EXHIBIT 8.3
FUND PARTICIPATION AGREEMENT
Xxxxxx Institutional Products Trust
TABLE OF CONTENTS
ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .4
ARTICLE II. Representations and Warranties. . . . . . . . . . .7
ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 11
ARTICLE IV. Sales Material and Information. . . . . . . . . . 14
ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 16
ARTICLE VI. Diversification and Qualification . . . . . . . . 17
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order . . . . 21
ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 24
ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 37
ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 38
ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 42
SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 46
SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 47
SCHEDULE C Administrative Services . . . . . . . . . . . . . 48
SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 49
SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 52
PARTICIPATION AGREEMENT
Among
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
XXXXXX INSTITUTIONAL PRODUCTS TRUST,
XXXXXX ASSOCIATES, INC.,
XXXXXX DISTRIBUTORS, INC.
and
XXXXXXX XXXXXX & CO., INC.
THIS AGREEMENT, made and entered into as of this ____ day of
_______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life
insurance
company, on its own behalf and on behalf of its Separate Account
Variable Annuity-1 Series
Account (the "Account"); XXXXXX INSTITUTIONAL PRODUCTS TRUST, a
Delaware
Business Trust (hereinafter the "Fund"); XXXXXX ASSOCIATES, INC.
(hereinafter the
"Adviser"), a corporation organized under the laws of Delaware;
XXXXXX
DISTRIBUTORS, INC., a corporation organized under the laws of
Colorado (hereinafter
the "Distributor"); and XXXXXXX XXXXXX & CO., INC., a California
corporation
(hereinafter "Schwab").
WHEREAS, the Fund engages in business as an open-end
management investment
company and is available to act as the investment vehicle for
separate accounts established
for variable life insurance policies and/or variable annuity
contracts (collectively, the
"Variable Insurance Products") to be offered by insurance
companies, including
FirstGWL&A, which have entered into participation agreements
similar to this Agreement
(hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares,
each designated a "Portfolio" and representing the interest in a
particular managed portfolio
of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities
and Exchange
Commission (hereinafter the "SEC"), dated April 24, 1996 (File No.
812-9852), granting
Participating Insurance Companies and variable annuity and variable
life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a),
15(a), and 15(b) of the
Investment Company Act of 1940, as amended, (hereinafter the "1940
Act") and Rules 6e-
2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Fund
to be sold to and held by variable annuity and variable life
insurance separate accounts of
life insurance companies that may or may not be affiliated with one
another and qualified
pension and retirement plans ("Qualified Plans") (hereinafter the
"Mixed and Shared
Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company
under the 1940 Act and shares of the Portfolio(s) are registered
under the Securities Act of
1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment
adviser under the
Investment Advisers Act of 1940, as amended, and any applicable
state securities laws; and
WHEREAS, the Distributor is duly registered as a broker-dealer
under the Securities
Exchange Act of 1934, as amended, (the "1934 Act") and is a member
in good standing of
the National Association of Securities Dealers, Inc. (the "NASD");
and
WHEREAS, FirstGWL&A has registered certain variable annuity
contracts supported
wholly or partially by the Account (the "Contracts") under the 1933
Act and said Contracts
are listed in Schedule A attached hereto and incorporated herein by
reference, as such
Schedule may be amended from time to time by mutual written
agreement; and
WHEREAS, the Account is a duly organized, validly existing
segregated asset
account, established by resolution of the Board of Directors of
FirstGWL&A on January 15,
1997, under the insurance laws of the State of New York, to set
aside and invest assets
attributable to the Contracts; and
WHEREAS, FirstGWL&A has registered the Account as a unit
investment trust
under the 1940 Act and has registered the securities deemed to be
issued by the Account
under the 1933 Act; and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations,
FirstGWL&A intends to purchase shares in the Portfolio(s) listed in
Schedule B attached
hereto and incorporated herein by reference, as such Schedule may
be amended from time
to time by mutual written agreement (the "Designated
Portfolio(s)"), on behalf of the
Account to fund the Contracts, and the Fund is authorized to sell
such shares to unit
investment trusts such as the Account at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations,
the Account also intends to purchase shares in other open-end
investment companies or
series thereof not affiliated with the Fund (the "Unaffiliated
Funds") on behalf of the
Account to fund the Contracts; and
WHEREAS, Schwab will perform certain services for the Fund in
connection with
the Contracts;
NOW, THEREFORE, in consideration of their mutual promises,
FirstGWL&A,
Schwab, the Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to FirstGWL&A those shares of the
Designated
Portfolio(s) which the Account orders, executing such orders on
each Business Day at the
net asset value next computed after receipt by the Fund or its
designee of the order for the
shares of the Portfolios. For purposes of this Section 1.1,
FirstGWL&A shall be the
designee of the Fund for receipt of such orders and receipt by such
designee shall constitute
receipt by the Fund, provided that the Fund receives notice of any
such order by 10:00 a.m.
Eastern time on the next following Business Day. "Business Day"
shall mean any day on
which the New York Stock Exchange is open for trading and on which
the Fund calculates
its net asset value pursuant to the rules of the SEC.
1.2. The Fund agrees to make shares of the Designated
Portfolio(s) available for
purchase at the applicable net asset value per share by FirstGWL&A
and the Account on
those days on which the Fund calculates its Designated
Portfolio(s)' net asset value pursuant
to rules of the SEC, and the Fund shall calculate such net asset
value on each day which the
New York Stock Exchange is open for trading. Notwithstanding the
foregoing, the Board
of Trustees of the Fund (hereinafter the "Board") may refuse to
sell shares of any Portfolio
to any person, or suspend or terminate the offering of shares of
any Portfolio if such action
is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion
of the Board acting in good faith and in light of its fiduciary
duties under federal and any
applicable state laws, necessary in the best interests of the
shareholders of such Portfolio.
1.3. The Fund will not sell shares of the Designated
Portfolio(s) to any other
Participating Insurance Company separate account unless an
agreement containing
provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7,
and Article VII of this
Agreement is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash, on FirstGWL&A's
request, any full or
fractional shares of the Fund held by FirstGWL&A, executing such
requests on each
Business Day at the net asset value next computed after receipt by
the Fund or its designee
of the request for redemption. However, if one or more of the
Designated Portfolios 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 three
Business 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 Fund shall be
permitted to delay
sending redemption proceeds to FirstGWL&A by the same number of
days that the Fund
is delayed sending redemption proceeds to the other shareholders of
the Fund. This Section
1.4 may be amended, in writing, by the parties consistent with the
requirements of the 1940
Act and interpretations thereof. For purposes of this Section 1.4,
FirstGWL&A shall be the
designee of the Fund for receipt of requests for redemption and
receipt by such designee
shall constitute receipt by the Fund, provided that the Fund
receives notice of any such
request for redemption by 10:00 A.M. Eastern time on the next
following Business Day.
1.5. The Parties hereto acknowledge that the arrangement
contemplated by this
Agreement is not exclusive; the Fund's shares may be sold to other
Participating Insurance
Companies (subject to Section 1.3 and Article VI hereof) and the
cash value of the Con-
tracts may be invested in other investment companies.
1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern
time on the next
Business Day after an order to purchase Fund shares is made in
accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal
funds transmitted by wire
and/or by a credit for any shares redeemed the same day as the
purchase.
1.7. The Fund shall pay and transmit the proceeds of
redemptions of Fund shares
by 3:00 p.m. Eastern Time on the next Business Day after a
redemption order is received
in accordance with Section 1.4 hereof. Payment shall be in federal
funds transmitted by wire
and/or a credit for any shares purchased the same day as the
redemption.
1.8. Issuance and transfer of the Fund's shares will be by
book entry only. Stock
certificates will not be issued to FirstGWL&A or the Account.
Shares ordered from the
Fund will be recorded in an appropriate title for the Account or
the appropriate sub-account
of the Account.
1.9. The Fund shall furnish same day notice (by wire or
telephone, followed by
written confirmation) to FirstGWL&A of any income, dividends or
capital gain distributions
payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby
elects to receive all
such income dividends and capital gain distributions as are payable
on the Portfolio shares
in additional shares of that Portfolio. FirstGWL&A reserves the
right to revoke this election
and to receive all such income dividends and capital gain
distributions in cash. The Fund
shall notify FirstGWL&A by the end of the next following Business
Day of the number of
shares so issued as payment of such dividends and distributions.
1.10.The Fund shall make the net asset value per share for
each Designated
Portfolio available to FirstGWL&A on each Business Day as soon as
reasonably practical
after the net asset value per share is calculated and shall use its
best efforts to make such
net asset value per share available by 6:00 p.m. Eastern time. In
the event of an error in
the computation of a Designated Portfolio's net asset value per
share ("NAV") or any
dividend or capital gain distribution (each, a "pricing error"),
the Adviser or the Fund shall
immediately notify FirstGWL&A as soon as possible after discovery
of the error. Such
notification may be verbal, but shall be confirmed promptly in
writing in accordance with
Article XI of this Agreement. A pricing error shall be corrected
as follows: (a) if the
pricing error results in a difference between the erroneous NAV and
the correct NAV of
less than $0.01 per share, then no corrective action need be taken;
(b) if the pricing error
results in a difference between the erroneous NAV and the correct
NAV equal to or greater
than $0.01 per share, but less than 1/2 of 1% of the Designated
Portfolio's NAV at the time
of the error, then the Adviser shall reimburse the Designated
Portfolio for any loss, after
taking into consideration any positive effect of such error;
however, no adjustments to
Contractowner accounts need be made; and (c) if the pricing error
results in a difference
between the erroneous NAV and the correct NAV equal to or greater
than 1/2 of 1% of the
Designated Portfolio's NAV at the time of the error, then the
Adviser shall reimburse the
Designated Portfolio for any loss (without taking into
consideration any positive effect of
such error) and shall reimburse FirstGWL&A for the costs of
adjustments made to correct
Contractowner accounts in accordance with the provisions of
Schedule E. If an adjustment
is necessary to correct a material error which has caused
Contractowners to receive less than
the amount to which they are entitled, the number of shares of the
applicable sub-account
of such Contractowners will be adjusted and the amount of any
underpayments shall be
credited by the Adviser to FirstGWL&A for crediting of such amounts
to the applicable
Contractowners accounts. Upon notification by the Adviser of any
overpayment due to a
material error, FirstGWL&A or Schwab, as the case may be, shall
promptly remit to Adviser
any overpayment that has not been paid to Contractowners; however,
Adviser acknowledges
that Schwab and FirstGWL&A do not intend to seek additional
payments from any
Contractowner who, because of a pricing error, may have underpaid
for units of interest
credited to his/her account. In no event shall Schwab or
FirstGWL&A be liable to
Contractowners for any such adjustments or underpayment amounts.
