SERVICING AGREEMENT
Dated as of August 1, 1999
ANLIC INSURANCE COMPANY (HAWAII), LTD., a Hawaii stock captive insurance
company ("ANLIC (Hawaii)"), ANCHOR NATIONAL LIFE INSURANCE COMPANY, an Arizona
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stock life insurance company ("Anchor"), ANCHOR INSURANCE COMPANY (HAWAII),
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LTD., a Hawaii stock captive insurance company ("AIC") and SUNAMERICA LIFE
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INSURANCE COMPANY, an Arizona stock life insurance company, as Servicer, agree
as follows:
PRELIMINARY STATEMENTS. (1) Certain terms that are capitalized and used
throughout this Agreement (in addition to those defined above) are defined in
Article I of this Agreement.
(2) ANLIC (Hawaii), AIC and Anchor have requested the Servicer to
provide various services in connection with the Reinsurance Agreement (as
defined below) between Anchor and ANLIC (Hawaii), and the Servicer is willing to
furnish such services on the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the terms
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defined in the Reinsurance Agreement (as defined below) shall have the
respective meanings specified therein, and the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Affiliate" means (i) as to any Person, any other Person that directly or
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indirectly, is in control of, is controlled by or is under common control with
such Person.
"Agent's Account" means the special account (account number 38858088) in
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the name of CNAI, as agent, maintained at the office of Citibank at 399 Park
Avenue, New York, New York.
"Allocation Procedures" means those allocation procedures in substantially
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the form of Schedule 14.6-2 of the Reinsurance Agreement.
"Alternate Base Rate" means, for any period, a fluctuating interest rate
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per annum as shall be in effect from time to time, which rate per annum shall at
all times be equal to the higher of:
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(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time as Citibank's base rate; or
(b) of one percent above the latest three-week moving average of
secondary market morning offering rates in the United States for three-month
certificates of deposit of major United States money market banks, such
three-week moving average being determined weekly on each Monday (or, if such
day is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank (i) on the basis of
such rates reported by certificate of deposit dealers to and published by the
Federal Reserve Bank of New York or (ii) if such publication shall be suspended
or terminated, on the basis of quotations for such rates received by Citibank
from three New York certificate of deposit dealers of recognized standing
selected by Citibank, in the case of clause (i) or (ii), adjusted to the nearest
1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next
higher 1/4 of one percent.
"Anchor" has the meaning specified in the first paragraph of this Agreement
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and includes the Separate Account.
"Anchor Parties" means SunAmerica, ANLIC (Hawaii) (but only so long as it
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is an Affiliate of Anchor) and the following other parties irrespective of their
affiliation with SunAmerica: the Servicer, AIC and Anchor.
"ANLIC (Hawaii) Security Agreement" means a Security Agreement dated the
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date hereof in favor of CNAI, as agent, as such agreement may be supplemented,
amended, replaced or otherwise modified from time to time.
"Cash Collateral Account" means a non-interest bearing cash collateral
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account (the "Cash Collateral Account") with Citibank, N.A. at its office at 399
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Park Avenue, New York, New York 10043, Account No. 40800176.
"Citibank" means Citibank, N.A., a national banking association.
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"Citicorp Product Information" has the meaning specified in Section 6.08.
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"CNAI" means Citicorp North America, Inc.
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"Collection Procedures" means those administration procedures specified in
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Schedule 14.6-1 to the Reinsurance Agreement in effect on the date hereof
relating to Annuities and Charges as modified in compliance with Section 14.6(c)
of the Reinsurance Agreement.
"Company Representatives" has the meaning specified in Section 6.08.
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"Daily Reinsurance Servicer Report" means a report substantially in the
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form of Exhibit 1.01A hereto, furnished by the Servicer to ANLIC (Hawaii)
pursuant to Section 4.02.
"Debt" means (i) indebtedness for borrowed money, (ii) obligations
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evidenced by bonds, debentures, notes or other similar instruments, (iii)
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obligations to pay the deferred purchase price of property or services, (iv)
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obligations as lessee under leases that shall have been or should be, in
accordance with GAAP recorded as capital leases and (v) obligations under direct
or indirect guaranties in respect of, and obligations (contingent or otherwise)
to purchase or otherwise acquire, or otherwise to assure a creditor against loss
in respect of, indebtedness or obligations of others of the kinds referred to in
clauses (i) through (iv) above, excluding, however, obligations arising under
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the Reinsurance Documents and, in the case of Anchor, obligations arising under
insurance, annuity and similar products sold by it in the ordinary course of its
business.
"Department" means the Governmental Authority responsible for the
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regulation of the insurance business of Anchor or the Initial Servicer, as the
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case may be, in their respective states of domicile.
"Fixed Account Segregated Asset Requirements and Procedures" means the
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requirements and procedures set forth in Schedule 14.4 to the Reinsurance
Agreement.
"Fund" means each of the following: Pathway Fund, an open management
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investment company organized as a Massachusetts business trust under the laws of
the Commonwealth of Massachusetts, SunAmerica Series Trust, an open management
investment company organized as a Massachusetts business trust under the laws of
the Commonwealth of Massachusetts and Anchor Series Trust, an open management
investment company organized as a Massachusetts business trust under the laws of
the Commonwealth of Massachusetts.
"GAAP" means generally accepted accounting principles.
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"Governmental Authority" means any nation or government, any state or other
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political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of government.
"Initial Servicer" means SunAmerica Life Insurance Company, an Arizona
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stock life insurance company.
"Initial Servicer Statutory Financial Statements" has the meaning set forth
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in Section 2.02(e).
"Investment Company" means a Person registered as a separate investment
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company under the Investment Company Act of 1940, as amended.
"Material Adverse Effect" means a material adverse effect on (a) the
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business or properties of any Anchor Party, (b) the rights, remedies or
interests of ANLIC (Hawaii) under any Reinsurance Document or (c) the ability of
any Anchor Party to perform its obligations under any Annuity or any Reinsurance
Document.
"Moody's" means Moody's Investors Service, Inc.
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"Net Amounts Payable" means Gross Amounts Payable after application of the
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netting provisions set forth in Article VIII of the Reinsurance Agreement.
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"Obligor" means each Person from whom Anchor has the right to receive any
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Charges pursuant to an Annuity.
"Payment Date" shall mean the 23rd calendar day of each month if such day
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falls on a Business Day, if not, then the first Business Day thereafter.
"Reinsurance Agreement" means the Reinsurance Agreement dated as of the
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date hereof between Anchor and ANLIC (Hawaii), as such agreement may be
supplemented, amended, replaced or otherwise modified from time to time.
"Reinsurance Documents" means this Agreement, the Reinsurance Agreement,
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the Standing Instructions, the Collection Procedures, the Allocation Procedures,
the Daily Reinsurance Servicer Report, the Reinsurance Servicer Report, the AIC
Retrocession Agreement, the ANLIC (Hawaii) YRT Retrocession Agreement, the CG
YRT Retrocession Agreement, the Successor YRT Retrocession Agreement and the
Fixed Account Segregated Asset Requirements and Procedures.
