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EXHIBIT 8(ii)
FUND PARTICIPATION AGREEMENT
This Fund Participation Agreement (the "Agreement"), dated as of the
1st day of August, 1999, is made by and among American General Annuity Insurance
Company ("Company"), One Group(R) Investment Trust (the "Trust"), the Trust's
investment advisor, Banc One Investment Advisors Corporation (the "Adviser"),
the Trust's administrator, Nationwide Advisory Services, Inc. (the
"Administrator"), and the Trust's transfer agent, Nationwide Investors Services,
Inc. (the "Transfer Agent").
WHEREAS, the Trust engages in business as an open-end
management investment company and is available to act as the
investment vehicle for separate accounts established by
insurance companies for individual and group life insurance
policies and annuity contracts with variable accumulation
and/or pay-out provisions (hereinafter referred to
individually and/or collectively as "Variable Insurance
Products");
WHEREAS, insurance companies desiring to utilize the
Trust as an investment vehicle under their Variable Insurance
Products are required to enter into participation agreements
with the Trust and the Administrator (the "Participating
Insurance Companies");
WHEREAS, shares of the Trust are divided into several
series of shares, each representing the interest in a
particular managed portfolio of securities and other assets,
any one or more of which may be made available for Variable
Insurance Products of Participating Insurance Companies;
WHEREAS, the Trust intends to offer shares of the
series set forth on Schedule B (each such series hereinafter
referred to as a "Portfolio") as may be amended from time to
time by mutual agreement of the parties hereto under this
Agreement to the accounts of the Company specified on Schedule
A (hereinafter referred to individually as an "Account";
collectively, the "Accounts")
WHEREAS, the Trust has obtained an order from the
Securities and Exchange Commission, granting the Trust
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 Trust to be sold to and held by Variable
Insurance Product separate accounts of both affiliated and
unaffiliated insurance companies (hereinafter the "Shared
Funding Exemptive Order");
WHEREAS, the Trust is registered as an open-end
management investment company under the 1940 Act and its
shares are registered under the Securities Act of 1933, as
amended (hereinafter the "1933 Act");
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;
WHEREAS, the Adviser is the investment adviser of the
Portfolios of the Trust;
WHEREAS, the Company has registered certain Variable
Insurance Products under the 1933 Act; and
WHEREAS, to the extent permitted by applicable
insurance laws and regulations, the Company intends to
purchase shares in the Portfolios on behalf of each Account to
fund certain of the aforesaid Variable Insurance Products and
the Trust is authorized to sell such shares to each such
Account at net asset value.
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ARTICLE 1
THE CONTRACTS
1. The Company represents that it has established each of the Accounts
specified on Schedule A as a separate account under Texas law, and has
registered each such Account as a unit investment trust under the 1940
Act to serve as an investment vehicle for variable annuity contracts
and/ or variable life contracts offered by the Company (the
"Contracts"). The Contracts provide for the allocation of net amounts
received by the Company to separate divisions of the Account for
investment in the shares of the Portfolios. Selection of a particular
division is made by the Contract owner who may change such selection
from time to time in accordance with the terms of the applicable
Contract. The Company agrees to make every reasonable effort to market
its Contracts. In marketing its Contracts, the Company will comply with
all applicable state or Federal laws.
ARTICLE 2
TRUST SHARES
2.1 The Trust agrees to make available for purchase by the
Company shares of the Portfolios and shall execute orders placed for
each Account on a daily basis at the net asset value next computed
after receipt by the Trust or its designee of such order. For purposes
of this Section 2.1, the Company shall be the designee of the Trust for
receipt of such orders from the Account and receipt by such designee
shall constitute receipt by the Trust; provided that the Trust receives
notice of such order by 10:00 a.m. Eastern Time on the next following
Business Day. Notwithstanding the foregoing, the Company shall use its
best efforts to provide the Trust with notice of such orders by 9:30
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 Trust calculates its net asset value pursuant
to the rules of the Securities and Exchange Commission, as set forth in
the Trust's prospectus and statement of additional information.
Notwithstanding the foregoing, the Board of Trustees of the Trust
(hereinafter the "Board") may refuse to permit the Trust 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 their
fiduciary duties under federal and any applicable state laws, necessary
in the best interests of the shareholders of such Portfolio.
2.2. The Trust agrees that shares of the Trust will be sold
only to Participating Insurance Companies for their Variable Insurance
Products and, in the Trust's discretion, to qualified pension and
retirement plans. No shares of any Portfolio will be sold to the
general public.
2.3. The Trust and the Transfer Agent agree to redeem for
cash, on the Company's request, any full or fractional shares of the
Trust held by the Company, executing such requests on a daily basis at
the net asset value next computed after receipt by the Trust or its
designee of the request for redemption. For purposes of this Section
2.3, the Company shall be the designee of the Trust for receipt of
requests for redemption from each Account and receipt by such designee
shall constitute receipt by the Trust; provided that the Transfer Agent
receives notice of such request for redemption on the next following
Business Day in accordance with the timing rules described in Section
2.1.
