EXHIBIT 9.6
PARTICIPATION AGREEMENT
Among
XXXXXXXX-XXXXXXXXX SERIES TRUST
XXXXXXXX-XXXXXXXXX CAPITAL MANAGEMENT
and
AETNA INSURANCE COMPANY of AMERICA
THIS AGREEMENT, made and entered into as of this ____ day of January, 1996
by and among AETNA INSURANCE COMPANY OF AMERICA (hereinafter "AICA"), a
Connecticut life insurance company, on its own behalf and on behalf of its
Variable Annuity Account I and such additional separate accounts as may be set
forth on Schedule A attached hereto (the "Accounts"); Xxxxxxxx-Xxxxxxxxx Series
Trust, a business trust organized under the laws of Delaware (hereinafter the
"Trust"); and Xxxxxxxx-Xxxxxxxxx Capital Management, (hereinafter the
"Adviser"), a California limited partnership.
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 for variable life insurance policies and/or variable annuity
contracts (collectively, the "Variable Insurance Products") to be offered by
insurance companies which have entered into participation agreements similar to
this Agreement (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets; and
WHEREAS, the Trust intends to file an application to obtain an order from
the Securities and Exchange Commission (the "SEC"), granting Participating
Insurance Companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended, (the "1940 Act") and
Rules 6e-2(b)(15) and 6e-3(T) (b)(15) thereunder, to the extent necessary to
permit shares of the Trust to be sold to and held by variable annuity and
variable life insurance separate accounts of life insurance companies that may
or may not be affiliated with one another (the "Shared Funding Exemptive
Order"); and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolio(s) are registered under
the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws; and
WHEREAS, AICA has registered or will register certain variable annuity and
variable life insurance contracts supported wholly or partially by the Account
(the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A
hereto, as it may be amended from time to time by mutual written agreement; and
WHEREAS, each Account is or will be a duly organized, validly existing
segregated asset account, established by resolution of the Board of Directors of
AICA, to set aside and invest assets attributable to variable annuity contracts,
including the Contracts; and
WHEREAS, AICA has registered or will register the Account as a unit
investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, AICA intends to purchase shares in the Portfolio(s) listed in
Schedule B hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolio(s)"), on behalf of the Accounts to fund the
aforesaid Contracts, and the Adviser, or an affiliate, is authorized to sell
such shares to unit investment trusts such as the Account at net asset value;
and
NOW, THEREFORE, in consideration of their mutual promises, AICA, the Trust
and the Adviser agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. The Adviser, or an affiliate, agrees to sell to AICA those shares of
the Designated Portfolio(s) which the Account orders, executing such orders on a
daily basis at the net asset value next computed after receipt by the Transfer
Agent for the Trust or its designee of the order for the shares of the
Portfolios. For purposes of this Section 1.1, AICA shall be the designee of the
Transfer Agent of the Trust for receipt of such orders and receipt by such
designee shall constitute receipt by the Transfer Agent of the Trust, provided
that the Transfer Agent of the Trust receives notice of any such order prior to
9:00 a.m. Eastern Time on the next following Business Day. "Business Day" shall
mean any day on which the New York Stock Exchange is open for trading and on
which the Trust calculates its net asset value pursuant to the rules of the SEC.
1.2. The Trust agrees to make shares of the Designated Portfolio(s)
available for purchase at the applicable net asset value per share by AICA and
the Account on those days on which the Trust calculates its Designated
Portfolio(s)' net asset value pursuant to rules of the SEC, and the Trust shall
calculate such net asset value on each day which the New York Stock Exchange is
open for trading. Notwithstanding the foregoing, the Board of Trustees of the
Trust (the "Board") may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the
-2-
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.
1.3. The Trust and the Adviser will not sell shares of the Designated
Portfolio(s) to any other insurance company or separate account and AICA will
not purchase shares of any investment company under the Contracts (other than
one advised by AICA or an affiliate) unless an agreement containing provisions
substantially the same as Sections 2.1, 3.6, 3.7, 3.8, and Article VII of this
Agreement is in effect to govern such sales.
1.4. The Trust agrees to redeem for cash, at AICA's request, any full or
fractional shares of the Trust held by AICA, executing such requests on a daily
basis at the net asset value next computed after receipt by the Transfer Agent
for the Trust or its designee of the request for redemption. Requests for
redemption identified by AICA, or its agent, as being in connection with
surrenders, annuitizations, or death benefits under the Contracts may be
executed within five (5) calendar days after receipt by the Transfer Agent for
the Trust or its designee of the requests for redemption subject to the right to
suspend redemptions pursuant to the 1940 Act. This Section 1.4 may be amended,
in writing, by the parties consistent with the requirements of the 1940 Act and
interpretations thereof. For purposes of this Section 1.4, AICA shall be the
designee of the Transfer Agent for the Trust for receipt of requests for
redemption and receipt by such designee shall constitute receipt by the Trust,
provided that the Trust receives notice of any such request for redemption by
9:00 a.m. Eastern Time on the next following Business Day.