"Reinsurance Servicer Report" means a report in substantially the form of
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Exhibit 1.01B hereto, furnished by the Servicer to ANLIC (Hawaii) pursuant to
Section 4.02.
"Responsible Officer" means, in respect of any Person, any authorized
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officer of such Person who has the title of vice president or higher or an
officer performing substantially the same function of such officer.
"S&P" means Standard & Poor's, a division of The McGraw Hill Companies.
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"SAP" means, with respect to any Person, statutory accounting practices
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prescribed or permitted by the insurance regulator of the jurisdiction of
domicile of such Person.
"Service Transfer" has the meaning assigned to that term in Section
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4.01(b).
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"Servicer" has the meaning specified in Section 4.01(a) and on the date
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hereof means the Initial Servicer.
"Servicer Default" means any one or more of the following:
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(a) a Servicer Remedy Event specified in Section 5.01(a); or
(b) any action taken or omitted by the Initial Servicer or any Servicer
that is an Affiliate of Anchor which has a Material Adverse Effect; or
(c) a Servicer Remedy Event specified in Section 5.01(g) with respect
to the Initial Servicer or any Servicer that is an Affiliate of Anchor.
"Servicer Remedy Event" has the meaning specified in Section 5.01.
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"Standing Instructions" means the irrevocable standing instructions in
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substantially the form of Schedule 13.1-2 of the Reinsurance Agreement.
"Successor Servicer" means at any time the Person (including CNAI, as
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agent, but excluding the Initial Servicer) then authorized pursuant to Article
IV to service, administer and collect the Gross Amounts Payable.
"Surrender" means, with respect to an Annuity, a total withdrawal of 100%
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of the accumulated value of the Annuity (other than through the receipt of
annuity payments during the Income Phase (as defined in the Prospectus) or the
payment of a death benefit) which results in a cancellation of the Annuity. For
purposes of this Agreement, partial withdrawals shall not be deemed Surrenders.
"Surrendered Annuity" means an Annuity with respect to which a Surrender
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has occurred.
SECTION 1.02. Other Terms. As used herein, and in any certificate or
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other document made or delivered pursuant hereto or thereto, accounting terms
not defined in Section 1.01, and accounting terms partly defined in Section 1.01
to the extent not defined, shall have the respective meanings given to them
under GAAP or SAP, as applicable, in effect on the date hereof. To the extent
that the definitions of accounting terms are inconsistent with the meanings of
such terms under GAAP or SAP, as applicable, the definitions contained herein
shall control. The term "including" means "including but not limited to". All
terms used in Article 9 of the UCC, and not specifically defined herein, are
used herein as defined in such Article 9. As used in any Reinsurance Document,
the phrase "hold in trust" shall not require segregation of assets unless
expressly set forth to the contrary.
SECTION 1.03. Computation of Time Periods. Unless otherwise stated in
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this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".
SECTION 1.04. Other Definitional Provisions. (a) The headings of the
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sections of this Agreement are solely for convenience of reference and shall not
affect the meaning, construction or effect of this Agreement.
(b) All terms defined in this Agreement shall have the defined meaning
when used in any certificate or other documents made or delivered pursuant
hereto unless otherwise defined therein.
(c) Any reference herein to any statute, agreement or document, or any
section thereof, shall, unless otherwise expressly provided, be a reference to
such statute, agreement, document or section as amended, modified or
supplemented (including any successor section) and in effect from time to time.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties of Anchor. Anchor
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represents and warrants as of the date hereof as follows:
(a) The execution, delivery and performance by Anchor of the
Reinsurance Documents to which it is a party are within Anchor's corporate
powers, have been duly authorized by all necessary corporate action, do not
contravene (i) Anchor's articles of incorporation or by-laws or (ii) law or any
regulation or contractual restriction binding on or affecting Anchor, and do not
result in or require the creation of any Adverse Claim (other than pursuant
thereto) upon or with respect to the Separate Accounts or Annuities or any of
its properties; and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law (other than California Civil Code 3440.1,
which has been duly complied with).
(b) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority is required for the due execution,
delivery and performance by Anchor of any Reinsurance Document to which it is a
party, or for the exercise by ANLIC (Hawaii) of its rights and remedies under
any such Reinsurance Document, except for such other filings with and approvals
of such Governmental Authorities as have been duly made and obtained prior to
the date hereof.
(c) Each Reinsurance Document to which it is a party is the legal,
valid and binding obligation of Anchor enforceable against Anchor in accordance
with its respective terms. The Reinsurance Documents to which it is a party
have been duly executed and delivered by Anchor.
(d) There is no pending or, to the knowledge of Anchor, threatened
action or proceeding against or involving any Anchor Party before any court,
Governmental Authority or arbitrator that may have a Material Adverse Effect or
that purports to affect the legality, validity or enforceability of the
Reinsurance Documents.
(e) Schedule 2.01(e) hereof contains true, correct and complete copies
of each of the forms of Annuity agreements (including but not limited to the
form of each endorsement included in any Annuity) and such forms of Annuity
contracts have been furnished to Connecticut General Life Insurance Company in
connection with the CG YRT Retrocession Agreement.
(f) Set forth on Schedule 2.01(f) hereto are the CARVM reserve
methodology for the Polaris program and for the Pathway program in use by
Anchor, as approved by the Arizona Department of Insurance and in use in other
applicable jurisdictions.
SECTION 2.02. Representations and Warranties of the Initial Servicer. The
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Initial Servicer represents and warrants as of the date hereof as follows:
(a) The Initial Servicer is a stock life insurance company duly
incorporated, validly existing and in good standing under the laws of Arizona
and is duly qualified and licensed in the District of Columbia and all States of
the United States of America except the States of New York and Wyoming and in
good standing as a foreign insurer in each jurisdiction where the failure to be
so qualified would have a Material Adverse Effect.
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(b) The execution, delivery and performance by the Initial Servicer of
each Reinsurance Document to which it is a party are within the Initial
Servicer's corporate powers, have been duly authorized by all necessary
corporate action, do not contravene (i) the Initial Servicer's articles of
incorporation or by-laws or (ii) law or any regulation or contractual
restriction binding on or affecting the Initial Servicer, and do not result in
or require the creation of any Adverse Claim (other than pursuant thereto) upon
or with respect to the Separate Account or Annuities or any of its properties;
and no transaction contemplated hereby requires compliance with any bulk sales
act or similar law (other than California Civil Code 3440.1, which has been duly
complied with).
(c) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority is required for the due execution,
delivery and performance by the Initial Servicer of any Reinsurance Document to
which it is a party, or for the exercise by ANLIC (Hawaii) of its rights and
remedies under any such Reinsurance Document, except for such other filings with
and approvals of such Governmental Authorities as have been duly made and
obtained prior to the date hereof.
