EXHIBIT (h)(14)(a)
PARTICIPATION AGREEMENT
AMONG
PIONEER VARIABLE CONTRACTS TRUST,
AMERICAN GENERAL LIFE INSURANCE COMPANY
PIONEER INVESTMENT MANAGEMENT, INC.
AND
PIONEER FUNDS DISTRIBUTOR, INC.
THIS AGREEMENT, made and entered into this 10th day of December, 2004,
by and among PIONEER VARIABLE CONTRACTS TRUST, a Delaware business trust (the
"Trust"), AMERICAN GENERAL LIFE INSURANCE COMPANY, a Texas life insurance
company (the "Company") on its own behalf and on behalf of each of the
segregated asset accounts of the Company set forth in Schedule A hereto, as may
be amended from time to time (the "Accounts"), PIONEER INVESTMENT MANAGEMENT,
INC., a Delaware corporation ("PIM") and PIONEER FUNDS DISTRIBUTOR, INC.
("PFD"), a corporation organized under the laws of The Commonwealth of
Massachusetts.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and its shares are registered or will be registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into
several series and classes of shares, each series being designated a "Portfolio"
and representing an interest in a particular managed pool of securities and
other assets;
WHEREAS, the Trust is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts to be offered by insurance companies, including the
Company, which have entered into participation agreements with the Trust (the
"Participating Insurance Companies");
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission (the "SEC"), dated July 9, 1997 (File No. 812-10494) (the
"Mixed and Shared Funding Exemptive Order") 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
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 companies that may or may not be affiliated
with one another and qualified pension and retirement plans ("Qualified Plans");
WHEREAS, PIM is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
law, and is the Trust's investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or variable
life insurance contracts (individually, the "Contract" or, collectively, the
"Contracts") which, if required by applicable law, will be registered under the
1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated
asset accounts, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the aforesaid variable
annuity and/or variable life insurance contracts that are allocated to the
Accounts (the Contracts and the Accounts covered by this Agreement, and each
corresponding Portfolio covered by this Agreement in which the Accounts may
invest, is specified in Schedule A attached hereto as may be modified from time
to time);
WHEREAS, the Company has registered or will register the Accounts as
unit investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, the Portfolios offered by the Trust to the Company and the
Accounts are set forth on Schedule A attached hereto;
WHEREAS, PFD is registered as a broker-dealer with the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") and is authorized
to sell shares of the Portfolios to unit investment trusts such as the Accounts;
WHEREAS, American General Equity Services Corporation ("Policy
Underwriter"), the underwriter for the variable annuity and the variable life
policies, is registered as a broker-dealer with the SEC under the 1934 Act and
is a member in good standing of the NASD; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios specified in Schedule A attached hereto (the "Shares") on behalf of
the Accounts to fund the Contracts, and PFD intends to sell such Shares to the
Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust,
PIM, PFD and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. PFD and the Company agree to provide pricing information,
execute orders and wire payments for purchases and redemptions of Fund
shares as set forth in this Article I until such time as they mutually
agree to utilize the National Securities Clearing Corporation ("NSCC").
1.2 PFD agrees to sell to the Company those Shares which the
Accounts order in accordance with the terms of this Agreement (based on
orders placed by Contract owners or participants on that Business Day,
as defined below) and which are available for purchase by such Accounts.
Each such order will be executed on a daily basis at the net asset value
next computed after receipt by the Trust or its designee of the order
for the Shares. For purposes of this Section 1.2, the Company shall be
the designee of the Trust for receipt of such orders from Contract
owners or participants and receipt by such designee shall constitute
receipt by the Trust; provided that the Trust or its designee receives
written (or facsimile) notice of such orders by the time the Trust
ordinarily calculates its net asset value as described from time to time
in the Trust's prospectus (which as of
2
the date of this Agreement is 4:00 p.m. New York time on such Business
Day. "Business Day" shall mean any day on which the New York Stock
Exchange, Inc. (the "NYSE") is open for trading and on which the Trust
calculates its net asset value pursuant to the rules of the SEC.
1.3. PFD agrees to make the Shares available for purchase at the
applicable net asset value per share by the Company and the Accounts on
those days on which the Trust calculates its net asset value in
accordance with the rules of the SEC, provided that the Company notifies
the Trust of such purchase order (via fax or email) by 9:30 a.m. New
York time on the next Business Day. Notwithstanding the foregoing, the
Board of Trustees of the Trust (the "Board") may refuse to sell any
Shares to the Company and the Accounts, or suspend or terminate the
offering of the Shares to the Company and the Accounts if such action is
required by law or by regulatory authorities having jurisdiction over
PIM, PFD or the Trust or is, in the sole discretion of the Board acting
in good faith and in light of its fiduciary duties under federal and any
applicable state laws, in the best interest of the Shareholders of such
Portfolio.
1.4. The Trust and PFD will sell Trust shares only to Participating
Insurance Companies and Qualified Plans which have agreed to participate
in the Trust to fund their Separate Accounts and/or Qualified Plans all
in accordance with the requirement of Section 817(h) of the Internal
Revenue Code, as amended (the "Code") and the Treasury regulations
thereunder. The Company will not resell the Shares except to the Trust
or its agents.
1.5. The Trust agrees, upon the Company's request, to redeem for
cash, any full or fractional Shares held by the Accounts (based on
orders placed by Contract owners on that Business Day). Each such
redemption request shall be executed 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 1.5, the Company
shall be the designee of the Trust for receipt of requests for
redemption from Contract owners or participants and receipt by such
designee shall constitute receipt by the Trust; provided that the
Company notifies the Trust of the request for redemption (via fax or
email) by 9:30 a.m. New York time on the next Business Day.
1.6 The Trust shall provide written confirmation to the Company (via
email or fax) by 1 p.m. New York time of the ending share balances held
by the Account on each Business Day after the Trust receives a purchase
order and/or request for redemption.
1.7. Each purchase, redemption and exchange order placed by the
Company shall be placed separately for each Portfolio and shall not be
netted with respect to any Portfolio. However, with respect to payment
of the purchase price by the Company and of redemption proceeds by the
Trust, the Company and the Trust shall net purchase and redemption
orders with respect to each Portfolio and shall transmit one net payment
for all of the Portfolios in accordance with Section 1.7 hereof.
1.8. In the event of net purchases, the Company shall transmit
federal funds to pay for the Shares by 2:00 p.m. New York time on the
next Business Day after an order to purchase the Shares is made in
accordance with the provisions of Section 1.2. hereof. Federal funds
shall be received by the Trust no later than the end of the next
Business Day after the Trust or its agent receives the purchase order.