2.4. The Company agrees that purchases and redemptions of
Portfolio shares offered by the then current prospectus of the Trust
shall be made in accordance with the provisions of such prospectus. The
Accounts of the Company, under which amounts may be invested in the
Trust are listed on Schedule A attached hereto and incorporated herein
by reference, as such Schedule A may be amended from time to time by
mutual written agreement of all of the parties hereto. The Company will
give the Trust and the Adviser concurrent written notice of its
intention to make available in the future, as a funding vehicle under
the Contracts, any other investment company.
2.5. The Company will place separate orders to purchase or
redeem shares of each Portfolio. Each order shall describe the net
amount of shares and dollar amount of each Portfolio to be purchased or
redeemed. In the event of net purchases, the Company shall pay for
Portfolio shares on the next Business Day after an order to purchase
Portfolio shares is made in accordance with the provisions of Section
2.1 hereof. Payment
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shall be in federal funds transmitted by wire. In the event of net
redemptions, the Portfolio shall pay the redemption proceeds in federal
funds transmitted by wire on the next Business Day after an order to
redeem Portfolio shares is made in accordance with the provisions of
Section 2.3 hereof. Notwithstanding the foregoing, if the payment of
redemption proceeds on the next Business Day would require the
Portfolio to dispose of Portfolio securities or otherwise incur
substantial additional costs, and if the Portfolio has determined to
settle redemption transactions for all shareholders on a delayed basis,
proceeds shall be wired to the Company within seven (7) days and the
Portfolio shall notify in writing the person designated by the Company
as the recipient for such notice of such delay by 3:00 p.m. Eastern
Time on the same Business Day that the Company transmits the redemption
order to the Portfolio.
2.6. Issuance and transfer of the Trust's shares will be by
book entry only. Share certificates will not be issued to the Company
or any Account. Shares ordered from the Trust will be recorded in an
appropriate title for each Account or the appropriate subaccount of
each Account.
2.7. The Administrator shall use its best efforts to furnish
same day notice by 5:00 p.m. Eastern Time (by wire or telephone,
followed by written confirmation) to the Company of any dividends or
capital gain distributions payable on the Trust's shares. The Company
hereby elects to receive all such dividends and capital gain
distributions as are payable on the Portfolio shares in additional
shares of that Portfolio. The Company reserves the right to revoke this
election and to receive all such dividends and capital gain
distributions in cash. The Trust shall notify the Company of the number
of shares so issued as payment of such dividends and distributions.
2.8. The Administrator shall make the net asset value per
share of each Portfolio available to the Company on a daily basis as
soon as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make such net asset value
per share available by 6:30 p.m. Eastern Time. In the event that the
Administrator is unable to meet the 6:30 p.m. time stated immediately
above, then the Administrator shall provide the Company with additional
time to notify the Administrator of purchase or redemption orders
pursuant to Sections 2.1 and 2.3, respectively, above. Such additional
time shall be equal to the additional time that the Administrator takes
to make the net asset values available to the Company; provided,
however, that notification must be made by 10:00 a.m. Eastern Time on
the Business Day such order is to be executed, regardless of when net
asset value is made available.
2.9. If the Administrator provides materially incorrect share net asset
value information through no fault of the Company, the Company shall be entitled
to an adjustment with respect to the Trust shares purchased or redeemed to
reflect the correct net asset value per share as subsequently determined by the
Administrator. The determination of the materiality of any net asset value
pricing error shall be based on the Trust's policy for correction of pricing
errors (the "Pricing Policy"). The correction of any such errors shall be made
at the Company level pursuant to the Pricing Policy. Any material error in the
calculation or reporting of net asset value per share, dividend or capital gain
information shall be reported promptly upon discovery to the Company.
ARTICLE 3
PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS, VOTING
3.1 The Trust shall provide the Company with as many printed
copies of the Trust's current prospectus as the Company may reasonably
request. The Administrator will provide the Company with a copy of the
statement of additional information suitable for duplication. If
requested by the Company, in lieu of providing printed copies, the
Trust shall provide camera-ready film or computer diskettes containing
the Trust's prospectus and statement of additional information in order
for the Company once each year (or more frequently if the prospectus
and/or statement of additional information for the Trust is amended
during the year) to have the prospectus for the Contracts and the
Trust's prospectus printed together in one document or separately. The
Company may elect to print the Trust's prospectus and/or its statement
of additional
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information in combination with other investment companies'
prospectuses and statements of additional information.
3.2(a). Except as otherwise provided in this Section 3.2, all
expenses of preparing, setting in type and printing and distributing
Trust prospectuses and statements of additional information shall be
the expense of the Company. For prospectuses and statements of
additional information provided by the Company to its existing owners
of Contracts in order to update disclosure as required by the 1933 Act
and/or the 1940 Act, the cost of setting in type, printing and
distributing shall be borne by the Trust. If the Company chooses to
receive camera-ready film or computer diskettes in lieu of receiving
printed copies of the Trust's prospectus and/or statement of additional
information, the Trust shall bear the cost of typesetting to provide
the Trust's prospectus and/or statement of additional information to
the Company in the format in which the Trust is accustomed to
formatting prospectuses and statements of additional information,
respectively, and the Company shall bear the expense of adjusting or
changing the format to conform with any of its prospectuses and/or
statements of additional information. In such event, the Trust will
reimburse the Company in an amount equal to the product of x and y
where x is the number of such prospectuses distributed to owners of the
Contracts, and y is the Trust's per unit cost of printing the Trust's
prospectuses. The same procedures shall be followed with respect to the
Trust's statement of additional information. The Trust shall not pay
any costs of typesetting, printing and distributing the Trust's
prospectus and/or statement of additional information to prospective
Contract owners.