(d) Each Reinsurance Document to which it is a party is the legal,
valid and binding obligation of the Initial Servicer enforceable against the
Initial Servicer in accordance with its terms. The Reinsurance Documents to
which it is a party have been duly executed and delivered by the Initial
Servicer.
(e) The annual Convention Statement of the Initial Servicer including,
the provisions made therein for investments and the valuation thereof, reserves,
policy and contract claims and statutory liabilities, as filed with the
Department and delivered to ANLIC (Hawaii) prior to the execution and delivery
of this Agreement, as of and for the years ended December 31, 1996, 1997 and
1998 (collectively, the "Initial Servicer Statutory Financial Statements"), have
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been prepared in accordance with SAP applicable thereto applied on a consistent
basis (except as noted therein). Each such Initial Servicer Statutory Financial
Statement was in compliance with applicable law when filed. According to the
best of the Initial Servicer's information, knowledge and belief, the Initial
Servicer Statutory Financial Statements are a full and true statement of all the
assets and liabilities and of the condition and affairs of the Initial Servicer
as of the respective dates thereof and of its income and deductions therefrom
for the respective years ended on such dates and have been completed in
accordance with the NAIC annual statement instructions and accounting practices
and procedures manuals except to the extent that state law may differ or that
state rules or regulations require differences in reporting not related to
accounting practices and procedures.
(f) There is no pending or, to the knowledge of the Initial Servicer,
threatened action or proceeding against or involving any Anchor Party before any
court, Governmental Authority or arbitrator that may materially adversely affect
(i) the financial condition or operations of the Initial Servicer or (ii) the
ability of the Initial Servicer to perform its obligations under any Reinsurance
Document to which it is a party, or that purports to affect the legality,
validity or enforceability of any Reinsurance Document.
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ARTICLE III
GENERAL COVENANTS
SECTION 3.01. Affirmative Covenants of Anchor. Until the Terminal
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Accounting Date, Anchor will, unless ANLIC (Hawaii) shall otherwise consent in
writing:
(a) Other Agreements. Duly and punctually observe and perform each and
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every obligation on its part to be observed or performed under each Reinsurance
Document to which it is a party, all of the terms of which (as the same may be
modified or amended from time to time as permitted herein) are hereby
incorporated herein by reference to the same extent as if set forth in full
herein irrespective of any expiration or termination of the such Reinsurance
Document.
(b) Collections Received by Anchor. (i) Deposit to the Cash Collateral
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Account on each Payment Date all Net Amounts Payable received from time to time
by Anchor and (ii) if Anchor has a claim's payment rating below A by S&P or
below A2 by Moody's, to the extent any distribution representing M&E Fees (as
defined in the Standing Instructions) other than a distribution on a Payment
Date pursuant to a Reinsurance Servicer Report shall be received by Anchor
notwithstanding the Custodian's receipt of the notice delivered pursuant to the
Standing Instructions, return such M&E Fees to the Custodian immediately upon
receipt and, until the same are so returned, hold and segregate the same.
(c) Notices. Furnish to Citicorp North America, Inc., at 399 Park
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Avenue, 6th Floor/Zone #2, New York, NY 10043, Telecopy (212) 758-6272, Attn:
Art Bovino, all notices delivered under the Reinsurance Agreement.
SECTION 3.02. Negative Covenants of Anchor. Until the Terminal Accounting
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Date, Anchor will not, unless ANLIC (Hawaii) shall otherwise consent in writing:
(a) Waive, amend or otherwise modify in any respect any Reinsurance
Document;
(b) Waive, amend or otherwise modify in any respect the CARVM reserve
methodology and pricing assumptions set forth on Schedule 2.01(f) hereto, except
to the extent permitted by Section 14.2(i) of the Reinsurance Agreement;
(c) Add any Fund pursuant to Section 14.7 of the Reinsurance Agreement
unless Anchor shall have delivered to ANLIC (Hawaii) a counterpart of the
Standing Instructions duly executed by such Fund; or
(d) Make any change in the character of its business or consent to any
change of the Collection Procedures, which change would be reasonably likely to
impair the collectability of the Gross Amounts Payable.
SECTION 3.03. Affirmative Covenants of the Initial Servicer. Until the
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payment in full in cash of all amounts payable under the Reinsurance Documents,
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the Initial Servicer will, unless ANLIC (Hawaii) shall otherwise consent in
writing:
(a) Performance. Duly and punctually observe and perform each and
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every obligation on its part to be observed or performed under this Agreement,
all of the terms of which (as the same may be modified or amended from time to
time as permitted herein) are hereby incorporated herein by reference to the
same extent as if set forth in full herein irrespective of any expiration or
termination of the Reinsurance Agreement.
(b) Performance and Compliance with Charges and Annuities. Timely and
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fully perform and comply with all material provisions, covenants and other
promises required to be observed by it under the Annuities.
(c) Collections Received by the Initial Servicer. Deposit to the Cash
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Collateral Account, on each date when such a deposit is required for the
Servicer under Article IV of this Agreement or is required pursuant to the
Standing Instructions, all Net Amounts Payable received from time to time by the
Initial Servicer or by Anchor.
(d) Collection Procedures, Allocation Procedures and Standing
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Instructions. Implement and comply at all times with the Collection Procedures,
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the Allocation Procedures and the Standing Instructions.
(e) Audits. At any time and from time to time during regular business
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hours, permit ANLIC (Hawaii), or its agents or representatives (including any
Successor Servicer), upon reasonable advance notice (i) to examine and make
copies of and abstracts from all books, records and documents (including
computer tapes and disks) in the possession or under the control of Anchor
relating to the Annuities and the Gross Amounts Payable and (ii) to visit the
offices and properties of Anchor for the purpose of examining such materials
described in clause (i) above, and to discuss matters relating to the Annuities
and the Gross Amounts Payable or Anchor's performance under the Reinsurance
Documents or under the Annuities with any of the officers or employees of Anchor
having knowledge of such matters, provided that by exercising any such rights
ANLIC (Hawaii) agrees that it will hold in confidence all information so
obtained and will use the same only for the purposes contemplated by the
Reinsurance Documents.
