EXHIBIT-99(aaa)
SHAREHOLDER SERVICES AGREEMENT
THIS SHAREHOLDER SERVICES AGREEMENT is made and entered into as of
November 10, 2004 by and between ANNUITY INVESTORS LIFE INSURANCE COMPANY (the
"Company"), and AMERICAN CENTURY INVESTMENT SERVICES, INC. ("Distributor").
WHEREAS, the Company offers to the public certain group and individual
variable annuity and variable life insurance contracts (the "Contracts"); and
WHEREAS, the Company wishes to make available as investment options under
the Contracts one or more of Class I and/or Class II shares of the funds made
available by the Distributor from time to time (the "Funds"), each of which is a
series of mutual fund shares registered under the Investment Company Act of
1940, as amended, and issued by American Century Variable Portfolios, Inc. or
American Century Variable Portfolios II, Inc. (collectively, the "Issuer"); and
WHEREAS, on the terms and conditions hereinafter set forth, Distributor
desires to make shares of the Funds available as investment options under the
Contracts and to retain the Company to perform certain administrative services
on behalf of the Funds, and the Company is willing and able to furnish such
services;
NOW, THEREFORE, the Company and Distributor agree as follows:
1. TRANSACTIONS IN THE FUNDS. Subject to the terms and conditions of
this Agreement, Distributor will cause the Issuer to make shares of the Funds
available to be purchased, exchanged, or redeemed, by or on behalf of the
Accounts (defined in Section 7(a) below) through a single account per Fund at
the net asset value applicable to each order. The Funds' shares shall be
purchased and redeemed on a net basis in such quantity and at such time as
determined by the Company to satisfy the requirements of the Contracts for which
the Funds serve as underlying investment media. Dividends and capital gains
distributions will be automatically reinvested in full and fractional shares of
the Funds.
2. ADMINISTRATIVE SERVICES. The Company agrees to provide all
administrative services for the Contract owners, including but not limited to
those services specified in EXHIBIT A (the "Administrative Services"). Neither
Distributor nor the Issuer shall be required to provide Administrative Services
for the benefit of Contract owners. The Company agrees that it will maintain and
preserve all records as required by law to be maintained and preserved in
connection with providing the Administrative Services, and will otherwise comply
in all material respects with all laws, rules and regulations applicable to the
marketing of the Contracts and the provision of the Administrative Services.
Upon request, the Company will provide Distributor or its representatives
reasonable information regarding the quality of the Administrative Services
being provided and its compliance with the terms of this Agreement.
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3. TIMING OF TRANSACTIONS.
(a) Distributor hereby appoints the Company as agent for the Funds
for the limited purpose of accepting purchase and redemption orders for Fund
shares from owners of individual contracts and participants under group
contracts (collectively, "Contract Owners"), as applicable. On each day the New
York Stock Exchange (the "Exchange") is open for business (each, a "Business
Day"), the Company may receive instructions from the Contract Owners for the
purchase or redemption of shares of the Funds ("Orders"). Orders received and
accepted by the Company prior to the price time for each Fund as set forth in
its prospectus (the "Price Time") generally the close of regular trading on the
Exchange (the "Close of Trading") on any given Business Day (currently, 4:00
p.m. Eastern time) and transmitted to the Funds' transfer agent by 10:00 a.m.
Eastern Time on the next Business Day will be executed at the net asset value
determined as of the relevant Fund's Price Time on the Business Day the Company
received such Order. Any Orders received by the Company on such day but after
the relevant Fund's Price Time on a Business Day, will be executed at the net
asset value next determined as of that Fund's Price Time on the next Business
Day. The day as of which an Order is executed by the Funds' transfer agent
pursuant to the provisions set forth above is referred to herein as the "Trade
Date". All Orders are subject to acceptance or rejection by Distributor or the
Funds in the sole discretion of any of them.
(b) Notwithstanding Section 3(a) above, if the Securities and
Exchange Commission adopts a rule, or Congress adopts a law, that changes the
requirements for intermediaries with regard to accepting Orders on behalf of the
Funds, the timing of transmitting Orders to the Funds, or otherwise affects the
way Orders are accepted, transmitted and priced, Section 3(a) shall be deemed to
be automatically amended to comply with such new rule or law.
