EXHIBIT 8.2
FUND PARTICIPATION AGREEMENT
The Xxxxx American Fund
TABLE OF CONTENTS
ARTICLE I. Sale of Fund Shares 4
ARTICLE II. Representations and Warranties 8
ARTICLE III. Prospectuses and Proxy Statements; Voting 11
ARTICLE IV. Sales Material and Information 14
ARTICLE V. Fees and Expenses 16
ARTICLE VI. Diversification and Qualification 18
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order 21
ARTICLE VIII. Indemnification 24
ARTICLE IX. Applicable Law 35
ARTICLE X. Termination 36
ARTICLE XI. Notices 40
ARTICLE XII. Miscellaneous 41
SCHEDULE A Contracts 45
SCHEDULE B Designated Portfolios 46
SCHEDULE C Administrative Services 47
SCHEDULE D Reports per Section 6.6 48
SCHEDULE E Expenses 51
PARTICIPATION AGREEMENT
Among
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
THE XXXXX AMERICAN FUND,
XXXX XXXXX MANAGEMENT, INC.,
XXXX XXXXX & COMPANY, INCORPORATED
and
XXXXXXX XXXXXX & CO., INC.
THIS AGREEMENT, made and entered into as of this ____ day of
_______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life
insurance company, on its own behalf and on behalf of its Separate
Account Variable Annuity-1 Series Account (the "Account"); THE
XXXXX AMERICAN FUND, a business trust organized under the laws of
the Commonwealth of Massachusetts (hereinafter the "Fund"); XXXX
XXXXX MANAGEMENT, INC. (hereinafter the "Adviser"), a New York
corporation; XXXX XXXXX & COMPANY, INCORPORATED (the
"Distributor"), a Delaware corporation; and XXXXXXX XXXXXX & CO.,
INC., a California corporation (hereinafter "Schwab").
WHEREAS, the Fund engages in business as an open-end
management investment company and is available to act as the
investment vehicle for separate accounts established for variable
life insurance policies and/or variable annuity contracts
(collectively, the "Variable Insurance Products") to be offered by
insurance companies, including FirstGWL&A, which have entered into
participation agreements similar to this Agreement (hereinafter
"Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares, each designated a "Portfolio" and
representing the interest in a particular managed portfolio of
securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities
and Exchange Commission (hereinafter the "SEC"), dated February 17,
1989 (File No. 812-7076), and amended September 14, 1995, granting
Participating Insurance Companies and variable annuity and variable
life insurance separate accounts exemptions from the provisions of
sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company
Act of 1940, as amended, (hereinafter the "1940 Act") and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary
to permit shares of the Fund to be sold to and held by variable
annuity and variable life insurance separate accounts of life
insurance companies that may or may not be affiliated with one
another and, as contemplated by paragraph (f)(3) of Treasury
Regulation 1.817-5, qualified and pension and retirement plans
("Qualified Plans") (hereinafter the "Mixed and Shared Funding
Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and shares of the
Portfolio(s) are registered under the Securities Act of 1933, as
amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment
adviser under the Investment Advisers Act of 1940, as amended, and
any applicable state securities laws; and
WHEREAS, the Distributor is duly registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended, (the "1934
Act") and is a member in good standing of the National Association
of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, FirstGWL&A has registered or will register certain
variable annuity contracts supported wholly or partially by the
Account (the "Contracts") under the 1933 Act and said Contracts are
listed in Schedule A attached hereto and incorporated herein by
reference, as it may be amended from time to time by mutual written
agreement; and
WHEREAS, the Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of
Directors of FirstGWL&A on January 15, 1997, to set aside and
invest assets attributable to the Contracts; and
WHEREAS, FirstGWL&A has registered or will register the
Account as a unit investment trust under the 1940 Act and has
registered or will register the securities deemed to be issued by
the Account under the 1933 Act; and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, FirstGWL&A intends to purchase shares in the
Portfolio(s) listed in Schedule B attached hereto and incorporated
herein by reference, as it may be amended from time to time by
mutual written agreement (the "Designated Portfolio(s)"), on behalf
of the Account to fund the Contracts, and the Fund is authorized to
sell such shares to unit investment trusts such as the Account at
net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Account also intends to purchase shares in
other open-end investment companies or series thereof not
affiliated with the Fund (the "Unaffiliated Funds") on behalf of
the Account to fund the Contracts; and
WHEREAS, Schwab will perform certain services for the Fund in
connection with the Contracts;
NOW, THEREFORE, in consideration of their mutual promises,
FirstGWL&A, Schwab, the Fund, the Distributor and the Adviser agree
as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to FirstGWL&A those shares of the
Designated Portfolio(s) which the Account orders, executing such
orders on each Business Day at the net asset value next computed
after receipt by the Fund or its designee of the order for the
shares of the Portfolios. For purposes of this Section 1.1,
FirstGWL&A shall be the designee of the Fund for receipt of such
orders and receipt by such designee shall constitute receipt by the
Fund, provided that the Fund receives notice of any such order by
10:00 a.m. Eastern time on the next following Business Day.
"Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Fund calculates its
net asset value pursuant to the rules of the SEC.
1.2. The Fund agrees to make shares of the Designated
Portfolio(s) available for purchase at the applicable net asset
value per share by FirstGWL&A on behalf of the Account on those
days on which the Fund calculates its Designated Portfolio(s)' net
asset value pursuant to rules of the SEC, and the Fund shall
calculate such net asset value on each day which the New York Stock
Exchange is open for trading. Notwithstanding the foregoing, the
Board of Trustees of the Fund (hereinafter the "Board") may refuse
to sell shares of any Portfolio to any person, or suspend or
terminate the offering of shares of any Portfolio if such action is
required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Board acting in good faith and in
light of their fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders of
such Portfolio.
1.3. The Fund will not sell shares of the Designated
Portfolio(s) to any other Participating Insurance Company or
separate account unless an agreement containing provisions
substantially the same as Sections 2.1, 3.5, 3.6, and Article VII
of this Agreement is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash, on FirstGWL&A's
request, any full or fractional shares of the Fund held by
FirstGWL&A, executing such requests on each Business Day at the net
asset value next computed after receipt by the Fund or its designee
of the request for redemption, except that the Fund reserves the
right to suspend the right of redemption, consistent with Section
22(e) of the 1940 Act and any applicable rules thereunder.
Requests for redemption identified by FirstGWL&A, or its agent, as
being in connection with surrenders, annuitizations, or death
benefits under the Contracts, upon prior written notice, may be
executed within seven (7) calendar days after receipt by the Fund
or its designee of the requests for redemption. This Section 1.4
may be amended, in writing, by the parties consistent with the
requirements of the 1940 Act and interpretations thereof. For
purposes of this Section 1.4, FirstGWL&A shall be the designee of
the Fund for receipt of requests for redemption and receipt by such
designee shall constitute receipt by the Fund, provided that the
Fund receives notice of any such request for redemption by 10:00
A.M. Eastern time on the next following Business Day.
1.5. The Parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's shares
may be sold to other Participating Insurance Companies (subject to
Section 1.3 and Article VI hereof) and the cash value of the
Contracts may be invested in other investment companies.
1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern
time on the next Business Day after an order to purchase Fund
shares is made in accordance with the provisions of Section 1.1
hereof. Payment shall be in federal funds transmitted by wire
and/or by a credit for any shares redeemed the same day as the
purchase.
1.7. The Fund shall pay and transmit the proceeds of
redemptions of Fund shares by 3:00 p.m. Eastern Time on the next
Business Day after a redemption order is received in accordance
with Section 1.4 hereof, except that payment may be delayed if, for
example, the Fund's cash position so requires or if extraordinary
market conditions exist, but in no event shall payment be delayed
for a greater period than is permitted by the 1940 Act. Payment
shall be in federal funds transmitted by wire and/or a credit for
any shares purchased the same day as the redemption.
1.8. Issuance and transfer of the Fund's shares will be by
book entry only. Stock certificates will not be issued to
FirstGWL&A or the Account. Shares ordered from the Fund will be
recorded in an appropriate title for the Account or the appropriate
sub-account of the Account.
1.9. The Fund shall furnish same day notice (by wire or
telephone, followed by written confirmation) to FirstGWL&A of any
income, dividends or capital gain distributions payable on the
Designated Portfolio(s)' shares. FirstGWL&A hereby elects to
receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that
Portfolio. FirstGWL&A reserves the right to revoke this election
in writing and to receive all such income dividends and capital
gain distributions in cash. The Fund shall notify FirstGWL&A by
the end of the next following Business Day of the number of shares
so issued as payment of such dividends and distributions.
