EXHIBIT 8(g)
DRAFT DATED: 09/13/05
FUND PARTICIPATION AGREEMENT
This FUND PARTICIPATION AGREEMENT ("Agreement") is made as of September
19, 2005, by and among BB&T Variable Insurance Funds (the "Fund"), a
Massachusetts business trust, on its behalf and on behalf of separate investment
series thereof, set forth on Exhibit A hereto, as it may be amended from time to
time by the parties and whether existing as of the date above or established
subsequent thereto (each a "Portfolio" and collectively, the "Portfolios"), BB&T
Asset Management, Inc. (the "Adviser" and "Administrator"), a North Carolina
corporation, BB&T Corporation ("BB&T"), a North Carolina corporation, and AIG
SunAmerica Life Assurance Company (the "Company"), a life insurance company
organized under the laws of the State of Arizona.
WHEREAS, the Fund is registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940, as amended (the "40
Act"), as an open-end management investment company; and
WHEREAS, the Fund is organized as a series fund comprised of separate
investment series, including the Portfolios; and
WHEREAS, the Fund was organized to act as the funding vehicle for
certain variable life insurance and/or variable annuity contracts offered by
life insurance companies through separate accounts of such life insurance
companies and may also offer its shares to certain qualified pension and
retirement plans; and
WHEREAS, the Fund operates under an order (the "Mixed and Shared Funding
Exemptive Order") from the SEC granting relief from various provisions of the
`40 Act and the rules thereunder to the extent necessary to permit Fund shares
to be sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated participating insurance companies
accounts ("Participating Companies") and qualified pension and retirement plans
outside the separate account context and any other trust, plan, account,
contract or annuity trust that is determined to be within the scope of Treasury
Regulation ss.1.817.5(f)(3)(iii) (collectively, the "Plans"); and
WHEREAS, the Company has established or will establish one or more
separate accounts ("Separate Accounts") to offer the variable annuity contracts
("Variable Contracts"), set forth on Exhibit B, as may be amended or
supplemented from time to time by the Company, and is desirous of having the
Fund as one of the underlying funding vehicles for such Variable Contracts; and
WHEREAS, the Adviser serves as the investment adviser to the Fund, and
as the general manager and administrator of the Fund pursuant to an Investment
Advisory Agreement, dated April 22, 2005 and a Management and Administration
Agreement dated May 1, 2005, respectively ; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Fund to serve as
investment options under the aforementioned Variable Contracts and the Fund is
authorized to sell such shares to the Company at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the parties
hereto agree as follows:
ARTICLE I
SALE OF FUND SHARES
1.1. The Fund and Adviser agree to make shares of the Fund ("Shares")
available to the Separate Accounts of the Company for investment of purchase
payments of Variable Contracts allocated to the designated Separate Accounts as
provided in the Fund's then current prospectus and statement of additional
information. Company agrees to purchase and redeem the Shares of the Portfolios
offered by the then current prospectus and statement of additional information
of the Fund in accordance with the provisions of such prospectus and statement
of additional information.
1.2. The Fund and Adviser agree to sell to the Company those Shares of
the selected Portfolios of the Fund which the Company orders, executing such
orders on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the order for the Shares of the Fund. For purposes
of this Section 1.2, the Company shall be the designee of the Fund for receipt
of such orders from the designated Separate Account and receipt by such designee
shall constitute receipt by the Fund; provided that the Company receives the
order by 4:00 p.m. Eastern time in good order ("Good Order"), as such term may
be defined by the Company, and the Fund or its designee receives notice from the
Company by telephone, facsimile (orally confirmed) or by such other means as the
Fund and the Company may mutually agree of such order by 8:45 a.m. Eastern time
on the next following Business Day. "Business Day" shall mean any day on which
the New York Stock Exchange is open for trading and on which the Fund calculates
its net asset value pursuant to the rules of the SEC.
1.3. The Fund and Adviser agree to redeem at the Company's request, any
full or fractional Shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption, in accordance with the
provisions of this Agreement and the Fund's then current registration statement.
For purposes of this Section 1.3, the Company shall be the designee of the Fund
for receipt of requests for redemption from the designated Separate Account and
receipt by such designee shall constitute receipt by the Fund; provided that the
Company receives the request for redemption by 4:00 p.m. Eastern time in Good
Order and the Fund or its designee receives notice from the Company by
telephone, facsimile (orally confirmed) or by such other means as the Fund (or
Adviser) and the Company may mutually agree of such request for redemption by
8:45 a.m. Eastern time on the next following Business Day.
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1.4. The Fund and Adviser agree to furnish as soon as reasonably
practicable, on or before the ex-dividend date, notice to the Company of any
income dividends or capital gain distributions payable on the Shares of any
Portfolios of the Fund. The Company hereby elects to receive all such income
dividends and capital gain distributions as are payable on a Portfolio's Shares
in additional Shares of the Portfolio. The Fund and Adviser shall notify the
Company or its designee of the number of Shares so issued as payment of such
dividends and distributions.
1.5. The Fund and Adviser shall make the net asset value per share for
each of the Portfolios available to the Company, or its designee, on a daily
basis, via a mutually agreeable form, as soon as reasonably practicable after
the net asset value per share is calculated but shall use their best efforts to
make such net asset value available by 6:30 p.m. Eastern time. If the Fund or
Adviser provides the Company with materially incorrect share net asset value
information, the Separate Account(s) shall be entitled to any adjustment to the
number of shares purchased, redeemed or held necessary to make the Separate
Account(s) whole. Additionally, the Company shall be entitled to reimbursement
from the Fund or Adviser, as determined by the Adviser, for any expenses
incurred by the Company in correcting the Separate Account or Variable Contract
records or in adjusting proceeds paid to Variable Contract owners who have
redeemed or reallocated interests under their Variable Contracts. The
determination of the materiality of any net asset value pricing error shall be
based on the Fund's policy for correction of pricing errors, and such policy
shall meet the requirements of the '40 Act. Any material error in the
calculation of the net asset value, dividend or capital gain information shall
be reported promptly by the Fund, Adviser or either of its designee, to the
Company upon discovery.
