FUND PARTICIPATION AND SERVICE AGREEMENT
Forethought Life Insurance Company ("Insurance Company"), for itself and on
behalf of one or more separate accounts of the Insurance Company ("Separate
Accounts"), American Funds Distributors, Inc. ("AFD"), American Funds Service
Company ("Transfer Agent"), Capital Research and Management Company ("CRMC"),
and the American Funds Insurance Series (the "Series"), an open-end investment
company for which AFD, CRMC and Transfer Agent provide services and which is
divided into funds (hereinafter collectively called the "Funds" and,
individually, a "Fund"), for good and valuable consideration, hereby agree on
this day of 2012, that Class 4 Shares of the Funds ("Class 4
Shares") and Class P2 shares of the Funds ("Class P2 Shares" and together with
Class 4 Shares, the "shares") shall be made available to serve as underlying
investment media for certain variable annuity contracts (hereinafter called
"Contract(s)"; holders of such Contracts hereinafter called "Contractholder(s)")
to be offered by the Insurance Company subject to the following provisions:
1. Authorization; Services.
a. As distributor of the Series, AFD agrees to make shares of the Funds
listed on the attached Exhibit A available to the Insurance Company for
itself and on behalf of the Separate Accounts on the attached Exhibit B
pursuant to the terms of this Agreement. The Insurance Company will offer
shares of the Funds in connection with the sale of Contracts to
Contractholders. Fund shares to be made available to Separate Accounts for
the Contracts shall be sold by the Series and purchased by the Insurance
Company for a given account in accordance with the provisions of this
Agreement and at the net asset value of the respective class of the
respective Fund (without the imposition of a sales load) computed in
accordance with the provisions of the then current Prospectus of the
Series. This Agreement is in all respects subject to statements regarding
the sale and repurchase or redemption of shares made in the offering
prospectuses of the Funds, and to the applicable Rules of FINRA, which
shall control and override any provision to the contrary in this Agreement.
b. Transfer Agent hereby appoints Insurance Company as limited agent and
designee with respect to shares of the Funds purchased, held, and redeemed
by the Separate Accounts solely for purposes of the provisions of this
Agreement, and Insurance Company accepts such appointment, on the terms set
forth herein.
c. During the term of this Agreement, Insurance Company shall perform the
administrative services ("Services") set forth on Exhibit C hereto, as such
exhibit may be amended from time to time by mutual consent of the parties,
in respect of Separate Accounts holding Class 4 Shares and/or Class P2
Shares of each Fund. In consideration of Insurance Company performing the
Services, the Series agrees to pay Insurance Company an administrative
services fee of 0.25% of the average daily net asset value of all Class 4
Shares and Class P2 Shares of the Funds held
by each Separate Account, payable quarterly, in arrears pursuant to an
Insurance Administrative Services Plan adopted by the Series. The Series
shall pay all fees within forty-five (45) days following the end of each
calendar quarter for fees accrued during that quarter. The fee will be
calculated as the product of (a) the average daily net asset value of all
Class 4 Shares or Class P2 Shares, as applicable, of the Funds held by each
Separate Account during the quarter; (b) the number of days in the quarter;
and (c) the quotient of 0.0025 divided by 365. CRMC will evaluate
periodically Insurance Company's service levels, including compliance with
established NSCC guidelines, transaction errors, compliance with the
prospectus and complaints from Contract owners, in determining whether to
continue making payments under the Insurance Administrative Services Plan.
Insurance Company represents to the Series and CRMC that it will not
receive compensation for the Services from contractholder fees or any other
source.
d. Insurance Company shall transmit to Transfer Agent or the Funds (or to
any agent designated by either of them) such information in the possession
of Insurance Company concerning the Contractholders as shall reasonably be
necessary for Transfer Agent to provide services as transfer agent for the
Funds and as any Fund shall reasonably conclude is necessary to enable that
Fund to comply with applicable state Blue Sky laws or regulations.
2. An affiliated broker dealer of the Insurance Company will be entitled to a
Rule 12b-1 distribution fee paid by the Series, to be accrued daily and paid
monthly at an annual rate of 0.25% of the average daily net assets of the Class
4 Shares and Class P2 Shares of each Fund attributable to the Contracts for as
long as the Series' Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act remains in effect.
3. Compliance with Laws; Reliance on Instructions.
a. AFD and CRMC acknowledge and agree that Insurance Company is not
responsible for: (i) any information contained in any prospectus,
registration statement, annual report, proxy statement, or item of
advertising or marketing material prepared by AFD and/or CRMC, which
relates to any Fund; (ii) registration or qualification of any shares of
any Fund under any federal or state laws; or (iii) compliance by AFD, CRMC
and the Funds with all applicable federal and state laws, rules and
regulations, the rules and regulations of any self-regulatory organization
with jurisdiction (the foregoing laws, rules and regulations are
collectively referred to herein as "Applicable Law") over AFD, CRMC or
Funds, and the provisions of the Funds' prospectus and statement of
additional information.
b. Insurance Company acknowledges and agrees that it is responsible for (i)
any representations concerning the Funds made by Insurance Company or its
agents that are not included in the prospectuses, statements of additional
information or advertising or marketing material relating to the Funds and
prepared or approved
2
in writing by AFD; (ii) satisfying prospectus delivery requirements, to the
extent required by law; and (iii) in connection with the services performed
in connection with this Agreement, the compliance or failure to comply with
any Applicable Law with jurisdiction over Insurance Company.
c. Insurance Company and its affiliates shall make no representations
concerning the Funds' shares except those contained in the then current
Prospectus of the Series, in such printed information subsequently issued
on behalf of the Series or other funds managed by CRMC as supplemental to
the Series' Prospectus, in information published on the Series' or CRMC's
internet site, or in materials approved by AFD, as provided in the Business
Agreement in effect among Insurance Company, AFD and CRMC.(the "Business
Agreement").
d. Each party is entitled to rely on any written records or instructions
provided to it by responsible persons of the other party(ies).