3.2(b). The Trust, at the Company's expense, shall provide the
Company with copies of Annual and Semi-Annual Reports (the "Reports")
in such quantity as the Company shall reasonably require for
distributing to Contract owners. The Trust, at its expense, shall
provide the Contract owners designated by the Company with copies of
its proxy statements and other communications to shareholders (except
for prospectuses and statements of additional information, and which
are covered in Section 3.2(a) above, and Reports). The Trust shall not
pay any costs of distributing proxy-related materials, Reports, and
other communications to prospective Contract owners.
3.2(c). The Company agrees to provide the Trust or its
designee with such information as may be reasonably requested by the
Trust to assure that the Trust's expenses do not include the cost of
typesetting, printing or distributing any of the foregoing documents
other than those actually distributed to existing Contract owners.
3.2(d). The Trust shall pay no fee or other compensation to
the Company under this Agreement, except that if the Trust or any
Portfolio adopts and implements a plan pursuant to Rule 12b-1 to
finance distribution expenses, then the Trust may make payments to the
Company or to the underwriter for the Contracts if and in amounts
agreed to by the Trust in writing.
3.2(e) All expenses, including expenses to be borne by the
Trust pursuant to Section 3.2 hereof, incident to performance by the
Trust under this Agreement shall be paid by the Trust. The Trust shall
see to it that all its shares are registered and authorized for
issuance in accordance with applicable federal law and, if and to the
extent deemed advisable by the Trust, in accordance with applicable
state laws prior to their sale. The Trust shall bear the expenses for
the cost of registration and qualification of the Trust's shares.
3.3. The Trust's statement of additional information shall be
obtainable from the Trust, the Administrator, the Company or such other
person as the Trust may designate.
3.4. If and to the extent required by law, the Company shall
with respect to proxy material distributed by the Trust to Contract
owners designated by the Company to whom voting privileges are required
to be extended:
(i) solicit voting instructions from Contract owners;
(ii) vote the Trust shares in accordance with
instructions received from Contract owners; and
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(iii) vote Trust shares for which no instructions
have been received in the same proportion as Trust shares of
such Portfolio for which instructions have been received, so
long as and to the extent that the Securities and Exchange
Commission continues to interpret the 1940 Act to require
pass-through voting privileges for variable contract owners.
The Company reserves the right to vote Trust shares held in
any segregated asset account in its own right, to the extent
permitted by law.
ARTICLE 4
SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be
furnished, to the Trust, the Adviser or their designee, drafts of the
separate accounts prospectuses and statements of additional information
and each piece of sales literature or other promotional material
prepared by the Company or any person contracting with the Company to
prepare such material in which the Trust, the Adviser or the
Administrator is described, at least ten Business Days prior to its
use. No such material shall be used if the Trust, the Adviser, the
Administrator or their designee reasonably objects to such use within
ten Business Days after receipt of such material.
4.2. Neither the Company nor any person contracting with the
Company to prepare sales literature or other promotional material shall
give any information or make any representations or statements on
behalf of the Trust or concerning the Trust in connection with the sale
of the Contracts other than the information or representations
contained in the registration statement or Trust prospectus, as such
registration statement or Trust prospectus may be amended or
supplemented from time to time, or in reports to shareholders or proxy
statements for the Trust, or in sales literature or other promotional
material approved by the Trust or its designee, except with the
permission of the Trust or its designee.
4.3. The Adviser shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales
literature or other promotional material prepared by the Trust in which
the Company or its Accounts, are described at least ten Business Days
prior to its use. No such material shall be used if the Company or its
designee reasonably objects to such use within ten Business Days after
receipt of such material.
4.4. Neither the Trust, the Administrator, the Transfer Agent,
nor the Adviser shall give any information or make any representations
on behalf of the Company or concerning the Company, each Account, or
the Contracts, other than the information or representations contained
in a registration statement or prospectus for the Contracts, as such
registration statement or prospectus may be amended or supplemented
from time to time, or in published reports or solicitations for voting
instruction for each Account which are in the public domain or approved
by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Trust will provide to the Company at least one
complete copy of all registration statements, prospectuses, statements
of additional information, reports, proxy statements, applications for
exemptions, requests for no-action letters, and all amendments to any
of the above, that relate to the Trust or its shares, promptly after
the filing of such document with the Securities and Exchange Commission
or other regulatory authorities.
4.6. The Company will provide to the Trust, upon the Trust's
request, at least one complete copy of all registration statements,
prospectuses, statements of additional information, reports,
solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate to
the investment in an Account or Contract, contemporaneously with the
filing of such documents with the Securities and Exchange Commission or
other regulatory authorities.