1.6. At the end of each Business Day, the Company shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day. Using these unit values, the Company shall process each such
Business Day's Separate Account transactions based on requests and premiums
received by it by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m. Eastern time) to determine the net dollar amount
of the Fund Shares which shall be purchased or redeemed at that day's closing
net asset value per share. The net purchase or redemption orders so determined
shall be transmitted to the Fund by the Company by [8:45] a.m. Eastern time on
the Business Day next following the Company's receipt of such requests and
premiums in accordance with the terms of Sections 1.2 and 1.3 hereof.
1.7. If the Company's order requests the purchase of the Fund Shares,
the Company shall pay for such purchase by wiring federal funds to the Fund or
its designated custodial account by 4:00 p.m. Eastern time on the day the order
is transmitted by the Company. If the Company's order requests a net redemption
resulting in a payment of redemption proceeds to the Company, the Fund or
Adviser shall wire the redemption proceeds to the Company by the next Business
Day. If federal funds are not received by the next Business Day, the Fund or
Adviser shall promptly, upon the Company's request, reimburse the Company for
any charges, costs, fees, interest or other expenses incurred by the Company in
connection with any advances to, or borrowing or overdrafts by, the Company, or
any similar expenses incurred by the Company, as a result of payments made to
Variable Contract owners by the Company based upon such redemption request;
provided, however, that no such reimbursement obligation shall exist if the Fund
is delayed in transmitting federal funds due to events beyond its reasonable
control,
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including, without limitation, events commonly referred to as "Acts of God." or
events that meet the standards for postponement of payment as provided in
Section 22(e) of the '40 Act. In any event, the Fund or Adviser shall notify the
person designated in writing by the Company as the recipient for such notice of
such delay by 3:00 p.m. Eastern time the same Business Day that the Company
transmits the redemption order to the Fund.
1.8. The Fund and Adviser agree that all Shares of the Portfolios of the
Fund will be sold only to Participating Companies which have agreed to
participate in the Fund to fund their separate accounts and/or to Plans, all in
accordance with the requirements of Section 817(h) of the Internal Revenue Code,
as amended (the "Code") and Treasury Regulation 1.817-5, as amended. Shares of
the Portfolios of the Fund will not be sold directly to the general public.
1.9. The Fund may refuse to sell Shares of any Portfolios to any person,
or suspend or terminate the offering of the Shares of any Portfolios if such
action: (i) is required by law or by regulatory authorities having jurisdiction:
or (ii) is, in the sole discretion of the Board of Directors/Trustees of the
Fund (the "Board"), in the exercise of its fiduciary duty and reasonable
business judgment, in the best interests of Fund shareholders.
1.10. Issuance and transfer of Portfolio Shares will be by book entry
only. Stock certificates will not be issued to the Company or the Separate
Accounts. Shares ordered from Portfolios will be recorded in appropriate book
entry titles for the Separate Accounts.
1.11. The Fund and Adviser each acknowledge that the Company may,
subject to any applicable law, make certain changes to the Variable Contracts.
The Company may, in its sole discretion, offer new portfolios or stop offering
existing portfolios, including the Portfolios, in the Variable Contracts. In
addition, the Company may also liquidate the shares of any portfolio, substitute
the shares of one portfolio, including one of the Portfolios, for another and/or
combine or reorganize sub-accounts that invest in the Shares. Additionally, the
parties acknowledge that pursuant to the terms of the Variable Contracts, the
Company has the right to substitute other securities for Shares of the
Portfolios. The Company agrees to provide to the Adviser at least 60 days notice
prior to effecting any such substitution. The Adviser agrees to bear the
Company's expenses of a substitution of securities in which other securities are
substituted for Shares of one or more Portfolios in the event of such a
substitution within one calendar year from termination of this Agreement;
provided the Agreement was terminated by the Company pursuant to any of the
following subsections of Section 9.2: (b), (c), (f), (i) or (l). For the purpose
of this Section, the Company's expenses shall include the costs incurred with
the preparation and filing of any necessary application with the SEC under
Section 26(c) of the '40 Act, the costs of any notices to Contract owners, and
the cost of any brokerage expenses of a portfolio and a replacing fund that the
Company is required to bear under the terms of an order of the SEC under Section
26(c) of the '40 Act.
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ARTICLE II
FEES AND EXPENSES
2.1. Except as otherwise provided under: (i) this Agreement, and (ii)
the Administrative Services Agreement, dated as of the same date hereof, by and
among Adviser and Company; the Fund shall pay no fee or other compensation to
Company, and Company shall pay no fee or other compensation to the Fund, except
as made a part of such agreements as they may be amended from time to time. All
expenses incident to performance by each party of its respective duties under
such agreements shall be paid by that party, unless otherwise specified therein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. The Company represents and warrants that it is an insurance company
duly organized and in good standing under the laws of Arizona and that it has
legally and validly established each Separate Account as a segregated asset
account under such laws.
3.2. The Company represents and warrants that it has registered or,
prior to any issuance or sale of the Variable Contracts, will register each
Separate Account as a unit investment trust in accordance with the provisions of
the `40 Act and cause each Separate Account to remain so registered to serve as
a segregated asset account for the Variable Contracts, unless an exemption from
registration is available.
3.3. The Company represents and warrants that the income, gains and
losses, whether or not realized, from assets allocated to each Separate Account
are, in accordance with the applicable Variable Contracts, to be credited to or
charged against such Separate Account without regard to other income, gains or
losses from assets allocated to any other accounts of the Company.
