Exhibit 99-B.8.9
FORM OF
FUND PARTICIPATION AGREEMENT
between
FUND and AICA
Aetna Insurance Company of America (the "Company"), the Xxxxxxx Funds,
Inc. (the "Fund") and The Xxxxxxx Co. (the "Distributor") hereby agree to an
arrangement whereby the series of the Fund listed on Schedule A attached hereto
shall be made available to serve as underlying investment media for Variable
Annuity Contracts ("Contracts") to be issued by the Company.
1. Establishment of Accounts; Availability of Fund.
The Company represents that it has established Variable Annuity Accounts I
and may establish such other accounts as may be set forth in Schedule A
attached hereto and as may be amended from time to time with the mutual
consent of the parties hereto (the "Accounts"), each of which is a
separate account under Connecticut Insurance law, and has registered or
will register each of the Accounts (except for such Accounts for which no
such registration is required) as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act"), to serve as an investment
vehicle for the Contracts. Each Contract provides for the allocation of
net amounts received by the Company to an Account for investment in the
shares of one of more specified open-end management investment companies
available through that Account as underlying investment media. Selection
of a particular investment management company and changes therein from
time to time are made by the participant or Contract owner, as applicable
under a particular Contract.
2. Pricing Information; Orders; Settlement.
(a) The Fund will make Fund shares available to be purchased by the
Company, and will accept redemption orders from the Company, on
behalf of each Account at the net asset value applicable to each
order on those days on which the Fund calculates its net asset value
(a "Business Day"). Fund shares shall be purchased and redeemed in
such quantity and at such time determined by the Company to be
necessary to meet the requirements of those Contracts for which the
Fund(s) serve as underlying investment media, provided, however,
that the Board of Directors of the Fund (hereinafter the
"Directors") may upon reasonable notice to the Company, refuse to
sell shares of any series of the Fund to any person, or suspend or
terminate the offering of shares of any series if such action is
required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Directors, acting in good faith
and in the best interests of the shareholders of any series and is
acting in compliance with their fiduciary obligations under federal
and/or any applicable state laws.
(b) The Fund will provide to the Company closing net asset value,
dividend and capital gain information at the close of trading each
day that the New York Stock Exchange (the "Exchange") is open (each
such day a "Business Day"). The Fund will use its best efforts to
provide such information by 6:30 p.m. Eastern Standard time and will
provide such information in no event later than 7:00p.m. Eastern
Standard time on such Business Day. The Company will send via
facsimile or electronic transmission to the Fund or its specified
agent orders to purchase and/or redeem Fund shares by 10:00 a.m.
Eastern Standard Time the following business day. Payment for net
purchases will be wired by the Company to an account designated by
the Fund to coincide with the order for shares of the Fund.
(c) The Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund shares
relating to the Contracts from Contract owners or participants.
Orders from Contract owners or participants received from any
distributor of the Contracts (including affiliates of the Company)
by the Company, acting as agent for the Fund, prior to the close of
the Exchange on any given business day will be executed by the Fund
at the net asset value determined as of the close of the Exchange on
such Business Day, provided that the Fund receives written (or
facsimile) notice of such order by 10 a.m. Eastern Standard Time on
the next following Business Day. Any orders received by the Company
acting as agent on such day but after the close of the Exchange will
be executed by the Fund at the net asset value determined as of the
close of the Exchange on the next business day following the day of
receipt of such order, provided that the Fund receives written (or
facsimile) notice of such order by 10 a.m. Eastern Standard Time
within two days following the day of receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired by
the Fund to an account designated by the Company on the same
Business Day the Company places an order to redeem Fund Shares.
Payments for net purchases of the Fund will be wired by the Company
to an account designated by the Fund on the same Business Day the
Company places an order to purchase Fund shares. Payments shall be
in federal funds transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a)
through 2(d) above, the parties may agree to provide pricing
information, execute orders and wire payments for purchases and
redemptions through National Securities Clearing Corporation's
Fund/SERV system in which case such activities will be governed by
the provisions set forth in an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other
party), and shall not be liable in the event that an error is a
result of any misinformation supplied by the other party
(g) The Fund and Distributor shall indemnify and hold the Company
harmless, from the effective date of this Agreement, against any
amount the Company is required to pay
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to Contract owners or participants due to: (i) an incorrect
calculation of a Fund's daily net asset value, dividend rate, or
capital gains distribution rate or (ii) incorrect or late reporting
of the daily net asset value, dividend rate, or capital gain
distribution rate of a Fund, upon written notification by the
Company, with supporting data, to Distributor. In addition, the Fund
or the Distributor shall be liable to the Company for systems and
out of pocket costs incurred by the Company in making a Contract
owners's or a participant's account whole, if such costs or expenses
are a result of the Fund's or the Distributor's failure to provide
timely or correct net asset values, dividend and capital gains or
financial information and if such information is not corrected by
4:00 p.m. Eastern Standard time of the next business day after
releasing such incorrect information provided the incorrect NAV as
well as the correct NAV for each day that the error occurred is
provided. If a mistake is caused in supplying such information or
confirmations, which results in a reconciliation with incorrect
information, the amount required to make a Contract owner's or a
participant's account whole shall be borne by the party providing
the incorrect information, regardless of when the error is
corrected.
