EXHIBIT 8.1
FUND PARTICIPATION AGREEMENT
TCI Portfolios, Inc.
TABLE OF CONTENTS
ARTICLE I. Sale of Fund Shares 3
ARTICLE II. Representations and Warranties 8
ARTICLE III. Prospectuses and Proxy Statements; Voting 11
ARTICLE IV. Sales Material and Information 13
ARTICLE V. Fees and Expenses 16
ARTICLE VI. Diversification and Qualification 17
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order 20
ARTICLE VIII. Indemnification 24
ARTICLE IX. Applicable Law 34
ARTICLE X. Termination 34
ARTICLE XI. Notices 38
ARTICLE XII. Miscellaneous 39
SCHEDULE A Contracts 42
SCHEDULE B Designated Portfolios 43
SCHEDULE C Administrative Services 44
SCHEDULE D Reports per Section 6.6 45
SCHEDULE E Expenses 48
PARTICIPATION AGREEMENT
Among
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
TCI PORTFOLIOS, INC.,
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.,
AMERICAN CENTURY INVESTMENT SERVICES, 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"); TCI
PORTFOLIOS, INC., a corporation organized under the laws of
Maryland (hereinafter the "Fund"); AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC. (hereinafter the "Adviser"), a Delaware
corporation; AMERICAN CENTURY INVESTMENT SERVICES, INC.
(hereinafter the "Distributor"), a Missouri corporation; and
XXXXXXX XXXXXX & CO., INC., a California corporation (hereinafter
"Schwab").
WHEREAS, the Fund engages in business as an open-end
management investment company and makes shares of its Portfolios
(defined below) 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 Xxxxx 00,
0000 (Xxxx No. 812-6937), 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 or will register 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 it 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 January 15, 1997, to set aside and
invest assets attributable to the Contracts; and
WHEREAS, FirstGWL&A has registered or will register the
Account as a unit investment trust under the 1940 Act and has
registered or will register 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 it 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 and Distributor agree 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 Distributor or its
designee of the order for the shares of the Portfolios. 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 Distributor
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 Fund calculates its net asset value pursuant to the rules of
the SEC.
1.2. The Fund and the Distributor agrees to make shares of the
Designated Portfolio(s) available for purchase by FirstGWL&A and
the Account at the applicable net asset value per share on each
Business Day. Notwithstanding the foregoing, the Board of
Directors of the Fund (hereinafter the "Board") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio if such action is required by
law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board acting in good faith and in light of
their fiduciary duties under federal and any applicable state laws,
necessary in the best interests of the shareholders of such
Portfolio.
1.3. The Distributor represents that Fund shares will only be
sold to insurance company separate accounts funding variable
annuities and variable life insurance products unless and until it
obtains an order for an amendment to the Mixed and Shared Funding
Exemptive Order granting exemptions from the provisions of sections
9(a), 13(a), 15(a), and 15(b) of the 1940 Act and Rules 6e-2(b)(15)
and 6e-3(T)(b)(15) thereunder to the extent necessary to permit
shares of the Designated Portfolio(s) to be sold to and held by
certain plans established under Sections 401(a), 403(a) and (b),
408(a), (b) and (k), 414(d), 457(b) or 501(c)(18) of the Internal
Revenue Code ("Qualified Plans") and the Distributor will not sell
shares of the Designated Portfolio(s) to any other Participating
Insurance Company, separate account or any Qualified Plan unless an
agreement containing provisions in all material respects
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. 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 Distributor
receives notice of any such request for redemption by 10:00 A.M.
Eastern time on the next following Business Day. The Adviser will
cause the Designated Portfolio(s) to pay and transmit the proceeds
of redemptions of Fund shares as follows: (i) on the next Business
Day after the redemption order is received by FirstGWL&A if the
Distributor receives notice of the redemption prior to 9:00 a.m.
Eastern time on such Business Day; and (ii) on the second Business
Day after the redemption order is received by FirstGWL&A if the
Distributor receives notice of the redemption after 9:00 a.m.
Eastern time but before 10:00 a.m. Eastern time; provided the Fund
provides the net asset value per share to FirstGWL&A as required in
Section 1.9 of this Agreement. Notwithstanding the foregoing, the
Advisor may elect in good faith to effect redemptions over a longer
period of time to the extent permitted under the 1940 Act without
liability hereunder on the part of the Fund, the Adviser or the
Distributor. Payment shall be in federal funds transmitted by wire
and/or a credit for any shares purchased the same day as the
redemption.
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. 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.