A pricing error within
categories (b) or (c) above shall be deemed to be "materially
incorrect" or constitute a
"material error" for purposes of this Agreement.
The standards set forth in this Section 1.10 are based on the
Parties' understanding
of the views expressed by the staff of the Securities and Exchange
Commission ("SEC") as
of the date of this Agreement. In the event the views of the SEC
staff are later modified
or superseded by SEC or judicial interpretation, the parties shall
amend the foregoing
provisions of this Agreement to comport with the appropriate
applicable standards, on terms
mutually satisfactory to all Parties.
ARTICLE II. Representations and Warranties
2.1. FirstGWL&A represents and warrants that the Contracts and
the securities
deemed to be issued by the Account under the Contracts are or will
be registered under the
1933 Act; that the Contracts will be issued and sold in compliance
in all material respects
with all applicable federal and state laws and that the sale of the
Contracts shall comply in
all material respects with state insurance suitability
requirements. FirstGWL&A further
represents and warrants that it is an insurance company duly
organized and in good standing
under applicable law and that it has legally and validly
established the Account prior to any
issuance or sale of units thereof as a segregated asset account
under Section 4240 of the
New York Insurance Law and has registered the Account as a unit
investment trust in
accordance with the provisions of the 1940 Act to serve as a
segregated investment account
for the Contracts and that it will maintain such registration for
so long as any Contracts are
outstanding as required by applicable law.
2.2. The Fund represents and warrants that Designated
Portfolio(s) shares sold
pursuant to this Agreement shall be registered under the 1933 Act,
duly authorized for
issuance and sold in compliance with all applicable federal
securities laws including without
limitation the 1933 Act, the 1934 Act, and the 1940 Act and that
the Fund is and shall
remain registered under the 0000 Xxx. The Fund shall amend the
registration statement for
its shares under the 1933 Act and the 1940 Act from time to time as
required in order to
effect the continuous offering of its shares.
2.3. The Fund reserves the right to adopt a plan pursuant to
Rule 12b-1 under the
1940 Act and to impose an asset-based or other charge to finance
distribution expenses as
permitted by applicable law and regulation. In any event, the Fund
and Adviser agree to
comply with applicable provisions and SEC staff interpretations of
the 1940 Act to assure
that the investment advisory or management fees paid to the Adviser
by the Fund are in
accordance with the requirements of the 1940 Act. To the extent
that the Fund decides to
finance distribution expenses pursuant to Rule 12b-1, the Fund
undertakes to have its Board,
a majority of whom are not interested persons of the Fund,
formulate and approve any plan
pursuant to Rule 12b-1 under the 1940 Act to finance distribution
expenses.
2.4. The Fund represents and warrants that it will make every
effort to ensure that
the investment policies, fees and expenses of the Designated
Portfolio(s) are and shall at all
times remain in compliance with the insurance and other applicable
laws of the State of New
York and any other applicable state to the extent required to
perform this Agreement. The
Fund further represents and warrants that it will make every effort
to ensure that
Designated Portfolio(s) shares will be sold in compliance with the
insurance laws of the State
of New York and all applicable state insurance and securities laws.
The Fund shall register
and qualify the shares for sale in accordance with the laws of the
various states if and to the
extent required by applicable law. FirstGWL&A and the Fund will
endeavor to mutually
cooperate with respect to the implementation of any modifications
necessitated by any
change in state insurance laws, regulations or interpretations of
the foregoing that affect the
Designated Portfolio(s) (a "Law Change"), and to keep each other
informed of any Law
Change that becomes known to either party. In the event of a Law
Change, the Fund
agrees that, except in those circumstances where the Fund has
advised FirstGWL&A that
its Board of Directors has determined that implementation of a
particular Law Change is
not in the best interest of all of the Fund's shareholders with an
explanation regarding why
such action is lawful, any action required by a Law Change will be
taken.
2.5. The Fund represents and warrants that it is lawfully
organized and validly
existing under the laws of the State of Delaware and that it does
and will comply in all
material respects with the 1940 Act.
2.6. The Adviser represents and warrants that it is and shall
remain duly registered
under all applicable federal and state securities laws and that it
shall perform its obligations
for the Fund in compliance in all material respects with the laws
of the State of Delaware
and any applicable state and federal securities laws.
2.7. The Distributor represents and warrants that it is and
shall remain duly
registered under all applicable federal and state securities laws
and that it shall perform its
obligations for the Fund in compliance in all material respects
with the laws of the State of
Colorado and any applicable state and federal securities laws.
2.8. The Fund and the Adviser represent and warrant that all
of their respective
officers, employees, investment advisers, and other individuals or
entities dealing with the
money and/or securities of the Fund are, and shall continue to be
at all times, covered by
one or more blanket fidelity bonds or similar coverage for the
benefit of the Fund in an
amount not less than the minimal coverage required by Rule 17g-1
under the 1940 Act or
related provisions as may be promulgated from time to time. The
aforesaid bonds shall
include coverage for larceny and embezzlement and shall be issued
by a reputable bonding
company.
2.9. Schwab represents and warrants that it has completed,
obtained and
performed, in all material respects, all registrations, filings,
approvals, and authorizations,
consents and examinations required by any government or
governmental authority as may
be necessary to perform this Agreement. Schwab does and will
comply, in all material
respects, with all applicable laws, rules and regulations in the
performance of its obligations
under this Agreement.
2.10.The Fund will provide FirstGWL&A with as much advance
notice as is
reasonably practicable of any material change affecting the
Designated Portfolio(s)
(including, but not limited to, any material change in the
registration statement or prospectus
affecting the Designated Portfolio(s)) and any proxy solicitation
affecting the Designated
Portfolio(s) and consult with FirstGWL&A in order to implement any
such change in an
orderly manner, recognizing the expenses of changes and attempting
to minimize such
expenses by implementing them in conjunction with regular annual
updates of the prospectus
for the Contracts. The Fund agrees to share equitably in expenses
incurred by FirstGWL&A
as a result of actions taken by the Fund, consistent with the
allocation of expenses contained
in Schedule E attached hereto and incorporated herein by reference.
2.11.FirstGWL&A represents and warrants, for purposes other
than diversification
under Section 817 of the Internal Revenue Code of 1986 as amended
("the Code"), that the
Contracts are currently and at the time of issuance will be treated
as annuity contracts under
applicable provisions of the Code, and that it will make every
effort to maintain such
treatment and that it will notify Schwab, the Fund, the Distributor
and the Adviser
immediately upon having a reasonable basis for believing that the
Contracts have ceased to
be so treated or that they might not be so treated in the future.
In addition, FirstGWL&A
represents and warrants that the Account is a "segregated asset
account" and that interests
in the Account are offered exclusively through the purchase of or
transfer into a "variable
contract" within the meaning of such terms under Section 817 of the
Code and the
regulations thereunder. FirstGWL&A will use every effort to
continue to meet such
definitional requirements, and it will notify Schwab, the Fund, the
Distributor and the
Adviser immediately upon having a reasonable basis for believing
that such requirements
have ceased to be met or that they might not be met in the future.
FirstGWL&A represents
and warrants that it will not purchase Fund shares with assets
derived from tax-qualified
retirement plans except, indirectly, through Contracts purchased in
connection with such
plans.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the Adviser or Distributor shall
provide FirstGWL&A and
Schwab with as many copies of the Fund's current prospectus for the
Designated Portfolio(s)
as FirstGWL&A and Schwab may reasonably request for marketing
purposes (including
distribution to Contractowners with respect to new sales of a
Contract), with expenses to be
borne in accordance with Schedule E hereof. If requested by
FirstGWL&A in lieu thereof,
the Adviser, Distributor or Fund shall provide such documentation
(including a camera-ready
copy and computer diskette of the current prospectus for the
Designated Portfolio(s)) and
other assistance as is reasonably necessary in order for FirstGWL&A
once each year (or
more frequently if the prospectuses for the Designated Portfolio(s)
are amended) to have
the prospectus for the Contracts and the Fund's prospectus for the
Designated Portfolio(s)
printed together in one document. The Fund and Adviser agree that
the prospectus (and
semi-annual and annual reports) for the Designated Portfolio(s)
will describe only the
Designated Portfolio(s) and will not name or describe any other
portfolios or series that may
be in the Fund unless required by law.
3.2. If applicable state or federal laws or regulations
require that the Statement of
Additional Information ("SAI") for the Fund be distributed to all
Contractowners, then the
Fund, Distributor and/or the Adviser shall provide FirstGWL&A with
copies of the Fund's
SAI or documentation thereof for the Designated Portfolio(s) in
such quantities, with
expenses to be borne in accordance with Schedule E hereof, as
FirstGWL&A may
reasonably require to permit timely distribution thereof to
Contractowners. The Adviser,
Distributor and/or the Fund shall also provide SAIs to any
Contractowner or prospective
owner who requests such SAI from the Fund (although it is
anticipated that such requests
will be made to FirstGWL&A or Schwab).
3.3. The Fund, Distributor and/or Adviser shall provide
FirstGWL&A and Schwab
with copies of the Fund's proxy material, reports to stockholders
and other communications
to stockholders for the Designated Portfolio(s) in such quantity,
with expenses to be borne
in accordance with Schedule E hereof, as FirstGWL&A may reasonably
require to permit
timely distribution thereof to Contractowners.