4. PROCESSING OF TRANSACTIONS.
(a) If transactions in Fund shares are to be settled through the
National Securities Clearing Corporation's ("NSCC") Mutual Fund Settlement,
Entry, and Registration Verification (Fund/SERV) system, the following
provisions shall apply:
(1) Each party to this Agreement represents that it or one
of its affiliates has entered into the Standard Networking Agreement with the
NSCC and it desires to participate in the programs offered by the NSCC Fund/SERV
system which provide (i) an automated process whereby shareholder purchases and
redemptions, exchanges and transactions of mutual fund shares are executed
through the Fund/SERV system, and (ii) a centralized and standardized
communication system for the exchange of customer-level information and account
activity through the Fund/SERV Networking system ("Networking").
(2) Through the NSCC daily, Distributor (or its agent) will
make the best attempt to provide to the Company by 7:00 p.m. Eastern Time on
each Business Day, the Funds' net asset value, dividend and capital gain
information and, in the case of income funds, the daily accrual for interest
rate factor (mil rate), determined at the Close of Trading. All such dividends
and capital gains shall be automatically received in shares of the Funds unless
otherwise notified by the Company.
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(3) For each Fund/SERV transaction, including transactions
establishing accounts with the Distributor or its affiliate, the Company shall
provide the Funds and the Distributor or its affiliate with all information
necessary or appropriate to establish and maintain each Fund/SERV transaction
(and any subsequent changes to such information), which the Company hereby
certifies is and shall remain true and correct. The Company shall maintain
documents required by the Funds to effect Fund/SERV transactions. Each
instruction shall be deemed to be accompanied by a representation by the Company
that it has received proper authorization from each person whose purchase,
redemption, account transfer or exchange transaction is effected as a result of
such instruction.
(4) At all times each party shall maintain insurance
coverage that is reasonable and customary in light of all its responsibilities
hereunder and under applicable law. Such coverage shall insure for losses
resulting from the criminal acts, errors or omissions of each party's employees
and agents.
(5) The parties agree to participate in Networking with each
other under the terms of the Standard Networking Agreement, except that (i)
Section 12 of Article IV relating to governing law is hereby amended by deleting
the second sentence of such section, and (ii) Section 13 of Article IV relating
to arbitration of disputes is hereby deleted and shall be of no force and effect
among the parties.
(6) The Company represents and warrants that all
instructions, questions and other correspondence concerning the accounts for
which trades are made in accordance with this SECTION 4(a) shall come from the
Company, and that individual account holders shall contact the Company, rather
than contact Distributor or the Funds directly, with instructions, questions and
requests concerning the Funds. The Company further represents and warrants that
it, rather than Distributor or the Funds, has reporting responsibility to its
clients for confirmations of transactions and monthly, quarterly and year-end
statements. The Company is a member of the Securities Investor Protection
Corporation and is current with the dues required by such membership.
(b) If transactions in Fund shares are to be settled directly with
the Funds' transfer agent, procedures relating to the processing and settlement
of Orders shall be subject to such instructions as Distributor may forward to
the Company from time to time. No later than 7:00 p.m. Eastern Time on each
Business Day, Distributor (or its agent) will provide to the Company via
facsimile or other electronic transmission acceptable to the Company the Funds'
net asset value, dividend and capital gain information and, in the case of
income funds, the daily accrual for interest rate factor (mil rate), determined
at the Close of Trading. All such dividends and capital gains shall be
automatically received in shares of the Funds unless otherwise notified by the
Company. Payment for net purchase transactions shall be made by wire transfer or
through a clearinghouse agency approved by the Distributor to the applicable
Fund custodial account designated by Distributor on the Business Day next
following the Trade Date. Such wire transfers shall be initiated by the
Company's bank prior to 4:00 p.m. Eastern time and received by the Funds prior
to 6:00 p.m. Eastern time on the Business Day next following the Trade Date. If
payment for a purchase Order is not timely received, the Fund may cancel the
Order or, at Distributor's option, resell the shares to the applicable Fund at
the then prevailing net asset value, and the Company shall be responsible for
all costs to Distributor, the Funds or any affiliate
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of the Funds resulting from such resale. The Company shall be responsible for
any loss, expense, liability or damage, including loss of profit suffered by
Distributor and/or the respective Funds resulting from delay or failure to make
timely payment for such shares or cancellation of any trade, or for any Orders
that are processed on an "as of" basis as an accommodation to the Company. The
Company shall not be entitled to any gains generated thereby.
