EXHIBIT 99-B.8.50
FUND PARTICIPATION AGREEMENT
BETWEEN
FEDERATED SERVICES COMPANY, FEDERATED DISTRIBUTORS,
WACHOVIA BANK, N.A. AND AICA
Aetna Insurance Company of America (the "Company"), Federated Services
Company (the "Transfer Agent"), Wachovia Bank, N.A. ("Wachovia") and Federated
Distributors (the "Distributor") hereby agree to an arrangement whereby The
Wachovia Funds ("Fund") shall be made available to serve as underlying
investment media for Variable Annuity Contracts ("Contracts") to be issued by
the Company.
1. ESTABLISHMENT OF ACCOUNTS; AVAILABILITY OF FUND.
The Company represents that it has established Variable Annuity Account I
and may establish such other accounts as may be set forth in Schedule A
attached hereto and as may be amended from time to time with the mutual
consent of the parties hereto (the "Accounts"), each of which is a separate
account under Florida Insurance law, and has registered or will register
each of the Accounts (except for such Accounts for which no such
registration is required) as a unit investment trust under the Investment
Company Act of 1940 (the "1940 Act"), to serve as an investment vehicle for
the Contracts. Each Contract provides for the allocation of net amounts
received by the Company to an Account for investment in the shares of one
of more specified open-end management investment companies available
through that Account as underlying investment media. Selection of a
particular investment company and changes therein from time to time are
made by the participant or Contract owner, as applicable under a particular
Contract.
2. PRICING INFORMATION; ORDERS; SETTLEMENT.
(a) Subject to the terms and conditions of the Fund's current registration
statement, the Transfer Agent and the Distributor will make shares of
those series and classes thereof on Schedule B attached hereto, as it
may be amended from time to time, available to be purchased by the
Company, and will accept redemption orders from the Company, on behalf
of each Account at the net asset value applicable to each order on
those days on which the Fund calculates its net asset value (a
"Business Day"). Fund shares shall be purchased and redeemed in such
quantity and at such time determined by the Company to be necessary to
meet the requirements of those Contracts for which the Fund(s) serve
as underlying investment media, provided, however, that the Board of
Trustees of the Fund (hereinafter the "Trustees") 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 Trustees, acting in good faith and in the best
interests of the shareholders of any Portfolio in accordance with
their fiduciary obligations under federal and/or any applicable state
laws. The Distributor shall provide prompt notice to the Company of
any such action.
(b) The Transfer Agent will provide to the Company closing net asset
value, dividend and capital gain information after the close of
trading each day that the New York Stock Exchange (the "Exchange") is
open (each such day a "Business Day"), and the Transfer Agent will use
its best efforts to provide such information no later than 6:30 p.m.
Eastern Standard time on such Business Day, and in no event later than
7:00 Eastern Standard time, except for delays due to extraordinary
circumstances. The Company will send via facsimile or electronic
transmission to the Transfer Agent orders to purchase and/or redeem
Fund shares by 10:00 a.m. Eastern Standard Time the following business
day. Payment for net purchases will be wired by the Company to an
account designated by the Transfer Agent to coincide with the order
for shares of the Fund.
(c) The Transfer Agent hereby appoints the Company as its agent for the
limited purpose of accepting purchase and redemption orders for Fund
shares relating to the Contracts from Contract owners or participants.
Orders from Contract owners or participants received from any
distributor of the Contracts (including affiliates of the Company) by
the Company, acting as agent for the Transfer Agent, prior to the
close of the Exchange on any given business day will be executed by
the Transfer Agent at the net asset value determined as of the close
of the Exchange on such Business Day, provided that the Transfer Agent
receives written (or facsimile) notice of such order by 10 a.m.
Eastern Standard Time on the next following Business Day. Any orders
received by the Company acting as agent on such day but after the
close of the Exchange will be executed by the Transfer Agent at the
net asset value determined as of the close of the Exchange on the next
business day following the day of receipt of such order, provided that
the Transfer Agent receives written (or facsimile) notice of such
order by 10 a.m. Eastern Standard Time within two days following the
day of receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired by
the Transfer Agent to an account designated by the Company on the same
Business Day the Company places an order to redeem Fund Shares.