3.4. It is understood and agreed that, except with respect to
information regarding
FirstGWL&A or Schwab provided in writing by that party, neither
FirstGWL&A nor Schwab
are responsible for the content of the prospectus or SAI for the
Designated Portfolio(s).
It is also understood and agreed that, except with respect to
information regarding the Fund,
the Distributor, the Adviser or the Designated Portfolio(s)
provided in writing by the Fund,
the Distributor or the Adviser, neither the Fund, Distributor nor
Adviser are responsible for
the content of the prospectus or SAI for the Contracts.
3.5. If and to the extent required by law FirstGWL&A shall:
(i) solicit voting instructions from Contractowners;
(ii) vote the Designated Portfolio(s) shares held in the
Account in
accordance with instructions received from
Contractowners: and
(iii)vote Designated Portfolio shares held in the Account
for which no
instructions have been received in the same
proportion as Designated
Portfolio(s) shares for which instructions have been
received from
Contractowners, so long as and to the extent that
the SEC continues
to interpret the 1940 Act to require pass-through
voting privileges for
variable contract owners. FirstGWL&A reserves the
right to vote
Fund shares held in any segregated asset account in
its own right, to
the extent permitted by law.
3.6. FirstGWL&A shall be responsible for assuring that each of
its separate
accounts holding shares of a Designated Portfolio calculates voting
privileges as directed by
the Fund and agreed to by FirstGWL&A and the Fund. The Fund agrees
to promptly notify
FirstGWL&A of any changes of interpretations or amendments of the
Mixed and Shared
Funding Exemptive Order. FirstGWL&A shall fulfill its obligations
under, and abide by the
terms of, the Mixed and Shared Funding Exemptive Order.
3.7. The Fund will comply with all provisions of the 1940 Act
requiring voting by
shareholders, and in particular the Fund will either provide for
annual meetings (except
insofar as the SEC may interpret Section 16 of the 1940 Act not to
require such meetings)
or, as the Fund currently intends, comply with Section 16(c) of the
1940 Act (although the
Fund 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 Fund will
act in accordance with the
SEC's interpretation of the requirements of Section 16(a) with
respect to periodic elections
of directors or trustees and with whatever rules the Commission may
promulgate with
respect thereto.
ARTICLE IV. Sales Material and Information
4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be
furnished, to the
Fund or its designee, a copy of each piece of sales literature or
other promotional material
that FirstGWL&A or Schwab, respectively, develops or proposes to
use and in which the
Fund (or a Portfolio thereof), its Adviser or one of its
sub-advisers or the Distributor is
named in connection with the Contracts, at least ten (10) Business
Days prior to its use. No
such material shall be used if the Fund or its designee objects to
such use within five (5)
Business Days after receipt of such material.
4.2. FirstGWL&A and Schwab shall not give any information or
make any
representations or statements on behalf of the Fund in connection
with the sale of the Con-
tracts other than the information or representations contained in
the registration statement
or prospectus for the Fund shares, as such registration statement
and prospectus 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, Distributor
or Adviser, except with the permission of the Fund, Distributor or
Adviser.
4.3. The Fund or the Adviser shall furnish, or shall cause to
be furnished, to
FirstGWL&A and Schwab, a copy of each piece of sales literature or
other promotional
material in which FirstGWL&A and/or its separate account(s), or
Schwab is named at least
ten (10) Business Days prior to its use. No such material shall be
used if FirstGWL&A or
Schwab objects to such use within five (5) Business Days after
receipt of such material.
4.4. The Fund, the Distributor and the Adviser shall not give
any information or
make any representations on behalf of FirstGWL&A or concerning
FirstGWL&A, the
Account, or the Contracts other than the information or
representations contained in a
registration statement or prospectus for the Contracts, as such
registration statement and
prospectus may be amended or supplemented from time to time, or in
reports for the
Account, or in sales literature or other promotional material
approved by FirstGWL&A or
its designee, except with the permission of FirstGWL&A.
4.5. FirstGWL&A, the Fund, the Distributor and the Adviser
shall not give any
information or make any representations on behalf of or concerning
Schwab, or use
Xxxxxx'x name except with the permission of Schwab.
4.6. The Fund will provide to FirstGWL&A and Schwab at least
one complete
copy of all registration statements, prospectuses, SAIs, 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 Designated Port-
folio(s), contemporaneously with the filing of such document(s)
with the SEC or NASD or
other regulatory authorities.
4.7. FirstGWL&A or Schwab will provide to the Fund at least
one complete copy
of all registration statements, prospectuses, SAIs, 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 Contracts or
the Account, contemporaneously with the filing of such document(s)
with the SEC, NASD,
or other regulatory authority.
4.8. For purposes of Articles IV and VIII, the phrase "sales
literature and other
promotional material" includes, but is not limited to,
advertisements (such as material
published, or designed for use in, a newspaper, magazine, or other
periodical, radio,
television, telephone or tape recording, videotape display, signs
or billboards, motion
pictures, or other public media; e.g., on-line networks such as the
Internet or other electronic
media), sales literature (i.e., any written communication
distributed or made generally
available to customers or the public, including brochures,
circulars, research reports, market
letters, form letters, seminar texts, reprints or excerpts of any
other advertisement, sales
literature, or published article), educational or training
materials or other communications
distributed or made generally available to some or all agents or
employees, and registration
statements, prospectuses, SAIs, shareholder reports, and proxy
materials and any other
material constituting sales literature or advertising under the
NASD rules, the 1933 Act or
the 0000 Xxx.
4.9. At the request of any party to this Agreement, each other
party will make
available to the other party's independent auditors and/or
representative of the appropriate
regulatory agencies, all records, data and access to operating
procedures that may be
reasonably requested in connection with compliance and regulatory
requirements related to
this Agreement or any party's obligations under this Agreement.
ARTICLE V. Fees and Expenses
5.1. The Fund, the Distributor and the Adviser shall pay no
fee or other compen-
sation to FirstGWL&A under this Agreement, and FirstGWL&A and
Schwab shall pay no
fee or other compensation to the Fund, Distributor or Adviser under
this Agreement,
although the parties hereto will bear certain expenses in
accordance with Schedule E,
Articles III, V, and other provisions of this Agreement.
5.2. All expenses incident to performance by the Fund, the
Distributor and the
Adviser under this Agreement shall be paid by the appropriate
party, as further provided
in Schedule E. The Fund shall see to it that all shares of the
Designated Portfolio(s) are
registered and authorized for issuance in accordance with
applicable federal law and, if and
to the extent required, in accordance with applicable state laws
prior to their sale.
5.3. The parties shall bear the expenses of routine annual
distribution (mailing
costs) of the Fund's prospectus and distribution (mailing costs) of
the Fund's proxy materials
and reports to owners of Contracts offered by FirstGWL&A, in
accordance with Schedule
E.
5.4. The Fund, the Distributor and the Adviser acknowledge
that a principal fea-
ture of the Contracts is the Contractowner's ability to choose from
a number of unaffiliated
mutual funds (and portfolios or series thereof), including the
Designated Portfolio(s) and the
Unaffiliated Funds, and to transfer the Contract's cash value
between funds and portfolios.
The Fund, the Distributor and the Adviser agree to cooperate with
FirstGWL&A and
Schwab in facilitating the operation of the Account and the
Contracts as described in the
prospectus for the Contracts, including but not limited to
cooperation in facilitating transfers
between Unaffiliated Funds.
5.5. Schwab agrees to provide certain administrative services,
specified in Schedule
C attached hereto and incorporated herein by reference, in
connection with the
arrangements contemplated by this Agreement. The parties
acknowledge and agree that the
services referred to in this Section 5.5 are recordkeeping,
shareholder communication, and
other transaction facilitation and processing, and related
administrative services only and are
not the services of an underwriter or a principal underwriter of
the Fund, and that Schwab
is not an underwriter for the shares of the Designated
Portfolio(s), within the meaning of
the 1933 Act or the 0000 Xxx.
5.6. As compensation for the services specified in Schedule C
hereto, the Adviser
agrees to pay Schwab a monthly Administrative Service Fee based on
the percentage per
annum on Schedule C hereto applied to the average daily value of
the shares of the
Designated Portfolio(s) held in the Account with respect to
Contracts sold by Schwab. This
monthly Administrative Service Fee is due and payable before the
15th (fifteenth) day
following the last day of the month to which it relates.
ARTICLE VI. Diversification and Qualification
6.1. The Fund, the Distributor and the Adviser represent and
warrant that the
Fund will at all times sell its shares and invest its assets in
such a manner as to ensure that
the Contracts will be treated as annuity contracts under the Code,
and the regulations issued
thereunder. Without limiting the scope of the foregoing, the Fund,
Distributor and Adviser
represent and warrant that the Fund and each Designated Portfolio
thereof will at all times
comply with Section 817(h) of the Code and Treasury Regulation
1.817-5, as amended from
time to time, and any Treasury interpretations thereof, relating to
the diversification
requirements for variable annuity, endowment, or life insurance
contracts and any
amendments or other modifications or successor provisions to such
Section or Regulations.
The Fund, the Distributor and the Adviser agree that shares of the
Designated Portfolio(s)
will be sold only to Participating Insurance Companies and their
separate accounts and to
Qualified Plans.
6.2. No shares of any Designated Portfolio of the Fund will be
sold to the general
public.
6.3. The Fund, the Distributor and the Adviser represent and
warrant that the
Fund and each Designated Portfolio is currently qualified as a
Regulated Investment
Company under Subchapter M of the Code, and that each Designated
Portfolio will maintain
such qualification (under Subchapter M or any successor or similar
provisions) as long as this
Agreement is in effect.
6.4. The Fund, Distributor or Adviser will notify FirstGWL&A
immediately upon
having a reasonable basis for believing that the Fund or any
Designated Portfolio has ceased
to comply with the aforesaid Section 817(h) diversification or
Subchapter M qualification
requirements or might not so comply in the future.