(c) The Company agrees not to withhold placing Orders received
from any customers for the purchase or sale of shares so as to profit itself as
a result of such withholding. The Company shall not purchase shares through
Distributor except for the purpose of covering purchase Orders received by the
Company, or for the Company's bona fide investment. The Company agrees to
purchase shares only from the Funds or its customers. If the Company purchases
shares from its customers, it will pay such customers not less than the
applicable redemption price as established by the then-current prospectuses of
the Funds.
5. PRICING ERRORS.
(a) In the event adjustments are required to correct any error in
the computation of the net asset value of any Fund's shares at the shareholder
level as a result of a pricing error that is deemed to be material under the
pricing policy of the Fund's Board of Directors or which Distributor otherwise
deems necessary to correct at the shareholder level, Distributor shall notify
the Company as soon as practicable after discovering the need for those
adjustments which result in a reimbursement to the Funds. Notification shall be
made by facsimile or by direct or indirect systems access acceptable to the
Company.
(b) If one or more of the Contract Owners received amounts from
any Fund in excess of the amounts to which it otherwise would have been entitled
prior to an adjustment for an error, the Company will use its best efforts to
collect such excess amounts from the applicable Contract Owners.
(c) If an adjustment is to be made in accordance with subsection
(a) above to correct an error which has caused one or more of the Contract
Owners to receive an amount less than that to which it is entitled, the Fund
shall use its best efforts to make all necessary adjustments to the number of
shares owned in the Fund and/or distribute to the Company the amount of such
underpayment for credit to the Contract Owners.
(d) For purposes of making adjustments as provided above, the
Funds will apply the same standards to all shareholders.
6. PROSPECTUS AND PROXY MATERIALS. Distributor shall provide the
Company with reasonable quantities of the Issuer's prospectuses, statements of
additional information, proxy materials, periodic fund reports to shareholders
and other materials that are required by law to be sent to the Issuer's
shareholders, each in the amounts and at the times requested by the Company. The
cost of any distribution of prospectuses, proxy materials, periodic fund reports
and other materials of the Issuer to the Contract Owners shall be paid by the
Company, and shall not be the responsibility of Distributor or the Issuers.
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7. COMPENSATION AND EXPENSES.
(a) The Accounts (defined in Section 8(a) below) shall be the sole
shareholder of Fund shares purchased for the Contract owners pursuant to this
Agreement (the "Record Owner"). The Record Owner shall properly complete any
applications or other forms required by Distributor or the Issuer from time to
time.
(b) Distributor acknowledges that it will derive a substantial
savings in administrative expenses, such as a reduction in expenses related to
postage, shareholder communications and recordkeeping, by virtue of having a
single shareholder account per Fund for the Accounts rather than having each
Contract owner as a shareholder. In consideration of the Administrative Services
and performance of all other obligations under this Agreement by the Company,
Distributor will pay the Company a fee (the "Administrative Services Fee") equal
to 25 basis points (0.25%) per annum of the average aggregate amount invested by
the Company in Class I shares of the Funds and 5 basis points (0.05%) per annum
of the average aggregate amount invested by the Company in Class II shares of
the Funds under this Agreement.
(c) In consideration of performance of the Distribution Services
specified on EXHIBIT B by the Company, Distributor will pay the Company a fee
(the "Distribution Fee") of 25 basis points (0.25%) of the average aggregate
amount invested by the Company in Class II shares of the Funds under this
Agreement.
(d) For the purposes of computing the payments to the Company
contemplated by this SECTION 7 the average aggregate amount invested by the
Company on behalf of the Accounts in the Funds over a one month period shall be
computed by totaling the Company's aggregate investment (share net asset value
multiplied by total number of shares of the Funds held by the Company) on each
calendar day during the month and dividing by the total number of calendar days
during such month.