1.5. The Parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Trust's shares may be sold to other
insurance companies (subject to Section 1.3 and Article VI hereof).
1.6. AICA shall pay for Trust shares by 10:00 a.m. Eastern Time on the next
Business Day after an order to purchase Trust shares is made in accordance with
the provisions of Section 1.1 hereof. Payment shall be in federal funds
transmitted by wire and/or by a credit for any shares redeemed the same day as
the purchase.
1.7. The Trust shall pay and transmit the proceeds of redemptions of Trust
shares by 10:00 a.m. Eastern Time on the next Business Day after a redemption
order is received in accordance with Section 1.4 hereof subject to the right to
suspend redemptions pursuant to the 1940 Act. Payment shall be in federal funds
transmitted by wire and/or a credit for any shares purchased the same day as the
redemption.
1.8. Issuance and transfer of the Trust's shares will be by book entry
only. Stock certificates will not be issued to AICA or to the Account. Shares
ordered from the Trust will be recorded in an appropriate title for the Account
or in the appropriate sub-account of the Account.
1.9. The Trust or its designee shall furnish same day notice (by wire or
telephone, followed by written confirmation) to AICA of any income, dividends or
-3-
capital gain distributions payable on the Designated Portfolio(s)' shares. AICA
hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Portfolio shares in additional shares of
that Portfolio. The Trust shall notify AICA by the end of the following
Business Day of the number of shares so issued as payment of such dividends and
distributions.
1.10. The Trust or its designee shall make the net asset value per share
for each Designated Portfolio available to AICA on a daily basis as soon as is
reasonably practical after the net asset value per share is calculated and shall
use its best efforts to make such net asset value per share available by 6:00
p.m. Eastern Time. If the Trust or its designee provides AICA with incorrect
per share net asset value information or incorrect information regarding
dividend or capital gains distributions, for any Designated Portfolio through no
fault of AICA, AICA, on behalf of the Accounts, shall be entitled to an
adjustment to the number of shares purchased or redeemed to reflect (as of the
date the incorrect net asset value per share or dividend or capital gains
distribution information was provided) the correct net asset value per share or
dividend or capital gains distribution only, if and to the extent necessary,
AICA is required to make adjustments to the number of units credited and/or unit
values for the Contracts for the periods affected. In addition, to the extent
that such adjustment in the number of shares to reflect the correct net asset
value per share or dividend or capital gains distribution is not sufficient to
compensate AICA for reasonable and necessary expenses and/or losses it has
incurred in making required adjustments to owners of Contracts as a result of
incorrect per share net asset value or dividend or capital gains distribution
information, the Trust or its designee shall assume and/or compensate AICA for
any such reasonable and necessary expenses and/or losses, provided that such
incorrect per share net asset value or dividend or capital gains distribution
information did not arise out of or result from AICA's misfeasance, bad faith,
negligence, or disregard of its duties under this Agreement. In such
circumstances, the Trust will request that AICA provide adequate supporting
data. Any error in the calculation or reporting of net asset value per share,
dividend or capital gains information greater than or equal to $.01 per share
shall be reported immediately upon discovery to AICA. Any error of a lesser
amount shall be corrected as soon as practicable.
1.11. The Trust and the Adviser shall use their reasonable best efforts
to enable each Designated Portfolio(s) to remain in compliance with the
insurance and other applicable laws of the State of Connecticut and any other
applicable state to the extent required to perform this Agreement. The Trust
shall register and qualify the shares for sale in accordance with the laws of
the various states if and to the extent required by applicable law.
-4-
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. AICA represents and warrants that each Account is or will be
registered as a unit investment trust under the 1940 Act and the Contracts are
or will be registered under the 1933 Act; that the Contracts will be issued and
sold in compliance in all material respects with all applicable federal and
state laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. AICA further represents
and warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has or will have legally and validly
established each Account prior to any issuance or sale thereof as a segregated
asset account under applicable state insurance law and has registered or will
register each Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the
Contracts.
2.2. The Trust represents and warrants that Designated Portfolio shares
sold pursuant to this Agreement are registered under the 1933 Act, duly
authorized for issuance and sold in compliance with all applicable federal
securities laws including without limitation the 1933 Act, the Securities
Exchange Act of 1934 ("1934 Act"), and the 1940 Act and that the Trust is and
shall remain registered under the 1940 Act. The Trust shall amend the
Registration Statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares.