SECTION 3.04. Reporting Requirements of the Initial Servicer. Until the
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Terminal Accounting Date, the Initial Servicer will, unless ANLIC (Hawaii) shall
otherwise consent in writing, furnish to ANLIC (Hawaii) (in addition to the
Initial Servicer's obligations under Section 3.03(a)):
(a) as soon as possible and in any event within five Business Days
after the Initial Servicer's knowledge of the occurrence of (i) each Servicer
Remedy Event or Servicer Default, (ii) each Recapture Event, (iii) each event
that, with the giving of notice or lapse of time or both, would constitute a
Servicer Remedy Event, Recapture Event or Servicer Default, or (iii) any
Material Adverse Effect, a written statement of a Responsible Officer of the
Initial Servicer setting forth details of such Servicer Remedy Event, Recapture
Event, Servicer Default, Event of Default, other event or effect and the action
that the Initial Servicer proposes to take with respect thereto;
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(b) (A) promptly upon becoming available, but in any event within 75
days after the end of each calendar year, a copy of the annual Convention
Statements of the Initial Servicer for such calendar year, and (B) promptly upon
becoming available, but in any event within 60 days after the end of each of the
first three calendar quarters, a copy of the quarterly Conventions Statements of
the Initial Servicer for such quarter, in each case as filed by the Initial
Servicer with the Department and executed by the appropriate officer under the
laws of the state of domicile of the Initial Servicer, prepared in accordance
with SAP and accompanied by the certification of the chief financial officer or
chief executive officer or controller or treasurer of the Initial Servicer that
such annual or quarterly Convention Statement presents, to the best of his or
her information, knowledge and belief, a full and true statement of all the
assets and liabilities and of the condition and affairs of the Initial Servicer
as of the date thereof and of its income and deductions therefrom for the period
ended on such date and have been completed in accordance with the NAIC statement
instructions and accounting practices and procedures manuals except to the
extent that state law may differ or that state rules or regulations require
differences in reporting not related to accounting practices and procedures;
(c) within 90 days after the end of each calendar year, a copy of each
"Statement of Actuarial Opinion" that is provided to the Department (or
equivalent information should the Department no longer require such a statement)
as to the adequacy of aggregate reserves for life policies and contracts of the
Initial Servicer;
(d) as soon as possible and in any event within five Business Days
after the occurrence of any adjustment, settlement, waiver, compromise or change
in the terms or conditions of any Annuity or any credit, discount or release in
respect thereof, other than (i) that which is permitted by the Waiver Allowance,
and (ii) any adjustments, settlements, waivers, compromises or changes in the
terms or conditions of any charges or any credits, discounts or releases in
respect thereof which, in the aggregate, exceeds $500,000 in excess of the
Waiver Allowance in any calendar year, the statement of a Responsible Officer of
the Initial Servicer setting forth details thereof;
(e) promptly after the receipt thereof and in any event within five
Business Days, copies of each communication received by the Initial Servicer
from the Securities and Exchange Commission or the National Association of
Securities Dealers to Anchor reporting the final results of, any audit or other
investigation related to the Annuities or any aspect of the sale, maintenance,
investment or administration thereof; and
(f) promptly, from time to time, such other information, documents,
records or reports respecting the Annuities and the Gross Amounts Payable or the
conditions or operations, financial or otherwise, of the Initial Servicer, as
ANLIC (Hawaii) may from time to time reasonably request in writing in order to
protect ANLIC (Hawaii)'s interests under or contemplated by any Reinsurance
Document.
SECTION 3.05. Negative Covenants of the Initial Servicer. Until the
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Terminal Accounting Date, the Initial Servicer will not, unless ANLIC (Hawaii)
shall otherwise consent in writing:
(a) Waive, amend or otherwise modify in any respect any Reinsurance
Document;
(b) Waive, amend or otherwise modify in any respect the CARVM reserve
methodology and pricing assumptions set forth on Schedule 2.01(f) hereto, except
to the extent permitted by Section 14.2(i) of the Reinsurance Agreement; and
(c) Consolidate with or merge with or into any other Person, provided
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that this Section 3.05(c) shall not apply to any merger of the Initial Servicer
with another Person if both (i) the Initial Servicer is the corporation
surviving to such merger and (ii) immediately after giving effect to such merger
no event or condition shall have occurred and be continuing which constitutes,
or with notice or lapse of time would constitute, a Servicer Remedy Event.
SECTION 3.06. Reporting Requirements of ANLIC (Hawaii). Until the
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Terminal Accounting Date, ANLIC (Hawaii) will, unless ANLIC (Hawaii) shall
otherwise consent in writing, furnish to the Agent:
(a) as soon as available and in any event within 60 days of the end of
each of the first three quarters of each calendar year, balance sheets of ANLIC
(Hawaii) prepared in accordance with GAAP as of the end of such quarter, and the
related statement of operations and surplus of ANLIC (Hawaii) each prepared in
accordance with GAAP for the period commencing at the end of the previous
calendar year and ending with the end of such quarter, certified by the chief
financial officer or chief accounting officer of ANLIC (Hawaii);
(b) as soon as available and in any event within 90 days after the end
of each calendar year, balance sheets of ANLIC (Hawaii) prepared in accordance
with GAAP as at the end of such year, and the related statement of operations
and surplus of ANLIC (Hawaii) for such year each prepared in accordance with
GAAP and certified by the chief financial officer or chief accounting officer of
ANLIC (Hawaii);
(c) promptly, from time to time, such other information, documents,
records or reports respecting the Annuities, the Gross Amounts Payable or the
conditions or operations, financial or otherwise, of ANLIC (Hawaii), as the
Agent may from time to time reasonably request in writing; and
(d) promptly prepare the annual actuarial report required by the
Insurance Division of the Department of Commerce & Consumer Affairs of the State
of Hawaii.
SECTION 3.07. Reporting Requirements of AIC. Until the Terminal
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Accounting Date, AIC will, unless ANLIC (Hawaii) shall otherwise consent in
writing, furnish to ANLIC (Hawaii):
(a) as soon as available and in any event within 60 days of the end of
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each of the first three quarters of each calendar year, balance sheets of AIC
prepared in accordance with GAAP as of the end of such quarter, and the related
statement of operations and surplus of AIC each prepared in accordance with GAAP
for the period commencing at the end of the previous calendar year and ending
with the end of such quarter, certified by the chief financial officer or chief
accounting officer of AIC;
(b) as soon as available and in any event within 90 days after the end
of each calendar year, balance sheets of AIC prepared in accordance with GAAP as
at the end of such year, and the related statement of operations and surplus of
AIC for such year each prepared in accordance with GAAP and certified by the
chief financial officer or chief accounting officer of AIC;
(c) promptly, from time to time, such other information, documents,
records or reports respecting the Reinsurance Documents or the conditions or
operations, financial or otherwise, of Anchor, as CNAI may from time to time
reasonably request in writing in order to protect ANLIC (Hawaii)'s interests
under or contemplated by any Reinsurance Document; and
(d) promptly prepare the annual actuarial report required by Insurance
Division of the Department of Commerce & Consumer Affairs of the State of
Hawaii.