(e) Distributor will calculate the amount of the payments to be
made pursuant to this SECTION 7 at the end of each calendar month and will make
such payment to the Company within 30 days thereafter. The check for such
payments will be accompanied by a statement showing the calculation of the
amounts being paid by Distributor for the relevant months and such other
supporting data as may be reasonably requested by the Company and shall be
mailed to:
Annuity Investors Life Insurance Company
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
8. REPRESENTATIONS.
(a) The Company represents and warrants that (i) this Agreement
has been duly authorized by all necessary corporate action and, when executed
and delivered, shall
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constitute the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms; (ii) it has established the Annuity Investors
Variable Account A, Annuity Investors Variable Account B and the Annuity
Investors Variable Account C (the "Accounts"), each of which is a duly
authorized and established separate account under Ohio insurance law, and has
registered each Account as a unit investment trust under the Investment Company
Act of 1940 (the "1940 Act") to serve as an investment vehicle for the
Contracts; (iii) each Contract provides for the allocation of net amounts
received by the Company to an Account for investment in the shares of one or
more specified investment companies selected among those companies available
through the Account to act as underlying investment media; (iv) selection of a
particular investment company is made by the Contract owner under a particular
Contract, who may change such selection from time to time in accordance with the
terms of the applicable Contract; and (v) the activities of the Company
contemplated by this Agreement comply in all material respects with all
provisions of federal and state securities laws applicable to such activities.
(b) Distributor represents that (i) it has the authority to
perform all obligations with respect to the Issuer under this Agreement (ii)
this Agreement has been duly authorized by all necessary corporate action and,
when executed and delivered, shall constitute the legal, valid and binding
obligation of Distributor, enforceable in accordance with its terms; (iii) the
prospectus of each Fund complies in all material respects with federal and state
securities laws, and (iv) shares of the Issuer are registered and authorized for
sale in accordance with all federal and state securities laws.
9. ADDITIONAL COVENANTS AND AGREEMENTS.
(a) Each party shall comply in all material respects with all
provisions of federal and state laws applicable to its respective activities
under this Agreement. All obligations of each party under this Agreement are
subject to compliance with applicable federal and state laws.
(b) Each party shall promptly notify the other party in the event
that it is, for any reason, unable to perform any of its obligations under this
Agreement.
(c) The Company covenants and agrees that all Orders accepted and
transmitted by it hereunder with respect to each Account on any Business Day
will be based upon instructions that it received from the Contract owners, in
proper form prior to the Close of Trading of the Exchange on that Business Day.
The Company shall time stamp all Orders or otherwise maintain records that will
enable the Company to demonstrate compliance with Section 9(c) hereof.
(d) The Company covenants and agrees that all Orders transmitted
to the Issuer, whether by telephone, telecopy, or other electronic transmission
acceptable to Distributor, shall be sent by or under the authority and direction
of a person designated by the Company as being duly authorized to act on behalf
of the Accounts. Distributor shall be entitled to rely on the existence of such
authority and to assume that any person transmitting Orders for the purchase,
redemption or transfer of Fund shares on behalf of the Company is "an
appropriate person" as used in Sections 8-107 and 8-401 of the Uniform
Commercial Code with respect to the
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transmission of instructions regarding Fund shares on behalf of the owner of
such Fund shares. The Company further agrees to be responsible for the accuracy
and propriety of all data transmitted to Distributor by the Company by
telephone, telecopy or other electronic transmission acceptable to Distributor.
(e) The Company agrees that, to the extent it is able to do so, it
will use its best efforts to give equal emphasis and promotion to shares of the
Funds as is given to other underlying investments of the Accounts, subject to
applicable Securities and Exchange Commission rules. In addition, the Company
shall not impose any fee, condition, or requirement for the use of the Funds as
investment options for the Contracts that operates to the specific prejudice of
the Funds vis-a-vis the other investment media made available for the Contracts
by the Company.