2.3. The Trust reserves the right to adopt a plan pursuant to Rule 12b-1
under the 1940 Act and to impose an asset-based or other charge to finance
distribution expenses as permitted by applicable law and regulation. In any
event, the Trust and Adviser agree to comply with applicable provisions and SEC
staff interpretations of the 1940 Act to assure that the investment advisory or
management fees paid to the Adviser by the Trust are legitimate and not
excessive. To the extent that the Trust decides to finance distribution
expenses pursuant to Rule 12b-1, the Trust undertakes to have a Board, a
majority of whom are not interested persons of the Trust, formulate and approve
any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution
expenses.
2.4. The Trust represents and warrants that it is lawfully organized and
validly existing under the laws of the State of Delaware and that it does and
will comply in all material respects with the 1940 Act.
2.5. The Adviser represents and warrants that it is and shall remain duly
registered under all applicable federal and state securities laws and that it
shall perform its obligations for the Trust in compliance in all material
respects with the laws of the State of California and any applicable state and
federal securities laws.
2.6. The Trust and the Adviser represent and warrant that all of their
officers, employees, investment advisers, and other individuals or entities
dealing with the money and/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 the minimal coverage required by
Section 17g-(1) of the 1940
-5-
Act or related provisions as may be promulgated from time to time. The
aforesaid bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
2.7. The Trust will provide AICA with as much advance notice as is
reasonably practicable of any material change affecting the Designated
Portfolio(s) (including, but not limited to, any material change in its
registration statement or prospectus affecting the Designated Portfolio(s) and
any proxy solicitation affecting the Designated Portfolio(s)) and consult with
AICA in order to implement any such change in an orderly manner, recognizing the
expenses of changes and attempting to minimize such expenses by implementing
them in conjunction with regular annual updates of the prospectus for the
Contracts.
2.8. AICA represents, assuming that the Trust complies with Article VI of
this Agreement, that the Contracts are currently treated as annuity contracts or
life insurance contracts, as applicable, under applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), and that it will make
every effort to maintain such treatment and that it will notify the Adviser and
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.
2.9. AICA represents and warrants that it will not purchase Trust shares
with assets derived from tax-qualified retirement plans except indirectly,
through Contracts purchased in connection with such plans.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1(a). At least annually, the Trust shall provide AICA, at AICA's
expense with camera ready copy of the Trust's prospectus for the Designated
Portfolios or as many copies of the Trust's current prospectus for the
Designated Portfolio(s) as AICA may reasonably request for marketing purposes
(including distribution to Contract owners with respect to new sales of a
Contract). If requested by AICA in lieu thereof, the Adviser or Trust shall
provide such documentation (including a final copy of the new prospectus for the
Designated Portfolio(s)) and other assistance as is reasonably necessary in
order for AICA once each year (or more frequently if the prospectus for the
Designated Portfolio(s) are amended) to have the prospectus for the Contracts
and the Trust's prospectus for the Designated Portfolio(s) printed together in
one document.
3.2. If applicable state or federal laws or regulations require that
the Statement of Additional Information ("SAI") for the Trust be distributed to
all Contract purchasers, then the Trust shall provide AICA, at AICA's expense,
with the Trust's SAI or camera ready documentation thereof for the Designated
Portfolio(s) in such quantities as AICA may reasonably request for marketing
purposes (including distribution to Contract owners with respect to new sales of
a Contract).
-6-
3.3. The Trust shall also provide such SAI to AICA or any owner of a
Contract or prospective owner who requests such SAI (although it is anticipated
that such requests will be made to AICA).
3.4. The Trust shall provide AICA, at AICA's expense, with copies of its
prospectus, SAI, and other communications to stockholders for the Designated
Portfolio(s) in such quantity as AICA shall reasonably require for mailing or
distribution to Contract owners. In addition, Adviser shall assume all printing
expenses in connection with printing a sufficient number of copies for all
Contract owners with respect to all proxy solicitations materials, voting
instruction materials and semi-annual and annual reports that are required to be
provided to Contract owners. In the event that AICA, at the request of the
Adviser, prints such materials and reports upon the receipt of camera ready copy
or other mutually acceptable electronic format from the Adviser, the Adviser
will reimburse AICA for all reasonable printing expenses. AICA shall assume all
postage and mailing expenses incurred in connection with providing such
materials and reports to Contract owners, provided that, if the Adviser is
printing such materials, AICA receives such materials in a timely manner from
the Adviser.
3.5. It is understood and agreed that, except with respect to information
regarding AICA provided in writing by that party, AICA is not responsible for
the content of the prospectus or SAI for the Designated Portfolio(s). It is
also understood and agreed that, except with respect to information regarding
the Trust, Adviser or the Designated Portfolio(s) provided in writing by the
Trust or the Adviser (including, in particular, expense information about the
Designated Portfolios that is intended to be included in the fee table portion
of the Prospectus for the Contracts), neither the Trust nor the Adviser are
responsible for the content of the prospectus or SAI for the Contracts.