3.4. The Company represents and warrants that interests in the Separate
Account under the Variable Contracts will be registered under the Securities Act
of 1933 (the "`33 Act") unless an exemption from registration is available prior
to any issuance or sale of the Variable Contracts and that the Variable
Contracts will be issued and sold in compliance in all material respects with
all applicable federal and state laws, including without limitation the '33 Act,
the '34 Act and the '40 Act. The Company agrees to notify the Fund of any
investment restrictions imposed by state insurance law and applicable to the
Fund.
3.5. The Company represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts; in each case, as disclosed in the registration
statement for the Variable Contract, under applicable provisions of the Code,
that it will maintain such treatment and that it will notify the Fund
immediately upon having a reasonable basis for believing that the Variable
Contracts have ceased to be so treated or that they might not be so treated in
the future.
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3.6. The Fund, together with the Adviser, represents and warrants that
the Portfolio Shares offered and sold pursuant to this Agreement will be
registered and conform with the requirements set forth under the `33 Act and
sold in accordance with all applicable federal and state laws, and the Fund is,
and shall remain registered under the `40 Act at the time of any issuance or
sale of such Shares and shall conform with the requirements of the '40 Act. The
Fund, subject to Section 1.9 above, shall amend its registration statement under
the `33 Act and the x00 Xxx from time to time as required in order to effect the
continuous offering of its Shares and copies of all amendments will be forwarded
to the Company at the time they are filed with the SEC. The Fund shall register
and qualify its Shares for sale in accordance with the laws of the various
states only if and to the extent deemed advisable by the Fund and Adviser.
3.7. The Fund, together with the Adviser, represents and warrants that
each Portfolio will make every effort to comply with the diversification
requirements set forth in Section 817(h) of the Code, and the rules and
regulations there under, including without limitation Treasury Regulation
1.817-5, and will notify the Company immediately upon having a reasonable basis
for believing any Portfolio has ceased to comply or might not so comply and will
immediately take all reasonable steps to adequately diversify the Portfolio to
achieve compliance. The Fund, together with Adviser, further represents and
warrants that any Plans investing in the Fund are duly qualified under the
applicable laws of the Code and eligible to invest in the Fund.
3.8. The Fund, together with the Adviser, represents and warrants that
each Portfolio invested in by the Separate Account shall elect to be treated as
a "regulated investment company" under Subchapter M of the Code, and it shall
make every effort to maintain qualification for such treatment for each taxable
year and will notify the Company immediately upon having a reasonable basis for
believing it has ceased to so qualify or might not so qualify in the future.
3.9. The Fund represents and warrants that it is duly organized and in
good standing under the laws of Massachusetts.
3.10. The Adviser and Administrator represent and warrant that it is
duly organized and in good standing under the laws of North Carolina, and that
it is and shall remain registered as an investment adviser with the SEC. The
Adviser and Administrator further represent and warrant that it complies with,
and the Fund complies with, all applicable federal and state laws and
regulations, and that the Adviser and Administrator will perform its obligations
for the Fund and the Company in compliance with the laws and regulations of its
state of domicile and any applicable and federal laws and regulations. The
Adviser represents and warrants that each Portfolio shall be managed in
accordance with its investment objective(s), investment strategies and
investment restrictions, as each are described in the Fund's registration
statement, as it shall be amended or supplemented.
3.11. BB&T represents and warrants that it is duly organized and in good
standing under the laws of North Carolina.
3.12. Adviser represents and warrants that it will cause the Fund to
continue to sell and distribute Portfolio Shares in accordance with all
applicable state and federal laws and
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regulations, including without limitation the `33 Act, the `34 Act, the `40 Act
and the NASD Rules of Conduct.
3.13. The Fund and Adviser represent and warrant that all the directors,
trustees, officers, employees of the Fund and Adviser, and other
individuals/entities who deal with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than that
required by Rule 17g-1 under the x00 Xxx. The aforesaid bond shall include
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company. The Fund and Adviser shall make all reasonable efforts to see that this
bond or another bond containing these same provisions is always in effect, and
each agrees to notify the Company in the event such coverage no longer applies.
The Fund and Adviser agree to assign any proceeds received from the fidelity
bond company to the Company to the extent of the Company's loss due to
activities covered by the bond. If there is any deficiency for any such loss,
the Fund and/or Adviser will promptly pay the Company that amount on demand.
3.14. Company represents and warrants that all of its directors,
officers, and employees who deal with the money and/or securities of any
Separate Account are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage in an amount not less than that required to be
maintained by entities subject to the requirements of Rule 17g-1 of the x00 Xxx.
The aforesaid bond shall include coverage for larceny and embezzlement and shall
be issued by a reputable bonding company. Company shall make all reasonable
efforts to see that this bond or another bond containing these same provisions
is always in effect, and each agrees to notify the Fund in the event such
coverage no longer applies.
ARTICLE IV
PROSPECTUS AND PROXY STATEMENTS
4.1. The Fund and Adviser, at no expense to the Company, shall prepare
and be responsible for filing with the SEC and any state regulators requiring
such filing all shareholder reports, notices, proxy materials (or similar
materials such as voting instruction solicitation materials), prospectuses and
statements of additional information of the Fund. The Fund or Adviser agree to
provide to the Company, at no expense to the Company, the Fund's shareholder
communications on a timely basis which shall be at least ten (10) Business Days
prior to any Company requirement to file with a regulatory agency, taking into
account the printing and distribution schedule. If the Fund or Adviser does not
provide such material to the Company within such time frame, the Fund or
Adviser, as determined by Adviser, shall bear any additional costs for expenses
incurred by the Company as a result of providing the material after the
deadline.
