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ITEM 23(h)(9)
FUND PARTICIPATION AGREEMENT
EFFECTIVE AS OF AUGUST 2, 1999
AMONG AMERICAN GENERAL ANNUITY INSURANCE COMPANY,
ONE GROUP INVESTMENT TRUST,
BANC ONE INVESTMENT ADVISORS CORPORATION,
NATIONWIDE ADVISORY SERVICES, INC., AND
NATIONWIDE INVESTORS SERVICES, INC.
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FUND PARTICIPATION AGREEMENT
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This Fund Participation Agreement (the "Agreement"), effective as of
the 2nd day of August, 1999, is made by and among American General Annuity
Insurance Company ("Company"), One Group(R) Investment Trust (the "Trust"), the
Trust's investment advisor, Banc One Investment Advisors Corporation (the
"Adviser"), the Trust's administrator, Nationwide Advisory Services, Inc. (the
"Administrator"), and the Trust's transfer agent, Nationwide Investors Services,
Inc. (the "Transfer Agent").
WHEREAS, the Trust engages in business as an open-end
management investment company and is available to act as the
investment vehicle for separate accounts established by insurance
companies for individual and group life insurance policies and
annuity contracts with variable accumulation and/or pay-out
provisions (hereinafter referred to individually and/or
collectively as "Variable Insurance Products");
WHEREAS, insurance companies desiring to utilize the Trust
as an investment vehicle under their Variable Insurance Products
are required to enter into participation agreements with the
Trust and the Administrator (the "Participating Insurance
Companies");
WHEREAS, shares of the Trust are divided into several series
of shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of
which may be made available for Variable Insurance Products of
Participating Insurance Companies;
WHEREAS, the Trust intends to offer shares of the series set
forth on Schedule B (each such series hereinafter referred to as
a "Portfolio") as may be amended from time to time by mutual
agreement of the parties hereto under this Agreement to the
accounts of the Company specified on Schedule A (hereinafter
referred to individually as an "Account"; collectively, the
"Accounts")
WHEREAS, the Trust has obtained an order from the Securities
and Exchange Commission, granting the Trust 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 Trust to be sold to and
held by Variable Insurance Product separate accounts of both
affiliated and unaffiliated insurance companies (hereinafter the
"Shared Funding Exemptive Order");
WHEREAS, the Trust is registered as an open-end management
investment company under the 1940 Act and its shares are
registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act");
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;
WHEREAS, the Adviser is the investment adviser of the
Portfolios of the Trust;
WHEREAS, the Company has registered certain Variable
Insurance Products under the 1933 Act; and
WHEREAS, to the extent permitted by applicable insurance
laws and regulations, the Company intends to purchase shares in
the Portfolios on behalf of each Account to fund certain of the
aforesaid Variable Insurance Products and the Trust is authorized
to sell such shares to each such Account at net asset value.
NOW, THEREFORE, in consideration of their mutual promises,
the Company, the Trust, the Adviser, the Administrator, and the
Transfer Agent agree as follows:
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ARTICLE 1
THE CONTRACTS
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1. The Company represents that it has established each of the Accounts specified
on Schedule A as a separate account under Texas law, and has registered each
such Account as a unit investment trust under the 1940 Act to serve as an
investment vehicle for variable annuity contracts and/ or variable life
contracts offered by the Company (the "Contracts"). The Contracts provide for
the allocation of net amounts received by the Company to separate divisions of
the Account for investment in the shares of the Portfolios. Selection of a
particular division is made by the Contract owner who may change such selection
from time to time in accordance with the terms of the applicable Contract. The
Company agrees to make every reasonable effort to market its Contracts. In
marketing its Contracts, the Company will comply with all applicable state or
Federal laws.
ARTICLE 2
TRUST SHARES
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2.1 The Trust agrees to make available for purchase by the Company
shares of the Portfolios and shall execute orders placed for each Account on a
daily basis at the net asset value next computed after receipt by the Trust or
its designee of such order. For purposes of this Section 2.1, the Company shall
be the designee of the Trust for receipt of such orders from the Account and
receipt by such designee shall constitute receipt by the Trust; provided that
the Transfer Agent receives notice of such order by 10:00 a.m. Eastern Time on
the next following Business Day ("Trade Date plus 1"). Notwithstanding the
foregoing, the Company shall use its best efforts to provide the Transfer Agent
with notice of such orders by 9:30 a.m. Eastern Time on Trade Date plus 1.
"Business Day" shall mean any day on which the New York Stock Exchange is open
for trading and on which the Trust calculates its net asset value pursuant to
the rules of the Securities and Exchange Commission, as set forth in the Trust's
prospectus and statement of additional information. Notwithstanding the
foregoing, the Board of Trustees of the Trust (hereinafter the "Board") may
refuse to permit the Trust 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.
2.2. The Trust agrees that shares of the Trust will be sold only to
Participating Insurance Companies for their Variable Insurance Products and, in
the Trust's discretion, to qualified pension and retirement plans. No shares of
any Portfolio will be sold to the general public.
