FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is effective as of this day of , 20 by and
among Forethought Life Insurance Company, a Indiana corporation (the "Company"),
acting herein for and on behalf of the Company and on behalf of each separate
account set forth on attached Schedule A, as the same may be amended from time
to time (the "Separate Accounts"); American Century Investment Services, Inc.
(the "Distributor"); and American Century Services, LLC ("Transfer Agent" and
collectively with Distributor, "American Century".
WITNESSETH:
WHEREAS, the Distributor serves as the distributor and Transfer Agent serves as
the Transfer Agent for American Century Variable Portfolios, Inc. (the
"Issuer"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act") that is available to
act as the investment vehicle for separate accounts established by insurance
companies for life insurance policies and annuity contracts; and
WHEREAS, the Distributor is registered as a broker/dealer under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), is a member in good standing
of the Financial Industry Regulatory Authority ("FINRA") and serves as principal
underwriter of the shares of the Issuer; and
WHEREAS, the Distributor intends to make available shares of the series of the
Issuer and any applicable class thereof as set forth in Separate Account
registration statements for the Company, as filed with the Securities and
Exchange Commission from time to time (the "Series"); and
WHEREAS, the Company is an insurance company which has registered or will
register the variable annuities and/or variable life insurance policies funded
through the Separate Account under the Securities Act of 1933, as amended (the
"1933 Act") and the 1940 Act, unless exempt from such registration, to be issued
by the Company for distribution (the "Contracts").
NOW, THEREFORE, in consideration of their mutual promises, the parties hereby
agree as follows:
ARTICLE I
SERIES SHARES
1.1 The Distributor agrees to make shares of the Series available for purchase
by the Company on behalf of the Separate Accounts on each Business Day (as
hereafter defined). The Transfer Agent will execute orders ("Orders") from the
Company on behalf of the Separate Accounts that are received prior to the price
time for each Series as set forth in such Series' then current prospectus
("Prospectus"). Such orders shall be executed by the Transfer Agent on a daily
basis at the net asset value of each Series next computed after receipt of such
Order by the Transfer Agent, or its designee as of the close of business on each
Business Day, or to the extent appropriate, as provided in Schedule C attached
hereto.
A. For purposes of this Agreement, the Company shall be the designee of the
Issuer and Distributor for receipt of orders from each Separate Account and
receipt by Company constitutes receipt by the Issuer, provided that the
Transfer Agent receives notice of such orders by 9:30 a.m. (Eastern time)
on the next following Business Day.
B. For purposes of this Agreement, "Business Day" shall mean any day on
which and for so long as the New York Stock Exchange is open for trading
and on which the Issuer calculates the net asset value of each Series
pursuant to the rules of the Securities and Exchange Commission ("SEC") or
as set forth in the Series' Prospectus.
1.2 The parties recognize that the Board of Directors of the Issuer (the
"Board"), acting in good faith and in the exercise of its fiduciary
responsibilities, may refuse to permit the Issuer to sell shares of any Series
to any person, or suspend or terminate the offering of shares of any Series if
such action is required by law or by regulatory authorities having jurisdiction
over the sale of shares.
1.3 The Distributor agrees, on behalf of the Issuer, that shares of the Issuer
or any of its Series will be sold only to insurance companies for use in
conjunction with variable life insurance policies or variable annuities. No
shares of the Issuer or any of its Series will be sold to the general public.
1.4 The Distributor agrees, on behalf of the Issuer, to redeem for cash, at the
Company's request, any full or fractional shares of the Series held by the
Separate Accounts, on a daily basis at the net asset value next computed after
receipt by the Issuer or its designee of the request for redemption.
A. For the purposes of this Agreement, the Distributor appoints the Company
as the designee of the Issuer for receipt of redemption requests from each
Separate Account and receipt by the Company constitutes receipt by the
Issuer, provided that the Transfer Agent receives notice of the redemption
request by 9:30 a.m. (Eastern time) on the next following Business Day.
1.5 Except as otherwise provided herein, the Company agrees that purchases and
redemptions of Series shares offered by the Prospectus of the Series shall be
made in accordance with the provisions of the Prospectus.
A. The Company will place separate orders to purchase or redeem shares of
each Series. Each order shall describe the net amount of shares and dollar
amount of each Series to be purchased or redeemed.
B. In the event of net purchases, the Company will pay for shares before
3:00 p.m. (Eastern time) on the next Business Day after receipt of an order
to purchase shares.
C. In the event of net redemptions, American Century shall cause the Issuer
to pay the redemption proceeds in federal funds transmitted by wire before
3:00 p.m. (Eastern time) on the next Business Day after an order to redeem
Series shares is made.
1.6 Issuance and transfer of the Series' shares will be by book entry only.
Share certificates will not be issued to the Company or any Separate Account.