1.10. The Fund shall make the net asset value per share
("NAV") for each Designated Portfolio available to FirstGWL&A on
each Business Day as soon as reasonably practical after the NAV per
share is calculated and shall use its best efforts to make such net
asset value per share available by 6:00 p.m. Eastern time. In the
event of a material error in the computation of a Designated
Portfolio's NAV or any dividend or capital gain distribution (each,
a "pricing error"), which results in adjustments to Contractowner's
accounts, the Adviser or the Fund shall immediately notify
FirstGWL&A as soon as possible after discovery of the error. Such
notification may be verbal, but shall be confirmed promptly in
writing in accordance with Article XI of this Agreement. A pricing
error shall be corrected as follows: (a) if the pricing error
results in a difference between the erroneous NAV and the correct
NAV equal to or greater than $0.01 per share, but less than 1/2 of
1% of the Designated Portfolio's NAV at the time of the error, then
the Adviser shall either reimburse the Designated Portfolio for any
loss, after taking into consideration any positive effect of such
error and no adjustments to Contractowner accounts need be made,
or, in the Adviser's discretion, the procedures described in item
(b) shall be followed; and (b) if the pricing error results in a
difference between the erroneous NAV and the correct NAV equal to
or greater than 1/2 of 1% of the Designated Portfolio's NAV at the
time of the error, then the Adviser shall reimburse the Designated
Portfolio for any unrecovered excess redemption proceeds (as
defined below) and shall reimburse FirstGWL&A for its reasonable
costs of adjustments made to correct Contractowner accounts in
accordance with the provisions of Schedule E. If an adjustment is
necessary to correct an error of category (b) above which has
caused Contractowners to receive less than the amount of shares or
redemption proceeds to which they are entitled, or is elected by
the Adviser in connection with an error of category (a), the number
of shares of the applicable account of each such Contractowner will
be adjusted and the amount of any underpayments on redemption
transactions not corrected by such adjustment shall be credited by
the Fund to FirstGWL&A for crediting of such amounts to the
applicable Contractowners' accounts. In the event an NAV pricing
error results in a Contractowner's receiving redemption proceeds in
an amount which is $500 or more in excess of the amount that such
Contractowner would have received with the correct NAV (such amount
being the "excess redemption proceeds"), then the effect of such
overpayment shall be corrected, to the extent possible, by an
adjustment to the number of shares in the Contractowner's account
and, FirstGWL&A and Schwab agree that they will make a good faith
attempt to collect such excess proceeds not accounted for by such
adjustment. Any overpayments that have not yet been paid to
Contractowners will be remitted to the Fund by FirstGWL&A or Schwab
upon notification by the Adviser of such overpayment. In no event
shall Schwab or FirstGWL&A be liable to Contractowners for any such
adjustments or underpayment amounts, other than amounts paid by the
Fund or Adviser for crediting to Contractowner Accounts as set
forth above. No provision in this section 1.10 shall require the
adjustment of a Contractowner's account if the adjustment required
for that account is less than $25. A pricing error within
categories (a) or (b) above shall be deemed to be "materially
incorrect" or constitute a "material error" for purposes of this
Agreement.
The standards set forth in this Section 1.10 are based on the
Parties' understanding of the views expressed by the staff of the
Securities and Exchange Commission ("SEC") as of the date of this
Agreement. In the event the views of the SEC staff are later
modified or superseded by SEC or judicial interpretation, the
parties shall amend the foregoing provisions of this Agreement to
comport with the appropriate applicable standards, on terms
mutually satisfactory to all Parties.
ARTICLE II. Representations and Warranties
2.1. FirstGWL&A represents and warrants that the securities
deemed to be issued by the Account under the Contracts are or,
prior to issuance, will be registered under the 1933 Act; that the
Contracts will be issued and sold in compliance in all material
respects with all applicable federal and state laws and that the
sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. FirstGWL&A further
represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that it has
legally and validly established the Account prior to any issuance
or sale of units thereof as a segregated asset account under
Section 4240 of the New York Insurance Law and has registered the
Account as a unit investment trust i
n accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts.
2.2. The Fund represents and warrants that Designated
Portfolio(s) shares sold pursuant to this Agreement shall be
registered under the 1933 Act, duly authorized for issuance and
sold in compliance with all applicable federal securities laws
including without limitation the 1933 Act, the 1934 Act, and the
1940 Act and that the Fund is and shall remain registered under the
0000 Xxx. The Fund shall amend the registration statement for its
shares under the 1933 Act and the 1940 Act from time to time as
required in order to effect the continuous offering of shares of
the Designated Portfolios.
2.3. The Fund reserves the right to adopt a plan pursuant to
Rule 12b-1 under the 1940 Act and to impose an asset-based or other
charge to finance distribution expenses as permitted by applicable
law and regulation. In any event, the Fund and Adviser agree to
comply with applicable provisions and SEC staff interpretations of
the 1940 Act to assure that the investment advisory or management
fees paid to the Adviser by the Fund are in accordance with the
requirements of the 1940 Act. To the extent that the Fund decides
to finance distribution expenses pursuant to Rule 12b-1, the Fund
undertakes to have its Board, a majority of whom are not interested
persons of the Fund, formulate and approve any plan pursuant to
Rule 12b-1 under the 1940 Act to finance distribution expenses.
2.4. The Fund represents and warrants that it will make every
effort to ensure that the investment policies, fees and expenses of
the Designated Portfolio(s) are and shall at all times remain in
compliance with the insurance and other applicable laws of the
State of New York and any other applicable state to the extent
required to perform this Agreement. The Fund further represents
and warrants that it will make every effort to ensure that
Designated Portfolio(s) shares will be sold in compliance with the
insurance laws of the State of New York and all applicable state
insurance and securities laws. The Fund shall register and qualify
the shares for sale in accordance with the laws of the various
states if and to the extent required by applicable law. FirstGWL&A
and the Fund will endeavor to mutually cooperate with respect to
the implementation of any modifications necessitated by any change
in state insurance laws, regulations or interpretations of the
foregoing that affect the Designated Portfolio(s) (a "Law Change"),
and to keep each other informed of any Law Change that becomes
known to either party. In the event of a Law Change, and to the
extent consistent with Article VII, the Fund agrees that, except in
those circumstances where the Fund has advised FirstGWL&A that its
Board of Directors has determined that implementation of a
particular Law Change is not in the best interest of all of the
Fund's shareholders, any action required by a Law Change will be
taken.
2.5. The Fund represents and warrants that it is lawfully
organized and validly existing under the laws of the Commonwealth
of Massachusetts and that it does and will comply in all material
respects with the 1940 Act.
2.6. The Adviser represents and warrants that it is and shall
remain duly registered under all applicable federal and state
securities laws and that it shall perform its obligations for the
Fund in compliance in all material respects with the laws of the
State of New York and any applicable state and federal securities
laws.
2.7. The Distributor represents and warrants that it is and
shall remain duly registered under all applicable federal and state
securities laws and that it shall perform its obligations for the
Fund in compliance in all material respects with the laws of the
State of Delaware and any applicable state and federal securities
laws.
2.8. The Fund, the Distributor and the Adviser represent and
warrant that all of their respective officers, employees,
investment advisers, and other individuals or entities dealing 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 the
minimal coverage required by Rule 17g-1 under the 1940 Act or
related provisions as may be promulgated from time to time. The
aforesaid bond shall include coverage for larceny and embezzlement
and shall be issued by a reputable bonding company.
2.9. Schwab represents and warrants that it has completed,
obtained and performed, in all material respects, all
registrations, filings, approvals, and authorizations, consents and
examinations required by any government or governmental authority
as may be necessary to perform this Agreement. Schwab does and
will comply, in all material respects, with all applicable laws,
rules and regulations in the performance of its obligations under
this Agreement.
2.10. The Fund will provide FirstGWL&A with as much
advance notice as is reasonably practicable of any material change
affecting the Designated Portfolio(s) (including, but not limited
to, any material change in the registration statement or prospectus
affecting the Designated Portfolio(s)) and any proxy solicitation
affecting the Designated Portfolio(s) and consult with FirstGWL&A
in order to implement any such change in an orderly manner,
recognizing the expenses of changes and attempting to minimize such
expenses by implementing them in conjunction with regular annual
updates of the prospectus for the Contracts. The Fund agrees to
share equitably in expenses incurred by FirstGWL&A as a result of
actions taken by the Fund, consistent with the allocation of
expenses contained in Schedule E attached hereto and incorporated
herein by reference.