1.8. The Distributor shall cause the Fund to furnish same day
notice (by wire or telephone, followed by written confirmation) to
FirstGWL&A of any income, dividends or capital gain distributions
payable on the Designated Portfolio(s)' shares (rate and reinvest
price). 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
Designated Portfolio. FirstGWL&A reserves the right to revoke this
election and to receive all such income dividends and capital gain
distributions in cash. The Distributor shall cause the Fund to
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.
1.9. The Adviser shall make the net asset value ("NAV") per
share for each Designated Portfolio available to FirstGWL&A on each
Business Day as soon as reasonably practical after the NAV per
share is calculated and shall use all reasonable efforts to make
such NAV per share available by 7:00 p.m. Eastern time. In the
event of a material error in the computation of a Designated
Portfolio's NAV per share or any dividend or capital gain
distribution (each a "pricing error"), the Adviser 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. For the purposes of this section 1.9, a "material
error" shall mean a pricing error that gives rise to the need to
take retroactive corrective action under the Fund's then current
pricing error correction policy (the "Policy"). Adviser represents
that the Board of Directors of the Fund has adopted a Policy which
governs the actions to be taken by the Fund and the Adviser in the
event of a pricing error. The terms of that Policy provide that a
pricing error is to 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 (a "full xxxxx," not as a
result of a rounding error), then non-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 (again, a "full xxxxx"), but less than one half of one
percent of the Designated Portfolio's NAV at the time of the error,
then the Adviser is required to make the Fund "whole"; however, no
adjustments need be made to shareholder transactions (including
Contractowners); and (c) 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 and greater than one half of one
percent of the Designated Portfolio's NAV at the time of the error,
then the Adviser is required to reimburse the Designated Portfolio
for any loss and shareholder transactions may be reprocessed. If
any such reprocessing causes FirstGWL&A to correct Contractowner
accounts, Adviser shall reimburse FirstGWL&A for its reasonable
out-of-pocket cost for adjustments made in connection with making
corrections to Contractowner accounts in accordance with the
provisions of Schedule E. If Contractowners have received amounts
of $500 or more in excess of the amounts to which they otherwise
would have been entitled prior to an adjustment for an error,
FirstGWL&A and Schwab, when requested by the Adviser of the Fund,
will make a good faith attempt to collect such excess amounts from
the Contractowners. Any overpayments that have not yet been paid
to Contractowners will be remitted by FirstGWL&A or Schwab upon
notification by the Adviser of such overpayment. In no event shall
Schwab or FirstGWL&A be liable to Contractowners for any such
adjustments or underpayment amounts.
The Parties acknowledge that the standards set forth in
Section 1.9 are consistent with the Parties' understanding of the
views expressed by the staff of the Securities and Exchange
Commission ("SEC") as of the date of this Agreement. In the event
the views of the SEC staff are later modified or superseded by the
SEC or judicial interpretation, or if the Board of Directors
determines in good faith that another practice is permissible, the
Board of Directors may amend such Policy (or adopt another policy)
without prior approval of any party to this Agreement. The Adviser
agrees to respond to any due diligence inquiry by Schwab or
FirstGWL&A regarding whether or not there have been any changes to
the Fund's pricing error Policy.
ARTICLE II. Representations and Warranties
2.1. FirstGWL&A represents and warrants that 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.
2.2. The Distributor and Adviser each represent and warrant
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 Adviser cause the Fund's
registration statement to be amended 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 Adviser agrees to cause the
Fund to comply with applicable provisions and SEC staff
interpretations of the 1940 Act to assure that the investment
advisory or management fees paid 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
cooperate with FirstGWL&A to make every reasonable effort to cause
that the investment policies, fees and expenses of the Designated
Portfolio(s) to be in compliance with the requirements under
insurance and other applicable laws of the State of New York to the
extent FirstGWL&A notifies the Adviser of any such requirements.
The Adviser shall register and qualify the shares of the Fund for
sale in accordance with the laws of the various states if and to
the extent required by applicable law.
2.5. The Adviser represents and warrants that the Fund is
lawfully organized and validly existing under the laws of the State
of Maryland and that it does and will comply in all material
respects with the 1940 Act.
2.6. 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 any applicable
state and federal securities laws.
2.7. 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 any applicable
state and federal securities laws.
2.8. The Adviser represents and warrants that all of its
officers, employees, and other individuals or entities dealing with
the money and/or securities of the Designated Portfolio(s) are, and
shall continue to be at all times, covered by a blanket fidelity
bond 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 bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
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 Adviser 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 Adviser 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 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, 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 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.