(h) The Company agrees to purchase and redeem the shares of the series
of the Fund named in Schedule A offered by the then current
prospectus and statement of additional information of the Fund in
accordance with the provisions of such prospectus and statement of
additional information.
3. Fees.
In consideration of services provided by the Company under this Agreement,
the Fund or Distributor shall pay fees to the Company as set forth in
Schedule C.
4. Expenses.
(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by the Fund under this Agreement shall
be paid by the Fund, including the cost of registration of Fund
shares with the Securities and Exchange Commission (the "SEC") and
in states where required. The Fund and Distributor shall pay no fee
or other compensation to the Company under this Agreement, and the
Company shall pay no fee or other compensation to the Fund or
Distributor, except as provided herein and in Schedule C attached
hereto and made a part of this Agreement as may be amended from time
to time with the mutual consent of the parties hereto. All expenses
incident to performance by each party of its respective duties under
this Agreement shall be paid by that party, unless otherwise
specified in this Agreement.
(b) The Fund or the Distributor shall provide to the Company, at the
location designated by the Company, periodic fund reports to
shareholders and other materials that are required by law to be sent
to Contract owners or participants. In addition, the Fund or the
Distributor shall provide the Company with a sufficient quantity of
its prospectuses, statements of additional information and any
supplements to any of
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these materials, to be used in connection with the offerings and
transactions contemplated by this Agreement
(c) The Fund or Distributor shall provide the company with a sufficient
quantity of its proxy material that is required to be sent to
Contract owners or participants. The cost associated with proxy
preparation, group authorization letters, programming for tabulation
and necessary materials (including postage) will be paid by the Fund
or Distributor.
5. Representations.
(a) The Company agrees that it and its agents shall not, without the
written consent of the Fund or the Distributor, make representations
concerning the Fund, or its shares except those contained in the
then current prospectuses and in current printed sales literature
approved by the Fund or the Distributor.
(b) The Fund and Distributor represent and warrant that (i) they have
examined and tested their systems and made reasonable inquiry of
their business partners and other entities with whom they conduct
business with respect to Year 2000 problems and (ii) their ability
to perform their obligations under this Agreement will not be
materially interrupted or disrupted as a result of any business
interruptions or other business problems relating to specific dates
or days before, during and after the Year 2000. This representation
and warranty does not extend to any interruption or disruption
caused solely by any act or omission of the Company.
6. Termination.
This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Distributor or the Fund,
upon sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice
to the Distributor and the Fund, if Fund shares are not available
for any reason to meet the requirement of Contracts as determined by
the Company. Reasonable advance notice of election to terminate
shall be furnished by Company;
(c) at the option of either the Company, the Distributor or the Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the
Account, the Company, the Fund or the Distributor by the National
Association of Securities Dealers, Inc. (the "NASD"), the SEC or any
other regulatory body;
(d) upon the determination of the Accounts to substitute for the Fund's
shares the shares of another investment company in accordance with
the terms of the applicable
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Contracts. The Company will give 60 days written notice to the Fund
and the Distributor of any decision to replace the Fund's shares;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance
with Federal law or such law precludes the use of Fund shares as an
underlying investment medium for Contracts issued or to be issued by
the Company. Prompt notice shall be given by the appropriate party
should such situation occur.
7. Continuation of Agreement.
Termination as the result of any cause listed in Section 6 shall not
affect the Fund's obligation to furnish its shares to Contracts then in
force for which its shares serve or may serve as the underlying medium
unless such further sale of Fund shares is prohibited by law or the SEC or
other regulatory body.
8. Advertising Materials; Filed Documents.
(a) Advertising and sales literature with respect to the Fund prepared
by the Company or its agents for use in marketing its Contracts will
be submitted to the Fund or its designee for review before such
material is submitted to any regulatory body for review, distributed
to the public, or used in connection with any Account or Contract..
No such material shall be used if the Fund or its designee
reasonably object to such use in writing, transmitted by facsimile
within five business days after receipt of such material.