2.3. The Trust and the Transfer Agent agree to redeem for cash, on the
Company's request, any full or fractional shares of the Trust held by the
Company, executing such requests on a daily basis at the net asset value next
computed after receipt by the Trust or its designee of the request for
redemption. For purposes of this Section 2.3, the Company shall be the designee
of the Trust for receipt of requests for redemption from each Account and
receipt by such designee shall constitute receipt by the Trust; provided that
the Transfer Agent receives notice of such request for redemption on Trade Date
plus 1 in accordance with the timing rules described in Section 2.1.
2.4. The Company agrees that purchases and redemptions of Portfolio
shares offered by the then current prospectus of the Trust shall be made in
accordance with the provisions of such prospectus. The Accounts of the Company,
under which amounts may be invested in the Trust are listed on Schedule A
attached hereto and incorporated herein by reference, as such Schedule A may be
amended from time to time by mutual written agreement of all of the parties
hereto. The Company will give the Trust and the Adviser concurrent written
notice of its intention to make available in the future, as a funding vehicle
under the Contracts, any other investment company.
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2.5. The Company will place separate orders to purchase or redeem
shares of each Portfolio. Each order shall describe the net amount of shares and
dollar amount of each Portfolio to be purchased or redeemed. In the event of net
purchases, the Company shall pay for Portfolio shares on Trade Date plus 1.
Payment shall be in federal funds transmitted by wire. In the event of net
redemptions, the Portfolio shall pay the redemption proceeds in federal funds
transmitted by wire by 2:00 p.m. Eastern Time on Trade Date plus 1.
Notwithstanding the foregoing, if the payment of redemption proceeds on the next
Business Day would require the Portfolio to dispose of Portfolio securities or
otherwise incur substantial additional costs, and if the Portfolio has
determined to settle redemption transactions for all shareholders on a delayed
basis, proceeds shall be wired to the Company within seven (7) days and the
Portfolio shall notify in writing the person designated by the Company as the
recipient for such notice of such delay by 3:00 p.m.Eastern Time on Trade Date
plus 1.
2.6. Issuance and transfer of the Trust's shares will be by book entry
only. Share certificates will not be issued to the Company or any Account.
Shares ordered from the Trust will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
2.7. The Administrator shall use its best efforts to furnish same day
notice by 5:00 p.m. Eastern Time (by wire or telephone, followed by written
confirmation) to the Company of any dividends or capital gain distributions
payable on the Trust's shares. The Company hereby elects to receive all such
dividends and capital gain distributions as are payable on the Portfolio shares
in additional shares of that Portfolio. The Company reserves the right to revoke
this election and to receive all such dividends and capital gain distributions
in cash. The Trust shall notify the Company of the number of shares so issued as
payment of such dividends and distributions.
2.8. The Administrator shall make the net asset value per share of each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6:30 p.m.
Eastern Time. In the event that the Administrator is unable to meet the 6:30
p.m. time stated immediately above, then the Administrator shall provide the
Company with additional time to notify the Administrator of purchase or
redemption orders pursuant to Sections 2.1 and 2.3, respectively, above. Such
additional time shall be equal to the additional time that the Administrator
takes to make the net asset values available to the Company.
2.9. If the Administrator provides materially incorrect share net asset
value information through no fault of the Company, the Company shall be entitled
to an adjustment with respect to the Trust shares purchased or redeemed to
reflect the correct net asset value per share as subsequently determined by the
Administrator. The determination of the materiality of any net asset value
pricing error shall be based on the Trust's policy for correction of pricing
errors (the "Pricing Policy"). The Company shall correct such error in its
records and in the records prepared by it for Contract owners in accordance with
information provided by the Administrator. Any material error in the calculation
or reporting of net asset value per share, dividend or capital gain information
shall be reported promptly upon discovery to the Company.
ARTICLE 3
PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS, VOTING
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3.1 The Trust shall provide the Company with as many printed copies of
the Trust's current prospectus as the Company may reasonably request. The
Administrator will provide the Company with a copy of the statement of
additional information suitable for duplication. If requested by the Company, in
lieu of providing printed copies, the Trust shall provide camera-ready film or
computer diskettes containing the Trust's prospectus and statement of additional
information in order for the Company once each year (or more frequently if the
prospectus and/or statement of additional information for the Trust is amended
during the year) to have the prospectus for the Contracts and the Trust's
prospectus printed together in one document or separately. The Company may elect
to print the Trust's prospectus and/or its statement of additional
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information in combination with other investment companies' prospectuses and
statements of additional information.
3.2(a). Except as otherwise provided in this Section 3.2, all expenses
of preparing, setting in type and printing and distributing Trust prospectuses
and statements of additional information shall be the expense of the Company.