If payment in federal funds for any purchase order is not received by
the end of such Business Day, the Company shall promptly, upon the
Trust's request, reimburse the Trust for any charges, costs, fees,
interest or other expenses incurred by the Trust in connection with any
advances to, or borrowings or overdrafts by, the Trust, or any similar
expenses (including the cost of and any loss incurred by the Trust in
unwinding any purchase of securities by the Trust) incurred by the Trust
as a result of portfolio transactions effected by the Trust based upon
such
3
purchase request. In the event of net redemption, the Trust shall
transmit federal funds by wire for redeemed Shares by 2:00 p.m. New York
time on the next Business Day after an order to redeem Shares is made in
accordance with the provisions of Section 1.2. hereof. Federal funds
shall be received by the Company no later than the end of the next
Business Day after the Trust (or its agent) receives the redemption
request. If payment in federal funds for any redemption is not received
by the end of such Business Day, the Trust shall promptly, upon the
Company's request, reimburse the Company for any charges, costs, fees,
interest or other expenses incurred by the Company in connection with
any advances to, or borrowings or overdrafts by, the Company, or any
similar expenses. The Trust reserves the right to postpone the date of
payment or satisfaction upon redemption consistent with Section 22(e) of
the 1940 Act and any rules pomulgated thereunder. Payments for net
redemptions shall be in federal funds transmitted by wire. On any
Business Day when the Federal Reserve Wire Transfer System is closed for
business, but the New York Stock Exchange is open for business, purchase
orders and redemption requests will be settled on the next Business Day
on which the Federal Reserve Wire Transfer System is open for business.
1.9. Issuance and transfer of the Shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts.
The Shares ordered from the Trust will be recorded in an appropriate
title for the Accounts or the appropriate subaccounts of the Accounts.
1.10. The Trust shall furnish the Company with advance notice by wire
or by telephone, followed by written confirmation of the day such
dividend(s) and distributions are expected to be paid. The Trust shall
also furnish notice (by fax or by email) no later than 5:00 p.m. New
York time on the ex-dividend date to the Company of any dividends or
capital gain distributions payable on the Shares. The Company hereby
elects to receive all such dividends and distributions as are payable in
cash or Shares on a Portfolio's Shares in additional Shares of that
Portfolio. The Company reserves the right to revoke this election and to
receive all such dividends and capital gains distributions in cash. The
Trust shall notify the Company by the end of the next following Business
Day of the number of Shares so issued as payment of such dividends and
distributions.
1.11. The Trust or its custodian shall make the net asset value per
share for each Portfolio available to the Company by email or fax on
each Business Day as soon as reasonably practical after the net asset
value per share ("NAV") is calculated and shall use its best efforts to
make such net asset value per share available by 6:00 p.m. New York
time. If the Trust is unable to meet the 6:00 p.m. deadline, the Trust
shall notify the Company and provide the Company with its best estimate
of when the NAV will be available. In the event of an error in the
computation of a Portfolio's XXXxx any dividend or capital gain
distribution (each, a "pricing error"), PIM or the Trust shall notify
the Company as soon as possible after the discovery of the error. Such
notification may be verbal, but shall be confirmed promptly in writing
in accordance with Article XII of this Agreement. A pricing error shall
be corrected in accordance with the Trust's internal policies and
procedures. If an adjustment is necessary to correct a material error
that occurred through no fault of the Company and such adjustment has
caused Contract owners to receive less than the number of Shares or
redemption proceeds to which they are entitled, the number of Shares of
the applicable Account will be adjusted and the amount of any
underpayments will be paid by the Trust or PIM to the Company for
crediting of such amounts to the Contract owners' accounts. Upon
notification by PIM of any overpayment due to a material error, the
Company shall promptly remit to the Trust or PIM, as appropriate, any
overpayment that has not been paid to Contract owner; however, PIM
acknowledges that the Company does not intend to seek additional
payments from any Contract owner who, because of a pricing error, may
have underpaid for units of interest credited to his/her account. The
costs of correcting such adjustments or of any delay in the
4
communication of the NAV that causes the Company financial hardship
shall be borne by the Trust or PIM unless the Company is at fault in
which case such costs shall be borne by the Company.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1. The Company represents and warrants that the Contracts are or
will be registered under the 1933 Act or are exempt from or not subject
to registration thereunder, and that the Contracts will be issued, sold,
and distributed in compliance in all material respects with all
applicable state and federal laws, including without limitation the 1933
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the 1940 Act. The Company further represents and warrants that it
(i) is an insurance company duly organized and in good standing under
applicable law; (ii) has legally and validly established each Account as
a segregated asset account under applicable law; (iii) has registered
or, prior to any issuance or sale of the Contracts, will register the
Accounts as unit investment trusts in accordance with the provisions of
the 1940 Act (unless exempt therefrom) to serve as segregated investment
accounts for the Contracts, and (iv) will maintain such registration for
so long as any Contracts are outstanding. The Company shall amend the
registration statements under the 1933 Act for the Contracts and the
registration statements under the 1940 Act for the Accounts from time to
time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company
shall register and qualify the Contracts for sales in accordance with
the securities laws of the various states only if and to the extent
deemed necessary by the Company. At the time the Company is required to
deliver the Trust's prospectus or statement of additional information to
a purchaser of Shares in accordance with the requirements of federal or
state securities laws, the Company shall distribute to such Contract
purchasers the then current Trust prospectus, as supplemented.
2.2. The Company represents and warrants that the Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code,
that it will maintain such treatment and that it will notify the Trust
or PIM 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.
2.3. The Company represents and warrants that Policy Underwriter, the
underwriter for the individual variable annuity contracts and the
variable life policies, is a member in good standing of the NASD and is
a registered broker-dealer with the SEC. The Company represents and
warrants that the Company and Policy Underwriter will sell and
distribute such contracts and policies in accordance in all material
respects with all applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 1940
Act and state insurance law suitability requirements.
2.4. The Trust represents and warrants that the Shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance in compliance with the laws of Delaware 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. The Trust shall register and qualify
the Shares for sale in accordance with the laws of the various states
only if and to the extent deemed necessary by the Trust.
2.5. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware.