Payments for net purchases of the Fund will be wired by the Company to
an account designated by the Transfer Agent or the Fund on the same
Business Day the Company places an order to purchase Fund shares.
Payments shall be in federal funds transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a) through
2(d) above, the parties may agree to provide pricing information,
execute orders and wire payments for purchases and redemptions through
National Securities Clearing Corporation's Fund/SERV system in which
case such activities will be governed by the provisions set forth in
an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other party),
and shall not be liable in the event that an error is a result of any
misinformation supplied by the other party.
(g) The Transfer Agent shall indemnify and hold the Company harmless, from
the effective date of this Agreement, against any amount the Company
is required to pay
to Contract owners or participants due to: (i) an incorrect
calculation of a Fund's daily net asset value, dividend rate, or
capital gains distribution rate or (ii) incorrect or late reporting of
the daily net asset value, dividend rate, or capital gain distribution
rate of a Fund, upon written notification by the Company, with
supporting data, to Transfer Agent ; provided, however, that no such
amounts shall be returned if they are not deemed material pursuant to
the then prevailing pricing error guidelines as set forth by the
Securities and Exchange Commission and its staff.
In addition, Transfer Agent shall be liable to the Company for any
costs the Company incurs in the preparation, printing and mailing of
communications to Contract holders or participants, if such costs or
expenses are a result of the failure to provide timely or correct net
asset values, dividend and capital gains or financial information and
if such information is not corrected by 4:00 p.m. East Coast time of
the next business day after releasing such incorrect information
provided the incorrect NAV as well as the correct NAV for each date
that the error occurred is provided. If a mistake is caused in
supplying such information or confirmations, which results in a
reconciliation with incorrect information, the amount required to make
a Contract owner's or a participant's account whole shall be borne by
the party providing the incorrect information, regardless of when the
error is corrected.
(h) The Company shall indemnify the Transfer Agent and the Distributor and
hold them harmless, from the effective date of this Agreement, against
any loss or liability resulting from its errors in the management of
the Contracts and the Accounts.
(i) The Company agrees to purchase and redeem the shares of the Funds
named in Schedule B offered by the then current prospectuses and
statements of additional information of the Fund in accordance with
the provisions of such prospectus and statement of additional
information.
3. FEES.
In consideration of services provided by the Company under this Agreement,
Wachovia shall pay fees to the Company as set forth in Schedule C.
4. EXPENSES.
(a) Except as otherwise provided in this Agreement, all expenses incident
to the performance by the Transfer Agent or the Distributor under this
Agreement shall be paid by the Transfer Agent, the Distributor or the
Fund, including the cost of registration of Fund shares with the
Securities and Exchange Commission (the "SEC") and in states where
required. The Transfer Agent and the Distributor shall pay no fee or
other compensation to the Company under this Agreement, and the
Company shall pay no fee or other compensation to the Transfer Agent
or the Distributor, except as provided herein as may be amended from
time to time with the mutual consent of the parties hereto. All
expenses incident to performance by each party of its respective
duties under this Agreement shall be paid by that party, unless
otherwise specified in this Agreement.
(b) The Distributor shall provide to the Company, at the location
designated by the Company, periodic fund reports to shareholders and
other materials that are required by law to be sent to Contract owners
or participants. In addition, the Distributor shall provide the
Company upon its request with reasonable quantities of its
prospectuses, statements of additional information and any supplements
to any of these materials, to be used in connection with the offerings
and transactions contemplated by this Agreement.
(c) The Distributor shall provide the company with a sufficient quantity
of its proxy material that is required to be sent to Contract owners
or participants. The cost associated with proxy preparation, group
authorization letters, programming for tabulation and necessary
materials (including postage) will be paid by the Distributor or the
Fund.
5. REPRESENTATIONS.
(a) The Company agrees that it and its agents shall not, without the
written consent of the Distributor, make representations concerning
the Fund, or its shares except those contained in the then current
prospectuses and in current printed sales literature approved by or
deemed approved by the Fund or the Distributor.
(b) The Company represents that its offering and management of the
Contracts and the Accounts is in accordance with all applicable laws
and regulations, including, without limitation, state and federal
insurance laws and tax laws and regulations, and that the purchase of
Fund shares by the Contracts and the Accounts will not result in any
violation of any such law or regulation by the Fund.
