fund; provided, however, that if
the number of entries would be too great to be transmitted through the Federal
Funds wire system, the Adviser shall, on the day the wire is sent, fax such
entries to Company or if possible, send via direct or indirect systems access
until otherwise directed by the Company in writing.
3.4 Book Entry Only. Issuance and transfer of shares of a Fund will be
by book entry only. Stock certificates will not be issued to the Company or the
Account. Shares of the Funds ordered from Distributors will be recorded in the
appropriate book entry title for the Account.
3.5 Distribution Information. The Adviser or Distributors shall provide
the Company with all distribution announcement information as soon as it is
announced by the Funds. The distribution information shall set forth, as
applicable, ex-dates, record date, payable date, distribution rate per share,
record date share balances, cash and reinvested payment amounts and all other
information reasonably requested by the Company. Where possible, the Adviser or
Distributors shall provide the Company with direct or indirect systems access to
the Adviser's systems for obtaining such distribution information.
3.6 Reinvestment. All dividends and capital gains distributions will be
automatically reinvested on the payable date in additional shares of the
applicable Fund at net asset value in accordance with each Fund's then current
prospectus.
3.7 Pricing Information. Distributors shall use its best efforts to
furnish to the Company prior to 6:00 p.m., Central time, on each Business Day
each Fund's closing net asset value for that day, and for those Funds for which
such information is calculated, the daily accrual for interest rate factor (mil
rate). Such information shall be communicated via fax, or indirect or direct
systems access acceptable to the Company.
3.8 Price Errors.
(a) Notification. If an adjustment is required in accordance
with a Fund's then current policies on reimbursement ("Fund Reimbursement
Policies") to correct any error in the computation of the net asset value of
Fund shares ("Price Error"), Adviser or Distributors shall notify Company as
soon as practicable after discovering the Price Error. Notice may be made via
facsimile or via direct or indirect systems access and shall state the incorrect
price, the correct price and, to the extent communicated to the Fund's
shareholders, the reason for the price change.
(b) Underpayments. If a Price Error causes an Account to
receive less than the amount to which it otherwise would have been entitled,
Adviser shall make all necessary adjustments (subject to the Fund Reimbursement
Policies) so that the Account receives the amount to which it would have been
entitled
(c) Overpayments. If a Price Error causes an Account to
receive more than the amount to which it otherwise would have been entitled,
Company, when requested by Adviser (in accordance with the Fund Reimbursement
Policies), will use its best efforts to collect such excess amounts from the
applicable Owners.
(d) Fund Reimbursement Policies. Adviser agrees to treat
Company's customers no less favorably than Adviser treats its retail
shareholders in applying the provisions of paragraphs 3.8(b) and 3.8(c).
(e) Expenses. Adviser shall reimburse Company for all
reasonable and necessary out-of-pocket expenses incurred by Company for payroll
overtime, stationery and postage in adjusting Owner accounts affected by a Price
Error described in paragraphs 3.8(b) and 3.8(c). Company shall use its best
efforts to mitigate all expenses which may be reimbursable under this section
3.8(e) and agrees that payroll overtime shall not include any time spent
programming computers or otherwise customizing Company's recordkeeping system.
Upon requesting reimbursement, Company shall present an itemized xxxx to Adviser
detailing the costs for which it seeks reimbursement.
3.9 Agency. Distributors hereby appoints the Company or its Designee as
its agents for the limited purpose of accepting purchase and redemption
instructions from the Owners for the purchase and redemption of shares of the
Funds by the Company on behalf of Account.
3.10 Quarterly Reports. Adviser agrees to provide Company a statement
of Fund assets as soon as practicable and in any event within 30 days after the
end of each fiscal quarter, and a statement certifying the compliance by the
Funds during that fiscal quarter with the diversification requirements and
qualification as a regulated investment company. In the event of a breach of
Section 6.4(a), Adviser will take all reasonable steps (a) to notify Company of
such breach and (b) to adequately diversify the Fund so as to achieve compliance
within the grace period afforded by Treasury Regulation 1.817-5.
4. Proxy Solicitations and Voting. The Company shall, at its expense, distribute
or arrange for the distribution of all proxy materials furnished by the Funds to
the Account and shall: (a) solicit voting instructions from Owners; (b) vote the
Fund shares in accordance with instructions received from Owners; and (c) vote
the Fund shares for which no instructions have been received, as well as shares
attributable to it, in the same proportion as Fund shares for which instructions
have been received from Owners, so long as and to the extent that the Securities
and Exchange Commission (the "SEC") continues to interpret the Investment
Company Act of 1940, as amended (the "1940 Act"), to require pass-through voting
privileges for various contract owners. The Company and its Designees will not
recommend action in connection with, or oppose or interfere with, the
solicitation of proxies for the Fund shares held for Owners.
5. Customer Communications.
5.1 Prospectuses. The Adviser or Distributors, at its expense, will
provide the Company with as many copies of the current prospectus for the Funds
as the Company may reasonably request for distribution, at the Company's
expense, to existing or prospective Owners.
5.2 Shareholder Materials. The Adviser and Distributors shall, as
applicable, provide in bulk to the Company or its authorized representative, at
a single address and at no expense to the Company, the following shareholder
communications materials prepared for circulation to Owners in quantities
requested by the Company which are sufficient to allow mailing thereof by the
Company and, to the extent required by applicable law, to all Owners: proxy or
information statements, annual reports, semi-annual reports, and all initial and
updated prospectuses, supplements and amendments thereof. None of the Funds, the
Adviser or Distributors shall be responsible for the cost of distributing such
materials to Owners.
6. Representations and Warranties.
6.1 The Company represents and warrants that:
(a) It is an insurance company duly organized and in good
standing under the laws of the State of New York and that it has legally and
validly established the Account prior to any issuance or sale thereof as a
segregated asset account and that the Company has and will maintain the capacity
to issue all Contracts that may be sold; and that it is and will remain duly
registered, licensed, qualified and in good standing to sell the Contracts in
all the jurisdictions in which such Contracts are to be offered or sold;
(b) It and each of its Designees is and will remain duly
registered and licensed in all material respects under all applicable federal
and state securities and insurance laws and shall perform its obligations under
this Agreement in compliance in all material respects with any applicable state
and federal laws;
(c) The Contracts are and will be registered under the
Securities Act of 1933, as amended (the "1933 Act"), and are and will be
registered and qualified for sale in the states where so required; and the
Account is and will be registered as a unit investment trust in accordance with
the 1940 Act and shall be a segregated investment account for the Contracts;
(d) The Contracts are currently treated as annuity contracts,
under applicable provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), and the Company will maintain such treatment and will notify
Adviser, Distributors and Funds promptly 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;
(e) It and each of its Designees is registered as a transfer
agent pursuant to Section 17A of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), or is not required to be registered as such;
(f) The arrangements provided for in this Agreement will be
disclosed to the Owners; and
(g) It is registered as a broker-dealer under the 1934 Act and
any applicable state securities laws, including as a result of entering into and
performing the Services set forth in this Agreement, or is not required to be
registered as such.
6.2 The Funds each represent and warrant that Fund shares sold pursuant
to this Agreement are and will be registered under the 1933 Act and the Fund is
and will be registered as a registered investment company under the Investment
Company Act of 1940, in each case, except to the extent the Company is so
notified in writing;
6.3 Distributors represents and warrants that:
(a) It is and will be a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD")and is and will be
registered as a broker-dealer with the SEC; and
(b) It will sell and distribute Fund shares in accordance with
all applicable state and federal laws and regulations.
6.4 Adviser represents and warrants that:
(a) It will cause each Fund to invest money from the Contracts
in such a manner as to ensure that the Contracts will be treated as variable
annuity contracts under the Code and the regulations issued thereunder, and that
each Fund will comply with Section 817(h) of the Code as amended from time to
time and with all applicable regulations promulgated thereunder; and
(b) It is and will remain duly registered and licensed in all
material respects under all applicable federal and state securities and
insurance laws and shall perform its obligations under this Agreement in
compliance in all material respects with any applicable state and federal laws.
6.5 Each of the Parties to this Agreement represents and warrants to
the others that:
(a) It has full power and authority under applicable law, and
has taken all action necessary, to enter into and perform this Agreement and the
person executing this Agreement on its behalf is duly authorized and empowered
to execute and deliver this Agreement;
(b) This Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms and it shall
comply in all material respects with all laws, rules and regulations applicable
to it by virtue of entering into this Agreement;
(c) No consent or authorization of, filing with, or other act
by or in respect of any governmental authority, is required in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement;
(d) The execution, performance and delivery of this Agreement
will not result in it violating any applicable law or breaching or otherwise
impairing any of its contractual obligations;
(e) Each Party to this Agreement is entitled to rely on any
written records or instructions provided to it by another Party; and
(f) Its directors, officers, employees, and investment
advisers, and other individuals/entities dealing with the money or securities of
a Fund are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund in an amount not less than
the amount required by the applicable rules of the NASD and the federal
securities laws, which bond shall include coverage for larceny and embezzlement
and shall be issued by a reputable bonding company.
7. Sales Material and Information
7.1 NASD Filings. The Company shall promptly inform Distributors as to
the status of all sales literature filings pertaining to the Funds and shall
promptly notify Distributors of all approvals or disapprovals of sales
literature filings with the NASD. For purposes of this Section 7, the phrase
"sales literature or other promotional material" shall be construed in
accordance with all applicable securities laws and regulations.
7.2 Company Representations. Neither the Company nor any of its
Designees shall make any material representations concerning the Adviser, the
Distributors, or a Fund other than the information or representations contained
in: (a) a registration statement of the Fund or prospectus of a Fund, as amended
or supplemented from time to time; (b) published reports or statements of the
Funds which are in the public domain or are approved by Distributors or the
Funds; or (c) sales literature or other promotional material of the Funds.
7.3 Adviser, Distributors and Fund Representations. None of Adviser,
Distributors or any Fund shall make any material representations concerning the
Company or its Designees other than the information or representations contained
in: (a) a registration statement or prospectus for the Contracts, as amended or
supplemented from time to time; (b) published reports or statements of the
Contracts or the Account which are in the public domain or are approved by the
Company; or (c) sales literature or other promotional material of the Company.
7.4 Trademarks, etc. Except to the extent required by applicable law,
no Party shall use any other Party's names, logos, trademarks or service marks,
whether registered or unregistered, without the prior consent of such Party.
7.5 Information From Distributors and Adviser. Upon request,
Distributors or Adviser will provide to Company at least one complete copy of
all registration statements, prospectuses, Statements of Additional Information,
reports, proxy statements, solicitations for voting instructions, applications
for exemptions, requests for no action letters, and all amendments to any of the
above, that relate to the Funds, in final form as filed with the SEC, NASD and
other regulatory authorities.
7.6 Information From Company. Company will provide to Distributors at
least one complete copy of all registration statements, prospectuses, Statements
of Additional Information, reports, solicitations for voting instructions, 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 a Fund and the Contracts, in final form as filed with the SEC, NASD
and other regulatory authorities.
7.7 Review of Marketing Materials. If so requested by Company, the
Adviser or Distributors will use its best efforts to review sales literature and
other marketing materials prepared by Company which relate to the Funds, the
Adviser or Distributors for factual accuracy as to such entities, provided that
the Adviser or Distributors is provided at least five (5) Business Days to
review such materials. Neither the Adviser nor Distributors will review such
materials for compliance with applicable laws. Company shall provide the Adviser
with copies of all sales literature and other marketing materials which refer to
the Funds, the Adviser or Distributors within five (5) Business Days after their
first use, regardless of whether the Adviser or Distributors has previously
reviewed such materials. If so requested by the Adviser or Distributors, Company
shall cease to use any sales literature or marketing materials which refer to
the Funds, the Adviser or Distributors that the Adviser or Distributors
determines to be inaccurate, misleading or otherwise unacceptable.
8. Fees and Expenses.
8.1 Fund Registration Expenses. Fund or Distributors shall bear the
cost of registration and qualification of Fund shares; preparation and filing of
Fund prospectuses and registration statements, proxy materials and reports;
preparation of all other statements and notices relating to the Fund or
Distributors required by any federal or state law; payment of all applicable
fees, including, without limitation, any fees due under Rule 24f-2 of the 1940
Act, relating to a Fund; and all taxes on the issuance or transfer of Fund
shares on the Fund's records.
8.2 Contract Registration Expenses. The Company shall bear the expenses
for the costs of preparation and filing of the Company's prospectus and
registration statement with respect to the Contracts; preparation of all other
statements and notices relating to the Account or the Contracts required by any
federal or state law; expenses for the solicitation and sale of the Contracts
including all costs of printing and distributing all copies of advertisements,
prospectuses, Statements of Additional Information, proxy materials, and reports
to Owners or potential purchasers of the Contracts as required by applicable
state and federal law; payment of all applicable fees relating to the Contracts;
all costs of drafting, filing and obtaining approvals of the Contracts in the
various states under applicable insurance laws; filing of annual reports on form
N-SAR, and all other costs associated with ongoing compliance with all such laws
and its obligations under this Agreement.
9. Indemnification.
9.1 Indemnification By Company.
(a) Company agrees to indemnify and hold harmless the Funds,
Adviser and Distributors and each of their directors, officers, employees and
agents, and each person, if any, who controls any of them within the meaning of
Section 15 of the 1933 Act (each, an "Indemnified Party" and collectively, the
"Indemnified Parties" for purposes of this Section 9.1) from and against any and
all losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of Company), and expenses including reasonable legal
fees and expenses, (collectively, hereinafter "Losses"), to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise insofar as such Losses:
(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact contained in the registration
statement, prospectus or sales literature for the Contracts or contained in 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 paragraph 9.1(a) 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 written information
furnished to Company by or on behalf of a Fund, Distributors or Adviser for use
in the registration statement or prospectus for the Contracts or in the
Contracts (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 or wrongful conduct of Company, its Designees or its agents,
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,
or sales literature covering a 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 written
information furnished to a Fund, Adviser or Distributors by or on behalf of
Company; or
(iv) arise out of, or as a result of, any failure by
Company, its Designees or persons under the Company's or Designees' control to
provide the Services and furnish the materials contemplated under the terms of
this Agreement; or
(v) arise out of, or result from, any material breach of
any representation or warranty made by Company, its Designees or persons under
the Company's or Designees' control in this Agreement or arise out of or result
from any other material breach of this Agreement by Company, its Designees or
persons under the Company's or Designees' control; as limited by and in
accordance with the provisions of Sections 9.1(b) and 9.1(c) hereof; or
(vi) arise out of, or as a result of, adherence by Adviser
or Distributors to instructions that it reasonably believes were originated by
authorized agents of Company.
This indemnification provision is in addition to any liability
which the Company or its Designees may otherwise have.
(b) Company shall not be liable under this indemnification
provision with respect to any Losses to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful misfeasance,
bad faith, or gross 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.
(c) Company 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 Company 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 Company of any such
claim shall not relieve Company from any liability which it may have to the
Indemnified Party otherwise than on account of this indemnification provision.
In case any such action is brought against any Indemnified Party, and it
notified the indemnifying Party of the commencement thereof, the indemnifying
Party will be entitled to participate therein and, to the extent that it may
wish, assume the defense thereof, with counsel satisfactory to such Indemnified
Party. After notice from the indemnifying Party of its intention to assume the
defense of an action, the Indemnified Party shall bear the expenses of any
additional counsel obtained by it, and the indemnifying Party shall not be
liable to such Indemnified Party under this Section for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation. The Indemnified
Party may not settle any action without the written consent of the indemnifying
Party. The indemnifying Party may not settle any action without the written
consent of the Indemnified Party unless such settlement completely and finally
releases the Indemnified Party from any and all liability. In either event,
consent shall not be unreasonably withheld.
(d) The Indemnified Parties will promptly notify Company of
the commencement of any litigation or proceedings against the Indemnified
Parties in connection with the issuance or sale of Fund shares or the Contracts
or the operation of a Fund.
9.2 Indemnification by Adviser and Distributors.
(a) Adviser and Distributors agrees to indemnify and hold
harmless Company and each of its directors, officers, employees and agents and
each person, if any, who controls Company within the meaning of Section 15 of
the 1933 Act (each, an "Indemnified Party" and collectively, the "Indemnified
Parties" for purposes of this Section 9.2) from and against any and all Losses
to which the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such Losses:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement or prospectus or sales literature of a Fund (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 Section 9.2(a) 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 written information furnished to a Fund,
Adviser or Distributors by or on behalf of Company for use in the registration
statement or prospectus for a Fund or in sales literature (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 or wrongful conduct of Adviser or Distributors or persons under
its control, with respect to the sale or distribution of Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement, prospectus,
or sales literature 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 statements
therein not misleading, if such statement or omission was made in reliance upon
written information furnished to Company by or on behalf of Adviser or
Distributors; or
(iv) arise out of, or as a result of, any failure by
Adviser or Distributors or persons under its control to provide the services and
furnish the materials contemplated under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation or warranty made by Adviser or Distributors or persons under its
control in this Agreement or arise out of or result from any other material
breach of this Agreement by Adviser or Distributors or persons under its
control; as limited by and in accordance with the provisions of Sections 9.2(b)
and 9.2(c) hereof.
This indemnification provision is in addition to any liability
which Adviser and Distributors may otherwise have.
(b) Adviser and Distributors shall not be liable under this
indemnification provision with respect to any Losses to which an Indemnified
Party would otherwise be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement.
(c) Adviser and Distributors 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 Adviser and Distributors
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 Adviser
and Distributors of any such claim shall not relieve Adviser and Distributors
from any liability which it may have to the Indemnified Party otherwise than on
account of this indemnification provision. In case any such action is brought
against any Indemnified Party, and it notified the indemnifying Party of the
commencement thereof, the indemnifying Party will be entitled to participate
therein and, to the extent that it may wish, assume the defense thereof, with
counsel satisfactory to such Indemnified Party. After notice from the
indemnifying Party of its intention to assume the defense of an action, the
Indemnified Party shall bear the expenses of any additional counsel obtained by
it, and the indemnifying Party shall not be liable to such Indemnified Party
under this Section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation. The Indemnified Party may not settle any action without
the written consent of the indemnifying Party. The indemnifying Party may not
settle any action without the written consent of the Indemnified Party unless
such settlement completely and finally releases the Indemnified Party from any
and all liability. In either event, consent shall not be unreasonably withheld.
(d) The Indemnified Parties will promptly notify Adviser and
Distributors of the commencement of any litigation or proceedings against the
Indemnified Parties in connection with the issuance or sale of the Contracts or
the operation of the Account.
10. Potential Conflicts.
10.1 Monitoring by Directors for Conflicts of Interest. The Directors
of each Fund will monitor the Fund for any potential or existing material
irreconcilable conflict of interest between the interests of the contract owners
of all separate accounts investing in the Fund, including such conflict of
interest with any other separate account of any other insurance company
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 interpretive 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 the Fund are
being managed; (e) a difference in voting instructions given by variable annuity
contract owners and variable life insurance contract owners or by contract
owners of different life insurance companies utilizing the Fund; or (f) a
decision by Company to disregard the voting instructions of Owners. The
Directors shall promptly inform the Company, in writing, if they determine that
an irreconcilable material conflict exists and the implications thereof.
10.2 Monitoring by the Company for Conflicts of Interest. The Company
will promptly notify the Directors, in writing, of any potential or existing
material irreconcilable conflicts of interest, as described in Section 10.1
above, of which it is aware. The Company will assist the Directors in carrying
out their responsibilities under any applicable provisions of the federal
securities laws and any exemptive orders granted by the SEC ("Exemptive Order"),
by providing the Directors, in a timely manner, with all information reasonably
necessary for the Directors to consider any issues raised. This includes, but is
not limited to, an obligation by the Company to inform the Directors whenever
Owner voting instructions are disregarded.
10.3 Remedies. If it is determined by a majority of the Directors, or a
majority of disinterested Directors, that a material irreconcilable conflict
exists, as described in Section 10.1 above, the Company shall, at its own
expense take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including, but not limited to: (a)
withdrawing the assets allocable to some or all of the separate accounts from
the applicable Fund and reinvesting such assets in a different investment
medium, including (but not limited to) another fund managed by the Adviser, or
submitting the question whether such segregation should be implemented to a vote
of all affected Owners and, as appropriate, segregating the assets of any
particular group that votes in favor of such segregation, or offering to the
affected owners the option of making such a change; and (b) establishing a new
registered management investment company or managed separate account.
10.4 Causes of Conflicts of Interest.
(a) State Insurance Regulators. If a material irreconcilable
conflict arises because a particular state insurance regulator's decision
applicable to the Company conflicts with the majority of other state regulators,
then the Company will withdraw the affected Account's investment in the
applicable Fund and terminate this Agreement with respect to such Account within
the period of time permitted by such decision, but in no event later than six
months after the Directors inform the Company 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 Directors. Until the end of the foregoing period,
the Distributors and Funds shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund to the extent
such actions do not violate applicable law.
(b) Disregard of Owner Voting. If a material irreconcilable
conflict arises because of Company's decision to disregard Owner voting
instructions and that decision represents a minority position or would preclude
a majority vote, Company may be required, at the applicable Fund's election, to
withdraw the Account's investment in said Fund. No charge or penalty will be
imposed against the Account as a result of such withdrawal.
10.5 Limitations on Consequences. For purposes of Sections 10.3 through
10.5 of this Agreement, a majority of the disinterested Directors shall
determine whether any proposed action adequately remedies any irreconcilable
material conflict. In no event will a Fund, the Adviser or the Distributors be
required to establish a new funding medium for any of the Contracts. The Company
shall not be required by Section 10.3 to establish a new funding medium for the
Contracts if an offer to do so has been declined by vote of a majority of Owners
affected by the irreconcilable material conflict. In the event that the
Directors determine that any proposed action does not adequately remedy any
irreconcilable material conflict, then the Company will withdraw the Account's
investment in the applicable Fund and terminate this Agreement as quickly as may
be required to comply with applicable law, but in no event later than six (6)
months after the Directors inform the Company 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.
10.6 Changes in Laws. If and to the extent that Rule 6e-2 and Rule
6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from
any provision of the Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Funds' Exemptive Order) on terms and
conditions materially different from those contained in the Funds' Exemptive
Order, then (a) the Funds and/or the Adviser, 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
10.1, 10.2, 10.3 and 10.4 of this Agreement shall continue in effect only to the
extent that terms and conditions substantially identical to such Sections are
contained in such Rule(s) as so amended or adopted.
11. Maintenance of Records.
(a) Recordkeeping and other administrative services to Owners
shall be the responsibility of the Company and shall not be the responsibility
of the Funds, Adviser or Distributors. None of the Funds, the Adviser or
Distributors shall maintain separate accounts or records for Owners. Company
shall maintain and preserve all records as required by law to be maintained and
preserved in connection with providing the Services and in making shares of the
Funds available to the Account.
(b) Upon the request of the Adviser or Distributors, the
Company shall provide copies of all the historical records relating to
transactions between the Funds and the Account, written communications regarding
the Funds to or from the Account and other materials, in each case (1) as are
maintained by the Company in the ordinary course of its business and in
compliance with applicable law, and (2) as may reasonably be requested to enable
the Adviser and Distributors, or its representatives, including without
limitation its auditors or legal counsel, to (A) monitor and review the
Services, (B) comply with any request of a governmental body or self-regulatory
organization or the Owners, (C) verify compliance by the Company with the terms
of this Agreement, (D) make required regulatory reports, (E) verify to Advisor's
reasonable satisfaction that all purchase and redemption orders aggregated for
each Trade Date were received by Company prior to the close of trading on the
NYSE on such Trade Date, or (F) perform general customer supervision. The
Company agrees that it will permit the Adviser and Distributors or such
representatives of either to have reasonable access to its personnel and records
in order to facilitate the monitoring of the quality of the Services.
(c) Upon the request of the Company, the Adviser and
Distributors shall provide copies of all the historical records relating to
transactions between the Funds and the Account, written communications regarding
the Funds to or from the Account and other materials, in each case (1) as are
maintained by the Adviser and Distributors, as the case may be, in the ordinary
course of its business and in compliance with applicable law, and (2) as may
reasonably be requested to enable the Company, or its representatives, including
without limitation its auditors or legal counsel, to (A) comply with any request
of a governmental body or self-regulatory organization or the Owners, (B) verify
compliance by the Adviser and Distributors with the terms of this Agreement, (C)
make required regulatory reports, or (D) perform general customer supervision.
(d) The Parties agree to cooperate in good faith in providing
records to one another pursuant to this Section 11.
12. Term and Termination.
12.1 Term and Termination Without Cause. The initial term of this
Agreement shall be for a period of one year from the date hereof. Unless
terminated as to any Fund upon not less than thirty (30) days prior written
notice to the other Parties, this Agreement shall thereafter automatically renew
for the remaining Funds from year to year, subject to termination at the next
applicable renewal date upon not less than 30 days prior written notice. Any
Party may terminate this Agreement as to any Fund following the initial term
upon six (6) months advance written notice to the other Parties.
12.2 Termination by Fund, Distributors or Adviser for Cause. Adviser,
Fund or Distributors may terminate this Agreement by written notice to the
Company, if any of them shall determine, in its sole judgment exercised in good
faith, that (a) the Company has suffered a material adverse change in its
business, operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity; or (b) any of the
Contracts are not registered, issued or sold in accordance with applicable state
and federal law or such law precludes the use of Fund shares as the underlying
investment media of the Contracts issued or to be issued by the Company.