6.5. Without in any way limiting the effect of Sections 8.3,
8.4 and 8.5 hereof and
without in any way limiting or restricting any other remedies
available to FirstGWL&A or
Schwab, the Adviser or Distributor will pay all costs associated
with or arising out of any
failure of the Fund or any Designated Portfolio to comply with
Sections 6.1, 6.2, or 6.3
hereof, including all costs associated with reasonable and
appropriate corrections or
responses to any such failure; such costs may include, but are not
limited to, the costs
involved in creating, organizing, and registering a new investment
company as a funding
medium for the Contracts and/or the costs of obtaining whatever
regulatory authorizations
are required to substitute shares of another investment company for
those of the failed
Portfolio (including but not limited to an order pursuant to
Section 26(b) of the 1940 Act);
such costs are to include, but are not limited to, fees and
expenses of legal counsel and other
advisors to FirstGWL&A and any federal income taxes or tax
penalties and interest thereon
(or "toll charges" or exactments or amounts paid in settlement)
incurred by FirstGWL&A
with respect to itself or owners of its Contracts in connection
with any such failure or
anticipated or reasonably foreseeable failure.
6.6. The Fund at the Fund's expense shall provide FirstGWL&A
or its designee
with reports certifying compliance with the aforesaid Section
817(h) diversification and
Subchapter M qualification requirements, at the times provided for
and substantially in the
form attached hereto as Schedule D and incorporated herein by
reference; provided,
however, that providing such reports does not relieve the Fund of
its responsibility for such
compliance or of its liability for any non-compliance.
6.7. FirstGWL&A agrees that if the Internal Revenue Service
("IRS") asserts in
writing in connection with any governmental audit or review of
FirstGWL&A or, to
FirstGWL&A's knowledge, or any Contractowner that any Designated
Portfolio has failed
to comply with the diversification requirements of Section 817(h)
of the Code or
FirstGWL&A otherwise becomes aware of any facts that could give
rise to any claim against
the Fund, Distributor or Adviser as a result of such a failure or
alleged failure:
(a) FirstGWL&A shall promptly notify the Fund, the
Distributor and the Adviser of
such assertion or potential claim;
(b) FirstGWL&A shall consult with the Fund, the Distributor
and the Adviser as to
how to minimize any liability that may arise as a result of
such failure or alleged
failure;
(c) FirstGWL&A shall use its best efforts to minimize any
liability of the Fund, the
Distributor and the Adviser resulting from such failure,
including, without limitation,
demonstrating, pursuant to Treasury Regulations, Section
1.817-5(a)(2), to the
commissioner of the IRS that such failure was inadvertent;
(d) any written materials to be submitted by FirstGWL&A to
the IRS, any
Contractowner or any other claimant in connection with any of
the foregoing
proceedings or contests (including, without limitation, any
such materials to be
submitted to the IRS pursuant to Treasury Regulations, Section
1.817-5(a)(2)) shall
be provided by FirstGWL&A to the Fund, the Distributor and the
Adviser (together
with any supporting information or analysis) within at least
two (2) business days
prior to submission;
(e) FirstGWL&A shall provide the Fund, the Distributor and the
Adviser with such
cooperation as the Fund, the Distributor and the Adviser shall
reasonably request
(including, without limitation, by permitting the Fund, the
Distributor and the Adviser
to review the relevant books and records of FirstGWL&A) in
order to facilitate
review by the Fund, the Distributor and the Adviser of any
written submissions
provided to it or its assessment of the validity or amount of
any claim against it
arising from such failure or alleged failure;
(f) FirstGWL&A shall not with respect to any claim of the IRS
or any Contractowner
that would give rise to a claim against the Fund, the
Distributor and the Adviser (i)
compromise or settle any claim, (ii) accept any adjustment on
audit, or (iii) forego
any allowable administrative or judicial appeals, without the
express written consent
of the Fund, the Distributor and the Adviser, which shall not
be unreasonably
withheld; provided that, FirstGWL&A shall not be required to
appeal any adverse
judicial decision unless the Fund and the Adviser shall have
provided an opinion of
independent counsel to the effect that a reasonable basis
exists for taking such
appeal; and further provided that the Fund, the Distributor
and the Adviser shall
bear the costs and expenses, including reasonable attorney's
fees, incurred by
FirstGWL&A in complying with this clause (f).
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order
7.1. The Board will monitor the Fund for the existence of any
material
irreconcilable conflict between the interests of the contract
owners of all separate accounts
investing in the Fund and the participants of all Qualified Plans
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 insur-
ance, 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 author-
ities; (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 in-
structions given by variable annuity contract and variable life
insurance contract owners or
by contract owners of different Participating Insurance Companies;
or (f) a decision by a
Participating Insurance Company to disregard the voting
instructions of contract owners.
The Board shall promptly inform FirstGWL&A if it determines that an
irreconcilable
material conflict exists and the implications thereof. The
directors of the Fund shall have
sole authority to determine whether an irreconcilable material
conflict exists and their
determination shall be binding upon FirstGWL&A.
7.2. FirstGWL&A will report any potential or existing
conflicts of which it is aware
to the Board. FirstGWL&A will assist the Board in carrying out its
responsibilities under
the Mixed and Shared Funding Exemptive Order, by providing the
Board with all
information reasonably necessary for the Board to consider any
issues raised. This includes,
but is not limited to, an obligation by FirstGWL&A to inform the
Board whenever contract
owner voting instructions are to be disregarded. Such
responsibilities shall be carried out
by FirstGWL&A with a view only to the interests of its
Contractowners.
7.3. If it is determined by a majority of the Board, or a
majority of its directors who
are not interested persons of the Fund, the Distributor, the
Adviser or any sub-adviser to
any of the Designated Portfolios (the "Independent Directors"),
that a material irreconcilable
conflict exists, FirstGWL&A and/or other Participating Insurance
Companies or Qualified
Plans 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 Fund or
any Designated Portfolio
and reinvesting such assets in a different investment medium,
including (but not limited to)
another portfolio of the Fund, or submitting the question whether
such segregation should
be implemented to a vote of all affected contract owners and, as
appropriate, segregating
the assets of any appropriate group (i.e., annuity contract owners,
life insurance contract
owners, or variable contract owners of one or more Participating
Insurance Companies) that
votes in favor of such segregation, or offering to the affected
contract owners the option of
making such a change; and (2) establishing a new registered
management investment
company or managed separate account and obtaining any necessary
approvals or orders of
the Commission in connection therewith.
7.4. If a material irreconcilable conflict arises because of
a decision by
FirstGWL&A to disregard contract owner voting instructions and that
decision represents
a minority position or would preclude a majority vote, FirstGWL&A
may be required, at the
Fund's election, to withdraw the Account's investment in the Fund
and terminate this
Agreement; provided, however that such withdrawal and termination
shall be limited to the
extent required by the foregoing material irreconcilable conflict
as determined by a majority
of the Independent Directors. Any such withdrawal and termination
must take place within
six (6) months after the Fund gives written notice that this
provision is being implemented,
and until the end of that six month period the Fund shall continue
to accept and implement
orders by FirstGWL&A for the purchase (and redemption) of shares of
the Fund.
7.5. If a material irreconcilable conflict arises because a
particular state insurance
regulator's decision applicable to FirstGWL&A conflicts with the
majority of other state
regulators, then FirstGWL&A will withdraw the Account's investment
in the Fund and
terminate this Agreement within six months after the Board informs
FirstGWL&A in writing
that it has determined that such decision has created an
irreconcilable material conflict;
provided, however, that such withdrawal and termination shall be
limited to the extent
required by the foregoing material irreconcilable conflict as
determined by a majority of the
disinterested members of the Board. Until the end of the foregoing
six month period, the
Fund shall continue to accept and implement orders by FirstGWL&A
for the purchase (and
redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this
Agreement, a majority of the
disinterested members of the Board shall determine whether any
proposed action adequately
remedies any irreconcilable material conflict, but in no event will
the Fund be required to
establish a new funding medium for the Contracts. FirstGWL&A shall
not be required by
Section 7.3 to establish a new funding medium for the Contracts if
an offer to do so has
been declined by vote of a majority of Contractowners materially
and 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
FirstGWL&A will withdraw the Account's investment in the Fund and
terminate this
Agreement within six (6) months after the Board informs FirstGWL&A
in writing of the
foregoing determination; provided, however, that such withdrawal
and termination shall be
limited to the extent required by any such material irreconcilable
conflict as determined by
a majority of the Independent 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 1940 Act or the rules
promulgated thereunder with respect to mixed or shared funding (as
defined in the Mixed
and Shared Funding Exemptive Order) on terms and conditions
materially different from
those contained in the Mixed and Shared Funding Exemptive Order,
then (a) the Fund
and/or 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: and (b) Sections
3.5, 3.6, 3.7, 7.1, 7.2, 7.3,
7.4, and 7.5 of this Agreement shall continue in effect only to the
extent that terms and con-
ditions substantially identical to such Sections are contained in
such Rule(s) as so amended
or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By FirstGWL&A
8.1(a). FirstGWL&A agrees to indemnify and hold harmless the
Fund, the
Distributor and the Adviser and each of their officers, directors
or trustees, employees or
agents and each person, if any, who controls the Fund, Distributor
or Adviser within the
meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes
of this Section 8.1) against any and all losses, claims, expenses,
damages, liabilities (including
amounts paid in settlement with the written consent of FirstGWL&A)
or litigation (including
reasonable legal and other expenses) to which the Indemnified
Parties may become subject
under any statute or regulation, at common law or otherwise,
insofar as such losses, claims,
expenses, damages, liabilities or expenses (or actions in respect
thereof) or settlements are
related to the sale, acquisition or redemption of the Fund's shares
or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue
statements of any material fact contained in the
registration statement or pro-
spectus or SAI covering the Contracts or contained in the
Contracts or sales
literature or other promotional material for the
Contracts (or any amendment
or supplement to any of the foregoing), or arise out of
or are based upon the
omission or the alleged omission to state therein a
material fact required to
be stated therein or necessary to make the statements
therein not misleading,
provided that this Agreement to indemnify shall not apply
as to any
Indemnified Party if such statement or omission or such
alleged statement or
omission was made in reliance upon and in conformity with
information
furnished in writing to FirstGWL&A or Schwab by or on
behalf of the
Adviser, Distributor or Fund for use in the registration
statement, prospectus
or SAI covering the Contracts or contained in the
Contracts or sales literature
or other promotional material for the Contracts (or any
amendment or
supplement) or otherwise for use in connection with the
sale of the Contracts
or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than
statements or representations contained in the
registration statement, pro-
spectus, SAI or sales literature or other promotional
material of the Fund not
supplied by FirstGWL&A or persons under its control) or
wrongful conduct
of FirstGWL&A or persons under its control, with respect
to the sale or
distribution of the Contracts or Fund Shares; or
(iii)arise out of any untrue statement or alleged untrue
statement of a material
fact contained in a registration statement, prospectus,
SAI or sales literature
or other promotional material of the Fund, or any
amendment thereof or
supplement thereto, or the omission or alleged omission
to state therein a
material fact required to be stated therein or necessary
to make the
statements therein not misleading, if such a statement or
omission was made
in reliance upon information furnished in writing to the
Fund, Adviser or
Distributor by or on behalf of FirstGWL&A; or
(iv) arise as a result of any failure by FirstGWL&A to provide
the services and
furnish the materials under the terms of this Agreement;
or
(v) arise out of or result from any material breach of any
representation and/or
warranty made by FirstGWL&A in this Agreement or arise
out of or result
from any other material breach of this Agreement by
FirstGWL&A, including
without limitation Section 2.11 and Section 6.7 hereof,
as limited by and in accordance with the provisions of Sections
8.1(b) and 8.1(c) hereof.