2.11. FirstGWL&A represents and warrants, for purposes
other than diversification under Section 817 of the Internal
Revenue Code of 1986 as amended ("the Code"), that the Contracts
are currently treated as annuity contracts under applicable
provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify Schwab, the Fund,
the Distributor and the Adviser immediately upon having a
reasonable basis for believing that the Contracts have ceased to be
so treated or that they might not be so treated in the future. In
addition, FirstGWL&A represents and warrants that the Account is a
"segregated asset account" and that interests in the Account are
offered exclusively through the purchase of or transfer into a
"variable contract" within the meaning of such terms under Section
817 of the Code and the regulations thereunder. FirstGWL&A will
use every effort to continue to meet such definitional
requirements, and it will notify Schwab, the Fund, the Distributor,
and the Adviser immediately upon having a reasonable basis for
believing that such requirements have ceased to be met or that they
might not be met in the future.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the Distributor or Fund shall provide
a camera-ready copy and/or computer diskette of the current
prospectus for the Designated Portfolio(s)) and other assistance as
is reasonably necessary in order for FirstGWL&A once each year (or
more frequently if the prospectuses for the Designated Portfolio(s)
are amended) to have the prospectus for the Contracts and the
Fund's prospectus for the Designated Portfolio(s) printed together
in one document. The Fund and Adviser agree that the prospectuses
(and semi-annual and annual reports) for the Designated
Portfolio(s) will describe only the Designated Portfolio(s) and
will not name or describe any other portfolios or series that may
be in the Fund unless required by law.
3.2. If applicable state or federal laws or regulations
require that the Statement of Additional Information ("SAI") for
the Fund be distributed to all Contractowners, then the Fund and/or
the Distributor shall provide FirstGWL&A with copies of the Fund's
SAI or documentation thereof for the Designated Portfolio(s) in
such quantities, with expenses to be borne in accordance with
Schedule E hereof, as FirstGWL&A may reasonably require to permit
timely distribution thereof to Contractowners. The Distributor
and/or the Fund shall also provide SAIs to any Contractowner or
prospective owner who requests such SAI from the Fund (although it
is anticipated that such requests will be made to FirstGWL&A or
Schwab).
3.3. The Fund and/or the Distributor shall provide FirstGWL&A
and Schwab with copies of the Fund's proxy material, reports to
stockholders and other communications to stockholders for the
Designated Portfolio(s) in such quantity, with expenses to be borne
in accordance with Schedule E hereof, as FirstGWL&A may reasonably
require to permit timely distribution thereof to Contractowners.
3.4. It is understood and agreed that, except with respect to
information regarding FirstGWL&A or Schwab provided in writing by
that party, neither FirstGWL&A nor Schwab are responsible for the
content of the prospectus or SAI for the Designated Portfolio(s).
It is also understood and agreed that, except with respect to
information regarding the Fund, the Distributor, Adviser or the
Designated Portfolio(s) provided in writing by the Fund, the
Distributor or Adviser, neither the Fund, the Distributor nor
Adviser are responsible for the content of the prospectus or SAI
for the Contracts.
3.5. If and to the extent required by law FirstGWL&A shall:
(i) solicit voting instructions from Contractowners;
(ii) vote the Designated Portfolio(s) shares in
accordance with instructions received from Contractowners: and
(iii) vote Designated Portfolio shares for which no
instructions have been received in the same proportion as
Designated Portfolio(s) shares for which instructions have been
received from Contractowners, so long as and to the extent that the
SEC continues to interpret the 1940 Act to require pass-through
voting privileges for variable contract owners. FirstGWL&A
reserves the right to vote Fund shares held in any segregated asset
account in its own right, to the extent permitted by law and the
Mixed and Shared Funding Exemptive Order.
3.6. FirstGWL&A shall be responsible for assuring that each of
its separate accounts holding shares of a Designated Portfolio
calculates voting privileges, and the Fund shall provide FirstGWL&A
with appropriate assistance in fulfilling such responsibility. The
Fund agrees to promptly notify FirstGWL&A of any changes of
interpretations or amendments of the Mixed and Shared Funding
Exemptive Order.
3.7. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will
either provide for annual meetings (except insofar as the SEC may
interpret Section 16 of the 1940 Act not to require such meetings)
or, as the Fund currently intends, comply with Section 16(c) of the
1940 Act (although the Fund is not one of the trusts described in
Section 16(c) of that Act) as well as with Sections 16(a) and, if
and when applicable, 16(b). Further, the Fund will act in
accordance with the SEC's interpretation of the requirements of
Section 16(a) with respect to periodic elections of directors or
trustees and with whatever rules the Commission may promulgate in
the future with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be
furnished, to the Fund or its designee, a copy of each piece of
sales literature or other promotional material that FirstGWL&A or
Schwab, respectively, develops or proposes to use and in which the
Fund (or a Portfolio thereof), its Adviser or one of its
sub-advisers or the Distributor is named in connection with the
Contracts, at least ten (10) Business Days prior to its use. No
such material shall be used if the Fund objects to such use within
five (5) Business Days after receipt of such material. If sales
literature or promotional material goes beyond naming the Fund, a
Designated Portfolio, the Adviser, a sub-adviser, or the
Distributor, FirstGWL&A or Schwab shall obtain from the Fund or its
designee affirmative written approval to use such material.
4.2. FirstGWL&A and Schwab shall not give any information or
make any representations or statements on behalf of or concerning
the Fund, the Adviser or the Distributor in connection with the
sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Fund
shares, as such registration statement and prospectus may be
amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other
promotional material approved by the Fund, the Adviser or the
Distributor, except with the permission of the Fund or the
Distributor.
4.3. The Fund shall furnish, or shall cause to be furnished,
to FirstGWL&A and Schwab, a copy of each piece of sales literature
or other promotional material in which it names FirstGWL&A and/or
its separate account(s), or Schwab in connection with the
transactions contemplated by this Agreement at least ten (10)
Business Days prior to its use. No such material shall be used if
FirstGWL&A or Schwab objects to such use within five (5) Business
Days after receipt of such material.
4.4. The Fund, the Distributor, and the Adviser shall not give
any information or make any representations on behalf of FirstGWL&A
or concerning FirstGWL&A, the Account, or the Contracts other than
the information or representations contained in a registration
statement or prospectus for the Contracts, as such registration
statement and prospectus may be amended or supplemented from time
to time, or in reports for the Account, or in sales literature or
other promotional material approved by FirstGWL&A or its designee,
except with the permission of FirstGWL&A.
4.5. In connection with the Transactions contemplated by this
Agreement, FirstGWL&A, the Fund, the Distributor and the Adviser
shall not give any information or make any representations on
behalf of or concerning Schwab, or use Xxxxxx'x name except with
the permission of Schwab, or except which merely names Schwab as
administrator or the Fund's participation in a Schwab sponsored
program.
4.6. The Fund will provide to FirstGWL&A and Schwab at least
one complete copy of all registration statements, prospectuses,
SAIs, reports, proxy statements, sales literature and other
promotional materials which refer to FirstGWL&A or Schwab,
applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Designated
Portfolio(s), contemporaneously with the filing of such document(s)
with the SEC or NASD or other regulatory authorities.
4.7. FirstGWL&A or Schwab will provide to the Fund at least
one complete copy of all registration statements, prospectuses,
SAIs, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to
any of the above, that relate to the Contracts or the Account,
contemporaneously with the filing of such document(s) with the SEC,
NASD, or other regulatory authority.
4.8. For purposes of Articles IV and VIII, the phrase "sales
literature and other promotional material" includes, but is not
limited to, advertisements (such as material published, or designed
for use in, a newspaper, magazine, or other periodical, radio,
television, telephone or tape recording, videotape display, signs
or billboards, motion pictures, or other public media; e.g.,
on-line networks such as Internet or other electronic media), sales
literature (i.e., any written communication distributed or made
generally available to customers or the public, including
brochures, circulars, research reports, market letters, form
letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational
or training materials or other communications distributed or made
generally available to some or all agents or employees, and
registration statements, prospectuses, SAIs, shareholder reports,
and proxy materials and any other material constituting sales
literature or advertising under the NASD rules, 1933 Act or the
0000 Xxx.
4.9. At the request of any party to this Agreement, each other
party will make available to the other party's independent auditors
and/or representative of the appropriate regulatory agencies, all
records, data and access to operating procedures that may be
reasonably requested in connection with compliance and regulatory
requirements related to this Agreement or any party's obligations
under this Agreement.
ARTICLE V. Fees and Expenses
5.1. The Fund shall pay no fee or other compensation to
FirstGWL&A or Schwab under this Agreement, and FirstGWL&A shall pay
no fee or other compensation to the Fund or Adviser under this
Agreement, although the parties hereto will bear certain expenses
in accordance with Schedule E, Articles III, V, and other
provisions of this Agreement.
5.2. Except as otherwise specifically provided herein or in
Schedule E, each party will bear all expenses incident its
performance under this Agreement. The Fund shall see to it that
all shares of the Designated Portfolio(s) are registered and
authorized for issuance in accordance with applicable federal law
and, if and to the extent required, in accordance with applicable
state laws prior to their sale and pay all expenses related
thereto.
5.3. The parties shall bear the expenses of routine annual
distribution (mailing costs) of the Fund's prospectus and
distribution (mailing costs) of the Fund's proxy materials and
reports to owners of Contracts offered by FirstGWL&A, in accordance
with Schedule E.