(f) The Company shall not, without the written consent of
Distributor, make representations concerning the Issuer or the shares of the
Funds except those contained in the then- current prospectus, statement of
additional information and in current printed sales literature approved by
Distributor or the Issuer.
(g) Advertising and sales literature with respect to the Issuer or
the Funds prepared by the Company or its agents, if any, for use in marketing
shares of the Funds as underlying investment media to Contract owners shall be
submitted to Distributor for review and approval before such material is used.
10. USE OF NAMES. Neither Distributor nor any of its affiliates nor the
Funds shall use any trademark, trade name, service ▇▇▇▇ or logo of the Company,
or any variation of any such trademark, trade name, service ▇▇▇▇ or logo,
without the Company's prior written consent, the granting of which shall be at
the Company's sole option. Except as otherwise provided for in Sections 9(f) and
9(g) of this Agreement, the Company shall not use any trademark, trade name,
service ▇▇▇▇ or logo of the Issuer, Distributor or any variation of any such
trademarks, trade names, service marks, or logos, without the prior written
consent of either the Issuer or Distributor, as appropriate, the granting of
which shall be at the sole option of Distributor and/or the Issuer.
11. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges to
all Contract Owners so long as the SEC continues to interpret the 1940 Act as
requiring such privileges. The Company will comply with reasonable requests
regarding methodology of calculating voting privileges for all Contract Owners.
(b) The Company will distribute to Contract owners all proxy
material furnished by Distributor and will vote shares in accordance with
instructions received from such Contract owners. The Company shall vote Fund
shares for which no voting instructions are 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.
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12. INDEMNITY.
(a) Distributor agrees to indemnify and hold harmless the Company
and its officers, directors, employees, agents, affiliates and each person, if
any, who controls the Company within the meaning of the Securities Act of 1933
(collectively, the "Indemnified Parties" for purposes of this SECTION 12(a))
against any losses, claims, expenses, damages or liabilities (including amounts
paid in settlement thereof) or litigation expenses (including legal and other
expenses) (collectively, "Losses"), to which the Indemnified Parties may become
subject, insofar as such Losses result from a breach by Distributor or the
Issuer of a material provision of this Agreement. Distributor will reimburse any
legal or other expenses reasonably incurred by the Indemnified Parties in
connection with investigating or defending any such Losses. Distributor shall
not be liable for indemnification hereunder if such Losses are attributable to
the negligence or misconduct of the Company in performing its obligations under
this Agreement.
(b) The Company agrees to indemnify and hold harmless Distributor
and the Issuer, and their respective officers, directors, employees, agents,
affiliates and each person, if any, who controls Issuer or Distributor within
the meaning of the Securities Act of 1933 (collectively, the "Indemnified
Parties" for purposes of this SECTION 12(b)) against any Losses (as defined in
Section 12(a) above) to which the Indemnified Parties may become subject,
insofar as such Losses result from a breach by the Company of a material
provision of this Agreement. The Company will reimburse any legal or other
expenses reasonably incurred by the Indemnified Parties in connection with
investigating or defending any such Losses. The Company shall not be liable for
indemnification hereunder if such Losses are attributable to the negligence or
misconduct of Distributor or the Issuer in performing their obligations under
this Agreement.
(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 that 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 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 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.
(d) If the indemnifying party assumes the defense of any such
action, the indemnifying party shall not, without the prior written consent of
the indemnified parties in such action, settle or compromise the liability of
the indemnified parties in such action, or permit a default or consent to the
entry of any judgment in respect thereof, unless in connection with such
settlement, compromise or consent, each indemnified party receives from such
claimant an unconditional release from all liability in respect of such claim.
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13. POTENTIAL CONFLICTS.