4.7. For purposes of this Article 4, the phrase "sales
literature or other promotional material" includes, but is not limited
to, any of the following: advertisements (such as material published,
or designed for use in, a newspaper, magazine, or other periodical,
radio, television, telephone or tape recording, videotape, display,
signs or billboards, motion pictures, or other public media), sales
literature (i.e., any
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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), and educational or training materials or other communications
distributed or made generally available to some or all agents or
employees.
4.8 The Company and its agents shall make no representations
concerning the Trust except those contained in the then-current
prospectus and Statement of Additional Information of the Trust and in
current printed sales literature of the Trust.
ARTICLE 5
ADMINISTRATIVE SERVICES TO CONTRACT OWNERS
5. Administrative services to Contract owners shall be the
responsibility of the Company and shall not be the responsibility of
the Trust or the Administrator. The Trust and the Administrator
recognize that the Company will be the sole shareholder of Trust shares
issued pursuant to the Contracts.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1. The Trust represents that it believes, in good faith,
that the Trust is currently qualified as a regulated investment
companies under Subchapter M of the Internal Revenue Code of 1986,as
amended (the "Code") and that it will make every effort to maintain
such qualification of the Trust and that it will notify the Company
immediately upon having a reasonable basis for believing that a Fund
has ceased to so qualify or that it might not so qualify in the future.
6.2. The Company represents that it believes, in good faith,
that the Contracts will at all times 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 the Trust
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.
6.3.The Trust represents that it believes, in good faith, that
the Funds will at all times comply with the diversification
requirements set forth in Section 817(h) of the Code and Section
1.817-5(b) of the regulations under the Code, and that it will make
every effort to maintain the Trust's' compliance with such
diversification requirements, and that it will notify the Company
immediately upon having a reasonable basis for believing that a Fund
has ceased to so qualify or that a Fund might not so qualify in the
future.
6.4 . The Company represents and warrants that the interests
of the Contracts are or will be registered unless exempt and that it
will maintain such registration under the 1933 Act and the regulations
thereunder to the extent required by the 1933 Act and that the
Contracts will be issued and sold in compliance with all applicable
federal and state laws and regulations. The Company further represents
and warrants that it is an insurance company duly organized and in good
standing under applicable law and that it has legally and validly
established each Account prior to any issuance or sale thereof as a
segregated asset account under the Texas Insurance Code and the
regulations thereunder and has registered or, prior to any issuance or
sale of the Contracts, will maintain the registration of each Account
as a unit investment trust in accordance with and to the extent
required by the provisions of the 1940 Act and the regulations
thereunder, unless exempt therefrom, to serve as a segregated
investment account for the Contracts. The Company shall amend its
registration statement for its contracts under the 1933 Act and the
1940 Act from time to time as required in order to effect the
continuous offering of its Contracts.
6.5. The Company represents that it believes, in good faith,
that the Variable Account is a "segregated asset account" and that
interests in the Variable Account are offered exclusively through the
purchase of a "variable contract," within the meaning of such terms
under Section 1.8170-5(f) (2) of the regulations under the Code, and
that it will make every effort to continue to meet such definitional
requirements, and that it will notify the Trust 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.
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6.6. The Trust represents and warrants that it is and shall
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Trust in an amount no less than
the minimal coverage as required currently by Rule 17g-(1) of the 1940
Act or related provisions as may be promulgated from time to time. Such
bond shall include coverage for larceny and embezzlement and shall be
issued by a relevant bonding company.
6.7. The Company represents and warrants that all of its
directors, officers, employees, investment advisers, and other entities
dealing with the money or securities of the Trust are and shall
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Trust, in an amount not less
than five million dollars ($5,000,000). Such bond shall include
coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
6.9. The Trust represents that to the extent that it decides
to finance distribution expenses pursuant to Rule 12b-1 under the 1940
Act, the Trust undertakes to have a majority of the disinterested
members of the Board, formulate and approve any plan under Rule 12b-1
to finance distribution expenses.
6.10. The Administrator and Transfer Agent each represents and
warrants that it complies with all applicable federal and state laws
and regulations and that it will perform its obligations for the Trust
and the Company in compliance with the laws and regulations of its
state of domicile and any applicable state and federal laws and
regulations.
6.11. The Trust shall provide the Company within ten (10)
business days after the end of each calendar quarter a letter from the
appropriate officer of the Trust certifying to the continued accuracy
of the representations contained in Sections 6.1, 6.3, and 6.6.
ARTICLE 7
STATEMENTS AND REPORTS
7.1 The Administrator or its designee shall provide the
Company within five (5) business days after the end of each month a
monthly statement of account confirming all transactions made during
that month in the Account.
7.2 The Trust and Administrator agree to provide the Company
no later than March 1 of each year with the investment advisory and
other expenses of the Trust incurred during the Trust's most recently
completed fiscal year, to permit the Company to fulfill its prospectus
disclosure obligations under the SEC's variable annuity fee table
requirements.