2.11 FirstGWL&A covenants and agrees that all orders
transmitted by it hereunder on any Business Day will be based upon
instructions that it received from Contractowners in proper form
prior to the close of trading on the new York Stock Exchange on the
previous Business Day. FirstGWL&A shall time stamp all order or
otherwise maintain records that will enable FirstGWL&A to
demonstrate compliance with this section.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the 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
Distributor 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 Distributor agrees that the prospectuses (but
not the SAI) (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 Distributor
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 Distributor 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 Distributor 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 is responsible for the
content of the prospectus or SAI for the Designated Portfolio(s).
(All references hereinafter to "prospectus" whether in respect of
Contracts or Fund shares, shall be deemed to include the related
SAI, unless otherwise specifically noted.) It is also understood
and agreed that, except with respect to information regarding the
Fund, the Distributor, the Adviser or the Designated Portfolio(s)
provided in writing by the Fund, the Distributor or Adviser,
neither the Fund, the Distributor nor Adviser is 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 in
accordance with instructions received from Contractowners: and
(iii) vote Designated Portfolio shares 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
calculates voting privileges in a manner consistent with all other
separate accounts investing in the Designated Portfolio(s). The
Adviser 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.
ARTICLE IV. Sales Material and Information
4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be
furnished, to the Distributor 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.
All such materials shall be directed to Xxxx Tantra, Distributor's
advertising compliance manager (or such other person as Distributor
may designate in writing) by mail at 0000 Xxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000, or by fax at (000) 000-0000. Such materials shall
be accompanied by a request for approval or comments within a
reasonable amount of time, which shall not be less than 10 business
days from the dated delivered to the Distributor or such shorter
period as the parties may agree from time to time. FirstGWL&A or
Schwab agrees to use reasonable efforts to notify Distributor's
advertising compliance manager of the delivery of such materials
(which includes leaving a voice mail message). If the Distributor
fails to respond within the time period set forth in the request
for review, FirstGWL&A or Schwab may use such material as submitted
without further approval by Distributor. If subsequent to approval
by Distributor (or the expiration of the time period set forth in
the request for approval), Distributor reasonably determines any
such material is or has become inaccurate, misleading or otherwise
inappropriate, it may request that the FirstGWL&A or Schwab modify
such advertising and sales literature, which FirstGWL&A or Schwab
will do at the next reprinting of any such materials. If
Distributor determines that such material should be modified
immediately, Distributor shall notify FirstGWL&A or Schwab of such
fact and FirstGWL&A or Schwab shall accommodate Distributor's
reasonable requests. In such instances, Distributor shall pay
FirstGWL&A or Xxxxxx'x reasonable out-of-pocket expenses in
reprinting any such advertising and sales materials.
Notwithstanding anything contained herein, FirstGWL&A or Schwab
shall be responsible for the compliance of all advertising and
sales literature prepared by FirstGWL&A or Schwab with all
applicable federal, state and NASD requirements.
4.2. FirstGWL&A and Schwab shall not give any information or
make any representations or statements on behalf of or concerning
the Fund or the Designated Portfolio(s) in connection with the sale
of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Fund
shares, as such registration statement and prospectus may be
amended or supplemented from time to time, or in sales literature
or other promotional material approved by the Distributor, except
with the permission of the Distributor.
4.3. The Distributor 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. Neither the Distributor nor the Adviser shall 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 or prospectus for the Contracts, as such registration
statement and prospectus 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 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 Distributor will provide to FirstGWL&A and Schwab at
least one complete copy of all registration statements,
prospectuses, 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) and that are relevant to this Agreement,
contemporaneously with or as promptly as practical after 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 and
all amendments to any of the above, that relate to the Contracts or
the Account and that are relevant to this Agreement,
contemporaneously with or as promptly as practical after 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/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 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
prospectuses, SAIs, shareholder reports, and proxy materials 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, the Adviser and the Distributor 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, the
Adviser, or the Distributor 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
Adviser 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 Distributor acknowledges 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.
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
within thirty (30) days following the last day of the month to
which it relates.
ARTICLE VI. Diversification and Qualification
6.1. 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 Adviser represents and warrants that the Fund and each
Designated Portfolio thereof will at all times comply with Section
817(h) of the Code and Treasury Regulation 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 Distributor agrees that shares of the Designated
Portfolio(s) will be sold only to Participating Insurance Companies
and their separate accounts and certain Qualified Plans (to the
extent permitted under the Mixed and Shared Funding Exemptive
Order).