5
2.6. PFD represents and warrants that it is a member in good standing
of the NASD and is registered as a broker-dealer with the SEC. PFD
represents that it will sell and distribute the Shares in accordance in
all material respects with all applicable state and federal securities
laws, including without limitation the 1933 Act, the 1934 Act, and the
0000 Xxx.
2.7. PIM represents and warrants that it is and shall remain duly
registered as an investment adviser under the Investment Advisers Act of
1940, as amended.
2.8. No less frequently than annually, the Company shall submit to
the Board such reports, material or data as the Board may reasonably
request so that it may carry out fully the obligations imposed upon it
by the conditions contained in the Mixed and Shared Funding Exemptive
Order pursuant to which the SEC has granted exemptive relief to permit
mixed and shared funding.
2.9. The Trust and PIM represent and warrant that all of their
respective officers, employees, investment advisers, and other
individuals or entities dealing with the money and/or securities of the
Trust are, and shall continue to be at all times, covered by one or more
blanket fidelity bonds or similar coverage for the benefit of the Trust
in an amount not less than the minimal coverage required by Rule 17g-1
under the 1940 Act or related provisions as may be promulgated form time
to time. The aforesaid bonds shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company. The
Company represents and warrants that all of its respective officers,
employees, and other individuals or entities employed or controlled by
the Company 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 in an deemed appropriate by the Company. The
aforesaid bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company. The Company agrees that
any amounts received under such bond relating to a claim arising under
this Agreement will be held by the Company for the benefit of the Trust.
The Company agrees to make all reasonable efforts to maintain such bond
and agrees to notify the Trust and PIM in writing in the event such
coverage terminates.
2.10. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Code, that the Contracts are
currently at the time of issuance and, assuming the Trust meets the
requirements of Article VI, will be treated as annuity contracts under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Trust, PFD and PIM
immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so
treated in the future. In addition, the Company represents and warrants
that each Account is a "segregated asset account" and that interests in
the Account are offered exclusively through the purchase of or transfer
into a "variable contract" within the meaning of such terms under
Section 817 of the Code and the regulations thereunder. The Company will
use every effort to continue to meet such definitional requirements, and
it will notify the Trust, PFD and PIM 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. The Company 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. PROSPECTUS AND PROXY STATEMENTS; VOTING
3.1. At least annually, the Trust or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing only the Portfolios listed in Schedule A
6
hereto) for the Shares as the Company may reasonably request for
distribution to existing Contract owners whose Contracts are funded by
such Shares. If requested by the Company, in lieu of providing copies of
the current prospectus, the Trust or its designee shall provide a master
of such prospectus suitable for duplication and/or printing by the
Company and the Company shall be reimbursed by the Trust or its designee
for such costs, as they relate to the printing and delivery of these
materials to existing Contract owners whose Contracts are funded by the
Shares. The Trust or its designee shall provide the Company, at the
Company's expense, with as many copies of the current prospectus for the
Shares as the Company may reasonably request for distribution to
prospective purchasers of Contracts. If requested by the Company in lieu
thereof, the Trust or its designee shall provide such documentation
(including a "camera ready" copy of the new prospectus as set in type
or, at the request of the Company, as a diskette in the form sent to the
financial printer) and other assistance as is reasonably necessary in
order for the parties hereto once each year (or more frequently if the
prospectus for the Shares is supplemented or amended) to have the
prospectus for the Contracts and the prospectus for the Shares printed
together in one document; the expenses of such printing to be
apportioned between (a) the Company and (b) the Trust or its designee in
proportion to the number of pages of the Contract and Shares'
prospectuses, taking account of other relevant factors affecting the
expense of printing, such as covers, columns, graphs and charts; the
Trust or its designee to bear the cost of printing the Trust's
prospectus portion of such document for distribution to owners of
existing Contracts funded by the Shares and the Company to bear the
expenses of printing the portion of such document relating to the
Accounts; provided, however, that the Company shall bear all printing
expenses of such combined documents where used for distribution to
prospective purchasers or to owners of existing Contracts not funded by
the Shares. In the event that the Company requests that the Trust or its
designee provides the Trust's prospectus in a "camera ready," diskette
format or other mutually agreed upon format, the Trust shall be
responsible for providing the prospectus in the format in which it or
PIM is accustomed to formatting prospectuses and shall bear the expense
of providing the prospectus in such format (e.g., typesetting expenses),
and the Company shall bear the expense of adjusting or changing the
format to conform with any of its prospectuses, subject to PIM's
approval which shall not be unreasonably withheld. Notwithstanding the
foregoing, the Trust shall also provide the Company, at the Trust's
expense, no less frequently than annually, copies of the Portfolios
prospectuses in PDF format for use on the Company's and/or affiliated
producer's websites.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or its
designee. The Trust or its designee, at its expense, shall print and
provide such statement of additional information to the Company (or a
master of such statement suitable for duplication by the Company) for
distribution to any owner of a Contract funded by the Shares. Upon
request, the Company shall be reimbursed by the Trust or its designee
for the duplication, printing and distribution costs for delivery of the
materials to existing Contract Owners whose Contracts are funded by the
Shares. The Trust shall also provide such statement of additional
information to the Company in a mutually agreed upon electronic format.
The Trust or its designee, at the Company's expense, shall print and
provide such statement to the Company (or a master of such statement
suitable for duplication by the Company) for distribution to a
prospective purchaser who requests such statement or to an owner of a
Contract not funded by the Shares.
3.3. The Trust or its designee shall provide the Company free of
charge, if and to the extent applicable to the Shares, copies of the
Trust's proxy materials, reports to Shareholders and other
communications to Shareholders (or, upon request, a master of such
materials suitable for duplication or printing by the Company) in such
quantity as the Company shall reasonably require for distribution to
Contract owners. The Company shall be reimbursed by the Trust or its
designee
7
for printing and/or duplication costs as they relate to delivery of
these materials to Contract owners. The cost of distributing such
documents shall be borne the Trust or its designee.
3.4 The Trust or PIM will provide the Company with as much notice as
is reasonably practicable of any proxy solicitation for any Portfolio,
and of any material change in the Trust's registration statement,
particularly any change resulting in change to the registration
statement or prospectus or statement of additional information for any
Account. The Trust and PIM will cooperate with the Company so as to
enable the Company to solicit proxies from Contract owners or to make
changes to its prospectus, statement of additional information or
registration statement, in an orderly manner. The Trust and PIM will
make reasonable efforts to attempt to have changes affecting Contract
prospectuses become effective simultaneously with the annual updates for
such prospectuses.