(b) The Fund will provide additional copies of its financials as soon as
available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and
all amendments or supplements to any of the above that relate to the
series of the Fund named in Schedule A promptly after the filing of
such document with the SEC or other regulatory authorities. At the
Distributor's request, the Company will provide to the Distributor
at least one complete copy of all registration statements,
prospectuses, statements of additional information, annual and
semi-annual reports, proxy statements, and all amendments or
supplements to any of the above that relate to the Account promptly
after the filing of such document with the SEC or other regulatory
authority.
(c) The Fund or the Distributor will provide via Excel spreadsheet
diskette format or in electronic transmission to the Company at
least quarterly portfolio information necessary to update Fund
profiles within seven business days following the end of each
quarter.
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9. Proxy Voting.
(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners
and participants to the extent the SEC continues to interpret the
1940 Act as requiring such privileges. The Company shall provide
pass-through voting privileges on Fund shares held by unregistered
separate accounts to all Contract owners.
(b) The Company will distribute to Contract owners and participants, as
appropriate, all proxy material furnished by the Fund and will vote
Fund shares in accordance with instructions received from such
Contract owners and participants. If and to the extent required by
law, the Company, with respect to each group Contract and in each
Account, shall vote Fund shares for which no instructions have been
received in the same proportion as shares for which such
instructions have been received. The Company and its agents shall
not oppose or interfere with the solicitation of proxies for Fund
shares held for such Contract owners and participants.
10. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Fund and the
Distributor, and its directors, officers, employees, agents and each
person, if any, who controls the Fund or its Distributor within the
meaning of the Securities Act of 1933 (the "1933 Act") against any
losses, claims, damages or liabilities to which the Fund or any such
director, officer, employee, agent, or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof)
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 sales literature of the Company 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, or arise
out of or as a result of conduct, statements or representations
(other than statements or representations contained in the
prospectuses or sales literature of the Fund) of the Company or its
agents, with respect to the sale and distribution of Contracts for
which Fund shares are the underlying investment. The Company will
reimburse any legal or other expenses reasonably incurred by the
Fund or any such director, officer, employee, agent, investment
Distributor, or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability
arises out of or is based upon (i) an untrue statement or omission
or alleged omission made in such Registration Statement or
prospectus in conformity with written materials furnished to the
Company by the Fund specifically for use therein or (ii) the willful
misfeasance, bad faith, or gross negligence by the Fund or
Distributor in the performance of its duties or the Fund's or
Distributor's reckless disregard of obligations or duties under this
Agreement or to the
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Company, whichever is applicable. This indemnity agreement will be
in addition to any liability which Company may otherwise have.
(b) The Fund and the Distributor agree to indemnify and hold harmless
the Company and its directors, officers, employees, agents and each
person, if any, who controls the Company within the meaning of the
1933 Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectuses or sales
literature of the Fund 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 material fact required to be stated
therein or necessary to make the statements therein not misleading.
The Fund will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, employee,
agent, or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that the Fund will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or omission or alleged
omission made in such Registration Statement or prospectuses which
are in conformity with written materials furnished to the Fund by
the Company specifically for use therein.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying
party hereunder, 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 10. In case any
such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to
the extent that it may wish to, assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 10 for
any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
11. Miscellaneous.
(a) Amendment and Waiver. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally, but
only by an instrument in writing signed by all parties hereto.
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(b) Notices. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent
by telex, telecopier or registered or certified mail, postage
prepaid, return receipt requested, or recognized overnight courier
service to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be designated
by notice from such party to all other parties.
To the Company:
Aetna Insurance Company of America
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: _______________, Counsel
To the Fund:
The Xxxxxxx Fund, Inc.
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Attn:
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To the Distributor:
The Xxxxxxx Co.
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Attn:
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Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) Successors and Assigns. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by
signing any such counterpart.
(e) Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
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(f) Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all
prior agreement and understandings relating to the subject matter
hereof.
(g) Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) Non Exclusivity. It is understood by the parties that this Agreement
is not an exclusive arrangement in any respect.
(i) Confidentiality. The terms of this Agreement and the Schedules
thereto will be held confidential by each party except to the extent
that either party or its counsel may deem it necessary to disclose
such terms.
12. Limitation on Liability of Directors, etc.
This agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund. The
obligations of this agreement shall be binding upon the assets and
property of the Fund only and shall not be binding on any Director,
officer or shareholder of the Fund individually.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the ____ day of _________, _____.
AETNA INSURANCE COMPANY OF AMERICA
By:__________________________________
Name:________________________________
Title:_______________________________
THE XXXXXXX FUND, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
THE XXXXXXX CO.
By:__________________________________
Name:________________________________
Title:_______________________________
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Schedule A
(For any future separate accounts--See Section 1)
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