8.1(b). FirstGWL&A shall not be liable under this
indemnification provision with
respect to any losses, claims, expenses, damages, liabilities or
litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful
misfeasance, bad faith, or negligence in the performance of such
Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of
obligations or duties under this
Agreement or to any of the Indemnified Parties.
8.1(c). FirstGWL&A shall not be liable under this
indemnification provision with
respect to any claim made against an Indemnified Party unless such
Indemnified Party shall
have notified FirstGWL&A in writing within a reasonable time after
the summons or other
first legal process giving information of the nature of the claim
shall have been served upon
such Indemnified Party (or after such Indemnified Party shall have
received notice of such
service on any designated agent), but failure to notify FirstGWL&A
of any such claim shall
not relieve FirstGWL&A from any liability which it may have to the
Indemnified Party
against whom such action is brought on account of this
indemnification provision, except to
the extent that FirstGWL&A has been prejudiced by such failure to
give notice. In addition,
any failure by the Indemnified Party to notify FirstGWL&A of any
such claim shall not
relieve FirstGWL&A from any liability which it may have to the
Indemnified Party against
whom the action is brought otherwise than on account of this
indemnification provision. In
case any such action is brought against the Indemnified Parties,
FirstGWL&A shall be
entitled to participate, at its own expense, in the defense of such
action. FirstGWL&A also
shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named
in the action; 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 FirstGWL&A, FirstGWL&A shall not have the
right to assume said
defense, but shall pay the costs and expenses thereof (except that
in no event shall
FirstGWL&A 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 FirstGWL&A to such party of FirstGWL&A'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 FirstGWL&A
will not be liable to such
party under this Agreement for any legal or other expenses
subsequently incurred by such
party independently in connection with the defense thereof other
than reasonable costs of
investigation.
8.1(d).The Indemnified Parties will promptly notify FirstGWL&A
of the
commencement of any litigation or proceedings against them in
connection with the issuance
or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2. Indemnification by Schwab
8.2(a).Schwab agrees to indemnify and hold harmless the Fund,
the Distributor
and the Adviser and each of their officers, directors or trustees,
employees or agents, and
each person, if any, who controls the Fund, Distributor or Adviser
within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this
Section 8.2) against any and all losses, claims, expenses, damages
and liabilities (including
amounts paid in settlement with the written consent of Schwab) or
litigation (including
reasonable legal and other expenses), to which the Indemnified
Parties may become subject
under any statute or regulation, at common law or otherwise,
insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to
the sale, acquisition or redemption of the Fund's shares or the
Contracts and:
(i) arise out of Xxxxxx'x dissemination of information
regarding the Fund that is
both (A) materially incorrect and (B) that was neither
contained in the Fund's
registration statement nor in the Fund's sales literature
or other promotional
material or provided in writing to Schwab, or approved in
writing, by or on
behalf of the Fund, Distributor or Adviser; or
(ii) arise out of or are based upon any untrue statements or
alleged untrue
statements of any material fact contained in sales
literature or other
promotional material prepared or approved by Schwab for
the Contracts or
arise out of or are based upon the omission or the
alleged omission to state
therein a material fact required to be stated therein or
necessary to make the
statements therein not misleading, provided that this
Agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or
such alleged statement or omission was made in reliance
upon and in
conformity with information furnished in writing to
FirstGWL&A or Schwab
by or on behalf of the Adviser, Distributor or the Fund
or to Schwab by
FirstGWL&A for use in the registration statement,
prospectus or SAI covering
the Contracts or contained in the Contracts or sales
literature or other
promotional material for the Contracts (or any amendment
or supplement)
or otherwise for use in connection with the sale of the
Contracts; or
(iii)arise out of or as a result of statements or
representations (other than
statements or representations contained in the
registration statement,
prospectus, SAI or sales literature or other promotional
material of the Fund
not supplied by Schwab or persons under its control) or
wrongful conduct of
Schwab or persons under its control, with respect to the
sale or distribution
of the Contracts; or
(iv) arise as a result of any failure by Schwab to provide the
services and furnish
the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or
warranty made by Schwab in this Agreement or arise out of
or result from any
other material breach of this Agreement by Schwab;
as limited by and in accordance with the provisions of Sections
8.2(b) and 8.2(c) hereof.
8.2(b). Schwab shall not be liable under this indemnification
provision with respect
to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or
negligence in the performance of such Indemnified Party's duties or
by reason of such
Indemnified Party's reckless disregard of obligations or duties
under this Agreement or to
any of the Indemnified Parties.
8.2(c). Schwab shall not be liable under this indemnification
provision with respect
to any claim made against an Indemnified Party unless such
Indemnified Party shall have
notified Schwab in writing within a reasonable time after the
summons or other first legal
process giving information of the nature of the claim shall have
been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service
on any designated agent), but failure to notify Schwab of any such
claim shall not relieve
Schwab from any liability which it may have to the Indemnified
Party against whom such
action is brought on account of this indemnification provision,
except to the extent that
Schwab has been prejudiced by such failure to give notice. In
addition, any failure by the
Indemnified Party to notify Schwab of any such claim shall not
relieve Schwab 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, Schwab shall be entitled
to participate, at its own
expense, in the defense of such action. Schwab also shall be
entitled to assume the defense
thereof, with counsel satisfactory to the party named in the
action; 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 Schwab, Schwab
shall not have the right to assume said defense, but shall pay the
costs and expenses thereof
(except that in no event shall Schwab 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 Schwab to such party of Xxxxxx'x
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 Schwab will
not be liable to such party under this Agreement for any legal or
other expenses
subsequently incurred by such party independently in connection
with the defense thereof
other than reasonable costs of investigation.
8.2(d). The Indemnified Parties will promptly notify Schwab
of the commencement
of any litigation or proceedings against them in connection with
the issuance or sale of the
Fund Shares or the Contracts or the operation of the Fund.
8.3. Indemnification by the Adviser
8.3(a). The Adviser agrees to indemnify and hold harmless
FirstGWL&A and
Schwab and each of their directors, officers, employees or agents,
and each person, if any,
who controls FirstGWL&A or Schwab within the meaning of Section 15
of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this
Section 8.3) against any and all
losses, claims, expenses, damages, liabilities (including amounts
paid in settlement with the
written consent of the Adviser) or litigation (including reasonable
legal and other expenses)
to which the Indemnified Parties may become subject under any
statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale,
acquisition or redemption
of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue
statement of any material fact contained in the
registration statement or
prospectus or SAI or sales literature or other
promotional material of the
Fund prepared by the Adviser (or any amendment or
supplement to any of
the foregoing), or arise out of or are based upon the
omission or the alleged
omission to state therein a material fact required to be
stated therein or
necessary to make the statements therein not misleading,
provided that this
Agreement to indemnify shall not apply as to any
Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reli-
ance upon and in conformity with information furnished in
writing to the
Adviser, the Distributor or the Fund by or on behalf of
FirstGWL&A or
Schwab for use in the registration statement, prospectus
or SAI for the Fund
or in sales literature or other promotional material (or
any amendment or
supplement) or otherwise for use in connection with the
sale of the Contracts
or the Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than
statements or representations contained in the
registration statement,
prospectus, SAI or sales literature or other promotional
material for the
Contracts not supplied by the Adviser or persons under
its control) or
wrongful conduct of the Adviser or persons under their
control, with respect
to the sale or distribution of the Contracts or Fund
shares; or
(iii)arise out of any untrue statement or alleged untrue
statement of a material
fact contained in a registration statement, prospectus,
SAI, or sales literature
or other promotional material covering the Contracts, or
any amendment
thereof or supplement thereto, or the omission or alleged
omission to state
therein a material fact required to be stated therein or
necessary to make the
statement or statements therein not misleading, if such
statement or omission
was made in reliance upon information furnished in
writing to FirstGWL&A
or Schwab by or on behalf of the Adviser, the Distributor
or the Fund; or
(iv) arise as a result of any failure by the Adviser to
provide the services and
furnish the materials under the terms of this Agreement
(including a failure,
whether unintentional or in good faith or otherwise, to
comply with the
diversification and other qualification requirements
specified in Article VI of
this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or
warranty made by the Adviser in this Agreement or arise
out of or result from
any other material breach of this Agreement by the
Adviser;
as limited by and in accordance with the provisions of Sections
8.3(b) and 8.3(c) hereof.
This indemnification is in addition to and apart from the
responsibilities and obligations of
the Adviser specified in Article VI hereof.