3.6. If and to the extent required by law, AICA shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Designated Portfolio shares in accordance with
instructions received from Contract owners: and
(iii) vote Designated Portfolio shares for which no instructions
have been received in the same proportion as Designated
Portfolio shares for which instructions have been received
from Contract owners, so long as and to the extent that the
SEC continues to interpret the 1940 Act to require pass-
through voting privileges for variable contract owners.
AICA reserves the right to vote Trust shares held in any
segregated asset account in its own right, to the extent
permitted by it by law. The Adviser reserves the right to
vote Trust shares acquired in order to provide "seed money"
for the Portfolios, to the extent permitted by law.
-7-
3.7. AICA shall be responsible for assuring that each of its separate
accounts holding shares of a Designated Portfolio calculates voting privileges
in the manner required by any Shared Funding Exemptive Order that may be
obtained in the future by the Trust. The Trust agrees to promptly notify AICA
of any changes of interpretations or amendments to any Shared Funding Exemptive
Order obtained by the Trust.
3.8. The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Trust will either provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the 1940
Act not to require such meetings) or, as the Trust currently intends, comply
with Section 16(c) of the 1940 Act (although the Trust is not one of the trusts
described in Section 16(c) of that Act) as well as with Sections 16(a) and, if
and when applicable, 16(b). Further, the Trust will act in accordance with the
SEC's interpretation of the requirements of Section 16(a) with respect to
periodic elections of trustees and with whatever rules the Commission may
promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. AICA shall furnish, or shall cause to be furnished, to Xxxxxxxx-
Xxxxxxxxx Securities, an affiliated broker-dealer of the Adviser, as distributor
of the Trust, for its written approval, at least ten (10) Business Days prior to
its use, a copy of each piece of sales literature or other promotional material
that AICA develops or proposes to use. Such promotional, sales, advertising and
training material shall be prepared and reviewed in light of all applicable
laws, rules and regulations. All such material shall be approved in writing by
Xxxxxxxx-Xxxxxxxxx Securities. Xxxxxxxx-Xxxxxxxxx Securities, as distributor of
the Trust, agrees to respond to requests for such approval on a prompt and
timely basis, not exceeding ten (10) Business Days for the initial review of
such materials, and five (5) Business Days for any subsequent review of such
materials.
4.2. AICA shall not give any information or make any representations or
statements on behalf of the Trust or the Adviser or concerning the Trust or the
Adviser in connection with the sale of the Contracts other than the information
or representations contained in the registration statement or prospectus for the
Trust shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Trust,
or in sales literature or other promotional material approved by the Trust or
its designee or by the Adviser, except with the written permission of the Trust
or Xxxxxxxx-Xxxxxxxxx Securities.
4.3. Xxxxxxxx-Xxxxxxxxx Securities, as distributor of the Trust, shall
furnish, or shall cause to be furnished, to AICA, at least ten (10) Business
Days prior to its use, a copy of each piece of sales literature or other
promotional material that Adviser or Xxxxxxxx-Xxxxxxxxx Securities develops or
proposes to use in connection with the sale of the Contracts. Such promotional,
sales, advertising and training material shall be prepared and reviewed in light
of all applicable laws, rules and regulations. All such material shall be
approved in writing by AICA, and AICA agrees to respond to
-8-
requests for such approval on a prompt and timely basis, not exceeding ten (10)
Business Days for the initial review of such materials, and five (5) Business
Days for any subsequent review of such materials.
4.4. The Trust, the Adviser and Xxxxxxxx-Xxxxxxxxx Securities shall not
give any information or make any representations on behalf of AICA or concerning
AICA, the Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus for the
Contracts, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports for the Account, or in sales
literature or other promotional material approved by AICA or its designee,
except with the written permission of AICA.
4.5. The Trust will provide to AICA at least one complete copy of all
registration statements, prospectuses, SAIs, reports, proxy statements, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Designated Portfolio(s), contemporaneously with the filing of such
document(s) with the SEC or the National Association of Securities Dealers, Inc.
("NASD") or other regulatory authorities.
4.6. AICA will provide to the Trust at least one complete copy of all
registration statements, prospectuses, SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Contracts or the Account (as it relates to the
Contracts), contemporaneously with the filing of such document(s) with the SEC,
the NASD, or other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales literature and
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media, including
electronic media), sales literature (I.E., any written communication distributed
or made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications distributed
or made generally available to some or all agents or employees and shareholder
reports. However, it is anticipated that materials provided solely (a)
internally to AICA's or the Adviser's own employees or counsel or (b) to certain
designated third parties and that are not designed to be provided or
communicated in any manner to the general public (e.g. training materials
provided to distributors or agents) will not be filed with the NASD or any state
securities or insurance regulatory authorities, although such materials will be
prepared in accordance with applicable laws.