12.3 Termination by Company for Cause. Company may terminate this
Agreement by written notice to the Adviser, Funds and Distributors in the event
that (a) any of the Fund shares are not registered, issued or sold in accordance
with applicable state 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 the Company; (b) the Funds cease to qualify as Regulated Investment
Companies under Subchapter M of the Code or under any successor or similar
provision, or if the Company reasonably believes that the Funds may fail to so
qualify; or (c) a Fund fails to meet the diversification requirements specified
in Section 6.4(a).
12.4 Termination by any Party. This Agreement may be terminated as to
any Fund by any Party at any time (a) by giving 30 days' written notice to the
other Parties in the event of a material breach of this Agreement by the other
Party or Parties that is not cured during such 30-day period, and (b) (i) upon
institution of formal proceedings relating to the legality of the terms and
conditions of this Agreement against the Account, Company, any Designee, the
Funds, Adviser or Distributors by the NASD, the SEC or any other regulatory body
provided that the terminating Party has a reasonable belief that the institution
of formal proceedings is not without foundation and will have a material adverse
impact on the terminating Party, (ii) by the non-assigning Party upon the
assignment of this Agreement in contravention of the terms hereof, or (iii) as
is required by law, order or instruction by a court of competent jurisdiction or
a regulatory body or self-regulatory organization with jurisdiction over the
terminating Party.
12.5 Limit on Termination. Notwithstanding the termination of this
Agreement with respect to any or all Funds, for so long as any Contracts remain
outstanding and invested in a Fund each Party to this Agreement shall continue
to perform such of its duties under this Agreement as are necessary to ensure
the continued tax deferred status thereof and the payment of benefits
thereunder, except to the extent proscribed by law, the SEC or other regulatory
body. Notwithstanding the foregoing, nothing in this Section 12.5 obligates a
Fund to continue in existence. In the event that any Fund elects to terminate
its operations, the Company shall, as soon as practicable, obtain an exemptive
order or order of substitution from the SEC to remove all Owners from the
applicable Fund.
13. Notices.
All notices under this Agreement shall be given in writing (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
facsimile, by registered or certified mail or by overnight delivery (postage
prepaid, return receipt requested) to the respective Parties as follows:
If to Strong Variable:
Strong Variable Insurance Funds, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile No.: 414/359-3948
If to Opportunity Fund II:
Strong Opportunity Fund II, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile No.: 414/359-3948
If to Adviser:
Strong Capital Management, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile No.: 414/359-3948
If to Distributors:
Strong Investments, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile No.: 414/359-3948
If to Company:
Annuity Investors Life Insurance Company
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
14. Miscellaneous.
14.1. Captions. The captions in this Agreement are included for
convenience of reference only and in no way affect the construction or effect of
any provisions hereof.
14.2. Enforceability. If any portion 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.
14.3. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which taken together shall constitute one and
the same instrument.
14.4. Remedies not Exclusive. 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 to this
Agreement are entitled to under state and federal laws.
14.5. Confidentiality. Subject to the requirements of legal process and
regulatory authority, the Funds and Distributors shall treat as confidential the
names and addresses of the owners of the Contracts and all information
reasonably identified as confidential in writing by the Company to this
Agreement 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 Company until such time
as it may come into the public domain.
14.6. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the internal laws of the State of Wisconsin
applicable to agreements fully executed and to be performed therein; exclusive
of conflicts of laws.
14.7. Survivability. Sections 6, 7.2, 7.3, 7.4, 9, 11 and 12.5 hereof
shall survive termination of this Agreement. In addition, all provisions of this
Agreement shall survive termination of this Agreement in the event that any
Contracts are invested in a Fund at the time the termination becomes effective
and shall survive for so long as such Contracts remain so invested.
14.8. Amendment and Waiver. No modification of any provision of this
Agreement will be binding unless in writing and executed by the Party to be
bound thereby. No waiver of any provision of this Agreement will be binding
unless in writing and executed by the Party granting such waiver.
Notwithstanding anything in this Agreement to the contrary, the Adviser may
unilaterally amend Exhibit A to this Agreement to add additional series of
Strong Variable Funds ("New Funds") as Funds by sending to the Company a written
notice of the New Funds. Any valid waiver of a provision set forth herein shall
not constitute a waiver of any other provision of this Agreement. In addition,
any such waiver shall constitute a present waiver of such provision and shall
not constitute a permanent future waiver of such provision.
14.9. Assignment. This Agreement shall be binding upon and shall inure
to the benefit of the Parties and their respective successors and assigns;
provided, however, that neither this Agreement nor any rights, privileges,
duties or obligations of the Parties may be assigned by any Party without the
written consent of the other Parties or as expressly contemplated by this
Agreement.
14.10. Entire Agreement. This Agreement contains the full and complete
understanding between the Parties with respect to the transactions covered and
contemplated under this Agreement, and supersedes all prior agreements and
understandings between the Parties relating to the subject matter hereof,
whether oral or written, express or implied.
14.11. Relationship of Parties; No Joint Venture, Etc. Except for the
limited purpose provided in Section 3.8, it is understood and agreed that the
Company and each of its Designees shall be acting as an independent contractor
and not as an employee or agent of the Adviser, Distributors or the Funds, and
none of the Parties shall hold itself out as an agent of any other Party with
the authority to bind such Party. Neither the execution nor performance of this
Agreement shall be deemed to create a partnership or joint venture by and among
any of the Company, any Designees, Funds, Adviser, or Distributors.
14.12. Expenses. All expenses incident to the performance by each Party
of its respective duties under this Agreement shall be paid by that Party.
14.13. Time of Essence. Time shall be of the essence in this Agreement.
14.14. Non-Exclusivity. Each of the Parties acknowledges and agrees
that this Agreement and the arrangements described herein are intended to be
non-exclusive and that each of the Parties is free to enter into similar
agreements and arrangements with other entities.
14.15. Operations of Funds. In no way shall the provisions of this
Agreement limit the authority of the Funds, the Adviser or Distributors to take
such action as it may deem appropriate or advisable in connection with all
matters relating to the operation of such Fund and the sale of its shares. In no
way shall the provisions of this Agreement limit the authority of the Company to
take such action as it may deem appropriate or advisable in connection with all
matters relating to the provision of Services or the shares of funds other than
the Funds offered to the Account.
GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
----------------------------------------
By: Xxxx X. Xxxxxxxx
Title: Senior Vice President
STRONG CAPITAL MANAGEMENT, INC.
--------------------------------------
Xxxxxxx X. Xxxxxxxxxxx, Vice President
STRONG INVESTMENTS, INC.
--------------------------------------
Xxxxxxx X. Xxxxxxxxxxx, Vice President
STRONG VARIABLE INSURANCE FUNDS, INC. on behalf of the
Designated Portfolios
----------------------------------------
Xxxxxxx X. Xxxxxxxxxxx, Vice President
STRONG OPPORTUNITY FUND II, INC.
----------------------------------------
Xxxxxxx X. Xxxxxxxxxxx, Vice President
EXHIBIT A
The following is a list of Designated Portfolios under this Agreement:
Strong Opportunity Fund II
Strong Mid Cap Growth Fund II
EXHIBIT B
The Services
Company or its Designees shall perform the following services.
Such services shall be the responsibility of the Company and shall not be the
responsibility of the Funds, Adviser or Distributors.
1. Maintain separate records for each Account, which records shall
reflect Fund shares ("Shares") purchased and redeemed, including the date and
price for all transactions, Share balances, and the name and address of each
Owner, including zip codes and tax identification numbers.
2. Credit contributions to individual Owner accounts and invest such
contributions in shares of the Funds to the extent so designated by the Owner.
3. Disburse or credit to the Owners, and maintain records of, all
proceeds of redemptions of Fund shares and all other distributions not
reinvested in shares.
4. Prepare and transmit to the Owners, periodic account statements
showing, among other things, the total number of Fund shares owned as of the
statement closing date, purchases and redemptions of shares during the period
covered by the statement, the net asset value of the Funds as of a recent date,
and the dividends and other distributions paid during the statement period
(whether paid in cash or reinvested in shares).
5. Transmit to the Owners, as required by applicable law, prospectuses,
proxy materials, shareholder reports, and other information provided by the
Adviser, Distributors or Funds and required to be sent to shareholders under the
Federal securities laws.
6. Transmit to Distributors purchase orders and redemption requests
placed by the Account and arrange for the transmission of funds to and from the
Funds.
7. Transmit to Distributors such periodic reports as Distributors shall
reasonably conclude is necessary to enable the Funds to comply with applicable
Federal securities and state Blue Sky requirements.
8. Transmit to each Account confirmations of purchase orders and
redemption requests placed by each Account.
9. Maintain all account balance information for the Account and daily
and monthly purchase summaries expressed in shares and dollar amounts.
10. Prepare, transmit and file any Federal, state and local government
reports and returns as required by law with respect to each account maintained
on behalf of the Account.
11. Respond to Owners' inquiries regarding, among other things, share
prices, account balances, dividend options, dividend amounts, and dividend
payment dates.
Schedule C--Account Information
1. Entity in whose name each Account will be opened: ________________________
Mailing address: ________________________
========================
2. Employer ID number (For internal usage only): ________________________
3. Authorized contact persons: The following persons are authorized on behalf of
the Company to effect transactions in each Account:
Name:____________________________ Phone:____________________________
Name:____________________________ Phone:____________________________
Name:____________________________ Phone:____________________________
Name:____________________________ Phone:____________________________
4. Will the Accounts have telephone exchange? ____ Yes ____ No (This option
lets Company redeem shares by telephone and apply the proceeds for purchase
in another identically registered Account.)
5. Will the Accounts have telephone redemption? ____ Yes ____ No (This option
lets Company sell shares by telephone. The proceeds will be wired to the
bank account specified below.)
6. All dividends and capital gains will be reinvested automatically.
7. Instructions for all outgoing wire transfers:______________________________
================================================================================
--------------------------------------------------------------------------------
8. If this Account Information Form contains changed information, the
undersigned authorized officer has executed this amended Account Information
Form as of the date set forth below and acknowledges the agreements and
representations set forth in the Services Agreement between the Company, Strong
Capital Management, Inc. and Strong Investments, Inc.
9. Company certifies under penalty of perjury that:
(i) The number shown on this form is the correct Employer ID number (or
that Company is waiting to be issued an Employer ID number), and
(ii) Company is not subject to backup withholding because (a) Company
is exempt from backup withholding, or (b) Company has not been notified by the
Internal Revenue Service ("IRS") that it is subject to backup withholding as a
result of failure to report all interest or dividends, or (c) the IRS has
notified the Company that it is no longer subject to backup withholding.
(Cross out (ii) if Company has been notified by the IRS that it is subject to
backup withholding because of underreporting interest or dividends on its tax
return.)
The IRS does not require Company's consent to any provision of this
document other than the certifications required to avoid backup withholding.
--------------------------------- --------------------------------
(Signature of Authorized Officer) (Date)
(Company shall inform Adviser and Distributors of any changes to information
provided in this Account Information Form pursuant to Section 13 of the
Agreement.)
Please Note: Distributors employs reasonable procedures to confirm that
instructions communicated by telephone are genuine and may not be liable for
losses due to unauthorized or fraudulent instructions. Please see the prospectus
for the applicable Fund for more information on the telephone exchange and
redemption privileges.
Schedule D
Billing and Count Information
1. Contact person to receive administrative fees:
Name: _________________________________
Title: _________________________________
Company Name:_____________________________
Address: _________________________________
City, State, Zip:_________________________
Phone Number:_____________________________
Fax Number:_______________________________
E-mail address:___________________________
2. Contact person that will furnish participant/shareholder counts:
Name: _________________________________
Title: _________________________________
Company Name:_____________________________
Address: _________________________________
City, State, Zip:_________________________
Phone Number:_____________________________
Fax Number:_______________________________
E-mail address:___________________________
July 12, 1999
Great American Life Insurance Company
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxxx
Re: Fee Letter Relating to the Great American Life Insurance Company of
New York Participation Agreement.
Dear Xx. Xxxxxxxx:
Pursuant to the Participation Agreement by and among Strong Capital
Management, Inc. ("Strong"), Great American Life Insurance Company of New
York(the "Company"), Strong Variable Insurance Funds, Inc., Strong Opportunity
Fund II, Inc. and Strong Investments, Inc. ("Distributors") dated ___________,
1999 (the "Participation Agreement"), the Company will provide certain
administrative services on behalf of the registered investment companies or
series thereof specified in Exhibit A (each a "Fund" and collectively the
"Funds").
In recognition of the reduction in administrative expenses that derives
from the performance of said administrative services, Strong agrees to pay the
Company the fee specified below for each Fund specified in Exhibit A to this
Agreement.
(a) For average aggregate amounts (as calculated in paragraph
(b), below) invested through variable insurance products issued by the
Company with the Funds, the monthly fee shall equal the percentage
(calculated in paragraph (b), below) of the applicable annual fee for
each Fund specified in Exhibit A.
(b) For purposes of computing the fee contemplated in
paragraph (a) above, Strong shall calculate and pay to the Company an
amount with respect to each Fund equal to the product of: (a) the
product of (i) the number of calendar days in the applicable month
divided by the number of calendar days in that year (365 or 366 as
applicable) and (ii) the applicable percentage specified in Exhibit A,
to this Agreement, multiplied by (b) the average daily market value of
the investments held in such Fund pursuant to the Participation
Agreement computed by totaling the aggregate investment (share net
asset value multiplied by the total number of shares held) on each day
during the calendar month and dividing by the total number of days
during such month.
(c) Strong shall calculate the amount of the payment to be
made pursuant to this Letter Agreement at the end of each calendar
month and will make such payment to the Company within 30 days after
receiving the report referenced in paragraph (e), below. Fees will be
paid, at Strong's election, by wire transfer or by check. All payments
under this Agreement shall be considered final unless disputed by the
Company in writing within 60 days of receipt.
(d) The parties agree that the fees contemplated herein are
solely for shareholder servicing and other administrative services
provided by the Company and do not constitute payment in any manner for
investment advisory, distribution, trustee, or custodial services.
(e) The Company agrees to provide Strong by the 15th day of
each month with a report which indicates the number of Owners that hold
through a Contract interests in each Account as of the last day of the
prior month.
(f) If requested in writing by Strong, and at Strong's
expense, the Company shall provide to Strong, by February 14th of each
year, a "Special Report" from a nationally recognized accounting firm
reasonably acceptable to Strong which substantiates for each month of
the prior calendar year: (a) the number of Owners that hold, through an
Account, interests in each Account maintained by the Company on the
last day of each month which held shares for which the fee provided for
in this Letter Agreement was received by the Company, (b) that any fees
billed to Strong for such month were accurately determined in
accordance with this Letter Agreement, and (c) such other information
in connection with this Agreement and the Participation Agreement as
may be reasonably requested by Strong.
(g) The parties to the Participation Agreement agree that
Strong may unilaterally amend Schedule A to the Participation Agreement
to add additional investment companies or series thereof ("New Funds")
as Funds subject to the provisions of this Letter Agreement by sending
to the Company a written notice of the New Funds and indicating therein
the fees to be paid to the Company with respect to the administrative
services provided pursuant to the Participation Agreement in connection
with such New Funds.
(h) The obligation to pay the fees specified in this Letter
Agreement shall survive the termination of the Participation Agreement
for a period of one year from the date of termination, provided that
Company continues to provide Services to the Owners with respect to
those assets invested in the Funds and provided that the Participation
Agreement has not been terminated because of an event described in
Sections 12.2, 12.3 or 12.4 of the Participation Agreement. Company
agrees that in the event of termination it will provide the Adviser
with any reports and certificates as requested by the Adviser to
determine that the continued payment of fees has been calculated in
accordance with this Letter Agreement.
(i) Capitalized terms not otherwise defined herein shall have
the meaning assigned to them in the Participation Agreement.
If you are in agreement with the foregoing, please sign and date below
where indicated and return one copy of this signed letter agreement to me.
Very truly yours,
Xxxxxxx X. Xxxxxxxxxxx
Strong Capital Management, Inc.
Accepted and agreed to as of _________, 1999.
Great American Life Insurance Company of New York
----------------------------------------
By: Xxxx X. Xxxxxxxx
Title: Senior Vice President
EXHIBIT A to Fee Letter
The Funds subject to this Agreement and applicable annual fees are as follows:
Fund Annual Fee
Strong Opportunity Fund II, Inc. 0.20%
Strong Variable Insurance Funds, Inc.
Strong Mid Cap Growth Fund II 0.20%
PARTICIPATION AGREEMENT
Among
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO FUNDS GROUP, INC.
and
GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
THIS AGREEMENT, made and entered into this 16th day of August, 1999 by
and among GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW YORK, (hereinafter the
"Insurance Company"), a New York corporation, on its own behalf and on behalf of
each segregated asset account of the Insurance Company set forth on Schedule A
hereto as may be amended from time to time (each such account hereinafter
referred to as the "Account"), INVESCO VARIABLE INVESTMENT FUNDS, INC., a
Maryland corporation (the "Company") and INVESCO FUNDS GROUP, INC. ("INVESCO"),
a Delaware corporation.
WHEREAS, the Company 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 annuity and life insurance contracts
to be offered by insurance companies which have entered into participation
agreements substantially identical to this Agreement ("Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Company is divided into several
series of shares, each designated a "Fund" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Company has obtained an order from the Securities and
Exchange Commission (the "Commission"), dated December 29, 1993 (File No.
812-8590), granting Participating Insurance Companies and their 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, (the "1940 Act") and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Company 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 (the "Mixed and Shared Funding
Exemptive Order"); and
WHEREAS, the Company is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, INVESCO is duly registered as an investment adviser under the
Investment Advisers Act of 1940 and any applicable state securities law and 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, the Insurance Company has registered under the 1933 Act, or
will register under the 1933 Act, certain variable annuity contracts identified
by the form number(s) listed on Schedule B to this Agreement, as amended from
time to time hereafter by mutual written agreement of all the parties hereto
(the "Contracts"); and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the board of directors of the
Insurance Company on the date shown for that Account on Schedule A hereto, to
set aside and invest assets attributable to the Contracts; and
WHEREAS, the Insurance Company has registered or will register each
Account as a unit investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Insurance Company intends to purchase shares in the Funds on
behalf of the Accounts to fund the Contracts and INVESCO is authorized to sell
such shares to unit investment trusts such as the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Insurance Company, the Company and INVESCO agree as follows:
ARTICLE I. Sale of Company Shares
1.1. INVESCO agrees to sell to the Insurance Company those shares of
the Company which each Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Company or its designee
of the order for the shares of the Company. For purposes of this Section 1.1,
the Insurance Company shall be the designee of the Company for receipt of such
orders from the Accounts and receipt by such designee shall constitute receipt
by the Company; provided that the Company receives notice of such order by 9:00
a.m., Mountain 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 Company calculates its net asset value pursuant to the rules of the
Commission.
1.2. The Company agrees to make its shares available for purchase at
the applicable net asset value per share by the Insurance Company and its
Accounts on those days on which the Company calculates its Funds' net asset
values pursuant to rules of the Commission and the Company shall use reasonable
efforts to calculate its Funds' net asset values on each day on which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
board of directors of the Company (hereinafter the "Board") may refuse to sell
shares of any Fund to any person, or suspend or terminate the offering of shares
of any Fund if such action is required by law or by regulatory authorities
having jurisdiction or is, in the sole discretion of the Board acting in good
faith and in light of their fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders of that Fund.
1.3. The Company and INVESCO agree that shares of the Company will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Fund will be sold to the general public.
1.4. The Company and INVESCO will not sell Company shares to any
insurance company or separate account unless an agreement containing provisions
substantially the same as Sections 2.1, 3.4, 3.5 and Article VII of this
Agreement is in effect to govern such sales.
1.5. The Company agrees to redeem, on the Insurance Company's request,
any full or fractional shares of the Company held by the Insurance Company,
executing such requests on a daily basis at the net asset value next computed
after receipt by the Company or its designee of the request for redemption. For
purposes of this Section 1.5, the Insurance Company shall be the designee of the
Company for receipt of requests for redemption from each Account and receipt by
that designee shall constitute receipt by the Company; provided that the Company
receives notice of the request for redemption by 9:00 a.m., Mountain Time, on
the next following Business Day.
1.6. The Insurance Company agrees to purchase and redeem the shares of
each Fund offered by the then-current prospectus of the Company in accordance
with the provisions of that prospectus.
1.7. The Insurance Company shall pay for Company shares by 9:00 a.m.,
Mountain Time, on the next Business Day after an order to purchase Company
shares is made in accordance with the provisions of Section 1.1 hereof. Payment
shall be in federal funds transmitted by wire. For the purpose of Sections 2.10
and 2.11, upon receipt by the Company of the federal funds so wired, such funds
shall cease to be the responsibility of the Insurance Company and shall become
the responsibility of the Company. Payment of aggregate redemption proceeds
(aggregate redemptions of a Fund's shares by an Account) ordinarily will be made
by wiring federal funds to the Insurance Company on the next Business Day after
receipt of the redemption request, but in any event within seven days after
receipt of the redemption request. Notwithstanding the foregoing, in the event
that one or more Funds has insufficient cash on hand to pay aggregate
redemptions on the next Business Day, and if such Fund has determined to settle
redemption transactions for all of its shareholders on a delayed basis (more
than one Business Day, but in no event more than seven calendar days, after the
date on which the redemption order is received, unless otherwise permitted by an
order of the Commission under Section 22(e) of the 1940 Act), the Company shall
be permitted to delay sending redemption proceeds to the Insurance Company by
the same number of days that the Company is delaying sending redemption proceeds
to the other shareholders of the Fund.
Redemptions of up to the lesser of $250,000 or 1% of the net asset
value of the Fund whose shares are to be redeemed in any 90-day period will be
made in cash. Redemptions in excess of that amount in any 90-day period may, in
the sole discretion of the Company, be in-kind redemptions, with the securities
to be delivered in payment of redemptions selected by the Company and valued at
the value assigned to them in computing the Fund's net asset value per share,
provided that (i) such in-kind redemptions are permitted under applicable
provisions of the 1940 Act and (ii) the Company at such time utilizes in-kind
redemptions under this Section 1.7 with respect to other Participating Insurance
Companies with redemptions in excess of $250,000 within any 90-day period.
1.8. Issuance and transfer of the Company's shares will be by book
entry only. Stock certificates will not be issued to the Insurance Company or
any Account. Shares ordered from the Company will be recorded in an appropriate
title for each Account or the appropriate subaccount of each Account.
1.9. The Company shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Insurance Company of any income,
dividends or capital gain distributions payable on the Funds' shares. The
Insurance Company hereby elects to receive all income dividends and capital gain
distributions payable on a Fund's shares in additional shares of that Fund. The
Insurance Company reserves the right to revoke this election and to receive all
such income dividends and capital gain distributions in cash. The Company shall
notify the Insurance Company of the number of shares issued as payment of
dividends and distributions.
1.10. The Company shall make the net asset value per share for each
Fund available to the Insurance Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make those per-share net asset values available via facsimile by
5:00 p.m., Mountain Time.
ARTICLE II. Representations and Warranties
2.1. The Insurance Company represents and warrants that 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 applicable state insurance suitability requirements. The
Insurance Company 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
thereof as a segregated asset account under New York Insurance Law Section 4240
and has registered, or prior to any issuance or sale of the Contracts will
register, 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.
2.2. The Company represents and warrants that Company shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sale in compliance with the laws of the State of
Maryland and all applicable federal securities laws and that the Company is and
shall remain registered under the 1940 Act. The Company 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. The Company shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent deemed advisable
by the Company or INVESCO.
2.3. The Company represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended, (the "Code") and that it will make every effort to maintain
that qualification (under Subchapter M or any successor or similar provision)
and that it will notify the Insurance Company immediately upon having a
reasonable basis for believing that it has ceased to so qualify or that it might
not so qualify in the future.
2.4. The Insurance Company represents and warrants that the Contracts
are currently treated as annuity contracts, under applicable provisions of the
Code and that it will make every effort to maintain such treatment and that it
will notify the Company and INVESCO 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.
2.5. The Company currently does not intend to make any payments to
finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act or
otherwise, although it may make such payments in the future. To the extent that
it decides to finance distribution expenses pursuant to Rule 12b-1, the Company
undertakes to have a board of directors, a majority of whom are not interested
persons of the Company, formulate and approve any plan under Rule 12b-1 to
finance distribution expenses.
2.6. The Company makes no representation as to whether any aspect of
its operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states.
2.7. INVESCO represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the Commission.
INVESCO further represents that it will sell and distribute the Company shares
in accordance with the laws of the State of New York and all applicable state
and federal securities laws, including without limitation the 1933 Act, the 1934
Act, and the 0000 Xxx.
2.8. The Company represents that it is lawfully organized and validly
existing under the laws of the State of Maryland and that it does and will
comply in all material respects with the 1940 Act.
2.9. INVESCO represents and warrants that it is and shall remain duly
registered in all material respects under all applicable federal and state
securities laws and that it shall perform its obligations for the Company in
compliance in all material respects with the laws of the State of Colorado and
any applicable state and federal securities laws.