4.2. At least annually, the Fund or its designee and Adviser shall
provide the Company, free of charge, with as many copies of the current
prospectus for the Shares of the Portfolios as the Company may reasonably
request for distribution to existing Variable Contract owners whose Variable
Contracts are funded by such Shares. The Fund or its designee and Adviser shall
provide the Company, at the Company's expense, with as many more copies of the
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current prospectus for the Shares as the Company may reasonably request for
distribution to prospective purchasers of Variable Contracts. If requested by
the Company in lieu thereof, the Fund or its designee shall provide such
documentation in a mutually agreeable form and such other assistance as is
reasonably necessary in order for the parties hereto once a year (or more
frequently if the prospectus for the Shares is supplemented or amended) to have
the prospectus for the Variable Contracts and the prospectus for the Fund Shares
and any other fund shares offered as investments for the Variable Contracts
printed together in one document, provided however that Company shall ensure
that, except as expressly authorized in writing by the Fund, no alterations,
edits or changes whatsoever are made to prospectuses or other Fund documentation
after such documentation has been furnished to Company or its designee. The Fund
or its designee shall promptly reimburse the Company advances made by the
Company for the Fund's pro-rata share of the printing [and distributing] costs
(excluding any non-printing costs such as composition and document layout
costs), for those pages that contain the prospectus for the Shares that the
Company prints for distribution to existing Variable Contract owners. The Fund
and Adviser agree to cooperate with the Company to provide the Fund's prospectus
on a timely basis, but not less than ten (10) Business Days prior to the
effective date of the Variable Contract prospectus.
4.3. The Fund shall provide the Company with copies of the Fund's proxy
statements, Fund annual and semi-annual reports to shareholders, and other Fund
communications to shareholders in such quantity as the Company shall reasonably
require for distributing to Variable Contract owners. The Fund and Adviser shall
bear the costs of preparing [and distributing] Fund proxy statements and related
communications for Variable Contract owners.
4.4. The Fund will provide the Company with at least one complete copy
of all 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 Portfolios promptly after the filing of each
such document with the SEC or other regulatory authority. The Company will
provide the Fund with at least one complete copy of all 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 and
the pertinent portion of the Separate Account promptly after the filing of each
such document with the SEC or other regulatory authority.
4.5. The Fund's prospectus shall state that the current Statement of
Additional Information ("SAI") for the Fund is available, and the Fund and
Adviser, at their own expense, shall provide a reasonable number of copies of
such SAI free of charge to the Company for itself or for any Variable Contract
owners who request such SAI.
ARTICLE V
SALES MATERIALS
5.1. The Company will furnish, or will cause to be furnished, to the
Fund or Adviser, each piece of sales literature or other promotional material in
which the Fund, Adviser or any affiliate thereof is named, at least five (5)
Business Days prior to its intended use. No such
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material shall be used unless the Fund or Adviser approves such material, and
such approval shall not be unreasonably withheld. Such approval shall be
presumed given if notice to the contrary is not received by Company within five
(5) Business Days after receipt by the Fund or Adviser of such material. In the
event any material is presumably approved as set forth in the prior sentence,
the Fund and Adviser reserve the right reasonably to object at anytime
thereafter to the continued use of any such sales literature or other
promotional material in which the Fund, Adviser, or any affiliate thereof is
named, and no such material shall be used thereafter if the Fund or Adviser so
objects.
5.2. The Fund or Adviser will furnish, or will cause to be furnished, to
the Company, each piece of sales literature or other promotional material in
which the Company or its Separate Accounts are named, at least five (5) Business
Days prior to its intended use. No such material shall be used unless the
Company approves such material, and such approval shall not be unreasonably
withheld. Such approval shall be presumed given if notice to the contrary is not
received by the Fund or within five (5) Business Days after receipt by the
Company of such material. In the event any material is presumably approved as
set forth in the prior sentence, the Company reserves the right reasonably to
object at anytime thereafter to the continued use of any such sales literature
or other promotional material in which the Company or any affiliate thereof is
named, and no such material shall be used thereafter if the Company so objects.
5.3. Except with the permission of the Company, neither the Fund or
Adviser shall give any information or make any representations on behalf of the
Company or concerning the Company, the Separate Accounts, or the Variable
Contracts other than the information contained in the registration statement or
prospectus for such Variable Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports of
the Separate Accounts for distribution to owners of such Variable Contracts, or
in sales literature or other promotional material approved by the Company or its
designee. Neither the Fund nor Adviser shall give such information or make such
statements in a context that causes the information, representations or
statements to be false or misleading.
5.4. Except with the permission of the Fund or Adviser, the Company
shall not give any information or make any representations or statements on
behalf of the Fund, Adviser, or any affiliate thereof or concerning the Fund,
Adviser or any affiliate thereof, other than the information or representations
contained in the registration statements or prospectuses for the Fund, as such
registration statements and prospectuses may be amended or supplemented from
time to time, or in reports to shareholders or proxy statements for the Fund, or
in sales literature or other promotional material approved by the Fund or
Adviser or designee thereof. The Company shall not give such information or make
such representations or statements in a context that causes the information,
representations or statements to be false or misleading. The Company's
responsibilities in this Section shall not extend to any affiliated person of
the Adviser or any employee or associated person thereof who is engaged in the
distribution of the Variable Contracts.
5.5. For purposes of this Agreement, the phrase "sales literature or
other promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for use, in
a newspaper, magazine or other periodical, radio, television,
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telephone or tape recording, videotape display, signs or billboards, motion
pictures or other public media), sales literature (such as any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, seminar texts, or reprints or excerpts of any other advertisement,
sales literature, or published article), educational or training materials or
other communications distributed or made generally available to some or all
agents or employees, registration statements, prospectuses, statements of
additional information, shareholder reports and proxy materials, and any other
material constituting sales literature or advertising under NASD rules, the `40
Act or the x00 Xxx.
ARTICLE VI
POTENTIAL CONFLICTS
6.1. The parties hereto agree that the conditions or undertakings
required by the Mixed and Shared Funding Exemptive Order that may be imposed on
any party hereto by virtue of such order by the SEC: (i) shall apply only upon
the sale of Shares of the applicable Portfolios to the Separate Account(s) (and
then only to the extent required under the x00 Xxx); (ii) will be incorporated
herein by reference; and (iii) all parties hereto agree to comply with such
conditions and undertakings to the extent applicable to each such party
notwithstanding any provision of this Agreement to the contrary.