4. Insurance Company Representations and Warranties.
a. The Insurance Company represents and warrants that:
(i) it has the corporate power and the authority to enter into and
perform all of its duties and obligations under this Agreement;
(ii) this Agreement constitutes its legal, valid and binding
obligation, enforceable against each above-named party in accordance
with its terms;
(iii) no consent or authorization of, filing with, or other act by or
in respect of any governmental authority is required in connection
with the execution, delivery, performance, validity or enforceability
of this Agreement;
(iv) it will or has established the Separate Accounts as separate
accounts under Indiana Insurance law;
(v) it has registered the Separate Accounts as unit investment trusts
under the Investment Company Act of 1940, as amended (the "1940 Act"),
to serve as investment vehicles for certain Contracts or,
alternatively, has not registered one or more of the Separate Accounts
in proper reliance upon an exclusion from registration under the 1940
Act;
(vi) the Contracts are or will be and at the time of issuance will be
treated as annuity contracts and life insurance policies, as
applicable, under applicable provisions of the Internal Revenue Code
of 1986, as amended, and the regulations thereunder (the "Code"), that
Insurance Company will maintain such treatment and that it will notify
the Series 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;
3
(vii) the offer of the Contracts has been registered with the U.S.
Securities and Exchange Commission (the "SEC") under the Securities
Act of 1933, as amended (the "1933 Act"), or it is properly exempt
from registration under the 1933 Act, and each such registration
statement and any further amendments or supplements thereto will, when
they become effective, conform in all material respects to the
requirements of the 1933 Act, and the rules and regulations of the SEC
thereunder, and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statement or omission made in reliance upon and in conformity with the
information furnished in writing to Insurance Company by AFD, Transfer
Agent, CRMC or the Series expressly for use therein;
(viii) the Contracts provide for the allocation of net amounts
received by the Insurance Company to the Separate Accounts, for
investment in the shares of specified investment companies selected
among those companies available through the Separate Accounts to act
as underlying investment media;
(ix) (a) it's affiliate, Forethought Securities, LLC will be a
properly registered or licensed broker or dealer under applicable
federal laws and regulations and is complying with and will continue
to comply with all applicable federal laws, rules and regulations, (b)
will be a member of FINRA, and (c) its membership with FINRA is not
currently suspended or terminated. Insurance Company agrees to notify
AFD immediately in writing if any of the foregoing representations
ceases to be true to a material extent.
(x) any information furnished in writing by Insurance Company for use
in the registration statement or annual report of the Series will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, nor result in the Series'
registration statement's failing to materially conform in all respects
to the requirements of the 1933 Act and 1940 Act and the rules and
regulations thereunder;
(xi) investment by each Separate Account in a Fund is in reliance on
and consistent with the terms of the Series' Mixed and Shared Funding
Order; and
(xiii) the Separate Accounts invest in the Funds in reliance on the
status of each Separate Account as a "Permitted Investor" within the
meaning of Section 817(h)(4)(A) of the Internal Revenue Code of 1986,
as amended.
4
5. Representations and Warranties of AFD, Transfer Agent, CRMC and the Series.
a. AFD and Transfer Agent each represents and warrants (as applicable)
that:
(i) this Agreement constitutes its legal, valid and binding
obligation, and is enforceable against it in accordance with its
terms;
(ii) no consent or authorization of, filing with, or other act by or
in respect of any governmental authority is required in connection
with the execution, delivery, performance, validity or enforceability
of this Agreement;
(iii) the execution, performance and delivery of this Agreement by it
will not result in its violating any Applicable Law or breaching or
otherwise impairing any of its contractual obligations;
(iv) AFD represents that the Funds are registered as investment
companies under the 1940 Act and Fund shares sold by the Funds are,
and will be, registered under the Securities Act of 1933, as amended;
(v) AFD represents that it is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, and may properly cause
Fund shares to be made available for the purposes of this Agreement;
(vi) Shares of the Series may be offered to separate accounts of
various insurance companies in addition to Insurance Company. AFD
represents, warrants and covenants that no shares of the Series shall
be sold to the general public in contravention of Section 817 of the
Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the "Code").
(vii) it has the corporate power and the authority to enter into and
perform all of its duties and obligations under this Agreement;
(viii) AFD and its affiliates are solely responsible for information
contained in any prospectus, registration statement, annual report,
proxy statement, or item of advertising or marketing material prepared
by AFD relating to any Fund; and
(ix) AFD represents that prospectuses, other materials concerning the
Funds are complete and accurate in all material respects and do not
contain any material omission or misstatement of a material fact
necessary to make the information not misleading or untrue.
b. CRMC and the Series represent and warrant that:
(i) the Series is, and shall be at all times while this Agreement is
in force, lawfully organized, validly existing, and properly qualified
as an open-end
5
management investment company in accordance with the laws of the
Commonwealth of Massachusetts;
(ii) a registration statement under the 1933 Act and under the 1940
Act with respect to the Series has been filed with the SEC in the form
previously delivered to Insurance Company and the Series' registration
statement and any further amendments thereto will, when they become
effective, and all definitive prospectuses and statements of
additional information and any further supplements thereto (the
"Prospectus") shall, conform in all material respects to the
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the SEC thereunder, and will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statement therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to CRMC or the
Series by Insurance Company expressly for use therein.
(iii) Each Fund will comply with the diversification requirements of
Section 817 and shall maintain its qualification as a "regulated
investment company" ("RIC") under the Code.
(iv) The Series makes no representation or warranty as to whether any
aspect of its operations (including but not limited to fees expenses
and investment policies) complies or will comply with the insurance
laws or regulations of the various states.
6. Omnibus Accounts. The Funds recognize that the Insurance Company, for itself
or on behalf of the Separate Accounts, will be the sole shareholder of shares of
the Funds issued pursuant to the Contracts, and that the Insurance Company
intends to establish one or more omnibus accounts per Fund. Such arrangement
will result in aggregated share orders. In the event that the aggregate
Contractholder accounts maintained by the Insurance Company do not balance with
the omnibus accounts maintained by the Transfer Agent, neither the Transfer
Agent, any of its affiliates nor the Funds shall be liable to the
Contractholders for any shortfall, provided that such shortfall is not a result
of an error or omission on the part of the Transfer Agent, its affiliates or the
Funds.