Shares purchased will be recorded in an appropriate title for each Separate
Account or the appropriate sub-account of each Separate Account. American
Century shall furnish to the Company the CUSIP number assigned to each Series as
may be amended from time to time.
1.7 The Distributor shall notify the Company in advance of any dividends or
capital gain distributions payable on the Series' shares, but by no later than
same day notice by 6:30 p.m. Eastern time on the declaration date (by wire or
telephone, followed by written confirmation). The Company elects to reinvest all
such dividends and capital gain distributions in additional shares of that
Series. The Distributor shall notify the Company of the number of shares issued
as payment of dividends and distributions. The Company reserves the right to
revoke this election and to receive all such dividends and capital gain
distributions in cash.
1.8 The Distributor shall provide, in a form acceptable to the Company, the net
asset value per share of each Series to the Company on a daily basis as soon as
reasonably practical after the net asset value per share is calculated. The
Distributor shall use its best efforts to make such net asset value per share
available by 6:30 p.m. Eastern time. Information specified in this Section and
Section 1.7 will be substantially in the form as set forth in Schedule C.
A. If the Distributor provides materially incorrect share net asset value
information through
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no fault of the Company, the Separate Accounts shall be entitled to an
adjustment with respect to the Series shares purchased or redeemed to
reflect the correct net asset value per share.
B. Any material error in the calculation or reporting of net asset value
per share, dividend or capital gain information shall be reported promptly
to the Company upon discovery.
1. The Distributor shall indemnify and hold harmless the Company
against any amount the Company is legally required to pay annuity or
life insurance contract owners that have selected a Series as an
investment option ("Contract owners"), and which amount is due to the
Issuer's or its agents' material miscalculation and/or incorrect
reporting of the daily net asset value, dividend rate or capital gains
distribution rate.
2. Should a material miscalculation by the Issuer or its agents
result in a gain to the Company, subject to the immediately following
sentence, the Company shall immediately reimburse the Issuer, the
applicable Series or its agents for any material losses incurred by
the Issuer, the applicable Series or its agents as a result of the
incorrect calculation. Should a material miscalculation by the Issuer
or its agents result in a gain for Contract owners, the Company will
consult with the Distributor or its designee as to what reasonable
efforts shall be made to recover the money and repay the Issuer, the
applicable Series or its agents. The Company shall then make such
reasonable effort, at the expense of the Distributor or its agents, to
recover the money and repay the Issuer, the applicable Series or its
agents; provided, however, the Company shall not be obligated to
initiate or otherwise pursue any legal action against Contract owners
for any such reimbursements.
3. The Distributor shall reimburse the Company for any and all out of
pocket costs, including out of pocket costs for Company's third party
administrator and expenses that result from the Distributor providing
a materially incorrect share net asset value. The Company shall submit
an invoice to the Distributor for such losses incurred as a result of
the above which shall be payable within sixty (60) days of receipt.
With respect to the material errors or omissions described above, this section
shall control over other indemnification provisions in this Agreement.
C. The Distributor shall also provide any additional information relating
to each Series, including the non-fair market net asset value, in the time
and manner reasonably requested by the Company.
1.9 The Company agrees to use its best efforts to provide information to the
Distributor solely for the purpose of facilitating its compliance with Rule
22c-2 in accordance with the Rule 22c-2 Shareholder Information Agreement
between the Company and American Century, a form of which agreement is attached
hereto as Schedule D. Nothing herein, nor any action by the Company, shall be
construed as, or infer that the Company has undertaken any duty or obligation,
whether express or implied, at law or in equity, to detect abusive trading
activities pursuant to the Fund Policies.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that:
A. The Contracts are or will be registered under the 1933 Act unless exempt
and that the registrations will be maintained to the extent required by
law.
B. The Contracts will be issued in material compliance with all applicable
federal and state laws and regulations.
C. The Company is duly organized and in good standing under applicable law.
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D. The Company has legally and validly established each Separate Account
prior to any issuance or sale as a segregated asset account under the
Indiana Insurance Code and has registered or, prior to any issuance or sale
of the Contracts, will register and will maintain the registration of each
Separate Account as a unit investment trust in accordance with the 1940
Act, unless exempt from such registration.
E. The Contracts provide for the allocation of net amounts received by the
Company to a Separate Account for investment in the shares of one or more
specified investment companies selected among those companies available
through the Separate Account to act as underlying investment portfolios and
selection of a particular investment company is made by the Contract owner
under a particular Contract, who may change such selection from time to
time in accordance with the terms of the applicable Contract.
2.2 American Century, on behalf of the Issuer, represents and warrants that:
A. Series shares sold pursuant to this Agreement shall be registered under
the 1933 Act and the regulations thereunder to the extent required.
B. Series shares shall be duly authorized for issuance in accordance with
the laws of each jurisdiction in which shares will be offered.