(a) The Company has received a copy of an application for
exemptive relief, as amended, filed by the Issuer on December 21, 1987, with the
SEC and the order issued by the SEC in response thereto (the "Shared Funding
Exemptive Order"). The Company has reviewed the conditions to the requested
relief set forth in such application for exemptive relief. As set forth in such
application, the Board of Directors of the Issuer (the "Board") will monitor the
Issuer for the existence of any material irreconcilable conflict between the
interests of the contract owners of all separate accounts ("Participating
Companies") investing in funds of the Issuer. An irreconcilable material
conflict may arise for a variety of reasons, including: (i) an action by any
state insurance regulatory authority; (ii) 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
actions by insurance, tax or securities regulatory authorities; (iii) an
administrative or judicial decision in any relevant proceeding; (iv) the manner
in which the investments of any portfolio are being managed; (v) a difference in
voting instructions given by variable annuity contract owners and variable life
insurance contract owners; or (vi) a decision by an insurer to disregard the
voting instructions of contract owners. The Board shall promptly inform the
Company if it determines that an irreconcilable material conflict exists and the
implications thereof.
(b) The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the 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 the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
(c) If a majority of the Board, or a majority of its disinterested
Board members, determines that a material irreconcilable conflict exists with
regard to contract owner investments in a Fund, the Board shall give prompt
notice to all Participating Companies. If the Board determines that the Company
is responsible for causing or creating said conflict, the Company shall at its
sole cost and expense, and to the extent reasonably practicable (as determined
by a majority of the disinterested Board members), take such action as is
necessary to remedy or eliminate the irreconcilable material conflict. Such
necessary action may include but shall not be limited to:
(i) withdrawing the assets allocable to the Accounts from
the Fund and reinvesting such assets in a different
investment medium or submitting the question of 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
Companies) that votes in favor of such segregation, or
offering to the affected contract owners the option of
making such a change; and/or
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(ii) establishing a new registered management investment
company or managed separate account.
(d) If a material irreconcilable conflict arises as a result of a
decision by the Company to disregard its contract owner voting instructions and
said decision represents a minority position or would preclude a majority vote
by all of its contract owners having an interest in the Issuer, the Company at
its sole cost, may be required, at the Board's election, to withdraw an
Account's investment in the Issuer 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 disinterested members of the Board.
(e) For the purpose of this SECTION 13 a majority of the
disinterested Board members shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Issuer be required to establish a new funding medium for any Contract. The
Company shall not be required by this SECTION 13 to establish a new funding
medium for any Contract if an offer to do so has been declined by vote of a
majority of the Contract owners materially adversely affected by the
irreconcilable material conflict.
14. TERMINATION; WITHDRAWAL OF OFFERING. This Agreement may be
terminated by any party upon 90 days' prior written notice to the other party,
or, on 60 days' written notice pursuant to a vote of a majority of the
outstanding securities of the Funds. Notwithstanding the above, the Issuer
reserves the right, without prior notice, to suspend sales of shares of any
Fund, in whole or in part, or to make a limited offering of shares of any of the
Funds in the event that (A) any regulatory body commences formal proceedings
against the Company, Distributor or the Issuer, which proceedings Distributor
reasonably believes may have a material adverse impact on the ability of the
Issuer or the Company to perform its obligations under this Agreement or (B) in
the judgment of Distributor, declining to accept any additional instructions for
the purchase or sale of shares of any such Fund is warranted by market, economic
or political conditions. Notwithstanding the foregoing, this Agreement may be
terminated immediately (i) by any party as a result of any other breach of this
Agreement by another party, which breach is not cured within 30 days after
receipt of notice from the other party, or (ii) by any party upon a
determination that continuing to perform under this Agreement would, in the
reasonable opinion of the terminating party's counsel, violate any applicable
federal or state law, rule, regulation or judicial order, (iii) by a vote of a
majority of the independent directors of the Funds, or (iv) upon assignment by
either party. Termination of this Agreement shall not affect the obligations of
the parties to make payments under Section 4 for Orders received by the Company
prior to such termination and shall not affect the Issuer's obligation to
maintain the Accounts in the name of the Contract Owners. After termination of
this Agreement, no fee shall be due with respect to any shares that are
purchased and held by the Accounts after the date of termination. However,
notwithstanding such termination, for a period of one (1) year after the date of
such termination Distributor will remain obligated to pay the Company the
Administrative Services Fee. This Agreement shall survive the termination to the
extent necessary for each party to perform its obligations with respect to
Shares for which the Administrative Services Fee continues to be due subsequent
to such termination.