6. TERMINATION.
This agreement shall terminate:
(a) as to the sale and issuance of new Contracts, at the option of either
the Company, the Distributor or the Fund, upon sixty days advance
written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice to
the Distributor and the Fund, if Fund shares are not available for any
reason to meet the requirement of Contracts as determined by the
Company. Reasonable advance notice of election to terminate shall be
furnished by Company;
(c) as to a given Account, upon the determination of the Account to
substitute for the Fund's shares the shares of another investment
company in accordance with the terms of the applicable Contracts. The
Company will give 60 days written notice to the Fund and the
Distributor of any decision to replace the Fund's' shares;
(d) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(e) if Fund shares are not registered, issued or sold in conformance with
Federal law or
such law precludes the use of Fund shares as an underlying investment
medium for Contracts issued or to be issued by the Company. Prompt
notice shall be given by the appropriate party should such situation
occur.
7. CONTINUATION OF AGREEMENT.
Termination as the result of any cause listed in Section 6, which, by its
terms implies or requires that Contract holders will continue to hold or
purchase shares of the Funds shall not affect the Fund's obligation to
furnish its shares to Contracts then in force for which its shares serve as
the underlying medium unless such further sale of Fund shares is prohibited
by law or the SEC or other regulatory body. In such event, all provisions
of this Agreement shall continue to apply to such sales. In the event of
termination of this Agreement, the parties agree that the requirements of
Section 10 of the Agreement shall survive.
8. ADVERTISING MATERIALS; FILED DOCUMENTS.
(a) Advertising and sales literature with respect to the Fund prepared by
the Company or its agents for use in marketing its Contracts will be
submitted to the Distributor for review before such material is
submitted to any regulatory body for review. No such material shall be
used if the Distributor reasonably objects to such use in writing,
transmitted by facsimile within three business days after receipt of
such material.
(b) The Distributor will provide copies of the Fund's financials as soon
as available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and all
amendments or supplements to any of the above that relate to the Fund
promptly after the filing of such document with the SEC or other
regulatory authorities. The Company will provide to each of the
Distributor and the Transfer Agent 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
Accounts promptly after the filing of such document with the SEC or
other regulatory authority.
(c) At the request of the Company, the Distributor will provide via Excel
spreadsheet diskette format or in electronic transmission to the
Company quarterly portfolio information necessary to update Fund
profiles with fourteen business days following the end of each
quarter.
9. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners and
participants to the extent the SEC continues to interpret the 1940 Act
as requiring such privileges. The Company shall provide pass-through
voting privileges on Fund shares held by unregistered separate
accounts to all Contract owners.
(b) The Company will distribute to Contract owners and participants, as
appropriate, all proxy material furnished by the Fund and will vote
Fund shares in accordance with instructions received from such
Contract owners and participants. If and to the extent required by
law, the Company, with respect to each group Contract and in each
Account, shall vote Fund shares for which no instructions have been
received in the same proportion as shares for which such instructions
have been received. The Company and its agents shall not oppose or
interfere with the solicitation of proxies for Fund shares held for
such Contract owners and participants.
10. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Fund, the
Transfer Agent, Wachovia and the Distributor, and its directors,
officers, employees, agents and each person, if any, who controls the
Fund or its Distributor within the meaning of the Securities Act of
1933 (the "1933 Act") against any losses, claims, damages or
liabilities to which the Fund or any such director, officer, employee,
agent, or controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Registration Statement, prospectus or sales literature of the
Company or the Accounts or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or arise out of or as a result of conduct, statements or
representations (other than statements or representations contained in
the prospectuses or sales literature of the Fund) of the Company or
its agents, with respect to the sale and distribution of Contracts for
which Fund shares are the underlying investment. The Company will
reimburse any legal or other expenses reasonably incurred by the Fund,
the Transfer Agent, Wachovia or the Distributor or any of their
directors, officers, employees, agents, or controlling persons in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, HOWEVER, that the Company will
not be liable in any such case to the extent that any such -------
loss, claim, damage or liability arises out of or is based upon (i) an
untrue statement or omission or alleged omission made in such
Registration Statement or prospectus in conformity with written
materials furnished to the Company by the Fund, the Transfer Agent,
Wachovia or the Distributor specifically for use therein or (ii) the
willful misfeasance, bad faith, or gross negligence by the Fund, the
Transfer Agent, Wachovia or the Distributor in the performance of
their duties or the Fund's, Transfer Agent's, Wachovia's or
Distributor's reckless disregard of obligations or duties under this
Agreement or to the Company, whichever is applicable. This indemnity
agreement will be in addition to any liability that Company may
otherwise have.
