FUND PARTICIPATION AGREEMENT
THIS FUND PARTICIPATION AGREEMENT made as of the 27th day of December,
2001 by and between AIG LIFE INSURANCE COMPANY, a Delaware corporation, on its
own behalf and on behalf of its affiliated life insurance company, American
International Life Assurance Company of New York (together, the "Company"), and
on behalf of each segregated asset account of the Company identified in Schedule
A hereto (each, an "Account" and collectively, the "Accounts"), and THE VANGUARD
GROUP, INC., a Pennsylvania corporation, on its own behalf and on behalf of each
investment company identified in Schedule B hereto ("Vanguard").
W I T N E S S E T H:
WHEREAS, Vanguard provides services as transfer agent, dividend
disbursement agent, and shareholder servicing agent for the open-end, management
investment companies registered under the Investment Company Act of 1940 that
are included in the Vanguard Group of investment companies (each, a "Vanguard
Fund" and collectively, the "Vanguard Funds");
WHEREAS, Vanguard and the Company desire to make shares of certain of the
Vanguard Funds identified in Schedule B (the "Funds") available to serve as
underlying investment options for variable annuity contracts ("Contracts")
designed and offered by the Company;
WHEREAS, Vanguard will establish an account or accounts on its mutual fund
shareholder accounting system to reflect the Accounts' ownership of shares of
the Vanguard Funds and all transactions by the Accounts involving such shares;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto, intending to be legally bound, hereby agree and declare as
follows:
1. Establishment of Accounts; Availability of Funds. The Company
represents that it has established under Delaware law the Accounts identified in
Schedule A hereto. Each of the Accounts is, as of the date of this Agreement,
registered as a unit investment trust in accordance with the provisions of the
Investment Company Act of 1940, as amended, to serve as a segregated asset
account for the Contracts. The Contracts provide for the allocation of net
amounts received by the Company to each Account for investment in shares of the
appropriate Fund as selected among those investments available through the
Contracts to act as underlying investment media.
2. Marketing and Promotion. The Company agrees to make every reasonable
effort to market its Contracts. It will use its best efforts to give equal
emphasis and promotion to shares of the Funds as is given to other underlying
investments available through the Contracts. In marketing and administering its
Contracts, the Company will comply with all applicable state and federal laws.
3. Sale of Fund Shares.
(a) Appointment of Company as Agent. Subject to and in accordance
with the terms and procedures hereof, the Company is hereby appointed as the
agent of Vanguard, and the Company hereby accepts such appointment, for the
limited purpose of treating instructions received by the Company from Contract
owners as to the allocation of Contract purchase payments, Contract transfers
and Contract surrenders (to the extent such instructions would result in the
purchase or redemption of Fund shares by the Company) ("Instructions") as
receipt by Vanguard of purchase and redemption orders for shares of the Funds.
Notwithstanding the Company's appointment hereunder as the agent of Vanguard for
the sole purpose of receiving Instructions for the purchase and redemption by
the Company and its Accounts of shares of the Funds, the Company shall not be,
nor hold itself out to the public or engage in any activity as, an agent for
Vanguard in respect of or in connection with the distribution or marketing of
shares of the Funds.
It is acknowledged and agreed by the parties that the availability
of shares of any Fund shall be subject to such Fund's then current prospectus
and Statement of Additional Information, federal and state securities laws and
applicable rules and regulations of the Securities and Exchange Commission (the
"SEC") and the National Association of Securities Dealers, Inc. (the "NASD").
(b) Receipt of Instructions by Company. In the case of any orders
resulting from Instructions received by the Company on any day on which the New
York Stock Exchange is open for trading (a "Business Day") prior to the time the
net asset values of shares of the Funds are determined (the close of trading on
the New York Stock Exchange, generally 4:00 p.m. Eastern Time) (the "Market
Close"), such orders shall be accorded a trade date on Vanguard's accounting
system that is the date of receipt of the Instructions by the Company, except as
set forth in Section 3(e) below. Any purchase or redemption order resulting from
Instructions received by the Company on any Business Day after the Market Close
shall be accorded a trade date on Vanguard's accounting system that is the next
Business Day.