5.4. The Fund, the Distributor and the Adviser acknowledge
that a principal feature of the Contracts is the Contractowner's
ability to choose from a number of unaffiliated mutual funds (and
portfolios or series thereof), including the Designated
Portfolio(s) and the Unaffiliated Funds, and to transfer the
Contract's cash value between funds and portfolios. The Fund, the
Distributor and the Adviser agree to not interfere with FirstGWL&A
and Schwab in facilitating the operation of the Account and the
Contracts as described in the prospectus for the Contracts,
including but not limited to cooperation in not interfering with
transfers between Unaffiliated Funds.
5.5. Schwab agrees to provide certain administrative services,
specified in Schedule C attached hereto and incorporated herein by
reference, in connection with the arrangements contemplated by this
Agreement. The parties acknowledge and agree that the services
referred to in this Section 5.5 are recordkeeping, shareholder
communication, and other transaction facilitation and processing,
and related administrative services only and are not the services
of an underwriter or a principal underwriter of the Fund and that
Schwab is not an underwriter for the shares of the Designated
Portfolio(s), within the meaning of the 1933 Act or the 0000 Xxx.
5.6. As compensation for the services rendered, as specified
in Schedule C hereto, the Adviser agrees to pay Schwab a monthly
Administrative Service Fee based on the percentage per annum on
Schedule C hereto applied to the average daily value of the shares
of the Designated Portfolio(s) held in the Account with respect to
Contracts sold by Schwab. This monthly Administrative Service Fee
is due and payable before the 15th (fifteenth) day following the
last day of the month to which it relates.
ARTICLE VI. Diversification and Qualification
6.1. The Fund, Distributor and Adviser represent and warrant
that they will make every effort to enable each Designated
Portfolio to at all times comply with Section 817(h) of the Code
and Treasury Regulation 1.817-5, as amended from time to time, and
any Treasury interpretations thereof, relating to the
diversification requirements for variable annuity, endowment, or
life insurance contracts and any amendments or other modifications
or successor provisions to such Section or Regulations. The Fund
and the Distributor agree that shares of the Designated
Portfolio(s) will be sold only to Participating Insurance Companies
and their separate accounts and certain Qualified Plans.
6.2. No shares of any Designated Portfolio of the Fund will be
sold to the general public.
6.3. The Fund and the Adviser represent and warrant that each
Designated Portfolio is currently qualified as a Regulated
Investment Company under Subchapter M of the Code, and that each
Designated Portfolio will maintain such qualification (under
Subchapter M or any successor or similar provisions) as long as
this Agreement is in effect.
6.4. The Fund, the Distributor or the Adviser will notify
FirstGWL&A immediately upon having a reasonable basis for believing
that any Designated Portfolio has ceased to comply with the
aforesaid Section 817(h) diversification or Subchapter M
qualification requirements or might not so comply in the future.
6.5. Without in any way limiting the effect of Sections 8.3,
8.4 and 8.5 hereof and without in any way limiting or restricting
any other remedies available to FirstGWL&A or Schwab, the Adviser
or the Distributor will pay all costs associated with or arising
out of any failure of the Fund or any Designated Portfolio to
comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs
associated with reasonable and appropriate corrections or responses
to any such failure; such costs may include, but are not limited
to, the costs involved in creating, organizing, and registering a
new investment company as a funding medium for the Contracts and/or
the costs of obtaining whatever regulatory authorizations are
required to substitute shares of another investment company for
those of the failed Portfolio (including but not limited to an
order pursuant to Section 26(b) of the 1940 Act); such costs are to
include, but are not limited to, fees and expenses of legal counsel
and other advisors to FirstGWL&A and any federal income taxes or
tax penalties and interest thereon (or "toll charges" or exactments
or amounts paid in settlement) incurred by FirstGWL&A with respect
to itself or owners of its Contracts in connection with any such
failure.
6.6. The Fund at the Fund's expense shall provide FirstGWL&A
or its designee with reports certifying compliance with the
aforesaid Section 817(h) diversification and Subchapter M
qualification requirements, at the times provided for and
substantially in the form attached hereto as Schedule D and
incorporated herein by reference; provided, however, that providing
such reports does not relieve the Fund of its responsibility for
such compliance or of its liability for any non-compliance.
6.7. FirstGWL&A agrees that if the Internal Revenue Service
("IRS") asserts in writing in connection with any governmental
audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, of any
Contractowner that any Designated Portfolio has failed to comply
with the diversification requirements of Section 817(h) of the Code
or FirstGWL&A otherwise becomes aware of any facts that could give
rise to any claim against the Fund, the Adviser or the Distributor
as a result of such a failure or alleged failure:
(a) FirstGWL&A shall promptly notify the Fund, the Adviser
and the Distributor of such assertion or potential claim;
(b) FirstGWL&A shall consult with the Fund, the Adviser and
the Distributor as to how to minimize any liability that may arise
as a result of such failure or alleged failure;
(c) FirstGWL&A shall use its best efforts to minimize any
liability of the Fund, the Adviser and the Distributor resulting
from such failure, including, without limitation, demonstrating,
pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the
commissioner of the IRS that such failure was inadvertent;
(d) any written materials to be submitted by FirstGWL&A to
the IRS, any Contractowner or any other claimant in connection with
any of the foregoing proceedings or contests (including, without
limitation, any such materials to be submitted to the IRS pursuant
to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided
by FirstGWL&A to the Fund, the Distributor and the Adviser
(together with any supporting information or analysis) within at
least two (2) business days prior to submission;
(e) FirstGWL&A shall provide the Fund, the Distributor and the
Adviser with such cooperation as the Fund, the Distributor and the
Adviser shall reasonably request (including, without limitation, by
permitting the Fund, the Distributor and the Adviser to review the
relevant books and records of FirstGWL&A) in order to facilitate
review by the Fund, the Distributor and the Adviser of any written
submissions provided to it or its assessment of the validity or
amount of any claim against it arising from such failure or alleged
failure;
(f) FirstGWL&A shall not with respect to any claim of the IRS
or any Contractowner that would give rise to a claim against the
Fund, the Distributor and the Adviser (i) compromise or settle any
claim, (ii) accept any adjustment on audit, or (iii) forego any
allowable administrative or judicial appeals, without the express
written consent of the Fund, the Distributor and the Adviser, which
shall not be unreasonably withheld; provided that, FirstGWL&A shall
not be required to appeal any adverse judicial decision unless the
Fund, the Distributor and the Adviser shall have provided an
opinion of independent counsel to the effect that a reasonable
basis exists for taking such appeal; and further provided that the
Fund, the Distributor and the Adviser shall bear the costs and
expenses, including reasonable attorney's fees, incurred by
FirstGWL&A in complying with this clause (f).
ARTICLE VII. Potential Conflicts and Compliance With
Mixed and Shared Funding Exemptive Order
7.1. The Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the
contract owners of all separate accounts investing in the Fund 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, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal
or state insurance, tax, or securities laws or regulations, or a
public ruling, private letter ruling, no-action or interpretative
letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision
in any relevant proceeding; (d) the manner in which the investments
of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life
insurance contract owners or by contract owners of different
Participating Insurance Companies; or (f) a decision by a
Participating Insurance Company to disregard the voting
instructions of contract owners. The Board shall promptly inform
FirstGWL&A if it determines that an irreconcilable material
conflict exists and the implications thereof.
7.2. FirstGWL&A will report any potential or existing
conflicts of which it is aware to the Board. FirstGWL&A will
assist the Board in carrying out its responsibilities under the
Mixed and Shared Funding Exemptive Order, by providing the Board
with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an
obligation by FirstGWL&A to inform the Board whenever contract
owner voting instructions are to be disregarded.
7.3. If it is determined by a majority of the Board, or a
majority of its directors who are not interested persons of the
Fund, the Distributor, the Adviser or any sub-adviser to any of the
Designated Portfolios (the "Independent Directors"), that a
material irreconcilable conflict exists, FirstGWL&A and other
Participating Insurance Companies shall, at their expense and to
the extent reasonably practicable (as determined by a majority of
the Independent Directors), take whatever steps are necessary to
remedy or eliminate the irreconcilable material conflict,
including: (1) withdrawing the assets allocable to some or all of
the separate accounts from the Fund or any Designated Portfolio and
reinvesting such assets in a different investment medium, including
(but not limited to) another portfolio of the Fund, or submitting
the question whether such segregation should be implemented to a
vote of all affected contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity
contract owners, life insurance contract owners, or variable
contract owners of one or more Participating Insurance Companies)
that votes in favor of such segregation, or offering to the
affected contract owners the option of making such a change; and
(2) establishing a new registered management investment company or
managed separate account.
