Exhibit 8
FUND PARTICIPATION AGREEMENT
Xxx Xxxxxx American Capital Life Investment Trust
First Great-West Life & Annuity Insurance Company
TABLE OF CONTENTS
ARTICLE I. Sale of Fund Shares.....................................................3
ARTICLE II. Representations and Warranties..........................................7
ARTICLE III. Prospectuses and Proxy Statements; Voting..............................10
ARTICLE IV. Sales Material and Information.........................................12
ARTICLE V. Fees and Expenses......................................................14
ARTICLE VI. Diversification and Qualification......................................15
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order ..............................18
ARTICLE VIII. Indemnification .......................................................21
ARTICLE IX. Applicable Law.........................................................31
ARTICLE X. Termination............................................................31
ARTICLE XI. Notices................................................................35
ARTICLE XII. Miscellaneous..........................................................35
SCHEDULE A Contracts..............................................................39
SCHEDULE B Designated Portfolios..................................................40
SCHEDULE C Administrative Services................................................41
SCHEDULE D Reports per Section 6.6................................................42
SCHEDULE E Expenses...............................................................44
43
PARTICIPATION AGREEMENT
Among
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
XXX XXXXXX AMERICAN CAPITAL LIFE INVESTMENT TRUST
XXX XXXXXX AMERICAN CAPITAL ASSET MANAGEMENT, INC.
XXX XXXXXX AMERICAN CAPITAL DISTRIBUTORS, INC.
and
XXXXXXX XXXXXX & CO., INC.
THIS AGREEMENT, made and entered into as of this ____ day of
_______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE
COMPANY (hereinafter "FIRSTGWL&A"), a New York life insurance company, on its
own behalf and on behalf of its Separate Account Variable Annuity-1 Series
Account (the "Account"); XXX XXXXXX AMERICAN CAPITAL LIFE INVESTMENT TRUST, a
business trust organized under the laws of Delaware (hereinafter the "Fund");
XXX XXXXXX AMERICAN CAPITAL ASSET MANAGEMENT, INC. (hereinafter the "Adviser"),
a corporation organized under the laws of Delaware; XXX XXXXXX AMERICAN CAPITAL
DISTRIBUTORS, INC., a corporation organized under the laws of Delaware
(hereinafter the "Distributor"); and XXXXXXX XXXXXX & CO., INC., a California
corporation (hereinafter "Schwab").
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts (collectively, the "Variable Insurance Products") to
be offered by insurance companies, including FIRSTGWL&A, which have entered into
participation agreements similar to this Agreement (hereinafter "Participating
Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (hereinafter the "SEC"), dated September 19, 1990 (File No.
812-7552), granting Participating Insurance Companies and variable annuity and
variable life insurance separate accounts exemptions from the provisions of
sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as
amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
life insurance companies that may or may not be affiliated with one another
(hereinafter the "Mixed and Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolio(s) are registered under
the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, and any applicable state
securities laws; and
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, FIRSTGWL&A has registered certain variable annuity contracts
supported wholly or partially by the Account (the "Contracts") under the 1933
Act and said Contracts are listed in Schedule A attached hereto and incorporated
herein by reference, as such Schedule may be amended from time to time by mutual
written agreement; and
WHEREAS, the Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of FIRSTGWL&A
on July 24, 1995, under the insurance laws of the State of New York, to set
aside and invest assets attributable to the Contracts; and
WHEREAS, FIRSTGWL&A has registered the Account as a unit investment trust
under the 1940 Act and has registered the securities deemed to be issued by the
Account under the 1933 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, FIRSTGWL&A intends to purchase shares in the Portfolio(s) listed in
Schedule B attached hereto and incorporated herein by reference, as such
Schedule may be amended from time to time by mutual written agreement (the
"Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and
the Fund is authorized to sell such shares to unit investment trusts such as the
Account at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Account also intends to purchase shares in other open-end
investment companies or series thereof not affiliated with the Fund (the
"Unaffiliated Funds") on behalf of the Account to fund the Contracts; and
WHEREAS, Schwab will perform certain services for the Fund in connection
with the Contracts;
NOW, THEREFORE, in consideration of their mutual promises, FIRSTGWL&A,
Schwab, the Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to FIRSTGWL&A those shares of the
Designated Portfolio(s) which the Account orders, executing such orders on each
Business Day at the net asset value next computed after receipt by the Fund or
its designee of the order for the shares of the Designated Portfolio(s). For
purposes of this Section 1.1, FIRSTGWL&A shall be the designee of the Fund for
receipt of such orders and receipt by such designee shall constitute receipt by
the Fund, provided that the Fund receives notice of any such order by 10:00 a.m.
Eastern time on the next following Business Day. "Business Day" shall mean any
day on which the New York Stock Exchange is open for trading and on which the
Designated Portfolio(s) calculates its net asset value pursuant to the rules of
the SEC.
1.2. The Fund agrees to make shares of the Designated Portfolio(s)
available for purchase at the applicable net asset value per share by FIRSTGWL&A
and the Account on each Business Day. Notwithstanding the foregoing, the Board
of Trustees of the Fund (hereinafter the "Board") may refuse to permit the Fund
to sell shares of any Designated Portfolio(s) to any person, or suspend or
terminate the offering of shares of any Designated Portfolio(s) if such action
is required by law or by regulatory authorities having jurisdiction or is, in
the sole discretion of the Board acting in good faith and in light of its
fiduciary duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of such Designated Portfolio(s).
1.3. The Fund will not sell shares of the Designated Portfolio(s) to any
other Participating Insurance Company separate account unless an agreement
containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and
Article VII of this Agreement is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash, on FIRSTGWL&A's request, any
full or fractional shares of the Fund held by FIRSTGWL&A, executing such
requests on each Business Day at the net asset value next computed after receipt
by the Fund or its designee of the request for redemption. Requests for
redemption identified by FIRSTGWL&A, or its agent, as being in connection with
surrenders, annuitizations, or death benefits under the Contracts, upon prior
written notice, may be executed within seven (7) calendar days after receipt by
the Fund or its designee of the requests for redemption. This Section 1.4 may be
amended, in writing, by the parties consistent with the requirements of the 1940
Act and interpretations thereof. For purposes of this Section 1.4, FIRSTGWL&A
shall be the designee of the Fund for receipt of requests for redemption and
receipt by such designee shall constitute receipt by the Fund, provided that the
Fund receives notice of any such request for redemption by 10:00 A.M. Eastern
time on the next following Business Day.
1.5. The Parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's shares may be sold to other
Participating Insurance Companies (subject to Section 1.3 and Article VI hereof)
and the cash value of the Contracts may be invested in other investment
companies.
1.6. FIRSTGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on
the next Business Day after an order to purchase Fund shares is made in
accordance with the provisions of Section 1.1 hereof. Payment shall be in
federal funds transmitted by wire and/or by a credit for any shares redeemed the
same day as the purchase.
1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund
shares by 3:00 p.m. Eastern Time on the next Business Day after a redemption
order is received in accordance with Section 1.4 hereof. Payment shall be in
federal funds transmitted by wire and/or a credit for any shares purchased the
same day as the redemption. Notwithstanding the foregoing, if the payment of
redemption proceeds on the next Business Day would require the Fund to dispose
of securities or otherwise incur substantial additional costs, and if the Fund
has determined to settle redemption transactions for all shareholders on a
delayed basis, proceeds shall be wired to FIRSTGWL&A within six (6) days and the
Fund shall notify in writing the person designated by FIRSTGWL&A as the
recipient for such notice of such delay by 3:00 p.m. Eastern Time on the same
Business Day that FIRSTGWL&A transmits the redemption orders to the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to FIRSTGWL&A or the Account. Shares
ordered from the Fund will be recorded in an appropriate title for the Account
or the appropriate sub-account of the Account.
1.9. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to FIRSTGWL&A of any dividends or capital gain
distributions payable on the Designated Portfolio(s)' shares. FIRSTGWL&A hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Designated Portfolio(s) shares in additional shares of that
Portfolio. FIRSTGWL&A reserves the right to revoke this election and to receive
all such dividends and capital gain distributions in cash. The Fund shall notify
FIRSTGWL&A by the end of the next following Business Day of the number of shares
so issued as payment of such dividends and distributions.