6.2. The Fund's Board will monitor the Fund for the existence of any
material irreconcilable conflict between and among the interests of the variable
contract owners of all Participating Companies and of Plan participants and
Plans investing in the Fund, and determine what action, if any, should be taken
in response to such conflicts. An irreconcilable material conflict may arise for
a variety of reasons, which may include: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretive letter, or any similar action by insurance,
tax or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
the Fund or any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity and variable life insurance contract
owners; (f) a decision by a Participating Company to disregard the voting
instructions of variable contract owners and (g) if applicable, a decision by a
Plan to disregard the voting instructions of plan participants.
6.3. The Company will report any reasonably foreseeable or existing
conflicts to the Board. The Company will be obligated to assist the Board in
carrying out its duties and responsibilities under the Mixed and Shared Funding
Exemptive Order by providing the Board with all information reasonably necessary
for the Board to consider any issues raised. The responsibility includes, but is
not limited to, an obligation by the Company to inform the Board whenever it has
determined to disregard Variable Contract owner voting instructions.
6.4. 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 the Fund, the Board shall give prompt
notice of the conflict and the implications
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thereof to all Participating Companies and Plans. If the Board determines that
Company is a relevant Participating Company or Plan with respect to said
conflict, 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: (a) withdrawing the assets allocable to some or all of the
Separate Accounts from the Fund or any Portfolio thereof and reinvesting those
assets in a different investment medium, which may include another Portfolio of
the Fund, or another investment company; (b) submitting the question as to
whether such segregation should be implemented to a vote of all affected
Variable Contract owners and as appropriate, segregating the assets of any
appropriate group (i.e variable annuity or variable life insurance contract
owners of one or more Participating Companies) that votes in favor of such
segregation, or offering to the affected Variable Contract owners the option of
making such a change; and (c) establishing a new registered management
investment company (or series thereof) or managed separate account. If a
material irreconcilable conflict arises because of the Company's decision to
disregard Variable Contract owner voting instructions, and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the election of the Fund to withdraw the Separate Account's
investment in the Fund, and no charge or penalty will be imposed as a result of
such withdrawal. The responsibility to take such remedial action shall be
carried out with a view only to the interests of the Variable Contract owners.
For the purposes of this Article, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict but in no event will
the Fund or its investment adviser (or any other investment adviser of the Fund)
be required to establish a new funding medium for any Variable Contract.
Further, the Company shall not be required by this Article to establish a new
funding medium for any Variable Contracts if any offer to do so has been
declined by a vote of a majority of Variable Contract owners materially and
adversely affected by the irreconcilable material conflict.
6.5. The Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to the Company.
6.6. The Company shall submit to the Board such reports, materials or
data, as the Board may reasonably request in writing, so that the Board may
fully carry out its obligations.
6.7. If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or if
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the `40
Act or the rules thereunder with respect to mixed and shared funding on terms
and conditions materially different from any exemptions granted in the Mixed and
Shared Funding Exemptive Order, or to eliminate the need for such exemptive
relief, then the Fund, and/or the Company, as appropriate, shall take such steps
as may be necessary to comply with Rule 6e-2 and Rule 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such Rules are applicable, and shall cease
compliance with this Article 6 to the extent such rules are no longer
applicable.
11
ARTICLE VII
VOTING
7.1. The Company will provide pass-through voting privileges to all
owners of Variable Contracts funded by Separate Accounts that are registered
under the '40 Act so long as the SEC continues to interpret the `40 Act as
requiring pass-through voting privileges for Variable Contract owners.
Accordingly, the Company, where applicable, will vote Shares of the Portfolio
held in its registered Separate Account(s) in a manner consistent with voting
instructions timely received from its Variable Contract owners. The Company will
be responsible for assuring that each of its Separate Accounts that participates
in the Fund calculates voting privileges in a manner as instructed by the Fund
or the Adviser that is intended to be consistent with the Mixed and Shared
Funding Exemptive Order. The Company will vote Shares held by registered
Separate Accounts for which it has not received timely voting instructions in
the same proportion as it votes those Shares for which it has received voting
instructions. The Company shall vote in its discretion Shares held by
unregistered Separate Accounts and Shares that it owns directly.
ARTICLE VIII
INDEMNIFICATION
8.1. Indemnification by the Company.
(a) Subject to Section 8.4 below, the Company agrees to indemnify
and hold harmless the Fund and Adviser, and each of their
trustees, directors, members, principals, officers, partners,
employees and agents and each person, if any, who controls the
Fund or Adviser within the meaning of Section 15 of the `33 Act
(collectively, the "Indemnified Parties" for purposes of this
Section 8.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the
written consent of the Company, which consent shall not be
unreasonably withheld) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject
under any statute, or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are
related to the Fund's Shares or the Variable Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement or prospectus for the Variable
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading; provided that this
agreement to indemnify shall not apply as to any
Indemnified
12
Party, or its designee, if such statement or omission or
such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the
Company by or on behalf of an Indemnified Party for use
in the registration statement or prospectus for the
Variable Contracts or in the Variable Contracts (or any
amendment or supplement), or otherwise for use in
connection with the sale of the Variable Contracts or
Fund Shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or
sales literature (unless such sales literature was
reviewed by the Company) of the Fund not supplied by the
Company, or persons under its control) or wrongful
conduct of the Company or persons under its control
(which shall not include any employee or associated
person of Adviser or any affiliate thereof); with respect
to the sale or distribution of the Variable Contracts or
Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the Fund or
any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statements therein not misleading if such statement
or omission or such alleged statement or omission was
made in reliance upon and in conformity with information
furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the
terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Company.
(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an
Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations
or duties under this Agreement.