3.5. The Trust hereby notifies the Company that it may be appropriate
to include in the prospectus pursuant to which a Contract is offered
disclosure regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote the Shares in accordance with instructions received
from Contract owners; and
(c) vote the Shares for which no instructions have been
received in the same proportion as the Shares of such
Portfolio 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. The Company will in no way recommend action in connection with
or oppose or interfere with the solicitation of proxies for the Shares
held for such Contract owners. The Company reserves the right to vote
shares held in any segregated asset account in its own right, to the
extent permitted by law. Participating Insurance Companies shall be
responsible for assuring that each of their separate accounts holding
Shares calculates voting privileges in the manner required by the Mixed
and Shared Funding Exemptive Order. The Trust and PIM will notify the
Company of any changes of interpretations or amendments to the Mixed and
Shared Funding Exemptive Order.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to
PFD or its designee, each piece of sales literature or other promotional
material in which the Trust, PIM, any other investment adviser to the
Trust, or any affiliate of PIM are named, at least five (5) Business
Days prior to its use. No such material shall be used if PFD or its
designee reasonably objects to such use within five (5) Business Days
after receipt of such material. PFD or its designee shall notify the
Company within five (5) Business Days of receipt of its approval or
disapproval of such materials.
4.2. The Company shall not make any representation on behalf of the
Trust, PIM, any other investment adviser to the Trust or any affiliate
of PIM and shall not give any information on behalf
8
of the Trust, PIM, any other investment adviser to the Trust, or any
affiliate of PIM or concerning the Trust or any other such entity in
connection with the sale of the Contracts other than the information
contained in the registration statement, prospectus or statement of
additional information for the Shares, as such registration statement,
prospectus and statement of additional information 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, PIM, PFD or their respective designees, except with the
permission of the Trust, PIM or their respective designees. The Trust,
PIM, PFD or their respective designees each agrees to respond to any
request for approval on a prompt and timely basis. The Company shall
adopt and implement procedures reasonably designed to ensure that
information concerning the Trust, PIM, PFD or any of their affiliates
which is intended for use only by brokers or agents selling the
Contracts (i.e., information that is not intended for distribution to
Contract owners or prospective Contract owners) is so used, and neither
the Trust, PIM, PFD nor any of their affiliates shall be liable for any
losses, damages or expenses relating to the improper use of such broker
only materials.
4.3. PFD shall furnish, or shall cause to be furnished, to the
Company or its designee, each piece of sales literature or other
promotional material in which the Company and/or the Accounts is named,
at least five (5) Business Days prior to its use. No such material shall
be used if the Company or its designee reasonably objects to such use
within five (5) Business Days after receipt of such material. The
Company shall notify PFD within five (5) Business Days of receipt of its
approval or disapproval of such materials.
4.4. The Trust, PIM and PFD shall not give any information or make
any representations on behalf of the Company or concerning the Company,
the Accounts, or the Contracts in connection with the sale of the
Contracts other than the information or representations contained in a
registration statement, prospectus, or statement of additional
information for the Contracts, as such registration statement,
prospectus and statement of additional information may be amended or
supplemented from time to time, or in reports for the Accounts, or in
sales literature or other promotional material approved by the Company
or its designee, except with the permission of the Company. The Company
or its designee agrees to respond to any request for approval on a
prompt and timely basis. The parties hereto agree that this Section 4.4.
is neither intended to designate nor otherwise imply that PIM is an
underwriter or distributor of the Contracts.
4.5. The Company and the Trust shall provide, or shall cause to be
provided, to the other at least one complete copy of all registration
statements, prospectuses, statements of additional information, reports,
proxy statements, sales literature and other promotional materials, and
all amendments to any of the above, that relate to the Contracts, or to
the Trust or its Shares, prior to or contemporaneously with the filing
of such document with the SEC or other regulatory authorities.
4.6. For purpose of this Article IV and Article VIII, the phrase
"sales literature or 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, electronic messages or tape recording, videotape display,
signs or billboards, motion pictures, or other public media, including,
for example, on-line networks such as the Internet or other electronic
media), and sales literature (such as brochures, electronic messages,
circulars, reprints or excerpts or any other advertisement, sales
literature, or published articles), distributed or made generally
available to customers or the public, educational or training materials
or communications distributed or made generally available to some or all
agents or employees, and shareholder reports, proxy materials (including
solicitations for voting instructions) and any other material
constituting
9
sales literature or advertising under the NASDR Conduct Rules, the 1933
Act or the 1940 Act. However, such phrase "sales literature or other
promotional material" shall not include any material that simply lists
the names of Portfolios of the Trust in a list of investment options.
4.7. At the request of any party to this Agreement, each other party
will make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records,
data, access to operating procedures that may be reasonably requesting
in connection with compliance and regulatory requirements related to the
Agreement or any party's obligations under this Agreement.
4.8 Subject to the terms of Sections 4.1 and 4.2 of this Agreement,
the Trust (and its Portfolios), PIM and PFD hereby each consents in
connection with the marketing of the Contracts to the Company's use of
their names or other identifying marks, including PIONEER INVESTMENTS(R)
and Pioneer's sail logo, in connection with the marketing of the
Contracts. The Trust, PIM or PFD or their affiliates may withdraw this
authorization as to any particular use of any such name or identifying
xxxx at any time: (i) upon a reasonable determination that such use
would have a material adverse effect on its reputation or marketing
efforts or its affiliates or (ii) if any of the Portfolios of the Trust
cease to be available through the Company. Except as set forth in the
previous sentence, the Company will not cause or permit, without prior
written permission, the use, description or reference to a Pioneer
party's name, or to the relationship contemplated in this Agreement, in
any advertisement, or promotional materials or activities, including
without limitation, any advertisement or promotional materials
published, distributed, or made available, or any activity conducted
through, the Internet or any other electronic medium.
ARTICLE V. FEES AND EXPENSES
5.1. Neither the Trust, PIM nor PFD shall pay any fee or other
compensation to the Company under this Agreement, other than pursuant to
Schedule B attached hereto, and the Company shall pay no fee or other
compensation to the Trust, PIM or PFD under this Agreement.
Notwithstanding the foregoing, the parties hereto will bear certain
expenses under the provisions of this Agreement and shall reimburse
other parties for expenses initially paid by one party but allocated to
another party. In addition, nothing herein shall prevent the parties
hereto from otherwise agreeing to perform, and arranging for appropriate
compensation for, other services relating to the Trust and/or to the
Accounts pursuant to this Agreement.