1.10. The Fund shall make the net asset value per share for each
Designated Portfolio available to FIRSTGWL&A on each Business Day as soon as
reasonably practical after the net asset value per share is calculated and shall
use its best efforts to make such net asset value per share available by 6:00
p.m. Eastern time. In the event of an error in the computation of a Designated
Portfolio(s)' net asset value per share ("NAV") or any dividend or capital gain
distribution (each, a "pricing error"), the Adviser or the Fund shall
immediately notify FIRSTGWL&A as soon as possible after discovery of the error.
Such notification may be verbal, but shall be confirmed promptly in writing in
accordance with Article XI of this Agreement. A pricing error shall be corrected
as follows: (a) if the pricing error results in a difference between the
erroneous NAV and the correct NAV of less than $0.01 per share, then no
corrective action need be taken; (b) if the pricing error results in a
difference between the erroneous NAV and the correct NAV equal to or greater
than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV
at the time of the error, then the Adviser shall reimburse the Designated
Portfolio(s) for any loss, after taking into consideration any positive effect
of such error; however, no adjustments to Contractowner accounts need be made;
and (c) if the pricing error results in a difference between the erroneous NAV
and the correct NAV equal to or greater than 1/2 of 1% of the Designated
Portfolio's NAV at the time of the error, then the Adviser shall reimburse the
Designated Portfolio(s) for any loss (without taking into consideration any
positive effect of such error) and shall reimburse FIRSTGWL&A for the costs of
adjustments made to correct Contractowner accounts in accordance with the
provisions of Schedule E. If an adjustment is necessary to correct a material
error which has caused Contractowners to receive less than the amount to which
they are entitled, the number of shares of the applicable sub-account of such
Contractowners will be adjusted and the amount of any underpayments shall be
credited by the Adviser to FIRSTGWL&A for crediting of such amounts to the
applicable Contractowners accounts. Upon notification by the Adviser of any
overpayment due to a material error, FIRSTGWL&A or Schwab, as the case may be,
shall promptly remit to the Fund any overpayment that has not been paid to
Contractowners; however, Adviser acknowledges that Schwab and FIRSTGWL&A do not
intend to seek additional payments from any Contractowner who, because of a
pricing error, may have underpaid for units of interest credited to his/her
account. In no event shall Schwab or FIRSTGWL&A be liable to Contractowners for
any such adjustments or underpayment amounts. A pricing error within categories
(b) or (c) above shall be deemed to be "materially incorrect" or constitute a
"material error" for purposes of this Agreement.
The standards set forth in this Section 1.10 are based on the Parties'
understanding of the views expressed by the staff of the SEC as of the date of
this Agreement. In the event the views of the SEC staff are later modified or
superseded by SEC or judicial interpretation, the parties shall amend the
foregoing provisions of this Agreement to comport with the appropriate
applicable standards, on terms mutually satisfactory to all Parties.
ARTICLE II. Representations and Warranties
2.1. FIRSTGWL&A represents and warrants that the Contracts and the
securities deemed to be issued by the Account under the Contracts are or will be
registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. FIRSTGWL&A further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established the Account
prior to any issuance or sale of units thereof as a segregated asset account
under Section 4240. of the New York Insurance Law and has registered the Account
as a unit investment trust in accordance with the provisions of the 1940 Act to
serve as a segregated investment account for the Contracts and that it will
maintain such registration for so long as any Contracts are outstanding as
required by applicable law.
2.2. The Fund represents and warrants that Designated Portfolio(s)
shares sold pursuant to this Agreement shall be registered under the 1933 Act,
duly authorized for issuance and sold in compliance with all applicable federal
securities laws including without limitation the 1933 Act, the 1934 Act, and the
1940 Act and that the Fund is and shall remain registered under the 0000 Xxx.
The Fund shall amend the registration statement for its shares under the 1933
Act and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares.
2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1
under the 1940 Act and to impose an asset-based or other charge to finance
distribution expenses as permitted by applicable law and regulation. In any
event, the Fund and Adviser agree to comply with applicable provisions and SEC
staff interpretations of the 1940 Act to assure that the investment advisory or
management fees paid to the Adviser by the Fund are in accordance with the
requirements of the 1940 Act. To the extent that the Fund decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its
Board, a majority of whom are not interested persons of the Fund, formulate and
approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses.
2.4. The Adviser represents and warrants that it will make every effort
to ensure that the investment policies, fees and expenses of the Designated
Portfolio(s) are and shall at all times remain in compliance with the insurance
and other applicable laws of the State of New York and any other applicable
state to the extent the Fund is notified of such applicable insurance laws by
FIRSTGWL&A and as required to perform this Agreement. The Distributor represents
and warrants that it will make every effort to ensure that Designated
Portfolio(s) shares will be sold in compliance with the insurance laws of the
State of New York and all applicable state insurance laws, to the extent the
Distributor is notified of such applicable insurance laws by FIRSTGWL&A, and
applicable securities laws. The Fund shall register and qualify the shares for
sale in accordance with the laws of the various states if and to the extent
required by applicable law. FIRSTGWL&A and the Fund will endeavor to mutually
cooperate with respect to the implementation of any modifications necessitated
by any change in state insurance laws, regulations or interpretations of the
foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep
each other informed of any Law Change that becomes known to either party. In the
event of a Law Change, the Fund agrees that, except in those circumstances where
the Fund has advised FIRSTGWL&A that the Adviser or the Funds' Board of Trustees
has in good faith determined that implementation of a particular Law Change is
not in the best interest of all of the Fund's shareholders, any action required
by a Law Change will be taken.
2.5. The Fund represents and warrants that it is lawfully organized and
validly existing under the laws of the State of Delaware and that it does and
will comply in all material respects with the 1940 Act.
2.6. The Adviser represents and warrants that it is and shall remain
duly registered under all applicable federal and state securities laws and that
it shall perform its obligations for the Fund in compliance in all material
respects with the laws of the State of Delaware and any applicable state and
federal securities laws.
2.7. The Distributor represents and warrants that it is and shall remain
duly registered under all applicable federal and state securities laws and that
it shall perform its obligations for the Fund in compliance in all material
respects with the laws of the State of Delaware and any applicable state and
federal securities laws.
2.8.(a) The Fund and the Adviser 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 Fund 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 Fund 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 from time to time. The aforesaid bonds shall include
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company.
2.8.(b) FIRSTGWL&A represents and warrants that all of its officers and
employees are covered by a blanket fidelity bond or similar coverage, in an
amount equal to the greater of $5 million or any amount required by applicable
federal or state law or regulation. The aforesaid includes coverage for larceny
and embezzlement and is issued by a reputable bonding company. FIRSTGWL&A agrees
to make every effort to ensure this bond or another bond containing these
provisions is always in effect.
2.9. Schwab represents and warrants that it has completed, obtained and
performed, in all material respects, all registrations, filings, approvals, and
authorizations, consents and examinations required by any government or
governmental authority as may be necessary to perform this Agreement. Schwab
does and will comply, in all material respects, with all applicable laws, rules
and regulations in the performance of its obligations under this Agreement.
2.10. The Fund will provide FIRSTGWL&A with as much advance notice as is
reasonably practicable of any material change affecting the Designated
Portfolio(s) (including, but not limited to, any material change in the
registration statement or prospectus affecting the Designated Portfolio(s)) and
any proxy solicitation affecting the Designated Portfolio(s) and consult with
FIRSTGWL&A in order to implement any such change in an orderly manner,
recognizing the expenses of changes and attempting to minimize such expenses by
implementing them in conjunction with regular annual updates of the prospectus
for the Contracts. The Fund agrees to share equitably in expenses incurred by
FIRSTGWL&A as a result of actions taken by the Fund, consistent with the
allocation of expenses contained in Schedule E attached hereto and incorporated
herein by reference.