6.2. No shares of any Designated Portfolio of the Fund will be
sold to the general public.
6.3. The Adviser represents and warrants 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 Distributor or the 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 anticipates that it will not so
comply in the future.
6.5. Without in any way limiting the effect of Sections 8.3
and 8.4 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 pursuant to the
mutual agreement of the Adviser, FirstGWL&A and Schwab, and/or the
costs of obtaining whatever regulatory authorizations are required
to substitute shares of another investment company for those of the
failed 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 Adviser at its expense shall provide FirstGWL&A or
its designee with reports demonstrating the Designated Portfolios'
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 to
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 or the Adviser as a
result of such a failure or alleged failure:
(a) FirstGWL&A shall promptly notify the Fund and the Adviser
of such assertion or potential claim;
(b) FirstGWL&A shall consult with the Fund 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 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 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 and the Adviser with
such cooperation as the Fund and the Adviser shall reasonably
request (including, without limitation, by permitting the Fund and
the Adviser to review the relevant books and records of FirstGWL&A)
in order to facilitate review by the Fund 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 or 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 or 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 or 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 or 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
Designated 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 Contractowner
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. From time to time, the
Distributor will identify in writing to FirstGWL&A any information
related to FirstGWL&A's Contractowners it requires from FirstGWL&A
in order for the Board to fulfill its responsibilities required by
the Mixed and Shared Funding Order. FirstGWL&A agrees to provide
such information within a reasonable time, as set forth in the
information request.
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 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 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 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 or
the completion of the termination and withdrawal of the Account's
investment in the Designated Portfolio(s), whichever occurs first,
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.
7.6. For purposes of Sections 7.3 through 7.6 of this
Agreement, a majority of the Independent Directors 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.
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 directors, officers, employees and affiliates and
each person, if any, who controls the Fund, the Distributor or the
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,
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, 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 statements or
alleged untrue statements of any material fact contained in the
registration statement or prospectus 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: (1) 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 thereto) or
otherwise for use in connection with the sale of the Contracts or
Fund shares; or (2) to the extent that such liability arises as a
result of the conduct of any indemnified party; 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, 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 and in conformity with information furnished in
writing to the Fund by or on behalf of FirstGWL&A for the purpose
of inclusion in such registration statement, prospectus, or sales
literature or other promotional material; 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 2.10
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 directors, officers, employees and affiliates and each
person, if any, who controls the Fund, the 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,
prospectus or sales literature or other promotional material of the
Fund prepared by the Distributor or Adviser on behalf of the Fund
nor provided in writing to Schwab, or approved in writing, by or on
behalf of the Fund, the Distributor or the 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 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: (1) 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, the
Distributor or the Fund or to Schwab by FirstGWL&A 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 thereto) or otherwise for use in connection
with the sale of the Contracts, or (2) to the extent such liability
arises as a result of the conduct of any Indemnified Party; or
(iii) 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 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 respective
directors, officers, employees and affiliates 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 sales literature or other
promotional material of the Fund prepared by the Distributor or the
Adviser on behalf of the Fund (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: (1) 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 or
prospectus for the Fund or in sales literature or other promotional
material (or any amendment or supplement thereto) or otherwise for
use in connection with the sale of the Contracts or the Fund
shares, or (2) or to the extent such liability arises as a result
of the conduct of any Indemnified Party; 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 for the Contracts not supplied by the
Adviser or persons under its control) or wrongful conduct of the
Fund or the Adviser or persons under their control, with respect to
the sale or distribution of Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus, or sales literature 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 and in conformity
with information furnished in writing to FirstGWL&A or Schwab by or
on behalf of the Adviser or the Fund for the purpose of inclusion
in such registration statement, prospectus, or sales literature or
other promotional material; or
(iv) arise as a result of any failure by the Fund 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 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 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
8.3(b) and 8.3(c) 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 Distributor
8.4(a). The Distributor agrees to indemnify and hold
harmless FirstGWL&A and Schwab and each of their respective
directors, officers, employees and affiliates 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, 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, expenses, 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 sales literature or other
promotional material of the Fund prepared by the Adviser or
Distributor on behalf of the Fund (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: (1) 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
prospectus for the Fund or in sales literature or other promotional
material (or any amendment or supplement thereto) or otherwise for
use in connection with the sale of the Contracts or Fund shares, or
(2) or to the extent such liability arises as a result of the
conduct of any Indemnified Party; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained
in the registration statement, prospectus, 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 Fund shares;
or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus, 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 and in conformity with information
furnished in writing to FirstGWL&A or Schwab by or on behalf of the
Adviser, the Distributor or Fund for the purpose of inclusion in
such registration statement, prospectus, or sales literature or
other promotional material; or
(iv) arise as a result of any failure by the Fund or the
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 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 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
8.4(b) and 8.4(c) hereof.