ARTICLE 8
POTENTIAL CONFLICTS
8.1.The Board will monitor the Trust for the existence of any
material irreconcilable conflict between the interests of the contract
owners of all separate accounts investing in the Trust. An
irreconcilable material conflict may arise for a variety of reasons,
including: (a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of any Portfolio are being managed; (e)
a difference in voting instructions given by variable annuity contract
owners and variable life insurance contract owners; or (f) a decision
by a Participating Insurance Company to disregard the voting
instructions of contract owners. The Board shall promptly inform the
Company if it determines that an irreconcilable material conflict
exists and the implications thereof.
8.2. The Company will report in writing any potential or
existing material irreconcilable conflict of which it is aware to the
Administrator. Upon receipt of such report, the Administrator shall
report the potential or existing material irreconcilable conflict to
the Board. The Administrator shall also report to the Board on a
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quarterly basis whether the Company has reported any potential or
existing material irreconcilable conflicts during the previous calendar
quarter. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing
the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform the Board whenever Contract owner
voting instructions are disregarded.
8.3. If it is determined by a majority of the Board, or a
majority of its disinterested trustees, that a material irreconcilable
conflict exists, the Company and other Participating Insurance
Companies shall, at their expense and to the extent reasonably
practicable (as determined by a majority of the disinterested
trustees), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (1) withdrawing
the assets allocable to some or all of the separate accounts from the
Trust or any Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Portfolio of
the Trust, or submitting the question 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 policy 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. No charge or penalty will be imposed as a result of
such withdrawal. The Company agrees that it bears the responsibility to
take remedial action in the event of a Board determination of an
irreconcilable material conflict and the cost of such remedial action,
and these responsibilities will be carried out with a view only to the
interests of Contract owners.
8.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract owner voting instructions
and that decision represents a minority position or would preclude a
majority vote, the Company may be required, at the Trust's election, to
withdraw the affected Account's investment in the Trust and terminate
this Agreement with respect to such Account (at the Company's expense);
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. No charge or penalty will be imposed as a result of such
withdrawal. The Company agrees that it bears the responsibility to take
remedial action in the event of a Board determination of an
irreconcilable material conflict and the cost of such remedial action,
and these responsibilities will be carried out with a view only to the
interests of Contract owners.
8.5. For purposes of Sections 8.3 through 8.4 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 Trust be
required to establish a new funding medium for the Contracts. The
Company shall not be required by Section 8.3 through 8.4 to establish a
new funding medium for the Contracts if an offer to do so has been
declined by vote of a majority of Contract owners materially adversely
affected by the irreconcilable material conflict.
8.6. 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 Shared Funding
Exemptive Order) on terms and conditions materially different from
those contained in the Shared Funding Exemptive Order, then the Trust
and/or the Participating Insurance Companies, as appropriate, shall
take such steps as may be necessary to comply with Rules 6e-2 and
6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable.
8.7. Each of the Company and the Adviser shall at least
annually submit to the Board such reports, materials or data as the
Board may reasonably request so that the Board may fully carry out the
obligations imposed upon them by the provisions hereof and in the
Shared Funding Exemptive Order, and said reports, materials and data
shall be submitted more frequently if deemed appropriate by the Board.
Without limiting the generality of the foregoing or the Company's
obligations under Section 8.2, the Company shall provide a written
report to the Board no later than January 15th of each year indicating
whether any material irreconcilable conflicts have arisen during the
prior fiscal year of the Trust. All reports received by the Board of
potential or existing conflicts, and all Board action with regard to
determining the existence of a conflict, notifying Participating
Insurance Companies of a conflict, and determining whether any proposed
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action adequately remedies a conflict, shall be properly recorded in
the minutes of the Board or other appropriate records, and such minutes
or other records shall be made available to the Securities and Exchange
Commission upon request.
ARTICLE 9
INDEMNIFICATION
9.1. Indemnification By The Company
9.1 (a). The Company agrees to indemnify and hold harmless the Trust,
the Administrator, the Transfer Agent, the Adviser, and each member of their
respective Boards and officers and each person, if any, who controls the Trust
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 9.1) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Company) or litigation (including legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Trust's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statement or prospectus for the Contracts or
contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Trust for use
in the registration statement or prospectus for the Contracts
or in the Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale
of the Contracts or Trust shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or sales
literature of the Trust not supplied by the Company, or
persons under its control and other than statements or
representations authorized by the Trust) or unlawful conduct
of the Company or persons under its control, with respect to
the sale or distribution of the Contracts or Trust shares; or
(iii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature of the
Trust 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 and in conformity with
information furnished to the Trust by or on behalf of the
Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms
of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company; as limited by and in
accordance with the provisions of Section 7.1(b) and 7.1(c)
hereof.
9.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
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9.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at as own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the
Indemnified Party named in the action. After notice from the Company to such
Indemnified Party of the Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company shall not be liable to such Indemnified Party
under this Agreement for any legal or other expenses subsequently incurred by
such Indemnified Party independently in connection with the defense thereof
other than reasonable costs of investigation.
9.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Trust shares or the Contracts or the operation of
the Trust.