For prospectuses and statements of additional information provided by the
Company to its existing owners of Contracts in order to update disclosure as
required by the 1933 Act and/or the 1940 Act, the cost of setting in type,
printing and distributing shall be borne by the Trust. If the Company chooses to
receive camera-ready film or computer diskettes in lieu of receiving printed
copies of the Trust's prospectus and/or statement of additional information, the
Trust shall bear the cost of typesetting to provide the Trust's prospectus
and/or statement of additional information to the Company in the format in which
the Trust is accustomed to formatting prospectuses and statements of additional
information, respectively, and the Company shall bear the expense of adjusting
or changing the format to conform with any of its prospectuses and/or statements
of additional information. In such event, the Trust will reimburse the Company
in an amount equal to the product of x and y where x is the number of such
prospectuses distributed to owners of the Contracts, and y is the Trust's per
unit cost of printing the Trust's prospectuses. The same procedures shall be
followed with respect to the Trust's statement of additional information. The
Trust shall not pay any costs of typesetting, printing and distributing the
Trust's prospectus and/or statement of additional information to prospective
Contract owners.
3.2(b). The Trust, at the Company's expense, shall provide the Company
with copies of Annual and Semi-Annual Reports (the "Reports") in such quantity
as the Company shall reasonably require for distributing to Contract owners. The
Trust, at its expense, shall provide the Contract owners designated by the
Company with copies of its proxy statements and other communications to
shareholders (except for prospectuses and statements of additional information,
and which are covered in Section 3.2(a) above, and Reports). The Trust shall not
pay any costs of distributing Reports and other communications to prospective
Contract owners.
3.2(c). The Company agrees to provide the Trust or its designee with
such information as may be reasonably requested by the Trust to assure that the
Trust's expenses do not include the cost of typesetting, printing or
distributing any of the foregoing documents other than those actually
distributed to existing Contract owners.
3.2(d). The Trust shall pay no fee or other compensation to the Company
under this Agreement, except that if the Trust or any Portfolio adopts and
implements a plan pursuant to Rule 12b-1 to finance distribution expenses, then
the Trust may make payments to the Company or to the underwriter for the
Contracts if and in amounts agreed to by the Trust in writing.
3.2(e) All expenses, including expenses to be borne by the Trust
pursuant to Section 3.2 hereof, incident to performance by the Trust under this
Agreement shall be paid by the Trust. The Trust shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Trust, in
accordance with applicable state laws prior to their sale. The Trust shall bear
the expenses for the cost of registration and qualification of the Trust's
shares.
3.3. If and to the extent required by law, the Company shall with
respect to proxy material distributed by the Trust to Contract owners designated
by the Company to whom voting privileges are required to be extended:
(i) solicit voting instructions from Contract owners;
(ii) vote the Trust shares in accordance with instructions
received from Contract owners; and
(iii) vote Trust shares for which no instructions have been
received in the same proportion as Trust shares of such Portfolio for
which instructions have been received, so long as and to the extent
that the Securities and Exchange Commission continues to interpret the
1940 Act to require pass-
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through voting privileges for variable contract owners. The Company
reserves the right to vote Trust shares held in any segregated asset
account in its own right, to the extent permitted by law.
ARTICLE 4
SALES MATERIAL AND INFORMATION
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4.1. The Company shall furnish, or shall cause to be furnished, to the
Trust, the Adviser or their designee, drafts of the separate accounts
prospectuses and statements of additional information and each piece of sales
literature or other promotional material prepared by the Company or any person
contracting with the Company to prepare such material in which the Trust, the
Adviser or the Administrator is described, at least ten Business Days prior to
its use. No such material shall be used if the Trust, the Adviser, the
Administrator or their designee reasonably objects to such use within ten
Business Days after receipt of such material.
4.2. Neither the Company nor any person contracting with the Company to
prepare sales literature or other promotional material shall give any
information or make any representations or statements on behalf of the Trust or
concerning the Trust in connection with the sale of the Contracts other than the
information or representations contained in the registration statement or Trust
prospectus, as such registration statement or Trust prospectus may be amended or
supplemented from time to time, or in reports to shareholders or proxy
statements for the Trust, or in sales literature or other promotional material
approved by the Trust or its designee, except with the permission of the Trust
or its designee.
4.3. The Adviser shall furnish, or shall cause to be furnished, to the
Company or its designee, each piece of sales literature or other promotional
material prepared by the Trust in which the Company or its Accounts, are
described at least ten Business Days prior to its use. No such material shall be
used if the Company or its designee reasonably objects to such use within ten
Business Days after receipt of such material.
4.4. Neither the Trust, the Administrator, the Transfer Agent, nor the
Adviser shall give any information or make any representations on behalf of the
Company or concerning the Company, each Account, or the Contracts, other than
the information or representations contained in a registration statement or
prospectus for the Contracts, as such registration statement or prospectus may
be amended or supplemented from time to time, or in published reports or
solicitations for voting instruction for each Account which are in the public
domain or approved by the Company for distribution to Contract owners, or in
sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Trust will provide to the Company at least one complete copy
of all registration statements, prospectuses, statements of additional
information, reports, proxy statements, applications for exemptions, requests
for no-action letters, and all amendments to any of the above, that relate to
the Trust or its shares, promptly after the filing of such document with the
Securities and Exchange Commission or other regulatory authorities.