2.11. FIRSTGWL&A represents and warrants, for purposes other than
diversification under Section 817 of the Internal Revenue Code of 1986 as
amended ("the Code"), that the Contracts are currently and at the time of
issuance 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 Schwab, the Fund, the Distributor and the Adviser 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,
FIRSTGWL&A represents and warrants that the 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. FIRSTGWL&A
will use every effort to continue to meet such definitional requirements, and it
will notify Schwab, the Fund, the Distributor and the Adviser 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. FIRSTGWL&A represents and
warrants that it will not purchase Fund shares with assets derived from
tax-qualified retirement plans except, indirectly, through Contracts purchased
in connection with such plans.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the Adviser or Distributor shall provide
FIRSTGWL&A and Schwab with as many copies of the Fund's current prospectus for
the Designated Portfolio(s) as FIRSTGWL&A and Schwab may reasonably request for
marketing purposes (including distribution to Contractowners with respect to new
sales of a Contract), with expenses to be borne in accordance with Schedule E
hereof. If requested by FIRSTGWL&A in lieu thereof, the Adviser, Distributor or
Fund shall provide such documentation (including a camera-ready copy and
computer diskette of the current prospectus for the Designated Portfolio(s)) and
other assistance as is reasonably necessary in order for FIRSTGWL&A once each
year (or more frequently if the prospectuses for the Designated Portfolio(s) are
amended) to have the prospectus for the Contracts and the Fund's prospectus for
the Designated Portfolio(s) printed together in one document. The Fund and
Adviser agree that the prospectus (and semi-annual and annual reports) for the
Designated Portfolio(s) will describe only the Designated Portfolio(s) and will
not name or describe any other portfolios or series that may be in the Fund
unless required by law.
3.2. If applicable state or federal laws or regulations require that the
Statement of Additional Information ("SAI") for the Fund be distributed to all
Contractowners, then the Fund, Distributor and/or the Adviser shall provide
FIRSTGWL&A with copies of the Fund's SAI or documentation thereof for the
Designated Portfolio(s) in such quantities, with expenses to be borne in
accordance with Schedule E hereof, as FIRSTGWL&A may reasonably require to
permit timely distribution thereof to Contractowners. The Adviser, Distributor
and/or the Fund shall also provide SAIs to any Contractowner or prospective
owner who requests such SAI from the Fund (although it is anticipated that such
requests will be made to FIRSTGWL&A or Schwab).
3.3. The Fund, Distributor and/or Adviser shall provide FIRSTGWL&A and
Schwab with copies of the Fund's proxy material, reports to stockholders and
other communications to stockholders for the Designated Portfolio(s) in such
quantity, with expenses to be borne in accordance with Schedule E hereof, as
FIRSTGWL&A may reasonably require to permit timely distribution thereof to
Contractowners.
3.4. It is understood and agreed that, except with respect to
information regarding FIRSTGWL&A or Schwab provided in writing by that party,
neither FIRSTGWL&A nor Schwab are responsible for the content of the prospectus
or SAI for the Designated Portfolio(s). It is also understood and agreed that,
except with respect to information regarding the Fund or its Designated
Portfolio(s), the Distributor or the Adviser, respectively, provided in writing
by the Fund, the Distributor or the Adviser, neither the Fund, the Distributor
nor Adviser are responsible for the content of the prospectus or SAI for the
Contracts.
3.5. If and to the extent required by law FIRSTGWL&A shall:
(i) solicit voting instructions from Contractowners;
(ii) vote the Designated Portfolio(s) shares held in the Account
in accordance with instructions received from
Contractowners: and
(iii) vote Designated Portfolio(s) shares held in the Account
for which no instructions have been received in the same
proportion as Designated Portfolio(s) shares for which
instructions have been received from Contractowners, 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. FIRSTGWL&A
reserves the right to vote Fund shares held in any
segregated asset account in its own right, to the extent
permitted by law.
3.6. FIRSTGWL&A shall be responsible for assuring that each of its
separate accounts holding shares of a Designated Portfolio(s) calculates voting
privileges as directed by the Fund. The Fund agrees to promptly notify
FIRSTGWL&A of any changes of interpretations or amendments of the Mixed and
Shared Funding Exemptive Order.
3.7. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the 1940
Act not to require such meetings) or, as the Fund currently intends, comply with
Section 16(c) of the 1940 Act (although the Fund is not one of the trusts
described in Section 16(c) of that Act) as well as with Sections 16(a) and, if
and when applicable, 16(b). Further, the Fund will act in accordance with the
SEC's interpretation of the requirements of Section 16(a) with respect to
periodic elections of directors or trustees and with whatever rules the
Commission may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. FIRSTGWL&A and Schwab shall furnish, or shall cause to be
furnished, to the Fund or its designee, a copy of each piece of sales literature
or other promotional material that FIRSTGWL&A or Schwab, respectively, develops
or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser
or one of its sub-advisers or the Distributor is named in connection with the
Contracts, at least ten (10) Business Days prior to its use. No such material
shall be used if the Fund objects to such use within five (5) Business Days
after receipt of such material.
4.2. FIRSTGWL&A and Schwab shall not give any information or make any
representations or statements on behalf of the Fund in connection with the sale
of the Contracts other than the information or representations contained in the
registration statement, prospectus or SAI for the Fund shares, as the same may
be amended or supplemented from time to time, or in sales literature or other
promotional material approved by the Fund, Distributor or Adviser, except with
the permission of the Fund, Distributor or Adviser.
4.3. The Fund or the Adviser shall furnish, or shall cause to be
furnished, to FIRSTGWL&A and Schwab, a copy of each piece of sales literature or
other promotional material in which FIRSTGWL&A and/or its separate account(s),
or Schwab is named at least ten (10) Business Days prior to its use. No such
material shall be used if FIRSTGWL&A or Schwab objects to such use within five
(5) Business Days after receipt of such material.
4.4. The Fund, the Distributor and the Adviser shall not give any
information or make any representations on behalf of FIRSTGWL&A or concerning
FIRSTGWL&A, the Account, or the Contracts other than the information or
representations contained in a registration statement, prospectus or SAI for the
Contracts, as the same may be amended or supplemented from time to time, or in
sales literature or other promotional material approved by FIRSTGWL&A or its
designee, except with the permission of FIRSTGWL&A.
4.5. FIRSTGWL&A, the Fund, the Distributor and the Adviser shall not
give any information or make any representations on behalf of or concerning
Schwab, or use Xxxxxx'x name except with the permission of Schwab.
4.6. The Fund will provide to FIRSTGWL&A and Schwab at least one
complete copy of all registration statements, prospectuses, SAIs, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Designated Portfolio(s), contemporaneously with the filing of such
document(s) with the SEC or NASD or other regulatory authorities.
4.7. FIRSTGWL&A or Schwab will provide to the Fund at least one complete
copy of all registration statements, prospectuses, SAIs, reports, solicitations
for voting instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Contracts or the Account,
contemporaneously with the filing of such document(s) with the SEC, NASD, or
other regulatory authority.
4.8. For purposes of Articles IV and VIII, the phrase "sales literature
and other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media; e.g.,
on-line networks such as the Internet or other electronic media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and shareholder reports, and proxy
materials (including solicitations for voting instructions) and any other
material constituting sales literature or advertising under the NASD rules, the
1933 Act or the 0000 Xxx.
4.9. 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 and
access to operating procedures that may be reasonably requested in connection
with compliance and regulatory requirements related to this Agreement or any
party's obligations under this Agreement.
ARTICLE V. Fees and Expenses
5.1. The Fund and the Adviser shall pay no fee or other compensation to
FIRSTGWL&A under this Agreement, and FIRSTGWL&A shall pay no fee or other
compensation to the Fund or Adviser under this Agreement, although the parties
hereto will bear certain expenses in accordance with Schedule E, Articles III,
V, and other provisions of this Agreement.
5.2. All expenses incident to performance by the Fund, the Distributor
and the Adviser under this Agreement shall be paid by the appropriate party, as
further provided in Schedule E. The Fund shall see to it that all shares of the
Designated Portfolio(s) are registered and authorized for issuance in accordance
with applicable federal law and, if and to the extent required, in accordance
with applicable state laws prior to their sale.
5.3. The parties shall bear the expenses of routine annual distribution
(mailing costs) of the Fund's prospectus and distribution (mailing costs) of the
Fund's proxy materials and reports to owners of Contracts offered by FIRSTGWL&A,
in accordance with Schedule E.