8.3(b). The Adviser shall not be liable under this
indemnification provision with
respect to any losses, claims, expenses, damages, liabilities or
litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful
misfeasance, bad faith, or negligence in the performance of such
Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of
obligations or duties under this
Agreement or to any of the Indemnified Parties.
8.3(c). The Adviser shall not be liable under this
indemnification provision with
respect to any claim made against an Indemnified Party unless such
Indemnified Party shall
have notified the Adviser in writing within a reasonable time after
the summons or other
first legal process giving information of the nature of the claim
shall have been served upon
such Indemnified Party (or after such Indemnified Party shall have
received notice of such
service on any designated agent), but failure to notify the Adviser
of any such claim shall not
relieve the Adviser from any liability which it may have to the
Indemnified Party against
whom such action is brought on account of this indemnification
provision, except to the
extent that the Adviser has been prejudiced by such failure to give
notice. In addition, any
failure by the Indemnified Party to notify the Adviser of any such
claim shall not relieve the
Adviser from any liability which it may have to the Indemnified
Party against whom the
action is brought otherwise than on account of this indemnification
provision. In case any
such action is brought against the Indemnified Parties, the Adviser
will be entitled to
participate, at its own expense, in the defense thereof. The
Adviser also shall be entitled
to assume the defense thereof, with counsel satisfactory to the
party named in the action;
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 Adviser, the Adviser shall not have the right to assume said
defense, but shall pay the
costs and expenses thereof (except that in no event shall the
Adviser 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
Adviser to such party of
the Adviser'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 Adviser will not be liable to such
party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.3(d). FirstGWL&A and Schwab agree to promptly notify the
Adviser of the
commencement of any litigation or proceedings against FirstGWL&A or
Schwab or any of
their officers or directors in connection with the issuance or sale
of the Contracts or the
operation of the Account.
8.4. Indemnification By the Fund
8.4(a). The Fund agrees to indemnify and hold harmless
FirstGWL&A and Schwab
and each of their directors, officers, employees or agents and each
person, if any, who
controls FirstGWL&A or Schwab within the meaning of Section 15 of
the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this
Section 8.4) against any and all
losses, claims, expenses, damages, liabilities (including amounts
paid in settlement with the
written consent of the Fund) or litigation (including reasonable
legal and other expenses)
to which the Indemnified Parties may become subject under any
statute or regulation, at
common law or otherwise, insofar as such losses, claims, expenses,
damages, liabilities or
expenses (or actions in respect thereof) or settlements, are
related to the operations of the
Fund and:
(i) arise as a result of any failure by the Fund to provide
the services and furnish
the materials under the terms of this Agreement
(including a failure, whether
unintentional or in good faith or otherwise, to comply
with the diversification
and other qualification requirements specified in Article
VI of this Agree-
ment); or
(ii) arise out of or result from any material breach of any
representation and/or
warranty made by the Fund in this Agreement or arise out
of or result from
any other material breach of this Agreement by the Fund;
or
(iii)arise out of or result from the incorrect or untimely
calculation or reporting
of the daily net asset value per share or dividend or
capital gain distribution
rate;
as limited by and in accordance with the provisions of Sections
8.4(b) and 8.4(c) hereof.
8.4(b). The Fund shall not be liable under this
indemnification provision with respect
to any losses, claims, expenses, damages, liabilities or litigation
to which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, bad
faith, or negligence in the performance of such Indemnified Party's
duties or by reason of
such Indemnified Party's reckless disregard of obligations or
duties under this Agreement
or to any of the Indemnified Parties.
8.4(c). The Fund shall not be liable under this
indemnification provision with respect
to any claim made against an Indemnified Party unless such
Indemnified Party shall have
notified the Fund in writing within a reasonable time after the
summons or other first legal
process giving information of the nature of the claim shall have
been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service
on any designated agent), but failure to notify the Fund of any
such claim shall not relieve
it from any liability which it may have to the Indemnified Party
against whom such action
is brought on account of this indemnification provision, except to
the extent that the Fund
has been prejudiced by such failure to give notice. In addition,
any failure by the
Indemnified Party to notify the Fund of any such claim shall not
relieve the Fund 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 Fund will be entitled
to participate, at its own
expense, in the defense thereof. The Fund shall also be entitled
to assume the defense
thereof, with counsel satisfactory to the party named in the
action; 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 Fund, the
Fund shall not have the right to assume said defense, but shall pay
the costs and expenses
thereof (except that in no event shall the Fund 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 Fund to such party of the
Fund'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 Fund
will not be liable to such party under this Agreement for any legal
or other expenses
subsequently incurred by such party independently in connection
with the defense thereof
other than reasonable costs of investigation.
8.4(d). FirstGWL&A and Schwab each agree to promptly notify
the Fund of the
commencement of any litigation or proceeding against FirstGWL&A or
Schwab or any of
their respective officers or directors in connection with the
Agreement, the issuance or sale
of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the
Fund.
8.5. Indemnification by the Distributor
8.5(a).The Distributor agrees to indemnify and hold harmless
FirstGWL&A and
Schwab and each of their directors, officers, employees or agents
and each person, if any,
who controls FirstGWL&A or Schwab within the meaning of Section 15
of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this
Section 8.5) against any and all
losses, claims, expenses, damages, liabilities (including amounts
paid in settlement with the
written consent of the Distributor) or litigation (including
reasonable legal and other
expenses) to which the Indemnified Parties may become subject under
any statute or
regulation, at common law or otherwise, insofar as such losses,
claims, expenses, damages,
liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale,
acquisition or redemption of the Fund's shares or the contracts
and:
(i) arise out of or are based upon any untrue statement or
alleged untrue
statement of any material fact contained in the
registration statement or
prospectus or SAI or sales literature or other
promotional material of the
Fund prepared by the Distributor (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 reli-
ance upon and in conformity with information furnished in
writing to the
Adviser, the Distributor or Fund by or on behalf of
FirstGWL&A or Schwab
for use in the registration statement or SAI or
prospectus for the Fund or in
sales literature or other promotional material (or any
amendment or supple-
ment) or otherwise for use in connection with the sale of
the Contracts or
Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than
statements or representations contained in the
registration statement,
prospectus, SAI, sales literature or other promotional
material for the
Contracts not supplied by the Distributor or persons
under its control) or
wrongful conduct of the Distributor or persons under
their control, with
respect to the sale or distribution of the Contracts or
Fund shares; or
(iii)arise out of any untrue statement or alleged untrue
statement of a material
fact contained in a registration statement, prospectus,
SAI, sales literature or
other promotional material covering the Contracts, or any
amendment thereof
or supplement thereto, or the omission or alleged
omission to state therein a
material fact required to be stated therein or necessary
to make the statement
or statements therein not misleading, if such statement
or omission was made
in reliance upon information furnished in writing to
FirstGWL&A or Schwab
by or on behalf of the Adviser, the Distributor or Fund;
or
(iv) arise as a result of any failure by the Distributor to
provide the services and
furnish the materials under the terms of this Agreement
(including a failure,
whether unintentional or in good faith or otherwise, to
comply with the
diversification and other qualification requirements
specified in Article VI of
this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or
warranty made by the Distributor in this Agreement or
arise out of or result
from any other material breach of this Agreement by the
Fund, Adviser or
Distributor;
as limited by and in accordance with the provisions of Sections
8.5(b) and 8.5(c) hereof.
This indemnification is in addition to and apart from the
responsibilities and obligations of
the Distributor specified in Article VI hereof.
8.5(b).The Distributor shall not be liable under this
indemnification provision with
respect to any losses, claims, expenses, damages, liabilities or
litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful
misfeasance, bad faith, or negligence in the performance or such
Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of
obligations or duties under this
Agreement or to any of the Indemnified Parties.
8.5(c)The Distributor shall not be liable under this
indemnification provision with
respect to any claim made against an Indemnified Party unless such
Indemnified Party shall
have notified the Distributor in writing within a reasonable time
after the summons or other
first legal process giving information of the nature of the claim
shall have been served upon
such Indemnified Party (or after such Indemnified Party shall have
received notice of such
service on any designated agent), but failure to notify the
Distributor of any such claim shall
not relieve the Distributor from any liability which it may have to
the Indemnified Party
against whom such action is brought on account of this
indemnification provision, except to
the extent that the Distributor has been prejudiced by such failure
to give notice. In
addition, any failure by the Indemnified Party to notify the
Distributor of any such claim
shall not relieve the Distributor from any liability which it may
have to the Indemnified Party
against whom the action is brought otherwise than on account of
this indemnification
provision. In case any such action is brought against the
Indemnified Parties, the Distributor
will be entitled to participate, at its own expense, in the defense
thereof. The Distributor
also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party
named in the action; 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 Distributor, the Distributor shall not
have the right to assume said
defense, but shall pay the costs and expenses thereof (except that
in no event shall the
Distributor 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 Distributor to such party of the Distributor'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
Distributor will not be
liable to such party under this Agreement for any legal or other
expenses subsequently
incurred by such party independently in connection with the defense
thereof other than
reasonable costs of investigation.