4.6. The Company will provide to the Trust, upon the Trust's request,
at least one complete copy of all registration statements, prospectuses,
statements of additional information, 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 investment in an Account or Contract,
contemporaneously with the filing of such documents with the Securities and
Exchange Commission or other regulatory authorities.
4.7. For purposes of this Article 4, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following: 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), 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
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other advertisement, sales literature, or published article), and educational or
training materials or other communications distributed or made generally
available to some or all agents or employees.
4.8 The Company and its agents shall make no representations concerning
the Trust except those contained in the then-current prospectus and Statement of
Additional Information of the Trust and in current printed sales literature of
the Trust.
ARTICLE 5
ADMINISTRATIVE SERVICES TO CONTRACT OWNERS
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5. Administrative services to Contract owners shall be the
responsibility of the Company and shall not be the responsibility of the Trust,
the Transfer Agent, the Adviser or the Administrator. The Trust and the
Administrator recognize that the Company will be the sole shareholder of Trust
shares issued pursuant to the Contracts.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
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6.1. The Trust represents that it believes, in good faith, that each
Portfolio is currently qualified as a regulated investment companies under
Subchapter M of the Internal Revenue Code of 1986,as amended (the "Code") and
that it will make every effort to maintain such qualification of the Trust and
that it will notify the Company immediately upon having a reasonable basis for
believing that a Portfolio has ceased to so qualify or that it might not so
qualify in the future.
6.2. The Company represents that it believes, in good faith, that the
Contracts will at all times be 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 the Trust 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.
6.3.The Trust represents that it believes, in good faith, that the
Funds will at all times comply with the diversification requirements set forth
in Section 817(h) of the Code and Section 1.817-5(b) of the regulations under
the Code, and that it will make every effort to maintain the Trust's' compliance
with such diversification requirements, and that it will notify the Company
immediately upon having a reasonable basis for believing that a Fund has ceased
to so qualify or that a Fund might not so qualify in the future.
6.4 . The Company represents and warrants that the interests of the
Contracts are or will be registered unless exempt and that it will maintain such
registration under the 1933 Act and the regulations thereunder to the extent
required by the 1933 Act and that the Contracts will be issued and sold in
compliance with all applicable federal and state laws and regulations. The
Company 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 each Account prior to any issuance or sale thereof as a
segregated asset account under the Texas Insurance Code and the regulations
thereunder and has registered or, prior to any issuance or sale of the
Contracts, will maintain the registration of each Account as a unit investment
trust in accordance with and to the extent required by the provisions of the
1940 Act and the regulations thereunder, unless exempt therefrom, to serve as a
segregated investment account for the Contracts. The Company shall amend its
registration statement for its contracts under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of its
Contracts.
6.5. The Company represents that it believes, in good faith, that the
Variable Account is a "segregated asset account" and that interests in the
Variable Account are offered exclusively through the purchase of a "variable
contract," within the meaning of such terms under Section 1.817-5(f) (2) of the
regulations under the Code, and that it will make every effort to continue to
meet such definitional requirements, and that it will notify the Trust
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.
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6.6. The Trust represents and warrants that it is and shall continue to
be at all times covered by a blanket fidelity bond or similar coverage for the
benefit of the Trust in an amount no less than the minimal coverage as required
currently by Rule 17g-(1) of the 1940 Act or related provisions as may be
promulgated from time to time. Such bond shall include coverage for larceny and
embezzlement and shall be issued by a relevant bonding company. The Trust will
notify the Company immediately upon having a reasonable basis for believing that
a Portfolio no longer has the coverage required by this Section 6.6.
6.7. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other entities dealing with the
money or securities of the Trust are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Trust, in an amount not less than five million dollars ($5,000,000). Such bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Company agrees to make all reasonable efforts to
see that this bond or another bond containing these provisions is always in
effect and agrees to notify the Trust immediately upon having a reasonable basis
for believing that the Company no longer has the coverage required by this
Section 6.7.
6.8. The Trust represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the Trust
undertakes to have a majority of the disinterested members of the Board,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
6.9. The Adviser, the Administrator and Transfer Agent each represents
and warrants that it complies with all applicable federal and state laws and
regulations and that it will perform its obligations for the Trust and the
Company in compliance with the laws and regulations of its state of domicile and
any applicable state and federal laws and regulations.
ARTICLE 7
STATEMENTS AND REPORTS
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7.1 The Administrator or its designee shall provide the Company within
five (5) business days after the end of each month a monthly statement of
account confirming all transactions made during that month in the Account.
7.2 The Trust and Administrator agree to provide the Company no later
than March 1 of each year with the investment advisory and other expenses of the
Trust incurred during the Trust's most recently completed fiscal year, to permit
the Company to fulfill its prospectus disclosure obligations under the SEC's
variable annuity fee table requirements.