13
(c) The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the
Company in writing within five (5) business days after the
summons or other first legal process giving information of the
nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any
such action is brought against an Indemnified Party, the
Company shall be entitled to participate at its own expense in
the defense of such action. The Company also shall be entitled
to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Company to
such party of the Company's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses
of any additional counsel retained by it, and the Company will
not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.2. Indemnification by the Fund.
(a) Subject to Section 8.4 below, the Fund agrees to indemnify and
hold harmless the Company and each of its directors, officers,
employees, and agents and each person, if any, who controls the
Company within the meaning of Section 15 of the `33 Act
(collectively, the "Indemnified Parties" for the purposes of
this Section 8.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the
written consent of the Fund which consent shall not be
unreasonably withheld) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject
under any statute, or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are
related to the Fund's Shares or the Variable Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement or prospectus of the Fund (or
any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading; provided, this agreement to indemnify shall
not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made
14
in reliance upon and in conformity with information
furnished to the Fund by or on behalf of the Company or
the Adviser for use in the registration statement or
prospectus for the Fund (or any amendment or supplement)
or otherwise for use in connection with the sale of the
Variable Contracts or Fund Shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or
sales literature for the Variable Contracts not supplied
by the Fund, Adviser or persons under their control) or
wrongful conduct of the Fund or persons under its
control, with respect to the sale or distribution of the
Variable Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus or sales literature covering the
Variable Contracts, or any amendment thereof or
supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading if such statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished to the Company for
inclusion therein by or on behalf of the Fund; or
(iv) arise as a result of a failure by the Fund to provide the
services and furnish the materials under the terms of
this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other
material breach of this Agreement by the Fund.
(b) The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's
willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and
duties under this Agreement.
(c) The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the
Fund in writing within five (5) business days after the summons
or other first legal process giving information of the nature
of the claim shall have been served upon such
16
Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but
failure to notify the Fund of any such claim shall not relieve
the Fund from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the
Fund shall be entitled to participate at its own expense in the
defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named
in the action. After notice from the Fund to such party of the
Fund's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional
counsel retained by it, and the Fund will not be liable to such
party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of
investigation.
8.3. Indemnification by Adviser and BB&T.
(a) Subject to Section 8.4 below, each of the Adviser (as the
adviser and administrator) and BB&T agrees to indemnify and
hold harmless the Company and each of its directors, officers,
employees, and agents and each person, if any, who controls the
Company within the meaning of Section 15 of the `33 Act
(collectively, the "Indemnified Parties" for the purposes of
this Section 8.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the
written consent of the Adviser and BB&T which consent shall not
be unreasonably withheld) or litigation (including legal and
other expenses) to which the Indemnified Parties may become
subject under any statute, or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are
related to the Fund's Shares or the Variable Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement or prospectus of the Fund (or
any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with
information furnished to the Fund, Adviser or BB&T by or on
behalf of the Company for use in the registration statement
or prospectus for the Fund (or any amendment or supplement)
or otherwise for use in connection with the sale of the
Variable Contracts or Fund Shares; or
16
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or
sales literature (unless such sales literature was
reviewed by Adviser) for the Variable Contracts not
supplied by Adviser, BB&T or the Fund or persons under
their control) or wrongful conduct of Adviser, BB&T or
the Fund or persons under their control, with respect to
the sale or distribution of the Variable Contracts or
Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement or prospectus covering the Variable Contracts,
or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statements therein not misleading if such statement
or omission or such alleged statement or omission was
made in reliance upon and in conformity with information
furnished to the Company for inclusion therein by or on
behalf of Adviser, BB&T or the Fund; or
(iv) arise as a result of any failure by Adviser, BB&T or the
Fund to provide the services and furnish the materials
under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by Adviser, the Fund
or BB&T in this Agreement or arise out of or result from
any other material breach of this Agreement by Adviser,
the Fund or BB&T.
(b) Adviser or BB&T, as the case may be, shall not be liable under
this indemnification provision with respect to any losses,
claims, damages, liabilities or litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement.
(c) BB&T or Adviser, as the case may be, shall not be liable under
this indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party
shall have notified Adviser or BB&T in writing within five (5)
business days after the summons or other first legal process
giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified
Party shall have received notice of such service on any
designated agent), but failure to notify Adviser or BB&T of any
such claim shall not relieve Adviser or BB&T from any liability
which it may
17
have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification
provision. In case any such action is brought against the
Indemnified Parties, Adviser and BB&T shall be entitled to
participate at their own expense in the defense thereof.
Adviser and BB&T also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the
action. After notice from Adviser or BB&T, as the case may be,
to such party of Adviser's or BB&T's election to assume the
defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and Adviser
or BB&T will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such
party independently in connection with the defense thereof
other than reasonable costs of investigation.
8.4. Indemnification for Errors. In the event of any error or delay with
respect to information regarding the purchase, redemption, transfer
or registration of Shares of the Fund, the parties agree that each
is obligated to make the Separate Accounts and/or the Fund,
respectively, whole for any error or delay that it causes, subject
in the case of pricing errors to the related Portfolio's policies
on materiality of pricing errors. In addition, each party agrees
that neither will receive compensation from the other for the costs
of any reprocessing necessary as a result of an error or delay.
Each party agrees to provide the other with prompt notice of any
errors or delays of the type referred to in this Section.
ARTICLE IX
TERM; TERMINATION
9.1. This Agreement shall be effective as of the date hereof and shall
continue in force until terminated, as to the Fund or any
Portfolio, in accordance with the provisions herein.