2.10. The Company and INVESCO represent and warrant that all of their
officers, employees, investment advisers, investment sub-advisers, and other
individuals or entities dealing with the money and/or securities of the Company
are, and shall continue to be at all times, covered by a blanket fidelity bond
or similar coverage for the benefit of the Company in an amount not less than
the minimum coverage required currently by Section 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. That fidelity bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11. The Insurance Company represents and warrants that all of its
officers, employees, investment advisers, and other individuals or entities
dealing with the money and/or securities of the Company are and shall continue
to be at all times covered by a blanket fidelity bond or similar coverage for
the benefit of the Company, in an amount not less than the minimum coverage
required currently for entities subject to the requirements of Rule 17g-1 of the
1940 Act or related provisions or may be promulgated from time to time. The
aforesaid Bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company. The Insurance Company further represents
and warrants that the employees of Insurance Company, or such other persons
designated by Insurance Company, listed on Schedule C have been authorized by
all necessary action of Insurance Company to give directions, instructions and
certifications to the Company and INVESCO on behalf of Insurance Company. The
Company and INVESCO are authorized to act and rely upon any directions,
instructions and certifications received from such persons unless and until they
have been notified in writing by the Insurance Company of a change in such
persons, and the Company and INVESCO shall incur no liability in doing so.
2.12. The Insurance Company represents and warrants that it will not
purchase Company shares with Account 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. INVESCO shall provide the Insurance Company (at the Insurance
Company's expense) with as many copies of the Company's current prospectus as
the Insurance Company may reasonably request. If requested by the Insurance
Company in lieu thereof, the Company shall provide such documentation (including
a final copy of the new prospectus as set in type at the Company's expense) and
other assistance as is reasonably necessary in order for the Insurance Company
once each year (or more frequently if the prospectus for the Company is amended)
to have the prospectus for the Contracts and the Company's prospectus printed
together in one document (at the Insurance Company's expense).
3.2. The Company's prospectus shall state that the Statement of
Additional Information for the Company (the "SAI") is available from INVESCO (or
in the Company's discretion, the Prospectus shall state that the SAI is
available from the Company), and INVESCO (or the Company), at its expense, shall
print and provide the SAI free of charge to the Insurance Company and to any
owner of a Contract or prospective owner who requests the SAI.
3.3. The Company, at its expense, shall provide the Insurance Company
with copies of its proxy material, reports to stockholders and other
communications to stockholders in such quantity as the Insurance Company shall
reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law, the Insurance Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Company shares in accordance with
instructions received from Contract owners; and
(iii) vote Company shares for which no instructions have
been received in the same proportion as Company
shares of such portfolio for which instructions have
been received:
so long as and to the extent that the Commission continues to interpret the 1940
Act to require pass-through voting privileges for variable contract owners. The
Insurance Company reserves the right to vote Company shares held in any
segregated asset account in its own right, to the extent permitted by law.
Participating Insurance Companies shall be responsible for assuring that each of
their separate accounts participating in the Company calculates voting
privileges in a manner consistent with the standards set forth on Schedule D
attached hereto and incorporated herein by this reference, which standards will
also be provided to the other Participating Insurance Companies. The Insurance
Company shall fulfill its obligations under, and abide by the terms and
conditions of, the Mixed and Shared Funding Exemptive Order.
3.5. The Company will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Company will either
provide for annual meetings (except insofar as the Commission may interpret
Section 16 of the 1940 Act not to require such meetings) or, as the Company
currently intends, comply with Section 16(c) of the 1940 Act (although the
Company is not one of the trusts described in Section 16(c) of that Act) as well
as with Sections 16(a) and, if and when applicable, 16(b). Further, the Company
will act in accordance with the Commission's interpretation of the requirements
of Section 16(a) with respect to periodic elections of directors and with
whatever rules the Commission may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Insurance Company shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company, a sub-adviser of one of the
Funds, or INVESCO is named, at least fifteen calendar days prior to its use. No
such material shall be used if the Company or its designee objects to such use
within ten calendar days after receipt of such material.
4.2. The Insurance Company shall not give any information or make any
representations or statements on behalf of the Company or concerning the Company
in connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Company's shares, as such registration statement and prospectus may be amended
or supplemented from time to time, or in reports or proxy statements for the
Company, or in sales literature or other promotional material approved by the
Company or its designee or by INVESCO, except with the permission of the Company
or INVESCO.
4.3. The Company, INVESCO, or its designee shall furnish, or shall
cause to be furnished, to the Insurance Company or its designee, each piece of
sales literature or other promotional material in which the Insurance Company
and/or its separate account(s), is named at least fifteen calendar days prior to
its use. No such material shall be used if the Insurance Company or its designee
object to such use within ten calendar days after receipt of that material.
4.4. The Company and INVESCO shall not give any information or make any
representations on behalf of the Insurance Company or concerning the Insurance
Company, the Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus for the
Contracts, as that registration statement and prospectus may be amended or
supplemented from time to time, or in published reports for the Account which
are in the public domain or approved by the Insurance Company for distribution
to Contract owners, or in sales literature or other promotional material
approved by the Insurance Company or its designee, except with the permission of
the Insurance Company.
4.5. The Company will provide to the Insurance Company at least one
complete copy of each registration statement, prospectus, statement of
additional information, report, proxy statement, piece of sales literature or
other promotional material, application for exemption, request for no-action
letter, and any amendment to any of the above, that relate to the Company or its
shares, contemporaneously with the filing of the document with the Commission,
the NASD, or other regulatory authorities.
4.6. The Insurance Company will provide to the Company at least one
complete copy of each registration statement, prospectus, statement of
additional information, report, solicitation for voting instructions, piece of
sales literature and other promotional material, application for exemption,
request for no action letter, and any amendment to any of the above, that
relates to the Contracts or the Account, contemporaneously with the filing of
the document with the Commission, the NASD, or other regulatory authorities.
4.7. For purposes of this Agreement, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements,
newspaper, magazine, or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures, or other
public 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 registration
statements, prospectuses, statements of additional information, shareholder
reports, and proxy materials.
4.8. 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. Company agrees
that Insurance Company shall have the right to inspect, audit and copy all
records pertaining to the performance of services under this Agreement pursuant
to the requirements of the Ohio Department of Insurance. However, Company and
INVESCO shall own and control all of their respective records pertaining to
their performance of the services under this Agreement.
ARTICLE V. Fees and Expenses
5.1. The Company and INVESCO shall pay no fee or other compensation to
the Insurance Company under this agreement, except that if the Company or any
Fund adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then INVESCO may make payments to the Insurance Company if and in
amounts agreed to by INVESCO in writing, subject to review by the board of
directors of the Company. No such payments shall be made directly by the
Company.
5.2. All expenses incident to performance by the Company under this
Agreement shall be paid by the Company. The Company shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Company or
INVESCO, in accordance with applicable state laws prior to their sale. The
Company shall bear the expenses for the cost of registration and qualification
of the Company's shares, preparation and filing of the Company's prospectus and
registration statement, proxy materials and reports, setting the prospectus in
type, setting in type and printing the proxy materials and reports to
shareholders (including the costs of printing a prospectus that constitutes an
annual report), the preparation of all statements and notices required by any
federal or state law, and all taxes on the issuance or transfer of the Company's
shares.
5.3. The Insurance Company shall bear the expenses of printing and
distributing to Contract owners the Contract prospectuses and of distributing to
Contract owners the Company's prospectus, proxy materials and reports.
ARTICLE VI. Diversification
6.1. The Company will, at the end of each calendar quarter, comply with
Section 817(h) of the Code and Treasury Regulation 1.817-5 relating to the
diversification requirements for variable annuity, endowment, modified endowment
or life insurance contracts and any amendments or other modifications to that
Section or Regulation.
ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Company for the existence of any
material irreconcilable conflict between the interests of the variable contract
owners of all separate accounts investing in the Company. 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 interpretive 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 Fund are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by a Participating Insurance Company to
disregard the voting instructions of variable contract owners. The Board shall
promptly inform the Insurance Company if it determines that an irreconcilable
material conflict exists and the implications thereof. The Board shall have sole
authority to determine whether an irreconcilable material conflict exists and
such determination shall be binding upon the Insurance Company.
7.2 The Insurance Company will report promptly any potential or
existing conflicts of which it is aware to the Board. The Insurance Company 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 the Insurance Company to inform the Board whenever
Contract owner voting instructions are to be disregarded. Such responsibilities
shall be carried out by Insurance Company with a view only to the interests of
the Contract owners.
7.3. If it is determined by a majority of the Board, or a majority of
its directors who are not interested persons of the Company, INVESCO, or any
sub-adviser to any of the Funds (the "Independent Directors"), that a material
irreconcilable conflict exists, the Insurance Company and/or other Participating
Insurance Companies shall, at their expense and to the extent reasonably
practicable (as determined by a majority of the Independent Directors), 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 Company or any Fund and reinvesting those
assets in a different investment medium, including (but not limited to) another
Fund of the Company, or submitting the question whether such segregation should
be implemented to a vote of all affected variable contract owners and, as
appropriate, segregating the assets of any appropriate group (e.g., 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 variable contract owners the option of
making such a change; and (2), establishing a new registered management
investment company or managed separate account and obtaining approval thereof by
the Commission.
7.4. If a material irreconcilable conflict arises because of a decision
by the Insurance Company to disregard Contract owner voting instructions and
that decision represents a minority position or would preclude a majority vote,
the Insurance Company may be required, at the Company's election, to withdraw
the affected Account's investment in the Company and terminate this Agreement
with respect to that Account; 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
Directors. Any such withdrawal and termination must take place within six (6)
months after the Company gives written notice that this provision is being
implemented, and until the end of that six month period INVESCO and the Company
shall continue to accept and implement orders by the Insurance Company for the
purchase (and redemption) of shares of the Company.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Insurance Company
conflicts with the majority of other state regulators, then the Insurance
Company will withdraw the affected Account's investment in the Company and
terminate this Agreement with respect to that Account within six months after
the Board informs the Insurance Company in writing that it has determined that
the state insurance regulator's 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 Independent Directors. Until the end of the
foregoing six month period, INVESCO and the Company shall continue to accept and
implement orders by the Insurance Company for the purchase (and redemption) of
shares of the Company.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the Independent Directors shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Company be required to establish a new funding medium for the
Contracts. The Insurance Company 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 Contract owners materially adversely 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 the Insurance Company will withdraw the Account's investment in
the Company and terminate this Agreement within six (6) months after the Board
informs the Insurance Company in writing of the foregoing determination,
provided, however, that the withdrawal and termination shall be limited to the
extent required by the material irreconcilable conflict, as determined by a
majority of the Independent Directors.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
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 Company and/or the Participating Insurance
Companies, 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 those rules are applicable; and (b) Sections 3.4, 3.5, 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 conditions substantially identical to those Sections are contained in
the Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Insurance Company
8.1(a). The Insurance Company agrees to indemnify and hold harmless the
Company and each director of the Board and officers and each person, if any, who
controls the Company 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, damages, liabilities (including amounts paid
in settlement with the written consent of the Insurance Company) or litigation
(including 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 or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Company'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 prospectus for the Contracts or
contained in the Contracts or sales literature 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 the Insurance Company by or on behalf
of the Company for use in the registration statement or
prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or shares of
the Company;
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or sales
literature of the Company not supplied by the Insurance
Company, or persons under its control) or wrongful conduct of
the Insurance Company or persons under its control, with
respect to the sale or distribution of the Contracts or
Company Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the Company 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 Company
by or on behalf of the Insurance Company: or
(iv) arise as a result of any failure by the Insurance Company
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 Insurance Company
in this Agreement or arise out of or result from any other
material breach of this Agreement by the Insurance Company,
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). The Insurance Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party that
may arise from that Indemnified Party's willful misfeasance, bad faith, or
negligence in the performance of that Indemnified Party's duties or by reason of
that Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Company, whichever is applicable.
8.1(c). The Insurance Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless that Indemnified Party shall have notified the Insurance Company 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 that
Indemnified Party (or after the Indemnified Party shall have received notice of
such service on any designated agent). Notwithstanding the foregoing, the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Insurance Company of its obligations hereunder except to the extent
that the Insurance Company has been prejudiced by such failure to give notice.
In addition, any failure by the Indemnified Party to notify the Insurance
Company of any such claim shall not relieve the Insurance Company from any
liability which it may have to the Indemnified Party against whom the action is
brought otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Insurance Company
shall be entitled to participate, at its own expense, in the defense of the
action. The Insurance Company also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action; provided,
however, that if the Indemnified Party shall have reasonably concluded that
there may be defenses available to it which are different from or additional to
those available to the Insurance Company, the Insurance Company shall not have
the right to assume said defense, but shall pay the reasonable costs and
expenses thereof (except that in no event shall the Insurance Company be liable
for the fees and expenses of more than one counsel for Indemnified Parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances).
After notice from the Insurance Company to the Indemnified Party of the
Insurance Company's election to assume the defense thereof, and in the absence
of such a reasonable conclusion that there may be different or additional
defenses available to the Indemnified Party, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it, and the
Insurance Company will not be liable to that party under this Agreement for any
legal or other expenses subsequently incurred by the party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.1(d). The Indemnified Parties will promptly notify the Insurance
Company of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Company's shares or the Contracts or
the operation of the Company.
8.2. Indemnification by INVESCO
8.2(a). INVESCO agrees to indemnify and hold harmless the Insurance
Company and each of its directors and officers and each person, if any, who
controls the Insurance Company 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, damages, liabilities (including reasonable
amounts paid in settlement with the written consent of INVESCO) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, 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 Company'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 or prospectus or sales literature of
the Company (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 the
statement or omission or alleged statement or omission was
made in reliance upon and in conformity with information
furnished in writing to INVESCO or the Company by or on behalf
of the Insurance Company for use in the registration statement
or prospectus for the Company or in sales literature (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Company 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 or sales
literature for the Contracts not supplied by INVESCO or
persons under its control) or wrongful conduct of the Company,
INVESCO or persons under their control, with respect to the
sale or distribution of the Contracts or shares of the
Company; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature 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 the Insurance Company by or on behalf
of the Company; or
(iv) arise as a result of any failure by the Company 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 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 INVESCO in this
Agreement or arise out of or result from any other material
breach of this Agreement by INVESCO; as limited by and in
accordance with the provisions of Sections 8.2(b) and 8.2(c)
hereof.
8.2(b) INVESCO shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party that may arise from the Indemnified
Party's willful misfeasance, bad faith, or negligence in the performance of the
Indemnified Party's duties or by reason of the Indemnified Party's reckless
disregard of obligations and duties under this Agreement or to the Insurance
Company or the Account, whichever is applicable.
8.2(c) INVESCO shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless the
Indemnified Party shall have notified INVESCO 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 the Indemnified Party (or after
the Indemnified Party shall have received notice of such service on any
designated agent). Notwithstanding the foregoing, the failure of any Indemnified
Party to give notice as provided herein shall not relieve INVESCO of its
obligations hereunder except to the extent that INVESCO has been prejudiced by
such failure to give notice. In addition, any failure by the Indemnified Party
to notify INVESCO of any such claim shall not relieve INVESCO 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 the Indemnified Parties, INVESCO will be entitled to
participate, at its own expense, in the defense thereof. INVESCO also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action; provided, however, that if the Indemnified Party shall have
reasonably concluded that there may be defenses available to it which are
different from or additional to those available to INVESCO, INVESCO shall not
have the right to assume said defense, but shall pay the reasonable costs and
expenses thereof (except that in no event shall INVESCO be liable for the fees
and expenses of more than one counsel for Indemnified Parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances).
After notice from INVESCO to the Indemnified Party of INVESCO's election to
assume the defense thereof, and in the absence of such a reasonable conclusion
that there may be different or additional defenses available to the Indemnified
Party, the Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and INVESCO will not be liable to that party under this
Agreement for any legal or other expenses subsequently incurred by that party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.2(d) The Insurance Company agrees to notify INVESCO promptly 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.
8.3 Indemnification By the Company
8.3(a). The Company agrees to indemnify and hold harmless the Insurance
Company, and each of its directors and officers and each person, if any, who
controls the Insurance Company 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, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
reasonable legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as those losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements result from the gross negligence, bad faith, willful misconduct, or
reckless disregard of duty of the Board or any member thereof, are related to
the operations of the Company and:
(i) arise as a result of any failure by the Company to provide
the services and furnish the materials under the terms of this
Agreement (including a failure to comply with the
diversification requirements specified in Article VI of this
Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company;
as limited by, and in accordance with the provisions of, Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party that may arise from the
Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of the Indemnified Party's duties or by reason of the Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Insurance Company, the Company, INVESCO or the Account, whichever is
applicable.
8.3(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless the
Indemnified Party shall have notified the Company 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 the Indemnified Party (or after
the Indemnified Party shall have received notice of such service on any
designated agent). Notwithstanding the foregoing, the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Company of its
obligations hereunder except to the extent that the Company has been prejudiced
by such failure to give notice. In addition, any failure by the Indemnified
Party to notify the Company of any such claim shall not relieve the Company 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 the Indemnified Parties, the Company
will be entitled to participate, at its own expense, in the defense thereof. The
Company also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action; provided, however, that if the
Indemnified Party shall have reasonably concluded that there may be defenses
available to it which are different from or additional to those available to the
Company, the Company shall not have the right to assume said defense, but shall
pay the costs and expenses thereof (except that in no event shall the Company be
liable for the fees and expenses of more than one counsel for Indemnified
Parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances). After notice from the Company to the Indemnified Party of the
Company's election to assume the defense thereof, and in the absence of such a
reasonable conclusion that there may be different or additional defenses
available to the Indemnified Party, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and the Company will not
be liable to that party under this Agreement for any legal or other expenses
subsequently incurred by that party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Insurance Company and INVESCO agree promptly to notify the
Company of the commencement of any litigation or proceedings against it or any
of its respective officers or directors in connection with this Agreement, the
issuance or sale of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Company.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and provisions hereof
interpreted under and in accordance with the laws of the State of Colorado.
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 any exemptions from those statutes, rules and regulations the
Commission 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 upon one year advance written
notice to the other parties; provided, however such notice
shall not be given earlier than one year following the date of
this Agreement; or
(b) at the option of the Insurance Company to the extent that
shares of Funds are not reasonably available to meet the
requirements of the Contracts as determined by the Insurance
Company, provided however, that such a termination shall apply
only to the Fund(s) not reasonably available. Prompt written
notice of the election to terminate for such cause shall be
furnished by the Insurance Company; or
(c) at the option of the Company in the event that formal
administrative proceedings are instituted against the
Insurance Company by the NASD, the Commission, an insurance
commissioner or any other regulatory body regarding the
Insurance Company's duties under this Agreement or related to
the sale of the Contracts, the operation of any Account, or
the purchase of the Company's shares, and the Company
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 Insurance Company to
perform its obligations under this Agreement; or
(d) at the option of the Insurance Company in the event that
formal administrative proceedings are instituted against the
Company or INVESCO by the NASD, the Commission, or any state
securities or insurance department or any other regulatory
body, and the Insurance Company 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 Company or INVESCO to perform its obligations
under this Agreement; or
(e) with respect to any Account, upon requisite vote of the
Contract owners having an interest in that Account (or any
subaccount) to substitute the shares of another investment
company for the corresponding Fund shares in accordance with
the terms of the Contracts for which those Fund shares had
been selected to serve as the underlying investment media. The
Insurance Company will give at least 30 days' prior written
notice to the Company of the date of any proposed vote to
replace the Company's shares; or
(f) at the option of the Insurance Company, in the event any
of the Company's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or
exemptions therefrom, or such law precludes the use of those
shares as the underlying investment media of the Contracts
issued or to be issued by the Insurance Company; or
(g) at the option of the Insurance Company, if the Company
ceases to qualify as a regulated investment company under
Subchapter M of the Code or under any successor or similar
provision, or if the Insurance Company reasonably believes
that the Company may fail to so qualify; or
(h) at the option of the Insurance Company, if the Company
fails to meet the diversification requirements specified in
Article VI hereof; or
(i) at the option of either the Company or INVESCO, if (1) the
Company or INVESCO, respectively, shall determine, in their
sole judgment reasonably exercised in good faith, that the
Insurance Company 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
material adverse publicity will have a material adverse impact
upon the business and operations of either the Company or
INVESCO, (2) the Company or INVESCO shall notify the Insurance
Company in writing of that determination and its intent to
terminate this Agreement, and (3) after considering the
actions taken by the Insurance Company and any other changes
in circumstances since the giving of such a notice, the
determination of the Company or INVESCO 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
(j) at the option of the Insurance Company, if (1) the
Insurance Company shall determine, in its sole judgment
reasonably exercised in good faith, that either the Company or
INVESCO 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 material adverse
publicity will have a material adverse impact upon the
business and operations of the Insurance Company, (2) the
Insurance Company shall notify the Company and INVESCO in
writing of the determination and its intent to terminate the
Agreement, and (3) after considering the actions taken by the
Company and/or INVESCO and any other changes in circumstances
since the giving of such a notice, the determination shall
continue to apply on the sixtieth (60th) day following the
giving of the notice, which sixtieth day shall be the
effective date of termination.
10.2. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 10.1(a) may be exercised for any
reason or for no reason.
10.3 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 to this Agreement of its intent to
terminate, which notice shall set forth the basis for the termination.
Furthermore,
(a) in the event that any termination is based upon the
provisions of Article VII, or the provisions of Section
10.1(a), 10.1(i), or 10.1(j) of this Agreement, the prior
written notice shall be given in advance of the effective date
of termination as required by those provisions; and
(b) in the event that any termination is based upon the
provisions of Section 10.1(c) or 10.1(d) of this Agreement,
the prior written notice shall be given at least ninety (90)
days before the effective date of termination.
10.4. Effect of Termination. Notwithstanding any termination of this
Agreement, the Company and INVESCO shall at the option of the Insurance Company,
continue to make available additional shares of the Company pursuant to the
terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement ("Existing Contracts").
Specifically, without limitation, the owners of the Existing Contracts shall be
permitted to reallocate investments in the Company, redeem investments in the
Company and/or invest in the Company upon the making of additional purchase
payments under the Existing Contracts. The parties agree that this Section 10.4
shall not apply to any terminations under Article VII and the effect of Article
VII terminations shall be governed by Article VII of this Agreement.
10.5. The Insurance Company shall not redeem Company shares
attributable to the Contracts (as opposed to Company shares attributable to the
Insurance Company's assets held in the Account) except (i) as necessary to
implement Contract-owner-initiated transactions, or (ii) as required by state
and/or federal laws or regulations or judicial or other legal precedent of
general application (a "Legally Required Redemption"). Upon request, the
Insurance Company will promptly furnish to the Company and INVESCO the opinion
of counsel for the Insurance Company (which counsel shall be reasonably
satisfactory to the Company and INVESCO) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption.
ARTICLE XI. Notices.
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of that other party set forth
below or at such other address as the other party may from time to time specify
in writing.
If to the Company:
X.X. Xxx 000000
Xxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
If to the Insurance Company:
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: General Counsel
If to INVESCO:
X.X. Xxx 000000
Xxxxxx, Xxxxxxxx 00000-0000
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 unless and until that information may come into the public
domain.
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
Commission, the NASD and state insurance regulators) and shall permit those
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
12.6. 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.
12.7. No party may assign this Agreement without the prior written
consent of the others.
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.
Insurance Company:
GREAT AMERICAN LIFE INSURANCE COMPANY OF
NEW YORK
By its authorized officer,
By: Xxxx X. Xxxxxxxx
Title: Senior Vice President
Date: August 16, 1999
Company:
INVESCO VARIABLE INVESTMENT FUNDS, INC.
By its authorized officer,
By:
Title:Treasurer and Chief Financial
and Accounting Officer
Date:
INVESCO:
INVESCO FUNDS GROUP, INC.
By its authorized officer,
By:
Title:Senior Vice President and
Treasurer
Date:
Schedule A
Accounts
Name of Account Date of Resolution of Insurance Company's Board which
Established the Account
GALIC of New York
Separate Account I May 7, 1999
Schedule B
Contracts
1. Contract Form
XX0000X00 Group Deferred Variable Xxxxxxx Xxxxxxxx
XX0000X00 Group Deferred Variable Xxxxxxx Xxxxxxxx
XX0000X00 Group Deferred Variable Annuity Contract
NY3382NQ99 Individual Nonqualified Deferred Variable Annuity Contract
NY3383Q99 Individual Qualified Deferred Variable Annuity Contract
NY3384NQ99 Individual Nonqualified Deferred Variable Annuity Contract
NY3385Q99 Individual Qualified Deferred Variable Annuity Contract
NY3386NQ99 Individual Nonqualified Deferred Variable Annuity Contract
NY3387Q99 Individual Qualified Deferred Variable Annuity Contract
Schedule C
Persons Authorized to Give Instructions to the Company and INVESCO
NAME ADDRESS AND PHONE NUMBER
(1)____Brian Xxxxxxxxx __ _000 X. Xxxxx Xx., Xxxxxxxxxx, XX 45202______
------------------------------ ---------------------------------------
Print or Type Name
____________________________________ Phone:____513/000-0000__________________
Signature
(2)_____Todd Gayhart___________________ _000 X. Xxxxx Xx., Xxxxxxxxxx, XX 45202______
Print or Type Name
____________________________________ Phone:_____513/000-0000________________
Signature
(3)____John Burress_____________________ _000 X. Xxxxx Xx., Xxxxxxxxxx, XX 45202______
Print or Type Name
____________________________________ Phone:___513/000-0000__________________
Signature
(4)____Scott Soudrette___________________ _000 X. Xxxxx Xx., Xxxxxxxxxx, XX 45202______
Print or Type Name
____________________________________ Phone:____513/000-0000________________
Signature
Schedule D
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Company by INVESCO, the Company and the
Insurance Company. The defined terms herein shall have the meanings assigned in
the Participation Agreement except that the term "Insurance Company" shall also
include the department or third party assigned by the Insurance Company to
perform the steps delineated below.