5.2. The Trust or its designee shall bear the expenses for the cost
of registration and qualification of the Shares under all applicable
federal and state laws, including preparation and filing of the Trust's
registration statement, and payment of filing fees and registration
fees; preparation and filing of the Trust's proxy materials and reports
to Shareholders; setting in type and printing its prospectus and
statement of additional information (to the extent provided by and as
determined in accordance with Article III above); setting in type and
printing the proxy materials and reports to Shareholders (to the extent
provided by and as determined in accordance with Article III above); the
preparation of all statements and notices required of the Trust by any
federal or state law with respect to its Shares; all taxes on the
issuance or transfer of the Shares; and the costs of distributing the
Trust's prospectuses (as supplemented or amended), reports to
Shareholders and proxy materials to owners of Contracts and participants
funded by the Shares and any expenses permitted to be paid or assumed by
the Trust pursuant to a plan, if any, under Rule 12b-1 under the 1940
Act. The Trust shall not bear any expenses of marketing the Contracts.
10
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Contracts
and of distributing the Trust's Shareholder reports to prospective
purchasers. The Company shall bear all expenses associated with the
registration, qualification, and filing of the Contracts under
applicable federal securities and state insurance laws; the cost of
preparing, printing and distributing the Contract prospectus or Private
Placement Memorandum and statement of additional information; and the
cost of preparing, printing and distributing annual individual account
statements for Contract owners as required by state insurance laws.
5.4. The Company agrees to provide certain administrative services,
specified in Schedule B attached hereto, in connection with the
arrangements contemplated by this Agreement. The parties intend that the
services referred to in the Section 5.4 be recordkeeping, shareholder
communication, and other transaction facilitation and processing, and
related administrative serves and are not the services of an underwriter
or principal underwriter of the Trust and the Company is not an
underwriter for Shares within the meaning of the 1933 Act.
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
6.1. The Trust and PIM represent and warrant that each Portfolio of
the Trust in which an Account invests will meet the diversification
requirements of Section 817(h)(1) of the Code and Treas. Reg. 1.817-5,
relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts, as they may be amended from time
to time (and any revenue rulings, revenue procedures, notices, and other
published announcements of the Internal Revenue Service interpreting
these sections), as if those requirements applied directly to each such
Portfolio.
6.2. The Trust and PIM represent that each Portfolio will elect to be
qualified as a Regulated Investment Company under Subchapter M of the
Code and that they will maintain such qualification (under Subchapter M
or any successor or similar provision).
6.3. No Shares of the Trust will be sold directly to the general
public.
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for the
existence of any material irreconcilable conflict between the interests
of the variable annuity contract owners and the variable life insurance
policy owners of the Company and/or affiliated companies ("contract
owners") investing in the Trust. A material irreconcilable conflict may
arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public
ruling, private letter ruling, no-action or interpretive letter, or any
similar action by insurance, tax or securities regulatory authorities;
(c) an administrative or judicial decision in nay relevant proceeding;
(d) the manner in which the investments of any Portfolio are being
managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance contract owners or by
contract owners of different Participating Insurance Companies; or (f) a
decision by a Participating Insurance Company to disregard the voting
instructions of contract owners. The Board shall have the sole authority
to determine if a material irreconcilable conflict exists, and such
determination shall be
11
binding on the Company only if approved in the form of a resolution by a
majority of the Board, or a majority of the disinterested trustees of
the Board. The Board will give prompt notice of any such determination
to the Company.
7.2. The Company agrees that it will be responsible for assisting the
Board in carrying out its responsibilities under the conditions set
forth in the Trust's exemptive application pursuant to which the SEC has
granted the Mixed and Shared Funding Exemptive Order by providing the
Board, as it may reasonably request, with all information necessary for
the Board to consider any issues raised and agrees that it will be
responsible for promptly reporting any potential or existing conflicts
of which it is aware to the Board including, but not limited to, an
obligation by the Company to inform the Board whenever contract owner
voting instructions are disregarded. The Company also agrees that, if a
material irreconcilable conflict arises, it will at its own cost remedy
such conflict up to and including (a) withdrawing the assets allocable
to some or all of the Accounts from the Trust or any Portfolio and
reinvesting such assets in a different investment medium, including (but
not limited to) another Portfolio of the Trust, or submitting to a vote
of all affected contract owners whether to withdraw assets from the
Trust or any Portfolio and reinvesting such assets in a different
investment medium and, as appropriate, segregating the assets
attributable to any appropriate group of contract owners (e.g., annuity
contract owners, life insurance owners or variable contract owners of
one or more Participating Insurance Companies) that votes in favor of
such segregation, or offering to any of the affected contract owners the
option of segregating the assets attributable to their contracts or
policies, and (b) establishing a new registered management investment
company and segregating the assets underlying the Contracts, unless a
majority of Contract owners materially adversely affected by the
conflict have voted to decline the offer to establish a new registered
management investment company.
7.3. A majority of the disinterested trustees of the Board shall
determine whether any proposed action by the Company adequately remedies
any material irreconcilable conflict. In the event that the Board
determines that any proposed action does not adequately remedy any
material irreconcilable conflict, the Company will withdraw from
investment in the Trust each of the Accounts designated by the
disinterested trustees and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination
shall be limited to the extent required to remedy any such material
irreconcilable conflict as determined by a majority of the disinterested
trustees of the Board.
7.4 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 Account's investment in the Trust and terminate this
Agreement; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the Trust's
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-month
period PFD and the Trust shall continue to accept and implement orders
by the Company for the purchase and redemption of shares of the Trust.
7.5. If material irreconcilable conflict arises because of particular
state insurance regulator's decision applicable to the Company conflicts
with the majority of other state regulators, then the Company will
withdraw the Account's investment in the Trust and terminate this
Agreement within six (6) months after the Trust's Board informs the
Company in writing that it has
12
determined that such decision has created a material irreconcilable
conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
members of the Trust's Board. Until the end of the foregoing six (6)
month period, the Trust and PFD shall continue to accept and implement
orders by the Company 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 disinterested members of the Board shall determine
whether any proposed action adequately remedies any material
irreconcilable 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 7.2 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 affected by the material irreconcilable conflict. In
the event that the Board determines that any proposed action does not
adequately remedy any material irreconcilable conflict, then the Company
will withdraw the Account's investment in the Trust and terminate this
Agreement within six (6) months after the Board informs the Company in
writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by
any such material irreconcilable conflict as determined by a majority of
the independent trustees.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any
provision of the 1940 Act or the rules promulgated thereunder with
respect to mixed or shared funding (as defined in the Mixed and Shared
Funding Exemptive Order) on terms and conditions materially different
from those contained in the Mixed and Shared Funding Exemptive Order,
then (a) the Trust and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with
Rule 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 3.5, 3.6, 7.1, 7.2,
7.3 and 7.7 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.