7. Pricing Information. The Series or the Transfer Agent will compute the
closing net asset value, and any distribution information (including the
applicable ex-date, record date, payable date, distribution rate per share,
income accrual and capital gains information) for each Fund as of the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time)
on each day the New York Stock Exchange is open for business (a "Business Day")
or at such other time as the net asset value of a Fund is calculated, as
disclosed in the relevant Funds' current prospectuses. The Series or the
Transfer Agent will use their best efforts to communicate to the Insurance
Company such information by 6:30 p.m. Eastern Time on each Business Day. Such
information shall be accurate and true in all respects and updated continuously.
6
8. Pricing Adjustments.
a. In the event an adjustment is made to the computation of the net asset
value of Fund shares as reported to Insurance Company under paragraph 7,
(1) the correction will be handled in a manner consistent with SEC
guidelines and the Investment Company Act of 1940, as amended and (2) the
Funds or Transfer Agent shall notify Insurance Company as soon as
practicable after discovering the need for any such adjustment.
Notification may be made in the following manner:
Method of Communication
(i) Fund/SERV Transactions. The parties agree that they will
ordinarily choose to use the National Securities Clearing
Corporation's Mutual Fund Settlement, Entry and Registration
Verification ("Fund/SERV") system, and if Fund/SERV is used, any
corrections to the fund prices for the prior trade date will be
submitted through the Mutual Fund Profile with the correct fund prices
and applicable date.
(ii) Manual Transactions. If there are technical problems with
Fund/SERV, or if the parties are not able to transmit or receive
information through Fund/SERV, any corrections to the fund prices
should be communicated by facsimile or by electronic transmission
acceptable to Transfer Agent, and will include for each day on which
an adjustment has occurred the incorrect Fund price, the correct
price, and, to the extent communicated to the applicable Fund's
shareholders, the reason for the adjustment. Funds and Transfer Agent
agree that the Insurance Company may send this notification or a
derivation thereof (so long as such derivation is approved in advance
by Funds or AFD, as applicable) to Contractholders whose accounts are
affected by the adjustment.
b. To the extent a price adjustment results in a deficiency or excess to a
Contractholder's account, Insurance Company and Transfer Agent agree to
evaluate the situation together on a case-by-case basis with the goal
towards pursuing an appropriate course of action. To the extent the price
adjustment was due to Transfer Agent's error, Transfer Agent shall
reimburse Contractholder's account. Any administrative costs incurred for
correcting Contractholder accounts will be at Insurance Company's expense.
9. Purchases and Redemption Orders; Settlement of Transactions
a. Manual Transactions. Manual transactions via facsimile shall be used by
Insurance Company only in the event that Insurance Company is in receipt of
orders for purchase or redemption of shares and is unable to transmit the
orders to the Transfer Agent due to unforeseen circumstances such as system
wide
7
computer failures experienced by Insurance Company or the National
Securities Clearing Corporation ("NSCC") or other events beyond the
Insurance Company's reasonable control. In the event manual transactions
are used, the following provisions shall apply:
(i) Next Day Transmission of Orders. The Insurance Company will notify
the Transfer Agent by 8:00 a.m. Eastern Time, on the next Business Day
the aggregate amounts of purchase orders and redemption orders, that
were placed by Contractholders in each Separate Account by 4:00 p.m.
Eastern time on the prior Business Day (the "Trade Date"). Insurance
Company represents that orders it receives after 4:00 p.m. Eastern
time on any given Business Day will be transmitted to the Transfer
Agent using the following Business Day's net asset value. Transfer
Agent may process orders it receives after the 8:00 a.m. deadline
using the net asset value next determined.
(ii) Purchases. All orders received by Insurance Company by 4:00 p.m.
on a Business Day and communicated to the Transfer Agent by the 8:00
a.m. deadline shall be treated by the Transfer Agent as if received as
of the close of trading on the Trade Date and the Transfer Agent will
therefore execute orders at the net asset values determined as of the
close of trading on the Trade Date. Insurance Company will initiate
payment by wire transfer to a custodial account designated by the
Funds for the aggregate purchase amounts prior to 4:00 p.m. Eastern
time on the next Business Day following Trade Date.
(iii) Redemptions. Aggregate orders for redemption of shares of the
Funds will be paid in cash and wired from the Funds' custodial account
to an account designated by the Insurance Company. Transfer Agent will
initiate payment by wire to Insurance Company or its designee proceeds
of such redemptions two Business Days following the Trade Date (T+2).
b. Fund/SERV Transactions. The parties will ordinarily use the Fund/SERV
system, and if used, the following provisions shall apply:
(i) Without limiting the generality of the following provisions of
this section, the Insurance Company and Transfer Agent each will
perform any and all duties, functions, procedures and responsibilities
assigned to it and as otherwise established by the NSCC applicable to
Fund/SERV and the Networking Matrix Level utilized.
(ii) Any information transmitted through Networking by any party to
the other and pursuant to this Agreement will be accurate, complete,
and in the format prescribed by the NSCC. Each party will adopt,
implement and maintain procedures reasonably designed to ensure the
accuracy of all transmissions through Networking and to limit the
access to, and the inputting of data into, Networking to persons
specifically authorized by such party.
8
(iii) Same Day Trades. On each Business Day, the Insurance Company
shall aggregate and calculate the purchase orders and redemption
orders for each Separate Account received by the Insurance Company
prior to 4:00 p.m. Eastern time. The Insurance Company shall
communicate to Transfer Agent for that Trade Date, by Fund/SERV, the
aggregate purchase orders and redemption orders (if any) for each
Separate Account received by 4:00 p.m. Eastern time on such Trade Date
by no later than the NSCC's Defined Contribution Clearance &
Settlement ("DCC&S") Cycle 8 (generally, 6:30 a.m. Eastern time)on the
following Business Day. Transfer Agent shall treat all trades
communicated to Transfer Agent in accordance with the foregoing as if
received prior to 4:00 p.m. Eastern time on the Trade Date. All orders
received by the Insurance Company after 4:00 p.m. Eastern time on a
Business Day shall not be transmitted to NSCC prior to the conclusion
of the DCC&S Cycle 8 on the following Business Day, and Insurance
Company represents that orders it receives after 4:00 p.m. Eastern
time on any given Business Day will be transmitted to the Transfer
Agent using the following Business Day's net asset value. Transfer
Agent may process orders it receives after the DCC&S Cycle 8 deadline
using the net asset value next determined.