(c) Issuance of Fund Shares. Issuance and transfer of shares of the
Funds shall be by book entry only. Stock certificates will not be issued to the
Company or any Account. Shares purchased from the Funds will be recorded on
Vanguard's accounting system in the appropriate Account or subaccount thereof
based upon information provided to Vanguard by the Company.
(d) Transmission of Orders by Company. Based on the Instructions
received by the Company on each Business Day, the Company shall transmit to
Vanguard by 8:30 a.m. Eastern Time on the following calendar day (including
Saturdays and holidays) a fax transmission containing the net purchase or
redemption order, in dollars, by each Account of the Company (or in the
aggregate for all Accounts, if that has been agreed to in advance by the
parties) for shares of each Fund for the preceding Business Day. Each
transmission by the Company of a net purchase or redemption order shall
constitute a representation by the Company that such net order was based solely
on Instructions from Contract owners received by the Company prior to the Market
Close on
the previous Business Day, and that such net order included all Instructions so
received by the Company. The Company shall maintain records sufficient to
identify the date and time of receipt of all Instructions involving the Funds
and shall make such records available upon request for examination by Vanguard
or its designated representative or, at the request of Vanguard, by appropriate
governmental authorities.
(e) Extraordinary Events. The Company is not authorized to accept as
Vanguard's agent any purchase or redemption of shares in an amount which equals
or exceeds the "Large Transaction Amount" for a Fund (as specified in Exhibit
A), where such order is the result of an "Extraordinary Event" of which the
Company is aware, unless the Company has notified Vanguard of such order, by
calling the Company's assigned Fund Sponsor associate, as soon as practicable
following the Company becoming aware of the Extraordinary Event and in no event
later than 3:00 p.m. Eastern time on the trade date. For these purposes, an
"Extraordinary Event" shall mean an event outside the normal operation of an
Account such as an entire Account moving into or out of the Company's account
with Vanguard, or an asset transfer, merger, acquisition or divestiture. In
accordance with the prospectus of each Fund, Vanguard reserves the right to
refuse any purchase order, or to delay settlement of any redemption order, which
equals or exceeds the applicable Large Transaction Amount and results from an
Extraordinary Event, and which Vanguard, in its sole discretion, deems
disruptive or detrimental to the applicable Fund. In connection with any
redemption order that equals or exceeds the applicable Large Transaction Amount,
Vanguard reserves the right to delay delivery of redemption proceeds for up to
seven days or to effect the redemption through an in-kind distribution of
securities. Vanguard reserves the right to amend or revise Exhibit A at any time
and will provide 24 hours' notice of such revision to the Company.
(f) Wiring of Funds. In the case of a net purchase order, the
Company shall remit to Vanguard the exact amount of requisite funds to cover
such order by Federal Funds wire by 4:00 p.m. Eastern Time on the Business Day
on which the transmission containing the net purchase order is transmitted to
Vanguard or, if such day is not a Business Day, on the next Business Day (the
"Settlement Date"). If the Company becomes aware that Vanguard may not receive,
prior to the Market Close on the Settlement Date, a wire transfer relating to a
net purchase order, the Company shall promptly inform Vanguard of the facts and
circumstances thereof and shall cooperate with Vanguard with the goal of
Vanguard receiving such purchase proceeds as soon as reasonably possible.
Notwithstanding the immediately preceding sentence, if a wire transfer relating
to an aggregate purchase order is not received by Vanguard prior to Market Close
on the appropriate Settlement Date, Vanguard reserves the right to (i) charge
the Company interest on the amount of the delayed wire as provided below or (ii)
redeem the shares for which payment has not been received on any Business Day
subsequent to the appropriate Settlement Date if (A) Vanguard has further
notified the Company by no later than 12:00 noon Eastern Time on the Business
Day following the Settlement Date that Vanguard still has not received the
delayed wire transfer relating to the net purchase order and (B) Vanguard still
has not received the delayed wire by one hour prior to Market Close on such
subsequent Business Day.