5.4. The Fund, the Distributor and the Adviser acknowledge that a
principal feature of the Contracts is the Contractowner's ability to choose from
a number of unaffiliated mutual funds (and portfolios or series thereof),
including the Designated Portfolio(s) and the Unaffiliated Funds, and to
transfer the Contract's cash value between funds and portfolios. The Fund, the
Distributor and the Adviser agree to cooperate with FIRSTGWL&A and Schwab in
facilitating the operation of the Account and the Contracts as described in the
prospectus for the Contracts, including but not limited to cooperation in
facilitating transfers between Unaffiliated Funds.
5.5. Schwab agrees to provide certain administrative services, specified
in Schedule C attached hereto and incorporated herein by reference, in
connection with the arrangements contemplated by this Agreement. The parties
acknowledge and agree that the services referred to in this Section 5.5 are
recordkeeping, shareholder communication, and other transaction facilitation and
processing, and related administrative services only and are not the services of
an underwriter or a principal underwriter of the Fund, and that Schwab is not an
underwriter for the shares of the Designated Portfolio(s), within the meaning of
the 1933 Act or the 0000 Xxx.
5.6. As compensation for the services specified in Schedule C hereto,
the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on
the percentage per annum on Schedule C hereto applied to the average daily value
of the shares of the Designated Portfolio(s) held in the Account with respect to
Contracts sold by Schwab. This monthly Administrative Service Fee is due and
payable before the 15th (fifteenth) day following the last day of the month to
which it relates.
ARTICLE VI. Diversification and Qualification
6.1. The Fund, the Distributor and the Adviser represent and warrant
that the Fund will at all times sell its shares and invest its assets in such a
manner as to ensure that the Contracts will be treated as annuity contracts
under the Code, and the regulations issued thereunder. Without limiting the
scope of the foregoing, the Fund, Distributor and Adviser represent and warrant
that the Fund and each Designated Portfolio thereof will at all times comply
with Section 817(h) of the Code and Treasury Regulation ss.1.817-5, as amended
from time to time, and any Treasury interpretations thereof, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications or successor provisions to
such Section or Regulations. The Fund, the Distributor and the Adviser agree
that shares of the Designated Portfolio(s) will be sold only to Participating
Insurance Companies and their separate accounts.
6.2. No shares of any Designated Portfolio of the Fund will be sold to
the general public.
6.3. The Fund and the Adviser represent and warrant that the Fund and
each Designated Portfolio is currently qualified as a Regulated Investment
Company under Subchapter M of the Code, and that each Designated Portfolio will
maintain such qualification (under Subchapter M or any successor or similar
provisions) as long as this Agreement is in effect.
6.4. The Fund, Distributor or Adviser will notify FIRSTGWL&A immediately
upon having a reasonable basis for believing that the Fund or any Designated
Portfolio has ceased to comply with the aforesaid Section 817(h) diversification
or Subchapter M qualification requirements or might not so comply in the future.
6.5. Without in any way limiting the effect of Sections 8.3, 8.4 and 8.5
hereof and without in any way limiting or restricting any other remedies
available to FIRSTGWL&A or Schwab, the Adviser or Distributor will pay all costs
associated with or arising out of any failure, or any anticipated or reasonably
foreseeable failure, of the Fund or any Designated Portfolio to comply with
Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable
and appropriate corrections or responses to any such failure; such costs may
include, but are not limited to, the costs involved in creating, organizing, and
registering a new investment company as a funding medium for the Contracts
and/or the costs of obtaining whatever regulatory authorizations are required to
substitute shares of another investment company for those of the failed
Designated Portfolio (including but not limited to an order pursuant to Section
26(b) of the 1940 Act); such costs are to include, but are not limited to,
reasonable fees and expenses of legal counsel and other advisors to FIRSTGWL&A
and any federal income taxes or tax penalties and interest thereon (or "toll
charges" or exactments or amounts paid in settlement) incurred by FIRSTGWL&A
with respect to itself or owners of its Contracts in connection with any such
failure or anticipated or reasonably foreseeable failure.
6.6. The Fund at the Fund's expense shall, upon request, provide to
FIRSTGWL&A or its designee with reports certifying compliance with the aforesaid
Section 817(h) diversification and Subchapter M qualification requirements, at
the times provided for and substantially in the form attached hereto as Schedule
D and incorporated herein by reference; provided, however, that providing such
reports does not relieve the Fund of its responsibility for such compliance or
of its liability for any non-compliance.
6.7. FIRSTGWL&A agrees that if the Internal Revenue Service ("IRS")
asserts in writing in connection with any governmental audit or review of
FIRSTGWL&A or, to FIRSTGWL&A's knowledge, or any Contractowner that any
Designated Portfolio has failed to comply with the diversification requirements
of Section 817(h) of the Code or FIRSTGWL&A otherwise becomes aware of any facts
that could give rise to any claim against the Fund, Distributor or Adviser as a
result of such a failure or alleged failure:
(a) FIRSTGWL&A shall promptly notify the Fund, the Distributor and the
Adviser of such assertion or potential claim;
(b) FIRSTGWL&A shall consult with the Fund, the Distributor and the
Adviser as to how to minimize any liability that may arise as a result
of such failure or alleged failure;
(c) FIRSTGWL&A shall use its best efforts to minimize any liability of
the Fund, the Distributor and the Adviser resulting from such failure,
including, without limitation, demonstrating, pursuant to Treasury
Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that
such failure was inadvertent;
(d) any written materials to be submitted by FIRSTGWL&A to the IRS, any
Contractowner or any other claimant in connection with any of the
foregoing proceedings or contests (including, without limitation, any
such materials to be submitted to the IRS pursuant to Treasury
Regulations, Section 1.817-5(a)(2)) shall be provided by FIRSTGWL&A to
the Fund, the Distributor and the Adviser (together with any supporting
information or analysis) within at least two (2) business days prior to
submission;
(e) FIRSTGWL&A shall provide the Fund, the Distributor and the Adviser
with such cooperation as the Fund, the Distributor and the Adviser shall
reasonably request (including, without limitation, by permitting the
Fund, the Distributor and the Adviser to review the relevant books and
records of FIRSTGWL&A) in order to facilitate review by the Fund, the
Distributor and the Adviser of any written submissions provided to it or
its assessment of the validity or amount of any claim against it arising
from such failure or alleged failure;
(f) FIRSTGWL&A shall not with respect to any claim of the IRS or any
Contractowner that would give rise to a claim against the Fund, the
Distributor and the Adviser (i) compromise or settle any claim, (ii)
accept any adjustment on audit, or (iii) forego any allowable
administrative or judicial appeals, without the express written consent
of the Fund, the Distributor and the Adviser, which shall not be
unreasonably withheld; provided that, FIRSTGWL&A shall not be required
to appeal any adverse judicial decision unless the Fund and the Adviser
shall have provided an opinion of independent counsel to the effect that
a reasonable basis exists for taking such appeal; and further provided
that the Fund, the Distributor and the Adviser shall bear the costs and
expenses, including reasonable attorney's fees, incurred by FIRSTGWL&A
in complying with this clause (f).
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract 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 promptly inform FIRSTGWL&A if
it determines that an irreconcilable material conflict exists and the
implications thereof.
7.2. FIRSTGWL&A will report any potential or existing conflicts of which
it is aware to the Board. FIRSTGWL&A will assist the Board in carrying out its
responsibilities under the Mixed and Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an obligation
by FIRSTGWL&A to inform the Board whenever contract owner voting instructions
are to be disregarded. Such responsibilities shall be carried out by FIRSTGWL&A
with a view only to the interests of its Contractowners.