1. The number of proxy proposals is given to the Insurance Company by
INVESCO as early as possible before the date set by the Company for the
shareholder meeting to facilitate the establishment of tabulation
procedures. At this time INVESCO will inform the Insurance Company of
the Record, Mailing and Meeting dates. This will be done verbally
approximately two months before meeting.
2. Promptly after the Record Date, the Insurance Company will perform a
"tape run", or other activity, which will generate the names, addresses
and number of units which are attributed to each
contractowner/policyholder (the "Customer") as of the Record Date.
Allowance should be made for account adjustments made after this date
that could affect the status of the Customers' accounts of the Record
Date.
Note: The number of proxy statements is determined by the
activities described in Step #2. The Insurance
Company will use its best efforts to call in the
number of Customers to INVESCO, as soon as possible,
but no later than one week after the Record Date.
3. The text and format for the Voting Instruction Cards ("Cards" or
"Card") is provided to the Insurance Company by the Company. The
Insurance Company, at its expense, shall produce and personalize the
Voting Instruction cards. The Legal Department of INVESCO ("INVESCO
Legal") must approve the Card before it is printed. Allow approximately
2-4 business days for printing information on the Cards. Information
commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as printed
by the Company).
(This and related steps may occur later in the chronological process
due to possible uncertainties relating to the proposals.)
4. During this time, INVESCO Legal will develop, produce, and the Company
will pay for the Notice of Proxy and the Proxy Statement (one
document). Printed and folded notices and statements will be sent to
Insurance Company for insertion into envelopes (envelopes and return
envelopes are provided and paid for by the Insurance Company). Contents
of envelope sent to customers by Insurance Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. Return envelope (postage pre-paid by Insurance Company)
addressed to the Insurance Company or its tabulation agent
d. "Urge buckslip" - optional, but recommended. (This is a small,
single sheet of paper that requests Customers to vote as
quickly as possible and that their vote is important. One copy
will be supplied by the Company.)
e. Cover letter - optional, supplied by Insurance Company and
reviewed and approved in advance by INVESCO Legal.
5. The above contents should be received by the Insurance Company
approximately 3-5 business days before mail date. Individual in charge
at Insurance Company reviews and approves the contents of the mailing
package to ensure correctness and completeness. Copy of this approval
sent to INVESCO Legal.
6. Package mailed by the Insurance Company.
* The Company must allow at least a 15-day solicitation
time to the Insurance Company as the shareowner. (A 5-week
period is recommended.) Solicitation time is calculated as
calendar days from (but not including) the meeting, counting
backwards.
7. Collection and tabulation of Cards begins. Tabulation usually takes
place in another department or another vendor depending on process
used. An often used procedure is to sort cards on arrival by proposal
into vote categories of all yes, no, or mixed replies, and to begin
data entry.
Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal
procedure.
8. If Cards are mutilated, or for any reason are illegible or are not
signed properly, they are sent back to the Customer with an explanatory
letter, a new Card and return envelope. The mutilated or illegible Card
is disregarded and considered to be not received for purposes of vote
tabulation. Such mutilated or illegible Cards are "hand verified,"
i.e., examined as to why they did not complete the system. Any
questions on those Cards are usually remedied individually.
9. There are various control procedures used to ensure proper tabulation
of votes and accuracy of the tabulation. The most prevalent is to sort
the Cards as they first arrive into categories depending upon their
vote; an estimate of how the vote is progressing may then be
calculated. If the initial estimates and the actual vote do not
coincide, then an internal audit of that vote should occur. This may
entail a recount.
10. The actual tabulation of votes is done in units which are then
converted to shares. (It is very important that the Company receives
the tabulations stated in terms of a percentage and the number of
shares.) INVESCO Legal must review and approve tabulation format.
11. Final tabulation in shares is verbally given by the Insurance Company
to INVESCO Legal on the morning of the meeting not later than 10:00
a.m. Denver time. INVESCO Legal may request an earlier deadline if
required to calculate the vote in time for the meeting.
12. A Certificate of Mailing and Authorization to Vote Shares will be
required from the Insurance Company as well as an original copy of the
final vote. INVESCO Legal will provided a standard form for each
Certification.
13. The Insurance Company will be required to box and archive the Cards
received from the Customers. In the event that any vote is challenged
or if otherwise necessary for legal, regulatory, or accounting
purposes, INVESCO Legal will be permitted reasonable access to such
Cards.
14. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
August 16, 1999
Xxxxx X. Lummanick
Vice President/Assistant General Counsel
INVESCO Funds Group, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
RE: INVESCO Variable Investment Funds, Inc. - Participation Agreement
Dear Xxx:
This purpose of this letter is to confirm certain financial arrangements between
INVESCO Funds Group, Inc. ("INVESCO"), the distributor for the INVESCO Variable
Investment Funds, Inc. (the "Company"), and Great American Life Insurance
Company of New York ("GALIC of NY") in connection with GALIC of NY's investment
in the Company through three of its funds, INVESCO VIF-Equity Income Fund,
INVESCO VIF-Total Return Fund and INVESCO VIF-High Yield Fund (individually, a
"Fund", collectively, the "Funds").
Administrative services to owners of variable annuity contracts offered by GALIC
of NY which are allocated into subaccounts invested in the Company shall be the
responsibility of GALIC of NY. GALIC of NY on behalf of its separate accounts
will be the sole shareholder of record of Company shares. The Company and
INVESCO recognize that they will derive a substantial savings in administrative
expense by virtue of having a sole shareholder rather than multiple
shareholders.
In consideration of the administrative savings resulting from having a sole
shareholder rather than multiple shareholders, INVESCO or its affiliates will
pay an administrative service fee to GALIC of NY equal, on an annual basis, to
0.20% per annum of the average aggregate net assets of the INVESCO VIF-Equity
Income and INVESCO VIF-Total Return Funds, and a service fee equal, on an annual
basis, equal to 0.15% per annum of the average aggregate net assets of the
INVESCO VIF-High Yield Fund, in each case on average aggregate net assets
attributable to variable annuity contracts offered by GALIC of NY (collectively,
"Eligible Contracts").
Such fee will be paid on a monthly basis in arrears. In no event will such fee
be paid by the Company, its shareholders, or by the contract holders, and in no
event will INVESCO have any responsibility under the Participation Agreement
dated August 16, 1999 or this letter to pay any amounts to any third party with
respect to GALIC of NY' or the Eligible Contracts' investments in the Funds.
Such payments, if any, shall be the responsibility of GALIC of NY. INVESCO's
payments to GALIC of NY are for administrative services only and do not
constitute payment in any manner for investment advisory services.
INVESCO shall have no obligation to make the above payments until such time as
the average net assets of a Fund, together with the average net assets of
Annuity Investors Variable Account B, reach $30 million. Beginning at such time,
INVESCO will make payments on the average aggregate net assets attributable to
the Eligible Contracts that hold investments in such Fund.
These financial arrangements shall continue so long as GALIC of NY holds shares
of the Company in its subaccounts and GALIC of NY therefore continues to provide
administrative services as set forth above. Please confirm your understanding of
this arrangement by having a copy of this letter signed where indicated below by
an appropriate officer of INVESCO and return this duplicate copy to me.
Very truly yours,
By:
Xxxx X. Xxxxxxxx
Senior Vice President
INVESCO Funds Group, Inc.
BY: ____________________________
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the ____ day of _________, 1999, by and among
the PBHG INSURANCE SERIES FUND, INC. ("FUND"), a Maryland corporation, PILGRIM
XXXXXX & ASSOCIATES, LTD. ("Adviser"), a Delaware corporation, and GREAT
AMERICAN LIFE INSURANCE COMPANY OF NEW YORK ("LIFE COMPANY"), a life insurance
company organized under the laws of the State of New York.
WHEREAS, FUND is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended (the "`40 Act"), as
an open-end, diversified management investment company; and
WHEREAS, FUND is organized as a series fund comprised of several
Portfolios ("Portfolios"), with those currently available being listed on
Appendix A hereto; and
WHEREAS, FUND was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts ("Separate
Accounts") of such life insurance companies ("Participating Insurance
Companies"); and
WHEREAS, FUND may also offer its shares to certain qualified pension
and retirement plans ("Qualified Plans"); and
WHEREAS, FUND will apply for an order from the SEC, granting
Participating Insurance Companies and their separate accounts exemptions from
the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the `40 Act, and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Portfolios of the FUND to be sold to and held by Variable
Contract separate accounts of both affiliated and unaffiliated Participating
Insurance Companies and Qualified Plans ("Exemptive Order"); and
WHEREAS, LIFE COMPANY has established or will establish one or more
separate accounts ("Separate Accounts") to offer Variable Contracts and is
desirous of having FUND as one of the underlying funding vehicles for such
Variable Contracts; and
WHEREAS, ADVISER is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940 and as a broker-dealer under the
Securities Exchange Act of 1934, as amended and acts as the FUND's investment
adviser; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase shares of FUND to fund the
aforementioned Variable Contracts and FUND is authorized to sell such shares to
LIFE COMPANY at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, LIFE
COMPANY, FUND, and ADVISER agree as follows:
Article I. SALE OF FUND SHARES
1.1 FUND agrees to make available to the Separate Accounts of LIFE
COMPANY shares of the selected Portfolios as listed on Appendix B for investment
of purchase payments of Variable Contracts allocated to the designated Separate
Accounts as provided in FUND's Registration Statement.
1.2 FUND agrees to sell to LIFE COMPANY those shares of the selected
Portfolios of FUND which LIFE COMPANY orders, executing such orders on a daily
basis at the net asset value next computed after receipt by FUND or its designee
of the order for the shares of FUND. For purposes of this Section 1.2, LIFE
COMPANY shall be the designee of FUND for receipt of such orders from the
designated Separate Account and receipt by such designee shall constitute
receipt by FUND; provided that LIFE COMPANY receives the order by 4:00 p.m. New
York time and FUND receives notice from LIFE COMPANY by telephone or facsimile
(or by such other means as FUND and LIFE COMPANY may agree in writing) of such
order by 8:30 a.m. New York 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 FUND calculates its net asset value pursuant to the rules of the
SEC.
1.3 FUND agrees to redeem on LIFE COMPANY's request, any full or
fractional shares of FUND held by LIFE COMPANY, executing such requests on a
daily basis at the net asset value next computed after receipt by FUND or its
designee of the request for redemption, in accordance with the provisions of
this agreement and FUND's Registration Statement. For purposes of this Section
1.3, LIFE COMPANY shall be the designee of FUND for receipt of requests for
redemption from the designated Separate Account and receipt by such designee
shall constitute receipt by FUND; provided that LIFE COMPANY receives the
request for redemption by 4:00 p.m. New York time and FUND receives notice from
LIFE COMPANY by telephone or facsimile (or by such other means as FUND and LIFE
COMPANY may agree in writing) of such request for redemption by 8:30 a.m. New
York time on the next following Business Day.
1.4 FUND shall furnish, on or before the ex-dividend date, notice to
LIFE COMPANY of any income dividends or capital gain distributions payable on
the shares of any Portfolio of FUND. LIFE COMPANY hereby elects to receive all
such income dividends and capital gain distributions as are payable on a
Portfolio's shares in additional shares of the Portfolio. FUND shall notify LIFE
COMPANY or its designee of the number of shares so issued as payment of such
dividends and distributions.
1.5 FUND shall make the net asset value per share for the selected
Portfolio(s) available to LIFE COMPANY on a daily basis as soon as reasonably
practicable after the net asset value per share is calculated but shall use its
best efforts to make such net asset value available by 7:00 p.m. New York time.
The FUND shall provide such net asset values to LIFE COMPANY by facsimile
transmission or in such other manner as FUND and LIFE COMPANY may agree. If FUND
provides LIFE COMPANY with materially incorrect share net asset value
information through no fault of LIFE COMPANY, LIFE COMPANY on behalf of the
Separate Accounts, shall be entitled to an adjustment to the number of shares
purchased or redeemed to reflect the correct share net asset value. Any material
error in the calculation of net asset value per share, dividend or capital gain
information shall be reported promptly upon discovery to LIFE COMPANY.
1.6 At the end of each Business Day, LIFE COMPANY shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day. Using these unit values, LIFE COMPANY 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 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 FUND by LIFE COMPANY by 8:30 a.m. New York Time on the
Business Day next following LIFE COMPANY's receipt of such requests and premiums
in accordance with the terms of Sections 1.2 and 1.3 hereof.
1.7 If LIFE COMPANY's order requests the purchase of FUND shares, LIFE
COMPANY shall pay for such purchase by wiring federal funds to FUND or its
designated custodial account on the day the order is transmitted by LIFE
COMPANY. If LIFE COMPANY's order requests a net redemption resulting in a
payment of redemption proceeds to LIFE COMPANY, FUND shall use its best efforts
to wire the redemption proceeds to LIFE COMPANY by the next Business Day. In any
event, proceeds shall be wired to LIFE COMPANY within three Business Days or
such longer period permitted by the '40 Act or the rules, orders or regulations
thereunder and FUND shall notify the person designated in writing by LIFE
COMPANY as the recipient for such notice of such delay by 3:00 p.m. New York
Time the same Business Day that LIFE COMPANY transmits the redemption order to
FUND.
1.8 FUND agrees that all shares of the Portfolios of FUND will be sold
only to Participating Insurance Companies which have agreed to participate in
FUND to fund their Separate Accounts and/or to Qualified Plans, all in
accordance with the requirements of Section 817(h) of the Internal Revenue Code
of 1986, as amended ("Code") and Treasury Regulation 1.817-5. Shares of the
Portfolios of FUND will not be sold directly to the general public.
1.9 FUND may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of the shares of or liquidate any Portfolio of
FUND if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Board of Directors of the FUND
(the "Board"), 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 Portfolios.
1.10 Issuance and transfer of Portfolio shares will be by book entry
only. Stock certificates will not be issued to LIFE COMPANY or the Separate
Accounts. Shares ordered from Portfolio will be recorded in appropriate book
entry titles for the Separate Accounts.
Article II. REPRESENTATIONS AND WARRANTIES
2.1 LIFE COMPANY represents and warrants that it is an insurance
company duly organized and in good standing under the laws of the State of New
York and that it has or will legally and validly established each Separate
Account as a segregated asset account under such laws, and that AAG Securities,
Inc., the principal underwriter for the Variable Contracts, is registered as a
broker-dealer under the Securities Exchange Act of 1934 (the "'34 Act").
2.2 LIFE COMPANY represents and warrants that it has registered or,
prior to any issuance or sale of the Variable Contracts, will register each
Separate Account as a unit investment trust ("UIT") in accordance with the
provisions of the `40 Act and cause each Separate Account to remain so
registered to serve as a segregated asset account for the Variable Contracts,
unless an exemption from registration is available.
2.3 LIFE COMPANY represents and warrants that the Variable Contracts
will be registered under the Securities Act of 1933 (the "33 Act") unless an
exemption from registration is available prior to any issuance or sale of the
Variable Contracts and that the Variable Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and further that the sale of the Variable Contracts shall comply in all material
respects with applicable state insurance law suitability requirements.
2.4 LIFE COMPANY represents and warrants that the Variable Contracts
are currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify FUND immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.
2.5 FUND represents and warrants that the Fund shares offered and sold
pursuant to this Agreement will be registered under the '33 Act and sold in
accordance with all applicable federal and state laws, and FUND shall be
registered under the `40 Act prior to and at the time of any issuance or sale of
such shares. FUND, subject to Section 1.9 above, shall amend its registration
statement under the `33 Act and the x00 Xxx from time to time as required in
order to effect the continuous offering of its shares. FUND shall register and
qualify its shares for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by FUND.
2.6 FUND represents and warrants that each Portfolio will comply with
the diversification requirements set forth in Section 817(h) of the Code, and
the rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify LIFE COMPANY immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance.
2.7 FUND represents and warrants that each Portfolio invested in by the
Separate Account intends to elect to be treated as a "regulated investment
company" under Subchapter M of the Code, and to qualify for such treatment for
each taxable year and will notify LIFE COMPANY immediately upon having a
reasonable basis for believing it has ceased to so qualify or might not so
qualify in the future.
2.8. ADVISER represents and warrants that it is and will remain duly
registered and licensed in all material respects under all applicable federal
and state securities laws and shall perform its obligations hereunder in
compliance in all material respects with any applicable state and federal laws.
Article III. PROSPECTUS AND PROXY STATEMENTS
3.1 FUND shall prepare and be responsible for filing with the SEC and
any state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of FUND. FUND
shall bear the costs of registration and qualification of shares of the
Portfolios, preparation and filing of the documents listed in this Section 3.1
and all taxes and filing fees to which an issuer is subject on the issuance and
transfer of its shares.
3.2 At least annually, FUND or its designee shall provide LIFE COMPANY,
free of charge, with as many copies of the current prospectus for the shares of
the Portfolios as LIFE COMPANY may reasonably request for distribution to
existing Variable Contract owners whose Variable Contracts are funded by such
shares. FUND or its designee shall provide LIFE COMPANY, at LIFE COMPANY's
expense, with as many copies of the current prospectus for the shares as LIFE
COMPANY may reasonably request for distribution to prospective purchasers of
Variable Contracts. If requested by LIFE COMPANY in lieu thereof, FUND or its
designee shall provide such documentation (including a "camera ready" copy of
the new prospectus as set in type or, at the request of LIFE COMPANY, as a
diskette in the form sent to the financial printer) and other assistance as is
reasonably necessary in order for the parties hereto once a year (or more
frequently if the prospectus for the shares is supplemented or amended) to have
the prospectus for the Variable Contracts and the prospectus for the FUND shares
printed together in one document. The expenses of such printing will be
apportioned between (a) LIFE COMPANY and (b) FUND in proportion to the number of
pages of the Variable Contract and FUND's prospectus, taking account of other
relevant factors affecting the expense of printing, such as covers, columns,
graphs and charts; FUND to bear the cost of printing the FUND's prospectus
portion of such document for distribution only to owners of existing Variable
Contracts funded by the FUND's shares and LIFE COMPANY to bear the expense of
printing the portion of such documents relating to the Separate Account;
provided, however, LIFE COMPANY shall bear all printing expenses of such
combined documents where used for distribution to prospective purchasers or to
owners of existing Variable Contracts not funded by the FUND's shares. In the
event that LIFE COMPANY requests that FUND or its designee provide FUND's
prospectus in a "camera ready" or diskette format, FUND shall be responsible for
providing the prospectus in the format in which it is accustomed to formatting
prospectuses and shall bear the expense of providing the prospectus in such
format (e.g. typesetting expenses), and LIFE COMPANY shall bear the expense of
adjusting or changing the format to conform with any of its prospectuses.
3.3 FUND will provide LIFE COMPANY with at least one complete copy of
all exemptive applications and all amendments or supplements to any of the above
that relate to the Portfolios promptly after the filing of each such document
with the SEC or other regulatory authority. FUND, at its expense, will provide
LIFE COMPANY with as many copies of its proxy statement, annual and semi-annual
reports to shareholders as LIFE COMPANY may reasonably require for distribution
to existing Variable Contract owners. LIFE COMPANY will provide FUND with at
least one complete copy of all prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements, exemptive
applications and all amendments or supplements to any of the above that relate
to a Separate Account promptly after the filing of each such document with the
SEC or other regulatory authority.
Article IV. SALES MATERIALS
4.1 LIFE COMPANY will furnish, or will cause to be furnished, to FUND
and ADVISER, each piece of sales literature or other promotional material in
which FUND or ADVISER is named, at least fifteen (15) Business Days prior to its
intended use. No such material will be used if FUND or ADVISER reasonably
objects to its use in writing within ten (10) Business Days after receipt of
such material.
4.2 FUND and ADVISER will furnish, or will cause to be furnished, to
LIFE COMPANY, each piece of sales literature or other promotional material in
which LIFE COMPANY or its Separate Accounts are named, at least fifteen (15)
Business Days prior to its intended use. No such material will be used if LIFE
COMPANY reasonably objects to its use in writing within ten (10) Business Days
after receipt of such material.
4.3 FUND and its affiliates and agents shall not give any information
or make any representations on behalf of LIFE COMPANY or concerning LIFE
COMPANY, the Separate Accounts, or the Variable Contracts issued by LIFE
COMPANY, other than the information or representations contained in a
registration statement or prospectus for such Variable Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in reports of the Separate Accounts or reports prepared for
distribution to owners of such Variable Contracts, or in sales literature or
other promotional material approved by LIFE COMPANY or its designee, except with
the written permission of LIFE COMPANY.
4.4 LIFE COMPANY and its affiliates and agents shall not give any
information or make any representations on behalf of FUND or concerning FUND
other than the information or representations contained in a registration
statement or prospectus for FUND, as such registration statement and prospectus
may be amended or supplemented from time to time, or in sales literature or
other promotional material approved by FUND or its designee, except with the
written permission of FUND.
4.5 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, 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 `40 Act or the '33 Act.
Article V. POTENTIAL CONFLICTS
5.1 The parties acknowledge that FUND will be filing an application
with the SEC to request an order granting relief from various provisions of the
'40 Act and the rules thereunder to the extent necessary to permit FUND shares
to be sold to and held by Variable Contract separate accounts of both affiliated
and unaffiliated Participating Insurance Companies and Qualified Plans. It is
anticipated that the Exemptive Order, when and if issued, shall require FUND and
each Participating Insurance Company to comply with conditions and undertakings
substantially as provided in this Section 5. If the Exemptive Order imposes
conditions materially different from those provided for in this Section 5, the
conditions and undertakings imposed by the Exemptive Order shall govern this
Agreement and the parties hereto agree to amend this Agreement consistent with
the Exemptive Order. The Fund will not enter into a participation agreement with
any other Participating Insurance Company unless it imposes the same conditions
and undertakings as are imposed on LIFE COMPANY hereby.
5.2 The Board will monitor FUND for the existence of any material
irreconcilable conflict between the interests of Variable Contract owners of all
separate accounts investing in FUND. An irreconcilable material conflict may
arise for a variety of reasons, which may include: (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 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 FUND are being managed;
(e) a difference in voting instructions given by Variable Contract owners; (f) a
decision by a Participating Insurance Company to disregard the voting
instructions of Variable Contract owners and (g) if applicable, a decision by a
Qualified Plan to disregard the voting instructions of plan participants.
5.3 LIFE COMPANY will report any potential or existing conflicts to the
Board. LIFE COMPANY will be responsible for assisting the Board in carrying out
its duties in this regard by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. The responsibility
includes, but is not limited to, an obligation by the LIFE COMPANY to inform the
Board whenever it has determined to disregard Variable Contract owner voting
instructions. These responsibilities of LIFE COMPANY will be carried out with a
view only to the interests of the Variable Contract owners.
5.4 If a majority of the Board or majority of its disinterested
Directors, determines that a material irreconcilable conflict exists affecting
LIFE COMPANY, LIFE COMPANY, at its expense and to the extent reasonably
practicable (as determined by a majority of the Board's disinterested
Directors), will take any steps necessary to remedy or eliminate the
irreconcilable material conflict, including; (a) withdrawing the assets
allocable to some or all of the Separate Accounts from FUND or any Portfolio
thereof and reinvesting those assets in a different investment medium, which may
include another Portfolio of FUND, or another investment company; (b) submitting
the question as to whether such segregation should be implemented to a vote of
all affected Variable Contract owners and as appropriate, segregating the assets
of any appropriate group (i.e variable annuity or variable life insurance
Contract owners of one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected Variable Contract owners
the option of making such a change; and (c) establishing a new registered
management investment company (or series thereof) or managed separate account.
If a material irreconcilable conflict arises because of LIFE COMPANY's decision
to disregard Variable Contract owner voting instructions, and that decision
represents a minority position or would preclude a majority vote, LIFE COMPANY
may be required, at the election of FUND, to withdraw the Separate Account's
investment in FUND, and no charge or penalty will be imposed as a result of such
withdrawal. The responsibility to take such remedial action shall be carried out
with a view only to the interests of the Variable Contract owners.
For the purposes of this Section 5.4, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict but in no event will
FUND or ADVISER (or any other investment adviser of FUND) be required to
establish a new funding medium for any Variable Contract. Further, LIFE COMPANY
shall not be required by this Section 5.4 to establish a new funding medium for
any Variable Contracts if any offer to do so has been declined by a vote of a
majority of Variable Contract owners materially and adversely affected by the
irreconcilable material conflict.
5.5 The Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to LIFE COMPANY.
5.6 No less than annually, LIFE COMPANY shall submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out its obligations. Such reports, materials, and data shall be
submitted more frequently if deemed appropriate by the Board.
Article VI. VOTING
6.1 LIFE COMPANY will provide pass-through voting privileges to all
Variable Contract owners so long as the SEC continues to interpret the `40 Act
as requiring pass-through voting privileges for Variable Contract owners.
Accordingly, LIFE COMPANY, where applicable, will vote shares of the Portfolio
held in its Separate Accounts in a manner consistent with voting instructions
timely received from its Variable Contract owners. LIFE COMPANY will be
responsible for assuring that each of its Separate Accounts that participates in
FUND calculates voting privileges in a manner consistent with other
Participating Insurance Companies. LIFE COMPANY will vote shares for which it
has not received timely voting instructions, as well as shares it owns, in the
same proportion as its votes those shares for which it has received voting
instructions.