C. Series shares shall be sold in material compliance with all applicable
federal and state securities laws and regulations.
D. The Issuer is and shall remain registered under the 1940 Act and the
regulations thereunder to the extent required.
E. The Issuer shall amend its registration statement under the 1933 Act and
the 1940 Act, from time to time, as required in order to effect the
continuous offering of the Series' shares.
F. The Issuer is currently qualified as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986, as amended, (the
"Code") and complies with Section 817(h) of the Code and regulations
thereunder. American Century, or one of its affiliates, will cause the
Issuer to make every effort to maintain such qualification and the
Distributor will notify the Company immediately in writing upon having a
reasonable basis for believing that the Issuer has ceased to qualify or
that the Issuer might not qualify in the future.
G. The Issuer is duly organized and validly existing under the laws of the
state of its organization.
H. The Issuer does and will comply in all material respects with the 1940
Act.
I. The Issuer has obtained an order from the SEC granting participating
insurance companies and variable insurance product separate accounts
exemptions from the provisions of the 1940 Act, as amended, and the rules
thereunder, to the extent necessary to permit shares of the Issuer or its
Series to be sold to and held by variable insurance product separate
accounts of both affiliated and unaffiliated life insurance companies.
J. The Distributor represents and warrants that it is and shall remain duly
registered under all applicable federal, state laws and regulations and
that it will perform its obligations for the Issuer and the Company in
material compliance with all applicable laws and regulations.
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K. The Distributor has, and during the term of the Agreement shall
maintain, the full and unfettered right, power and authority to effect all
actions described herein, including, without limitation, any and all
express or implied, direct or indirect, matters in any way related thereto,
for and on behalf of the Issuer. Provided further, the Company and persons
and all parties related thereto may rely on such representation without
further inquiry and have undertaken all actions herein in reliance upon the
same.
ARTICLE III
PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS; VOTING
3.1 The Distributor shall provide the Company with as many printed copies of
the current Prospectus(es), statement of additional information, proxy
statements, annual reports and semi annual reports of each Series (and no other
series), and any supplements or amendments to any of the foregoing, as the
Company may reasonably request. If requested by the Company, the Distributor
shall provide such documents in the form of typeset electronic document files or
other such electronic means and such other assistance as is reasonably necessary
in order for the Company to have any of the Prospectus(es), statement of
additional information, proxy statements, annual reports and semi annual reports
of each Series (and no other series), and any supplements or amendments to any
of the foregoing. Such documents may be printed in combination with such
documents of other fund companies' and/or such documents for the Contracts
and/or may be delivered electronically. The decision of whether to distribute
summary prospectuses or statutory prospectuses for a Series is at the discretion
of the Company.
Expenses associated with providing, printing, processing and distributing such
documents shall be allocated in accordance with Schedule Battached hereto. The
Distributor agrees to use best efforts to resolve any billing discrepancy
detected by the Company and remit any corrective payment promptly upon demand.
3.2 The Distributor or its designee will provide the Company 90 days notice of
any change for a Series, including but not limited to, (a) fund objective
changes, (b) anticipated fund mergers/substitutions, (c) no-action or exemptive
requests from the SEC, (d) fund name changes, (e) fund adviser or sub-adviser
changes; and/or (f) conditions or undertakings that affect the Company's rights
or obligations hereunder. If the Distributor does not provide the Company with
90 days notice the Company will use its best efforts to make the change at the
date requested by the Distributor. The Distributor will reimburse the Company
for all reasonable out of pocket expenses for facilitating the changes and for
notifying Contract owners of such changes, including any additional expenses
incurred by the Company as a result of the Distributor failing to provide the
Company with the required notice. Notwithstanding anything to the contrary, the
Distributor will provide all registration statement supplements to the Company
in hand no later than the date of filing such document with the Securities and
Exchange Commission; time being of the essence. The Distributor will provide the
Company with updated shareholder reports no later than 45 days after the end of
the reporting period. The Company reserves the right, in its sole discretion, to
combine the delivery of Issuer supplements to coordinate with other Company
variable product supplements and to levy a surcharge for its administrative
costs and expenses incurred in connection with circulating supplements that do
not coincide with scheduled variable product prospectus updates.
3.3 The Distributor will provide the Company with copies of its proxy
solicitations applicable to the Series. The Company will, to the extent required
by law, (a) distribute proxy materials applicable to the Series to eligible
Contract owners, (b) solicit voting instructions from eligible Contract owners,
(c) vote the Series shares in accordance with instructions received from
Contract owners; and (d) if required by law, vote Series shares for which no
instructions have been received in the same proportion as shares of the Series
for which instructions have been received.
A. To the extent permitted by applicable law, the Company reserves the
right to vote Series shares held in any Separate Account in its own right.