ARTICLE 8
POTENTIAL CONFLICTS
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8.1.The Board will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Trust. 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 owners and variable life
insurance contract owners; or (f) a decision by a Participating Insurance
Company to disregard the voting instructions of contract owners. The Board shall
promptly inform the Company if it determines that an irreconcilable material
conflict exists and the implications thereof.
8.2. The Company will report in writing any potential or existing
material irreconcilable conflict of which it is aware to the Administrator. Upon
receipt of such report, the Administrator shall report the potential
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or existing material irreconcilable conflict to the Board. The Administrator
shall also report to the Board on a quarterly basis whether the Company has
reported any potential or existing material irreconcilable conflicts during the
previous calendar quarter. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded.
8.3. If it is determined by a majority of the Board, or a majority of
its disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Trust or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Trust, 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 policy
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. No charge
or penalty will be imposed as a result of such withdrawal. The Company agrees
that it bears the responsibility to take remedial action in the event of a Board
determination of an irreconcilable material conflict and the cost of such
remedial action, and these responsibilities will be carried out with a view only
to the interests of Contract owners.
8.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect to such
Account (at the Company's expense); 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. No charge or penalty will be imposed as a result of such
withdrawal. The Company agrees that it bears the responsibility to take remedial
action in the event of a Board determination of an irreconcilable material
conflict and the cost of such remedial action, and these responsibilities will
be carried out with a view only to the interests of Contract owners.
8.5. For purposes of Sections 8.3 through 8.4 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Trust be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 8.3 through 8.4 to
establish a new funding medium for the Contracts if an offer to do so has been
declined by vote of a majority of Contract owners materially adversely affected
by the irreconcilable material conflict.
8.6. 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 Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then the Trust 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.
8.7. Each of the Company and the Adviser shall at least annually submit
to the Board such reports, materials or data as the Board may reasonably request
so that the Board may fully carry out the obligations imposed upon them by the
provisions hereof and in the Shared Funding Exemptive Order, and said reports,
materials and data shall be submitted more frequently if deemed appropriate by
the Board. Without limiting the generality of the foregoing or the Company's
obligations under Section 8.2, the Company shall provide to the Administrator a
written report to the Board no later than January 15th of each year indicating
whether any material irreconcilable conflicts have arisen during the prior
fiscal year of the Trust. All reports received by the Board of potential or
existing conflicts, and all Board action with regard to determining the
existence of a
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conflict, notifying Participating Insurance Companies of a conflict, and
determining whether any proposed action adequately remedies a conflict, shall be
properly recorded in the minutes of the Board or other appropriate records, and
such minutes or other records shall be made available to the Securities and
Exchange Commission upon request.
ARTICLE 9
INDEMNIFICATION
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9.1. INDEMNIFICATION BY THE COMPANY
9.1(a). The Company agrees to indemnify and hold harmless the Trust,
the Administrator, the Transfer Agent, the Adviser, and each member of their
respective Boards and officers and each person, if any, who controls the Trust
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 9.1) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Company) or litigation (including legal and other expenses), to
which the Indemnified Parties may become subject under any statute, 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 Trust's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement or prospectus for the Contracts or
contained in the Contracts or sales literature 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 to the Company by or
on behalf of the Trust for use in the registration statement or
prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Trust shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature of the
Trust not supplied by the Company, or persons under its control
and other than statements or representations authorized by the
Trust) or unlawful conduct of the Company or persons under its
control, with respect to the sale or distribution of the
Contracts or Trust shares; or
(iii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature of the
Trust or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading if such a statement or omission was made
in reliance upon and in conformity with information furnished to
the Trust by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide
the services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company; as limited by and in
accordance with the provisions of Section 9.1(b) and 9.1(c)
hereof.
9.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
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Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
9.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within 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 Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at as own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the
Indemnified Party named in the action. After notice from the Company to such
Indemnified Party of the Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company shall not be liable to such Indemnified Party
under this Agreement for any legal or other expenses subsequently incurred by
such Indemnified Party independently in connection with the defense thereof
other than reasonable costs of investigation.
9.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Trust shares or the Contracts or the operation of
the Trust.
9.2. INDEMNIFICATION BY ADMINISTRATOR
9.2(a). The Administrator agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 9.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Administrator) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements:
(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 sales literature of the
Trust (or any amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Trust or the
Administrator by or on behalf of the Company, the Adviser, the
Transfer Agent, Counsel for the Trust , the independent public
accountant to the Trust , or any person or entity that is not
acting as agent for or controlled by the Administrator for use in
the registration statement or prospectus for the Trust or in
sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or Portfolio
shares; or
(ii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature 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 information furnished to the
Company by or on behalf of the Administrator; or
(iii) arise as a result of any failure by the Administrator to
provide the services and furnish the materials under the terms of
this Agreement; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Administrator in this
Agreement or arise out of or result from any other material
breach of this
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Agreement by the Administrator; as limited by and in accordance
with the provisions of Section 9.2(b) and 9.2(c) hereof.
9.2(b). The Administrator shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party as
such may arise from such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement.