(iv) When transmitting instructions for the purchase and/or redemption
of shares of the Funds, Insurance Company shall submit one order for
all contractholder purchase transactions and one order for all
contractholder redemption transactions, unless otherwise agreed to by
the Insurance Company and the Transfer Agent.
c. Contingencies. All orders are subject to acceptance by Transfer Agent
and become effective only upon confirmation by Transfer Agent. Upon
confirmation, the Transfer Agent will verify total purchases and
redemptions and the closing share position for each fund/account. In the
case of delayed settlement, Transfer Agent and Insurance Company shall make
arrangements for the settlement of redemptions by wire no later than the
time permitted for settlement of redemption orders by the Investment
Company Act of 1940. Such wires for Insurance Company should be sent to:
UMB Bank
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ABA # ▇▇▇▇▇▇▇▇▇
DDA # 9872026624
Account name: Forethought Operating Account
9
Such wires for Transfer Agent should be sent to:
▇▇▇▇▇ Fargo Bank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ABA#: ▇▇▇▇▇▇▇▇▇
AFS Account#: 4100-060532
For Credit to AFS acct. no. (account number and fund)
FBO Forethought Life Insurance Company
d. Processing Errors. Processing errors which result from any delay or
error caused by Insurance Company may be adjusted through the NSCC System
by Insurance Company by the necessary transactions on a current basis.
e. Coding. If applicable, orders for the purchase of Fund shares shall
include the appropriate coding to enable Transfer Agent to properly
calculate commission payments to any broker-dealer firm assigned to the
Separate Account.
f. Reconciliation. Insurance Company shall reconcile share positions with
respect to each Fund for each Separate Account as reflected on its records
to those reflected on statements from Transfer Agent and shall, on request,
certify that each Separate Account's share positions with respect to each
Fund reported by Transfer Agent reconcile with Insurance Company's share
positions for that Separate Account. Insurance Company shall promptly
inform Transfer Agent of any record differences and shall identify and
resolve all non-reconciling items within five business days.
g. Verification. Within a reasonable period of time after receipt of a
confirmation relating to an instruction, Insurance Company shall verify its
accuracy in terms of such instruction and shall notify Transfer Agent of
any errors appearing on such confirmation.
h. Order Processing. Any order by Insurance Company for the purchase of
shares of the respective Funds through AFD shall be accepted at the time
when it is received by AFD/Transfer Agent (or any clearinghouse agency that
AFD/Transfer Agent may designate from time to time), and at the offering
and sale price determined in accordance with this Agreement, unless
rejected by AFD, Transfer Agent or the respective Funds. In addition to the
right to reject any order, the Funds have reserved the right to withhold
shares from sale temporarily or permanently. AFD/Transfer Agent will not
accept any order from Insurance Company that is placed on a conditional
basis or subject to any delay or contingency prior to execution. The
procedure relating to the handling of orders shall be subject to
instructions that AFD shall forward from time to time. The shares purchased
will be issued by the respective Funds only against receipt of the purchase
price, in collected New York or Los Angeles Clearing House funds. If
10
payment for the shares purchased is not received within three days after
the date of confirmation, the sale may be cancelled by AFD or by the
respective Funds without any responsibility or liability on the part of AFD
or the Funds, and AFD and/or the respective Funds may hold the Insurance
Company responsible for any loss, expense, liability or damage, including
loss of profit suffered by AFD and/or the respective Funds, resulting from
Insurance Company's delay or failure to make payment as aforesaid.
i. Dividends and Distributions. The Transfer Agent shall furnish notice
promptly to the Insurance Company of any dividend or distribution payable
on any Funds held by the Separate Accounts. The Insurance Company hereby
elects to receive all such dividends and distributions as are payable on
shares of a Fund recorded in the title for the corresponding Separate
Account in additional shares of that Fund. The Series shall notify the
Insurance Company of the number of shares so issued. All such dividends and
distributions shall be automatically reinvested at the ex-dividend date net
asset value. The Insurance Company reserves the right to revoke this
election and to receive all such income dividends and capital gain
distributions in cash.
j. Right to Suspend. The Series reserves the right to temporarily suspend
sales if the Board of Trustees of the Series, acting in good faith and in
light of its fiduciary duties under federal and any applicable state laws,
deems it appropriate and in the best interests of shareholders or in
response to the order of an appropriate regulatory authority. Insurance
Company shall abide by requirements of the Funds' frequent trading policy
as described in the Series' prospectus and statement of additional
information.
k. Book Entry. Transfer of the Series' shares will be by book entry only.
No stock certificates will be issued to the Separate Accounts. Shares
ordered from a particular Fund will be recorded by the Series as instructed
by Insurance Company in an appropriate title for the corresponding Separate
Account.
l. Limitations on Redemptions. The Insurance Company shall not redeem Fund
shares attributable to the Contracts (as opposed to Fund shares
attributable to the Insurance Company's assets held in the Account) except
(i) as necessary to implement Contractholder-initiated transactions, or
(ii) as required by state and/or federal laws or regulations or judicial or
other legal precedent of general application (a "Legally Required
Redemption"). Upon request, the Insurance Company will promptly furnish to
the Series and AFD an opinion of counsel for the Insurance Company (which
counsel shall be reasonably satisfactory to the Series and AFD) to the
effect that any redemption pursuant to clause (ii) above is a Legally
Required Redemption.
10. Account Activity. Upon request, the Transfer Agent shall send to the
Insurance
11
Company, (i) confirmations of activity in each Separate Account within five (5)
Business Days after each Trade Date on which a purchase or redemption of shares
of a Fund is effected for a Separate Account; (ii) statements detailing activity
in each Separate Account no less frequently than quarterly; and (iii) such other
information as may reasonably be requested by Insurance Company and agreed upon
by Transfer Agent.