In the case of a net redemption order, Vanguard shall remit or cause
to be remitted to the Company the exact amount of requisite funds to cover such
order by Federal Funds wire sent by Vanguard by 4:00 p.m. Eastern Time on the
Business Day that the transmission containing the net redemption order is
received by Vanguard or, if such day is not a Business Day, on the next
Business Day; provided, however, that in the event that the Company's account in
a Fund is redeemed in full such that it will have a zero balance on such
Business Day, Vanguard reserves the right to wire, or to cause to be wired, the
redemption proceeds within the time frame set forth in the applicable Fund
prospectus. If Vanguard becomes aware that the Company may not receive the wire
transfer relating to a net redemption order by 4:00 p.m. Eastern Time on the
appropriate date, Vanguard shall promptly inform the Company of the facts and
circumstances thereof and shall cooperate with the Company with the goal of the
Company receiving such proceeds as soon as reasonably possible. If such wire
transfer is not received by the Company on the appropriate date, Vanguard shall
pay the Company interest on the amount of the delayed wire as provided below.
In the event that a wire is delayed, the interest owed shall be
deemed to be the interest cost on the delayed funds until paid, charged at the
Federal Funds "offered" rate as published by The Wall Street Journal.
(g) Transmission by Fund Sponsor of Share Price and Distribution
Information. Vanguard shall transmit to the Company by 7:00 p.m. Eastern Time on
each Business Day a file identifying the net asset value per share (or "share
price") of the Funds as of the Market Close on that Business Day. Vanguard shall
also transmit to the Company by 7:00 p.m. Eastern Time on the first Business Day
following each record date established for the payment of dividends or capital
gains distributions by a Fund a file containing the dividend or capital gains
distribution rate for such payment. The Company shall not be entitled to rely on
any source of share price or distribution information other than such
transmission by Vanguard.
(h) Confirmations. Vanguard shall transmit to the Company by 8:30
a.m. Eastern Time on each Business Day a confirmation of any net purchase or
redemption orders for shares of the Funds with a trade date of the second
preceding Business Day. However, on any Business Day that is the first Business
Day of the month, Vanguard shall transmit such confirmation by 11:00 a.m.
Eastern Time.
(i) Processing Adjustments. Each business day the Company and
Vanguard will reconcile their records so that an appropriate number of shares of
each of the Funds is credited to the Accounts invested in the various Funds with
Vanguard.
(i) In the event of any error (other than a Pricing Error, as
hereinafter defined) or delay with respect to the procedures
outlined in this Section 3 which is caused by Vanguard, Vanguard
shall make any adjustments on its accounting system necessary to
correct such error or delay and shall reimburse the Accounts for any
losses or reasonable costs incurred directly as a result of the
error or delay.
(ii) In the event of any error or delay with respect to the
procedures outlined in this Section 3 which is caused by the
Company, the Company shall adjust its records accordingly in order
to correct such error or delay. The Company will notify Vanguard of
the error and required correction and shall reimburse Vanguard and
the Funds for any losses or reasonable costs incurred as a result of
the error or delay. In the event of an error or delay caused by the
Company, Vanguard will process any adjustment with the trade date of
the day such error or delay is identified by the Company to
Vanguard.
(iii) The Company and Vanguard, respectively, each agree to
provide the other prompt notice of any errors or delays of the type
referred to in this Section 3(i) and to use reasonable efforts to
take such action as may be appropriate to avoid or mitigate any such
costs or losses.
(j) Pricing Errors. In the event of an error in the computation of a
Fund's net asset value per share which, in accordance with procedures adopted by
the Fund's Board of Trustees consistent with views expressed by the staff of the
Securities and Exchange Commission regarding appropriate error correction
standards, as shall be in effect or amended from time to time, requires
adjustment to transactions previously effected on behalf of an Account (a
"Pricing Error"), Vanguard shall notify the Company as soon as possible after
discovery of the Pricing Error. Such notification may be oral, but shall be
confirmed promptly in writing. In such event, Vanguard shall reimburse the
affected Fund for any loss (without taking into consideration any positive
effect of such Pricing Error) and shall make appropriate adjustments to the
Company's accounts, which adjustments shall net the impact of individual
Contract gains and losses; this will result in either a net payment to the
Account from Vanguard (in the event of net Contract losses) or from the Account
to Vanguard (in the event of net Contract gains), but only to the extent the
Company is able to and does subtract such gains from the Contract's Account
Values. In addition, in the event that the Pricing Error causes the Company to
incur any direct costs for re-processing Contract accounts under an Account,
such as preparing and mailing revised statements, Vanguard shall reimburse the
Company for all such reasonable costs upon receipt from the Company of an
invoice or other statement documenting such costs in reasonable detail.