7.3. If it is determined by a majority of the Board, or a majority of
its directors who are not interested persons of the Fund, the Distributor, the
Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent
Directors"), that a material irreconcilable conflict exists, FIRSTGWL&A and
other Participating Insurance Companies shall, at their expense and to the
extent reasonably practicable (as determined by a majority of the Independent
Directors), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (1) withdrawing the
assets allocable to some or all of the separate accounts from the Fund or any
Designated Portfolio(s) and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision
by FIRSTGWL&A to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, FIRSTGWL&A may
be required, at the Fund's election, to withdraw the Account's investment in the
Fund 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 Independent
Directors. Any such withdrawal and termination must take place within six (6)
months after the Fund gives written notice that this provision is being
implemented, and until the end of that six month period the Adviser, the
Distributor and the Fund shall continue to accept and implement orders by
FIRSTGWL&A for the purchase (and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to FIRSTGWL&A conflicts with the
majority of other state regulators, then FIRSTGWL&A will withdraw the Account's
investment in the Fund and terminate this Agreement within six months after the
Board informs FIRSTGWL&A in writing that it has determined that such decision
has created an irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing six month
period, the Fund shall continue to accept and implement orders by FIRSTGWL&A for
the purchase (and redemption) of shares of the Fund.
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 irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. FIRSTGWL&A shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contractowners affected by the irreconcilable material
conflict. In the event that the Board determines that any proposed action does
not adequately remedy any irreconcilable material conflict, then FIRSTGWL&A will
withdraw the Account's investment in the Fund and terminate this Agreement
within six (6) months after the Board informs FIRSTGWL&A 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 Directors.
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 Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3,
7.4, and 7.5 of this Agreement shall continue in effect only to the extent that
terms and conditions substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
7.8. FIRSTGWL&A and the Adviser shall at least annually submit to the
Fund's Board such reports, materials or data as the Board may reasonably request
so that the Board may fully carry out the obligations imposed upon them by the
provisions hereof and in the Mixed and Shared Funding Exemptive Order, and said
reports, materials and data shall be submitted more frequently if deemed
appropriate by the Board.
ARTICLE VIII. Indemnification
8.1. Indemnification By FIRSTGWL&A
8.1(a).FIRSTGWL&A agrees to indemnify and hold harmless the Fund, the
Distributor and the Adviser and each of their respective officers and directors
or trustees and each person, if any, who controls the Fund, Distributor or
Adviser within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, expenses, damages and liabilities (including amounts paid in
settlement with the written consent of FIRSTGWL&A) or litigation (including
reasonable legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, expenses, damages or liabilities (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statement or prospectus or SAI covering the
Contracts or contained in the Contracts or sales literature
or other promotional material for the Contracts (or any
amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, provided that this Agreement to indemnify
shall not apply as to any Indemnified Party if
-------- such statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished in writing to
FIRSTGWL&A or Schwab by or on behalf of the Adviser,
Distributor or Fund for use in the registration statement or
prospectus for the Contracts or in the Contracts or sales
literature or other promotional material (or any amendment
or supplement to any of the foregoing) or otherwise for use
in connection with the sale of the Contracts or Fund shares;
or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature or other
promotional material of the Fund not supplied by FIRSTGWL&A or
persons under its control) or wrongful conduct of FIRSTGWL&A or
persons under its control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, SAI, or sales literature or other promotional
material of the Fund, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, if such a statement or
omission was made in reliance upon information furnished in
writing to the Fund by or on behalf of FIRSTGWL&A; or
(iv) arise as a result of any failure by FIRSTGWL&A to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by FIRSTGWL&A in this
Agreement or arise out of or result from any other material
breach of this Agreement by FIRSTGWL&A, including without
limitation Section 2.11 and Section 6.7 hereof,
as limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.
8.1(b). FIRSTGWL&A shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
any of the Indemnified Parties.
8.1(c). FIRSTGWL&A shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified FIRSTGWL&A in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify FIRSTGWL&A of any
such claim shall not relieve FIRSTGWL&A from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision, except to the extent that FIRSTGWL&A
has been prejudiced by such failure to give notice. In case any such action is
brought against the Indemnified Parties, FIRSTGWL&A shall be entitled to
participate, at its own expense, in the defense of such action. FIRSTGWL&A also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from FIRSTGWL&A to such party of
FIRSTGWL&A's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and
FIRSTGWL&A will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.1(d).The Indemnified Parties will promptly notify FIRSTGWL&A of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2. Indemnification by Schwab
8.2(a).Schwab agrees to indemnify and hold harmless the Fund, the
Distributor and the Adviser and each of their respective officers and directors
or trustees and each person, if any, who controls the Fund, Distributor or
Adviser within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, expenses, damages and liabilities (including amounts paid in
settlement with the written consent of Schwab) or litigation (including
reasonable legal and other expenses), to which the Indemnified Parties may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements are related to the sale or acquisition of the
Fund's shares or the Contracts and:
(i) arise out of Xxxxxx'x dissemination of information regarding the
Fund that is both (A) materially incorrect and (B) that was
neither contained in the Fund's registration statement nor in the
Fund's sales literature and other promotional material or
provided in writing to Schwab, or approved in writing, by or on
behalf of the Fund, Distributor or Adviser; or
(ii) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in sales
literature or other promotional material prepared or approved by
Schwab for the Contracts or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this Agreement to indemnify
shall not apply as to any Indemnified Party if such
--------
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished in writing to FIRSTGWL&A or Schwab by or on behalf
of the Adviser, Distributor or the Fund or to Schwab by
FIRSTGWL&A for use in the registration statement, prospectus
or SAI for the Contracts or in the Contracts or sales
literature or other promotional material (or any amendment
or supplement any of the foregoing) or otherwise for use in
connection with the sale of the Contracts; or
(iii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI or sales literature or
other promotional material of the Fund not supplied by Schwab or
persons under its control) or wrongful conduct of Schwab or
persons under its control, with respect to the sale or
distribution of the Contracts; or
(iv) arise as a result of any failure by Schwab to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by Schwab in this Agreement
or arise out of or result from any other material breach of this
Agreement by Schwab;
as limited by and in accordance with the provisions of
Sections 8.2(b) and 8.2(c) hereof.
8.2(b). Schwab shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
any of the Indemnified Parties.
8.2(c). Schwab shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified Schwab in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Schwab of any such claim shall not relieve Schwab
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision,
except to the extent that Schwab has been prejudiced by such failure to give
notice. In case any such action is brought against the Indemnified Parties,
Schwab shall be entitled to participate, at its own expense, in the defense of
such action. Schwab also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from Schwab
to such party of Xxxxxx'x election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and Schwab will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.2(d). The Indemnified Parties will promptly notify Schwab of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.3. Indemnification by the Adviser
8.3(a). The Adviser agrees to indemnify and hold harmless FIRSTGWL&A and
Schwab and each of their directors and officers and each person, if any, who
controls FIRSTGWL&A or Schwab within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.3)
against any and all losses, claims, expenses, damages, liabilities (including
amounts paid in settlement with the written consent of the Adviser) or
litigation (including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or SAI or sales literature
or other promotional material of the Fund prepared by the Fund,
the Distributor or the Adviser (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this Agreement to indemnify
shall not apply as to any Indemnified Party if such
--------
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information
furnished in writing to the Adviser, the Distributor or the Fund
by or on behalf of FIRSTGWL&A or Schwab for use in the
registration statement, prospectus or SAI for the Fund or in
sales literature or other promotional material (or any amendment
or supplement to any of the foregoing) or otherwise for use in
connection with the sale of the Contracts or the Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI or sales literature or
other promotional material for the Contracts not supplied by the
Adviser or persons under its control) or wrongful conduct of the
Fund, the Distributor or the Adviser or persons under their
control, with respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, SAI, or sales literature or other promotional
material covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance
upon information furnished in writing to FIRSTGWL&A or Schwab by
or on behalf of the Adviser, the Distributor or the Fund; or
(iv) arise as a result of any failure by the Fund, the Distributor or
the Adviser to provide the services and furnish the materials
under the terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with the
diversification and other qualification requirements specified in
Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, the Distributor
or the Adviser in this Agreement or arise out of or result from
any other material breach of this Agreement by the Adviser, the
Distributor or the Fund; or
(vi) arise out of or result from the incorrect or untimely calculation
or reporting by the Fund, the Distributor or the Adviser of the
daily net asset value per share or dividend or capital gain
distribution rate;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Adviser specified in Article VI hereof.
8.3(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
any of the Indemnified Parties.