11. Expenses. All expenses incident to each party's performance of this
Agreement shall be paid by the respective party.
The Funds shall pay the cost of registration of their shares with the SEC,
preparation of the Fund's prospectuses, proxy materials and reports, or the
preparation of other related statements and notices required by Applicable Law.
The Funds shall pay the cost of qualifying Fund shares in states where required.
12. Proxy and Other Communication Materials. The Funds shall distribute to the
Insurance Company their proxy material and periodic Fund reports to
shareholders. AFD, Transfer Agent or the Funds shall provide the Insurance
Company with a reasonable quantity of the Funds' prospectuses and sales
literature upon request to be used for the Separate Accounts in connection with
the transactions contemplated by this Agreement.
AFD, Transfer Agent or the Funds shall provide to Insurance Company, or its
authorized representative, at no expense to Insurance Company, the following
Contractholder communication materials prepared for circulation to
Contractholders in quantities reasonably requested by Insurance Company which
are sufficient to allow mailing thereof by Insurance Company, to the extent
required by Applicable Law, to all Contractholders in the Separate Accounts:
proxy or information statements, annual reports, semi-annual reports, and all
updated prospectuses, supplements and amendments thereof. If requested by the
Company, the Trust shall provide such documents in the form of typeset
electronic document files or other such electronic means and such other
assistance as is reasonably necessary in order for the Company to have any of
the documents of each Fund and any supplements or amendments to any of the
foregoing. Such documents may be printed in combination with such documents of
other fund companies' and/or such documents for the Contracts and/or may be
delivered electronically. Expenses associated with the printing, processing, and
distributing such documents will be at the expense of AFD, Transfer Agent or the
Funds. AFD, Transfer Agent or the Funds shall provide Insurance Company with
other documents and materials as Insurance Company may reasonably request from
time to time. In the event that the Company must file and deliver a supplement
to the Policy prospectus as a direct result of a supplement filed for the Trust
prospectus, the expense of printing and delivering the Policy supplement will be
at the expense of the Trust or its designee.
AFD will provide Insurance Company on a timely basis with investment performance
information for each Fund, including (a) the top ten portfolio holdings on a
quarterly basis; and (b) on a monthly basis, average annual total return for the
prior one-year, three year, five-year, ten-year and life of the Fund. AFD will
endeavor to provide the
12
information in clause (a) to Insurance Company within twenty business days after
the end of each quarter, and will endeavor to provide the information in clause
(b) to Insurance Company within five business days after the end of each month.
13. [Reserved]
14. Proxy Materials/Voting. The Insurance Company will distribute all proxy
material furnished by the Funds to the extent required by Applicable Law, at the
expense of the Fund. For so long as the SEC interprets the 1940 Act to require
pass-through voting by insurance companies whose separate accounts are
registered as investment companies under the 1940 Act ("Registered Separate
Accounts"), the Insurance Company shall vote shares of the Funds held in
Registered Separate Accounts at shareholder meetings of the Funds in accordance
with instructions timely received by the Insurance Company (or its designated
agent) from owners of Contracts funded by such Registered Separate Accounts
having a voting interest in the Funds. The Insurance Company shall vote shares
of the Funds held in Registered Separate Accounts that are attributable to the
Contracts as to which no timely instructions are received, as well as shares
held in such Registered Separate Account that are not attributable to the
Contracts and owned beneficially by the Insurance Company (resulting from
charges against the Contracts or otherwise), in the same proportion as the votes
cast by owners of the Contracts funded by the Registered Separate Account having
a voting interest in the Funds from whom instructions have been timely received.
The Insurance Company shall vote shares of the Funds held in its general account
or in any Separate Account that is not registered under the 1940 Act, if any, in
its discretion.
15. Future Registration of Separate Account(s). If Insurance Company registers
a Separate Account that includes any Fund as an underlying investment option as
a unit investment trust under the 1940 Act, Insurance Company will provide to
each Fund, as appropriate, 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 Contracts or any Separate
Account contemporaneously with the filing of such document with the SEC, FINRA
or other regulatory authority.
16. Independent Contractor Status. The Insurance Company shall, for all
purposes herein, be deemed to be an independent contractor and shall have,
unless otherwise expressly provided or authorized, no authority to act for or
represent AFD or the Funds in any way or otherwise be deemed an agent of AFD or
the Funds.
17. Termination. At the terminating party's election and the other party's
concurrence, termination of this Agreement may be limited solely as to new
Contracts. This Agreement shall terminate:
a. at the option of the Insurance Company, AFD, Transfer Agent, CRMC or the
Series upon 90 days advance written notice to the other parties;
13
b. at any time by giving 30 days written notice to the other party in the
event of a material breach of this Agreement by the other party that is not
cured during such 30-day period;
c. at the option of the Insurance Company, AFD or the Series, upon
institution of formal proceedings relating to (i) the marketing of the
Contracts, (ii) the Separate Accounts, (iii) the Insurance Company, (iv)
AFD or (v) the Funds by FINRA, the SEC or any other regulatory body;
d. at the option of Insurance Company immediately upon written notice, if
the Series or CRMC fails to meet the requirements for either
diversification under Section 817 or RIC status under the Code;
e. at the option of any party upon termination of CRMC's investment
advisory agreement with the Series. Notice of such termination shall be
promptly furnished. This paragraph (e) shall not be deemed to apply if,
contemporaneously with such termination, a new contract of substantially
similar terms is entered into between CRMC and the Series;
f. except for Insurance Company's delegation of its duties to a
subcontractor or to an affiliate, upon assignment of this Agreement, at the
option of any party not making the assignment, unless made with the written
consent of the other parties;
g. in the event interests in the Separate Accounts, the Contracts, or Fund
shares are not registered, issued or sold in conformity with Applicable Law
or such Applicable Law precludes the use of Fund shares as an underlying
investment medium of Contracts issued or to be issued by the Insurance
Company. Prompt notice shall be given by the terminating party to the other
parties in the event the conditions of this provision occur;
h. for Registered Separate Accounts, they may terminate upon a decision by
the Insurance Company, in accordance with regulations of the SEC for
Registered Separate Accounts, to substitute Fund shares with the shares of
another investment company for Contracts for which the Fund shares have
been selected to serve as the underlying investment medium for Registered
Separate Accounts, in which case the following provisions shall apply:
(i) The Insurance Company will give 60 days written notice to the
applicable Fund and AFD upon the occurrence of the earlier of the
following actions taken for the purpose of substituting shares of the
Fund: (1) an application made to the SEC, (2) a proposed
Contractholder vote, or (3) the Insurance Company's determination to
substitute Fund shares with the shares of another investment company;
and
14
(ii) The Funds or AFD will in no way recommend action in connection
with, or oppose or interfere with any application made to the SEC by
the Insurance Company with regard to the substitution of Fund shares
with shares of another investment company or seek in any manner to
oppose or interfere with a proposed Contractholder vote; or
i. upon such shorter notice as is required by law, order or instruction by
a court of competent jurisdiction or a regulatory body or self-regulatory
organization with jurisdiction over the terminating party.