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY THE COMPANY
The Company agrees to indemnify and hold harmless the Trust,
PIM, PFD, any affiliates of PIM, and each of their respective directors,
trustees, officers and each person, if any, who controls the Trust or
PIM within the meaning of Section 15 of the 1933 Act, and any agents or
employees of the foregoing (each an "Indemnified Party," or
collectively, the "Indemnified Parties" for purposes of this Section
8.1) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Company) or
expenses (including reasonable counsel fees) to which any Indemnified
Party 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:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained
in the registration statement, prospectus or statement
of additional information for the Contracts or contained
in the Contracts or sales literature or other
promotional material for the Contracts (or any amendment
or
13
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 reasonable reliance upon and in
conformity with information furnished to the Company or
its designee by or on behalf of the Trust, PIM or PFD
for use in the registration statement, prospectus or
statement of additional information for the Contracts or
in the Contracts or sales literature or other
promotional material (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Shares; or
(b) arise out of or as a result of statements or
representations not supplied by the Company or its
designee, or persons under its control (other than
statements or representations contained in the Trust's
registration statement, prospectus, statement of
additional information or in sales literature or other
promotional material of the Trust and on which the
Company has reasonably relied) or wrongful conduct of
the Company or persons under its control, with respect
to the sale or distribution of the Contracts or Shares;
or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the
registration statement, prospectus, statement of
additional information, or sales literature or other
promotional 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
statement or statements therein not misleading, if such
statement or omission was made in reliance upon
information furnished to the Trust by or on behalf of
the Company; or
(d) 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; or
(e) arise as a result of any failure by the Company to
perform any of its obligations under this Agreement;
as limited by and in accordance with the provisions of this Article
VIII.
8.2. INDEMNIFICATION BY PIM AND PFD
PIM and PFD agree to indemnify and hold harmless the Company and
Policy Underwriter and each of their trustees and officers and each
person, if any, who controls the Company or Policy Underwriter within
the meaning of Section 15 of the 1933 Act, and any agents or employees
of the foregoing (each an "Indemnified Party," or collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Trust) or expenses (including
reasonable counsel fees) to which any Indemnified Party may become
subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the
Shares or the Contracts and:
14
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained
in the registration statement, prospectus, statement of
additional information or sales literature or other
promotional material 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 statement 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 reasonable reliance upon and in
conformity with information furnished to the Trust, PIM,
PFD or their respective designees by or on behalf of the
Company for use in the registration statement,
prospectus or statement of additional information for
the Trust or in sales literature or other promotional
material for the Trust (or any amendment or supplement)
or otherwise for use in connection with the sale of the
Contracts or Shares; or
(b) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Contract's registration
statement, prospectus, statement of additional
information or in sales literature or other promotional
material for the Contracts not supplied by the Trust,
PIM, PFD or any of their respective designees or persons
under their respective control and on which any such
entity has reasonably relied) or wrongful conduct of the
Trust, PIM, PFD or persons under their control, with
respect to the sale or distribution of the Contracts or
Shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the
registration statement, prospectus, statement of
additional information, or sales literature or other
promotional literature of the Accounts or relating to
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, PIM or PFD; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement (including a failure, whether unintentional or
in good faith or otherwise, to comply with the
diversification requirements specified in Article VI of
this Agreement) or arise out of or result from any other
material breach of this Agreement by the Trust; or
(e) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset
value per share or dividend or capital gain distribution
rate; or
(f) arise as a result of any failure by PIM or PFD to
perform any of their respective obligations under this
Agreement;
as limited by and in accordance with the provisions of this Article
VIII.
8.3. In no event shall the Trust, PIM or PFD be liable under the
indemnification provisions contained in this Agreement to any individual
or entity, including without limitation, the Company,
15
or any Participating Insurance Company or any Contract owner, with
respect to any losses, claims, damages, liabilities or expenses that
arise out of or result from (i) a breach of any representation,
warranty, and/or covenant made by the Company hereunder or by any
Participating Insurance Company under an agreement containing
substantially similar representations, warranties and covenants; (ii)
the failure by the Company or any Participating Insurance Company to
maintain its segregated asset account (which invests in any Portfolio)
as a legally and validly established segregated asset account under
applicable state law and as a duly registered unit investment trust
under the provisions of the 1940 Act (unless exempt therefrom); or (iii)
the failure by the Company or any Participating Insurance Company to
maintain its variable annuity and/or variable life insurance contracts
(with respect to which any Portfolio serves as an underlying funding
vehicle) as life insurance, endowment or annuity contracts under
applicable provisions of the Code.
8.4. Neither the Company, the Trust, PIM nor PFD shall be liable
under the indemnification provisions contained in this Agreement with
respect to any losses, claims, damages, liabilities or expenses to which
an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, willful misconduct, 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.
8.5. Promptly after receipt by an Indemnified Party under this
Section 8.5. of notice of commencement of any action, such Indemnified
Party will, if a claim in respect thereof is to be made against the
indemnifying party under this section, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
Indemnified Party otherwise than under this section. In case any such
action is brought against any Indemnified Party, and it notified the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, assume the defense thereof, with counsel satisfactory to such
Indemnified Party. After notice from the indemnifying party of its
intention to assume the defense of an action, the Indemnified Party
shall bear the expenses of any additional counsel obtained by it, and
the indemnifying party shall not be liable to such Indemnified Party
under this section for any legal or other expenses subsequently incurred
by such Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation.
8.6. A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article VIII. The indemnification provisions contained in this Article
VIII shall survive any termination of this Agreement.
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 Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, the
Mixed and Shared Funding Exemptive Order) and the terms hereof shall be
interpreted and construed in accordance therewith.
16
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS OR LITIGATION
The Trust, PIM, PFD and the Company agree that each such party
shall promptly notify the other parties to this Agreement, in writing,
of the institution of any formal proceedings brought against such party
or its designees by the NASD, the SEC, or any insurance department or
any other regulatory body regarding such party's duties under this
Agreement or related to the sale of the Contracts, the operation of the
Accounts, or the purchase of the Shares. Each of the parties further
agrees promptly to notify the other parties of the commencement of any
litigation or proceeding against it or any of its respective officers,
directors, trustees, employees or 1933 Act control persons in connection
with this Agreement, the issuance or sale of the Contracts, the
operation of the Accounts, or the sale or acquisition of Shares. The
indemnification provisions contained in this Article X shall survive any
termination of this Agreement.