7.4. If a material irreconcilable conflict arises because of
a decision by FirstGWL&A to disregard contract owner voting
instructions and that decision represents a minority position or
would preclude a majority vote, FirstGWL&A may be required, at the
Fund's election, to withdraw the Account's investment in the Fund
and terminate this Agreement; provided, however that such
withdrawal and termination shall be limited to the extent required
by the foregoing material irreconcilable conflict as determined by
a majority of the Independent Directors. Any such withdrawal and
termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and
until the end of that six month period the Distributor and the Fund
shall continue to accept and implement orders by FirstGWL&A for the
purchase (and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to
FirstGWL&A conflicts with the majority of other state regulators,
then FirstGWL&A will withdraw the Account's investment in the Fund
and this Agreement shall terminate within six months after the
Board informs FirstGWL&A in writing that it has determined that
such decision has created an irreconcilable material conflict;
provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing
six month period, the Fund shall continue to accept and implement
orders by FirstGWL&A for the purchase (and redemption) of shares of
the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this
Agreement, a majority of the Independent Directors shall determine
whether any proposed action adequately remedies any irreconcilable
material conflict, but in no event will the Fund be required to
establish a new funding medium for the Contracts. FirstGWL&A shall
not be required by Section 7.3 to establish a new funding medium
for the Contracts if an offer to do so has been declined by vote of
a majority of Contractowners affected by the irreconcilable
material conflict. In the event that the Board determines that any
proposed action does not adequately remedy any irreconcilable
material conflict, then FirstGWL&A will withdraw the Account's
investment in the Fund and this Agreement shall terminate within
six (6) months after the Board informs FirstGWL&A in writing of the
foregoing determination; provided, however, that such withdrawal
and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
Independent Directors.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from
any provision of the 1940 Act or the rules promulgated thereunder
with respect to mixed or shared funding (as defined in the Mixed
and Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Mixed and Shared
Funding Exemptive Order, then (a) the Fund and/or the Participating
Insurance Companies, as appropriate, shall take such steps as may
be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such rules are applicable: and
(b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this
Agreement shall be deemed modified to the extent necessary also to
comply with the terms and conditions contained in such Rule(s) as
so amended or adopted.
7.8. FirstGWL&A shall at least annually submit to the Board of
Trustees of the Fund such reports, materials or data as the
Trustees may reasonably request so that the Trustees may fully
carry out the obligations imposed upon them by the Mixed and Shared
Funding Exemptive Order, and said reports, materials and data shall
be submitted more frequently if deemed appropriate by the Board of
Trustees.
7.9. FirstGWL&A agrees that any remedial action taken by it in
resolving any irreconcilable conflict will be carried out at its
expense and with a view only to the interests of its
Contractowners.
ARTICLE VIII. Indemnification
8.1. Indemnification By FirstGWL&A
8.1(a). FirstGWL&A agrees to indemnify and hold
harmless the Fund, the Distributor and the Adviser and each of
their officers and directors or trustees and each person, if any,
who controls the Fund, Distributor or Adviser within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this Section 8.1) against any and all losses,
claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of FirstGWL&A) or litigation
(including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses,
claims, expenses, damages, liabilities or expenses (or actions in
respect thereof) or settlements are related to the sale or
acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or SAI covering the Contracts
or contained in the Contracts or sales literature and other
promotional material for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this Agreement
to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished
in writing to FirstGWL&A or Schwab by or on behalf of the Adviser,
Distributor or Fund for use in the registration statement or
prospectus or SAI for the Contracts or in the Contracts or sales
literature and other promotional material (or any amendment or
supplement) or otherwise for use in connection with the sale of the
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, SAI or sales literature
and other promotional material of the Fund not supplied by
FirstGWL&A or persons under its control) or wrongful conduct of
FirstGWL&A or persons under its control, with respect to the sale
or distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus, SAI, or sales literature and other promotional material
of the Fund, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement or
statements therein not misleading, if such a statement or omission
was made in reliance upon information furnished in writing to the
Fund by or on behalf of FirstGWL&A; or
(iv) arise as a result of any failure by FirstGWL&A to provide
the services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by FirstGWL&A in this Agreement
or arise out of or result from any other material breach of this
Agreement by FirstGWL&A, including without limitation Section 2.11
and Section 6.7 hereof,
as limited by and in accordance with the provisions of Sections
8.1(b) and 8.1(c) hereof.
8.1(b). FirstGWL&A shall not be liable under this
indemnification provision with respect to any losses, claims,
expenses, damages, liabilities or litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or negligence
in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations or
duties under this Agreement to any of the Indemnified Parties.
8.1(c). FirstGWL&A shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified
FirstGWL&A in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service
on any designated agent), but failure to notify FirstGWL&A of any
such claim shall not relieve FirstGWL&A from any liability which it
may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification
provision, except to the extent that FirstGWL&A has been prejudiced
by such failure to give notice. In case any such action is brought
against the Indemnified Parties, FirstGWL&A shall be entitled to
participate, at its own expense, in the defense of such action.
FirstGWL&A also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After
notice from FirstGWL&A to such party of FirstGWL&A's election to
assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and
FirstGWL&A will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify
FirstGWL&A of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the Fund
Shares or the Contracts or the operation of the Fund.
8.2. Indemnification by Schwab
8.2(a). Schwab agrees to indemnify and hold harmless
the Fund, the Distributor and the Adviser and each of their
officers and directors or trustees and each person, if any, who
controls the Fund, Distributor or Adviser within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this Section 8.2) against any and all losses,
claims, expenses, damages and liabilities (including amounts paid
in settlement with the written consent of Schwab) or litigation
(including reasonable legal and other expenses), to which the
Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of
the Fund's shares or the Contracts and:
(i) arise out of Xxxxxx'x dissemination of information
regarding the Fund, the Adviser or the Distributor that is both (A)
materially incorrect and (B) that was neither contained in the
Fund's registration statement or sales literature and other
promotional material of the Fund prepared by the Fund or provided
in writing by the Fund to Schwab, or approved in writing, by or on
behalf of the Fund, the Distributor or the Adviser; or
(ii) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in sales
literature or other promotional material prepared by Schwab for the
Contracts or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this Agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished in writing to FirstGWL&A or
Schwab by the Adviser, the Distributor or Fund for use in the
registration statement or prospectus for the Contracts or in the
Contracts or sales literature and other promotional material (or
any amendment or supplement) or otherwise for use in connection
with the sale of the Contracts; or
(iii) arise out of or as a result of statements or
representations (other than statements or representations contained
in the registration statement, prospectus or sales literature of
the Fund not supplied by Schwab or persons under its control) or
wrongful conduct of Schwab or persons under its control, with
respect to the sale or distribution of the Contracts; or
(iv) arise as a result of any failure by Schwab to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by Schwab in this Agreement or
arise out of or result from any other material breach of this
Agreement by Schwab;
as limited by and in accordance with the provisions of Sections
8.2(b) and 8.2(c) hereof.
8.2(b). Schwab shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation to which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, bad faith, or negligence in the performance of
such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this
Agreement to any of the Indemnified Parties.
8.2(c). Schwab shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified
Schwab in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service
on any designated agent), but failure to notify Schwab of any such
claim shall not relieve Schwab from any liability which it may have
to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision, except
to the extent that Schwab has been prejudiced by such failure to
give notice. In case any such action is brought against the
Indemnified Parties, Schwab shall be entitled to participate, at
its own expense, in the defense of such action. Schwab also shall
be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from
Schwab to such party of Xxxxxx'x election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it, and Schwab will not be
liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Indemnified Parties will promptly notify
Schwab of the commencement of any litigation or proceedings against
them in connection with the issuance or sale of the Fund Shares or
the Contracts or the operation of the Fund.
8.3. Indemnification by the Adviser
8.3(a). The Adviser agrees to indemnify and hold
harmless FirstGWL&A and Schwab and each of their directors and
officers and each person, if any, who controls FirstGWL&A or Schwab
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any
and all losses, claims, expenses, damages, liabilities (including
amounts paid in settlement with the written consent of the Adviser)
or litigation (including reasonable legal and other expenses) to
which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of
the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or SAI or sales literature or
other promotional material of the Fund prepared by the Fund,
Adviser or the Distributor (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 in writing to the Adviser,
the Distributor or the Fund by or on behalf of FirstGWL&A or Schwab
for use in the registration statement or prospectus or SAI for the
Fund or in sales literature and other promotional material (or any
amendment or supplement) or otherwise for use in connection with
the sale of the Contracts or the 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, SAI or sales literature
or other promotional material for the Contracts not supplied by the
Adviser or persons under its control) or wrongful conduct of the
Fund, the Distributor or Adviser or persons under their control,
with respect to the sale or distribution of the Contracts or Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus, SAI, or sales literature and other promotional material
covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statement or statements therein not misleading, if such
statement or omission was made in reliance upon and in conformity
with information furnished in writing to FirstGWL&A or Schwab by or
on behalf of the Adviser, the Distributor or the Fund; or
(iv) arise as a result of any failure by the Fund, the Adviser
or the Distributor to provide the services and furnish the
materials under the terms of this Agreement (including a failure to
comply with the diversification and other qualification
requirements of Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, the Adviser or the
Distributor in this Agreement or arise out of or result from any
other material breach of this Agreement by the Adviser, the Fund or
the Distributor; or
(vi) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset value per
share or dividend or capital gain distribution rate;
as limited by and in accordance with the provisions of Sections
8.3(b) and 8.3(c) hereof. This indemnification is in addition to
and apart from the responsibilities and obligations of the Adviser
specified in Article VI hereof.