ARTICLE IV
ADMINISTRATION AND COLLECTION
SECTION 4.01. Designation of Servicer. (a) The Gross Amounts Payable shall be
-----------------------
serviced, administered and collected by the Person (the "Servicer") designated
--------
to do so from time to time in accordance with this Section 4.01. Until ANLIC
(Hawaii) designates a new Servicer pursuant to this Section 4.01, SunAmerica
Life Insurance Company is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Servicer pursuant to the terms hereof. Anchor
agrees to pay to the Initial Servicer on demand all of its fees, costs and
expenses in connection with the performance of its obligation as Servicer. If
any Servicer Default shall have occurred and be continuing, Anchor may designate
as Servicer any Person (a "Successor Servicer") permitted hereby to succeed in
------------------
whole or in part the Initial Servicer or any successor, if such Person shall be
approved by ANLIC (Hawaii) (which approval not to be unreasonably delayed or
withheld) and shall agree in writing (and obtain all necessary licenses and
regulatory approvals) to perform the duties and obligations of the Servicer
pursuant to the terms hereof to the extent requested by Anchor and permitted by
all applicable laws, rules and regulations. If Anchor is unable to obtain the
consent of a third party to succeed the Initial Servicer or a Successor
Servicer, as the case may be, as Servicer, ANLIC (Hawaii) hereby reserves the
right to act as Servicer in whole or in part in accordance with the preceding
sentence. Notwithstanding anything to the contrary in any Reinsurance Document
and without limiting the scope of duties and obligations that may be performed
by a Successor Servicer, the Successor Servicer may from time to time during
regular business hours inspect records and oversee activities of the Initial
Servicer in respect of its performance of obligations under the Reinsurance
Documents, including but not
12
limited to taking all actions and reviewing all information appropriate to
confirm compliance with the Collection Procedures, Allocation Procedures and
Fixed Account Segregated Asset Requirements and Procedures. The Servicer may,
with the prior written consent of ANLIC (Hawaii), subcontract with any other
Person to service, administer or collect the Gross Amounts Payable if such
Person is permitted to do so by all applicable laws, rules and regulations,
provided that (i) the Person with whom the Servicer so subcontracts shall not
----
become the Servicer hereunder and the Servicer shall remain liable for the
performance of the duties and obligations of the Servicer pursuant to the terms
hereof and (ii) the Initial Servicer is not required to obtain the prior written
consent of ANLIC (Hawaii) to subcontract (A) with any Affiliate of the Initial
Servicer or (B) with any other Person approved by the Department.
(b) Upon the designation of any Successor Servicer pursuant to Section
4.01(a), all authority and power of the Servicer under this Agreement in respect
of the duties and obligations to be performed by such Successor Servicer shall
pass to and be vested in a Successor Servicer (a "Service Transfer"); provided,
---------------- --------
however, that the responsibilities and duties of the Servicer under this
- -------
Agreement for Collections received prior to such designation of a Successor
- -------
Servicer, and the responsibilities and duties of the Servicer which the
- ----
Successor Servicer has not expressly agreed to perform, shall not terminate.
- ----
Without limitation but solely to the extent permitted by applicable law, ANLIC
- --
(Hawaii) is hereby authorized and empowered (upon the failure of the Servicer to
cooperate) with full power of substitution to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, all documents and other
instruments upon the failure of the Servicer to execute or deliver such
documents or instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such Service Transfer. The
Servicer agrees to cooperate with ANLIC (Hawaii) and such Successor Servicer in
effecting the termination of the responsibilities and rights of the Servicer to
conduct servicing hereunder, including the transfer to such Successor Servicer
of all authority of the Servicer to service the Gross Amounts Payable provided
for under this Agreement to the extent requested for such Service Transfer,
including all authority over all Collections that shall on the date of transfer
be held by the Servicer for deposit, or that have been deposited by the
Servicer, in the Cash Collateral Account or the Agent's Account, or that shall
thereafter be received with respect to the Charges, and in assisting the
Successor Servicer. To the extent requested by ANLIC (Hawaii) in connection
with such Service Transfer, the Servicer shall promptly at its own expense (i)
transfer its electronic records relating to the Gross Amounts Payable to the
Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and (ii) transfer to the Successor Servicer copies (and, to
the extent required for enforcement, originals) of all other records,
correspondence and documents necessary for the continued servicing of the
Annuities and the Gross Amounts Payable, in the manner and at such times as the
Successor Servicer shall reasonably request. To the extent that compliance with
this Section 4.01(b) shall require the Servicer to disclose to the Successor
Servicer information of any kind that the Servicer reasonably deems to be
confidential or subject to licensing restrictions, the Successor Servicer shall
be required to enter into such customary licensing and confidentiality
agreements as the Servicer shall deem necessary to protect its interest or to
comply with the requirements of such licensing restrictions. The Initial
Servicer, however, will continue
13
at all times to prepare and furnish in accordance with the Reinsurance Documents
(1) a Reinsurance Servicer Report on or before the fifteenth (15th) Business Day
of each month and (2) all reports as and when required by Section 3.06 for ANLIC
(Hawaii) and Section 3.07 for AIC, and each Successor Servicer shall make
available to the Initial Servicer any information in the possession of such
Successor Servicer necessary for the Initial Servicer to prepare any Reinsurance
Servicer Report.
SECTION 4.02. Duties of Servicer. (a) ANLIC (Hawaii), AIC and Anchor
--------------------
hereby appoint as their agent the Servicer, from time to time designated
pursuant to Section 4.01, to perform the functions which the Servicer is to
perform under the Reinsurance Documents. The Servicer shall take or cause to be
taken all such actions as may be necessary or advisable to collect all Gross
Amounts Payable from time to time, all in accordance with applicable laws, rules
and regulations, with reasonable care and diligence, and in accordance with the
Reinsurance Documents. In addition, the Servicer shall prepare on behalf of
ANLIC (Hawaii) and AIC the annual actuarial report required Insurance Division
of the Department of Commerce & Consumer Affairs of the State of Hawaii.
(b) Except as provided in Section 4.02(c), the Servicer will cause
Anchor to deposit all Net Amounts Payable in the Cash Collateral Account (to the
extent not previously so deposited) on each Payment Date. The Servicer shall,
not later than two Business Days prior to each Payment Date, deliver to ANLIC
(Hawaii) the Reinsurance Servicer Report.
(c) Upon receipt by the Servicer of a request to do so from ANLIC
(Hawaii) stating that an event or condition has occurred and is continuing which
constitutes, or with notice or lapse of time or both would constitute, a
Servicer Remedy Event or that the claims paying rating of Anchor or the Initial
Servicer has become less than A2 by Moody's or A by S&P, the Servicer shall:
(i) cause all Charges to be identified in the Daily Reinsurance
Servicer Report in accordance with the Reinsurance Documents on each Business
Day (A) in the case of contingent deferred sales charges, on the Business Day on
which they accrue, and (B) in the case of all other Gross Amounts Payable, on
the first Business Day after they accrue,
(ii) provide to the Custodian and to the Agent on each Business Day a
Daily Reinsurance Servicer Report, and
(iii) to the extent any distribution representing M&E Fees (as defined
in the Standing Instructions) other than a distribution on a Payment Date
pursuant to a Reinsurance Servicer Report shall be received by the Initial
Servicer notwithstanding the Custodian's receipt of the notice delivered
pursuant to the Standing Instructions, return such M&E Fees to the Custodian
immediately upon receipt and, until the same are so returned, hold in trust and
segregate the same.