(b) The Transfer Agent, Wachovia and the Distributor agree to indemnify
and hold harmless the Company and its directors, officers, employees,
agents and each person, if any, who controls the Company within the
meaning of the 1933 Act against any losses, claims, damages or
liabilities to which the Company or any such director, officer,
employee, agent or controlling person may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, prospectuses or sales literature of the Fund
or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Transfer Agent, Wachovia or the
Distributor will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, employee,
agent, or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED,
HOWEVER, that the Transfer Agent, Wachovia or the Distributor will not
be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon (i) an untrue
statement or omission or alleged omission made in such Registration
Statement or prospectuses which are in conformity with written
materials furnished to the Fund, the Transfer Agent, Wachovia or the
Distributor by the Company specifically for use therein or (ii) the
willful misfeasance, bad faith, or gross negligence by the Company in
the performance of its duties or the Company's reckless disregard of
obligations or duties under this Agreement or to the Transfer Agent,
Wachovia, or Distributor, whichever is applicable.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
otherwise than under this Section 10. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish to, assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section 10 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
11. MISCELLANEOUS.
(a) AMENDMENT AND WAIVER. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally, but
only by an instrument in writing signed by all parties hereto.
(b) NOTICES. All notices and other communications hereunder shall be given
or made in writing and shall be delivered personally, or sent by
telex, telecopier or registered or certified mail, postage prepaid,
return receipt requested, or recognized overnight courier service to
the party or parties to whom they are directed at the following
addresses, or at such other addresses as may be designated by notice
from such party to all other parties.
To the Company:
Aetna Insurance Company of America
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Counsel
To the Transfer Agent:
Federated Services Company
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
To the Distributor:
Federated Securities Corp.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx 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.
(c) SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted
successors and assigns.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by signing
any such counterpart.
(e) SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
(f) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior
agreement and understandings relating to the subject matter hereof.
(g) GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) NON EXCLUSIVITY. It is understood by the parties that this Agreement
is not an exclusive arrangement in any respect.
(i) CONFIDENTIALITY. The terms of this Agreement and the Schedules thereto
will be held confidential by each party except to the extent that
either party or its counsel may deem it necessary to disclose such
terms.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the ____ day of _________, _____.
AETNA INSURANCE COMPANY OF AMERICA
By:
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Name: Xxxxxx X. XxXxxxx
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Title: Pursuant to a Delegation of Authority dated August 12, 1998
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TRANSFER AGENT
By:
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Name:
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Title:
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DISTRIBUTOR
By:
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Name:
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Title:
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WACHOVIA BANK, N.A.
By:
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Name:
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Title:
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SCHEDULE A
(For any future separate accounts - See Section 1)
SCHEDULE B
Wachovia Balanced Fund (Class A)
Wachovia Special Values Fund (Class A)
SCHEDULE C
Fees to the Company
Administrative services to Contract owners and participants shall be the
responsibility of the Company and shall not be the responsibility of the Fund,
the Transfer Agent, Wachovia or the Distributor. The Distributor recognizes the
Company as the sole shareholder of Fund shares issued under the Fund
Participation Agreement, and that substantial savings will be derived in
administrative expenses, such as significant reductions in postage expense and
shareholder communications, by virtue of having a sole shareholder for each of
the Accounts rather than multiple shareholders. In consideration of the
administrative savings resulting from such arrangement, Wachovia hereby agrees
to pay the Company a servicing fee based on the annual rate of 0.10% (0.025%
quarterly) of the average net assets invested in the Funds through the Contracts
in each calendar quarter. Wachovia will make such payments to the Company within
thirty (30) days after the end of each calendar quarter. Each payment will be
accompanied by a statement showing the calculation of the fee payable to the
Company for the quarter and such other supporting data as may be reasonably
requested by the Company.