6.2 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or if
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the `40
Act or the rules thereunder with respect to mixed and shared funding on terms
and conditions materially different from any exemptions granted in the Exemptive
Order, then FUND, and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rule 6e-2 and Rule
6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such Rules are
applicable.
Article VII. INDEMNIFICATION
7.1 Indemnification by LIFE COMPANY. LIFE COMPANY agrees to indemnify
and hold harmless FUND, ADVISER and each of their directors, principals,
officers, employees and agents and each person, if any, who controls FUND or
ADVISER within the meaning of Section 15 of the `33 Act (collectively, the
"Indemnified Parties" for purposes of this Article VII) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of LIFE COMPANY, which consent shall not be unreasonably
withheld) or litigation (including 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
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of FUND's shares or the Variable Contracts and:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
Registration Statement or prospectus for the Variable Contracts
or contained in the Variable 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 to LIFE COMPANY by or on
behalf of FUND for use in the registration statement or
prospectus for the Variable Contracts or in the Variable
Contracts or sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the
Variable Contracts or FUND shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature of FUND
not supplied by LIFE COMPANY, or persons under its control) or
wrongful conduct of LIFE COMPANY or persons under its control,
with respect to the sale or distribution of the Variable
Contracts or FUND shares; or
(c) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement,
prospectus, or sales literature of 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 statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished to FUND by or on behalf
of LIFE COMPANY; or
(d) arise as a result of any failure by LIFE COMPANY to provide
substantially the services and furnish the materials under the
terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by LIFE COMPANY in this
Agreement or arise out of or result from any other material
breach of this Agreement by LIFE COMPANY.
7.2 LIFE COMPANY shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from 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.
7.3 LIFE COMPANY 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 LIFE COMPANY 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 LIFE COMPANY of any
such claim shall not relieve LIFE COMPANY 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, LIFE COMPANY shall be entitled to participate at
its own expense in the defense of such action. LIFE COMPANY also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from LIFE COMPANY to such party of LIFE
COMPANY's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and LIFE
COMPANY 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.
7.4 Indemnification by ADVISER. ADVISER agrees to indemnify and hold
harmless LIFE COMPANY and each of its directors, officers, employees, and agents
and each person, if any, who controls LIFE COMPANY within the meaning of Section
15 of the `33 Act (collectively, the "Indemnified Parties" for the purposes of
this Article VII) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of ADVISER which
consent shall not be unreasonably withheld) 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 FUND's shares or the
Variable Contracts and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of
FUND (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 ADVISER or FUND
by or on behalf of LIFE COMPANY for use in the registration
statement or prospectus for FUND or in sales literature (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Variable Contracts or FUND shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for the
Variable Contracts not supplied by ADVISER or persons under its
control) or wrongful conduct of FUND or ADVISER or persons
under their control, with respect to the sale or distribution
of the Variable Contracts or FUND shares; or
(c) arise out of any untrue statement or alleged untrue statement
of a material fact containedin a registration statement,
prospectus, or sales literature covering the Variable
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
statements therein not misleading, if such statement or
omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to
LIFE COMPANY for inclusion therein by or on behalf of FUND; or
(d) arise as a result of (i) a failure by FUND to provide
substantially the services and furnish the materials under the
terms of this Agreement; or (ii) a failure by a Portfolio(s)
invested in by the Separate Account to comply with the
diversification requirements of Section 817(h) of the Code; or
(iii) a failure by a Portfolio(s) invested in by the Separate
Account to qualify as a "regulated investment company" under
Subchapter M of the Code; or
(e) arise as a result of any failure by FUND or ADVISER to provide
substantially the services and furnish the materials under the
terms of this Agreement; or
(f) arise out of or result from any material breach of any
representation and/or warranty made by ADVISER in this
Agreement or arise out of or result from any other material
breach of this Agreement by ADVISER.
7.5 ADVISER shall not be liable under this indemnification provision
with respect to any losses, claims, 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 and duties under this Agreement.
7.6 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 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 ADVISER of any such claim shall not
relieve 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. In case any such action is brought against the
Indemnified Parties, ADVISER shall be entitled to participate at its own expense
in the defense thereof. ADVISER also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from ADVISER to such party of 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 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.
Article VIII. TERM; TERMINATION
8.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
8.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of LIFE COMPANY or FUND at any time from the
date hereof upon 60 days' notice, unless a shorter time is
agreed to by the parties;
(b) At the option of LIFE COMPANY, if FUND shares are not
reasonably available to meet the requirements of the
Variable Contracts as determined by LIFE COMPANY. Prompt
notice of election to terminate shall be furnished by LIFE
COMPANY, said termination to be effective ten days after
receipt of notice unless FUND makes available a sufficient
number of shares to reasonably meet the requirements of the
Variable Contracts within said ten-day period;
(c) At the option of LIFE COMPANY, upon the institution of
formal proceedings against FUND by the SEC, the NASD, or any
other regulatory body, the expected or anticipated ruling,
judgment or outcome of which would, in LIFE COMPANY's
reasonable judgment, materially impair FUND's ability to
meet and perform FUND's obligations and duties hereunder.
Prompt notice of election to terminate shall be furnished by
LIFE COMPANY with said termination to be effective upon
receipt of notice;
(d) At the option of FUND, upon the institution of formal
proceedings against LIFE COMPANY by the SEC, the NASD, or
any other regulatory body, the expected or anticipated
ruling, judgment or outcome of which would, in FUND's
reasonable judgment, materially impair LIFE COMPANY's
ability to meet and perform its obligations and duties
hereunder. Prompt notice of election to terminate shall be
furnished by FUND with said termination to be effective upon
receipt of notice;
(e) In the event FUND's shares are not registered, issued or
sold in accordance with applicable state or federal law, or
such law precludes the use of such shares as the underlying
investment medium of Variable Contracts issued or to be
issued by LIFE COMPANY. Termination shall be effective upon
such occurrence without notice;
(f) At the option of FUND if the Variable Contracts cease to
qualify as annuity contracts or life insurance contracts, as
applicable, under the Code, or if FUND reasonably believes
that the Variable Contracts may fail to so qualify.
Termination shall be effective upon receipt of notice by
LIFE COMPANY;
(g) At the option of LIFE COMPANY, upon FUND's breach of any
material provision of this Agreement, which breach has not
been cured to the satisfaction of LIFE COMPANY within ten
days after written notice of such breach is delivered to
FUND;
(h) At the option of FUND, upon LIFE COMPANY's breach of any
material provision of this Agreement, which breach has not
been cured to the satisfaction of FUND within ten days after
written notice of such breach is delivered to LIFE COMPANY;
(i) At the option of FUND, if the Variable Contracts are not
registered, issued or sold in accordance with applicable
federal and/or state law. Termination shall be effective
immediately upon such occurrence without notice;
(j) In the event this Agreement is assigned without the prior
written consent of LIFE COMPANY, FUND, and ADVISER,
termination shall be effective immediately upon such
occurrence without notice.
8.3 Notwithstanding any termination of this Agreement pursuant to
Section 8.2 hereof, FUND shall, at the option of LIFE COMPANY, continue to make
available additional FUND shares, as provided below, pursuant to the terms and
conditions of this Agreement, for all Variable Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, if LIFE COMPANY so
elects, the owners of the Existing Contracts or LIFE COMPANY, whichever shall
have legal authority to do so, shall be permitted to reallocate investments in
FUND, redeem investments in FUND and/or invest in FUND upon the payment of
additional premiums under the Existing Contracts. In the event of a termination
of this Agreement pursuant to Section 8.2 hereof, LIFE COMPANY, as promptly as
is practicable under the circumstances, shall notify FUND and ADVISER whether
LIFE COMPANY elects to continue to make FUND shares available after such
termination. If FUND shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect and
thereafter either FUND or LIFE COMPANY may terminate the Agreement, as so
continued pursuant to this Section 8.3, upon sixty (60) days prior written
notice to the other party.
8.4 Except as necessary to implement Variable Contract owner initiated
transactions, or as required by state insurance laws or regulations, LIFE
COMPANY shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to LIFE COMPANY's assets held in the Separate
Accounts), and LIFE COMPANY shall not prevent Variable Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Variable Contracts until thirty (30) days after the LIFE COMPANY shall have
notified FUND of its intention to do so.
Article IX. NOTICES
Any notice hereunder shall be given by registered or certified mail
return receipt requested 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 FUND:
PBHG Insurance Series Fund, Inc.
000 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
With a copy to:
PBHG Insurance Series Fund, Inc.
000 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
Attention: Xxxx X. Zerrr, Esq.
If to the ADVISER:
PBHG Insurance Series Fund, Inc.
000 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
With a copy to:
PBHG Insurance Series Fund, Inc.
000 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
Attention: Xxxx X. Xxxx, Esq.
If to LIFE COMPANY:
Great American Life Insurance Company of New York
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article X. MISCELLANEOUS
10.1 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.
10.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
10.3 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.
10.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Pennsylvania. It shall also be subject to the provisions of the federal
securities laws and the rules and regulations thereunder and to any orders of
the SEC granting exemptive relief therefrom and the conditions of such orders.
10.5 It is understood and expressly stipulated that neither the
shareholders of shares of any Portfolio nor the Directors or officers of FUND or
any Portfolio shall be personally liable hereunder. No Portfolio shall be liable
for the liabilities of any other Portfolio. All persons dealing with FUND or a
Portfolio must look solely to the property of FUND or that Portfolio,
respectively, for enforcement of any claims against FUND or that Portfolio. It
is also understood that each of the Portfolios shall be deemed to be entering
into a separate Agreement with LIFE COMPANY so that it is as if each of the
Portfolios had signed a separate Agreement with LIFE COMPANY and that a single
document is being signed simply to facilitate the execution and administration
of the Agreement.
10.6 Each party 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.
10.7 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.
10.8 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by FUND,
ADVISER and the LIFE COMPANY.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Fund Participation Agreement as of the date and year
first above written.
PBHG INSURANCE SERIES FUND, INC.
By:_____________________________
Name:___________________________
Title:__________________________
PILGRIM XXXXXX & ASSOCIATES, LTD.
By:_____________________________
Name:___________________________
Title:__________________________
GREAT AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By:______________________________
Name: Xxxx. X. Xxxxxxxx
Title: Senior Vice President
Appendix A
PBHG Insurance Series Fund, Inc. - Portfolios
PBHG Growth II Portfolio
PBHG Large Cap Growth Portfolio
PBHG Technology & Communications Portfolio
Appendix B
Separate Accounts Selected Portfolios
GALIC of New York Separate Account I PBHG Growth II Portfolio
PBHG Large Cap Growth Portfolio
PBHG Technology & Communications
Portfolio
SERVICE AGREEMENT
THIS SERVICE AGREEMENT (hereinafter called "Agreement") dated February
17, 1999, by and between AMERICAN ANNUITY GROUP, INC and GREAT AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK (hereinafter called "GALIC OF NY").
WHEREAS, AAG and its subsidiaries (hereinafter called "AAG") has
extensive experience in the administration of annuity, traditional life, long
term care and supplemental health insurance business; and
WHEREAS, GALIC OF NY is a subsidiary of AAG, and desires that AAG
perform certain administrative, accounting and other services (hereinafter
called "Services") for GALIC OF NY in its business operations and desires
further to make use in its day-to-day operations of certain property, equipment,
and facilities (hereinafter called "Facilities") of AAG as GALIC OF NY may
request; and
WHEREAS, AAG and GALIC OF NY contemplate that such an arrangement will
achieve certain operating economies and improve Services to the benefit of AAG,
GALIC OF NY and GALIC OF NY's policyholders; and
WHEREAS, AAG and GALIC OF NY wish to assure that all charges for
Services and the use of Facilities incurred hereunder are reasonable and in
accordance with the requirements of applicable law and regulations and to the
extent practicable reflect actual costs and are arrived at in a fair and
equitable manner, and that estimated costs, whenever used, are adjusted
periodically, to bring them into alignment with actual costs; and
WHEREAS, AAG and GALIC OF NY wish to identify the Services to be
rendered to GALIC OF NY, the Facilities to be used by GALIC OF NY and to provide
a method for determining the charges to be made to GALIC OF NY.
NOW, THEREFORE, in consideration of the premises and of the promises
set forth herein, and intending to be legally bound hereby, AAG and GALIC OF NY
agree as follows:
1. PERFORMANCE OF SERVICES AND USE OF FACILITIES.
AAG agrees to the extent requested by GALIC OF NY to perform such
Services for GALIC OF NY as GALIC OF NY determines to be reasonably necessary in
the conduct of its business and operations.
AAG agrees to the extent requested by GALIC OF NY to make available its
personnel and Facilities to GALIC OF NY as GALIC OF NY may determine to be
reasonably necessary in the conduct of its business and operations, including
but not limited to the following functions: policy administration; accounting
and auditing services; actuarial; marketing; legal; administrative and other
regulatory matters; general corporate matters; contract matters; use of data
processing and computer equipment; use of business property, whether owned or
leased; and use of communications equipment. It is the intent of the parties
that AAG will provide all services which GALIC OF NY requires in connection with
its business of marketing, issuing and servicing fixed and variable annuities
traditional life products, long term care insurance and supplemental
health products, and provide all Facilities needed in connection with such
business. Notwithstanding the foregoing, this Agreement is not intended to cover
investment services or policy distribution which may be the subject of separate
agreements.
AAG agrees at all times to use its best efforts to maintain sufficient
personnel and Facilities of the kind necessary to perform the Services set forth
in this Agreement. AAG shall have the right upon thirty (30) days prior written
notice to and non-disapproval by the New York Department of Insurance to
subcontract with those subsidiaries, affiliates or unrelated third parties
(hereinafter "Subcontractors") accepted in writing by GALIC OF NY to perform any
Services and provide any personnel and Facilities which AAG is obligated to
provide to GALIC OF NY pursuant to this Agreement and in strict accordance with
the terms, conditions and limitations contained in this Agreement; provided,
however, AAG shall not be relieved of its obligations, or of any liability
hereunder to GALIC OF NY arising as a result of any failures of SUBCONTRACTORS
to perform. Until changed in accordance with the foregoing, Services shall be
provided by AAG.
(a) CAPACITY OF PERSONNEL; STATUS OF FACILITIES, Whenever AAG utilizes
its personnel to perform Services for GALIC OF NY pursuant to this Agreement,
such personnel shall at all times remain employees of AAG subject solely to its
direction and control and AAG shall alone retain full liability to such
employees for their welfare, salaries, fringe benefits, legally required
employer contributions and tax obligations.
No facility of AAG used in performing Services for or subject to use by
GALIC OF NY shall be deemed to be transferred, assigned, conveyed or leased by
performance or use pursuant to this Agreement.
(b) EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing any
Services hereunder which require the exercise of judgment by AAG, AAG shall
perform any such Services in accordance with any standards and guidelines GALIC
OF NY develops and communicates to AAG. In performing any Services hereunder,
AAG shall at all times act in a manner reasonably calculated to be in, or not
opposed to, the best interests of GALIC OF NY. AAG shall have no liability for
any action taken or omitted by it in furnishing Services and Facilities under
this Agreement, in good faith and without gross negligence or willful
misconduct.
(c) CONTROL. The performance of Services by AAG for GALIC OF NY
pursuant to this Agreement shall in no way impair the absolute control of the
business and operations of AAG or GALIC OF NY by their respective Boards of
Directors. AAG shall act hereunder so as to assure the separate operating
identity of GALIC OF NY as required pursuant to the laws of the State of New
York.
2. SERVICES.
The performance of services by AAG under this Agreement with respect to
the business and operations of GALIC OF NY shall at all times be subject to the
direction and control of the Board of Directors of GALIC OF NY.
Subject to the foregoing and to the terms and conditions of this
Agreement, AAG shall provide to GALIC OF NY, under the general supervision of
its Board of Directors the Services set forth below.
(a) POLICY ADMINISTRATION. AAG shall provide all services in connection
with policy administration and policyholder services including:
policy issuance, premium processing, loan processing, surrender and
annuity processing and policyholder services.
(b) ACCOUNTING AND AUDITING. AAG shall provide the following accounting
services: preparation and maintenance of the financial statements
and reports including annual and quarterly statements on both
statutory and GAAP basis and tax returns, and processing of the
related financial records and transactions of GALIC OF NY. AAG
shall also provide such assistance as may be required with respect
to tax and auditing services.
(c) ACTUARIAL. AAG shall provide all actuarial services needed in
connection with GALIC OF NY's business including policy design and
development and reserve valuation.
(d) MARKETING. AAG shall provide all marketing services needed in
connection with GALIC OF NY's business including market research,
development of marketing materials and campaigns and recruitment of
agents.
(e) LEGAL. AAG shall provide all legal services and compliance services
needed in connection with GALIC OF NY's business including company
licensing, product approval and other regulatory matters.
(f) ADMINISTRATIVE AND OTHER REGULATORY MATTERS. AAG shall provide all
administrative and regulatory services needed in connection with
GALIC OF NY's business.
(g) CORPORATE MATTERS. AAG shall provide services with respect to
general corporate matters involving GALIC OF NY.
(h) POLICY MATTERS. AAG shall provide all services in connection with
the development of policies and products to be marketed by GALIC OF
NY.
(i) DATA PROCESSING AND COMPUTER EQUIPMENT. AAG shall provide
telecommunications services and electronic data processing
services, Facilities and integration, including software
programming and documentation and hardware utilization.
3. CHARGES. The charge to GALIC OF NY for such Services and Facilities
provided by AAG shall be at a rate as mutually agreed upon plus a reasonable
charge for direct overhead, the amount of such charge for overhead to be agreed
upon by the parties from time to time and reported annually. The basis for
determining such charges for Services and Facilities to GALIC OF NY shall be
those used by AAG for internal cost distribution including, where appropriate,
activity based costing records. Such basis shall be modified and adjusted by
mutual agreement where necessary or appropriate to reflect fairly and equitably
the actual incidence of cost incurred by AAG and/or SUBCONTRACTORS on behalf of
GALIC OF NY.
4. PAYMENT. AAG and/or SUBCONTRACTORS shall submit to GALIC OF NY
within thirty (30) days of the end of each calendar month a written statement of
the amount estimated to be owed by GALIC OF NY for Services and the use of
personnel or Facilities pursuant to this Agreement in that calendar month and
GALIC OF NY shall pay to the party rendering the statement within thirty (30)
days following receipt of such written statement the amount set forth in the
statement. Within thirty (30) days after the end of each calendar quarter, AAG
and/or SUBCONTRACTORS will submit to GALIC OF NY a detailed written statement of
the charges due from GALIC OF NY to AAG and/or SUBCONTRACTORS in the preceding
calendar quarter, including charges not included in any previous statements, and
any balance payable as shown in such statement shall be paid within fifteen (15)
days following receipt of such written statement by GALIC OF NY.
5. ACCOUNTING RECORDS AND DOCUMENTS. AAG and/or SUBCONTRACTORS shall be
responsible for maintaining full and accurate accounting records of all Services
rendered and Facilities used pursuant to this Agreement and such additional
information as GALIC OF NY may reasonably request for purposes of its internal
bookkeeping and accounting operations. The accounting records to be maintained
by AAG shall include any records required to be maintained by GALIC OF NY under
applicable laws. AAG and/or SUBCONTRACTORS shall keep such accounting records
insofar as they pertain to the computation of charges hereunder available at its
principal offices for audit, inspection and copying by GALIC OF NY or any
governmental agency having jurisdiction over GALIC OF NY during all reasonable
business hours. With respect to accounting and statistical records prepared by
AAG by reason of its performance under this Agreement, summaries of such records
shall be delivered to GALIC OF NY within thirty (30) days from the end of the
month to which the records pertain.
6. OTHER RECORDS AND DOCUMENTS. All books, records, and files
established and maintained by AAG and/or SUBCONTRACTORS by reason of its
performance under this Agreement which, absent this Agreement, would have been
held by GALIC OF NY shall be deemed the property of GALIC OF NY, and shall be
subject to examination by GALIC OF NY and persons authorized by it at all times,
and shall be delivered to GALIC OF NY at least quarterly. With respect to
original documents other than those provided for in Section 5 hereof which would
otherwise be held by GALIC OF NY and which may be obtained by AAG in performing
under this Agreement, AAG shall deliver such documents to GALIC OF NY within
thirty (30) days of their receipt by AAG except where continued custody of such
original documents is necessary to perform hereunder.
7. LICENSING. AAG shall be responsible for obtaining any licenses or
permits needed to provide the services described herein and shall be responsible
for providing personnel who have any required license or permit.
8. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be deemed
to grant AAG an exclusive right to provide Services to GALIC OF NY, and GALIC OF
NY retains the right to contract with any third party, affiliated or
unaffiliated, for the performance of Services or for the use of Facilities as
are available to or have been requested by GALIC OF NY pursuant to this
Agreement. Similarly, AAG retains the right to contract with any third party,
affiliated or unaffiliated, to perform services or to provide facilities,
identical or similar to those being performed or provided herein.
9. TERMINATION AND MODIFICATION. This Agreement shall remain in effect
until terminated by either AAG or GALIC OF NY upon giving thirty (30) days or
more advance written notice, provided that GALIC OF NY shall have the right to
elect to continue to receive data processing Services and/or to continue to
utilize data processing Facilities and related software for up to one year from
the date of such notice. Upon termination, AAG shall promptly deliver to GALIC
OF NY all books and records that are, or are deemed by this Agreement to be, the
property of GALIC OF NY.
10. SETTLEMENT ON TERMINATION. No later than ninety (90) days after the
effective date of termination of this Agreement, AAG shall deliver to GALIC OF
NY a detailed written statement for all charges incurred and not included in any
previous statement to the effective date of termination. The amount owned
hereunder shall be due and payable within thirty (30) days of receipt of such
statement.
11. EFFECTIVE DATE. This Agreement shall become effective upon the
later of (I) the date hereof, or (ii) the receipt of any required approval of
the New York Department of Insurance or the expiration of any waiting period
provided for by the laws or regulations of the State of New York
12. ASSIGNMENT. This Agreement and any rights pursuant hereto shall not
be assignable by either party hereto, except as set forth herein or by operation
of law. Except as and to the extent specifically provided in this Agreement,
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto, or their respective legal successors, any
rights, remedies, obligations or liabilities, or to relieve any person other
than the parties hereto, or their respective legal successors, from any
obligations or liabilities that would otherwise be applicable. The covenants and
agreements contained in this Agreement shall be binding upon, extend to and
inure to the benefit of the parties hereto, their, and each of their, successors
and assigns respectively.
13. GOVERNING LAW. This Agreement is made pursuant to and shall be
governed by, interpreted under, and the rights of the parties determined in
accordance with, the laws of the State of New York.
14. ARBITRATION. Any unresolved difference of opinion between the
parties arising out of or relating to this Agreement, or the breach thereof,
except as provided in Section 3, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
and the Expedited Procedures thereof, and judgment upon the award rendered by
the Arbitrator may be entered in any Court having jurisdiction thereof. The
arbitration shall take place in Cincinnati, Ohio.
15. NOTICE. All notices, statements or requests provided for hereunder
shall be deemed to have been duly given when delivered by hand to an officer of
the other party, or when deposited with the U.S. Postal Service, as certified or
registered mail, postag e prepaid, addressed or to such other person or place as
each party may from time to time designate by written notice sent as aforesaid.
If to AAG: AMERICAN ANNUITY GROUP, INC. 000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000 Attention: General Counsel Phone Number (000) 000-0000 Fax
Number (000) 000-0000
If to GALIC OF NY:
GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: President
Phone Number (000) 000-0000
Fax Number (000) 000-0000
16. ENTIRE AGREEMENT. This Agreement, together with such Amendments as
may from time to time be executed in writing by the parties, constitutes the
entire Agreement between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereunto set their hands as of the date
first above written.
AMERICAN ANNUITY GROUP, INC.
By:____________________________
Its:___________________________
GREAT AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By:____________________________
Its:___________________________
INVESTMENT SERVICES AGREEMENT
THIS INVESTMENT SERVICES AGREEMENT ("Agreement"), dated and effective
as of February 17, 1999 between GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW
YORK, an New York life insurance company ("Company"), and AMERICAN ANNUITY
GROUP, INC., a Delaware corporation ("American").
WHEREAS, Company seeks to obtain information and advice with respect to
the investment of its assets; and
WHEREAS, American, utilizing its own employees along with services
provided by its affiliate, American Money Management ("AMM"), is willing and
able to supply such investment services pursuant to the terms and conditions set
forth below;
NOW, THEREFORE, for the consideration herein stated, the parties agree
as follows:
1.0 INVESTMENT SERVICES.
1.1 American shall furnish investment services to Company, which services
shall include the following:
1.1.1 to counsel and advise Company in connection with the formulation of
investment programs and strategies designed to accomplish Company's
investment objectives; and
1.1.2 to manage the investment of Company's portfolios of Invested Assets
(as later defined) in accordance with investment policies, objectives,
directions and guidelines established by Company, as set forth in
Section 1.3 below, and, in connection therewith, to have full
discretion and authority, without prior consultation or prior
approval, to buy, sell and otherwise trade in stocks, bonds and other
securities or assets and take such other actions which American shall
deem requisite, appropriate or advisable.