8.4(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.
8.4(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.
8.4(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 Securities and Exchange Commission 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; 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 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, the Distributor or the Adviser with respect to any Designated
Portfolio if FirstGWL&A reasonably believes that the Designated
Portfolio will fail to meet the Section 817(h) diversification
requirements or Subchapter M qualifications specified in Article VI
hereof; or
(g) at the option of either the Fund, the Distributor or
the Adviser, if (i) the Fund, Distributor or Adviser determines, in
its sole judgment reasonably exercised in good faith, that either
FirstGWL&A or Schwab has suffered a material adverse change in
their 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, the Distributor or the 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, the
Distributor or the 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 either the Fund,
the Distributor or the Adviser has suffered a material adverse
change in its business or financial condition or is the subject of
material adverse publicity and that material adverse change or
publicity will have a material adverse impact on the Fund's, the
Distributor's or the Adviser's ability to perform its obligations
under this Agreement, (ii) FirstGWL&A or Schwab notifies the
Adviser of that determination and its intent to terminate this
Agreement, and (iii) after considering the actions taken by the
Fund, the Distributor or the 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 Securities and Exchange Commission, 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 Securities and Exchange Commission, 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.
10.2. Notice Requirement. No termination of this
Agreement shall be effective unless and until the party terminating
this Agreement gives prior written notice to all other parties of
its intent to terminate, which notice shall set forth the basis for
the termination. 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(b), 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.
10.3. Effect of Termination. 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, and the Distributor shall,
at the option of FirstGWL&A or Schwab, continue to cause the Fund
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").
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, provided, however, that Adviser's obligation to make the
administrative services fee payment under Section 5.6 hereof shall
continue only if (i) Schwab continues to provide the administrative
services contemplated by Section 5.5 and; (i) the Adviser or an
affiliate of Adviser continues to serve as the investment adviser
to a Designated Portfolio.
10.5. Survival of 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:
TCI Portfolios, Inc.
X.X. Xxx 000000
Xxxxxx Xxxx, XX 00000-0000
Attention: General Counsel
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:
American Century Investment Management, Inc.
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
If to the Distributor:
American Century Investment Services, Inc.
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
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
reasonably 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
if mutually agreed to by the relevant parties 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. No provision of this Agreement may be deemed or
construed to modify or supersede any contractual rights, duties, or
indemnifications, as between the Adviser, 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/ Xxxxxx X. Xxxx
Title: Vice President, Marketing & Product
Development Date: April 1, 1997
TCI PORTFOLIOS, INC.
By its authorized officer,
By:/s/ Xxxxxxx X. Xxxxx
Title: Vice President
Date: March 21, 1997
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
By its authorized officer,
By:/s/ Xxxxxxx X. Xxxxx
Title: Vice President
Date: March 21, 1997
AMERICAN CENTURY INVESTMENT SERVICES, INC.
By its authorized officer,
By:/s/ Xxxxxxx X. Xxxxx
Title: Vice President
Date: March 21, 1997
XXXXXXX XXXXXX & CO., INC.
By its authorized officer,
By:/s/ Xxxx Xxxxxx
Title: Vice President, Annuities & Life
Insurance
Date: Xxxxx 00, 0000
Xxxxxx Variable Annuity
SCHEDULE A
Contracts Form Numbers
First Great-West Life & Annuity Insurance Company
Group Variable/Fixed Annuity Contract J434NY
SCHEDULE B
Designated Portfolios
TCI Growth
TCI International
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 annuity information and questions - including:
respond to Contractowner inquiries
delivery of prospectus - both fund and annuity;
entry of initial and subsequent orders;
transfer of cash to insurance company and/or funds;
explanations of fund objectives and characteristics;
entry of transfers between funds;
fund balance and allocation inquiries;
mail fund prospectus.
B. For the services, Schwab shall receive a fee of 0.00% 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 30 (thirty) days
after the last day of the month to which such payment relates.
C. The Distributor will calculate and Schwab will confirm on a
daily basis for each Designated Portfolio the number of shares and
the asset balance on which the fee is to be paid pursuant to this
agreement. Also provided will be a monthly summary of the reports,
expressed in both shares and dollar amounts.