9.2. Indemnification by Administrator
9.2(a). The Administrator agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 9.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Administrator) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of
the Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to the Trust or the Administrator by or on behalf of
the Company, the Adviser, the Transfer Agent, Counsel for the
Trust , the independent public accountant to the Trust , or
any person or entity that is not acting as agent for or
controlled by the Administrator for use in the registration
statement or prospectus for the Trust or in sales literature
(or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Portfolio shares;
or
(ii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature
covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the
Administrator; or
(iii) arise as a result of any failure by the Administrator to
provide the services and furnish the materials under the terms
of this Agreement; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Administrator in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Administrator; as
limited by and in accordance with the provisions of Section
9.2(b) and 9.2(c) hereof.
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9.2(b). The Administrator shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party as
such may arise from such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement.
9.2(c). The Administrator 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 Administrator 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 Administrator
of any such claim shall not relieve the Administrator from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Administrator will be
entitled to participate, at its own expense, in the defense thereof. The
Administrator also shall be entitled to assume the defense thereof, with counsel
satisfactory to the Indemnified Party named in the action. After notice from the
Administrator to such Indemnified Party of the Administrator's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Administrator will
not be liable to such Indemnified Party under this Agreement for any legal or
other expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof other than reasonable costs of
investigation.
9.2(d). The Company agrees promptly to notify the Administrator of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account in which the Portfolios are made available.
9.3. Indemnification by the Adviser
9.3(a). The Adviser agrees to indemnify and hold harmless the Company
and its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (hereinafter collectively, the
"Indemnified Parties" and individually, "Indemnified Party," for purposes of
this Section 9.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Adviser)
or litigation (including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of
the Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to the Adviser or the Trust by or on behalf of the
Company, the Administrator, the Transfer Agent, Counsel for
the Trust, the independent public accountant to the Trust, or
any person or entity that is not acting as agent for or
controlled by the Adviser for use in the registration
statement or prospectus for the Trust or in sales literature
(or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Portfolio shares;
or
(ii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature
covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the
Adviser; or
(iii) arise as a result of any failure by the Adviser to
provide the services and furnish the materials under the terms
of this Agreement; or
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(iv) 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 Section 9.3(b) and 9.3(c)
hereof.
9.3(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
9.3(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. 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 Indemnified Party
named in the action. After notice from the Adviser to such Indemnified Party of
the Adviser's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Adviser will not be liable to such Indemnified Party under this Agreement
for any legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other then reasonable costs
of investigation.
9.3(d). The Company agrees to promptly notify the Adviser of the
commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of each Account, or the
sale or acquisition of shares of the Trust.
9.4. Indemnification by the Trust
9.4(a). The Trust agrees to indemnify and hold harmless the Company and
its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (hereinafter collectively, the
"Indemnified Parties" and individually, "Indemnified Party," for purposes of
this Section 9.4) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Trust) or
litigation (including legal and other expenses) to which the Indemnified Parties
may become subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement or prospectus or sales literature of the Trust (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 the Trust by
or on behalf of the Adviser, the Company, the Transfer Agent, or the
Administrator for use in the registration statement or prospectus for the Trust
or in sales literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Portfolio shares; or
(ii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the Contracts, or any
amendment thereof or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statement or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the Company by or on
behalf of the Trust; or
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(iii) arise as a result of any failure by the Trust to
provide the services and furnish the materials under the terms of this
Agreement; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or arise out
of or result from any other material breach of this Agreement by the Trust; as
limited by and in accordance with the provisions of Section 9.4(b) and 9.4(c)
hereof.
9.4(b). The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
9.4(c). The Trust 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 Trust 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 Trust of any
such claim shall not relieve the Trust from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Trust will be entitled to participate, at
its own expense, in the defense thereof. The Trust also shall be entitled to
assume the defense thereof, with counsel satisfactory to the Indemnified Party
named in the action. After notice from the Trust to such Indemnified Party of
the Trust's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Trust will not be liable to such Indemnified Party under this Agreement for any
legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other then reasonable costs
of investigation.
9.4(d). The Company agrees to promptly notify the Trust of the
commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of each Account, or the
sale or acquisition of shares of the Trust.
9.5. Indemnification by Transfer Agent
9.5(a). The Transfer Agent agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.5)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Transfer Agent) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the Trust
(or any amendment or supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Trust or the Transfer Agent by or on behalf of the Company, the
Adviser, the Administrator, Counsel for the Trust, the independent
public accountant to the Trust, or any person or entity that is not
acting as agent for or controlled by the Transfer Agent for use in the
registration statement or prospectus for the Trust or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Portfolio shares; or
(ii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the Contracts, or
any amendment thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statement or statements therein not
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misleading, if such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the Transfer
Agent; or
(iii) arise as a result of any failure by the Transfer Agent
to provide the services and furnish the materials under the terms of
this Agreement; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Transfer Agent in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Transfer Agent; as limited by and in accordance
with the provisions of Section 9.5(b) and 9.5(c) hereof.
9.5(b). The Transfer Agent shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party as
such may arise from such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement.
9.5(c). The Transfer Agent 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 Transfer Agent 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 Transfer Agent
of any such claim shall not relieve the Transfer Agent from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Transfer Agent will be
entitled to participate, at its own expense, in the defense thereof. The
Transfer Agent also shall be entitled to assume the defense thereof, with
counsel satisfactory to the Indemnified Party named in the action. After notice
from the Transfer Agent to such Indemnified Party of the Transfer Agent's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the Transfer
Agent will not be liable to such Indemnified Party under this Agreement for any
legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other than reasonable costs
of investigation.