4. Expenses.
(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by any Fund under this Agreement shall be paid by
such Fund or Vanguard, including the cost of registration of such Fund's shares
with the SEC and in states where required. All expenses incident to the
performance by the Company under this Agreement shall be paid by the Company.
(b) Vanguard shall provide the Company, upon request, with
sufficient copies of the Funds' proxy material, periodic reports to shareholders
and other materials that are required by law to be sent to Fund shareholders. In
addition, Vanguard shall provide the Company, upon request, with a sufficient
quantity of the Funds' prospectuses to be used in connection with the Company's
offerings and the transactions contemplated by this Agreement. The cost of
preparing and printing such materials shall be paid by the Funds, and the cost
of distributing such materials shall be paid by the Company; provided, however,
that if at any time a Fund reasonably deems the usage of such items to be
excessive, Vanguard may request that the Company pay the cost of printing
(including press time and paper) of any additional copies of such materials
requested by the Company.
5. Company Use of Vanguard Name. The Company agrees and acknowledges that
Vanguard is the sole owner of its name and marks and those of the Funds, and
that any and all use of any designation comprised in whole or in part of the use
of those names and marks under this Agreement shall inure to the benefit of
Vanguard. The use by the Company of those names and marks in any advertisement
or sales literature or other promotional materials shall occur only with the
prior written consent of a Managing Director of higher ranking officer of
Vanguard. Except to the extent required by law, the Company shall not, without
the prior written consent of Vanguard, make written representations regarding
the Funds, Vanguard, or any of their affiliates, except those contained in the
then current prospectus and in the then current sales literature for the Funds.
Upon termination of this Agreement for any reason, the Company shall cease all
use of any such names and marks as soon as reasonably practicable.
6. Administration of Accounts. Administrative services to purchasers of
Contracts, including without limitation all record keeping, shall be the
responsibility of the Company and shall not be the responsibility of any Fund or
Vanguard. Vanguard and the Funds shall recognize the appropriate Account as the
sole shareholder of each of the respective Fund shares issued to such Account
under this Agreement.
7. Representations and Warranties. Vanguard and the Company, respectively,
each represent that it has obtained and shall maintain all authorizations,
licenses, qualifications or registrations of any governmental body required of
it in connection with this Agreement and that such registrations are and will
remain in full force and effect during the term of this Agreement, and that it
will promptly notify the other party in the event that it is unable to perform
any of its obligations under this Agreement.
(a) The Company further represents and warrants that:
(i) it has full power and authority to enter into and perform
this Agreement;
(ii) (A) its internal control systems for the processing and
transmission of orders for the purchase and redemption of Fund
shares are designed to monitor, regulate and exclude orders received
after the Market Close on each Business Day from being aggregated
and communicated to a Fund or its designee with orders received
before Market Close on such Business Day (consistent with the
requirements of Section 22(c) of the Investment Company Act of 1940
and Rule 22c-1 thereunder and the registration statements of the
Funds); (B) its internal control systems shall implement
commercially reasonable efforts, in accordance with general industry
standards, to assure that such processing of transactions occurs
without error or omission, and does not result in late transmission
of orders to a Fund; and (C) it shall provide Vanguard with such
reports on its internal control systems as Vanguard may reasonably
request from time to time;
(iii) it is not required to be registered as broker-dealer
under any applicable federal securities laws as a result of entering
into and performing the services set forth in this Agreement; and
(iv) all purchases and redemptions of Fund shares contemplated
by this Agreement shall be effected in accordance with the Fund's
then current prospectus.
(b) Vanguard further represents and warrants that:
(i) it is duly registered as a transfer agent under Section
17A of the Securities Exchange Act of 1934, as amended;
(ii) it is authorized to enter into this Agreement on behalf
of the Funds, and the performance of its obligations hereunder does
not and will not violate or conflict with any governing documents or
agreements with respect to (A) the Funds or (B) any applicable law;
(iii) each Fund is an open-end investment company registered
under the Investment Company Act of 1940, as amended; and
(iv) a registration statement under the Securities Act of
1933, as amended, is current and appropriate state securities law
filings have been made and will continue to be made with respect to
all shares of the Funds being offered for sale.
