PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this __ day of February, 2002, by
and between MFS FUND DISTRIBUTORS, INC., a Delaware corporation ("MFS"), and AIG
Life Insurance Company, a Delaware corporation (the "Company"), on its own
behalf and on behalf of each of the segregated asset accounts of the Company
listed in Schedule B (the "Account" or the "Accounts");
WHEREAS, each of the funds which comprise the MFS Family of Funds (certain
of which may from time to time be listed on Schedule A attached hereto) (each, a
"Fund" and collectively, the "Funds") is registered as an open-end investment
company under the Investment Company Act of 1940 as amended (the "1940 Act"),
WHEREAS each Fund is comprised of multiple classes of shares which are or
will be registered under the Securities Act of 1933 as amended (the "1933 Act");
WHEREAS MFS is registered as a broker-dealer with the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, MFS serves as distributor for each of the Funds pursuant to the
terms of a Distribution Agreement between each of the Funds and MFS;
WHEREAS, the Company will issue certain group fixed and variable annuity
contracts (individually, the "Policy" or collectively, the "Policies") which, if
required, will be registered under the 1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated
asset accounts, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the aforesaid group
fixed and/or variable annuity contracts that are allocated to the Accounts (the
Policies and the Accounts covered by this Agreement, and each corresponding Fund
covered by this Agreement in which the Accounts invest, is specified in Schedule
A attached hereto as may be modified from time to time);
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase Class A shares in one or more of
the Funds specified in Schedule A attached hereto (the "Shares") on behalf of
the Accounts to fund the Policies, and MFS intends to sell such Shares to the
Accounts;
NOW, THEREFORE, in consideration of their mutual promises, MFS and the
Company agree as follows:
ARTICLE I. Sale of Trust Shares
1.1. MFS agrees to sell to the Company those Shares which the Accounts
order (based on orders placed by Policy holders on that Business Day, as
defined below) and which are available for purchase by such Accounts,
executing such orders on a daily basis at the net asset value next
computed after receipt by MFS or its designee of the order for the Shares.
For purposes of this Section 1.1, the Company shall be the designee of MFS
for receipt of such orders from Policy owners and receipt by such designee
shall constitute receipt by MFS; provided that MFS receives notice of such
orders by 9:00 a.m. Eastern Time on the next following Business Day.
"Business Day" shall mean any day on which the New York Stock Exchange,
Inc. (the "NYSE") is open for trading and on which the Funds calculate
their respective net asset values pursuant to the rules of the SEC.
1.2. MFS agrees to make the Shares available indefinitely for purchase at
the applicable net asset value per share by the Company and the Accounts
on those days on which the Funds calculate their respective net
asset value pursuant to rules of the SEC and each Fund shall calculate
such net asset value on each day which the NYSE is open for trading.
Notwithstanding the foregoing, MFS may refuse to sell any Shares to the
Company and the Accounts, or suspend or terminate the offering of the
Shares if such action is required by law or by regulatory authorities
having jurisdiction or, pursuant to a determination made by the Board of
Trustees of any Fund acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, that such action is
necessary in the best interest of the Shareholders of such Fund.
1.3. MFS agrees to redeem for cash, on the Company's request, any full or
fractional Shares held by the Accounts (based on orders placed by Policy
holders on that Business Day), executing such requests on a daily basis at
the net asset value next computed after receipt by MFS or its designee of
the request for redemption. For purposes of this Section 1.3, the Company
shall be the designee of MFS for receipt of requests for redemption from
Policy owners and receipt by such designee shall constitute receipt by
MFS; provided that MFS receives notice of such request for redemption by
9:00 a.m. Eastern Time on the next following Business Day.
1.4. Each purchase, redemption and exchange order placed by the Company
shall be placed separately for each Fund and shall not be netted with
respect to any Fund. However, with respect to payment of the purchase
price by the Company and of redemption proceeds by MFS, the Company and
MFS shall net purchase and redemption orders with respect to each Fund and
shall transmit one net payment for all of the Funds in accordance with
Section 1.5 hereof.
1.5. In the event of net purchases, the Company shall pay for the Shares
by 4:00 p.m. Eastern Time on the next Business Day after an order to
purchase the Shares is made in accordance with the provisions of Section
1.1. hereof. In the event of net redemptions, MFS shall pay the redemption
proceeds by 4:00 p.m. Eastern Time on the next Business Day after an order
to redeem the shares is made in accordance with the provisions of Section
1.3. hereof. All such payments shall be in federal funds transmitted by
wire.
1.6. Issuance and transfer of the Shares will be by book entry only. Stock
certificates will not be issued to the Company or the Accounts. The Shares
ordered from MFS will be recorded in an appropriate title for the Accounts
or the appropriate subaccounts of the Accounts.
1.7. MFS shall furnish same day notice (by wire or telephone followed by
written confirmation) to the Company of any dividends or capital gain
distributions payable on the Shares. The Company hereby elects to receive
all such dividends and distributions as are payable on a Fund's Shares in
additional Shares of that Fund. MFS shall notify the Company of the number
of Shares so issued as payment of such dividends and distributions. The
Company reserves the right to revoke this election and to receive all such
dividends and distributions in cash.
1.8. MFS or its designee shall make the net asset value per share for each
Fund available to the Company on each Business Day 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 MFS is unable to meet the 6:30 p.m.
time stated herein, it shall provide additional time for the Company to
place orders for the purchase and redemption of Shares. Such additional
time shall be equal to the additional time which MFS takes to make the net
asset value available to the Company. If MFS provides materially incorrect
share net asset value information, MFS shall make an adjustment to the
number of shares purchased or redeemed for the Accounts to reflect the
correct net asset value per share. Any material error in the calculation
or reporting of net asset value per share, dividend or capital gains
information shall be reported promptly upon discovery to the Company.
1.9 The Fund shall transmit to the Company by 8:30 a.m. Eastern Standard
Time on each Business Day a confirmation of any net purchase or redemption
orders for shares of the Fund with a trade date of the second preceding
Business Day. However, on any Business Day that is the first Business Day