1.2 Custody and control of the securities and all other assets comprising
Company's investment portfolio shall at all times be subject to the
direction and control of Company, acting through its Board of
Directors or an appropriate committee thereof. All purchases and sales
of securities shall be in the name of Company, and all certificates or
other instruments representing its investments shall be held by
Company or in accounts at depository institutions designated by
Company or in book form where appropriate. Such securities will be
held in accounts segregated from those of American or its affiliates.
1.3 American agrees that the investment services it furnishes will be in
accordance with the general, investment policies, objectives and
guidelines (collectively, "Guidelines") submitted by American to
Company and approved by the Board of Directors of Company or an
appropriate committee of the Board of Directors of Company.
1.4 The Company shall at all times keep American fully informed as to the
funds available, or to become available, for investment, and generally
as to its financial condition. The Company shall furnish American with
copies of financial statements and with other information with regard
to its affairs, as American may from time to time request.
1.5 Notwithstanding Section 1.1 above, American shall not (i) invest any
of the Invested Assets in securities of American or any of its
affiliates or any entity controlled by any of them, (ii) cause Company
to purchase any securities from, or sell any securities to, American
or any of its affiliates or any entity controlled by any of them or
(iii) invest any of such Invested Assets in any investment opportunity
which was previously made available to and declined by American, in
each case without first obtaining the approval of the Board of
Directors of the Company or a appropriate Committee thereof.
1.6 For purposes of this Agreement, "Invested Assets" shall mean bonds,
stocks (common and preferred), short term investments and similar invested
assets carried on the Company's statutory convention statements on Schedules BA,
DA and D as admitted assets as permitted by applicable law.
2.0 PURCHASE AND SALE OF SECURITIES.
American shall place all orders for the purchase and sale of portfolio
securities for Company accounts with brokers or dealers selected by American and
shall seek to execute portfolio transactions on terms which are advantageous to
Company in selecting brokers or dealers to execute transactions. American shall
not be obligated to solicit competitive bids or seek the lowest available
commission cost.
3.0 OTHER SERVICES; REPORTS AND RECORDS.
3.1 American shall maintain adequate records relating to the furnishing of
investment services under this Agreement, including those with respect
to the acquisition and disposition of securities, and shall provide
Company with all reports and documentation necessary for proper
accounting and regulatory reporting. American shall provide to Company
such oral or written reports as to its services provided under this
Agreement as Company shall reasonably require.
3.2 All records maintained pursuant to this Agreement shall be deemed the
property of Company and shall be subject to examination by Company and
by persons authorized by it, or by governmental authorities, at all
times upon reasonable notice. Except as expressly authorized in this
Agreement or directed by Company in writing, American shall keep
confidential such records and other information obtained by reason of
this Agreement. Upon termination of this Agreement, American shall
promptly return all such records to Company.
4.0 INVESTMENT FEES; EXPENSES.
4.1 In full compensation and consideration for the performance of its
obligations hereunder, Company shall pay to American an annual fee
equal to .15% of the statutory carrying value of Invested Assets. The
fee paid by the Company shall not in any case exceed the actual cost
of the services provided by American. In addition, American shall be
entitled to reimbursement for the reasonable fees and expenses of its
outside legal counsel for necessary legal services rendered to
American in connection with the performance of its obligations
hereunder. All such fees and expenses shall be paid by Company.
Payments due hereunder shall be computed by American and paid by
Company on a quarterly basis measured as of the end of the preceding
calendar quarter based on the statutory carrying value of Invested
Assets at such date. The quarterly portion of the fee shall be billed
within 30 days after the end of each calendar quarter or portion
thereof in which services are rendered under this Agreement and paid
within 10 days after receipt of the xxxx.
4.2 American shall furnish at its own expense necessary executive and
other personnel for providing investment services to Company
hereunder, including personnel to perform clerical, bookkeeping,
accounting and other office functions. Company shall be responsible
for the expenses of (a) brokerage commissions, issue and transfer
taxes and other costs in connection with securities transactions to
which Company is a party, including any portion of such commissions
attributable to research and brokerage services, (b) taxes payable by
Company to federal, state and other governmental agencies, and (c)
custodial fees and expenses.
5.0 NON-EXCLUSIVITY OF SERVICES.
The services of American to be provided hereunder are not to be deemed
exclusive and American shall be free to provide similar services for its own
account and the accounts of other affiliates, provided that such services do not
materially interfere with services to be rendered hereunder.
6.0 SUBCONTRACTING.
Company acknowledges that American intends to subcontract with American
Money Management Corporation to provide a portion of the services to be rendered
hereunder. The arrangement with American Money Management Corporation to provide
those services shall not relieve American of any liability or responsibility
hereunder and any cost or expense of obtaining such services shall be the sole
responsibility of American.
7.0 LIABILITY; INDEMNIFICATION.
7.1 Neither American nor any of its directors, officers or employees or
other persons affiliated with American shall have any liability
hereunder for any act, omission, misstatement or error in judgment in
the course of, or in connection with, providing investment advisory
services under this Agreement, or for any losses that may be sustained
from such investment advisory services. Company shall indemnify and
hold harmless American and its directors, officers, employees and
other affiliated persons from and against any and all liability,
claims and damages arising from or in connection with providing
services hereunder; provided, however, that the foregoing shall not
relieve American from liability for negligence, gross negligence or
willful misfeasance in providing services under this Agreement.
7.2 As to all other services provided by American hereunder, neither
American nor any of its directors, officers or employees or other
persons affiliated with American shall have any liability hereunder
for any act, omission, misstatement or error in judgment in the course
of, or in connection with, providing such other services, or for any
losses that may be sustained from such other services, and Company
shall indemnify and hold harmless American and its directors,
officers, employees and other affiliated persons from and against any
and all liability, claims and damages arising from or in connection
with providing such other services hereunder; provided, however, that
the foregoing shall not relieve American from liability for
negligence, gross negligence or willful misfeasance in providing such
other services.
8.0 TERMINATION; RENEGOTIATION.
8.1 This Agreement shall remain in effect until terminated by any party
thereto at any time upon ninety (90) days written notice to the other
party's normal business address. Upon termination of this Agreement,
Company shall pay pro rata any investment fees due for any portion of
a calendar quarter within ten (10) days following the date of
termination.
8.2 This Agreement shall be subject to renegotiations upon the request of
either party at the end of each three (3) year period during which
this Agreement continues in effect. The party requesting renegotiation
shall provide written notice thereof to the other party's normal
business address during the thirty (30) day period preceding the end
of any three (3) year period. If such renegotiations result in an
Agreement which is unsatisfactory to Company, it shall be entitled to
terminate this Agreement in accordance with the terms hereof.
9.0 NOTICES.
Notices or other writings given or sent under or pursuant to this
Agreement shall be in writing and be deemed to have been given or sent
if delivered to the party at its address listed below in person or by
telex or telecopy or within two (2) days of mailing if mailed postage
prepaid to such address. The addresses of the parties are:
GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: General Counsel
with a copy to:
American Annuity Group, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: General Counsel
Each party may change its address by giving notice as herein required.
10.0 SOLE INSTRUMENT.
This instrument constitutes the sole and only agreement of the parties
hereto relating to the subject matter hereof and correctly sets forth the
rights, duties, and obligations of each party to the other as of its date.
11.0 WAIVER OR MODIFICATION.
No waiver or modification of this Agreement shall be effective unless
reduced to a written document signed by the party to be charged.
12.0 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
13.0 ASSIGNMENT.
No party to this Agreement shall have the right to sell, transfer,
delegate, or assign this Agreement or any of its rights or duties hereunder to
any person, firm or corporation at any time during the term hereof, and any
proposed assignee shall acquire no rights nor be able to assume any obligations
unless the written consent of the other party to this Agreement is given before
such assignment or delegation takes place. However, subject to this paragraph,
this Agreement binds and inures to the benefit of the parties, their successors
and assigns.
14.0 COMPLIANCE WITH APPLICABLE LAW.
This Agreement shall be performed in accordance with the requirements
of the Securities Act of 1933, Securities Exchange Act of 1934, Investment
Company Act of 1940, Investment Advisors Act of 1940 and the applicable rules
and regulations of the Securities and Exchange Commission promulgated
thereunder, to the extent that any of the foregoing are applicable to the
subject matter of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above, effective for all purposes as of such date for
services rendered subsequent to such date.
GREAT AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
BY: /s/_________________________
Title: ______________________
AMERICAN ANNUITY GROUP, INC.
BY: /s/_________________________
Title: Senior Vice President
SERVICE AGREEMENT
THIS SERVICE AGREEMENT (hereinafter called "Agreement") dated December
1, 1995, by and between AMERICAN ANNUITY GROUP, INC.(hereinafter called "AAG")
and GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW YORK (hereinafter called "GALIC
OF NY").
WHEREAS, AAG has extensive experience in the administration of annuity
business; and
WHEREAS, GALIC OF NY is a subsidiary of AAG, and desires that AAG
perform certain administrative, accounting and other services (hereinafter
called "Services") for GALIC OF NY in its business operations and desires
further to make use in its day-to-day operations of certain property, equipment,
and facilities (hereinafter called "Facilities") of AAG and its subsidiaries as
GALIC OF NY may request; and
WHEREAS, AAG and GALIC OF NY contemplate that such an arrangement will
achieve certain operating economies and improve Services to the benefit of AAG,
GALIC OF NY and GALIC OF NY's policyholders; and
WHEREAS, AAG and GALIC OF NY wish to assure that all charges for
Services and the use of Facilities incurred hereunder are reasonable and in
accordance with the requirements of applicable law and regulations and to the
extent practicable reflect actual costs and are arrived at in a fair and
equitable manner, and that estimated costs, whenever used, are adjusted
periodically, to bring them into alignment with actual costs; and
WHEREAS, AAG and GALIC OF NY wish to identify the Services to be
rendered to GALIC OF NY and AAG and its subsidiaries and the Facilities to be
used by GALIC OF NY and to provide a method for determining the charges to be
made to GALIC OF NY.
NOW, THEREFORE, in consideration of the premises and of the promises set
forth herein, and intending to be legally bound hereby, AAG and GALIC OF NY
agree as follows:
1. PERFORMANCE OF SERVICES AND USE OF FACILITIES. AAG agrees to the
extent requested by GALIC OF NY to perform such Services for GALIC OF NY as
GALIC OF NY determines to be reasonably necessary in the conduct of its business
and operations.
AAG agrees to the extent requested by GALIC OF NY to make available its
personnel and Facilities to GALIC OF NY as GALIC OF NY may determine to be
reasonably necessary in the conduct of its business and operations, including
but not limited to the following functions: policy administration; accounting
and auditing services; actuarial; marketing; legal; administrative and other
regulatory matters; general corporate matters; contract matters; use of data
processing and computer equipment; use of business property, whether owned or
leased; and use of communications equipment. It is the intent of the parties
that AAG will perform all services which GALIC OF NY requires in connection with
its business of marketing, issuing and servicing fixed and variable annuities
and provide all Facilities needed in connection with such business.
Notwithstanding the foregoing, this Agreement is not intended to cover
investment services or policy distribution which may be the subject of separate
agreements.
AAG agrees at all times to use its best efforts to maintain sufficient
personnel and Facilities of the kind necessary to perform the Services sent
forth in this Agreement. AAG shall have the right upon thirty (30) days prior
written notice to and non-disapproval by the Ohio Department of Insurance to
subcontract with those subsidiaries, affiliates or unrelated third parties
(hereinafter "Subcontractors") accepted in writing by GALIC OF NY to perform any
Services and provide any personnel and Facilities which AAG is obligated to
provide to GALIC OF NY pursuant to this Agreement and in strict accordance with
the terms, conditions and limitations contained in this Agreement; provided,
however, AAG shall not be relieved of its obligations, or of any liability
hereunder to GALIC OF NY arising as a result of any failures of SUBCONTRACTORS
to perform. Until changed in accordance with the foregoing, Services shall be
provided by AAG.
(a) CAPACITY OF PERSONNEL; STATUS OF FACILITIES, Whenever AAG utilizes
its personnel to perform Services for GALIC OF NY pursuant to this Agreement,
such personnel shall at all times remain employees of AAG subject solely to its
direction and control and AAG shall alone retain full liability to such
employees for their welfare, salaries, fringe benefits, legally required
employer contributions and tax obligations.
No facility of AAG used in performing Services for or subject to use by
GALIC OF NY shall be deemed to be transferred, assigned, conveyed or leased by
performance or use pursuant to this Agreement.
(b) EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing any
Services hereunder which require the exercise of judgment by AAG, AAG shall
perform any such Services in accordance with any standards and guidelines GALIC
OF NY develops and communicates to AAG. In performing any Services hereunder,
AAG shall at all times act in a manner reasonably calculated to be in, or not
opposed to, the best interests of GALIC OF NY. AAG shall have no liability for
any action taken or omitted by it in furnishing Services and Facilities under
this Agreement, in good faith and without gross negligence or willful
misconduct.
(c) CONTROL. The performance of Services by AAG for GALIC OF NY pursuant
to this Agreement shall in no way impair the absolute control of the business
and operations of AAG or GALIC OF NY by their respective Boards of Directors.
AAG shall act hereunder so as to assure the separate operating identity of GALIC
OF NY as required pursuant to the laws of the State of Ohio.
2. SERVICES. The performance of services by AAG under this Agreement
with respect to the business and operations of GALIC OF NY shall at all times be
subject to the direction and control of the Board of Directors of GALIC OF NY.
Subject to the foregoing and to the terms and conditions of this Agreement, AAG
shall provide to GALIC OF NY the Services set forth below.
(a) POLICY ADMINISTRATION. Under the general supervision of the Board of
Directors of GALIC OF NY, AAG shall provide all services in connection with
policy administration and policyholder services including: policy issuance,
premium processing, loan processing, surrender and annuity processing and
policyholder services.
(b) ACCOUNTING AND AUDITING. Under the general supervision of the Board
of Directors of GALIC OF NY, AAG shall provide the following accounting
services: preparation and maintenance of the financial statements and reports
including annual and quarterly statements on both statutory and GAAP bases and
tax returns, and processing of the related financial records and transactions of
GALIC OF NY. AAG shall also provide such assistance as may be required with
respect to tax and auditing services.
(c) ACTUARIAL. Under the general supervision of the Board of Directors
of GALIC OF NY, AAG shall provide all actuarial services needed in connection
with GALIC OF NY's business including policy design and development and reserve
valuation.
(d) MARKETING. Under the general supervision of the Board of Directors
of GALIC OF NY, AAG shall provide all marketing services needed in connection
with GALIC OF NY's business including market research, development of marketing
materials and campaigns and recruitment of agents.
(e) LEGAL. Under the general supervision of the Board of Directors of
GALIC OF NY, AAG shall provide all legal services and compliance services needed
in connection with GALIC OF NY's business including company licensing, product
approval and other regulatory matters.
(f) ADMINISTRATIVE AND OTHER REGULATORY MATTERS. Under the general
supervision of the Board of Directors of GALIC OF NY, AAG shall provide all
administrative and regulatory services needed in connection with GALIC OF NY's
business.
(g) CORPORATE MATTERS. Under the general supervision of the Board of
Directors of GALIC OF NY, AAG shall provide services with respect to general
corporate matters involving GALIC OF NY.
(h) POLICY MATTERS. Under the general supervision of the Board of
Directors of GALIC OF NY, AAG shall provide all services in connection with the
development of policies and products to be marketed by GALIC OF NY.
(i) DATA PROCESSING AND COMPUTER EQUIPMENT. Under the general
supervision of the Board of Directors of GALIC OF NY, AAG shall provide
telecommunications services and electronic data processing services, Facilities
and integration, including software programming and documentation and hardware
utilization.
3. CHARGES. GALIC OF NY shall not be charged by AAG for the Services and
Facilities provided by AAG until such time as GALIC OF NY becomes an operating
entity issuing annuity contracts. All expenses incurred prior to such time in
the development of the annuity contracts shall be borne by AAG under the general
supervision of the Board of Directors of GALIC OF NY.
After such time, the charge to GALIC OF NY for such Services and
Facilities shall be at a rate as mutually agreed upon plus a reasonable charge
for direct overhead, the amount of such charge for overhead to be agreed upon by
the parties from time to time and reported annually.
The bases for determining such charges for Services and Facilities to
GALIC OF NY shall be those used by AAG for internal cost distribution including,
where appropriate, Activity Based Costing records. Such bases shall be modified
and adjusted by mutual agreement where necessary or appropriate to reflect
fairly and equitably the actual incidence of cost incurred by AAG and/or
SUBCONTRACTORS on behalf of GALIC OF NY.
4. PAYMENT. AAG and/or SUBCONTRACTORS shall submit to GALIC OF NY within
thirty (30) days of the end of each calendar month a written statement of the
amount estimated to be owed by GALIC OF NY for Services and the use of personnel
or Facilities pursuant to this Agreement in that calendar month and GALIC OF NY
shall pay to the party rendering the statement within thirty (30) days following
receipt of such written statement the amount set forth in the statement.
Within thirty (30) days after the end of each calendar quarter, AAG
and/or SUBCONTRACTORS will submit to GALIC OF NY a detailed written statement of
the charges due from GALIC OF NY to AAG and/or SUBCONTRACTORS in the preceding
calendar quarter, including charges not included in any previous statements, and
any balance payable as shown in such statement shall be paid within fifteen (15)
days following receipt of such written statement by GALIC OF NY.
5. ACCOUNTING RECORDS AND DOCUMENTS. AAG and/or SUBCONTRACTORS shall be
responsible for maintaining full and accurate accounting records of all Services
rendered and Facilities used pursuant to this Agreement and such additional
information as GALIC OF NY may reasonably request for purposes of its internal
bookkeeping and accounting operations. The accounting records to be maintained
by AAG shall include any records required to be maintained by GALIC OF NY under
applicable laws. AAG and/or SUBCONTRACTORS shall keep such accounting records
insofar as they pertain to the computation of charges hereunder available at its
principal offices for audit, inspection and copying by GALIC OF NY or any
governmental agency having jurisdiction over GALIC OF NY during all reasonable
business hours. With respect to accounting and statistical records prepared by
AAG by reason of its performance under this Agreement, summaries of such records
shall be delivered to GALIC OF NY within thirty (30) days from the end of the
month to which the records pertain.
6. OTHER RECORDS AND DOCUMENTS. All books, records, and files
established and maintained by AAG and/or SUBCONTRACTORS by reason of its
performance under this Agreement which, absent this Agreement, would have been
held by GALIC OF NY shall be deemed the property of GALIC OF NY, and shall be
subject to examination by GALIC OF NY and persons authorized by it at all times,
and shall be delivered to GALIC OF NY at least quarterly. With respect to
original documents other than those provided for in Section 5 hereof which would
otherwise be held by GALIC OF NY and which may be obtained by AAG in performing
under this Agreement, AAG shall deliver such documents to GALIC OF NY within
thirty (30) days of their receipt by AAG except where continued custody of such
original documents is necessary to perform hereunder
7. LICENSING. AAG shall be responsible for obtaining any licenses or
permits needed to provide the services described herein and shall be responsible
for providing personnel who have any required license or permit.
8. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be deemed
to grant AAG an exclusive right to provide Services to GALIC OF NY, and GALIC OF
NY retains the right to contract with any third party, affiliated or
unaffiliated, for the performance of Services or for the use of Facilities as
are available to or have been requested by GALIC OF NY pursuant to this
Agreement. Similarly, AAG retains the right to contract with any third party,
affiliated or unaffiliated, to perform services or to provide facilities,
identical or similar to those being performed or provided herein.
9. TERMINATION AND MODIFICATION. This Agreement shall remain in effect
until terminated by either AAG or GALIC OF NY upon giving thirty (30) days or
more advance written notice, provided that GALIC OF NY shall have the right to
elect to continue to receive data processing Services and/or to continue to
utilize data processing Facilities and related software for up to one year from
the date of such notice. Upon termination, AAG shall promptly deliver to GALIC
OF NY all books and records that are, or are deemed by this Agreement to be, the
property of GALIC OF NY.
10. SETTLEMENT ON TERMINATION. No later than ninety (90) days after the
effective date of termination of this Agreement, AAG shall deliver to GALIC OF
NY a detailed written statement for all charges incurred and not included in any
previous statement to the effective date of termination. The amount owned
hereunder shall be due and payable within thirty(30) days of receipt of such
statement.
11. EFFECTIVE DATE. This Agreement shall become effective upon the later
of (i) the date hereof, or (ii) the receipt of any required approval of the Ohio
Department of Insurance or the expiration of any waiting period provided for by
the laws or regulations of the State of Ohio.
12. ASSIGNMENT. This Agreement and any rights pursuant hereto shall not
be assignable by either party hereto, except as set forth herein or by operation
of law. Except as and to the extent specifically provided in this Agreement,
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto, or their respective legal successors, any
rights, remedies, obligations or liabilities, or to relieve any person other
than the parties hereto, or their respective legal successors, from any
obligations or liabilities that would otherwise be applicable. The covenants and
agreements contained in this Agreement shall be binding upon, extend to and
inure to the benefit of the parties hereto, their, and each of their, successors
and assigns respectively.
13. GOVERNING LAW. This Agreement is made pursuant to and shall be
governed by, interpreted under, and the rights of the parties determined in
accordance with, the laws of the State of Ohio.
14. ARBITRATION. Any unresolved difference of opinion between the
parties arising out of or relating to this Agreement, or the breach thereof,
except as provided in Section 3, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
and the Expedited Procedures thereof, and judgment upon the award rendered by
the Arbitrator may be entered in any Court having jurisdiction thereof. The
arbitration shall take place in Cincinnati, Ohio.
15. NOTICE. All notices, statements or requests provided for hereunder
shall be deemed to have been duly given when delivered by hand to an officer of
the other party, or when deposited with the U.S. Postal Service, as certified or
registered mail, postage prepaid, addressed or to such other person or place as
each party may from time to time designate by written notice sent as aforesaid.
If to AAG:
AMERICAN ANNUITY GROUP, INC.
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Phone Number (000) 000-0000
Fax Number (000) 000-0000
If to GALIC OF NY:
GREAT AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Phone Number (000) 000-0000
Fax Number (000) 000-0000
16. ENTIRE AGREEMENT. This Agreement, together with such Amendments as
may from time to time be executed in writing by the parties, constitutes the
entire Agreement between the parties with respect to the subject matter hereof.
In witness whereof, the parties hereunto set their hands as of the date
first above written.
American Annuity Group, Inc.
By:____________________________
Its:___________________________
Great American Life Insurance
Company of New York
By:____________________________
Its:___________________________
Xx. Xxxx X. Xxxxxxxx
May 19, 1999
May 19, 1999
Xx. Xxxx X. Xxxxxxxx
Senior Vice President
Annuity Investors Life Insurance Company
00xx Xxxxx, Xxxxxxxx Xxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Dear Xx. Xxxxxxxx:
This letter sets forth the agreement between Great American Life
Insurance Company of New York (the "Company"), and Janus Capital Corporation
(the "Adviser"), concerning certain administrative services.
1. Administrative Services and Expenses. Administrative services for the
separate accounts of the Company (the "Accounts") which invest in one
or more portfolios (collectively, the "Portfolios") of Janus Aspen
Series (the "Trust") pursuant to the Participation Agreement between
the Company and the Trust dated ______________ (the "Participation
Agreement"), and for purchasers of variable annuity or life insurance
contracts (the "Contracts") issued through the Accounts are the
responsibility of the Company. Administrative services for the
Portfolios, in which the Accounts invest, and for purchasers of shares
of the Portfolios, are the responsibility of the Trust. These
administrative services the Company intends to provide to the Trust and
its Portfolios are set forth in Schedule A attached to this letter
agreement, which may be amended from time to time.
2. Service Fee. In consideration of the anticipated administrative expense
savings resulting to the Trust from the Company's services, the Adviser
agrees to pay the Company a fee ("Service Fee"), computed daily and
paid monthly in arrears, at an annual rate equal to fifteen (15) basis
points (0.15%) of the average monthly value of the shares of the
Portfolios held in the Accounts, such payments to commence following
the month in which the average monthly value of investments by the
Accounts (together with the average monthly value of investments by the
separate accounts of Annuity Investors Life Insurance Company) reach
$50 million. The Service Fee will be correspondingly suspended if the
average monthly value of such investments drops below $50 million in
any month. For purposes of this Paragraph 2, the average monthly value
of the shares of the Portfolios will be based on the sum of the daily
net asset values calculated by the Portfolios in a month divided by the
number of days in the month.
3. Nature of Payments. The parties to this letter agreement recognize and
agree that the Adviser's payments to the Company relate to
administrative services only and do not constitute payment in any
manner for administrative services provided by the Company to the
Account or to the Contracts, for investment advisory services or for
costs of distribution of Contracts or of shares of the Portfolios, and
that these payments are not otherwise related to investment advisory or
distribution services or expenses.