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15. NON-EXCLUSIVITY. Both parties acknowledge and agree that this
Agreement and the arrangement described herein are intended to be non-exclusive
and that each party is free to enter into similar agreements and arrangements
with other entities.
16. SURVIVAL The provisions of SECTION 10 (Use of Names), SECTION 12
(Indemnity) and Section 17 (Privacy Procedures) of this Agreement shall survive
termination of this Agreement. In addition, the obligations of the parties to
make payments as discussed in SECTION 14 (Termination; Withdrawal of Offering)
shall survive the termination of this Agreement.
17. PRIVACY PROCEDURES. Each of the parties to this Agreement affirms
that it has procedures in place reasonably designed to protect the privacy of
non-public customer information and it will maintain such information that it
may acquire pursuant to this Agreement in confidence and in accord with all
applicable privacy laws. Each of the parties agrees not to use, or permit the
use of, any such customer information for any purpose except to carry out the
terms of this Agreement and/or pursuant to any exceptions set forth in such
privacy laws. This provision shall survive the termination of this Agreement.
18. AMENDMENT. 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 of the parties hereto.
19. NOTICES. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent by telex,
telecopier, express delivery 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:
Annuity Investors Life Insurance Company
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (office number)
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To the Issuer or Distributor:
American Century Investment Services, Inc.
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (office number)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopy number)
Any notice, demand or other communication given in a manner prescribed in this
SECTION 19 shall be deemed to have been delivered on receipt.
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20. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned and will
be terminated automatically upon any attempted assignment. This Agreement shall
be binding upon and inure to the benefit of both parties hereto.
21. 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.
22. 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.
23. ENTIRE AGREEMENT. This Agreement, including the attachments hereto,
constitutes the entire agreement between the parties with respect to the matters
dealt with herein, and supersedes all previous agreements, written or oral, with
respect to such matters.
If the foregoing correctly sets forth our understanding, please indicate
your agreement to and acceptance thereof by signing below, whereupon this
Agreement shall become a binding agreement between us as of the latest date
indicated.
AMERICAN CENTURY INVESTMENT
SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
Date: 11/24/04
We agree to and accept the terms of the foregoing Agreement.
ANNUITY INVESTORS LIFE
INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Date: 11/9/04
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EXHIBIT A
ADMINISTRATIVE SERVICES
Pursuant to the Agreement to which this is attached, the Company shall perform
all administrative services required or requested under the Contracts with
respect to the Contract owners, including, but not limited to, the following:
1. Maintain separate records for each Contract Owner, which records
shall reflect the shares purchased and redeemed and share balances of such
Contract owners. The Company will maintain a single master account with each
Fund on behalf of the Contract owners and such account shall be in the name of
the Company (or its nominee) as the record owner of shares owned by the Contract
owners.
2. Disburse or credit to the Accounts all proceeds of redemptions of
shares of the Funds.
3. Prepare and transmit to the Contract owners, as required by law or
the Contracts, periodic statements showing ownership interest as of the
statement closing date, purchases and redemptions by the Contract owners during
the period covered by the statement and the dividends and other distributions
paid during the statement period, and such other information as may be required,
from time to time, by the Contracts.
4. Transmit purchase and redemption orders properly submitted by the
Contract Owners in accordance with the procedures set forth in SECTION 4 to the
Agreement.
5. Distribute to the Contract Owners copies of the Funds' prospectus,
proxy materials, periodic fund reports to shareholders and other materials that
the Funds are required to provide by law or otherwise.
6. Maintain and preserve all records as required by law to be
maintained and preserved in connection with providing the Administrative
Services for the Contract Owners.
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EXHIBIT B
DISTRIBUTION SERVICES
Pursuant to the Agreement to which this is attached, the Company shall perform
distribution services for Class II shares of the Funds, including, but not
limited to, the following:
1. Receive and answer correspondence from prospective shareholders, including
distributing prospectuses, statements of additional information, and
shareholder reports.
2. Provide facilities to answer questions from prospective investors about
Fund shares.
3. Assist investors in completing application forms and selecting account
options.
4. Provide other reasonable assistance in connection with the distribution of
Fund shares.
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