9.2(c). The Administrator 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 Administrator 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 Administrator
of any such claim shall not relieve the Administrator from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Administrator will be
entitled to participate, at its own expense, in the defense thereof. The
Administrator also shall be entitled to assume the defense thereof, with counsel
satisfactory to the Indemnified Party named in the action. After notice from the
Administrator to such Indemnified Party of the Administrator'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 Administrator will
not be liable to such Indemnified Party under this Agreement for any legal or
other expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof other than reasonable costs of
investigation.
9.2(d). The Company agrees promptly to notify the Administrator of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account in which the Portfolios are made available.
9.3. INDEMNIFICATION BY THE ADVISER
9.3(a). The Adviser agrees to indemnify and hold harmless the Company
and its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (hereinafter collectively, the
"Indemnified Parties" and individually, "Indemnified Party," for purposes of
this Section 9.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Adviser)
or litigation (including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements:
(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 sales literature of the
Trust (or any amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Adviser or
the Trust by or on behalf of the Company, the Administrator, the
Transfer Agent, Counsel for the Trust, the independent public
accountant to the Trust, or any person or entity that is not
acting as agent for or controlled by the Adviser for use in the
registration statement or prospectus for the Trust or in sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Portfolio shares;
or
(ii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature 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 information furnished to the
Company by or on behalf of the Adviser; or
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13
(iii) arise as a result of any failure by the Adviser to provide
the services and furnish the materials under the terms of this
Agreement; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Adviser; as limited by and in
accordance with the provisions of Section 9.3(b) and 9.3(c)
hereof.
9.3(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
9.3(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. 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 Indemnified Party
named in the action. After notice from the Adviser to such Indemnified 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 Indemnified Party under this Agreement
for any legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other then reasonable costs
of investigation.
9.3(d). The Company agrees to promptly notify the Adviser of the
commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of each Account, or the
sale or acquisition of shares of the Trust.
9.4. INDEMNIFICATION BY THE TRUST
9.4(a). The Trust agrees to indemnify and hold harmless the Company and
its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (hereinafter collectively, the
"Indemnified Parties" and individually, "Indemnified Party," for purposes of
this Section 9.4) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Trust) or
litigation (including legal and other expenses) to which the Indemnified Parties
may become subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(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 sales literature of the
Trust (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 the Trust by or on
behalf of the Adviser, the Company, the Transfer Agent, or the
Administrator for use in the registration statement or prospectus
for the Trust or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of
the Contracts or Portfolio shares; or
(ii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature 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
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therein or necessary to make the statement or statements therein
not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on
behalf of the Trust; or
(iii) arise as a result of any failure by the Trust to provide
the services and furnish the materials under the terms of this
Agreement; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Trust; as limited by and in
accordance with the provisions of Section 9.4(b) and 9.4(c)
hereof.
9.4(b). The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
9.4(c). The Trust 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 Trust 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 Trust of any
such claim shall not relieve the Trust from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Trust will be entitled to participate, at
its own expense, in the defense thereof. The Trust also shall be entitled to
assume the defense thereof, with counsel satisfactory to the Indemnified Party
named in the action. After notice from the Trust to such Indemnified Party of
the Trust'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
Trust will not be liable to such Indemnified Party under this Agreement for any
legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other then reasonable costs
of investigation.
9.4(d). The Company agrees to promptly notify the Trust of the
commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of each Account, or the
sale or acquisition of shares of the Trust.
9.5. INDEMNIFICATION BY TRANSFER AGENT
9.5(a). The Transfer Agent agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 9.5)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Transfer Agent) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements:
(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 sales literature of the Trust
(or any amendment or supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Trust or the Transfer Agent by or on behalf of the Company, the
Adviser, the Administrator, Counsel for the Trust, the independent
public accountant to the Trust, or any person or entity that is not
acting as agent for or controlled by the Transfer Agent for use in the
registration statement or prospectus for the Trust or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Portfolio shares; or
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(ii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature 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 information furnished to the
Company by or on behalf of the Transfer Agent; or
(iii) arise as a result of any failure by the Transfer Agent to
provide the services and furnish the materials under the terms of
this Agreement; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Transfer Agent in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Transfer Agent; as limited by and
in accordance with the provisions of Section 9.5(b) and 9.5(c)
hereof.
9.5(b). The Transfer Agent shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party as
such may arise from such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement.
9.5(c). The Transfer Agent 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 Transfer Agent 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 Transfer Agent
of any such claim shall not relieve the Transfer Agent from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Transfer Agent will be
entitled to participate, at its own expense, in the defense thereof. The
Transfer Agent also shall be entitled to assume the defense thereof, with
counsel satisfactory to the Indemnified Party named in the action. After notice
from the Transfer Agent to such Indemnified Party of the Transfer Agent'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 Transfer
Agent will not be liable to such Indemnified Party under this Agreement for any
legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other than reasonable costs
of investigation.