9.2. This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of the Company or the Fund at any time from the
date hereof upon ninety (90) days notice, unless a shorter time
is agreed to by the parties;
(b) At the option of the Company, if Fund Shares are not reasonably
available to meet the requirements of the Variable Contracts as
determined by the Company. Prompt notice of election to
terminate shall be furnished by the Company, said termination
to be effective ten (10) days after receipt of notice unless
the Fund makes available a sufficient number of Shares to
reasonably meet the requirements of the Variable Contracts
within said ten-day period;
(c) At the option of the Company, upon the institution of formal
proceedings against the Fund by the SEC, the National
Association of Securities
18
Dealers, Inc., or any other regulatory body, the expected or
anticipated ruling, judgment or outcome of which would, in the
Company's reasonable judgment, materially impair the Fund's
ability to meet and perform its obligations and duties
hereunder. Prompt notice of election to terminate shall be
furnished by the Company with said termination to be effective
upon receipt of notice;
(d) At the option of the Company, upon the institution of formal
proceedings against the Adviser or BB&T by the SEC, the
National Association of Securities Dealers, Inc., or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in the Company's reasonable
judgment, materially impair the Adviser's or BB&T's ability to
meet and perform their obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by the
Company with said termination to be effective upon receipt of
notice;
(e) At the option of the Fund or Adviser, upon the institution of
formal proceedings against the Company by the SEC, the NASD, or
any other regulatory body, the expected or anticipated ruling,
judgment or outcome of which would, in the Fund's or Adviser's
reasonable judgment, materially impair the Company's ability to
meet and perform its obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by the Fund
or Adviser with said termination to be effective upon receipt
of notice;
(f) In the event the Fund's Shares are not registered, issued or
sold in accordance with applicable state or federal law.
Termination shall be effective upon such occurrence without
notice;
(g) In the event any such applicable state or federal law precludes
the use of the Shares as the underlying investment medium of
Variable Contracts issued or to be issued by the Company.
Termination shall be effective upon such occurrence without
notice;
(h) At the option of the Fund or Adviser if the Variable Contracts
cease to qualify as annuity contracts or life insurance
contracts, as applicable, under the Code, or if the Fund or
Adviser reasonably believe that the Variable Contracts may fail
to so qualify. Termination shall be effective upon receipt of
notice by the Company;
(i) At the option of the Company, upon the Fund's, Adviser's or
BB&T's breach of any material provision of this Agreement,
which breach has not been cured to the satisfaction of the
Company within ten days after written notice of such breach is
delivered to the Fund, Adviser or BB&T, as the case may be;
19
(j) At the option of the Fund or Adviser, upon the Company's breach
of any material provision of this Agreement, which breach has
not been cured to the satisfaction of the Fund or Adviser
within ten days after written notice of such breach is
delivered to the Company;
(k) At the option of the Fund or Adviser, if the Variable Contracts
are not registered, issued or sold in accordance with
applicable federal and/or state law. Termination shall be
effective immediately upon such occurrence without notice;
(l) At the option of the party from which consent was not obtained,
in the event this Agreement is assigned without the prior
written consent of all parties hereto, termination shall be
effective upon written notice;
(m) At the option of the Fund and Adviser, by a vote of the
majority of the Fund's Board, or at the option of the Company,
upon a reasonable determination that a material irreconcilable
conflict exists among the interests of (i) all Contract owners
of all Separate Accounts, or (ii) the interests of
Participating Companies investing in the Fund.
9.3. Notwithstanding any termination of this Agreement pursuant to
Section 9.2 hereof, except as required by the Mixed and Shared
Funding Exemptive Order, the Fund at the option of the Company will
continue to make available additional Fund Shares, as provided
below, pursuant to the terms and conditions of this Agreement, for
all Variable Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the
Existing Contracts or the Company, whichever shall have legal
authority to do so, shall be permitted to reallocate investments in
the Fund, redeem investments in the Fund and/or invest in the Fund
upon the payment of additional premiums under the Existing
Contracts.
ARTICLE X
NOTICES
Any notice hereunder shall be given by registered or certified mail
return receipt requested to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.
If to the Fund:
BB&T Variable Insurance Funds
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attention: Client Services
20
If to the Adviser or Administrator:
BB&T Asset Management
000 Xxxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Mr. Trip Xxxxxxx
If to BB&T:
BB&T Corporation
[434 Xxxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel]
If to the Company:
AIG SunAmerica Life Assurance Company
00000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
With a copy to:
AIG SunAmerica Life Assurance Company
1 SunAmerica Center
1999 Avenue of the Stars, 00xx xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: General Counsel
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
ARTICLE XI
MISCELLANEOUS
11.1. Privacy.
(a) Confidential Information. The parties acknowledge that, in the
performance of the Agreement, they receive or access
information about customers and other proprietary information
of the parties, including but not limited to, names, addresses,
account balances, account numbers, account activity, social
security numbers, taxpayer identification numbers, and
financial and health information, as well as all forms and
types of financial, business, technical, or economic
information, whether tangible
21
or intangible, and whether or how stored, compiled, or
memorialized physically, electronically, graphically,
photographically, or in writing ("Confidential Information").
Confidential Information excludes information that (1) is
independently developed by a party without violating the
disclosing party's proprietary rights, (2) is or becomes
publicly known (other than through unauthorized disclosure),
(3) is intentionally disclosed by the owner of such information
to a third party free of any obligation of confidentiality, (4)
is already known by a party, as evidenced by the written
records of that party, free of an obligation of confidentiality
other than pursuant to this Agreement, or (5) is rightfully
received by a party free of any obligation of confidentiality.
(b) Use. The parties may use Confidential Information only in
connection with this Agreement and may not disclose
Confidential Information to any other party except as permitted
by the Xxxxx-Xxxxx-Xxxxxx Act. The parties may disclose
Confidential Information only to their respective employees and
agents on a need-to-know basis, provided they have first
obtained the assurance of each such employee and agent to
observe this confidentiality. The parties will take reasonable
steps to protect the Confidential Information, applying at
least the same security measures and level of care as they
employ to protect their own Confidential Information. If a
party is compelled by applicable law to disclose any
Confidential Information, the party so compelled must promptly
notify, in writing, the party whose Confidential Information is
being disclosed, and provide that party with an opportunity to
limit the production. Each party will have the right to audit
the others for the limited purpose of ensuring compliance with
this provision.