4.8. At the request of any party to this Agreement, each other party
will make available to the requesting party's independent auditors and/or
representatives of the appropriate regulatory agencies, all records, data and
access to operating
-9-
procedures that may be reasonably requested in connection with compliance and
regulatory requirements related to this Agreement or any party's obligations
under this Agreement.
ARTICLE V. FEES AND EXPENSES
5.1. The Trust and the Adviser shall pay no fee or other compensation to
AICA under this Agreement, and AICA shall pay no fee or other compensation to
the Trust or the Adviser under this Agreement.
5.2. All expenses incident to performance by the Trust or the Adviser under
this Agreement shall be paid by them. The Trust shall see to it that all shares
of the Designated Portfolio(s) are duly registered and authorized for issuance
in accordance with applicable federal law and, if and to the extent required, in
accordance with applicable state laws prior to their sale.
5.3. All expenses incident to performance by AICA under this Agreement
shall be paid by AICA. In this regard, AICA shall bear the expenses of routine
annual distribution of the Trust's prospectus and distributing the Trust's proxy
materials and reports to owners of Contracts offered by AICA.
ARTICLE VI. DIVERSIFICATION AND QUALIFICATION
6.1. The Trust shall use their best efforts to sell its shares and invest
its assets in such a manner as to ensure that the Contracts will be treated as
annuity contracts under the Code, and the regulations issued thereunder. The
Trust and the Adviser agree that shares of the Designated Portfolio(s) will be
sold only to Participating Insurance Companies and their separate accounts,
unless and until the parties otherwise agree in writing.
6.2. No shares of the Trust will be sold to the general public. However,
shares of the Trust may be sold to AICA or the Adviser to provide initial seed
money to the Portfolios, provided the holding of such shares by AICA or the
Adviser is in compliance with Section 817(h) of the Code and the regulations
thereunder.
6.3. The Trust and Adviser represent and warrant that the Trust and each
Designated Portfolio intends to qualify as a Regulated Investment Company under
Subchapter M of the Code, and that the Trust and the Adviser will expend their
best efforts to maintain such qualification (under Subchapter M or any successor
or similar provisions) as long as this Agreement is in effect.
6.4. The Trust or Adviser will notify AICA immediately upon having a
reasonable basis for believing that the Trust or any Portfolio has ceased to
comply with the aforesaid Section 817(h) diversification or Subchapter M
qualification requirements or might not so comply in the future.
-10-
ARTICLE VII. POTENTIAL CONFLICTS AND COMPLIANCE WITH ANY
SHARED FUNDING EXEMPTIVE ORDER OBTAINED
7.1. 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 Designated Portfolio are being managed; (e) a difference in
voting instructions given by variable annuity contract and variable life
insurance contract owners; or (f) a decision by a Participating Insurance
Company to disregard the voting instructions of contract owners. The Trust
shall promptly inform AICA if the Board determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. AICA and the Adviser will report any potential or existing conflicts
of which it is aware to the Board. AICA and the Adviser will assist the Board
in carrying out its responsibilities under any Shared Funding Exemptive Order
obtained by the Trust, 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 AICA to inform the Board whenever contract
owner voting instructions are to be disregarded. Such responsibilities shall be
carried out by AICA with a view only to the interests of its Contract owners.
7.3. If it is determined by a majority of the Board, or a majority of its
trustees who are not interested persons of the Trust, the Adviser or any sub-
adviser to any of the Designated Portfolios (the "Independent Trustees"), that a
material irreconcilable conflict exists, AICA and other Participating Insurance
Companies shall, at their expense and to the extent reasonably practicable (as
determined by a majority of the Independent Trustees), take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict, up to and
including: (a) withdrawing the assets allocable to some or all of the separate
accounts from the Trust or any Designated Portfolio and reinvesting such assets
in a different investment medium, including (but not limited to) another
Designated 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 contract owners, or variable contract owners of
one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected Contract owners the option of making
such a change; and (b) establishing a new registered management investment
company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision by
AICA to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, AICA may be
required, at the Trust's election, to withdraw the Account's investment in the
Trust and terminate this
-11-
Agreement; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the Independent Trustees. Any such withdrawal
and termination must take place within six (6) months after the Trust gives
written notice that this provision is being implemented and, until the end of
that six (6) month period, the Adviser and the Trust shall continue to accept
and implement orders by AICA for the purchase (and redemption) of shares of the
Trust.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to AICA conflicts with the
majority of other state regulators, then AICA will withdraw the Account's
investment in the Trust and terminate this Agreement within six (6) months after
the Board informs AICA in writing that it has determined that such decision has
created an irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
Independent Trustees. Until the end of the foregoing six (6) month period, the
Adviser and the Trust shall continue to accept and implement orders by AICA for
the purchase (and redemption) of shares of the Trust.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the Independent Trustees 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. AICA
shall not be required by Section 7.3 to establish a new funding medium for the
Contracts if an offer to do so has been declined by vote of a majority of
Contract owners materially adversely affected by the irreconcilable material
conflict. In the event that the Board determines that any proposed action does
not adequately remedy any irreconcilable material conflict, then AICA will
withdraw the Account's investment in the Trust and terminate this Agreement
within six (6) months after the Board informs AICA in writing of the foregoing
determination; provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the Independent Trustees.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) under the 1940
Act 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 on terms and conditions materially different from those