9.5(d). The Company agrees promptly to notify the Transfer Agent of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account in which the Portfolios are made available.
ARTICLE 10
APPLICABLE LAW
--------------
10.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Massachusetts.
10.2. 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
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE 11
TERMINATION
-----------
11.1. This Agreement shall continue in full force and effect until the
first to occur of:
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(a) termination by any party for any reason upon ninety days
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Trust,
the Adviser, the Transfer Agent and the Administrator with respect to
any Portfolio based upon the Company's determination that shares of
such Portfolio are not reasonably available to meet the requirements
of the Contracts. Reasonable advance notice of election to terminate
shall be furnished by the Company, said termination to be effective
ten (10) days after receipt of notice unless the Trust makes available
a sufficient number of shares to reasonably meet the requirements of
the Account within said ten (10) day period; or
(c) termination by the Company upon written notice to the Trust,
the Adviser, the Transfer Agent and the Administrator 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 medium of the Contracts issued or to be issued
by the Company. The terminating party shall give prompt notice to the
other parties of its decision to terminate; or
(d) termination by the Company upon written notice to the Trust,
the Adviser and the Administrator with respect to any Portfolio in the
event that such portfolio ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code or under any successor or
similar provision; or
(e) termination by the Company upon written notice to the Trust,
the Adviser, the Transfer Agent and the Administrator with respect to
any Portfolio in the event that such Portfolio fails to meet the
diversification requirements specified in Section 6.3 hereof; or
(f) termination by either the Trust, the Adviser, the Transfer
Agent or the Administrator by written notice to the Company, if either
one or more of the Trust, the Adviser, the Transfer Agent, or the
Administrator, shall determine, in its or their sole judgment
exercised in good faith, that the Company and/or their affiliated
companies has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity, provided
that the Trust, the Adviser, the Transfer Agent or the Administrator
will give the Company sixty (60) days' advance written notice of such
determination of its intent to terminate this Agreement, and provided
further that after consideration of the actions taken by the Company
and any other changes in circumstances since the giving of such
notice, the determination of the Trust, the Adviser, the Transfer
Agent or the Administrator shall continue to apply on the 60th day
since giving of such notice, then such 60th day shall be the effective
date of termination; or
(g) termination by the Company by written notice to the Trust,
the Adviser, the Transfer Agent and the Administrator, if the Company
shall determine, in its sole judgment exercised in good faith, that
either the Trust, the Adviser, the Transfer Agent or the Administrator
has suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or
is the subject of material adverse publicity, provided that the
Company will give the Trust, the Adviser, the Transfer Agent and the
Administrator sixty (60) days' advance written notice of such
determination of its intent to terminate this Agreement, and provided
further that after consideration of the actions taken by the Trust,
the Adviser, the Transfer Agent or the Administrator and any other
changes in circumstances since the giving of such notice, the
determination of the Company shall continue to apply on the 60th day
since giving of such notice, then such 60th day shall be the effective
date of termination; or
(h) termination by the Trust, the Adviser, the Transfer Agent or
the Administrator by written notice to the Company, if the Company
gives the Trust, the Adviser, the Transfer Agent and the Administrator
the written notice specified in Section 2.4 hereof and at the time
such notice was given there was no notice of termination outstanding
under any other provision of this Agreement; provided, however any
termination under this Section 11.1(h) shall be effective sixty (60)
days after the notice specified in Section 2.4 was given; or
(i) termination by any party upon the other party's breach of any
representation in Article 6 or a any material provision of this
Agreement, which breach has not been cured to the satisfaction of the
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terminating party within ten (10) days after written notice of such
breach is delivered to the Trust or the Company, as the case may be;
or
(j) termination by the Trust, the Adviser, the Transfer Agent or
Administrator by written notice to the Company in the event an Account
or Contract is not registered (unless exempt from registration) or
sold in accordance with applicable federal or state law or regulation,
or the Company fails to provide pass-through voting privileges as
specified in Section 3.3.
11.2 EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Trust shall at the option of the Company, continue to make
available additional shares of the Trust 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") unless such
further sale of Trust shares is proscribed by law, regulation or applicable
regulatory body, or unless the Trust determines that liquidation of the Trust
following termination of this Agreement is in the best interests of the Trust
and its shareholders. Specifically, without limitation, the owners of the
Existing Contracts shall be permitted to direct reallocation of investments in
the Trust, redemption of investments in the Trust and/or investment in the Trust
upon the making of additional purchase payments under the Existing Contracts.
The parties agree that this Section 11.2 shall not apply to any terminations
under Article 8 and the effect of such Article 8 terminations shall be governed
by Article 8 of this Agreement.
11.3. The Company shall not redeem Trust shares attributable to the
Contracts (as distinct from Trust shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract owner
initiated or approved transactions, or (ii) as required by state and/or federal
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Trust, the Adviser and the
Administrator the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Trust and the Adviser) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contracts,
the Company shall not prevent Contract Owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Trust or the Adviser 30 days notice of its intention to do so.