ANLIC (Hawaii) may require compliance with this Section 4.02(c) whether or not
ANLIC (Hawaii) shall have designated a Successor Servicer under Section 4.01.
14
(d) Upon the request of ANLIC (Hawaii) after a Servicer Default shall
have occurred and be continuing, the Initial Servicer shall deliver to the
Successor Servicer, and the Successor Servicer shall hold in trust for ANLIC
(Hawaii) in accordance with their respective interests, copies (and, to the
extent required for enforcement, originals) of all documents, instruments and
records (including computer tapes or disks) that evidence or relate to the Net
Amounts Payable.
(e) The Servicer's authorization under this Agreement shall terminate
upon the indefeasible payment in full in cash of amounts payable under the
Reinsurance Documents and receipt by ANLIC (Hawaii) and the Servicer,
respectively, of all other amounts owed to ANLIC (Hawaii) and the Servicer under
this Agreement (unless otherwise agreed by ANLIC (Hawaii) and the Servicer).
(f) No later than two Business Days prior to any Payment Date, the
Servicer shall provide to ANLIC (Hawaii) a Reinsurance Servicer Report as of the
last day of the immediately preceding calendar month.
SECTION 4.03. Rights of ANLIC (Hawaii). At any time following the
---------------------------
designation of a Servicer other than the Initial Servicer pursuant to Section
4.01 and subject at all times to compliance with applicable law:
(a) Anchor and the Initial Servicer shall, at ANLIC (Hawaii)'s request,
(i) assemble all of the documents, instruments and other records (including
computer tapes and disks) that evidence the Annuities and the Gross Amounts
Payable, or which are otherwise necessary or desirable to collect such Gross
Amounts Payable, and shall make copies (and, to the extent required for
enforcement, originals) of the same available to ANLIC (Hawaii) at a place
selected by ANLIC (Hawaii) or its designee, and (ii) promptly upon receipt,
segregate and remit all cash constituting Net Amounts Payable to ANLIC (Hawaii)
or its designee.
(b) ANLIC (Hawaii) may, to the maximum extent permitted by applicable
law, take any and all steps in Anchor's or the Initial Servicer's name and on
behalf of Anchor, the Initial Servicer and the other Anchor Parties necessary or
desirable, in the determination of ANLIC (Hawaii), to collect all amounts due in
respect of the Gross Amounts Payable.
SECTION 4.04. Responsibilities of Anchor. Anything herein to the contrary
--------------------------
notwithstanding:
(a) Anchor shall perform all of its obligations under the Annuities in
accordance with its customary practices and the exercise by ANLIC (Hawaii) of
its rights hereunder shall not relieve Anchor from such obligations or its
obligations with respect to Gross Amounts Payable.
(b) ANLIC (Hawaii) shall not have any obligation or liability with
respect to the Annuities or the Gross Amounts Payable.
(c) Anchor will deposit to the Cash Collateral Account, on each date
when such a deposit is required for the Servicer under Article IV of this
Agreement or is required pursuant to the Standing Instructions, all Net
15
Amounts Payable received from time to time by Anchor. Anchor shall not adjust,
settle or compromise the amount or payment of any Charges, release wholly or
partly the Custodian or any obligor thereunder, or allow any credit or discount
thereon, except for the Waiver Allowance.
SECTION 4.05. Further Action. (a) ANLIC (Hawaii), AIC, Anchor and the
---------------
Initial Servicer each agrees that from time to time, at its expense, it will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary, or that ANLIC (Hawaii) may reasonably
request, in order to, protect or more fully evidence the interests of ANLIC
(Hawaii) in the Reinsurance Documents, or to enable any of them to exercise and
enforce any of their respective rights and remedies under the Reinsurance
Documents.
ARTICLE V
SERVICER REMEDY EVENTS
SECTION 5.01. Servicer Remedy Event. Each of the following events shall
----------------------
constitute a "Servicer Remedy Event":
-----------------------
(a) The Servicer (i) shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in Section 3.04(b),
(c) or (e) or clause (ii) of this Section 5.01(a)) on its part to be performed
or observed and such failure shall remain unremedied for 3 Business Days or (ii)
shall fail to make any payment or deposit to be made by it under any Reinsurance
Document when due (or, upon the discovery of an unintentional error in a
Reinsurance Servicer Report as to an amount to be so paid or deposited, within 3
Business Days after such discovery if (A) the amount erroneously stated in such
Reinsurance Servicer Report was paid or deposited when due, (B) within such 3
Business Days the Servicer provides to ANLIC (Hawaii) a corrected Reinsurance
Servicer Report and (C) such Reinsurance Servicer Report states a greater amount
to be paid or deposited); or
(b) Anchor shall fail to perform or observe any term, covenant or
agreement contained in Section 3.01(b), Section 3.02, Section 14.4(g) of the
Reinsurance Agreement, or Section 14.5(c) of the Reinsurance Agreement; or
(c) Any representation or warranty or statement made by any Anchor
Party (or any of their respective officers) in or furnished pursuant to any
Reinsurance Document shall prove to have been incorrect in any material respect
when made; or
(d) Any Anchor Party shall fail to perform or observe any other term,
covenant or agreement contained in any Reinsurance Document on its part to be
performed or observed and any such failure shall remain unremedied for 10 days
after written notice thereof shall have been given to such Anchor Party by ANLIC
(Hawaii); or
(e) Anchor shall fail to pay any principal of or premium or interest on
any Debt which is outstanding in a principal amount of at least U.S.