contained in the Shared Funding Exemptive Order, then (a) 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) under the 1940 Act, as
amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and
(b) Sections 3.6, 3.7, 3.8, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
-12-
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY AICA
8.1(a). AICA agrees to indemnify and hold harmless each of the
Trust, the Adviser, and any sub-advisers and their officers and partners and
each member of their Board(s) and each person, if any, who controls any such
person within the meaning of the Section 15 of the 1933 Act (each an
"Indemnified Party" and collectively, the "Indemnified Parties" for purposes of
this Section 8.1) against any and all losses, claims, expenses, damages,
liabilities (including amounts paid in settlement with the written consent of
AICA) or litigation (including legal and other expenses) to which such
Indemnified Party may become subject under any statute or regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of the Trust's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus or SAI for the Contracts or contained in the
Contracts or sales literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, PROVIDED that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished in
writing to AICA by or on behalf of the Trust or the Adviser 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 AICA or persons under its control) or wrongful conduct of AICA or
persons under its control, with respect to the sale or distribution
of the Contracts or Trust Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or
sales literature of the 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 information furnished in writing to the
Trust by or on behalf of AICA; or
(iv) arise as a result of any failure by AICA 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 AICA in this Agreement or arise out of or
result from any other material breach of this Agreement by AICA;
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). AICA shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or 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 or to
the Trust, whichever is applicable.
8.1(c). AICA 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 AICA 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 AICA of any such claim shall not relieve AICA 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,
except to the extent that AICA has been prejudiced by such failure to give
notice. In case any such action is brought against an Indemnified Party, AICA
shall be entitled to participate, at its own expense, in the defense of such
action. AICA also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from AICA to such
party of AICA's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
AICA will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify AICA 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.
8.2. INDEMNIFICATION BY THE ADVISER
8.2(a). The Adviser agrees to indemnify and hold harmless AICA and
its directors and officers and each person, if any, who controls AICA within the
meaning of Section 15 of the 1933 Act (each an "Indemnified Party" and
collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, expenses, 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 or regulation, at
-14
common law or otherwise, insofar as such losses, claims, expenses, damages,
liabilities (or actions in respect thereof) or litigation 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 statement or alleged untrue
statement of any material fact contained in the registration statement
or prospectus or SAI 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 in
writing to the Trust or the Adviser by or on behalf of AICA 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 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 for the Contracts not
supplied by the Adviser or persons under its control) or wrongful
conduct of the Trust or Adviser or persons under their control, with
respect to the sale or distribution of the Contracts or Trust shares;
or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus or
sales literature covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished in writing to AICA by or on behalf of the Trust or the
Adviser; or
(iv) arise as a result of any failure by the Trust or the Adviser to
provide the services and furnish the materials required to be provided
or furnished by the Trust or the Adviser under the terms of this
Agreement (including a failure to comply with the diversification and
other qualification requirements specified in Article VI of this
Agreement); or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Trust or Adviser in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Adviser;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
-15-
8.2(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and duties under this
Agreement or to AICA or the Account, whichever is applicable.
8.2(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, except to the extent that the Adviser
has been prejudiced by such failure to give notice. In case any such action is
brought against an Indemnified Party, the Adviser will be entitled to
participate, at its own expense, in the defense of such action. The Adviser
also shall be entitled to assume the defense thereof, with counsel reasonably
satisfactory to the party named in the action. After notice from the Adviser to
such 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 party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.2(d). AICA agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
8.3. INDEMNIFICATION BY THE TRUST
8.3(a). The Trust agrees to indemnify and hold harmless AICA and its
directors and officers and each person, if any, who controls AICA within the
meaning of Section 15 of the 1933 Act (each individually an "Indemnified Party"
and collectively, the "Indemnified Parties" for purposes of this Section 8.3)
against any and all losses, claims, expenses, damages, liabilities (including
amounts paid in settlement with the written consent of the Trust) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, expenses, damages, liabilities or expenses (or actions in
respect thereof) or settlement, are related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to provide the services
and furnish the materials required to be provided or furnished by it
under the terms of this Agreement (including a failure, whether
unintentional
-16-
or in good faith or otherwise, to comply with the diversification and
other qualification requirements specified in Article VI of this
Agreement); or
(ii) arise out of or result from any material breach of any representation
and/or warranty made by the Trust in this Agreement or arise out of or
result from any other material breach of this Agreement by the Trust;
or
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and duties under this
Agreement or to AICA, the Trust, the Adviser or the Account, whichever is
applicable.