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B. Unregistered separate accounts subject to the Employee Retirement Income
Security Act of 1974 ("ERISA") will refrain from voting shares for which no
instructions are received if such shares are held subject to the provisions
of ERISA.
3.4 American Century, or one of its affiliates, shall cause the Issuer to
comply with all provisions of the 1940 Act and the rules thereunder requiring
voting by shareholders.
ARTICLE IV
SALES MATERIAL AND INFORMATION
4.1 The Company shall furnish, or shall cause to be furnished, to the
Distributor prior to use, each piece of sales literature or advertising prepared
by the Company in which the Issuer, its investment adviser or the Distributor is
described. No sales literature or advertising will be used if the Distributor
reasonably objects to its use within ten (10) Business Days following receipt by
the Distributor.
4.2 The Company will not, without the permission of the Distributor, make any
representations or statements on behalf of the Distributor or concerning the
Issuer or its investment adviser in connection with the advertising or sale of
the Contracts, other than information or representations contained in: (a) the
registration statement or Series Prospectus(es), (b) Series' annual and semi
annual reports to shareholders, (c) proxy statements for the Series, or, (d)
sales literature or other promotional material approved by the Distributor.
4.3 The Distributor shall furnish, or shall cause to be furnished, to the
Company prior to use, each piece of sales literature or advertising prepared by
theDistributor in which the Company, the Contracts or Separate Accounts, are
described. No sales literature or advertising will be used if the Company
reasonably objects to its use within ten (10) Business Days following receipt by
the Company.
4.4 Neither American Century nor the Issuer will, without the permission of the
Company, make any representations or statements on behalf of the Company, the
Contracts, or the Separate Accounts or concerning the Company, the Contracts or
the Separate Accounts, in connection with the advertising or sale of the
Contracts, other than the information or representations contained in: (a) the
registration statement or prospectus for the Contracts, (b) Separate Account
reports to shareholders, (c) in sales literature or other promotional material
approved by the Company.
4.5. The Distributor will provide to the Company at least one complete copy of
all registration statements, Prospectuses, statements of additional information,
reports to shareholders, proxy statements, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions and requests for no-action letters, and all amendments, that relate
to the Series or its shares.
4.6 The Company will provide to the Distributor, upon the Distributor's request,
at least one complete copy of all registration statements, prospectuses,
statements of additional information, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions, and requests for no action letters, and all amendments, that relate
to the Contracts.
4.7 The Company is hereby granted, during the term of this Agreement, a
royalty-free, worldwide license to use, print, broadcast and otherwise display
in any print or electronic medium the Issuer's and American Century's service
marks, trade names and logos in sales literature or other promotional material.
For the purposes of this Agreement, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in a newspaper, magazine, or other
periodical, radio, television, telephone, Internet, or tape recording, videotape
display, signs, video streams, computerized media, websites or other public
media), sales literature or other promotional material (i.e., any written
communication distributed or made generally available to key firms, customers or
the public, including brochures, circulars, pitch books, information provided on
a website, research reports, market letters, form letters, seminar texts,
reprints or excerpts of
6
any other advertisement, sale literature or other promotional material),
educational or training materials or other communications distributed or made
generally available to some or all agents, wholesalers or employees.
ARTICLE V
DIVERSIFICATION
5.1 The Distributor, on behalf of the Issuer, represents and warrants that, at
all times, each Series will comply with Section 817(h) of the Code and all
regulations thereunder, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts and any amendments or
other modifications to such Section or regulations. In the event a Series ceases
to so qualify, the Distributor will notify the Company immediately of such event
and will cause the Issuer or its investment adviser will take all steps
necessary to adequately diversify the Series so as to achieve compliance within
the grace period afforded by Treasury Regulation Section 1.817-5. If a Series
fails to achieve compliance with Section 817(h) within the grace period the
Distributor will reimburse the Company for all reasonable damages resulting to
the Company.
ARTICLE VI
POTENTIAL CONFLICTS
6.1 The Board will monitor the Series for the existence of any material
irreconcilable conflict between the interests of the Contract owners of all
separate accounts investing in the Series. The Board shall promptly inform the
Company if it determines that an irreconcilable material conflict exists and the
implications thereof.
6.2 The Company will report any potential or existing material irreconcilable
conflict of which it is actually aware to the Board. This includes, but is not
limited to, an obligation by the Company to inform the Board whenever Contract
owner voting instructions are disregarded.
6.3 If it is determined by a majority of the Board, or a majority of its
independent Directors, that a material irreconcilable conflict exists due to
issues relating to the Contracts, the Company will, at the its expense and to
the extent reasonably practicable, take whatever steps it can which are
necessary to remedy or eliminate the irreconcilable material conflict,
including, without limitation, withdrawal of the affected Separate Account's
investment in the Series. No charge or penalty will be imposed as a result of
such withdrawal.