Upon termination and at the request of the requesting party, the other
party shall deliver to the requesting party, any records which the
requesting party may be required by law or regulations to have access to or
to maintain.
18. Notices. All notices under this Agreement, unless otherwise specified in
the Agreement shall be given in writing and delivered via overnight delivery
(postage prepaid, return receipt requested), facsimile transmission or
registered or certified mail, as follows:
If to the Insurance Company:
Forethought Life Insurance Company
Attn: ▇▇▇▇ ▇▇▇▇, EVP, Chief Investment Officer
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to AFD, Transfer Agent, CRMC or to the Series:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Capital Research and Management Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇
American Funds Distributors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
15
And:
American Funds Service Company
Attn: HOST -- Contract Administration
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
phone: 800/▇▇▇-▇▇▇▇, ext. 8
facsimile: 210/474-4088
or to such other address or person as may be specified in a written notice given
to the other parties. The date of service of any notice shall be the date it is
received by the recipient.
19. Books and Records. Each party hereto shall cooperate with the other parties
and all appropriate governmental authorities and shall permit authorities
reasonable access to its books and records upon proper notice in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby. Each party shall maintain and preserve all records in its
possession as required by law to be maintained and preserved in connection with
the provision of the services contemplated hereunder. Upon the request of a
party, the other party shall provide copies of all records as may be necessary
to (a) monitor and review the performance of either party's activities, (b)
assist either party in resolving disputes, reconciling records or responding to
auditor's inquiries, (c) comply with any request of a governmental body or
self-regulatory organization, (d) verify compliance by a party with the terms of
this Agreement, (e) make required regulatory reports, or (f) perform general
customer service. The parties agree to cooperate in good faith in providing
records to one another under this provision.
20. Indemnification.
a. Insurance Company shall indemnify and hold harmless AFD, Transfer Agent,
CRMC, the Series, each of the Funds, and each of their affiliates,
directors, officers, employees and agents and each person who controls them
within the meaning of the 1933 Act, from and against any and all losses,
claims, damages, liabilities and expenses, including reasonable attorneys'
fees ("Losses"), they may incur, insofar as such Losses arise out of or are
based upon (i) Insurance Company's negligence or willful misconduct in the
performance of its duties and obligations under this Agreement, (ii)
Insurance Company's violation of any Applicable Law in connection with the
performance of its duties and obligations under this Agreement, and (iii)
any breach by Insurance Company of any provision of this Agreement,
including any representation, warranty or covenant made in the Agreement.
Insurance Company shall also reimburse AFD, Transfer Agent, CRMC, the
Series, the Funds and their respective affiliates for any legal or other
expenses reasonably incurred by any of them in connection with
investigating or defending against such Losses. This indemnity provision is
in addition to any other liability which Insurance Company may otherwise
have to AFD, the Transfer Agent, CRMC, the Series, the Funds or their
respective affiliates.
16
b. AFD, Transfer Agent or CRMC, as applicable, shall indemnify and hold
harmless, Insurance Company and its directors, officers, employees and
agents and each person who controls them within the meaning of the 1933
Act, from and against any and all Losses they may incur, insofar as such
Losses arise out of or are based upon (i) AFD's, Transfer Agent's or CRMC's
negligence or willful misconduct in the performance of its duties and
obligations under this Agreement, (ii) AFD's, Transfer Agent's or CRMC's
violation of Applicable Law in connection with the performance of its
duties and obligations under this Agreement, and (iii) any breach by AFD,
Transfer Agent or CRMC of any provision of this Agreement, including any
representation, warranty or covenant made in the Agreement by AFD, Transfer
Agent or the Series. AFD, Transfer Agent or CRMC, as applicable, shall also
reimburse Insurance Company for any legal or other expenses reasonably
incurred in connection with investigating or defending against such Losses.
This indemnity provision is in addition to any other liability which AFD,
Transfer Agent or CRMC may otherwise have to Insurance Company.
c. Promptly after receipt by a party entitled to indemnification under this
paragraph 20 (an "Indemnified Party") of notice of the commencement of an
investigation, action, claim or proceeding, such Indemnified Party will, if
a claim in respect thereof is to be made against the indemnifying party
under this paragraph 20, notify the indemnifying party of the commencement
thereof. The indemnifying party will be entitled to assume the defense
thereof, with counsel satisfactory to the Indemnified Party. After notice
from the indemnifying party of its intention to assume the defense of an
action and the appointment of satisfactory counsel, Indemnified Party shall
bear the expenses of any additional counsel obtained by it, and the
indemnifying party shall not be liable to such Indemnified Party under this
paragraph for any legal expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof other than reasonable costs of
investigation. The indemnifying party shall not, without the prior written
consent of the Indemnified Party, settle or compromise the liability of the
Indemnified Party; provided, however, that in the event that the
Indemnified Party fails to provide its written consent, the indemnifying
party shall thereafter be liable to provide indemnification only to the
extent of the amount for which the action could otherwise have been settled
or compromised.
21. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York exclusive of conflicts of
laws.
