EXHIBIT (8)(a)
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PARTICIPATION AGREEMENT
EXHIBIT 8A
FUND PARTICIPATION AGREEMENT
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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
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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
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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
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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 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
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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
(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.
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Article 4
Sales Material and Information
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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
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.
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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
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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
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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.
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
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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
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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
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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 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
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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 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.
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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.
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
9
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;
(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.
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
10
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
11
(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
(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
12
(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 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
13
(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 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)
14
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 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.
15
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
16
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
17
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
stockholders and/or policyholders, as soon as or report of the Company sent
to 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]
18
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: _____________________________________
19
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
-------------------------------
Name of Separate Account and Date Established Form Numbers
by Board of Directors Funded by Separate Account
-------------------------------------------------------------------------------
A.G. Separate Account A Contract Form Nos:
------------------
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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
21