6.4 The Company, at the request of the Distributor will, at least annually,
submit to the Board such reports, materials or data as the Board may reasonably
request so that the Board may fully carry out the obligations imposed upon them.
All reports received by the Board of potential or existing conflicts, and all
Board action with regard to determining the existence of a conflict, and
determining whether any proposed action adequately remedies a conflict, shall be
properly recorded in the minutes of the Board or other appropriate records, and
such minutes or other records shall be made available to the SEC upon request.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification by the Company
A. The Company agrees to indemnify and hold harmless American Century, the
Issuer and each of their directors, Trustees or (if applicable), officers,
employees and agents and each person, if any, who controls the Issuer
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually, an "Indemnified Party" for purposes
of this Section 7.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent
of the Company, which consent shall not be unreasonably withheld) or
expenses (including the
7
reasonable costs of investigating or defending any alleged loss, claim,
damage, liability or expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, "Losses"), to which the Indemnified
Parties may become subject under any statute or regulation, or at common
law or otherwise, insofar as such Losses are related to the sale or
acquisition of Series shares or the Contracts and:
1. Arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in a disclosure
document for the Contracts or in the Contracts themselves or in sales
literature generated or approved by the Company applicable to the
Contracts or Separate Accounts (or any amendment or supplement to any
of the foregoing) (collectively, "Company Documents" for the purposes
of this Article VII), 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 indemnity 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 was accurately
derived from written information furnished to the Company by or on
behalf of the Issuer for use in Company Documents or otherwise for use
in connection with the sale of the Contracts or Series shares; or
2. Arise out of or result from statements or representations (other
than statements or representations contained in and accurately derived
from the registration statement, prospectus, statement of additional
information or sales literature of the Issuer applicable to the Series
(or any amendment or supplement to any of the foregoing)
(collectively, "Issuer Documents" for purposes of this Article VII))
or wrongful conduct of the Company or persons under its control, with
respect to the sale or acquisition of the Contracts or Series shares;
or
3. Arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Issuer Documents 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 statement or omission was made in reliance upon and
accurately derived from written information furnished to American
Century by or on behalf of the Company; or
4. Arise out of or result from any failure by the Company to provide
the services or furnish the materials required under the terms of this
Agreement; or
5. Arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company.
B. The Company shall not be liable under this indemnification provision
with respect to any Losses which are due to an Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to the
Issuer or American Century, whichever is applicable.
C. The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify the
Company of any such claim shall not relieve the Company from any liability
which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the
Company shall be entitled to participate, at its own expense, in the
defense of such action. the Company also shall be entitled to assume the
defense thereof, with counsel reasonably satisfactory to the party named in
the action. After notice from the Company to such party of the Company's
election to assume the defense thereof, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it, and the
Company will not be
8
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.
D. The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them or any of their
officers or directors in connection with the issuance or sale of the Series
shares or the Contracts or the operation of the Issuer.
7.2 Indemnification by American Century
A. American Century agrees to indemnify and hold harmless the Company and
each of its directors, officers, employees and agents and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" and individually, an
"Indemnified Party" for purposes of this Section 7.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Distributor, which consent shall not be
unreasonably withheld) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or
expense and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become
subject under any statute or regulation, or at common law or otherwise,
insofar as such Losses are related to the sale or acquisition of the Series
shares or the Contracts and:
1. Arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in Issuer Documents or
arise out of or are based upon 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, provided that
this indemnity 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 was accurately derived from written information
furnished to the Issuer or American Century by or on behalf of the
Company for use in Issuer Documents or otherwise for use in connection
with the sale of the Contracts or Series shares; or
2. Arise out of or result from statements or representations (other
than statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of American Century or
persons under its control, with respect to the sale or distribution of
the Contracts or Series shares; or
3. Arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Company Documents, 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 statement or omission was made in reliance upon and
accurately derived from written information furnished to the Company
by or on behalf of the American Century or the Issuer; or
4. Arise out of or result from any failure by American Century to
provide the services or furnish the materials required under the terms
of this Agreement; or
5. Arise out of or result from any material breach of any
representation and/or warranty made by American Century in this
Agreement or arise out of or result from any other material breach of
this Agreement by American Century.
B. American Century shall not be liable under this indemnification
provision with respect to any Losses which are due to an Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and duties under this
Agreement or to the Company or the Separate Account, whichever is
applicable.
C. American Century 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 American
9
Century 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 American Century of any such claim shall not relieve
American Century from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, American Century shall be entitled to participate, at
its own expense, in the defense thereof. American Century also shall be
entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from American Century to such party
of its election to assume the defense thereof, the Indemnified Party shall
bear the expenses of any additional counsel retained by it, and American
Century 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.