8.3(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision, except to the extent that the Adviser
has been prejudiced by such failure to give notice. In case any such action is
brought against the Indemnified Parties, the Adviser will be entitled to
participate, at its own expense, in the defense thereof. The Adviser also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Adviser to such party of the
Adviser's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Adviser will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.3(d). FIRSTGWL&A and Schwab agree promptly to notify the Adviser of
the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Contracts
or the operation of the Account.
8.4. Indemnification By the Fund
8.4(a). The Fund agrees to indemnify and hold harmless FIRSTGWL&A and
Schwab and each of their respective directors and officers and each person, if
any, who controls FIRSTGWL&A or Schwab within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
8.4) against any and all losses, claims, expenses, damages and liabilities
(including amounts paid in settlement with the written consent of the Fund) or
litigation (including reasonable legal and other expenses) to which the
Indemnified Parties may be required to pay or become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
expenses, damages, liabilities or expenses (or actions in respect thereof) or
settlements, are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good
faith or otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this
Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Fund;
as limited by and in accordance with the provisions of Sections
8.4(b) and 8.4(c) hereof.
8.4(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
any of the Indemnified Parties.
8.4(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve it from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision, except to the extent that the Fund has been
prejudiced by such failure to give notice. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund shall also be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.4(d). FIRSTGWL&A and Schwab each agree promptly to notify the Fund of
the commencement of any litigation or proceeding against itself or any of its
respective officers or directors in connection with the Agreement, the issuance
or sale of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Fund.
8.5. Indemnification by the Distributor
8.5(a).The Distributor agrees to indemnify and hold harmless FIRSTGWL&A
and Schwab and each of their respective directors and officers and each person,
if any, who controls FIRSTGWL&A or Schwab within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 8.5) against any and all losses, claims, expenses, damages and
liabilities (including amounts paid in settlement with the written consent of
the Distributor) or litigation (including reasonable legal and other expenses)
to which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or SAI or sales literature
or other promotional material of the Fund prepared by the Fund,
Adviser or Distributor (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, provided that this Agreement to indemnify shall not
apply as to any Indemnified Party if such statement
--------
or omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished in
writing to the Adviser, the Distributor or Fund by or on behalf
of FIRSTGWL&A or Schwab for use in the registration statement or
SAI or prospectus for the Fund or in sales literature or other
promotional material (or any amendment or supplement to any of
the foregoing) or otherwise for use in connection with the sale
of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI, sales literature or
other promotional material for the Contracts not supplied by the
Distributor or persons under its control) or wrongful conduct of
the Fund, the Distributor or Adviser or persons under their
control, with respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, SAI, sales literature or other promotional material
covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished in writing to FIRSTGWL&A or Schwab by or on behalf of
the Adviser, the Distributor or Fund; or
(iv) arise as a result of any failure by the Fund, Adviser or
Distributor to provide the services and furnish the materials
under the terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with the
diversification and other qualification requirements specified in
Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, Adviser or
Distributor in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund, Adviser or
Distributor; or
(vi) arise out of or result from the incorrect or untimely calculation
or reporting of the daily net asset value per share or dividend
or capital gain distribution rate;
as limited by and in accordance with the provisions of Sections 8.5(b) and
8.5(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Distributor specified in Article VI
hereof.
8.5(b).The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
any of the Indemnified Parties.
8.5(c) The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Distributor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Distributor of
any such claim shall not relieve the Distributor from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision, except to the extent that the
Distributor has been prejudiced by such failure to give notice. In case any such
action is brought against the Indemnified Parties, the Distributor will be
entitled to participate, at its own expense, in the defense thereof. The
Distributor also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Distributor
to such party of the Distributor's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Distributor will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.5(d) FIRSTGWL&A and Schwab agree to promptly notify the Distributor of
the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Contracts
or the operation of the Account.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York,
without regard to the New York Conflict of Laws provisions.
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.
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, with
respect to some or all Portfolios, 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 FIRSTGWL&A or Schwab by written notice to
the other parties with respect to any Portfolio based upon
FIRSTGWL&A's or Xxxxxx'x determination that shares of such
Portfolio are not reasonably available to meet the requirements
of the Contracts; provided, however, that reasonable advance
notice of election to terminate shall be furnished by FIRSTGWL&A
or Schwab, as the case may be, said termination to be effective
ten (10) days after receipt of notice unless the Portfolio makes
available a sufficient number of shares to reasonably meet the
requirements of the Contracts within said ten (10) day period; or
(c) at the option of FIRSTGWL&A or Schwab by written notice to
the other parties with respect to any Portfolio in the event any
of the Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/ or federal law or such law
precludes the use of such shares as the underlying investment
media of the Contracts issued or to be issued by FIRSTGWL&A; or
(d) at the option of the Fund, Distributor or Adviser in the
event that formal administrative proceedings are instituted
against FIRSTGWL&A or Schwab by the NASD, the SEC, the Insurance
Commissioner or like official of any state or any other
regulatory body regarding FIRSTGWL&A's or Xxxxxx'x duties under
this Agreement or related to the sale of the Contracts, the
operation of any Account, or the purchase of the Fund shares, if,
in each case, the Fund, Distributor or Adviser, as the case may
be, reasonably determines in its sole judgment exercised in good
faith, that any such administrative proceedings will have a
material adverse effect upon the ability of FIRSTGWL&A or Schwab
to perform its obligations under this Agreement; or
(e) at the option of FIRSTGWL&A or Schwab in the event that
formal administrative proceedings are instituted against the
Fund, the Distributor or the Adviser by the NASD, the SEC, or any
state securities or insurance department or any other regulatory
body, if Schwab or FIRSTGWL&A reasonably determines in its sole
judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability
of the Fund, the Distributor or the Adviser to perform their
obligations under this Agreement; or
(f) at the option of FIRSTGWL&A by written notice to the Fund
with respect to any Portfolio if the Portfolio fails to meet the
Section 817(h) diversification requirements or Subchapter M
qualifications specified in Article VI hereof; or
(g) at the option of either the Fund, the Distributor or the
Adviser, if (i) the Fund, Distributor or Adviser, respectively,
shall determine, in its sole judgment reasonably exercised in
good faith, that either FIRSTGWL&A or Schwab has suffered a
material adverse change in its business or financial condition or
is the subject of material adverse publicity and that material
adverse change or publicity will have a material adverse impact
on FIRSTGWL&A's or Xxxxxx'x ability to perform its obligations
under this Agreement, (ii) the Fund, Distributor or Adviser
notifies FIRSTGWL&A or Schwab, as appropriate, of that
determination and its intent to terminate this Agreement, and
(iii) after considering the actions taken by FIRSTGWL&A or Schwab
and any other changes in circumstances since the giving of such a
notice, the determination of the Fund, Distributor or Adviser
shall continue to apply on the sixtieth (60th) day following the
giving of that notice, which sixtieth day shall be the effective
date of termination; or
(h) at the option of either FIRSTGWL&A or Schwab, if (i)
FIRSTGWL&A or Schwab, respectively, shall determine, in its sole
judgment reasonably exercised in good faith, that the Fund,
Distributor or Adviser has suffered a material adverse change in
its business or financial condition or is the subject of material
adverse publicity and that material adverse change or publicity
will have a material adverse impact on the Fund's, Distributor's
or Adviser's ability to perform its obligations under this
Agreement, (ii) FIRSTGWL&A or Schwab notifies the Fund,
Distributor or Adviser, as appropriate, of that determination and
its intent to terminate this Agreement, and (iii) after
considering the actions taken by the Fund, Distributor or Adviser
and any other changes in circumstances since the giving of such a
notice, the determination of FIRSTGWL&A or Schwab shall continue
to apply on the sixtieth (60th) day following the giving of that
notice, which sixtieth day shall be the effective date of
termination; or
(i) at the option of FIRSTGWL&A in the event that formal
administrative proceedings are instituted against Schwab by the
NASD, the SEC, or any state securities or insurance department or
any other regulatory body regarding Xxxxxx'x duties under this
Agreement or related to the sale of the Fund's shares or the
Contracts, the operation of any Account, or the purchase of the
Fund shares, provided, however, that FIRSTGWL&A determines in its
sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect
upon the ability of Schwab to perform its obligations related to
the Contracts; or
(j) at the option of Schwab in the event that formal
administrative proceedings are instituted against FIRSTGWL&A by
the NASD, the SEC, or any state securities or insurance
department or any other regulatory body regarding FIRSTGWL&A's
duties under this Agreement or related to the sale of the Fund's
shares or the Contracts, the operation of any Account, or the
purchase of the Fund shares, provided, however, that Schwab
determines in its sole judgment exercised in good faith, that any
such administrative proceedings will have a material adverse
effect upon the ability of FIRSTGWL&A to perform its obligations
related to the Contracts; or
(k) at the option of any non-defaulting party hereto in the event
of a material breach of this Agreement by any party hereto (the
"defaulting party") other than as described in 10.1(a)-(j);
provided, that the non-defaulting party gives written notice
thereof to the defaulting party, with copies of such notice to
all other non-defaulting parties, and if such breach shall not
have been remedied within thirty (30) days after such written
notice is given, then the non-defaulting party giving such
written notice may terminate this Agreement by giving thirty (30)
days written notice of termination to the defaulting party.