16
$50,000,000 in the aggregate, within the applicable grace period (if any) for
such payment after the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Debt which has not been effectively waived under such
agreement or instrument if the effect of such event or condition (after the
expiration of any grace or cure periods provided for therein) is to accelerate,
or to permit the acceleration of, the maturity of such Debt; or any such Debt
shall be accelerated or otherwise declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the stated maturity
thereof; or
(f) Anchor shall fail for any reason to own all Annuities and Charges
and rights therein free and clear of any Adverse Claim; or
(g) There shall be a filing or entry of a decree or order for relief by
a court, or the commencement of a delinquency proceeding by a Governmental
Authority (including any insurance regulatory authority), having jurisdiction in
the premises in respect of any Anchor Party or any substantial part of their
respective property in an involuntary case or proceeding under any applicable
bankruptcy, insolvency, rehabilitation, liquidation, reorganization,
conservation, dissolution or other similar law now or hereafter in effect, or
there shall be appointed a receiver, liquidator, rehabilitator, conservator,
assignee, custodian, trustee, sequestrator or similar official for any Anchor
Party or for any substantial part of its respective property, or there shall be
ordered a winding-up, liquidation, rehabilitation, reorganization, conservation
or dissolution of any Anchor Party's business, and (other than in a case or
proceeding in which such case, proceeding, decree, order or appointment was
instituted by an Affiliate of an Anchor Party or by a Governmental Authority
(including any insurance regulatory authority)) where any of the foregoing
matters shall remain unstayed and in effect for a period of 60 consecutive days;
any Anchor Party shall commence a voluntary case or proceeding under any
applicable bankruptcy, insolvency, rehabilitation, liquidation, reorganization,
conservation, dissolution or other similar law now or hereafter in effect, or
any Anchor Party shall consent to the entry of an order for relief in an
involuntary case or proceeding under any such law or shall consent to the
appointment of or taking possession by a receiver, liquidator, rehabilitator,
conservator, assignee, custodian, trustee, sequestrator or similar official for
such Anchor Party or for any substantial part of its property, or any Anchor
Party shall make any general assignment for the benefit of creditors, or any
Anchor Party shall fail generally to pay its debts as such debts become due or
any Anchor Party shall admit in writing its inability to pay its debts
generally; or any Anchor Party shall take any corporate action to authorize any
of the actions set forth above in this subsection (g); or
(h) Any "Event of Recapture" shall occur under and as defined in the
Reinsurance Agreement or the AIC Retrocession Agreement;
then, and in any such event, or in the event that Anchor has a claim's payment
17
rating below A by S&P or below A2 by Moody's, ANLIC (Hawaii) may at any time
thereafter deliver the notice referred to in Section 2 of the Standing
Instructions to the Custodian. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law or this or any other agreement.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement, and no consent to any departure by Anchor or the Initial
Servicer herefrom, shall in any event be effective unless the same shall be in
writing and signed by ANLIC (Hawaii), and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 6.02. Notices, Etc. All notices and other communications provided
------------
for hereunder shall, unless otherwise stated herein, be in writing (including
telecopier, telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, telexed, cabled or delivered by hand or by overnight courier, as to
each party hereto, at its address set forth under its name on the signature
pages hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. All such notices and communications
shall be effective when received.
SECTION 6.03. No Waiver; Remedies. No failure on the part of ANLIC
---------------------
(Hawaii) to exercise, and no delay in exercising, any of its rights hereunder or
under any Reinsurance Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 6.04. Binding Effect; Assignability. This Agreement shall be
-------------------------------
binding upon and inure to the benefit of ANLIC (Hawaii), Anchor, the Servicer
and their respective assigns, except that neither the Servicer nor Anchor shall
have the right to assign its rights hereunder or any interest herein without the
prior written consent of ANLIC (Hawaii). This Agreement shall create and
constitute the continuing obligation of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such time, as all
amounts payable under the Reinsurance Documents shall have been indefeasibly
paid in full in cash.
SECTION 6.05. Consent to Jurisdiction. (a) Each party hereto hereby
-------------------------
irrevocably submits to the exclusive jurisdiction of any State or Federal court
sitting in the State of Delaware, or, if no court in Delaware will exercise
jurisdiction, Arizona, and any appellate court from any thereof in any action or
proceeding arising out of or relating to any Reinsurance Document or any other
instrument or document furnished pursuant hereto, and each such party hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such Delaware or Arizona State court, as the case may
be, or in such Federal court sitting in Delaware or Arizona, as the case may be.
Each such party hereby irrevocably waives, to the fullest
18
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. Each such party irrevocably consents
to the service of copies of the summons and complaint and any other process that
may be served in any such action or proceeding by the mailing of copies of such
process to such party at its address specified pursuant to Section 6.02. Each
such party agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
(b) Nothing in this Section 6.05 shall affect the right of any such
party to serve legal process in any other manner permitted by law or affect the
right of any such party to bring any action or proceeding against any other such
party or their respective property in the courts of other jurisdictions other
than the State of New York if no court in the States of Delaware or Arizona will
exercise jurisdiction.
SECTION 6.06. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATE SHALL BE
-------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 6.07. No Proceedings. ANLIC (Hawaii), AIC, Anchor and the
---------------
Servicer each hereby agrees that it will not institute against the Purchaser any
proceeding of the type referred to in Section 5.01(g) so long as any commercial
paper or other debt securities issued by the Purchaser shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any such commercial paper or other debt securities shall have been outstanding.
SECTION 6.08. Confidentiality. (a) The structure of the transactions
---------------
contemplated by the Reinsurance Documents (as defined in this Agreement and the
Servicing Agreement dated as of December 31, 1997 among ANLIC Insurance Company
(Hawaii), Anchor, Anchor Insurance Company (Hawaii) and SunAmerica Life
Insurance Company), any related analyses, computer models, information, tax,
legal or accounting opinions or other documents and any related written
information (collectively, "Citicorp Product Information") constitute CNAI's
------------------------------
proprietary information; provided that Citicorp Product Information shall not
--------
include any information that:
(i) is or becomes available to the public other than as a result of
disclosure by the Company Representatives, ANLIC (Hawaii), the Initial Servicer
or Anchor, or
(ii) was known by or was in the possession of ANLIC (Hawaii), the
Initial Servicer or Anchor prior to its disclosure by CNAI to ANLIC (Hawaii),
the Initial Servicer or Anchor, or
(iii) becomes available to ANLIC (Hawaii), the Initial Servicer or
Anchor on a non-confidential basis from a source not known to be bound by a
confidentiality agreement with or under other obligation of secrecy to CNAI.
(b) ANLIC (Hawaii), the Initial Servicer and Anchor agree to maintain
the confidentiality of the Citicorp Product Information (and all drafts thereof)
and not to disclose the Citicorp Product Information, directly or
19
indirectly, without CNAI's consent, other than:
(i) to their respective officers, directors, employees, agents,
attorneys, accountants and advisors ("Company Representatives"), and then only
-----------------------
on a confidential, need-to-know basis,
(ii) as required by law, rule or regulation or judicial process or
(iii) as requested or required by any state, local, federal or foreign
authority or examiner regulating insurance or reinsurance companies or banking
or otherwise having jurisdiction.
(c) ANLIC (Hawaii), the Initial Servicer and Anchor agree to use the
Citicorp Product Information only in connection with the transaction
contemplated by the Reinsurance Documents and not for any other purpose.
(d) ANLIC (Hawaii), the Initial Servicer and Anchor agree to cause the
Company Representatives and the Anchor Parties to comply with these provisions
and to be responsible for any failure of any such representatives and the Anchor
Parties so to comply.