D. The Indemnified Parties shall promptly notify American Century of the
commencement of any litigation or proceedings against them or any of their
officers or directors in connection with the issuance or sale of the
Contracts or the operation of a Separate Account.
7.3 Any party seeking indemnification (the "Potential Indemnitee") will
promptly notify any party from whom they intend to seek indemnification (each a
"Potential Indemnitor") of all demands made and/or actions commenced against the
Potential Indemnitee which may require a Potential Indemnitor to provide such
indemnification. At its option and expense, a Potential Indemnitor may retain
counsel and control any litigation for which it may be responsible to indemnify
a Potential Indemnitee under this Agreement.
7.4 With respect to any claim, the parties each shall give the others
reasonable access during normal business hours to its books, records, and
employees and those books, records, and employees within its control pertaining
to such claim, and shall otherwise cooperate with one and other in the defense
of any claim. Regardless of which party defends a particular claim, the
defending party shall give the other parties written notice of any significant
development in the case as soon as practicable, and such other parties, at all
times, shall have the right to intervene in the defense of the case.
7.5 If a party is defending a claim and indemnifying another party hereto, and:
(i) a settlement proposal is made by the claimant, or (ii) the defending party
desires to present a settlement proposal to the claimant, then the defending
party promptly shall notify the Indemnified Party of such settlement proposal
together with its counsel's recommendation. If the defending party desires to
enter into the settlement and the Indemnified Party fails to consent within
thirty (30) Business Days (unless such period is extended, in writing, by mutual
agreement of the parties hereto), then the Indemnified Party, from the time it
fails to consent forward, shall defend the claim and shall indemnify the
defending party for all costs associated with the claim which are in excess of
the proposed settlement amount.
Regardless of which party is defending the claim: (i) if a settlement requires
an admission of liability by the non-defending party or would require the
non-defending party to either take action (other than purely ministerial action)
or refrain from taking action (due to an injunction or otherwise) (a "Specific
Performance Settlement"), the defending party may agree to such settlement only
after obtaining the express, written consent of the non-defending party. If a
non-defending party fails to consent to a Specific Performance Settlement, the
consequences described in the last sentence of the first paragraph of this
Section 7.7 shall not apply.
7.6 The parties shall use good faith efforts to resolve any dispute concerning
this indemnification obligation. Should those efforts fail to resolve the
dispute, the ultimate resolution shall be determined in a de novo proceeding,
separate and apart from the underlying matter complained of, before a court of
competent jurisdiction. Either party may initiate such proceedings with a court
of competent jurisdiction at any time following the termination of the efforts
by such parties to resolve the dispute (termination of such
10
efforts shall be deemed to have occurred thirty (30) days from the commencement
of the same unless such time period is extended by the written agreement of the
parties). The prevailing party in such a proceeding shall be entitled to recover
reasonable attorneys' fees, costs, and expenses.
ARTICLE VIII
APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Indiana without giving
effect to the principles of conflicts of laws.
8.2 This Agreement, its terms and definitions, shall be subject to the
provisions of the 1933 Act, the Securities Exchange Act of 1934, and the 1940
Act, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant.
ARTICLE IX
TERMINATION
9.1 This Agreement shall continue in full force and effect until the first to
occur of:
A. Termination by any party for any reason upon 90 days advance written
notice delivered to the other parties; or
B. Termination by the Company by written notice to American Century with
respect to any Series in the event any of the Series' shares are not
registered, issued or sold in accordance with applicable state and/or
federal law, or such law precludes the use of such shares as the underlying
investment medium of the Contracts issued or to be issued by the Company;
or
C. Termination by the Company upon written notice to American Century with
respect to any Series in the event that such Series ceases to qualify as a
"regulated investment company" under Subchapter M of the Code or under any
successor or similar provision; or
D. Termination by the Company upon written notice to American Century with
respect to any Series in the event that such Series fails to meet the
diversification requirements specified in Section 5.1 of this Agreement; or
E. Termination by American Century in connection with Board's determination
to cease issuing shares pursuant to Article 1, Section 1.2 above; provided
that the Company is provided with ninety (90) days prior written notice
thereof; or
F. Termination upon mutual written agreement of the parties to this
Agreement.
9.2 Effect of Termination.
A. Notwithstanding any termination of this Agreement, the Distributor
shall, at the option of the Company, continue to make available additional
shares of the Series pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (the "Existing Contracts") unless such further sale of
Series shares is proscribed by law, regulation or applicable regulatory
body. Specifically, without limitation, the owners of the Existing
Contracts will be permitted to direct allocation and reallocation of
investments in the Series, redeem investments in the Series and invest in
the Series through additional purchase payments. The foregoing
notwithstanding, the Company agrees, to use its reasonable best efforts
following any termination of this Agreement, to take reasonable steps
necessary to redeem the investment of the Series Shares attributable to the
Contracts within two years from the date of termination of the Agreement as
provided in this Article IX. Such steps shall include, but not be limited
to, using reasonable efforts to seek an order pursuant to Section 26(c) of
the 1940 Act to permit the substitution of other securities for the Series
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shares attributable to the Contracts at the expense Series.