8.3(b). The Adviser shall not be liable under this
indemnification provision with respect to any losses, claims,
expenses, damages, liabilities or litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or negligence
in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations or
duties under this Agreement to any of the Indemnified Parties.
8.3(c). The Adviser shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified
the Adviser in writing within a reasonable time after the summons
or other first legal process giving information of the nature of
the claim shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify the Adviser
of any such claim shall not relieve the Adviser from any liability
which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification
provision, except to the extent that the Adviser has been
prejudiced by such failure to give notice. In case any such action
is brought against the Indemnified Parties, the Adviser will be
entitled to participate, at its own expense, in the defense
thereof. The Adviser also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the
Adviser's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel
retained by it, and the Adviser will not be liable to such party
under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Indemnified Parties will promptly notify the
Adviser of the commencement of any litigation or proceedings
against them.
8.4. Indemnification By the Fund
8.4(a). The Fund agrees to indemnify and hold harmless
FirstGWL&A and Schwab and each of their directors and officers and
each person, if any, who controls FirstGWL&A or Schwab within the
meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.4) against any
and all losses, claims, expenses, damages, liabilities (including
amounts paid in settlement with the written consent of the Fund) or
litigation (including reasonable legal and other expenses) to which
the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses,
claims, expenses, damages, liabilities or expenses (or actions in
respect thereof) or settlements, are related to the operations of
the Fund and:
(i) arise as a result of any failure by the Fund to provide
the services and furnish the materials under the terms of this
Agreement (including a failure to comply with the diversification
and other qualification requirements of Article VI of this
Agreement); or
(ii) 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;
as limited by and in accordance with the provisions of Sections
8.4(b) and 8.4(c) hereof.
8.4(b). The Fund shall not be liable under this
indemnification provision with respect to any losses, claims,
expenses, damages, liabilities or litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or negligence
in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations or
duties under this Agreement to any of the Indemnified Parties.
8.4(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 a reasonable time after the summons or
other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service
on any designated agent), but failure to notify the Fund of any
such claim shall not relieve it from any liability which it may
have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision, except
to the extent that the Fund has been prejudiced by such failure to
give notice. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund shall also 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.
8.4(d). The Indemnified Parties will promptly notify the
Fund of the commencement of any litigation or proceeding against
them.
8.4(e). It is understood and agreed that no liability of
the Fund Pursuant to this section 8.4 shall extend to the assets of
any portfolio of the Fund other than the Designated Portfolios, or
where the failure or breach giving rise to such liability relates
to a single Designated Portfolio, to the assets of any other
Designated Portfolio.
8.5. Indemnification by the Distributor
8.5(a). The Distributor agrees to indemnify and hold
harmless FirstGWL&A and Schwab and each of their directors and
officers and each person, if any, who controls FirstGWL&A or Schwab
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.5) against any
and all losses, claims, expenses, damages, liabilities (including
amounts paid in settlement with the written consent of the
Distributor) or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties may become subject under
any statute or regulation, at common law or otherwise, insofar as
such losses, claims, expenses, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale
or acquisition of the Fund's shares or the contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or SAI or sales literature or
other promotional material of the Fund prepared by the Fund,
Adviser or Distributor (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 in writing to the Adviser,
the Distributor or Fund by or on behalf of FirstGWL&A or Schwab for
use in the registration statement or SAI or prospectus for the Fund
or in sales literature or other promotional material (or any
amendment or supplement) or otherwise for use in connection with
the sale of the 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, SAI, sales literature or
other promotional material for the Contracts not supplied by the
Fund, Adviser or Distributor or persons under their control) or
wrongful conduct of the Fund, the Distributor or Adviser or persons
under their control, with respect to the sale or distribution of
the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus, SAI, sales literature or other promotional material
covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statement or statements therein not misleading, if such
statement or omission was made in reliance upon and in conformity
with information furnished in writing to FirstGWL&A or Schwab by or
on behalf of the Adviser, the Distributor or Fund; or
(iv) arise as a result of any failure by the Fund, Adviser or
Distributor to provide the services and furnish the materials under
the terms of this Agreement (including a failure to comply with the
diversification and other qualification requirements of Article VI
of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, Adviser or
Distributor in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund, Adviser or
Distributor;
as limited by and in accordance with the provisions of Sections
8.5(b) and 8.5(c) hereof. This indemnification is in addition to
and apart from the responsibilities and obligations of the
Distributor specified in Article VI hereof.
8.5(b). The Distributor shall not be liable under this
indemnification provision with respect to any losses, claims,
expenses, damages, liabilities or litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or negligence
in the performance or such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations or
duties under this Agreement to any of the Indemnified Parties.
8.5(c) The Distributor shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified
the Distributor in writing within a reasonable time after the
summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified
Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the
Distributor of any such claim shall not relieve the Distributor
from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of
this indemnification provision, except to the extent that the
Distributor has been prejudiced by such failure to give notice. In
case any such action is brought against the Indemnified Parties,
the Distributor will be entitled to participate, at its own
expense, in the defense thereof. The Distributor also shall be
entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from the
Distributor to such party of the Distributor's election to assume
the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the
Distributor will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.5(d) The Indemnified Parties will promptly notify the
Distributor of the commencement of any litigation or proceedings
against them.
ARTICLE IX. Applicable Law
9.1. Except as provided in Section 9.2, this Agreement shall
be construed and the provisions hereof interpreted under and in
accordance with the laws of the State of New York, without regard
to the New York Conflict of Laws provisions.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules
and regulations as the Securities and Exchange Commission may grant
(including, but not limited to, the Mixed and Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause,
with respect to some or all Portfolios, upon six (6) months advance
written notice delivered to the other parties; provided, however,
that such notice shall not be given earlier than six (6) months
following the date of this Agreement; or
(b) at the option of FirstGWL&A or Schwab by written
notice to the other parties with respect to any Portfolio based
upon FirstGWL&A's or Xxxxxx'x reasonable determination in their
respective sole judgment exercised in good faith that shares of
such Portfolio are not reasonably available to meet the
requirements of the Contracts; or
(c) at the option of FirstGWL&A or Schwab by written
notice to the other parties with respect to any Portfolio in the
event any of the Portfolio's shares are not registered, issued or
sold in accordance with applicable state and/ or federal law or
such law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by
FirstGWL&A; or
(d) at the option of the Fund, the Adviser or
Distributor in the event that formal administrative proceedings are
instituted against FirstGWL&A or Schwab by the NASD, the SEC, the
Insurance Commissioner or like official of any state or any other
regulatory body, if, in each case, the terminating party reasonably
determines in its sole judgment exercised in good faith, that any
such administrative proceedings will have a material adverse effect
upon the ability of FirstGWL&A or Schwab to perform its obligations
under this Agreement; or
(e) at the option of FirstGWL&A or Schwab in the event
that formal administrative proceedings are instituted against the
Fund, the Distributor or Adviser by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body, if
Schwab or FirstGWL&A reasonably determines in its sole judgment
exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of the Fund,
the Distributor or Adviser to perform their obligations under this
Agreement; or
(f) at the option of FirstGWL&A by written notice to the
Fund with respect to any Portfolio if FirstGWL&A reasonably
believes that the Portfolio will fail to meet the Section 817(h)
diversification requirements or Subchapter M qualifications
specified in Article VI hereof; or
(g) at the option of the Fund, the Distributor or the
Adviser, if (i) the Fund, the Distributor, or the Adviser,
respectively, shall determine, in its sole judgment reasonably
exercised in good faith, that either FirstGWL&A or Schwab has
suffered a material adverse change in its business or financial
condition or is the subject of material adverse publicity and that
material adverse change or publicity will have a material adverse
impact on FirstGWL&A's or Xxxxxx'x ability to perform its
obligations under this Agreement, (ii) the Fund, the Distributor or
Adviser notifies FirstGWL&A or Schwab, as appropriate, of that
determination and its intent to terminate this Agreement, and (iii)
after considering the actions taken by FirstGWL&A or Schwab and any