8.5(d)FirstGWL&A and Schwab agree to promptly notify the
Distributor of the
commencement of any litigation or proceedings against FirstGWL&A or
Schwab or any of
their officers or directors in connection with the issuance or sale
of the Contracts or the
operation of the Account.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions
hereof interpreted under
and in accordance with the laws of the State of New York, without
regard to the New York
Conflict of Laws provisions.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940
Acts, and the rules and regulations and rulings thereunder,
including such exemptions from
those statutes, rules and regulations as the Securities and
Exchange 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, with or without cause,
with respect to some or
all Portfolios, upon six (6) months advance written
notice delivered to the
other parties; provided, however, that such notice shall
not be given earlier
than six (6) months following the date of this Agreement;
or
(b) at the option of FirstGWL&A or Schwab by written
notice to the other
parties with respect to any Portfolio based upon
FirstGWL&A's or Xxxxxx'x
determination that shares of such Portfolio are not
reasonably available to
meet the requirements of the Contracts; or
(c) at the option of FirstGWL&A or Schwab by written
notice to the other
parties with respect to any Portfolio in the event any of
the Portfolio's shares
are not registered, issued or sold in accordance with
applicable state and/ or
federal law or such law precludes the use of such shares
as the underlying
investment media of the Contracts issued or to be issued
by FirstGWL&A; or
(d) at the option of the Fund or the Adviser in the
event that formal
administrative proceedings are instituted against
FirstGWL&A or Schwab by
the NASD, the SEC, the Insurance Commissioner or like
official of any state
or any other regulatory body regarding FirstGWL&A's or
Xxxxxx'x duties
under this Agreement or related to the sale of the
Contracts, the operation
of any Account, or the purchase of the Fund shares, if,
in each case, the Fund
reasonably determines in its sole judgment exercised in
good faith, that any
such administrative proceedings will have a material
adverse effect upon the
ability of FirstGWL&A or Schwab to perform its
obligations under this
Agreement; or
(e) at the option of FirstGWL&A or Schwab in the event
that formal
administrative proceedings are instituted against the
Fund, the Distributor or
the Adviser by the NASD, the SEC, or any state securities
or insurance
department or any other regulatory body, if Schwab or
FirstGWL&A
reasonably determines in its sole judgment exercised in
good faith, that any
such administrative proceedings will have a material
adverse effect upon the
ability of the Fund, the Distributor or the Adviser to
perform their obligations
under this Agreement; or
(f) at the option of FirstGWL&A by written notice to the
Fund with respect
to any Portfolio if FirstGWL&A reasonably believes that
the Portfolio will fail
to meet the Section 817(h) diversification requirements
or Subchapter M
qualifications specified in Article VI hereof; or
(g) at the option of either the Fund, the Distributor or
the Adviser, if (i) the
Fund, Distributor or Adviser, respectively, shall
determine, in their sole
judgment reasonably exercised in good faith, that either
FirstGWL&A or
Schwab has suffered a material adverse change in their
business or financial
condition or is the subject of material adverse publicity
and that material
adverse change or publicity will have a material adverse
impact on
FirstGWL&A's or Xxxxxx'x ability to perform its
obligations under this
Agreement, (ii) the Fund, Distributor or Adviser notifies
FirstGWL&A or
Schwab, as appropriate, of that determination and its
intent to terminate this
Agreement, and (iii) after considering the actions taken
by FirstGWL&A or
Schwab and any other changes in circumstances since the
giving of such a
notice, the determination of the Fund, Distributor or
Adviser shall continue
to apply on the sixtieth (60th) day following the giving
of that notice, which
sixtieth day shall be the effective date of termination;
or
(h) at the option of either FirstGWL&A or Schwab, if (i)
FirstGWL&A or
Schwab, respectively, shall determine, in its sole
judgment reasonably exercised
in good faith, that the Fund, Distributor or Adviser has
suffered a material
adverse change in its business or financial condition or
is the subject of
material adverse publicity and that material adverse
change or publicity will
have a material adverse impact on the Fund's,
Distributor's or Adviser's ability
to perform its obligations under this Agreement, (ii)
FirstGWL&A or Schwab
notifies the Fund, Distributor or Adviser, as
appropriate, of that determination
and its intent to terminate this Agreement, and (iii)
after considering the
actions taken by the Fund, Distributor or Adviser and any
other changes in
circumstances since the giving of such a notice, the
determination of
FirstGWL&A or Schwab shall continue to apply on the
sixtieth (60th) day
following the giving of that notice, which sixtieth day
shall be the effective date
of termination; or
(i) at the option of FirstGWL&A in the event that formal
administrative
proceedings are instituted against Schwab by the NASD,
the Securities and
Exchange Commission, or any state securities or insurance
department or any
other regulatory body regarding Xxxxxx'x duties under
this Agreement or
related to the sale of the Fund's shares or the
Contracts, the operation of any
Account, or the purchase of the Fund shares, provided,
however, that
FirstGWL&A determines in its sole judgment exercised in
good faith, that any
such administrative proceedings will have a material
adverse effect upon the
ability of Schwab to perform its obligations related to
the Contracts; or
(j) at the option of Schwab in the event that formal
administrative
proceedings are instituted against FirstGWL&A by the
NASD, the Securities
and Exchange Commission, or any state securities or
insurance department or
any other regulatory body regarding FirstGWL&A's duties
under this
Agreement or related to the sale of the Fund's shares or
the Contracts, the
operation of any Account, or the purchase of the Fund
shares, provided,
however, that Schwab determines in its sole judgment
exercised in good faith,
that any such administrative proceedings will have a
material adverse effect
upon the ability of FirstGWL&A to perform its obligations
related to the
Contracts; or
(k) at the option of any non-defaulting party hereto in
the event of a material
breach of this Agreement by any party hereto (the
"defaulting party") other
than as described in 10.1(a)-(j); provided, that the
non-defaulting party gives
written notice thereof to the defaulting party, with
copies of such notice to all
other non-defaulting parties, and if such breach shall
not have been remedied
within thirty (30) days after such written notice is
given, then the non-
defaulting party giving such written notice may terminate
this Agreement by
giving thirty (30) days written notice of termination to
the defaulting party.
10.2.Notice Requirement. No termination of this Agreement
shall be effective
unless and until the party terminating this Agreement gives prior
written notice to all other
parties of its intent to terminate, which notice shall set forth
the basis for the termination.
Furthermore,
(a) in the event any termination is based upon the provisions
of Article VII, or the
provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this
Agreement, the prior written
notice shall be given in advance of the effective date of
termination as required by
those provisions unless such notice period is shortened by
mutual written agreement
of the parties;
(b) in the event any termination is based upon the provisions
of Section 10.1(d),
10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior
written notice shall be given
at least sixty (60) days before the effective date of
termination; and
(c) in the event any termination is based upon the provisions
of Section 10.1(b),
10.1(c) or 10.1(f), the prior written notice shall be given in
advance of the effective
date of termination, which date shall be determined by the
party sending the notice.
10.3.Effect of Termination. Notwithstanding any termination
of this Agreement,
other than as a result of a failure by either the Fund or
FirstGWL&A to meet Section
817(h) of the Code diversification requirements, the Fund, the
Distributor and the Adviser
shall, at the option of FirstGWL&A or Schwab, continue to make
available additional shares
of the Designated Portfolio(s) pursuant to the terms and conditions
of this Agreement, for
all Contracts in effect on the effective date of termination of
this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without
limitation, the owners of the
Existing Contracts shall be permitted to reallocate investments in
the Designated
Portfolio(s), redeem investments in the Designated Portfolio(s)
and/or invest in the
Designated Portfolio(s) upon the making of additional purchase
payments under the Existing
Contracts. The parties agree that this Section 10.3 shall not
apply to any terminations under
Article VII and the effect of such Article VII terminations shall
be governed by Article VII
of this Agreement.
10.4.Surviving Provisions. Notwithstanding any termination of
this Agreement, each
party's obligations under Article VIII to indemnify other parties
shall survive and not be
affected by any termination of this Agreement. In addition, with
respect to Existing
Contracts, all provisions of this Agreement shall also survive and
not be affected by any
termination of this Agreement.
10.5.Survival of Agreement. A termination by Schwab shall
terminate this
Agreement only as to Schwab, and this Agreement shall remain in
effect as to the other par-
ties; provided, however, that in the event of a termination by
Schwab the other parties shall
have the option to terminate this Agreement upon 60 (sixty) days
notice, rather than the six
(6) months specified in Section 10.1(a).
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered
or certified mail to the
other party at the address of such party set forth below or at such
other address as such
party may from time to time specify in writing to the other party.
If to the Fund:
Xxxxxx Institutional Products Trust
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx Xxx
If to FirstGWL&A:
First Great-West Life & Annuity Insurance Company
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention:Assistant Vice President, Savings Products
If to the Adviser:
Xxxxxx Associates, Inc.
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention:Xxxxx Xxx
If to the Distributor:
Xxxxxx Distributors, Inc.
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
If to Schwab:
Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention:General Counsel
ARTICLE XII. Miscellaneous
12.1.Subject to the requirements of legal process and
regulatory authority, each
party hereto shall treat as confidential the names and addresses of
the owners of the
Contracts and all information reasonably identified as confidential
in writing by any other
party hereto and, except as permitted by this Agreement, shall not
disclose, disseminate or
utilize such names and addresses and other confidential information
without the express
written consent of the affected party until such time as such
information may come into the
public domain. Without limiting the foregoing, no party hereto
shall disclose any
information that another party has designated as proprietary.
12.2.The captions in this Agreement are included for
convenience of reference only
and in no way define or delineate any of the provisions hereof or
otherwise affect their
construction or effect.
12.3.This Agreement may be executed simultaneously in two or
more counterparts,
each of which taken together shall constitute one and the same
instrument.
12.4.If any provision of this Agreement shall be held or made
invalid by a court
decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected
thereby.
12.5.Each party hereto shall cooperate with each other party
and all appropriate
governmental authorities (including without limitation the SEC, the
NASD and state
insurance regulators) and shall permit such authorities reasonable
access to its books and
records in connection with any investigation or inquiry relating to
this Agreement or the
transactions contemplated hereby. Notwithstanding the generality
of the foregoing, each
party hereto further agrees to furnish the New York Insurance
Commissioner with any
information or reports in connection with services provided under
this Agreement which such
Commissioner may request in order to ascertain whether the variable
annuity operations of
FirstGWL&A are being conducted in a manner consistent with the New
York Variable
Annuity Regulations and any other applicable law or regulations.
12.6.Any controversy or claim arising out of or relating to
this Agreement, or
breach thereof, shall be settled by arbitration in a forum jointly
selected by the relevant
parties (but if applicable law requires some other forum, then such
other forum) in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association,
and judgment upon the award rendered by the arbitrators may be
entered in any court
having jurisdiction thereof.
12.7.The rights, remedies and obligations contained in this
Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in
equity, which the parties hereto are entitled to under state and
federal laws.
12.8.This Agreement or any of the rights and obligations
hereunder may not be
assigned by any party without the prior written consent of all
parties hereto.