B. The Company agrees not to redeem Series shares attributable to the
Contracts except (i) as necessary to implement Contract owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application or
(iii) as permitted by an order of the SEC. Upon request, the Company will
promptly furnish to American Century the opinion of counsel for the Company
to the effect that any redemption pursuant to clause (ii) above is a
legally required redemption.
C. In addition to the foregoing, Article VII Indemnification shall survive
any termination of this Agreement.
ARTICLE X
NOTICES
10.1 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 American Century:
American Century Investment Services, Inc.
American Century Services, LLC
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: General Counsel
If to the Company:
Forethought Life Insurance Company
000 Xxxxx Xxxxxxxx Xxxxxx Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxx, EVP, Chief Investment Officer
ARTICLE XI
MISCELLANEOUS
11.1 Each party will treat as confidential any and all "Nonpublic Personal
Financial Information," Shareholder Information and all information reasonably
expected to be treated as confidential (collectively, "Confidential
Information") and not release any Confidential Information unless (a) the other
party provides written consent to do so; (b) a party is compelled to do so by
court order, subpoena or comparable request issued by any governmental agency,
regulator or other competent authority; or (c) permitted by applicable law. Each
party shall safeguard Confidential Information as required by applicable law and
provide reasonable confirmation upon request. As used above, (i) "Nonpublic
Personal Financial Information" shall refer to personally identifiable financial
information about any prospective or then existing customer of the Company
including customer lists, names, addresses, account numbers and any other data
provided by customers to the Company in connection with the purchase or
maintenance of a product or service that is not Publicly Available; and (ii)
"Publicly Available" shall mean any information that the disclosing party has a
reasonable basis to believe is lawfully made available to the general public
from federal, state, or local government records, widely distributed media, or
disclosures made to the general public that are required by federal, state, or
local law. American Century, on behalf of itself and the Issuer, and its
affiliates agree that it and they shall not use the information received
pursuant to this Agreement, including any Confidential Information, for
marketing or solicitation purposes.
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11.2 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.
11.3 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
11.4 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
11.5 Each party shall cooperate with each other party and all appropriate
governmental authorities (including, without limitation, the SEC, FINRA and
state insurance regulators) and shall permit such authorities (and other
parties) reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
11.6 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.
11.7 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.
11.8 The waiver of, or failure to exercise, any right provided for in this
Agreement shall not be deemed a waiver of any further or future right under this
Agreement.
11.9 The Company shall be excused from performance under this Agreement and
shall have no liability to any other party hereof or any third person for any
period that it is prevented, hindered or unable to perform any of our
obligations, in whole or in part, as a result of acts of God, strikes, terrorist
activities, power outages (including so-called xxxxx outs), material changes in
circumstances or laws, regulations or interpretations of the same affecting any
of our obligations hereunder, or other causes beyond its reasonable control; and
such non-performance shall not be a default under this Agreement.
11.10 The parties mutually acknowledge that this Agreement represents the
collective drafting efforts of each party and therefore any ambiguity shall not
be interpreted against the interests of any party.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in its name and on its behalf by its duly authorized representative as of the
day of , 20 .
FORETHOUGHT LIFE INSURANCE COMPANY
On its behalf and each Separate Account
named in Schedule A
By:
-----------------------------------
Its
AMERICAN CENTURY INVESTMENT SERVICES, AMERICAN CENTURY SERVICES, LLC
INC.