X. Xxxxxx will communicate all purchase, withdrawal, and exchange
orders it receives from its customers to FirstGWL&A who will
retransmit them to the 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 Adviser 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).
FORM D1
CERTIFICATE OF COMPLIANCE
American Century Investment Management, Inc., the investment
adviser for TCI Growth and TCI International (the "Funds"), hereby
notifies you that, based on internal compliance testing performed
as of the end of the calendar quarter ended , 19 , the
Funds were 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 American Century Investment
Management, Inc., other than the exceptions discussed below:
Exceptions Remedial Action
If no exception to report, please indicate "None."
Signed this day of
, .
American Century Investment
Management, Inc.
(Signature)
By:
(Type or Print Name and
Title/Position)
SCHEDULE E
EXPENSES
The Distributor and/or Adviser, FirstGWL&A and Schwab will
coordinate the functions and pay the costs of the completing these
functions based upon an allocation of costs in the tables below.
With respect to documents that contain materials related to the
Designated Portfolio(s) and portfolios of other issuers and for
which Adviser is indicated as the party responsible for the
expense, costs shall be allocated to the Adviser according to the
number of pages of the Fund's portion of such documents as compared
to the total number of pages of the document.
Item
Function
Party Responsible for Coordination
Party Responsible for Expense
Mutual Fund Prospectus
Printing of combined prospectuses
FirstGWL&A
Adviser
Distributor shall supply FirstGWL&A with such numbers of the
Designated Portfolio(s) prospectus(es) as FirstGWL&A shall
reasonably request
FirstGWL&A
Distributor
Distribution to New and Inforce Clients
FirstGWL&A
FirstGWL&A
Distribution to Prospective Clients
Schwab
Schwab
Product Prospectus
Printing for Inforce Clients
FirstGWL&A
FirstGWL&A
Printing for Prospective Clients
FirstGWL&A
Schwab
Distribution to New and Inforce Clients
FirstGWL&A
FirstGWL&A
Distribution to Prospective Clients
Schwab
Schwab
Item
Function
Party Responsible for Coordination
Party Responsible for Expense
Mutual Fund Prospectus Update & Distribution
If Required by Fund or Distributor
Distributor and FirstGWL&A
Distributor
If Required by FirstGWL&A
FirstGWL&A
FirstGWL&A
If Required by Schwab
Schwab
Schwab
Product Prospectus Update & Distribution
If Required by Fund or Distributor
FirstGWL&A
Distributor
If Required by FirstGWL&A
FirstGWL&A
FirstGWL&A
If Required by Schwab
Schwab
Schwab
Mutual Fund SAI
Printing (one copy to be provided)
Distributor
Distributor
Distribution and copying
FirstGWL&A
FirstGWL&A
Product SAI
Printing
FirstGWL&A
FirstGWL&A
Distribution
FirstGWL&A
FirstGWL&A
Item
Function
Party Responsible for Coordination
Party Responsible for Expense
Proxy Material for Mutual Fund:
Printing if proxy required by Law
Adviser
Adviser
Distribution (including labor) if proxy required by Law
FirstGWL&A
Adviser
Printing & distribution if required by FirstGWL&A
FirstGWL&A
FirstGWL&A
Printing & distribution if required by Schwab
FirstGWL&A
Schwab
Item
Function
Party Responsible for Coordination
Party Responsible for Expense
Mutual Fund Annual & Semi-Annual Report
Printing of combined reports
FirstGWL&A
Distributor
Distribution
FirstGWL&A
FirstGWL&A and Schwab
Other communication to New and Prospective clients
If Required by the Fund or Distributor
Schwab
Distributor
If Required by FirstGWL&A
Schwab
FirstGWL&A
If Required by Schwab
Schwab
Schwab
Other communication to inforce
Distribution (including labor) if required by the Fund or
Distributor
FirstGWL&A
Distributor
If Required by FirstGWL&A
FirstGWL&A
FirstGWL&A
If Required by Schwab
FirstGWL&A
Schwab
Item
Function
Party Responsible for Coordination
Party Responsible for Expense
Errors in Share Price calculation pursuant to Section 1.10
Cost of error to participants
FirstGWL&A
Adviser
Cost of administrative work to correct error
FirstGWL&A
Adviser
Operations of the Fund
All operations and related expenses, 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
Fund or Distributor
Fund or Adviser
Operations of the Account
Federal registration of units of separate account (24f-2 fees)
FirstGWL&A
FirstGWL&A