ARTICLE XI. TERMINATION
11.1. This Agreement shall terminate with respect to the Accounts, or
one, some, or all Portfolios:
(a) at the option of any party upon six (6) months' advance
written notice delivered to the other parties; provided,
however, that such notice shall not be given earlier
than six (6) months following the date of this
Agreement; or
(b) at the option of the Company to the extent that the
Shares of Portfolios are not reasonably available to
meet the requirements of the Contracts or are not
"appropriate funding vehicles" for the Contracts, as
reasonably determined by the Company. Without limiting
the generality of the foregoing, the Shares of a
Portfolio would not be "appropriate funding vehicles"
if, for example, such Shares did not meet the
diversification or other requirements referred to in
Article VI hereof; or if the Company would be permitted
to disregard Contract owner voting instructions pursuant
to Rule 6e-2 or 6e-3(T) under the 1940 Act. Prompt
notice of the election to terminate for such cause and
an explanation of such cause shall be furnished to the
Trust by the Company; or
(c) at the option of the Trust, PIM or PFD upon institution
of formal proceedings against the Company by the NASD,
the SEC, or any insurance department or any other
regulatory body regarding the Company's duties under
this Agreement or related to the sale of the Contracts,
the operation of the Accounts, or the purchase of the
Shares; provided that the party terminating this
Agreement under this provision shall give notice of such
termination to the other parties to this Agreement; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust by the NASD, the SEC, or
any state securities or insurance department or any
other regulatory body regarding the duties of the Trust,
PIM or PFD under this Agreement or related to the sale
of the Shares; provided that the party terminating this
Agreement under this provision shall give notice of such
termination to the other parties to this Agreement; or
17
(e) at the option of the Company, the Trust, PIM or PFD upon
receipt of any necessary regulatory approvals and/or the
vote of the Contract owners having an interest in the
Accounts (or any subaccounts) to substitute the shares
of another investment company for the corresponding
Portfolio Shares in accordance with the terms of the
Contracts for which those Portfolio Shares had been
selected to serve as the underlying investment media.
The Company will give thirty (30) days' prior written
notice to the Trust of the Date of any proposed vote or
other action taken to replace the Shares; or
(f) at the option of the Trust, PIM or PFD by written notice
to the Company, if any one or all of the Trust, PIM or
PFD respectively, shall determine, in their sole
judgment exercised in good faith, that the Company has
suffered a material adverse change in its business,
operations, financial condition, or prospects since the
date of this Agreement or is the subject of material
adverse publicity; or
(g) at the option of the Company by written notice to the
Trust, PIM or PFD, if the Company shall determine, in
its sole judgment exercised in good faith, that the
Trust, PIM or PFD has suffered a material adverse change
in this business, operations, financial condition or
prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(h) at the option of any party to this Agreement, upon
another unaffiliated party's material breach of any
provision of or representation contained in this
Agreement.
11.2. The notice shall specify the Portfolio or Portfolios, Contracts
and, if applicable, the Accounts as to which the Agreement is to be
terminated.
11.3. It is understood and agreed that the right of any party hereto
to terminate this Agreement pursuant to Section 11.1(a) may be exercised
for cause or for no cause.
11.4. Except as necessary to implement Contract owner initiated
transactions, or as required by state insurance laws or regulations, the
Company shall not redeem the Shares attributable to the Contracts (as
opposed to the Shares attributable to the Company's assets held in the
Accounts), and the Company shall not prevent Contract owners from
allocating payments to a Portfolio that was otherwise available under
the Contracts, until thirty (30) days after the Company shall have
notified the Trust of its intention to do so.
11.5. Notwithstanding any termination of this Agreement, the Trust and
PFD shall, at the option of the Company, continue for a period not
exceeding six (6) months to make available additional shares of the
Portfolios pursuant to the terms and conditions of this Agreement, for
all Contracts in effect on the effective date of termination of this
Agreement (the "Existing Contracts"), except as otherwise provided under
Article VII of this Agreement; provided, however, that in the event of a
termination pursuant to Section 11.1. (c), (f) or (h), the Trust, PIM
and PFD shall at their option have the right to terminate immediately
all sales of Shares to the Company. Specifically, without limitation,
the owners of the Existing Contracts shall be permitted to transfer or
reallocate investment under the Contracts, redeem investments in any
Portfolio and/or invest in the Trust upon the making of additional
purchase payments under the Existing Contracts.
11.6 Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify the other parties shall
survive and not be affected by any termination of
18
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 XII. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail, overnight courier or facsimile 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:
PIONEER VARIABLE CONTRACTS TRUST
x/x Xxxx xxx Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Secretary
If to the Company:
AMERICAN GENERAL LIFE INSURANCE COMPANY
0000-X Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
If to PIM:
PIONEER INVESTMENT MANAGEMENT, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, General Counsel
If to PFD:
PIONEER FUNDS DISTRIBUTOR, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Senior Vice President
ARTICLE XIII. MISCELLANEOUS
13.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential all
information reasonably identified as confidential in writing by
any party hereto and, except as permitted by this Agreement or
as otherwise required by applicable law or regulation, shall not
disclose, disseminate or utilize such other confidential
information without the express written consent of the affected
party until such time as it may come into the public domain.
Notwithstanding anything to the contrary in this Agreement, in
addition to and not in lieu of other provisions in this
Agreement:
19
(a) "Confidential Information" includes without limitation
all information regarding the customers of the Company,
the Trust, PIM, PFD or any of their subsidiaries,
affiliates or licensees; or the accounts, account
numbers, names, addresses, social security numbers or
any other personal identifier of such customers; or any
information derived therefrom.
(b) Neither the Company, the Trust, PIM or PFD may disclose
Confidential Information for any purpose other than to
carry out the purpose for which Confidential Information
was provided to the Company, the Trust, PIM or PFD as
set forth in this Agreement; and the Company, the Trust,
PIM and PFD agree to cause their employees, agents and
representatives, or any other party to whom the Company,
the Trust, PIM or PFD may provide access to or disclose
Confidential Information to limit the use and disclosure
of Confidential Information to that purpose.