other changes in circumstances since the giving of such a notice,
the determination of the Fund, the Distributor or Adviser shall
continue to apply on the sixtieth (60th) day following the giving
of that notice, which sixtieth day shall be the effective date of
termination; or
(h) at the option of either FirstGWL&A or Schwab, if (i)
FirstGWL&A or Schwab, respectively, shall determine, in its sole
judgment reasonably exercised in good faith, that either the Fund,
the Distributor or the Adviser has suffered a material adverse
change in its business or financial condition or is the subject of
material adverse publicity and that material adverse change or
publicity will have a material adverse impact on the Fund's, the
Distributor's or Adviser's ability to perform its obligations under
this Agreement, (ii) FirstGWL&A or Schwab notifies in writing the
Fund, the Distributor or Adviser, as appropriate, of that
determination and its intent to terminate this Agreement, and (iii)
after considering the actions taken by the Fund, the Distributor or
Adviser and any other changes in circumstances since the giving of
such a notice, the determination of FirstGWL&A or Schwab shall
continue to apply on the sixtieth (60th) day following the giving
of that notice, which sixtieth day shall be the effective date of
termination; or
(i) at the option of FirstGWL&A in the event that formal
administrative proceedings are instituted against Schwab by the
NASD, the Securities and Exchange Commission, or any state
securities or insurance department or any other regulatory body
regarding Xxxxxx'x duties under this Agreement or related to the
sale of the Fund's shares or the Contracts, the operation of any
Account, or the purchase of the Fund shares, provided, however,
that FirstGWL&A determines in its sole judgment exercised in good
faith, that any such administrative proceedings will have a
material adverse effect upon the ability of Schwab to perform its
obligations related to the Contracts; or
(j) at the option of Schwab in the event that formal
administrative proceedings are instituted against FirstGWL&A by the
NASD, the Securities and Exchange Commission, or any state
securities or insurance department or any other regulatory body
regarding FirstGWL&A's duties under this Agreement or related to
the sale of the Fund's shares or the Contracts, the operation of
any Account, or the purchase of the Fund shares, provided, however,
that Schwab determines in its sole judgment exercised in good
faith, that any such administrative proceedings will have a
material adverse effect upon the ability of FirstGWL&A to perform
its obligations related to the Contracts; or
(k) at the option of the Fund, the Adviser or the
Distributor by written notice to FirstGWL&A, in the event that the
terminating party reasonably believes that the Contracts will cease
to qualify as annuity contracts under the Code or that a
definitional requirement referred to in Section 2.11 will not be
met, or if the Contracts are not registered, issued or sold in
accordance with applicable state and/or federal law; or
(l) at the option of any non-defaulting party hereto in
the event of a material breach of this Agreement by any party
hereto (the "defaulting party") other than as described in
10.1(a)-(k); provided, that the non-defaulting party gives written
notice thereof to the defaulting party, with copies of such notice
to all other non-defaulting parties, and if such breach shall not
have been remedied within thirty (30) days after such written
notice is given, then the non-defaulting party giving such written
notice may terminate this Agreement by giving thirty (30) days
written notice of termination to the defaulting party.
10.2. Notice Requirement. No termination of this
Agreement shall be effective unless and until the party terminating
this Agreement gives prior written notice to all other parties of
its intent to terminate, which notice shall set forth the basis for
the termination. Furthermore,
(a) in the event any termination is based upon the provisions
of Article VII, or the provisions of Section 10.1(a), 10.1(g) or
10.1(h) of this Agreement, the prior written notice shall be given
in advance of the effective date of termination as required by
those provisions unless such notice period is shortened by mutual
written agreement of the parties;
(b) in the event any termination is based upon the provisions
of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement,
the prior written notice shall be given at least sixty (60) days
before the effective date of termination; and
(c) in the event any termination is based upon the provisions
of Section 10.1(b), 10.1(c), 10.1(f) or 10.1(k), the prior written
notice shall be given in advance of the effective date of
termination.
10.3. Effect of Termination. Notwithstanding any
termination of this Agreement, other than as a result of a failure
by either the Fund or FirstGWL&A to meet Section 817(h) of the Code
diversification requirements, the Fund, the Adviser and the
Distributor shall, at the option of FirstGWL&A or Schwab, continue
to make available additional shares of the Designated Portfolios
pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the
Designated Portfolios, redeem investments in the Designated
Portfolios and/or invest in the Designated Portfolios upon the
making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.3 shall not
apply to any terminations under Article VII and the effect of such
Article VII terminations shall be governed by Article VII of this
Agreement.
10.4. Surviving Provisions. Notwithstanding any
termination of this Agreement, each party's obligations under
Article VIII to indemnify other parties shall survive and not be
affected by any termination of this Agreement. In addition, to the
extent necessary to give effect to Section 10.3 hereof, with
respect to Existing Contracts, all provisions of this Agreement
shall also survive and not be affected by any termination of this
Agreement.
10.5. Survival of Agreement. A termination by Schwab
shall terminate this Agreement only as to Schwab, and this
Agreement shall remain in effect as to the other parties; provided,
however, that in the event of a termination by Schwab the other
parties shall have the option to terminate this Agreement upon 60
(sixty) days notice, rather than the six (6) months specified in
Section 10.1(a).
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by
registered or certified mail to a 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 parties.
If to the Fund:
The Xxxxx American Fund
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
If to FirstGWL&A:
First Great-West Life & Annuity Insurance Company
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Assistant Vice President, Savings Products
If to the Adviser:
Xxxx Xxxxx Management, Inc.
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
If to the Distributor:
Xxxx Xxxxx & Company, Incorporated
00 Xxxxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxx
If to Schwab:
Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: General Counsel
ARTICLE XII. Miscellaneous
12.1. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential
the names and addresses of the owners of the Contracts and all
information reasonably identified as confidential in writing by any
other party hereto and, except as permitted by this Agreement,
shall not disclose, disseminate or utilize such names and addresses
and other confidential information without the express written
consent of the affected party until such time as such information
may come into the public domain. Without limiting the foregoing,
no party hereto shall disclose any information that another party
has designated as proprietary.
12.2. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any
of the provisions hereof or otherwise affect their construction or
effect.
12.3. This Agreement may be executed simultaneously in two
or more counterparts, each of which taken together shall constitute
one and the same instrument.
12.4. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement shall not be affected thereby.
12.5. Each party hereto shall cooperate with each other
party and all appropriate governmental authorities (including
without limitation the SEC, the NASD and state insurance
regulators) and shall permit such authorities reasonable access to
its books and records in connection with any investigation or
inquiry relating to this Agreement or the transactions contemplated
hereby. Notwithstanding the generality of the foregoing, each
party hereto further agrees to furnish the New York Insurance
Commissioner with any information or reports in connection with
services provided under this Agreement which such Commissioner may
reasonably request in order to ascertain whether the variable
annuity operations of FirstGWL&A are being conducted in a manner
consistent with the New York Variable Annuity Regulations and any
other applicable law or regulations.
12.6. Any controversy or claim arising out of or relating
to this Agreement, or breach thereof, shall be settled by
arbitration in a forum jointly selected by the relevant parties
(but if applicable law requires some other forum, then such other
forum) in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
12.7. The rights, remedies and obligations contained in
this Agreement are cumulative and are in addition to any and all
rights, remedies and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws.
12.8. This Agreement or any of the rights and obligations
hereunder may not be assigned by any party without the prior
written consent of all parties hereto.
12.9. The Fund is a business trust organized under the
laws of the Commonwealth of Massachusetts and under a Declaration
of Trust, to which reference is hereby made, a copy of which is on
file at the office of the Secretary of State of the Commonwealth of
Massachusetts, and to any and all amendments thereto so filed or
hereafter filed. The obligations of the Fund entered into
hereunder in the name of the Fund or on behalf thereof by any of
its trustees, officers, employees or agents are undertaken not
individually but in such capacities, and are not binding upon any
of the trustees, officers, employees or shareholders of the Fund
personally, but bind only the assets of the Fund or of the
Designated Portfolio.
12.10. Schwab and FirstGWL&A agree that the obligations
assumed by the Distributor and the Adviser pursuant to this
Agreement shall be limited in any case to the Distributor and
Adviser and their respective assets and neither Schwab nor
FirstGWL&A shall seek satisfaction of any such obligation from the
shareholders of the Distributor or the Adviser, the Directors,
officers, employees or agents of the Distributor or Adviser, or any
of them, except to the extent permitted under this Agreement.
12.11. The Fund, Adviser and Distributor agree that the
obligations assumed by FirstGWL&A and Schwab pursuant to this
Agreement shall be limited in any case to FirstGWL&A and Schwab and
their respective assets and neither the Fund, Distributor nor
Adviser shall seek satisfaction of any such obligation from the
shareholders of the FirstGWL&A or Schwab, the directors, officers,
employees or agents of the FirstGWL&A or Schwab, or any of them,
except to the extent permitted under this Agreement.