8.3(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, except to the extent that the Trust
has been prejudiced by such failure to give notice. In case any such action is
brought against an Indemnified Party, the Trust will be entitled to participate
in the defense or to defend against such action and will not be liable to such
party under this Agreement for any legal or other expenses subsequently incurred
by such party independently in connection with the defense thereof other than
reasonable costs of investigation.
8.3(d). AICA agrees promptly to notify the Trust of the commencement
of any litigation or proceeding against it or any of its officers or directors
in connection with the Agreement, the issuance or sale of the Contracts, the
operation of the Account, or the sale or acquisition of shares of the Trust.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of California,
except the California conflict of laws provisions.
-17-
9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those laws, rules and regulations as the SEC may grant
(including, but not limited to, any Shared Funding Exemptive Order obtained by
the Trust) and the terms hereof shall be interpreted and construed in accordance
therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, with respect
to some or all Designated Portfolios, upon six (6) months advance
written notice delivered to the other parties; provided, however, that
such notice shall not be given earlier than July 31, 1998; or
(b) at the option of AICA, by thirty (30) days written notice to the
other parties with respect to any Designated Portfolio based upon
AICA's determination that shares of such Portfolio are not reasonably
available to meet the requirements of the Contracts; or
(c) at the option of AICA, by thirty (30) days written notice to the
other parties with respect to any Designated Portfolio in the event
any of the Designated Portfolio's shares are not registered, issued or
sold in accordance with applicable state and/or federal law or such
law precludes the use of such shares as the underlying investment
media of the Contracts issued or to be issued by AICA; or
(d) at the option of the Trust, upon thirty (30) days written notice,
in the event that formal administrative proceedings are instituted
against AICA or the principal underwriter of the Contracts by the
NASD, the SEC, the Insurance Commissioner or like official of any
state or any other regulatory body regarding AICA's duties under this
Agreement or related to the sale of the Contracts, the operation of
any Account, or the purchase of the Trust shares, provided, however,
that the Trust determines, in its sole judgment exercised in good
faith, that any such administrative proceeding will have a material
adverse effect upon the ability of AICA to perform its obligations
under this Agreement; or
(e) at the option of AICA, upon thirty (30) days written notice, in
the event that formal administrative proceedings are instituted
against the Trust or Adviser by the SEC, the NASD, or any state
securities or insurance department or any other regulatory body,
provided, however, that AICA determines, in its sole judgment
exercised in good faith, that any such administrative proceeding will
have a material adverse effect upon the ability of the Trust or
Adviser to perform its obligations under this Agreement; or
-18-
(f) at the option of AICA, by written notice to the Trust and the
Adviser with respect to any Designated Portfolio if AICA reasonably
believes that the Portfolio will fail to meet the Section 817(h)
diversification requirements or Subchapter M qualifications specified
in Article VI hereof; or
(g) at the option of either the Trust or the Adviser, if (i) the
Trust or the Adviser, respectively, shall determine, in its sole
judgement reasonably exercised in good faith, that AICA has suffered a
material adverse change in its business or financial condition or is
the subject of material adverse publicity and that material adverse
change or publicity will have a material adverse impact on AICA's
ability to perform its obligations under this Agreement, (ii) the
Trust or the Adviser notifies AICA of that determination and its
intent to terminate this Agreement, AND (iii) after considering the
actions taken by AICA and any other changes in circumstances since the
giving of such a notice, the determination of the Trust or Adviser
shall continue to apply, in its sole judgment exercised in good faith,
on the sixtieth (60th) day following the giving of that notice, which
sixtieth day shall be the effective date of termination; or
(h) at the option of AICA, if (i) AICA shall determine, in its sole
judgement reasonably exercised in good faith, that either the Trust or
the Adviser has suffered a material adverse change in its business or
financial condition or is the subject of material adverse publicity
and that material adverse change or publicity will have a material
adverse impact on the Trust's or the Adviser's ability to perform its
obligations under this Agreement, (ii) AICA notifies the Trust or the
Adviser, as appropriate, of that determination and its intent to
terminate this Agreement, AND (iii) after considering the actions
taken by the Trust or the Adviser and any other changes in
circumstances since the giving of such a notice, the determination of
AICA shall continue to apply, in its sole judgment exercised in good
faith, on the sixtieth (60th) day following the giving of that notice,
which sixtieth (60th) day shall be the effective date of termination.
10.2. NOTICE REQUIREMENT. No termination of this Agreement shall be
effective unless and until the party terminating this Agreement gives prior
written notice to all other parties of its intent to terminate, which notice
shall set forth the basis for the termination.