ARTICLE 12
NOTICES
-------
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust:
One Group Investment Trust
Three Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxx, Xx.
If to the Administrator:
Nationwide Advisory Services, Inc.
Three Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx Xxxxxxx, Director Strategic Development
If to the Transfer Agent:
Nationwide Investors Services, Inc.
Three Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
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Attn.: Xxxxx Xxxxxxx
If to the Adviser:
Banc One Investment Advisors Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx X0
Xxxxxxxx, Xxxx 00000-0000
Attn: Xxxx X. Xxxxxx
If to the Company:
American General Annuity Insurance Company
0000 Xxxxx Xxxxxxx, X00-00
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
ARTICLE 13
MISCELLANEOUS
13.1. All persons dealing with the Trust must look solely to the
property of the Trust for the enforcement of any claims against the Trust as
neither the Board, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Trust. Each of the
Company, the Adviser, the Transfer Agent and the Administrator acknowledges and
agrees that, as provided by the Trust's Amended and Restated Declaration of
Trust, the shareholders, trustees, officers, employees and other agents of the
Trust and the Portfolios shall not personally be bound by or liable for matters
set forth hereunder, nor shall resort be had to their private property for the
satisfaction of any obligation or claim hereunder. The Trust's Amended and
Restated Declaration of Trust is on file with the Secretary of State of
Massachusetts.
13.2. 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 until such time as it may come into
the public domain without the express written consent of the affected party.
13.3. 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.
13.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.5. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
13.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the National Association of Securities
Dealers and state insurance regulators) and shall permit such authorities (and
other parties hereto) reasonable access to its books and records in connection
with any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
13.7. 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.
13.8. 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; provided, however, that the Adviser may, with advance written
notice to the other parties hereto, assign this Agreement or any rights or
obligations hereunder to any affiliate of or
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company under common control with the Adviser if such assignee is duly licensed
and registered to perform the obligations of the Adviser under this Agreement.
13.9. The Company shall furnish, or shall cause to be furnished, to
the Trust or its designee upon request, copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under generally
accepted accounting principles ("GAAP"), if any), as soon as practical
and in any event within 90 days after the end of each fiscal year;
(b) the Company's June 30th quarterly statements (statutory), as
soon as practical and in any event within 45 days following such
period;
(c) any financial statement, proxy statement, notice or report of
the Company sent to stockholders and/or policyholders, as soon as
practical after the delivery thereof to stockholders;
(d) any registration statement (without exhibits) and financial
reports the Company filed with the Securities and Exchange Commission
or any state insurance regulator, as soon as practical after the
filing thereof; and
(e) any other public report submitted to the Company by
independent accountants in connection with any annual, interim or
special audit made by them of the books of the Company, as soon as
practical after the receipt thereof.
13.10 The names "One Group(R) Investment Trust" and `Trustees of One
Group(R) Investment Trust" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated June 7, 1993 to which reference is
hereby made and a copy of which is on file at the office of the Secretary of the
Commonwealth of Massachusetts and elsewhere as required by law, and to any and
all amendments thereto so filed or hereafter filed. The obligations of `One
Group Investment Trust' entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, Shareholders or
representatives of the Trust personally, but bind only the assets of the Trust,
and all persons dealing with any series of Shares of the Trust must look solely
to the assets of the Trust belonging to such series for the enforcement of any
claims against the Trust.
[SIGNATURE PAGES FOLLOW]
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AMERICAN GENERAL ANNUITY INSURANCE COMPANY
By: /s/ XXXXX X. XXXXXX
--------------------
Title: Executive VP - Marketing
ONE GROUP INVESTMENT TRUST
By: /s/ XXXXX X. XXXXX, XX.
-----------------------
Title: President
BANC ONE INVESTMENT ADVISORS CORPORATION
By: /s/ XXXX X. XXXXXX
------------------
Title: Senior Managing Director
NATIONWIDE ADVISORY SERVICES, INC.
By: /s/ XXXXXXXXXXX X. XXXX
------------------------
Title: Treasurer
NATIONWIDE INVESTORS SERVICES, INC.
By: /s/ XXXXX X. XXXXX, XX.
-----------------------
Title: VP - General Manager
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SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
-------------------------------
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Name of Separate Account and Date Form Numbers
Established by Board of Directors Funded by Separate Account
---------------------------------------------------------------------------------------------
CONTRACT FORM NOS:
------------------
A.G. Separate Account A, November 9, 1994 VA124-99R
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SCHEDULE B
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PORTFOLIOS OF THE TRUST
-----------------------
One Group Investment Trust Bond Portfolio
One Group Investment Trust Government Bond Portfolio
One Group Investment Trust Balanced Portfolio
One Group Investment Trust Large Cap Growth Portfolio
One Group Investment Trust Equity Index Portfolio
One Group Investment Trust Diversified Equity Portfolio
One Group Investment Trust Mid Cap Growth Portfolio
One Group Investment Trust Diversified Mid Cap Portfolio
One Group Investment Trust Mid Cap Value Portfolio
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