22. Subchapter M. CRMC will endeavor to have each Fund comply with Subchapter M
of the Internal Revenue Code of 1986, as amended, and the regulations thereunder
and shall qualify as a regulated investment company thereunder.
17
23. Entire Agreement/Amendments. This Agreement (together with the Business
Agreement) contains the entire understanding and agreement among the parties
with respect to the subject matter of this Agreement and supersedes any and all
prior agreements, understandings, documents, projections, financial data,
statements, representations and warranties, oral or written, express or implied,
between the parties hereto and their respective affiliates, representatives and
agents in respect of the subject matter hereof. This agreement may not be
amended except by written agreement of the parties. If there should be any
conflict between the terms of this Agreement and those of the Business
Agreement, the terms of this Agreement shall govern.
24. Assignability. This Agreement shall extend to and be binding upon the
Insurance Company, the Series, AFD, CRMC and the Transfer Agent and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or corporation,
other than the parties hereto and their respective successors and permitted
assigns, any legal or equitable right, remedy or claim in respect of this
Agreement or any provision herein contained. Neither this Agreement nor any
rights, privileges, duties or obligations of the parties hereto may be assigned
by any party without the prior written consent of the other parties or as
expressly contemplated by this Agreement; provided, however, that a merger of,
reinsurance arrangement by, or change of control of a party shall not be deemed
to be an assignment for purposes of this Agreement.
25. Proprietary Information. AFD and the Funds agree that the names, addresses,
and other information relating to the Contractholders or prospects for the sale
of the Contracts developed by Insurance Company are the exclusive property of
the Insurance Company and may not be used by AFD, Transfer Agent, CRMC or the
Funds without the written consent of the Insurance Company except for carrying
out the terms of this Agreement or as otherwise provided for in this Agreement
and any amendments thereto. Each party to this Agreement agrees to maintain the
confidentiality of all information (including personal financial information of
the customers of either party) received from the other party pursuant to this
Agreement. Each party agrees not to use any such information for any purpose, or
disclose any such information to any person, except as permitted or required by
applicable laws, rules and regulations, including applicable state privacy laws
and the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and any regulations promulgated thereunder. This
provision, to the extent permissible by applicable law, shall not be construed
to limit the parties' obligation to comply with paragraph 19, above.
AFD, the Transfer Agent, CRMC and the Series hereby consent to the Insurance
Company's use of the names of the Series, the Funds, AFD, the Transfer Agent and
CRMC in connection with marketing the Funds and Contracts, subject to the terms
of this Agreement and that certain Business Agreement, by and among Insurance
Company, CRMC, Forethought Distributors, LLC and American Funds Distributors.
Insurance Company acknowledges and agrees that AFD, CRMC and/or their affiliates
own all right, title and interest in and to the names American Funds, American
Funds Distributors, American Funds Insurance Series, American Funds Service
Company and Capital Research and Management Company and covenants not, at any
time, to challenge the
18
rights of AFD, CRMC and/or its affiliates to such name or design, or the
validity or distinctiveness thereof. AFD, the Transfer Agent, CRMC and the
Series hereby consent to the use of any trademark, trade name, service ▇▇▇▇ or
logo used by AFD, the Transfer Agent, CRMC and the Series, subject to AFD, the
Transfer Agent, CRMC or the Series approval of such use and in accordance with
reasonable requirements of that party. Such consent will terminate with the
termination of this Agreement. The Insurance Company agrees and acknowledges
that all use of any designation comprised in whole or in part of the name,
trademark, trade name, service ▇▇▇▇ and logo under this Agreement shall inure to
the benefit of AFD, the Transfer Agent, CRMC and/or the Series.
26. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
27. No Waiver. No waiver of any provision of this Agreement will be binding
unless in writing and executed by the party granting such waiver. Any valid
waiver of a provision set forth herein shall not constitute a waiver of any
other provision of this Agreement. In addition, any such waiver shall constitute
a present waiver of such provision and shall not constitute a permanent future
waiver of such provision.
28. No Joint Venture, Etc. Neither the execution nor performance of this
Agreement shall be deemed to create a partnership or joint venture by and among
Insurance Company, Transfer Agent, AFD, CRMC and the Funds.
29. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same Agreement. Neither this Agreement nor any amendment
shall become effective until all counterparts have been fully executed and
delivered.
30. Survival. The provisions of paragraphs 4, 5, 20 and 25 survive termination
of this Agreement. If this Agreement terminates, the Series, at Insurance
Company's option, will continue to make additional shares of the Funds available
for all existing Contracts as of the effective date of termination (under the
same terms and conditions as were in effect prior to termination of this
Agreement with respect to existing Contractholders), unless the applicable Fund
liquidates or applicable laws prohibit further sales.
31. Non-exclusivity. Each of the parties acknowledges and agrees that this
Agreement and the arrangements described herein are intended to be non-exclusive
and that each of the parties is free to enter into similar agreements and
arrangements with other entities.
32. Insurance. At all times Insurance Company shall maintain insurance coverage
that is reasonable and customary in light of all its responsibilities hereunder.
Such coverage shall insure for losses resulting from the criminal acts or errors
and omissions of Insurance Company's employees and agents.
19
33. Oversight of Insurance Company. Insurance Company will permit Transfer
Agent or its representative to have reasonable access to Insurance Company's
personnel and records pertaining to this Agreement in order to facilitate the
monitoring of the quality of the services performed by Insurance Company under
this Agreement.
34. Independent Audit. In the event Transfer Agent determines, based on a
review of complaints received in accordance with paragraph 19, above, that
Insurance Company is not processing Contractholder transactions accurately,
Transfer Agent reserves the right to require that Insurance Company's data
processing activities as they relate to this Agreement be subject to an audit by
an independent accounting firm to ensure the existence of, and adherence to,
proper operational controls. Insurance Company shall make available upon
Transfer Agent's request a copy of any report by such accounting firm as it
relates to said audit. Insurance Company shall immediately notify Transfer Agent
in the event of a material breach of operational controls.