12.12. No provision of this Agreement may be deemed or
construed to modify or supersede any contractual rights, duties, or
indemnifications, as between the Distributor and the Fund, and as
between the Adviser and the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly
authorized representative and its seal to be hereunder affixed
hereto as of the date specified below.
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE
COMPANY
By its authorized officer,
By:/s/ Xxxxxx X. Xxxx
Title: Vice President, Marketing & Product
Development Date: April 1, 1997
THE XXXXX AMERICAN FUND:
By its authorized officer,
By:/s/ Xxxxxxx X. Xxxx
Title: Treasurer
Date: Xxxxx 00, 0000
XXXX XXXXX MANAGEMENT, INC.:
By its authorized officer,
By:/s/ Xxxxxxx X. Xxxx
Title: Executive Vice President
Date: Xxxxx 00, 0000
XXXX XXXXX & COMPANY, INCORPORATED:
By its authorized officer,
By:/s/ Xxxxxxx X. Xxxx
Title: Executive Vice President
Date: March 12, 1997
XXXXXXX XXXXXX & CO., INC.
By its authorized officer,
By:/s/ Xxxx Xxxxxx
Title: Vice President, Annuities & Life
Insurance
Date: Xxxxx 00, 0000
Xxxxxx Variable Annuity
SCHEDULE A
ContractsForm Numbers
First Great-West Life & Annuity Insurance Company
Group Variable/Fixed Annuity Contract J434NY
SCHEDULE B
Designated Portfolios
Xxxxx American Growth Portfolio
Xxxxx American Small Capitalization Portfolio
SCHEDULE C
Administrative Services
To be performed by Xxxxxxx Xxxxxx & Co., Inc.
X. Xxxxxx will provide the properly registered and licensed
personnel and systems needed for all customer servicing and support
- for both fund and annuity information and questions - including:
respond to Contractowner inquiries
delivery of prospectus - both fund and annuity;
entry of initial and subsequent orders;
transfer of cash to insurance company and/or funds;
explanations of fund objectives and characteristics;
entry of transfers between funds;
fund balance and allocation inquiries;
mail fund prospectus.
B. For the services, Schwab shall receive a fee of 0.25% per
annum applied to the average daily value of the shares of the fund
held by Xxxxxx'x customers, payable by the Adviser directly to
Schwab, such payments being due and payable within 15 (fifteen)
days after the last day of the month to which such payment relates.
C. The Fund will calculate and Schwab will verify with FirstGWL&A
the asset balance for each day on which the fee is to be paid
pursuant to this Agreement with respect to each Designated
Portfolio.
X. Xxxxxx will communicate all purchase, withdrawal, and exchange
orders it receives from its customers to FirstGWL&A who will
retransmit them to each fund.
SCHEDULE D
Reports per Section 6.6
With regard to the reports relating to the quarterly testing
of compliance with the requirements of Section 817(h) and
Subchapter M under the Internal Revenue Code (the "Code") and the
regulations thereunder, the Fund shall provide within twenty (20)
Business Days of the close of the calendar quarter a report to
FirstGWL&A in the Form D1 attached hereto and incorporated herein
by reference, regarding the status under such sections of the Code
of the Designated Portfolio(s), and if necessary, identification of
any remedial action to be taken to remedy non-compliance.
With regard to the reports relating to the year-end testing of
compliance with the requirements of Subchapter M of the Code,
referred to hereinafter as "RIC status," the Fund will provide the
reports on the following basis: (i) the last quarter's quarterly
reports can be supplied within the 20-day period, and (ii) a
year-end report will be provided 45 days after the end of the
calendar year. However, if a problem with regard to RIC status, as
defined below, is identified in the third quarter report, on a
weekly basis, starting the first week of December, additional
interim reports will be provided specially addressing the problems
identified in the third quarter report. If any interim report
memorializes the cure of the problem, subsequent interim reports
will not be required.
A problem with regard to RIC status is defined as any
violation of the following standards, as referenced to the
applicable sections of the Code:
(a) Less than ninety percent of gross income is derived from
sources of income specified in Section 851(b)(2);
(b) Thirty percent or greater gross income is derived from
the sale or disposition of assets specified in Section 851(b)(3);
(c) Less than fifty percent of the value of total assets
consists of assets specified in Section 851(b)(4)(A); and
(d) No more than twenty-five percent of the value of total
assets is invested in the securities of one issuer, as that
requirement is set forth in Section 851(b)(4)(B).
FORM D1
CERTIFICATE OF COMPLIANCE
I, , a duly authorized officer,
director or agent of Fund hereby certify that
Fund is in compliance with all requirements of Section
817(h) and Subchapter M of the Internal Revenue Code (the "Code")
and the regulations thereunder as required in the Fund
Participation Agreement among First Great-West Life & Annuity
Insurance Company, Xxxxxxx Xxxxxx & Co., Inc. and
other than the exceptions discussed below:
Exceptions Remedial Action
If no exception to report, please indicate "None."
Signed this day of
, .
(Signature)
By:
(Type or Print Name and
Title/Position)
SCHEDULE E
EXPENSES
The Fund and/or Distributor and/or Adviser, and FirstGWL&A will
coordinate the functions and pay the costs of the completing these
functions based upon an allocation of costs in the tables below.
Costs shall be allocated to reflect the Fund's share of the total
costs determined according to the number of pages of the Fund's
respective portions of the documents.
Item
Function
Party Responsible for Coordination
Party Responsible for Expense
Mutual Fund Prospectus
Printing of combined prospectuses
FirstGWL&A
Fund or Distributor, as applicable
Distributor shall supply FirstGWL&A with such numbers of the
Designated Portfolio(s) prospectus(es) as FirstGWL&A shall
reasonably request
FirstGWL&A
Fund or Distributor, as applicable
Distribution to New and Inforce Clients
FirstGWL&A
FirstGWL&A
Distribution to Prospective Clients
Schwab
Schwab
Product Prospectus
Printing for Inforce Clients
FirstGWL&A
FirstGWL&A
Printing for Prospective Clients
FirstGWL&A
Schwab
Distribution to New and Inforce Clients
FirstGWL&A
FirstGWL&A
Distribution to Prospective Clients
Schwab
Schwab
Mutual Fund Prospectus Update & Distribution
If Required by Fund or Distributor
Fund or Distributor
Fund or Distributor
If Required by FirstGWL&A
FirstGWL&A
FirstGWL&A
If Required by Schwab
Schwab
Schwab
Product Prospectus Update & Distribution
If Required by Fund or Distributor
FirstGWL&A
Fund or Distributor
Item
Function
Party Responsible for Coordination
Party Responsible for Expense
If Required by First GWL&A
FirstGWL&A
First GWL&A
If Required by Schwab
Schwab
Schwab
Mutual Fund SAI
Printing
Fund or Distributor
Fund or Distributor
Distribution
First GWL&A
First GWL&A
Product SAI
Printing
FirstGWL&A
FirstGWL&A
Distribution
FirstGWL&A
First GWL&A
Item
Function
Party Responsible for Coordination
Party Responsible for Expense
Proxy Material for Mutual Fund:
Printing if proxy required by Law
Fund or Distributor
Fund or Distributor
Distribution (including labor) if proxy required by Law
FirstGWL&A
Fund or Distributor
Printing & distribution if required by FirstGWL&A
FirstGWL&A
FirstGWL&A
Printing & distribution if required by Schwab
FirstGWL&A
Schwab
Item
Function
Party Responsible for Coordination
Party Responsible for Expense
Mutual Fund Annual & Semi-Annual Report
Printing of combined reports
FirstGWL&A
Fund or Distributor
Distribution
FirstGWL&A
FirstGWL&A and Schwab
Other communication to New and Prospective clients
If Required by the Fund or Distributor
Schwab
Fund or Distributor
If Required by FirstGWL&A
Schwab
FirstGWL&A
Item
Function
Party Responsible for
Coordination
Party Responsible for Expense
If Required by Schwab
Schwab
Schwab
Other communication to inforce
Distribution (including labor) if required by the Fund or
Distributor
FirstGWL&A
Fund or Distributor
If Required by FirstGWL&A
FirstGWL&A
FirstGWL&A
If Required by Schwab
FirstGWL&A
Schwab
Item
Function
Party Responsible for Coordination
Party Responsible for Expense
Errors in Share Price calculation pursuant to Section 1.10
Cost of error to participants
FirstGWL&A
Fund or Adviser
Cost of administrative work to correct error
FirstGWL&A
Fund or Adviser
Operations of the Fund
All operations and related expenses, including the cost of
registration and qualification of shares, taxes on the issuance or
transfer of shares, cost of management of the business affairs of
the Fund, and expenses paid or assumed by the fund pursuant to any
Rule 12b-1 plan
Fund or Distributor
Fund or Adviser
Operations of the Account
Federal registration of units of separate account (24f-2 fees)
FirstGWL&A
FirstGWL&A