(c) Security. Each party agrees to comply with all federal, state,
and local law or regulation related to privacy including,
without limitation, Regulation S-P of the Securities and
Exchange Commission, and Title V of the Xxxxx-Xxxxx-Xxxxxx Act.
Each party represents and warrants that it has implemented and
currently maintains an effective information security program
to protect the Confidential Information, which program includes
administrative, technical, and physical safeguards:
(i) to insure the security and confidentiality of
Confidential Information;
(ii) to protect against any anticipated threats or hazards to
the security or integrity of such Confidential
Information; and
(iii) to protect against unauthorized access to or use of
Confidential Information which could result in
substantial harm or inconvenience to either party or
other affiliates, or to customers of any of them;
22
(d) Injunctive Relief. The parties acknowledge that the
unauthorized disclosure of Confidential Information is likely
to cause irreparable injury to the disclosing party and that,
in the event of a violation or threatened violation of a
party's obligations hereunder, the disclosing party shall have
no adequate remedy at law and shall therefore be entitled to
enforce each such obligation by temporary or permanent
injunctive or mandatory relief obtained in any court of
competent jurisdiction without the necessity of proving
damages, posting any bond or other security, and without
prejudice to any other rights and remedies which may be
available at law or in equity.
(e) Use Upon Termination. At the termination of this Agreement, or
in the event a party makes a request for the return of their
Confidential Information, the other parties will promptly
return the original and all copies of same, or certify in
writing to the requesting party that the Confidential
Information has been destroyed, provided however, that each
party shall retain Confidential Information in its possession
necessary to service its customers. This Confidentiality
provision shall survive the termination of this Agreement.
11.2. Short-Term Trading. The parties hereto acknowledge that Company
has adopted administrative procedures to discourage contract owners engaged in
trading strategies that seek to benefit from short-term price fluctuations or
price inefficiencies in the Portfolios ("Short-Term Trading"). The Company's
Short-Term Trading policies applicable to the Variable Contract owners are
disclosed in the Variable Contract prospectus, which may be amended from time to
time by Company. The parties agree that the Variable Contracts are not intended
to serve as vehicles for Short-Term Trading. The Company and the Fund agree to
cooperate to deter transfer activity in the Portfolios where such activity
occurs through the Variable Contracts and has been identified as abusive or
following a "market timing" pattern.
The Fund agrees to notify Company of transfer activity that the Fund
deems to be Short-Term Trading activity. After receiving such notice from the
Fund, Company agrees that it will cooperate with the Fund to limit Short-Term
Trading to the extent permissible under the terms and conditions of its Variable
Contracts and other governing laws.
11.3. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which taken together shall constitute one and the
same instrument.
11.4. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
the Agreement shall not be affected thereby.
11.5. Governing Law. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the laws of the State
of California. It shall also be subject to the provisions of the federal
securities laws and the rules and regulations thereunder
23
and to any orders of the SEC granting exemptive relief therefrom and the
conditions of such orders.
11.6. Liability. This Agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his or her capacity as an officer of
the Fund. The obligations of this Agreement shall be binding upon the assets and
property of the Fund and each respective Portfolio thereof only and shall not be
binding on any Director/Trustee, officer or shareholder of the Fund
individually. In addition, no Portfolio shall be liable for any loss, expense,
fee, charge or liability of any kind relating to or arising from the actions or
omissions of any other Portfolio or from the application of this Agreement to
any other Portfolio. It is also understood that each of the Portfolios shall be
deemed to be entering into a separate Agreement with the Company so that it is
as if each of the Portfolios had signed a separate Agreement with the Company
and that a single document is being signed simply to facilitate the execution
and administration of the Agreement.
11.7. Inquiries and Investigations. Each party shall cooperate with each
other party and all appropriate governmental authorities (including without
limitation the SEC, the NASD and state insurance regulators) and shall permit
such authorities reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
11.8. Survival. The terms and provisions contained in this Agreement
which by their terms require their performance by either party after the
expiration or other termination of this Agreement, including but not limited to
Article VIII, shall be and remain enforceable notwithstanding such expiration or
other termination of this Agreement for any reason whatsoever.
11.9. 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.
11.10. Amendment, Waiver and Other Matters. Neither this Agreement, nor
any provision hereof, may be amended, waived, modified or terminated in any
manner except by a written instrument properly authorized and executed by all
parties hereto. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
24
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Fund Participation Agreement as of the date and year
first above written.
BB&T CORPORATION, AIG SUNAMERICA LIFE ASSURANCE COMPANY,
a North Carolina corporation an Arizona life insurance company
------------------------------------- --------------------------------------
Name: Name: Xxxx Xxxxxx Xxxxx
------------------------------
Title: Title: President
------------------------------
BB&T VARIABLE INSURANCE FUNDS,
a Massachusetts business trust
-------------------------------------
Name:
------------------------------
Title:
------------------------------
BB&T ASSET MANAGEMENT, INC.,
a North Carolina corporation
-------------------------------------
Name:
------------------------------
Title:
------------------------------
EXHIBIT A
BB&T VIF Large Cap Value Fund
BB&T VIF Large Company Growth Fund
BB&T VIF Mid Cap Growth Fund
BB&T VIF Special Opportunities Equity Fund
BB&T VIF Capital Manager Equity Fund
BB&T VIF Total Return Bond Fund
EXHIBIT B
Separate Account: Variable Contract:
Variable Separate Account Polaris II Platinum
6/25/81 AN-968C (1/04) - Group;
AN-969 (1/04) - Individual
Polaris II Platinum Principal Rewards
AN-936C (3/99) - Group;
AN-937 (3/99) - Individual
Polaris Choice II
AN-948C (7/01) - Group;
AN-949 (7/01) - Individual