9.5(d). The Company agrees promptly to notify the Transfer Agent of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account in which the Portfolios are made available.
ARTICLE 10
APPLICABLE LAW
10.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Massachusetts.
10.2. 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
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE 11
TERMINATION
11.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason upon six-months
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Trust,
the Adviser, the Transfer Agent and the Administrator with respect to
any Portfolio based upon the Company's determination that shares of
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such Portfolio are not reasonably available to meet the requirements of
the Contracts. Reasonable advance notice of election to terminate shall
be furnished by the Company, said termination to be effective ten (10)
days after receipt of notice unless the Trust makes available a
sufficient number of shares to reasonably meet the requirements of the
Account within said ten (10) day period; or
(c) termination by the Company upon written notice to the
Trust, the Adviser, the Transfer Agent and the Administrator 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 medium of the Contracts issued or to be issued by
the Company. The terminating party shall give prompt notice to the
other parties of its decision to terminate; or
(d) termination by the Company upon written notice to the
Trust, the Adviser and the Administrator with respect to any Portfolio
in the event that such portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M of the Code or under any
successor or similar provision; or
(e) termination by the Company upon written notice to the
Trust, the Adviser, the Transfer Agent and the Administrator with
respect to any Portfolio in the event that such Portfolio fails to meet
the diversification requirements specified in Section 6.3 hereof; or
(f) termination by either the Trust, the Adviser, the Transfer
Agent or the Administrator by written notice to the Company, if either
one or more of the Trust, the Adviser, the Transfer Agent, or the
Administrator, shall determine, in its or their sole judgment exercised
in good faith, that the Company and/or their affiliated companies has
suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or is
the subject of material adverse publicity, provided that the Trust, the
Adviser, the Transfer Agent or the Administrator will give the Company
sixty (60) days' advance written notice of such determination of its
intent to terminate this Agreement, and provided further that after
consideration of the actions taken by the Company and any other changes
in circumstances since the giving of such notice, the determination of
the Trust, the Adviser, the Transfer Agent or the Administrator shall
continue to apply on the 60th day since giving of such notice, then
such 60th day shall be the effective date of termination; or
(g) termination by the Company by written notice to the Trust,
the Adviser, the Transfer Agent and the Administrator, if the Company
shall determine, in its sole judgment exercised in good faith, that
either the Trust, the Adviser, the Transfer Agent or the Administrator
has suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or is
the subject of material adverse publicity, provided that the Company
will give the Trust, the Adviser, the Transfer Agent and the
Administrator sixty (60) days' advance written notice of such
determination of its intent to terminate this Agreement, and provided
further that after consideration of the actions taken by the Trust, the
Adviser, the Transfer Agent or the Administrator and any other changes
in circumstances since the giving of such notice, the determination of
the Company shall continue to apply on the 60th day since giving of
such notice, then such 60th day shall be the effective date of
termination; or
(h) termination by the Trust, the Adviser, the Transfer Agent
or the Administrator by written notice to the Company, if the Company
gives the Trust, the Adviser, the Transfer Agent and the Administrator
the written notice specified in Section 2.4 hereof and at the time such
notice was given there was no notice of termination outstanding under
any other provision of this Agreement; provided, however any
termination under this Section 11.1(h) shall be effective sixty (60)
days after the notice specified in Section 2.4 was given; or
(i) termination by any party upon the other party's breach of
any representation in Article 6 or a any material provision of this
Agreement, which breach has not been cured to the satisfaction of the
terminating party within ten (10) days after written notice of such
breach is delivered to the Trust or the Company, as the case may be; or
(j) termination by the Trust, the Adviser, the Transfer Agent
or Administrator by written notice to the Company in the event an
Account or Contract is not registered (unless exempt from registration)
or sold
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in accordance with applicable federal or state law or regulation, or
the Company fails to provide pass-through voting privileges as
specified in Section 3.4.
11.2 Effect of Termination. Notwithstanding any termination of this
Agreement, the Trust shall at the option of the Company, continue to make
available additional shares of the Trust pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing Contracts") unless such
further sale of Trust shares is proscribed by law, regulation or applicable
regulatory body, or unless the Trust determines that liquidation of the Trust
following termination of this Agreement is in the best interests of the Trust
and its shareholders. Specifically, without limitation, the owners of the
Existing Contracts shall be permitted to direct reallocation of investments in
the Trust, redemption of investments in the Trust and/or investment in the Trust
upon the making of additional purchase payments under the Existing Contracts.
The parties agree that this Section 11.2 shall not apply to any terminations
under Article 8 and the effect of such Article 8 terminations shall be governed
by Article 8 of this Agreement.
11.3. The Company shall not redeem Trust shares attributable to the
Contracts (as distinct from Trust shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract owner
initiated or approved transactions, or (ii) as required by state and/or federal
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Trust, the Adviser and the
Administrator the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Trust and the Adviser) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contracts,
the Company shall not prevent Contract Owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Trust or the Adviser 30 days notice of its intention to do so.