(c) The Company, the Trust, PIM and PFD agree to implement
appropriate measures designed to ensure the security and
confidentiality of Confidential Information, to protect
such information against any anticipated threats or
hazards to the security and integrity of such
information, and to protect against unauthorized access
to, or use of, Confidential Information that could
result in substantial harm or inconvenience to any of
the customers of the Company or any of its subsidiaries,
affiliates or licensees; the Company, the Trust, PIM and
PFD further agree to cause all their respective agents,
representatives or subcontractors, or any other party to
whom they provide access to or disclose Confidential
Information, to implement appropriate measures to meet
the objectives set forth in this Section 13.1.
13.2. 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.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the
same instrument.
13.4. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
13.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
13.6. Each party hereto shall cooperate with each other party in
connection with inquiries by appropriate governmental authorities
(including without limitation the SEC, the NASD, and state insurance
regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
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. A copy of the Trust's Certificate of Trust is on file with the
Secretary of State of Delaware. The Company acknowledges that the
obligations of or arising out of this instrument are not binding
20
upon any of the Trust's trustees, officers, employees, agents or
shareholders individually, but are binding solely upon the assets and
property of the Trust in accordance with its proportionate interest
hereunder. The Company further acknowledges that the assets and
liabilities of each Portfolio are separate and distinct and that the
obligations of or arising out of this instrument are binding solely upon
the assets or property of the Portfolio on whose behalf the Trust has
executed this instrument. The Company also agrees that the obligations
of each Portfolio hereunder shall be several and not joint, in
accordance with its proportionate interest hereunder, and the Company
agrees not to proceed against any Portfolio for the obligations of
another Portfolio.
13.9. 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.
13.10. Neither this Agreement nor any of the rights and obligations
hereunder may be assigned by any party without the prior written consent
of all parties hereto.
13.11. The Trust, PIM and PFD agree that the obligations assumed by the
Company shall be limited in any case to the Company and its assets and
neither the Trust, PIM nor PFD shall seek satisfaction of any such
obligation from the shareholders of Company, the directors, officers,
employees or agents of the Company, or any of them.
13.12. No provision of the Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or indemnifications,
as between PIM and the Trust and PFD and the Trust.
13.13. This Agreement, including any Schedules or Exhibits hereto, may
be amended only by a written instrument executed by each party hereto.
21
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 above.
AMERICAN GENERAL LIFE INSURANCE COMPANY
By its authorized officer,
By:
------------------------------
Name:
Title:
Date:
ATTEST:
By:
------------------------------
Name:
Title:
Date:
PIONEER VARIABLE CONTRACTS TRUST,
ON BEHALF OF THE PORTFOLIOS
By its authorized officer and not
individually,
By:
------------------------------
Xxxxxx X. Xxxxx
Secretary
Date:
PIONEER INVESTMENT MANAGEMENT, INC.
By its authorized officer,
By:
------------------------------
Xxxxxx X. Xxxxxx
President and Chief Executive
Officer
Date:
22
SCHEDULE A
ACCOUNTS, CONTRACTS AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
As of December 10, 2004
NAME OF SEPARATE PORTFOLIOS AND
ACCOUNT AND DATE CONTRACTS FUNDED CLASS OF SHARES
ESTABLISHED BY BOARD OF DIRECTORS BY SEPARATE ACCOUNT AVAILABLE TO CONTRACTS
--------------------------------------------- ------------------------------------------- ---------------------------------------
American General Life Insurance Company Platinum Investor Variable Annuity Pioneer Fund VCT Portfolio (Class I)
Separate Account D, established November Pioneer Growth Xxxxxxxxxxxxx XXX
00, 0000 Xxxxxxxxx (Class I)
--------------------------------------------- ------------------------------------------- ---------------------------------------
American General Life Insurance Company Corporate America Variable Life Pioneer Growth Opportunities VCT
Separate Account VL-R, established Insurance Policies Portfolio (Class I)
May 6, 1997
--------------------------------------------- ------------------------------------------- ---------------------------------------
American General Life Insurance Company Platinum Investor I Variable Life Pioneer Fund VCT Portfolio (Class I)
Separate Account VL-R, established Insurance Policies Pioneer Growth Opportunities VCT
May 6, 1997 Platinum Investor II Variable Life Portfolio (Class I)
Insurance Policies
Platinum Investor III Variable Life
Insurance Policies
Platinum Investor PLUS Variable
Life Insurance Policies
Platinum Investor Survivor Variable
Life Insurance Policies
Platinum Investor Survivor II Variable
Life Insurance Policies
--------------------------------------------- ------------------------------------------- ---------------------------------------
American General Life Insurance Company American General Signature Products Pioneer Fund VCT Portfolio (Class I)
Separate Account VL-U LIS, established Pioneer Growth Opportunities VCT
October 19, 1998 Portfolio (Class I)
--------------------------------------------- ------------------------------------------- ---------------------------------------
23
SCHEDULE B
1. Administrative Services
Administrative services to Contract owners and participants shall be the
responsibility of the Company and shall not be the responsibility of the Trust
or PFD. The Company will provide properly registered and licensed personnel and
any systems needed for all Contract owners servicing and support - for both fund
and annuity and life insurance information and questions, including:
. Communicate all purchase, withdrawal, and exchange orders it
receives from its customers to PFD;
. Respond to Contract owner and participant inquires;
. Delivery of both Trust and Contract prospectuses as required
under applicable law;
. Entry of initial and subsequent orders;
. Transfer of cash to Portfolios;
. Explanations of Portfolio objectives and characteristics;
. Entry of transfers between Portfolios;
. Portfolio balance and allocation inquires; and
. Mail Trust proxies.
2. Administrative Service Fees
For the administrative services set forth above, PIM or any of its affiliates
shall pay a servicing fee based on the annual rate of _____% of the average
aggregate net daily assets invested in the Class I Shares of the Portfolios
through the Accounts at the end of each calendar quarter. Such payments will be
made to the Company within thirty (30) days after the end of each calendar
quarter. Such fees shall be paid quarterly in arrears. Each payment will be
accompanied by a statement showing the calculation of the fee payable to the
Company for the quarter and such other supporting data as may be reasonably
requested by the Company. The Company will calculate the asset balance on each
day on which the fee is to be paid pursuant to this Agreement with respect to
each Portfolio for the purpose of reconciling its calculation of average
aggregate net daily assets with PIM's calculation. Annually (as of December 31)
or upon reasonable request of PIM, Company will provide PIM a statement showing
the number of subaccounts in each Class of Shares of each Portfolio as of the
most recent calendar quarter end.
24