4. Representations and Warranties.
a. The Adviser represents and warrants that in the event the
Trustees of the Trust approve the payment of all or any
portion of the Service Fee by the Trust, the Trust will
calculate in the same manner the Service Fee to all insurance
companies that have entered into Service Fee arrangements with
the Adviser and/or the Trust (the "Participating Insurance
Companies").
b. The Company represents and warrants that: (1) it and its
employees and agents meet the requirements of applicable law,
including but not limited to federal and state securities law
and state insurance law, for the performance of services
contemplated herein; and (2) it will not purchase Trust shares
of the Portfolios with Account assets derived from
tax-qualified retirement plans except indirectly, through
Contracts purchased in connection with such plans and that the
Service Fee does not include any payment to the Company that
is prohibited under the Employee Retirement Income Securities
Act of 1974 ("ERISA") with respect to any assets of a Contract
owner invested in a Contract using the Portfolios as
investment vehicles.
c. The Company represents, warrants and agrees that: (1) the
payment of the Service Fee by the Adviser is designed to
reimburse the Company for providing administrative services to
the Trust that the Trust would customarily pay and does not
represent reimbursement to the Company for providing
administrative services to the Contract or Account as
described in Section 26 of the Investment Company Act of 1940
(the "1940 Act") and the rules and regulations thereunder; (2)
no portion of the Service Fee will be rebated by the Company
to any Contract owner; and (3) if required by applicable law,
the Company will disclose to each Contract owner the existence
of the Service Fee received by the Company pursuant to this
letter agreement in a form consistent with the requirements of
applicable law and will disclose the amount of the Service
Fee, if any, that is paid by the Trust.
5. Indemnification
a. The Company agrees to indemnify and hold harmless the Adviser
and its directors, officers, and employees from any and all
loss, liability and expense resulting from any gross
negligence or willful wrongful act of the Company in
performing its services under this letter agreement, from the
inaccuracy or breach of any representation made in this letter
agreement, or from a breach of a material provision of this
letter agreement, except to the extent such loss, liability or
expense is the result of the Adviser's willful misfeasance,
bad faith or gross negligence in the performance of its
duties.
b. The Adviser agrees to indemnify and hold harmless the Company
and its directors, officers, agents and employees from any and
all loss, liability and expense resulting from any gross
negligence or willful wrongful act of the Adviser in
performing its services under this letter agreement, from the
inaccuracy or breach of any representation made in this letter
agreement, or from a breach of a material provision of this
letter agreement, except to the extent such loss, liability or
expense is the result of the Company's willful misfeasance,
bad faith or gross negligence in the performance if its
duties.
6. Termination.
a. Either party may terminate this letter agreement, without
penalty, on sixty (60) days' written notice to the other
party.
b. This letter agreement will terminate at the option of either
party in the event of the termination of the Participation
Agreement.
c. This letter agreement will terminate immediately upon the
determination of either party, with the advice of counsel,
that the payment of the Service Fee is in conflict with
applicable law.
7. Amendment. This letter agreement may be amended only upon mutual
agreement of the parties hereto in writing.
8. Confidentiality. The terms of this letter agreement will be treated as
confidential and will not be disclosed to the public or any outside
party except with each party's prior written consent, as required by
law or judicial process or as provided in paragraph 4c herein.
9. Assignment. This letter agreement may not be assigned (as that term is
defined in the 0000 Xxx) by either party without the prior written
approval of the other party, which approval will not be unreasonably
withheld, except that the Adviser may assign its obligations under this
letter agreement, including the payment of all or any portion of the
Service Fee, to the Trust upon thirty (30) days' written notice to the
Company.
10. Governing Law. This letter agreement will be construed and the
provisions hereof interpreted under and in accordance with the laws of
the State of Colorado.
11. Counterparts. This letter agreement may be executed in counterparts,
each of which will be deemed an original but all of which will together
constitute one and the same instrument.
If this letter agreement is consistent with your understanding of the matters we
discussed concerning administrative expense payments, kindly sign below and
return a signed copy to us.
Very truly yours,
JANUS CAPITAL CORPORATION
By: _______________________________
Name: _______________________________
Title: _______________________________
GREAT AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By: _______________________________
Name: _______________________________
Title: _______________________________
Attachment: Schedule A
Schedule A
Pursuant to the letter agreement to which this Schedule is attached, the Company
will perform administrative services including, but not limited to, the
following:
1. Print and mail to Contract owners copies of the Portfolios'
prospectuses, proxy materials, periodic fund reports to shareholders and other
materials that the Trust is required by law or otherwise to provide to its
shareholders.
2. Provide Contract owner services including, but not limited to,
financial consultants' advice with respect to inquiries related to the
Portfolios (not including information about performance or related to sales) and
communicating with Contract owners about Portfolio (and subaccount) performance.
3. Provide other administrative support for the Trust as mutually
agreed to by the Company and the Adviser and relieve the Trust of other usual or
incidental administrative services provided to individual Contract owners.
Xxxxxxx Plan
Participation Agreement
THIS AGREEMENT is made as of July 9, 1999, by and among Great American Life
Insurance Company of New York ("Company"), on its own behalf and on behalf of
each separate account of the Company set forth on Exhibit A-1 to this Agreement
as it may be amended from time to time (collectively, "Account"), The Xxxxxxx
Plan ("Fund") on its own behalf and on behalf of the portfolios listed on
Exhibit A to this Agreement as it may be amended from time to time
("Portfolios"), and Xxxxxxx Partners, Ltd. (the "Advisor" and "Distributor"),
who serves as both advisor and distributor for The Xxxxxxx Plan (each, a "Party"
and collectively, the "Parties").
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares of the Fund, on behalf of the Account to
fund the variable annuity contracts that use the Fund as an underlying
investment medium (the "Contracts");
WHEREAS, the Company, Adviser and Distributor desires to facilitate the purchase
and redemption of shares of the Fund by the Company for the Account through one
account in the Fund (an "Omnibus Account") to be maintained of record by the
Company, subject to the terms and conditions of this Agreement;
WHEREAS, the Company desires to provide administrative services and functions
(the "Services") for purchasers of Contracts ("Owners") on the terms and
conditions set forth herein;
WHEREAS, the Company has registered or will register certain variable life
insurance policies and/or variable annuity contracts under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, the Company has registered or will register the Account as a unit
investment trust under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Company desires to utilize the Fund and/or one or more Portfolios
as an investment vehicle of the Account.
NOW, THEREFORE, in consideration of the mutual promises set forth herein, the
Company, Fund, Adviser and Distributor agree as follows:
1. Performance of Services. Company agrees to perform the administrative
functions and services specified in Exhibit B attached hereto with respect
to the shares of the Fund included in the Account.
2. The Omnibus Accounts.
2.1 The Omnibus Account will be opened based upon the information contained
in Exhibit C hereto: In connection with the Omnibus Account, Company
represents and warrants that it is authorized to act on behalf of each
Owner effecting transactions in the Omnibus Account and that the
information specified on Exhibit C hereto is correct.
2.2 The Fund shall designate the Omnibus Account with an account number.
This account number will be the means of identification when the
Parties are transacting in the Omnibus Account. The assets in the
Account are segregated from the Company's own assets. The Adviser
agrees to cause the Omnibus Account to be kept open on the Fund's
books, as applicable, regardless of a lack of activity or small
position size except to the extent the Company takes specific action to
close an Omnibus Account or to the extent the Fund's prospectus
reserves the right to close accounts which are inactive or of a small
position size. In the latter two cases, the Adviser will give prior
notice to the Company before closing an Omnibus Account.
2.3 The Company agrees to provide Adviser such information as Adviser or
Distributor may reasonably request concerning Owners as may be
necessary or advisable to enable Company and Distributor to comply with
applicable laws, including state "Blue Sky" laws relating to the sales
of shares of the Fund to the Accounts.
3. Fund Shares Transactions.
3.1 In General. Shares of the Fund shall be sold on behalf of the Fund by
Distributor and purchased by Company for the Account and indirectly for
the appropriate subaccount thereof at the net asset value next computed
after receipt by Distributor of each order of the Company or its
designee, in accordance with the provisions of this Agreement, the then
current prospectus of the Fund, and the Contracts. The Board of
Directors of the Fund ("Directors") may refuse to sell shares of the
applicable Fund to any person, or suspend or terminate the offering of
shares of the Fund if such action is required by law or by regulatory
authorities having jurisdiction. Company agrees to purchase and redeem
the shares of the Fund in accordance with the provisions of this
Agreement, of the Contract and of the then current prospectus for the
Contract and Fund. Except as necessary to implement transactions as
specified in the Contracts or as initiated by the Owners, or as
otherwise permitted by state or federal laws or regulations, Company
shall not redeem shares of Fund attributable to the contract.
3.2 Purchase and Redemption Orders. On each day that the Fund is open for
business (a "Business Day"), the Company shall aggregate and calculate
the net purchase or redemption order resulting from investment in and
redemptions under the Contracts for shares of the Fund that it received
prior to the close of trading on the New York Stock Exchange (the
"NYSE") (i.e. 4:00 p.m., Eastern time, unless the NYSE closes at an
earlier time in which case such earlier time shall apply) and
communicate to Distributor, by telephone or facsimile (or by such other
means as the Parties hereto may agree to in writing), the net aggregate
purchase or redemption order (if any) for the Omnibus Account for such
Business Day (such Business Day is sometimes referred to herein as the
"Trade Date"). The Company will communicate such orders to Distributor
prior to 9:00 a.m., Eastern Time, on the next Business Day following
the Trade Date. All trades communicated to Distributor by the foregoing
deadline shall be treated by Distributor as if they were received by
Distributor prior to the close of trading on the Trade Date.
3.3 Settlement of Transactions.
(a) Purchases. Company will wire, or arrange for the wire of the
purchase price of each purchase order to the custodian for the
Fund in accordance with written instructions provided by
Distributor to the Company so that either (1) such funds are
received by the custodian for the Fund prior to 1:00 p.m.,
Eastern time, on the next Business Day following the Trade
Date, or (2) Distributor is provided with a Federal Funds wire
system reference number prior to such 1:00 p.m. deadline
evidencing the entry of the wire transfer of the purchase
price to the applicable custodian into the Federal Funds wire
system prior to such time. Company agrees that if it fails to
provide funds to the Fund's custodian by the close of business
on the next Business Day following the Trade Date, then, at
the option of Distributor, (i) the transaction may be
canceled, or (ii) the transaction may be processed at the
next-determined net asset value for the applicable Fund after
purchase order funds are received. In such event, the Company
shall indemnity and hold harmless Distributor, Adviser, and
the Fund from any liabilities, costs and damages either may
suffer as a result of such failure.
(b) Redemptions. The Adviser will use its best efforts to cause to
be transmitted to such custodial account as Company shall
direct in writing, the proceeds of all redemption orders
placed by Company by 9:00 a.m., Eastern time, on the Business
Day immediately following the Trade Date, by wire transfer on
that Business Day. Should Company need to extend the
settlement on a trade, it will contact Adviser to discuss the
extension. For purposes of determining the length of
settlement, Adviser agrees to treat the Account no less
favorably than other shareholders of the Fund. Each wire
transfer of redemption proceeds shall indicate, on the Federal
Funds wire system, the amount thereof attributable to the
Fund; provided, however, that if the number of entries would
be too great to be transmitted through the Federal Funds wire
system, the Adviser shall, on the day the wire is sent, fax
such entries to Company or, if possible, send via direct or
indirect systems access until otherwise directed by the
Company in writing.
(c) Authorized Persons. The following persons are each duly
authorized to act on behalf of the Company and the Account
under this Agreement. The Fund, Adviser and Distributor are
entitled to conclusively rely on verbal or written
instructions that Adviser or Distributor reasonably believes
were originated by any one of said persons. The Company shall
inform Adviser and Distributor of additions to or subtractions
from this list of authorized persons pursuant to Section 13,
hereof:
Xxxx Xxxxxxx
Xxxxx Xxxxxxxxx
Xxxx Xxxxxxx
Xxxx Xxxxxxx
Xxxxx Xxxxxxxxx
3.4 Book Entry Only. Issuance and transfer of shares of the Fund will be by
book entry only. Stock certificates will not be issued to the Company
or the Account. Shares of the Fund ordered from Distributor will he
recorded in the appropriate book entry title for the Account.
3.5 Distribution Information. The Adviser or Distributor shall provide the
Company with all distribution announcement information as soon as it is
announced by the Fund. The distribution information shall set forth, as
applicable, ex-date, record date, payable date, distribution rate per
share, record date share balances, cash and reinvested payment amounts
and all other information reasonably requested by the Company. Where
possible, the Adviser or Distributor shall provide the Company with
direct or indirect systems access to the Adviser's systems for
obtaining such distribution information
3.6 Reinvestment. All dividends and capital gains distributions will be
automatically reinvested on the payable date in additional shares of
the Fund at net asset value in accordance with the Fund's then current
prospectus.
3.7 Pricing Information. Distributor shall use its best efforts to furnish
to the Company prior to 7:00 p.m., Eastern time, on each Business Day
the Fund's closing net asset value for that day, and if appropriate,
the daily accrual for interest rate factor, (mil rate). Such
information shall be communicated via fax, or indirect or direct
systems access acceptable to the Company.
3.8 Price Errors.
(a) In the event adjustments are required to correct any error in
the computation of the net asset value of shares of the Fund,
the Fund or Adviser shall promptly notify Company after
discovering the need for those adjustments which result in a
reimbursement to an Account in accordance with such Fund's
then current policies on reimbursement. Notification may be
made orally or via direct or indirect systems access. Any such
notification shall be promptly followed by a letter written on
Fund or Adviser letterhead and shall state for each day for
which an error occurred the incorrect price, the correct
price, and, to the extent communicated to the Fund's
shareholder, the reason for the price change. Fund and Adviser
agree that Company may send this writing, or derivation
thereof (so long as such derivation is approved in advance by
Fund or Adviser, which approval shall not be unreasonably
withheld) to Owners that are affected by the price change.
(b) If the Account received amounts in excess of the amounts to
which it otherwise would have been entitled prior to an
adjustment for an error, Company, when requested by Fund or
Adviser, will use its best efforts to collect such excess
amounts from the Account. In no event, however, shall Company
be liable to Fund or Adviser for any such amounts.
(c) If an adjustment is to be made in accordance with subsection
(a) above to correct an error which has caused the Account to
receive an amount less than that to which it is entitled, Fund
or Adviser shall make all necessary adjustments (within the
parameters specified in subsection (a)) to the number of
shares owned in the Account and distribute to the Company the
amount of such underpayment for credit to the Account.
3.9 Agency. Distributor hereby appoints the Company as its agent for the
limited purpose of accepting purchase and redemption instructions
pursuant to Sections 3.1, 3.2 and 3.3.
3.10 Quarterly Reports. Adviser agrees to provide Company a statement of
Fund assets as soon as practicable and in any event within 30 days
after the end of each fiscal year quarter, and a statement certifying
the compliance by the Fund during that fiscal quarter with the
diversification requirements and qualification as a regulated
investment company. In the event of a breach of Section 6.4(a), Adviser
will take all reasonable steps (a) to notify Company of such breach and
(b) to adequately diversify the Fund so as to achieve compliance within
the grace period afforded by Treasury Regulation 1.817-5.
4. Proxy Solicitations and Voting. The Company shall, at its expense,
distribute or arrange for the distribution of all proxy materials
furnished by the Fund to the Account and shall:
(i) solicit voting instructions from Owners;
(ii) vote the Fund shares in accordance with
instructions received from Owners; and
(iii) vote the Fund shares for which no instructions
have been received, as well as shares attributable
to it, in the same proportion as Fund shares for
which instructions have been received from Owners,
so long as and to the extent that the Securities
and Exchange Commission (the "SEC") continues to
interpret the 1940 Act, to require pass-through
voting privileges for various contract owners. The
Company and its agents will not recommend action in
connection with, or oppose or interfere with, the
solicitation of proxies for the Fund shares held
for Owners.
5. Customer Communications.
5.1 Prospectuses. The Adviser or Distributor, at its expense, will provide
the Company with as many printed copies of the current prospectus(es)
for the Fund and/or Portfolios as the Company may reasonably request
for distribution to existing or prospective Owners, and/or, at the
Company's request, a single camera ready copy of each such prospectus,
which the Company will print at its expense, and/or, at the Company's
request, a single digital copy of each such prospectus, which the
Company will reproduce in digital format at its expense. The Company
will distribute the Fund and/or Portfolio prospectus(es) to existing
and prospective Owners at its expense.
5.2 Shareholder Materials. The Adviser and Distributor shall, as
applicable, provide in bulk to the Company or its authorized
representative, at a single address and at no expense to the Company,
the following shareholder communications materials prepared for
circulation to Owners in quantities requested by the Company which are
sufficient to allow mailing thereof by the Company and, to the extent
required by applicable law, to all Owners: proxy or information
statements, annual reports, semi-annual reports, and all updated
prospectuses, supplements and amendments thereof. Neither the Fund, the
Advisor nor Distributor shall be responsible for the cost of
distributing such materials to Owners.
6. Representations and Warranties.
6.1 The Company represents and warrants that:
(a) It is an insurance company duly organized and in good standing
under the laws of the State of New York and that it has
legally and validly established the Account prior to any
issuance or sale thereof as a segregated asset account and
that the Company has and will maintain the capacity to issue
all Contracts that may be sold; and that it is and will remain
duly registered, licensed, qualified and in good standing to
sell the Contracts in all the jurisdictions in which such
Contracts are to be offered or sold;
(b) It is and will remain duly registered and licensed in all
material respects under all applicable federal and state
securities and insurance laws and shall perform its
obligations hereunder in compliance in all material respects
with any applicable state and federal laws;
(c) The Contracts are and will be registered under the 1933 Act,
and are and will be registered and qualified for sale in the
states where so required; and the Account is and will be
registered as a unit investment trust in accordance with the
1940 Act and shall be a segregated investment account for the
Contracts;
(d) The Contracts are currently treated as annuity contracts,
under applicable provisions of the Internal Revenue Code of
1986, as amended (the "Code"), and the Company will maintain
such treatment and will notify Adviser, Distributor and Fund
promptly 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;
(e) It is registered as a transfer agent pursuant to Section 17A
of the Securities Exchange Act of 1934, as amended (the "1934
Act") unless it is not required to be registered as such.
(f) The arrangements provided for in this Agreement will be
disclosed to the Owners; and
(g) It or its subsidiary is registered as a broker-dealer under
the 1934 Act and any applicable state securities laws,
including as a result of entering into and performing the
Services set forth in this Agreement, unless it is not
required to be registered as such.
6.2 The Fund represents and warrants that Fund shares sold pursuant to this
Agreement are and will be registered under the 1933 Act and the Fund is
and will be registered as a registered investment company under the
Investment Company Act of 1940, in each case, except to the extent the
Company is so notified in writing.
6.3 Distributor represents and warrants that:
(a) It is and will be a member in good standing of the NASD and is
and will be registered as a broker-dealer with the SEC; and
(b) It will sell and distribute Fund shares in accordance with all
applicable state and federal laws and regulations.
6.4 Adviser represents and warrants that:
(a) It will cause each Fund to invest money from the Contracts in
such a manner as to ensure that the Contracts will be treated
as variable annuity contracts under the Code and the
regulations issued thereunder, and that each Fund will comply
with Section 817(h) of the Code as amended from time to time
and with all applicable regulations promulgated thereunder;
(b) It is and will remain duly registered and licensed in all
material respects under all applicable federal and state
securities and insurance laws and shall perform its
obligations hereunder in compliance in all material respects
with any applicable state and federal laws; and
6.5 Each of the Parties hereto represents and warrants to the others that:
(a) It has full power and authority under applicable law and has
taken all action necessary, to enter into and perform this
Agreement and the person executing this Agreement on its
behalf is duly authorized and empowered to execute and deliver
this Agreement;
(b) This Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its
terms and it shall comply in all material respects with all
laws, rules and regulations applicable to it by virtue of
entering into this Agreement;
(c) Except for the effectiveness of the Registration Statement
filed by the Fund under the 1933 Act and 1940 Act, no consent
or authorization of, filing with, or other act by or in
respect of any governmental authority, is required in
connection with the execution, delivery, performance, validity
or enforceability of this Agreement.
(d) The execution, performance and delivery of this Agreement will
not result in it violating any applicable law or breaching or
otherwise impairing any of its contractual obligations;
(e) Each Party hereto is entitled to rely on any written records
or instructions provided to it by another Party; and
(f) Its directors, officers, employees. and investment advisers,
and other individuals/entities dealing with the money or
securities of the Fund are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage
for the benefit of the Fund in an amount not less than the
amount required by the applicable rules of the National
Association of Securities Dealers, Inc. ("NASD") and the
federal securities laws, which bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable
bonding company.
7. Sales Material and Information.
7.1 NASD Filings. The Company shall promptly inform Distributor as to the
status of all sales literature filings pertaining to the Fund and shall
promptly notify Distributor of all approvals or disapprovals of sales
literature filings with the NASD. For purposes of this Section 7, the
phrase "sales literature or other promotional material" shall be
construed in accordance with all applicable securities laws and
regulations.
7.2 Company Representations. The Company shall not make any material
representations concerning the Adviser, the Distributor or the Fund
other than the information or representations contained in: (a) a
registration statement of the Fund or prospectus of the Fund, as
amended or supplemented from time to time; (b) published reports or
statements of the Fund which are in the public domain or approved by
Distributor or the Fund; or (c) sales literature or, other promotional
material of the Fund.
7.3 The Advisor. Distributor and Fund Representations. None of Adviser,
Distributor or the Fund shall make any material representations
concerning the Company other than the information or representations
contained in: (a) a registration statement or prospectus for the
Contracts, as amended or supplemented from time to time; (b) published
reports or statements of the Contracts or the Account which are in the
public domain or are approved by the Company; or (c) sales literature
or other promotional material of the Company.
7.4 Trademarks etc. Except to the extent required by applicable law, no
Party shall use any other Party's names, logos, trademarks or service
marks, whether registered or unregistered, without the prior consent of
such Party.
7.5 Information from Distributor and Adviser. Upon request, Distributor or
Adviser will provide to Company at least one complete copy of all
registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, solicitations for voting
instructions, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the
Fund, in final form as filed with the SEC, NASD and other regulatory
authorities.
7.6 Information from Company. Company will provide to Distributor at least
one complete copy of all registration statements, prospectuses,
Statements of Additional Information, reports, solicitations for voting
instructions, 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 Fund and the
Contracts, in final form as filed with the SEC, NASD and other
regulatory authorities.
7.7 Review of Marketing Materials. If so requested by Company, the Adviser
or Distributor will use its best efforts to review sales literature and
other marketing materials prepared by Company which relate to the Fund,
the Adviser or Distributor for factual accuracy as to such entities,
provided that the Adviser or Distributor is provided at least five (5)
Business Days to review such materials. Neither the Adviser nor
Distributor will review such materials for compliance with applicable
laws. Company shall provide the Adviser with copies of all sales
literature and other marketing materials which refer to the Fund, the
Company or Distributor within five (5) Business Days after their first
use, regardless of whether the Adviser or Distributor has previously
reviewed such materials. If so requested by the Adviser or Distributor,
Company shall cease to use any sales literature or marketing materials
which refer to the Fund, the Adviser or Distributor that the Adviser or
Distributor determines to be inaccurate, misleading or otherwise
unacceptable.
8. Fees and Expenses.
8.1 Fund Registration Expenses. Fund or Distributor shall bear the cost of
registration and qualification of Fund shares; preparation and filing
of Fund prospectuses and registration statements, proxy materials and
reports; preparation of all other statements and notices relating to
the Fund or Distributor required by any federal or state law; payment
of all applicable fees, including, without limitation, any fees due
under Rule 24f-2 of the 1940 Act, relating to the Fund; and all taxes
on the issuance or transfer of Fund shares on the Fund's records.
8.2 Contract Registration Expenses. The Company shall bear the expenses for
the costs of preparation and filing of the Company's prospectus and
registration statement with respect to the Contracts; preparation of
all other statements and notices relating to the Account or the
Contracts required by any federal or state law; expenses for the
solicitation and sale of the Contracts including all costs of printing
and distributing all copies of advertisements, prospectuses, Statements
of Additional Information, proxy materials, and reports to Owners or
potential purchasers of the Contracts as required by applicable state
and federal law; payment of all applicable fees relating to the
Contracts; all costs of drafting, filing and obtaining approvals of the
Contracts in the various states under applicable insurance laws; filing
of annual reports on form N-SAR, and all other costs associated with
ongoing compliance with all such laws and its obligations hereunder.
9. Indemnification.
9.1 Indemnification by Company.
(a) Company agrees to indemnify and hold harmless the Fund,
Adviser and Distributor and each of their directors, officers,
employees and agents, and each person, if any, who controls
any of them within the meaning of Section 15 of the 1933 Act
(each, an "Indemnified Party" and collectively, the
"Indemnified Parties" for purposes of this Section 9.1) from
and against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent
of Company), and expenses (including reasonable legal fees and
expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise
(collectively, hereinafter "Losses"), insofar as such Losses:
(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact
contained in the registration statement, prospectus
or sales literature for the Contracts or contained in
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 paragraph 9.1(a) 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 written information furnished to Company by or
on behalf of the Fund, Distributor or Adviser for use
in the registration statement or prospectus for the
Contracts or in the Contracts (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 or wrongful conduct of Company or its
agents, 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, or sales
literature covering 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
written information furnished to the Fund, Adviser or
Distributor or on behalf of Company; or
(iv) arise out of, or as a result of, any failure by
Company or persons under its control to provide the
Services and furnish the materials contemplated under
the terms of this Agreement; or
(v) arise out of, or result from, any material breach of
any representation or warranty made by Company or
persons under its control in this Agreement or arise
out of or result from any other material breach of
this Agreement by Company or persons under its
control: as limited by and in accordance with the
provisions of Sections 9.1(b) and 9.1(c) hereof; or
(vi) arise out of, or as a result of, adherence by Adviser
or Distributor to instructions that it reasonably
believes were originated by persons specified in
Section 32(c), hereof
This indemnification provision is in addition to any
liability, which the Company may otherwise have.