ARTICLE 12
NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust:
One Group Investment Trust
Three Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxx, Xx.
If to the Administrator:
Nationwide Advisory Services, Inc.
Three Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx Xxxxxxx, Director Strategic Development
If to the Transfer Agent:
Nationwide Investors Services, Inc.
Three Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attn.: Xxxxx Xxxxxxx
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If to the Adviser:
Banc One Investment Advisors Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx X0
Xxxxxxxx, Xxxx 00000-0000
Attn: Xxxx X. Xxxxxx
If to the Company:
American General Annuity Insurance Company
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx ________
Attn: _________________
ARTICLE 13
MISCELLANEOUS
13.1. All persons dealing with the Trust must look solely to the
property of the Trust for the enforcement of any claims against the Trust as
neither the Board, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Trust. Each of the
Company, the Adviser, the Transfer Agent and the Administrator acknowledges and
agrees that, as provided by the Trust's Amended and Restated Declaration of
Trust, the shareholders, trustees, officers, employees and other agents of the
Trust and the Portfolios shall not personally be bound by or liable for matters
set forth hereunder, nor shall resort be had to their private property for the
satisfaction of any obligation or claim hereunder. The Trust's Amended and
Restated Declaration of Trust is on file with the Secretary of State of
Massachusetts.
13.2. 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 until such time as it may come into
the public domain without the express written consent of the affected party.
13.3. 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.
13.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.5. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
13.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the National Association of Securities
Dealers and state insurance regulators) and shall permit such authorities (and
other parties hereto) reasonable access to its books and records in connection
with any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
13.7. 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.
13.8. 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; provided, however, that the Adviser may, with advance written notice to
the other parties hereto, assign this Agreement or any rights or obligations
hereunder to any affiliate of or
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company under common control with the Adviser if such assignee is duly licensed
and registered to perform the obligations of the Adviser under this Agreement.
13.9. The Company shall furnish, or shall cause to be furnished, to the
Trust or its designee upon request, copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under generally
accepted accounting principles ("GAAP"), if any), as soon as practical
and in any event within 90 days after the end of each fiscal year;
(b) the Company's June 30th quarterly statements (statutory),
as soon as practical and in any event within 45 days following such
period;
(c) any financial statement, proxy statement, notice or report
of the Company sent to stockholders and/or policyholders, as soon as
practical after the delivery thereof to stockholders;
(d) any registration statement (without exhibits) and
financial reports the Company filed with the Securities and Exchange
Commission or any state insurance regulator, as soon as practical after
the filing thereof; and
(e) any other public report submitted to the Company by
independent accountants in connection with any annual, interim or
special audit made by them of the books of the Company, as soon as
practical after the receipt thereof.
13.10 The names "One Group(R) Investment Trust" and `Trustees of One
Group(R) Investment Trust" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated June 7, 1993 to which reference is
hereby made and a copy of which is on file at the office of the Secretary of the
Commonwealth of Massachusetts and elsewhere as required by law, and to any and
all amendments thereto so filed or hereafter filed. The obligations of `One
Group Investment Trust' entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, Shareholders or
representatives of the Trust personally, but bind only the assets of the Trust,
and all persons dealing with any series of Shares of the Trust must look solely
to the assets of the Trust belonging to such series for the enforcement of any
claims against the Trust.
[SIGNATURE PAGES FOLLOW]
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AMERICAN GENERAL ANNUITY INSURANCE COMPANY
By:
-------------------------------------------
Title:
---------------------------------------
ONE GROUP INVESTMENT TRUST
By:
-------------------------------------------
Title:
---------------------------------------
BANC ONE INVESTMENT ADVISORS CORPORATION
By:
-------------------------------------------
Title:
---------------------------------------
NATIONWIDE ADVISORY SERVICES, INC.
By:
-------------------------------------------
Title:
---------------------------------------
NATIONWIDE INVESTORS SERVICES, INC.
By:
-------------------------------------------
Title:
---------------------------------------
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SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
-------------------------------------------- -----------------------------------
Name of Separate Account and Date Form Numbers
Established by Board of Directors Funded by Separate Account
-------------------------------------------- -----------------------------------
Contract Form Nos:
A.G. Separate Account A
-------------------------------------------- -----------------------------------
-------------------------------------------- -----------------------------------
-------------------------------------------- -----------------------------------
-------------------------------------------- -----------------------------------
-------------------------------------------- -----------------------------------
-------------------------------------------- -----------------------------------
-------------------------------------------- -----------------------------------
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SCHEDULE B
PORTFOLIOS OF THE TRUST
One Group Investment Trust Bond Portfolio
One Group Investment Trust Government Bond Portfolio
One Group Investment Trust Balanced Portfolio
One Group Investment Trust Large Cap Growth Portfolio
One Group Investment Trust Equity Index Portfolio
One Group Investment Trust Diversified Equity Portfolio
One Group Investment Trust Mid Cap Growth Portfolio
One Group Investment Trust Diversified Mid Cap Portfolio
One Group Investment Trust Mid Cap Value Portfolio
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