By: By:
----------------------------------- ---------------------------------
Its Its
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SCHEDULE A
SEPARATE ACCOUNTS
NAME OF SEPARATE ACCOUNT
Forethought Life Insurance Company Separate Account A
NAME OF CONTRACT FUNDED BY SEPARATE ACCOUNT
ForeRetirement Variable Annuity
15
SCHEDULE B
ALLOCATION OF EXPENSES
ITEM PAID BY THE COMPANY PAID BY THE DISTRIBUTOR
----------------------------------------------------------------------------------------------------------------
Registration Statements Preparing and filing the Separate Account's Preparing and filing the Issuer's
registration statement registration statement
Prospectuses, Text composition and alterations for Separate Text composition and alterations for
Supplements, and Account prospectus, supplements and statements Series prospectuses, supplements and
Statements of of additional information statements of additional information
Additional Information
Printing, processing, mailing and distributing Printing, processing, mailing and
or electronically delivering of Separate distributing and/or electronically
Account prospectuses, supplements and delivering of Series prospectuses,
statements of additional information to new and supplements and statements of
existing Contract owners as required by additional information for use with
applicable law Contract owners, including Contract
Printing, processing, mailing and distributing owners making an initial investment in
Separate Account and Series prospectuses, a Series, as required by applicable
supplements and statements of additional law (1)
information for use with prospective Contract
owners
Documents and Printing, processing, mailing and
Communications related distributing or electronically
fund to changes delivering Series and Separate Account
supplements and other communications
related to fund substitutions, fund
closings, fund mergers and other
similar fund transactions (1)
Annual and Semi-Annual Text composition of annual and semi-annual Text composition of annual and
Reports reports of the Separate Account semi-annual reports of the Series
Printing, processing, mailing, and distributing Printing, processing, mailing, and
or electronically delivering annual and distributing or electronically
semi-annual reports of the Separate Account to delivering annual and semi-annual
Contract owners reports of the Series to Contract
owners (1)
Proxies Text composition, printing, processing, Text composition, printing,
mailing, distributing or electronically processing, mailing, distributing or
delivering and tabulation of proxy statements electronically delivering and
and voting instruction solicitation materials tabulation of proxy statements and
to Contract owners with respect to proxies voting instruction solicitation
sponsored by the Separate Accounts materials to Contract owners with
respect to proxies sponsored by a
Series or the Issuer (1)
------------
(1) The Company may request that Distributor provide typeset electronic
document files of such documents for use with Contract owners. The Company
may choose to print the Series' prospectus(es), statement of additional
information, and semi-annual and annual reports, or any of such documents,
in combination with such documents of other fund companies; or may utilize
electronic delivery for such fund documents. In this case, the
Distributor's share of the total expense for printing, processing, mailing,
and distribution of the combined materials or of electronic delivery of
such materials shall be allocated based upon the methodology deemed
reasonable and appropriate by the Company.
The Company shall send invoices for such expense to Distributor within 90 days
of the event along with such other supporting data as may be reasonably
requested. The invoice will reference the applicable
16
regulatory document for the event, by Series and CUSIP, along with the
Distributor's number of pages printed. The Company invoices should be sent to
the following email message group: XXXXXX@xxxxxxxxxxxxxxx.xxx. Fees will be
payable within 45 days of receipt of the invoice, as long as such supporting
data defines the appropriate expenses.
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SCHEDULE C
PROCESSING SPECIFICATIONS
I. FORMAT FOR NAV AND DIVIDEND INFORMATION
Please provide the following information when sending the nightly NAV and
Dividend Distribution Date Fax/Email. This information should be received
nightly via Fax/ Email even if it is also provided through NSCC.
Mutual Fund Company Name
Pricing Company Name
Fund Name (no abbreviations)
Fund Number
Ticker and/or Cusip Number
NAV
NAV Change from Prior Day
Ordinary Dividend Distribution
Ordinary Dividend Distribution Change from Prior Day
Short Term Gain Distribution
Long Term Gain Distribution
Pricing Contact Name and Phone Number
Distribution Data Contact Name and Phone Number
Emergency after hours Name & Phone Number
II. NSCC TRANSACTIONS
The following terms and conditions hereby amend Article I of the Agreement with
respect to the receipt and transmission of orders routed through the National
Securities Clearing Corporation ("NSCC") in accordance with the NSCC's Defined
Contribution Clearance & Settlement ("DCC&S") platform cycle file:
A. American Century will accept all orders to purchase shares of the Series
available using the NSCC's DCC&S platform. American Century will also
provide the Company with account positions and activity data using the
NSCC's Networking platform. The Company shall pay for Series shares by
federal funds wire using the NSCC's Fund/SERV System in accordance with the
rules and regulations of the NSCC, as the same may be amended from time to
time.
B. The Company shall use best efforts to promptly notify American Century
or its designated transfer agent of its inability to use the NSCC's DCC&S
platform by telephone and/or facsimile.
C. American Century will provide the Company with account positions and
activity data using the NSCC's Networking platform (i.e., the NSCC's
product that allows Issuers, Distributors and Companies to exchange account
level information electronically).
D. Payment for Series shares redeemed in accordance with this Schedule
shall be effectuated using the NSCC's FundSERV System. Payment shall be in
federal funds transmitted by wire to the Issuer's designated Settling Bank.
For the purposes of the foregoing, a "Settling Bank" shall mean the entity
appointed by the Issuer to perform such settlement services on behalf of
the Series and which entity agrees to abide by the NSCC's Rules and
Procedures insofar as they relate to the same day funds settlement.
18
E. The Distributor shall furnish notice to the Company of any income,
dividends or capital gain distributions payable on the Series' shares
through the NSCC's FundSERV System.
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SCHEDULE D
FORM OF RULE 22C-2 SHAREHOLDER INFORMATION AGREEMENT
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