No termination of this Agreement shall be effective unless and
until the party terminating this Agreement gives prior written
notice to all other parties of its intent to terminate, which
notice shall set forth the basis for the termination.
Furthermore,
(a) in the event any termination is based upon the provisions of Article
VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this
Agreement, the prior written notice shall be given in advance of the
effective date of termination as required by those provisions unless
such notice period is shortened by mutual written agreement of the
parties; (b) in the event any termination is based upon the provisions
of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the
prior written notice shall be given at least sixty (60) days before the
effective date of termination; and (c) in the event any termination is
based upon the provisions of Section 10.1(c) or 10.1(f), the prior
written notice shall be given in advance of the effective date of
termination, which date shall be determined by the party sending the
notice.
Notwithstanding any termination of this Agreement, other than as a result of a
failure by either the Fund or FIRSTGWL&A to meet Section 817(h) of the Code
diversification requirements, the Fund, the Distributor and the Adviser shall,
at the option of FIRSTGWL&A or Schwab, continue to make available additional
shares of the Designated Portfolio(s) pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing Contracts"), unless such
further sale of Fund shares is proscribed by law, regulation or applicable
regulatory body, or unless the Fund determines that liquidation of the Fund
following termination of this Agreement is in the best interests of the Fund and
its shareholders. Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Designated
Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in
the Designated Portfolio(s) upon the making of additional purchase payments
under the Existing Contracts. The parties agree that this Section 10.3 shall not
apply to any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.
10.4. Surviving Provisions. Notwithstanding any termination of this
Agreement, each party's obligations under Article VIII to indemnify other
parties shall survive and not be affected by any termination of this Agreement.
In addition, with respect to Existing Contracts, all provisions of this
Agreement shall also survive and not be affected by any termination of this
Agreement.
. A termination by Schwab shall terminate this Agreement only as to Schwab, and
this Agreement shall remain in effect as to the other parties; provided,
however, that in the event of a termination by Schwab the other parties shall
have the option to terminate this Agreement upon 60 (sixty) days notice, rather
than the six (6) months specified in Section 10.1(a).
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund:
Xxx Xxxxxx American Capital Life Investment Trust
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention:
If to FIRSTGWL&A:
First Great-West Life & Annuity Insurance Company
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention:Assistant Vice President, Savings Products
If to the Adviser:
Xxx Xxxxxx American Capital Asset Management, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention:
If to the Distributor:
Xxx Xxxxxx American Capital Distributors, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention:
If to Schwab:
Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: General Counsel
ARTICLE XII. Miscellaneous
12.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain. Without limiting the foregoing, no party hereto shall disclose
any information that another party has designated as proprietary.
12.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.4. 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.
12.5. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state 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.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the New York Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable annuity
operations of FIRSTGWL&A are being conducted in a manner consistent with the New
York Variable Annuity Regulations and any other applicable law or regulations.
12.6. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, may be settled by arbitration in a forum jointly
selected by the relevant parties (but if applicable law requires some other
forum, then such other forum) in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
12.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
12.9. Schwab and FIRSTGWL&A are hereby expressly put on notice of the
limitation of liability as set forth in the Declarations of Trust of the Fund
and agree that the obligations assumed by the Fund, Distributor and the Adviser
pursuant to this Agreement shall be limited in any case to the Fund, Distributor
and Adviser and their respective assets and neither Schwab nor FIRSTGWL&A shall
seek satisfaction of any such obligation from the shareholders of the Fund,
Distributor or the Adviser, the Trustees, officers, employees or agents of the
Fund, Distributor or Adviser, or any of them.
12.10. The Fund, the Distributor and the Adviser agree that the
obligations assumed by FIRSTGWL&A and Schwab pursuant to this Agreement shall be
limited in any case to FIRSTGWL&A and Schwab and their respective assets and
neither the Fund, Distributor nor Adviser shall seek satisfaction of any such
obligation from the shareholders of FIRSTGWL&A or Schwab, the directors,
officers, employees or agents of the FIRSTGWL&A or Schwab, or any of them,
except to the extent permitted under this Agreement.
12.11. No provision of this Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or indemnifications, as
between the Adviser and the Fund, and the Distributor and the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By its authorized officer,
By:_/s/ R.K. Shaw_____________________________
Title: V.P., Marketing and Product Development
Date: August 19, 1997
XXX XXXXXX AMERICAN CAPITAL LIFE INVESTMENT TRUST
By its authorized officer,
By:_/s Xxxxxx X. McDonnell_________________________
Title: President
Date: August 12, 1997
XXX XXXXXX AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By its authorized officer,
By:_/s Xxxxxx X. McDonnell_________________________
Title: President
Date: August 12, 1997
XXX XXXXXX AMERICAN CAPITAL DISTRIBUTORS, INC.
By its authorized officer,
By:_/s/ Xxxxxxx X. Molinari__________________________
Title: President
Date: August 12, 1997
XXXXXXX XXXXXX & CO., INC.
By its authorized officer,
By:_/s/ Xxxx Xxxxxx __________________________
Title: Vice
--------------------------------
President, Annuities & Life Insurance
Date: August 18, 1997
Schwab Variable Annuity
SCHEDULE A
Contracts Form Numbers
First Great-West Life & Annuity Insurance Company
Group Variable/Fixed Annuity Contract J434NY
SCHEDULE B
Designated Portfolios
Xxx Xxxxxx American Life Insurance Trust: Real Estate Securities Portfolio
SCHEDULE C
Administrative Services
To be performed by Xxxxxxx Xxxxxx & Co., Inc.
X. Xxxxxx will provide the properly registered and licensed personnel and
systems needed for all customer servicing and support - for both Fund and
Contract information and questions - including:
respond to Contractowner inquiries delivery of prospectus - both Fund
and Contract; entry of initial and subsequent orders; transfer of cash
to insurance company and/or Fund; explanations of fund objectives and
characteristics; entry of transfers between funds; Contract balance and
allocation inquiries; mail Fund prospectus.
B. For the services, Schwab shall receive a fee of 0.25% per annum applied to
the average daily value of the shares of the Fund held by Xxxxxx'x customers,
payable by the Adviser directly to Schwab, such payments being due and payable
within 15 (fifteen) days after the last day of the month to which such payment
relates.
C. The Fund will calculate and Schwab will verify with FIRSTGWL&A the asset
balance for each day on which the fee is to be paid pursuant to this Agreement
with respect to each Designated Portfolio.
X. Xxxxxx will communicate all purchase, withdrawal, and exchange orders it
receives from its customers to FIRSTGWL&A who will retransmit them to each fund.
SCHEDULE D
Reports per Section 6.6
With regard to the reports relating to the quarterly testing of
compliance with the requirements of Section 817(h) and Subchapter M under the
Internal Revenue Code (the "Code") and the regulations thereunder, the Fund
shall provide within twenty (20) Business Days of the close of the calendar
quarter a report to FIRSTGWL&A in the Form D1 attached hereto and incorporated
herein by reference, regarding the status under such sections of the Code of the
Designated Portfolio(s), and if necessary, identification of any remedial action
to be taken to remedy non-compliance.