35. Arbitration. In the event of a dispute between the parties with respect to
this Agreement, and in the event the parties are unable to resolve the dispute
between them, such dispute shall be settled by arbitration; one arbitrator to be
named by each party to the disagreement and a third arbitrator to be selected by
the two arbitrators named by the parties. The decision of a majority of the
arbitrators shall be final and binding on all parties to the arbitration. The
expenses of such arbitration shall be paid by the non-prevailing party.
36. No Recourse. The obligations of the Series under this Agreement are not
binding upon any of the Trustees, officers, employees or shareholders (except
CRMC if it is a shareholder) of the Series individually, but bind only the
Series' assets. When seeking satisfaction for any liability of the Series in
respect of this Agreement, Insurance Company and the Account agree not to seek
recourse against said Trustees, officers, employees or shareholders, or any of
them, or any of their personal assets for such satisfaction.
37. Conflicts. The parties to this Agreement recognize that due to differences
in tax treatment or other considerations, the interests of various
Contractholders participating in one or more Funds might, at some time, be in
conflict. Each party shall report to the other party any potential or existing
conflict of which it becomes aware. The Board of Trustees of the Series shall
promptly notify Insurance Company of the existence of irreconcilable material
conflict and its implications. If such a conflict exists, Insurance Company
will, at its own expense, take whatever action it deems necessary to remedy such
conflict; in any case, Contractholders will not be required to bear such
expenses.
38. Mixed and Shared Funding. The Series hereby notifies Insurance Company that
it may be appropriate to include in the Prospectus pursuant to which a Contract
is offered disclosure regarding the risks of mixed and shared funding.
20
39. Shareholder Information Agreement. The Insurance Company has executed or
will execute an agreement with Transfer Agent pursuant to Rule 22c-2 under the
Investment Company Act of 1940, under which the Insurance Company is required,
upon request, to provide the Funds with certain account information and to
prohibit transactions that violate the policies established by the Funds for the
purpose of eliminating or reducing any dilution of the value of the outstanding
shares issued by the Funds.
40. Confidentiality of Holdings Information. The Insurance Company may receive
derivative holdings information (the "Holdings Information") related to the
Funds offering Class P2 Shares on a daily basis from the Series, CRMC or one of
their designees in order to coordinate with Insurance Company's internal hedging
program (the "Purpose"). Insurance Company agrees that the Holdings Information
is confidential and may only be used by Insurance Company for the Purpose.
Insurance Company agrees that it (a) will hold any and all Holdings Information
it obtains in strictest confidence. Without limiting the foregoing, Insurance
Company shall use at least the same degree of care, but no less than reasonable
care, to avoid disclosure or use of this Holdings Information as it employs with
respect to its own confidential information of a like importance; (b) may
disclose or provide access to its employees who have a need to know and may make
copies of Holdings Information only to the extent reasonably necessary to carry
out the Purpose; (c) currently has, and in the future will maintain in effect
and enforce, rules and policies to protect against access to or use or
disclosure of Holdings Information other than in accordance with this Agreement,
including without limitation written instruction to and agreements with
employees and agents who are bound by an obligation of confidentiality no less
stringent than set forth in this Agreement to ensure that such employees and
agents protect the confidentiality of Holdings Information. Insurance Company
expressly will instruct its employees and agents not to disclose Holdings
Information to third parties, including without limitation customers,
sub-contractors or consultants, and (d) will notify the Series and CRMC
immediately of any unauthorized disclosure or use, and will cooperate with them
in taking action to ensure that the Holdings Information is not used by such
receiving party.
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
FORETHOUGHT LIFE INSURANCE COMPANY,
for itself and on behalf of the Separate
Accounts
By:
--------------------------------
Name:
Title:
AMERICAN FUNDS DISTRIBUTORS, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
AMERICAN FUNDS INSURANCE SERIES
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and
Principal Executive Officer
AMERICAN FUNDS SERVICE COMPANY
By:
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
22
CAPITAL RESEARCH AND MANAGEMENT COMPANY
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
Secretary
23
EXHIBIT A
AMERICAN FUNDS INSURANCE SERIES FUNDS
Class 4 Shares
Global Growth and Income Fund
Growth Fund
Growth-Income Fund
International Fund
New World Fund
Class P2 Shares
Protected Asset Allocation Fund
24
EXHIBIT B
INSURANCE COMPANY ACCOUNTS
Forethought Life Insurance Company Separate Account A
25
EXHIBIT C
ADMINISTRATIVE SERVICES
1. Periodic Reconciliation. The Insurance Company shall provide the Funds with
sufficient information to allow for the periodic reconciliation of outstanding
units of Insurance Company separate accounts and shares of the Funds.
2. Record Maintenance. To facilitate the reconciliation activities described in
paragraph 1, the Insurance Company shall maintain with respect to each Separate
Account holding the Funds' Class 4 Shares or Class P2 Shares and each Contract
owner for whom such shares are beneficially owned the following records:
a. Number of shares;
b. Date, price and amount of purchases and redemptions (including dividend
reinvestments) and dates and amounts of dividends paid for at least the
current year to date;
c. Name and address and taxpayer identification numbers;
d. Records of distributions and dividend payments; and
e. Any transfers of shares.
3. Fund Information. The Insurance Company shall respond to inquiries from
Contract owners regarding the Funds, including questions about the Funds'
objectives and investment strategies.
4. Shareholder Communications. The Insurance Company shall provide for the
delivery of certain Fund-related materials as required by applicable law or as
requested by Contract owners. The Fund related materials shall consist of
updated prospectuses and any supplements and amendments thereto, statements of
additional information, annual and other periodic reports, proxy or information
statements and other appropriate shareholder communications. The expense of
printing and mailing such documents will be at the expense of AFD, Transfer
Agent or the Fund. The Insurance Company shall respond to inquiries from
Contract owners relating to the services provided by them and inquiries relating
to the Funds.
5. Transactional Services. The Insurance Company shall (a) communicate to the
Funds' transfer agent, purchase, redemption and exchange orders; and (b)
communicate to the Separate Accounts and Contract owners, mergers, splits and
other reorganization activities of the Funds.
6. Other Information. The Insurance Company shall provide to the Separate
Accounts and Contract owners such other information as shall be required under
applicable law and regulations.
26