12.9.Schwab and FirstGWL&A agree that the obligations assumed
by the Fund, the
Distributor and the Adviser pursuant to this Agreement shall be
limited in any case to the
Fund, the Distributor and Adviser and their respective assets and
neither Schwab nor
FirstGWL&A shall seek satisfaction of any such obligation from the
shareholders of the
Fund or the Adviser, the directors, officers, employees or agents
of the Fund or Adviser, or
any of them, except to the extent permitted under this Agreement.
12.10.The Fund, the Distributor and the Adviser agree that the
obligations assumed
by FirstGWL&A and Schwab pursuant to this Agreement shall be
limited in any case to
FirstGWL&A and Schwab and their respective assets and neither the
Fund, Distributor nor
Adviser shall seek satisfaction of any such obligation from the
shareholders of the
FirstGWL&A or Schwab, the directors, officers, employees or agents
of the FirstGWL&A
or Schwab, or any of them, except to the extent permitted under
this Agreement.
00.00.Xx provision of this Agreement may be deemed or
construed to modify or
supersede any contractual rights, duties, or indemnifications, as
between the Adviser and the
Fund, and the Distributor and the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to
be executed in its name and on its behalf by its duly authorized
representative and its seal
to be hereunder affixed hereto as of the date specified below.
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By its authorized officer,
By:/s/ Xxxxxx X. Xxxx
Title: Vice President, Marketing & Product
Development
Date: April 1, 1997
XXXXXX INSTITUTIONAL PRODUCTS TRUST
By its authorized officer,
By:/s/ Xxxxxx X. Xxxxx
Title: Xxxxxx X. Xxxxx, President
Date: March 25, 1997
XXXXXX ASSOCIATES, INC.
By its authorized officer,
By:/s/ Xxxxxx X. Xxxxx
Title: Xxxxxx X. Xxxxx, President
Date: March 25, 1997
XXXXXX DISTRIBUTORS, INC.
By its authorized officer,
By:/s/ Xxxxx X. Xxxxxx
Title: Xxxxx X. Xxxxxx, President
Date: March 24, 1997
XXXXXXX XXXXXX & CO., INC.
By its authorized officer,
By:/s/ Xxxx Xxxxxx
Title:Vice President, Annuities & Life Insurance
Date:March 31, 1997
Schwab Variable
Annuity
SCHEDULE A
Contracts Form Numbers
First Great-West Life & Annuity Insurance Company
Group Variable/Fixed Annuity Contract J434NY
SCHEDULE B
Designated Portfolios
Xxxxxx IPT-Small Company Growth Fund
SCHEDULE C
Administrative Services
To be performed by Xxxxxxx Xxxxxx & Co., Inc.
X. Xxxxxx will provide the properly registered and licensed
personnel and systems
needed for all customer servicing and support - for both fund and
annuity information
and questions - including:
respond to Contractowner inquiries
delivery of prospectus - both fund and annuity;
entry of initial and subsequent orders;
transfer of cash to insurance company and/or funds;
explanations of fund objectives and characteristics;
entry of transfers between funds;
fund balance and allocation inquiries;
mail fund prospectus.
B. For the services, Schwab shall receive a fee of 0.25% per
annum applied to the
average daily value of the shares of the fund held by Xxxxxx'x
customers, payable by the
Adviser directly to Schwab, such payments being due and payable
within 15 (fifteen) days
after the last day of the month to which such payment relates.
C. The Fund will calculate and Schwab will verify with FirstGWL&A
the asset
balance for each day on which the fee is to be paid pursuant to
this Agreement with
respect to each Designated Portfolio.
X. Xxxxxx will communicate all purchase, withdrawal, and exchange
orders it
receives from its customers to FirstGWL&A who will retransmit them
to each fund.
SCHEDULE D
Reports per Section 6.6
With regard to the reports relating to the quarterly testing
of compliance with the
requirements of Section 817(h) and Subchapter M under the Internal
Revenue Code (the
"Code") and the regulations thereunder, the Fund shall provide
within twenty (20)
Business Days of the close of the calendar quarter a report to
FirstGWL&A in the Form
D1 attached hereto and incorporated herein by reference, regarding
the status under
such sections of the Code of the Designated Portfolio(s), and if
necessary, identification
of any remedial action to be taken to remedy non-compliance.
With regard to the reports relating to the year-end testing of
compliance with the
requirements of Subchapter M of the Code, referred to hereinafter
as "RIC status," the
Fund will provide the reports on the following basis: (i) the last
quarter's quarterly
reports can be supplied within the 20-day period, and (ii) a
year-end report will be
provided 45 days after the end of the calendar year. However, if
a problem with regard
to RIC status, as defined below, is identified in the third quarter
report, on a weekly
basis, starting the first week of December, additional interim
reports will be provided
specially addressing the problems identified in the third quarter
report. If any interim
report memorializes the cure of the problem, subsequent interim
reports will not be
required.
A problem with regard to RIC status is defined as any
violation of the following
standards, as referenced to the applicable sections of the Code:
(a) Less than ninety percent of gross income is derived from
sources of income
specified in Section 851(b)(2);
(b) Thirty percent or greater gross income is derived from
the sale or disposition
of assets specified in Section 851(b)(3);
(c) Less than fifty percent of the value of total assets
consists of assets specified in
Section 851(b)(4)(A); and
(d) No more than twenty-five percent of the value of total
assets is invested in the
securities of one issuer, as that requirement is set forth in
Section 851(b)(4)(B).
FORM D1
CERTIFICATE OF COMPLIANCE
I, , a duly authorized officer,
director or agent of
Fund hereby swear and affirm that
Fund is in compliance
with all requirements of Section 817(h) and Subchapter M of the
Internal Revenue Code
(the "Code") and the regulations thereunder as required in the Fund
Participation
Agreement among First Great-West Life & Annuity Insurance Company,
Xxxxxxx Xxxxxx
& Co., Inc. and other than the exceptions discussed
below:
Exceptions Remedial Action
If no exception to report, please indicate "None."
Signed this day of
, .
(Signature)
By:
(Type or Print Name and
Title/Position)
SCHEDULE E
EXPENSES
The Fund and/or the Distributor and/or Adviser, and FirstGWL&A will
coordinate the functions and pay the costs of the completing these
functions based
upon an allocation of costs in the tables below. Costs shall be
allocated to reflect
the Fund's share of the total costs determined according to the
number of pages
of the Fund's respective portions of the documents.
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
Mutual Fund
Prospectus
Printing of combined
prospectuses
FirstGWL&A
Fund, Distributor
or Adviser, as
applicable
Fund, Distributor or
Adviser shall supply
FirstGWL&A with
such numbers of the
Designated Portfolio(s)
prospectus(es) as
FirstGWL&A shall
reasonably request
FirstGWL&A
Fund, Distributor
or Adviser, as
applicable
Distribution to New
and Inforce Clients
FirstGWL&A
FirstGWL&A
Distribution to
Prospective Clients
Schwab
Schwab
Product Prospectus
Printing for Inforce
Clients
FirstGWL&A
FirstGWL&A
Printing for Prospective
Clients
FirstGWL&A
Schwab
Distribution to New
and Inforce Clients
FirstGWL&A
FirstGWL&A
Distribution to
Prospective Clients
Schwab
Schwab
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
Mutual Fund
Prospectus Update &
Distribution
If Required by Fund,
Distributor or Adviser
Fund, Distributor or
Adviser
Fund, Distributor
or Adviser
If Required by
FirstGWL&A
FirstGWL&A
FirstGWL&A
If Required by Schwab
Schwab
Schwab
Product Prospectus
Update & Distribution
If Required by Fund,
Distributor or Adviser
FirstGWL&A
Fund, Distributor
or Adviser
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
If Required by
FirstGWL&A
FirstGWL&A
FirstGWL&A
If Required by Schwab
Schwab
Schwab
Mutual Fund SAI
Printing
Fund, Distributor or
Adviser
Fund, Distributor
or Adviser
Distribution
FirstGWL&A
FirstGWL&A
Product SAI
Printing
FirstGWL&A
FirstGWL&A
Distribution
FirstGWL&A
FirstGWL&A
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
Proxy Material for
Mutual Fund:
Printing if proxy
required by Law
Fund, Distributor or
Adviser
Fund, Distributor
or Adviser
Distribution (including
labor) if proxy required
by Law
FirstGWL&A
Fund, Distributor
or Adviser
Printing & distribution
if required by
FirstGWL&A
FirstGWL&A
FirstGWL&A
Printing & distribution
if required by Schwab
FirstGWL&A
Schwab
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
Mutual Fund Annual &
Semi-Annual Report
Printing of combined
reports
FirstGWL&A
Fund, Distributor
or Adviser
Distribution
FirstGWL&A
FirstGWL&A and
Schwab
Other communication
to New and Prospective
clients
If Required by the
Fund, Distributor or
Adviser
Schwab
Fund, Distributor
or Adviser
If Required by
FirstGWL&A
Schwab
FirstGWL&A
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
If Required by Schwab
Schwab
Schwab
Other communication
to inforce
Distribution (including
labor) if required by
the Fund, Distributor
or Adviser
FirstGWL&A
Fund, Distributor
or Adviser
If Required by
FirstGWL&A
FirstGWL&A
FirstGWL&A
If Required by Schwab
FirstGWL&A
Schwab
Item
Function
Party Responsible for
Coordination
Party Responsible
for Expense
Errors in Share Price
calculation pursuant to
Section 1.10
Cost of error to
participants
FirstGWL&A
Fund or Adviser
Cost of administrative
work to correct error
FirstGWL&A
Fund or Adviser
Operations of the Fund
All operations and
related expenses,
including the cost of
registration and
qualification of shares,
taxes on the issuance or
transfer of shares, cost
of management of the
business affairs of the
Fund, and expenses
paid or assumed by the
fund pursuant to any
Rule 12b-1 plan
Fund, Distributor or
Adviser
Fund or Adviser
Operations of the
Account
Federal registration of
units of separate
account (24f-2 fees)
FirstGWL&A
FirstGWL&A