With regard to the reports relating to the year-end testing of
compliance with the requirements of Subchapter M of the Code, referred to
hereinafter as "RIC status," the Fund will provide the reports on the following
basis: (i) the last quarter's quarterly reports can be supplied within the
20-day period, and (ii) a year-end report will be provided 45 days after the end
of the calendar year. However, if a problem with regard to RIC status, as
defined below, is identified in the third quarter report, on a weekly basis,
starting the first week of December, additional interim reports will be provided
specially addressing the problems identified in the third quarter report. If any
interim report memorializes the cure of the problem, subsequent interim reports
will not be required.
A problem with regard to RIC status is defined as any violation of the
following standards, as referenced to the applicable sections of the Code:
(a) Less than ninety percent of gross income is derived from sources of
income specified in Section 851(b)(2); (b) Thirty percent or greater
gross income is derived from the sale or disposition of assets specified
in Section 851(b)(3); (c) Less than fifty percent of the value of total
assets consists of assets specified in Section 851(b)(4)(A); and (d) No
more than twenty-five percent of the value of total assets is invested
in the securities of one issuer, as that requirement is set forth in
Section 851(b)(4)(B).
9
FORM D1
CERTIFICATE OF COMPLIANCE
For the quarter ended:
I, , a duly authorized officer, director or agent of Fund hereby
swear and affirm that Fund is in compliance with all requirements
of Section 817(h) and Subchapter M of the Internal Revenue Code
(the "Code") and the regulations thereunder as required in the
Fund Participation Agreement among First Great-West Life &
Annuity Insurance Company, Xxxxxxx Xxxxxx & Co., Inc. and other
than the exceptions discussed below:
Exceptions Remedial Action
Signed this day of , .
(Signature)
By:
(Type or Print Name and Title/Position)
B-2853
SCHEDULE E
EXPENSES
The Fund and/or the Distributor and/or Adviser, and FIRSTGWL&A will coordinate
the functions and pay the costs of the completing these
functions based upon an allocation of costs in the tables below. Costs shall be
allocated to reflect the Fund's share of the total costs determined according to
the number of pages of the Fund's respective portions of the documents.
------------------------ ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------ ---------------------- ---------------------- ------------------
Mutual Fund Prospectus Printing of combined FIRSTGWL&A Fund,
prospectuses Distributor or
Adviser, as
applicable
------------------------ ---------------------- ---------------------- ------------------
Fund, Distributor or FIRSTGWL&A Fund,
Adviser shall supply Distributor or
FIRSTGWL&A with such Adviser, as
numbers of the applicable
Designated
Portfolio(s)
prospectus(es) as
FIRSTGWL&A shall
reasonably request
------------------------ ---------------------- ---------------------- ------------------
Distribution to New FIRSTGWL&A FIRSTGWL&A
and Inforce Clients
------------------------ ---------------------- ---------------------- ------------------
Distribution to Schwab Schwab
Prospective Clients
------------------------ ---------------------- ---------------------- ------------------
Product Prospectus Printing for Inforce FIRSTGWL&A FIRSTGWL&A
Clients
------------------------ ---------------------- ---------------------- ------------------
Printing for FIRSTGWL&A Schwab
Prospective Clients
------------------------ ---------------------- ---------------------- ------------------
Distribution to New FIRSTGWL&A FIRSTGWL&A
and Inforce Clients
------------------------ ---------------------- ---------------------- ------------------
Distribution to Schwab Schwab
Prospective Clients
------------------------ ---------------------- ---------------------- ------------------
------------------------ ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------ ---------------------- ---------------------- ------------------
Mutual Fund Prospectus If Required by Fund, Fund, Distributor or Fund,
Update & Distribution Distributor or Adviser Distributor or
Adviser Adviser
------------------------ ---------------------- ---------------------- ------------------
If Required by FIRSTGWL&A FIRSTGWL&A
FIRSTGWL&A
------------------------ ---------------------- ---------------------- ------------------
If Required by Schwab Schwab Schwab
------------------------ ---------------------- ---------------------- ------------------
Product Prospectus If Required by Fund, FIRSTGWL&A Fund,
Update & Distribution Distributor or Distributor or
Adviser Adviser
------------------------ ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------ ---------------------- ---------------------- ------------------
If Required by FIRSTGWL&A FIRSTGWL&A
FIRSTGWL&A
------------------------ ---------------------- ---------------------- ------------------
If Required by Schwab Schwab Schwab
------------------------ ---------------------- ---------------------- ------------------
Mutual Fund SAI Printing Fund, Distributor or Fund,
Adviser Distributor or
Adviser
------------------------ ---------------------- ---------------------- ------------------
Distribution FIRSTGWL&A FIRSTGWL&A
------------------------ ---------------------- ---------------------- ------------------
Product SAI Printing FIRSTGWL&A FIRSTGWL&A
------------------------ ---------------------- ---------------------- ------------------
Distribution FIRSTGWL&A FIRSTGWL&A
------------------------ ---------------------- ---------------------- ------------------
------------------------ ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------ ---------------------- ---------------------- ------------------
Proxy Material for Printing if proxy Fund, Distributor or Fund,
Mutual Fund: required by Law Adviser Distributor or
Adviser
------------------------ ---------------------- ---------------------- ------------------
Distribution FIRSTGWL&A Fund,
(including labor) if Distributor or
proxy required by Law Adviser
------------------------ ---------------------- ---------------------- ------------------
Printing & FIRSTGWL&A FIRSTGWL&A
distribution if
required by
FIRSTGWL&A
------------------------ ---------------------- ---------------------- ------------------
Printing & FIRSTGWL&A Schwab
distribution if
required by Schwab
------------------------ ---------------------- ---------------------- ------------------
------------------------ ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------ ---------------------- ---------------------- ------------------
Mutual Fund Annual & Printing of combined FIRSTGWL&A Fund,
Semi-Annual Report reports Distributor or
Adviser
------------------------ ---------------------- ---------------------- ------------------
Distribution FIRSTGWL&A FIRSTGWL&A and
Schwab
------------------------ ---------------------- ---------------------- ------------------
Other communication to If Required by the Schwab Fund,
New and Prospective Fund, Distributor or Distributor or
clients Adviser Adviser
------------------------ ---------------------- ---------------------- ------------------
If Required by Schwab FIRSTGWL&A
FIRSTGWL&A
------------------------ ---------------------- ---------------------- ------------------
Item Function Party Responsible for Party
Coordination Responsible for
Expense
------------------------ ---------------------- ---------------------- ------------------
If Required by Schwab Schwab Schwab
------------------------ ---------------------- ---------------------- ------------------
Other communication to Distribution FIRSTGWL&A Fund,
inforce (including labor and Distributor or
printing) if Adviser
required by the
Fund, Distributor or
Adviser
------------------------ ---------------------- ---------------------- ------------------
Distribution FIRSTGWL&A FIRSTGWL&A
(including labor and
printing)if required
by FIRSTGWL&A
------------------------ ---------------------- ---------------------- ------------------
Distribution FIRSTGWL&A Schwab
(including labor and
printing if required
by Schwab
------------------------ ---------------------- ---------------------- ------------------
------------------------ ---------------------- ---------------------- ------------------
Item Function Party Responsible Party
for Coordination Responsible for
Expense
------------------------ ---------------------- ---------------------- ------------------
Errors in Share Price Cost of error to FIRSTGWL&A Adviser
calculation pursuant participants
to Section 1.10
------------------------ ---------------------- ---------------------- ------------------
Cost of FIRSTGWL&A Adviser
administrative work
to correct error
------------------------ ---------------------- ---------------------- ------------------
Operations of the Fund All operations and Fund, Distributor or Fund or Adviser
related expenses, Adviser
including the cost
of registration and
qualification of
shares, taxes on the
issuance or transfer
of shares, cost of
management of the
business affairs of
the Fund, and
expenses paid or
assumed by the fund
pursuant to any Rule
12b-1 plan
------------------------ ---------------------- ---------------------- ------------------
Operations of the Federal registration FIRSTGWL&A FIRSTGWL&A
Account of units of separate
account (24f-2 fees)
------------------------ ---------------------- ---------------------- ------------------