10.3. EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement or any other agreement between the parties, the Trust and the Adviser
shall 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"). Specifically, without limitation, the owners of the
Existing Contracts shall be permitted to reallocate investments in the Trust,
redeem investments in the Trust and/or invest in the Trust upon the making of
additional purchase payments under the
-19-
Existing Contracts. The parties agree that this Section 10.3 shall not apply to
any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.
10.4 RESTRICTIONS ON REDEMPTION OF SHARES. AICA shall not redeem Trust
shares attributable to the Contracts (as opposed to Trust shares attributable to
the AICA assets held in the Account) except: (a) as necessary to implement
Contract owner initiated transactions, (b) as required by with state and/or
federal laws or regulations or judicial or other legal precedent of general
application (a "Legally Required Redemption") or (c) as permitted by an order of
the SEC pursuant to Xxxxxxx 00(x) xx xxx 0000 Xxx (xx and to the extent that the
SEC continues to require the receipt of such an order or any other order of the
SEC in order for AICA to redeem Trust shares attributable to the Contracts).
Upon request, AICA will promptly furnish to the Trust and the Adviser an opinion
of counsel for AICA (which counsel shall be reasonably satisfactory to the Trust
and the Adviser) to the effect that any redemption pursuant to clause (b) above
is a Legally Required Redemption or any redemption pursuant to clauses (a), (b)
or (c) is permitted without first obtaining an order of the SEC pursuant to
Section 26(b) of the 1940 Act. Furthermore, AICA may prevent Contract owners
from allocating payments to a Portfolio that was otherwise available under the
Contracts provided that AICA first gives the Trust or the Adviser ninety (90)
days notice of its intention to do so.
10.5. SURVIVING PROVISIONS. Notwithstanding any termination of this
Agreement, each party's obligations under Article VIII to indemnify other
parties shall survive and not be affected by any termination of this Agreement.
In addition, with respect to Existing Contracts, all provisions of this
Agreement shall also survive and not be affected by any termination of this
Agreement.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Trust:
Xxxxxxxx-Xxxxxxxxx Series Trust
000 Xxxx Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Secretary
If to the Adviser:
Xxxxxxxx-Xxxxxxxxx Capital Management
000 Xxxx Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
If to AICA:
-20-
AICA Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
with a simultaneous copy to:
Xxxxx X. XxXxxx, Esq.
AICA Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
or such other address as such party may hereafter specify in writing or by
facsimile. Each such notice to a party shall be either hand delivered or
transmitted by registered or certified United States mail with return receipt
requested, and shall be effective upon delivery.
ARTICLE XII. MISCELLANEOUS
12.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain. Without limiting the foregoing, no party hereto shall disclose
any information that such party has been advised is proprietary, except such
information that such party is required to disclose by any appropriate
governmental authority (including without limitation the SEC, the NASD and state
securities or insurance regulators).
12.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.4. This Agreement constitutes the whole agreement between the
parties hereto with respect to the subject matter hereof, and supersedes all
prior oral or written understandings, agreements or negotiations between the
parties with respect to such subject matter, except as otherwise agreed to in
writing by the parties. No prior writings by or between the parties with
respect to the subject matter hereof shall be used by either party in connection
with the interpretation of any provision of this Agreement. If any provision of
this Agreement shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of the Agreement shall not be affected thereby.
-21-
12.5. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state securities or insurance regulators) and shall permit such
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
12.6. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum jointly
selected by the relevant parties (but if applicable law requires some other
forum, then such other forum) in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
12.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
-22-
12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
AETNA INSURANCE COMPANY OF AMERICA
By its authorized officer
SEAL By: _____________________________
Title: ____________________________
Date: ____________________________
XXXXXXXX-XXXXXXXXX SERIES TRUST
By its authorized officer
SEAL By: _______________________________
E. Xxxxx Xxxxx, Jr.
Title: Secretary
Date:_______________________________
XXXXXXXX-XXXXXXXXX CAPITAL MANAGEMENT
SEAL By: ______________________________
E. Xxxxx Xxxxx, Jr.
Title:
Date: ____________________________
-23-
SCHEDULE A
CONTRACTS AND
SEPARATE ACCOUNTS FORM NUMBERS
----------------- ------------
Variable Annuity Account I 1. G-CDA-94 (NQ) using the
Xxxxxxxx-Xxxxxxxxx/ ALIAC
Schedule Page.
2. G-CDA-94 (IR) using the
Xxxxxxxx-Xxxxxxxxx/ALIAC
Schedule Page.
-24-
SCHEDULE B
DESIGNATED PORTFOLIOS
---------------------
Xxxxxxxx-Xxxxxxxxx Series Trust:
1. Core Growth Series
2. Emerging Growth Series
3. International Growth Series
4. Value Series
5. Diversified Income Series
6. International Fixed Income Series
-25-