8. Termination. This Agreement shall terminate as to the issuance of new
Contracts:
(a) at the option of either the Company or Vanguard upon three
months' advance written notice to the other, or any mutually agreed upon time
period;
(b) at the option of the Company if either the Funds' shares are not
available for any reason to meet the requirements of the Contracts as determined
by the Company, provided that reasonable advance notice of election to terminate
shall be furnished by the Company;
(c) at the option of either the Company or Vanguard upon the taking
of any material action or the institution of proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the Accounts, Vanguard
or the Funds by the NASD, the SEC or any other regulatory body;
(d) upon assignment of this Agreement unless made with the written
consent of the other party hereto; or
(e) if the Funds' shares are not registered, issued or sold in
compliance with federal law or such law precludes the use of Fund shares as the
underlying investment medium of Contracts issued or to be issued by the Company,
provided that prompt notice shall be given by either party should such situation
occur.
9. Continuation of Agreement. Termination as a result of any cause listed
in the preceding paragraph shall not affect Vanguard's obligation to furnish
shares of the Funds to Contracts then in force for which shares of the Funds
serve or may serve as the underlying investment medium unless such further sale
of Fund shares is proscribed by law or the SEC or other regulatory body.
10. Advertising Materials; Filed Documents.
(a) All advertising and literature with respect to the Funds
prepared by the Company or its agents for use in marketing the Contracts will be
submitted to Vanguard for review and acceptance in Vanguard's sole discretion
before such material is first used.
(b) Vanguard will provide to the Company at least one complete copy
of all registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and all amendments
or supplements to any of the above that relate to the Funds promptly after the
filing of such documents with the SEC or other regulatory authorities.
11. Proxy Voting. The Company, as the sole shareholder of the Funds'
shares issued under this Agreement, shall vote such shares in its sole
discretion.
12. Diversification. Vanguard represents that each Fund has elected to be
qualified as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended, and each will maintain such qualification
(under Subchapter M or any successor or similar provision). Without limiting the
scope of the foregoing, each Fund represents and warrants that it will, at a
minimum, meet the diversification requirements of Section 5(b)(1) of the
Investment Company Act of 1940, relating to the diversification requirements for
open-end management companies, and any amendments or other modifications to such
Section, as if those requirements applied directly to each such Fund.
Notwithstanding the foregoing, for any Fund that is structured as a 'Fund of
Funds', the foregoing representations regarding diversification are made on
behalf of the underlying funds, and not the Fund of Funds.
13. Indemnification.
(a) The Company agrees to indemnify and hold harmless Vanguard and
the Funds and each of their respective directors, officers, employees, agents
and each person, if any, who controls a Fund or Vanguard within the meaning of
the Act against any losses, claims, damages or liabilities to which the Funds or
Vanguard or any such director, officer, employee, agent or controlling person
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement of any material fact contained in the sales
literature of the Company 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, (ii) conduct, statements or representations (other than
statements or representations contained in the then current prospectuses or
sales literature of the Funds) of the Company or its agents, with respect to the
sale and distribution of Contracts for which shares of the Funds are the
underlying investment,
(iii) the Company's failure to maintain favorable tax-qualified status for the
Contracts investing in the Accounts, (iv) the Company's lack of good faith,
negligence or willful misconduct in carrying out its duties and responsibilities
under this Agreement, (v) any breach by the Company of any material provision of
this Agreement, or (vi) any breach by the Company of any representation,
warranty or covenant made in this Agreement. The Company will reimburse any
legal or other expenses reasonably incurred by the Funds or Vanguard or any such
director, officer, employee, agent, investment adviser or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or omission or alleged
omission made in such sales literature in conformity with then current written
materials furnished to the Company by the Funds specifically for use therein.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Vanguard agrees to indemnify and hold harmless the Company and
each of its directors, officers, employees, agents and each person, if any, who
controls the Company within the meaning of the Act against any losses, claims,
damages or liabilities to which the Company or any such director, officer,
employee, agent or controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement of any
material fact contained in the then current registration statement, prospectus
or sales literature of the Funds, 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, (ii) Vanguard's lack of good faith,
negligence or willful misconduct in carrying out its duties and responsibilities
under this Agreement, (v) any breach by Vanguard of any material provision of
this Agreement, or (vi) any breach by Vanguard of any representation, warranty
or covenant made in this Agreement. Vanguard will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
employee, agent or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that Vanguard will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in such registration statement,
prospectus or sales literature in conformity with written materials furnished to
the Funds by the Company specifically for use therein. This indemnity agreement
will be in addition to any liability which Vanguard may otherwise have.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of an action, such indemnified party will, if a claim
in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party of the commencement thereof; but the omission to
so notify the indemnifying party will not relieve it form any liability which it
may have to any indemnified party otherwise than under this Section 12. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish to, assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
arty, and after notice from the indemnifying party to such indemnified party of
its election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 12 for any legal or other
expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
13. Miscellaneous.
(a) Amendment and Waiver. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally, but only by an
instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent by fax,
telex, telecopier or registered or certified mail, postage prepaid, return
receipt requested, to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be designated by notice
from such party to all other parties:
To the Company:
AIG Life Insurance Company
Domestic Law Department
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxx
To Vanguard or any Fund:
The Vanguard Group, Inc.
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Any notice, demand or other communication given in a manner prescribed in this
subsection (b) shall be deemed to have been delivered on receipt.
(b) Successors and Assigns. This Agreement shall be binding upon and
insure to the benefit of the parties hereto and their respective permitted
successors and assigns.
(c) Back-up Files. The Company shall maintain back-up files stored
in an appropriate location at no cost to Vanguard. The purpose of backup and
recovery procedures is to permit file recovery in the event of disruption of
normal processing.
(d) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to the principles of conflicts of law thereof.
(e) Compliance with Applicable Laws. The Company and Vanguard will
conduct each of the activities pursuant to this Agreement in compliance with all
applicable laws,
rules and regulations, including, but not limited to, the securities laws
governing the sale of mutual fund shares.
(f) Anti-Money Laundering Policies. To the extent legally required,
the Company agrees to comply with all money laundering rules, regulations and
government guidance, including but not limited to, cash and suspicious activity
reporting and recordkeeping requirements, as well as creation and implementation
of policies, procedures and internal controls in order to ensure compliance.
(g) Authorized Persons. For purposes of this Agreement, the Company
will designate "Authorized Persons" entitled to act on its behalf in connection
with this Agreement. "Authorized Person" will mean any officer or employee of
the Company designated by providing Vanguard with the following: (a) a properly
certified copy of a corporate resolution reflecting the vote of the Board of
Directors of the Company authorizing the officer or employee to act in
connection with this Agreement; and (b) a specimen signature of such officer or
employee. Vanguard shall be entitled to act upon all instructions received from
such Authorized Persons until it receives and has had a reasonable opportunity
to act upon written notice from the Company that such persons are no longer
authorized to act.
(h) Confidentiality. 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 (unless it has obtained the
express written consent of the affected party) disclose, disseminate or utilize
such names and addresses and other confidential information, except as may be
required in order to fulfill its obligations under this Agreement, until such
time as it may come into the public domain, except to the extent that such names
and addresses were rightfully in a party's possession free of any obligation of
confidentiality at or subsequent to the time such names and addresses were
communicated to such party by the other party.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.
(j) Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
(k) Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties hereto with regard to the
Company's utilizing the Funds identified herein in the Contracts and supersedes
all prior agreements and understandings relating to the subject matter hereof.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers as of the day and year first above written.
AIG LIFE INSURANCE COMPANY
By:__________________________________
Its:__________________________________
THE VANGUARD GROUP, INC.
By:__________________________________
Its:__________________________________
SCHEDULE A
THE ACCOUNTS
Variable Account I of AIG Life Insurance Company
Variable Account A of American International Life Assurance Company of New York
SCHEDULE B
THE FUNDS
Vanguard(R) 500 Index Fund
Vanguard(R) International Growth Fund
Vanguard(R) LifeStrategy(R) Conservative Growth Fund
Vanguard(R) LifeStrategy(R) Growth Fund
Vanguard(R) LifeStrategy(R) Income Fund
Vanguard(R) LifeStrategy(R) Moderate Growth Fund
Vanguard(R) Prime Money Market Fund
Vanguard(R) PRIMECAP Fund
Vanguard(R) Small-Cap Growth Index Fund
Vanguard(R) Small-Cap Value Index Fund
Vanguard(R) Total Bond Market Index Fund
Vanguard(R) U.S. Growth Fund
Vanguard(R) Wellington Fund
Vanguard(R) Windsor Fund