(b) Company shall not be liable under this indemnification
provision with respect to any Losses to which an Indemnified
Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross 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.
(c) Company 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 Company 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 Company of any such claim shall not relieve
Company from any liability which it may have to the
Indemnified Party otherwise than on account of this
indemnification provision. In case any such action is brought
against any Indemnified Party, and it notified the
Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled to participate therein
and, to the extent that it may wish, assume the defense
thereof, with counsel satisfactory to such Indemnified Party.
After notice from the Indemnifying Party of its intention to
assume the defense of an action, the Indemnified Party shall
bear the expenses of any additional counsel obtained by it,
and the Indemnifying Party shall not be liable to such
Indemnified Party under this Section for any legal or other
expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof other than reasonable
costs of investigation. The Indemnified Party may not settle
any action without the written consent of the Indemnifying
Party. The Indemnifying Party may not settle any action
without the written consent of the Indemnified Party unless
such settlement completely and finally releases the
Indemnified Party from any and all liability. In either event,
consent shall not be unreasonably withheld.
(d) The Indemnified Parties will promptly notify Company of the
commencement of any litigation or proceedings against the
Indemnified Parties in connection with the issuance or sale of
Fund shares or the Contracts or the operation of the Fund.
9.2 Indemnification by Adviser and Distributor.
(a) Adviser and Distributor agrees to indemnify and hold harmless
Company and each of its directors, officers, employees and
agents and each person, if any, who controls Company within
the meaning of Section 15 of the 1933 Act ("Indemnified Party"
and collectively, the "Indemnified Parties" for purposes of
this Section 9.2) against any and all Losses to which the
Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such
Losses:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the registration statement or prospectus
or sales literature of the Fund (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 Section
9.2(a) 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 written information furnished to the
Fund, Adviser or Distributor by or on behalf of
Company for use in the registration statement or
prospectus for the Fund or in sales literature (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 or wrongful conduct of Adviser or
Distributor or persons under its control, with
respect to the sale or distribution of Fund shares;
or
(iii)arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, or sales
literature 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 statements therein not misleading, if such
statement or omission was made in reliance upon
written information furnished to Company by or on
behalf of Adviser or Distributor; or
(iv) arise out of, or as a result of, any failure by
Adviser or Distributor or persons under its control
to provide the services and furnish the materials
contemplated under the terms of this Agreement; or
(v) arise out of or result from any material breach of
any representation or warranty made by Adviser or
Distributor or persons under its control in this
Agreement or arise out of or result from any other
material breach of this Agreement by Adviser or
Distributor or persons under its control; as limited
by and in accordance with the provisions of Sections
9.2(b) and 9.2(c) hereof.
This indemnification provision is in addition to any liability
which Adviser and Distributor may otherwise have.
(b) Adviser and Distributor shall not be liable under this
indemnification provision with respect to any Losses to which
an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified
Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this
Agreement or to Company.
(c) Adviser and 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 Adviser and Distribution 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 Adviser and
Distributor of any such claim shall not relieve Adviser and
Distributor from any liability which it may have to the
Indemnified Party otherwise than on account of this
indemnification provision. In case any such action is brought
against any Indemnified Party, and it notified the
Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled to participate therein
and, to the extent that it may wish, assume the defense
thereof, with counsel satisfactory to such Indemnified Party.
After notice from the Indemnifying Party of its intention to
assume the defense of an action, the Indemnified Party shall
bear the expenses of any additional counsel obtained by it,
and the Indemnifying Party shall not be liable to such
Indemnified Party under this Section for any legal or other
expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof other than reasonable
costs of investigation. The Indemnified Party may not settle
any action without the written consent of the Indemnifying
Party. The Indemnifying Party may not settle any action
without the written consent of the Indemnified Party unless
such settlement completely and finally releases the
Indemnified Party from any and all liability. In either event,
consent shall not be unreasonably withheld.
(d) The Indemnified Parties will promptly notify Adviser and
Distributor of the commencement of any litigation or
proceedings against the Indemnified Parties in connection with
the issuance or sale of the Contracts or the operation of the
Account.
10. Potential Conflicts.
10.1 Monitoring by Directors for Conflicts of Interest. The Directors of
each Fund will monitor the Fund for any potential or existing material
irreconcilable conflict of interest 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 interpretive 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 the Fund are being managed; (e) a
difference in voting instructions given by variable annuity contract
owners; or (f) a decision by Company to disregard the voting
instructions of Owners. The Directors shall promptly inform the
company, in writing, if they determine that an irreconcilable material
conflict exists and the implications thereof.
10.2 Monitoring by the Company for Conflicts of Interest. The Company will
promptly notify the Directors, in writing, of any potential or existing
material irreconcilable conflicts of interest, as described in Section
10.1 above, of which it is aware. The Company will assist the Directors
in carrying out their responsibilities under any applicable provisions
of the federal securities laws and any exemptive orders granted by the
SEC ("Exemptive Order") by providing the Directors, in a timely manner,
with all information reasonably necessary for the Directors to consider
any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Directors whenever Owner voting
instructions are disregarded.
10.3 Remedies. If it is determined by a majority of the Directors, or a
majority of disinterested Directors, that a material irreconcilable
conflict exists, as described in Section 10.1 above, the Company shall,
at its own expense take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including,
but not limited to: (a) withdrawing the assets allocable to some or all
of the separate accounts from the applicable Fund and reinvesting such
assets in a different investment medium, including (but not limited to)
another fund managed by the Adviser, or submitting the question whether
such segregation should be implemented to a vote of all affected owners
and, as appropriate, the assets of any particular group that votes in
favor of such segregation, or offering to the affected owners the
option of making such a change; and (b) establishing a new registered
management investment company or managed separate account.
10.4 Causes of Conflicts of Interest.
(a) State Insurance Regulators. If a material irreconcilable
conflict arises because a particular state insurance
regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will
withdraw the affected Account's investment in the applicable
Fund and terminate this Agreement with respect to such Account
within the period of time permitted by such decision, but in
no event later than six months after the Directors inform the
Company 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 Directors. Until the end of the foregoing
period, the Distributor and Fund shall continue to accept and
implement orders by the Company for the purchase (and
redemption) of shares of the Fund to the extent such actions
do not violate applicable law.
(b) Disregard of Owner Voting. If a material irreconcilable
conflict arises because of Company's decision to disregard
Owner voting instructions and that decision represents a
minority position or would preclude a majority vote, Company
may be required, at the applicable Fund's election, to
withdraw the Account's investment in said Fund. No charge or
penalty will be imposed against the Account as a result of
such withdrawal.
10. Limitations on Consequences. For purposes of Sections 10.3 through 10.5
of this Agreement, a majority of the disinterested Directors shall
determine whether any proposed action adequately remedies any
irreconcilable material conflict. In no event will the Fund, the
Adviser or the Distributors be required to establish a new funding
medium for any of the Contracts. The Company shall not be required by
Section 10.3 to establish a new funding medium for the Contracts if an
offer to do so has been declined by vote of a majority of Owners
affected by the irreconcilable material conflict. In the event that the
Directors determine that any proposed action does not adequately remedy
any irreconcilable material conflict, then the Company will withdraw
the Account's investment in the applicable Fund and terminate this
Agreement as quickly as may be required to comply with applicable law,
but in no event later than six (6) months after the Directors inform
the Company 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.
10.6 Changes in Laws. If and to the extent that Rule 6e-2 and Rule 6e-3(T)
are amended, or Rule 6e-3 is adopted, to provide exemptive relief from
any provision of the Act or the rules promulgated thereunder with
respect to mixed or shared funding, (as defined in the Exemptive Order,
if any) on terms and conditions materially different from those
contained in the Exemptive Order, if any, then (a) the Funds and/or the
Company, 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
10.1, 10.2, 10.3 and 10.4 of this Agreement shall continue in effect
only to the extent that terms and conditions substantially identical to
such Sections are contained in such Rule(s) as so amended or adopted.
11. Maintenance of Records.
(a) Recordkeeping and other administrative services to Owners
shall be the responsibility of the Company and shall not be
the responsibility of the Fund, Adviser or Distributor. None
of the Fund, the Adviser or Distributor shall maintain
separate accounts or records for Owners. Company shall
maintain and preserve all records as required by law to be
maintained and preserved in connection with providing the
Services and in making shares of the Fund available to the
Account.
(b) Upon the request of the Adviser or Distributor, the Company
shall provide copies of all the historical records relating to
transactions between the Fund and the Account, written
communications regarding the Fund to or from the Account and
other materials, in each case (1) as are maintained by the
Company in the ordinary course of its business and in
compliance with applicable law, and (2) as may reasonably be
requested to enable the Adviser and Distributor, or its
representatives, including without limitation its auditors or
legal counsel, to (A) monitor and review the Services, (B)
comply with any request of a governmental body or
self-regulatory organization or the Owners, (C) verify
compliance by the Company with the terms of this Agreement,
(D) make required regulatory reports, or (E) perform general
customer supervision. The Company agrees that it will permit
the Adviser and Distributor or such representatives of either
to have reasonable access to its personnel and records in
order to facilitate the monitoring of the quality of the
Services.
(c) Upon the request of the Company, the Adviser and Distributor
shall provide copies of all the historical records relating to
transactions between the Fund and the Account, written
communications regarding the Fund to or from the Account and
other materials, in each case (1) as are maintained by the
Adviser and Distributor, as the case may be, in the ordinary
course of its business and in compliance with applicable law,
and (2) as may reasonably be requested to enable the Company,
or its representatives, including without limitation its
auditors or legal counsel, to (A) comply with any request of a
governmental body or self-regulatory organization or the
Owners, (B) verify compliance by the Adviser and Distributor
with the terms of this Agreement, (C) make required regulatory
reports, or (D) perform general customer supervision.
(d) The Parties agree to cooperate in good faith in providing
records to one another pursuant to this Section 11.
12. Term and Termination.
12.1 Term and Termination without Cause. The initial term of this Agreement
shall be for a period of one year from the date hereof. Unless
terminated by any Party upon not less than thirty (30) days prior
written notice to the other Parties, this Agreement shall thereafter
automatically renew from year to year, subject to termination at the
next applicable renewal date upon not less than 30 days prior written
notice. Any Party may terminate this Agreement following the initial
term upon six (6) months advance written notice to the other Parties.
12.2 Termination by Fund, Distributor or Adviser for Cause. Adviser, Fund or
Distributor may terminate this Agreement immediately by written notice
to the Company, if any of them shall determine, in its sole judgment
exercised in good faith, that (a) the Company has suffered a material
adverse change in its business, operations, financial condition or
prospectus since the date of this Agreement or is the subject of
material adverse publicity; or (b) any of the Contracts are not
registered, issued or sold in accordance with applicable state and
federal law or such law precludes the use of Fund shares as the
underlying investment media of the Contracts issued or to be issued by
the Company.
12.3 Termination by Company for Cause. Company may terminate this Agreement
by written notice to the Adviser, Fund and Distributor in the event
that (a) the Fund shares are not registered, issued or sold in
accordance with applicable state 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 the Company; (b) the Fund ceases to
qualify as a Regulated Investment Company under Subchapter M of the
Code or under any successor or similar provision, or if the Company
reasonably believes that the Fund may fail to so qualify; or (c) the
Fund fails to meet the diversification requirements specified in
Section 6.4(a).
12.4 Termination by any Party. This Agreement may be terminated by any Party
at any time (A) by giving 30 days' written notice to the other Parties
in the event of an material breach of this Agreement by the other Party
or Parties that is not cured during such 30-day period, and (B) (i)
upon institution of formal proceedings relating to the legality of the
terms and conditions of this Agreement against the Account, Company,
Fund, Adviser or Distributor by the NASD, the SEC or any other
regulatory body provided that the terminating Xxxxx has a reasonable
belief that the institution of formal proceedings is not without
foundation and will have a material adverse impact on the terminating
Party, (ii) by the non-assigning Party upon the assignment of this
Agreement in contravention of the terms hereof, or (iii) as is required
by law, order or instruction by a court of competent jurisdiction or a
regulatory body or self-regulatory organization with jurisdiction over
the terminating Party.
12.5 Limiton Termination. Notwithstanding the termination of this Agreement
with respect to the Fund, for so long as any Contracts remain
outstanding and Invested in the Fund each Party hereto shall continue
to perform such of its duties hereunder as are necessary to ensure the
continued tax deferred status thereof and the payment of benefits
thereunder, except to the extent proscribed by law, the SEC or other
regulatory body. Notwithstanding the foregoing, nothing in this Section
12.5 obligates the Fund to continue in existence. In the event that the
Fund elects to terminate its operations, the Company shall, as soon as
practicable, obtain an exemptive order or order of substitution from
the SEC to remove all Owners from the Fund.
13. Notices.
All notices hereunder shall be given in writing (and shall be deemed to
have been duly given upon receipt) by delivery in person, by facsimile, by
registered or certified mail or by overnight delivery (postage prepaid,
return receipt requested) to the respective Parties as follows:
If to Xxxxxxx Variable:
The Xxxxxxx Plan
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
e-mail: xxxx@xxxxxxxxxxx.xxx
If to Adviser:
Xxxxxxx Partners, Ltd.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
e-mail: xxxx@xxxxxxxxxxx.xxx
If to Distributor:
Xxxxxxx Partners, Ltd.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
e-mail: xxxx@xxxxxxxxxxx.xxx
If to Company:
Great American Life Insurance Company of New York
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
14. Miscellaneous.
14.1 Captions. The captions in this Agreement are included for convenience
of reference only and in no way affect the construction or effect of
any provisions hereof.
14.2 Enforceability. If any portion 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.
14.3 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one
and the same instrument.
14.4 Remedies not Exclusive. 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.
14.5 Confidentiality. Subject to the requirements of legal process and
regulatory authority, the Fund and Distributor shall treat as
confidential the names and addresses of the owners of the Contracts and
all information reasonably identified as confidential in writing by the
Company 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
Company until such time as it may come into the public domain.
14.6 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of Ohio applicable to
agreements fully executed and to he performed therein, exclusive of
conflicts of laws.
14.7 Survivability. Sections 6, 7.2, 7.3, 7.4, 9, 11 and 12.5 hereof shall
survive termination of this Agreement. In addition, all provisions of
this Agreement shall survive termination of this Agreement in the event
that any Contracts are invested in the Fund at the time the termination
becomes effective and shall survive for so long as such Contracts
remain so invested.
14.8 Amendment and Waiver. No modification of any provision of this
Agreement will be binding unless in writing and executed by the Party
to be bound thereby. No waiver of any provision of this Agreement will
be binding unless in writing and executed by the Party granting such
waiver. Notwithstanding anything in this Agreement to the contrary, the
Company may unilaterally amend Exhibit A hereto to add additional
series of The Xxxxxxx Plan ("New Funds") as Funds by sending to the
Company a written notice of the New Funds. Any valid waiver of a
provision set forth herein shall not constitute a waiver of any other
provision of this Agreement. In addition, any such waiver shall
constitute a present waiver of such provision and shall not constitute
a permanent fixture waiver of such provision.
14.9 Assignment. This Agreement shall be binding upon and shall inure to the
benefit of the Parties and their respective successors and assigns;
provided however that neither this Agreement nor any rights,
privileges, duties or obligations of the Parties may be assigned by any
Party without the written consent of the other Parties or as expressly
contemplated by this Agreement.
14.10 Entire Agreement. This Agreement contains the full and complete
understanding between the Parties with respect to the transactions
covered and contemplated hereunder, and supersedes all prior agreements
and understandings between the Parties relating to the subject matter
hereof, whether oral or written, express or implied.
14.11 Relationship of Parties: No Joint Venture, Etc. Except for the limited
purpose provided in Section 3.8, it is understood and agreed that the
Company shall be acting as an independent contractor and not as an
employee or agent of the Adviser, Distributor or the Fund, and none of
the Parties shall hold itself out as an agent of any other Party with
the authority to bind such Party. Neither the execution nor performance
of this Agreement shall be deemed to create a partnership or joint
venture by and among any of the Company, Fund, Adviser, or Distributor.
14.12 Expenses. All expenses incident to the performance by each Party of its
respective duties under this Agreement shall be paid by that Party.
14.13 Time of Essence. Time shall be of the essence in this Agreement.
14.14 Non-Exclusivity. Each of the Parties acknowledges and agrees that this
Agreement and the arrangements described herein are intended to be
non-exclusive and that each of the Parties is free to enter into
similar agreements and arrangements with other entities.
14.15 Operations of Funds. In no way shall the provisions of this Agreement
limit the authority of the Fund, the Company or Distributor to take
such action as it may deem appropriate or advisable in connection with
all matters relating to the operation of such Fund and the sale of its
shares. In no way shall the provisions of this Agreement limit the
authority of the Company to take such action as it may deem appropriate
or advisable in connection with all matters relating to the provision
of Services or the shares of fund other than the Fund offered to the
Account.
IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
duly executed as of the date first above written.
Great American Life Insurance Company of New York
By: _________________________________
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
Xxxxxxx Partners, Ltd. - Adviser
By: _________________________________
Name: Xxxxxx X. Ally
Title: General Partner
Xxxxxxx Partners, Ltd. - Distributor
By: _________________________________
Name: Xxxxxx X. Ally
Title: General Partner
The Xxxxxxx Plan - Fund
By: _________________________________
Name: Xxxxxx X. Ally
Title: President
Exhibit A
Portfolios:
The Xxxxxxx Plan Small-Cap Variable Series
Exhibit A-1
Separate Accounts:
GALIC of New York Separate Account I
Exhibit B
The Services
Company shall perform the following services. Such services shall be the
responsibility of the Company and shall not be the responsibility of the Fund,
Adviser or Distributor.
1. Maintain separate records for the Account, which records shall reflect Fund
shares ("Shares") purchased and redeemed, including the date and price for
all transactions, Share balances, and the name and address of each Owner,
including zip codes and tax identification numbers.
2. Credit contributions to individual Owner accounts and invest such
contributions in shares of the Funds to the extent so designated by the
Owner.
3. Disburse or credit to the Owners, and maintain records of, all proceeds of
redemptions of Fund shares and all other distributions not reinvested in
shares.
4. Prepare and transmit to the Owners, periodic account statements showing,
among other things, the total number of Fund shares owned as of the
statement closing date, purchases and redemptions of shares during the
period covered by the statement, the net asset value of the Funds as of a
recent date, and the dividends and other distributions paid during the
Statement period (whether paid in cash or reinvested in shares).
5. Transmit to the Owners, as required by applicable law, prospectuses, proxy
materials, shareholder reports, and other information provided by the
Adviser, Distributor or Fund and required to be sent to shareholders under
the Federal securities laws.
6. Transmit to Distributor purchase orders and redemption requests placed by
the Account and arrange for the transmission of funds to and from the Fund.
7. Transmit to Distributor such periodic reports as Distributor shall
reasonably conclude is necessary to enable the Fund to comply with
applicable Federal securities and state Blue-Sky requirements.
8. Transmit to the Account confirmations of purchase orders and redemption
requests placed by the Account.
9. Maintain all account balance information for the Account and daily and
monthly purchase summaries expressed in shares and dollar amounts.
10. Prepare, transmit and file any Federal, state and local government reports
and returns as required by law with respect to the account maintained on
behalf of the Account.
11. Respond to Owners' inquiries regarding, among other things, share prices,
account balances, dividend options, dividend amounts, and dividend payment
dates.
Exhibit C
Account Information
1. Entity in whose name each Account will be opened:
Great American Life Insurance Company of New York
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
2. Employer ID number (For internal use only): 00-0000000
3. Authorized contact persons: The following persons are authorized on behalf
of the Company to effect transactions in each Account:
Xxxxx Xxxxxxxxx 000-000-0000
Xxxx Xxxxxxx 000-000-0000
Xxxx Xxxxxxx 000-000-0000
Xxxxx Xxxxxxxxx 000-000-0000
4. Will the Accounts have telephone exchange? [ ] Yes [ X ] No (This option
lets Company redeem shares by telephone and apply the proceeds for purchase
in another identically registered Xxxxxxx Funds account.)
5. Will the Accounts have telephone redemption? [ ] Yes [ X ] No (This option
lets Company sell shares by telephone. The proceeds will be wired to the
bank account specified below.)
6. All dividends and capital gains will be reinvested automatically.
7. Instructions for all outgoing wire transfers:
The Provident Bank
Xxxxxxxxxx, XX 00000
ABA # 000000000
For the Account of Great American
Life Insurance Company of New York
Account # 0011-924 Amount:
Attn.: Wire Transfer Department
8. If this Account information Form contains changed information, the
undersigned authorized officer has executed this amended Account
Information Form as of the date set forth below and acknowledges the
agreements and representations set forth in the Participation Agreement
between the Company, the Fund, Adviser and Distributor:
---------------------------------- -----------------------
(Signature of Authorized Officer) (Date)
9. Company represents under penalty of perjury that:
(i) The employer ID number on this form is correct; and
(ii) Company is not subject to backup withholding because (a) Company
is exempt from backup withholding, (b) Company has not been
notified by the IRS that it is subject to backup withholding as a
result of failure to report all interest or dividends, or (c) the
IRS has notified the Company that it is no longer subject to
backup withholding. (Cross out (ii) if Company has been notified
by the IRS that it is subject to backup withholding because of
underreporting interest or dividends on its tax return.)
Please Note Distributor employs reasonable procedures to confirm that
instructions communicated by telephone are genuine and may not be
liable for losses due to unauthorized or fraudulent instructions.
Please see the prospectus for the applicable Fund' for more
information on the telephone exchange and redemption privileges.
July 9, 1999
Great American Life Insurance Company of New York
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Dear Xxxx:
Re: Fee letter relating to the Great American Life Insurance Company of
New York Participation Agreement.
Pursuant to the Participation Agreement by and among The Xxxxxxx Plan (the
"Fund"), and Great American Life Insurance Company of New York (the "Company")
dated July 9, 1999 (the "Participation Agreement"), the Company will provide
certain administrative services on behalf of the registered investment companies
or series thereof specified in Exhibit A.
In recognition of the reduction in administrative expenses that derives from the
performance of said administrative services, The Xxxxxxx Plan agrees to pay the
Company the fee specified below.
(a) For average aggregate amounts (as calculated in paragraph (b), below)
invested through variable insurance products issued by the Company with
the Fund, the monthly fee shall equal the percentage (calculated
paragraph (b), below) of the applicable annual fee for each Fund
specified in Exhibit A.
(b) For purposes of computing the fee contemplated in paragraph (a) above,
the Fund shall calculate and pay to the Company an amount equal to the
product of: (a) the product of (i) the number of calendar days in the
applicable month divided by the number of calendar days in that year
(365 or 366 as applicable) and (ii) the applicable percentage specified
in Exhibit A, hereto, multiplied by (b) the average daily market value
of the investments held in such Fund pursuant to the Participation
Agreement computed by totaling the aggregate investment (share net
asset value multiplied by the total number of shares held) on each day
during the calendar month and dividing by the total number of days
during such month.
(c) The Fund shall calculate the amount of the payment to be made pursuant
to this Letter Agreement at the end of each calendar month and will
make such payment to the Company within 30 days after receiving the
report referenced in paragraph (e), below. Fees will be paid by wire
transfer or by check. All payments hereunder shall be considered final
unless disputed by the Company in writing within 60 days of receipt.
(d) The parties agree that the fees contemplated herein are solely for
shareholder servicing and other administrative services provided by the
Company and do not constitute payment in any manner for investment
advisory, distribution, trustee, or custodial services.
(e) The Company agrees to provide the Fund by the 15th day of each month
with a report, which indicates the number of Owners that hold Contract
interests in each Account as of the last day of the prior month.
(f) If requested in writing by the Fund, and at the Fund's expense, the
Company shall provide to the Fund, by February 14th of each year a
"Special Report" from a nationally recognized accounting firm
reasonably acceptable to the Fund which substantiates for each month of
the prior calendar year: (a) the number of Owners that hold, through an
Account, interests in each Account maintained by the Company on the
last day of each month which held shares for which the fee provided or
in this Letter Agreement was received by the Company, (b) that any fees
billed to the Fund for such month were accurately determined in
accordance with this Letter Agreement, and (c) such other information
in connection with this Agreement and the Participation Agreement as
may be reasonably requested by the Fund.
(g) The parties hereto agree that the Fund may unilaterally amend Schedule
A hereto to add additional investment companies or series thereof ("New
Funds") as Funds subject to the provisions of this Letter Agreement by
sending to the Company a written notice of the New Funds and indicating
therein the fees to be paid to the Company with respect to the
administrative services provided pursuant to the Participation
Agreement in connection with such New Funds.
(h) This Letter Agreement shall terminate upon termination of the
Participation Agreement. Accordingly, all payments pursuant to this
Letter Agreement shall cease upon termination of the Participation
Agreement.
(i) Capitalized terns not otherwise defined herein shall have the meaning
assigned to herein in the Participation Agreement.
If you are in agreement with the foregoing, please sign and date below where
indicated and return one copy of this signed letter agreement to me.
Very truly yours,
Xxxxxx X. Ally
President
The Xxxxxxx Plan
Accepted and agreed as of July 9, 1999 by
Great American Life Insurance Company of New York
By: _______________________________
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
Exhibit A to Letter dated July 9, 1999
The Funds subject to this Agreement and applicable annual fees are as follows:
Fund Annual Fee
The Xxxxxxx Plan Small-Cap Variable Series .20%