(e) In the event that ANLIC (Hawaii), the Initial Servicer and Anchor
are requested, compelled or required (by deposition, interrogatory, request for
information or production of documents, subpoena, civil investigative demand or
similar process) to disclose any Citicorp Product Information, then ANLIC
(Hawaii), the Initial Servicer and Anchor shall, to the extent permitted by law
and reasonably practicable under the circumstances, immediately give the other
party notice of such request so that the other party may seek a protective order
or other appropriate remedy. If, in the absence of a protective order or
waiver, ANLIC (Hawaii), the Initial Servicer and Anchor are nonetheless
compelled to disclose Citicorp Product Information, ANLIC (Hawaii), the Initial
Servicer and Anchor may disclose such information without liability hereunder;
provided that ANLIC (Hawaii), the Initial Servicer and Anchor exercise
-------
reasonable efforts (at CNAI's sole cost and expense) to obtain assurance that
-------
confidential treatment will be accorded to such disclosed information. ANLIC
-
(Hawaii), the Initial Servicer and Anchor shall not oppose any action by CNAI to
-
obtain a protective order or other assurance that confidential treatment will be
accorded.
(f) The parties agree that CNAI will suffer irreparable harm from and
will not have an adequate remedy at law with respect to any breach of this
Section. In addition to all other remedies, CNAI shall be entitled to specific
performance and injunctive or other equitable relief as a remedy for any such
breach. If the Anchor Parties obtain actual knowledge of any unauthorized
disclosure of the Citicorp Product Information by any Company Representative,
the Anchor Parties shall disclose to CNAI such unauthorized disclosure.
(g) The provisions of this Section 6.08 shall survive termination of
this Agreement.
SECTION 6.09. Payments and Computations, Etc. (a) All amounts to be paid
------------------------------
or deposited by Anchor or the Servicer pursuant to the Reinsurance Documents
shall be paid or deposited in accordance with the terms hereof no
20
later than 11:00 A.M. (New York City time) on the day when due in lawful money
of the United States of America in same day funds to the Agent's Account (or,
where a Reinsurance Document so specifies, to the Cash Collateral Account) for
the account of ANLIC (Hawaii).
(b) Anchor or the Initial Servicer shall, to the extent permitted by
law, pay to ANLIC (Hawaii) interest on all amounts not paid or deposited when
due by Anchor or the Initial Servicer under the Reinsurance Documents at 2% per
annum above the Alternate Base Rate in effect from time to time, payable on
demand; provided, however, that such interest rate shall not at any time exceed
-------- -------
the maximum rate permitted by applicable law. All computations of interest and
fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first but excluding the last day) elapsed.
SECTION 6.10. Execution in Counterparts; Severability. This Agreement may
---------------------------------------
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement. In case any provision in or obligation under
this Agreement should be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 6.11. Judgment. (a) If, for the purposes of obtaining judgment
--------
in any court, it is necessary to convert a sum due under the Reinsurance
Documents in United States dollars into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures CNAI could purchase United States dollars with such other currency in
New York on the Business Day preceding that on which final judgment is given.
(b) The transaction contemplated by the Reinsurance Documents is an
international insurance transaction in which the specification of United States
dollars and payment in New York, New York, is of the essence, and United States
dollars shall be the currency of account in all events. The obligation of each
Anchor Party party to any Reinsurance Document in respect of any sum due from it
to any other party under any Reinsurance Document shall, notwithstanding any
judgment in a currency other than United States dollars, be discharged only to
the extent that on the Business Day following receipt by such party of any sum
adjudged to be so due in such other currency such party may in accordance with
normal banking procedures purchase United States dollars with such other
currency; if the United States dollars so purchased are less than the sum
originally due to such party in United States dollars, each Anchor Party party
to this Agreement agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such party against such loss, and if the United States
dollars so purchased exceed the sum originally due to any party in United States
dollars, such party agrees to remit to such Anchor Party such excess.
21
SECTION 6.12. WAIVER OF JURY TRIAL. EACH OF ANLIC (Hawaii), ANCHOR AND
---------------------
THE SERVICER, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY
REINSURANCE DOCUMENT.
22
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
ANCHOR INSURANCE COMPANY (HAWAII), LTD.
By:____________________________________
Name
Title
Address for Notices:
c/o Anchor Insurance Company (Hawaii), Ltd.
c/o 50th State Risk Management Services, Inc.
Six Waterfront Plaza, Room 405
500 Ala Moana Boulevard
Honolulu, HI 96813
Attention: Ann Nakagawa
Facsimile: (808) 524-9526
Telephone: (808) 543-9737
with a copy to:
General Counsel
SunAmerica Inc.
1 SunAmerica Center
1999 Avenue of the Stars
Los Angeles, CA 90067
Telephone: 310-772-6000
Telecopy: 310-772-6574
ANCHOR NATIONAL LIFE INSURANCE COMPANY
By_____________________________________
Title:
1 SunAmerica Center
1999 Avenue of the Stars
Los Angeles, CA 90067
Attention: Jim Belardi
Telephone: 310-772-6000
Telecopy: 310-772-6635
with a copy to:
General Counsel
SunAmerica Inc.
1 SunAmerica Center
1999 Avenue of the Stars
Los Angeles, CA 90067
Telephone: 310-772-6000
Telecopy: 310-772-6574
23
ANLIC INSURANCE COMPANY (HAWAII), LTD., as Seller
By__________________________________
Title:
c/o ANLIC Insurance Company (Hawaii), Ltd.
c/o 50th State Risk Management Services, Inc.
Six Waterfront Plaza, Room 405
500 Ala Moana Boulevard
Honolulu, HI 96813
Attention: Ann Nakagawa
Facsimile: (808) 524-9526
Telephone: (808) 543-9737
with a copy to:
General Counsel
SunAmerica Inc.
1 SunAmerica Center
1999 Avenue of the Stars
Los Angeles, CA 90067
Telephone: 310-772-6000
Telecopy: 310-772-6574
and
Citicorp North America, Inc.
399 Park Avenue
6th Floor/Zone 2
New York, NY 10043
Attention: Art Bovino
Telephone: (212) 559-6166
Telecopy: (212) 758-6272
SUNAMERICA LIFE INSURANCE COMPANY, as Servicer
By__________________________________
Title:
1 SunAmerica Center
1999 Avenue of the Stars
Los Angeles, CA 90067
Attention: Jim Belardi
Telephone: 310-772-6000
Telecopy: 310-772-6635
with a copy to:
General Counsel
SunAmerica Inc.
1 SunAmerica Center
1999 Avenue of the Stars
Los Angeles, CA 90067
Telephone: 310-772-6000
Telecopy: 310-772-6574
24
EXECUTION COPY
SERVICING AGREEMENT
DATED AS OF AUGUST 1, 1999
AMONG
ANLIC INSURANCE COMPANY (HAWAII), LTD.,
INDIVIDUALLY,
ANCHOR INSURANCE COMPANY (HAWAII), LTD.,
INDIVIDUALLY,
ANCHOR NATIONAL LIFE INSURANCE COMPANY,
INDIVIDUALLY,
AND
SUNAMERICA LIFE INSURANCE COMPANY,
AS SERVICER
TABLE OF CONTENTS
PAGE
----
PRELIMINARY STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Terms . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.03. Computation of Time Periods . . . . . . . . . . . . . . 5
SECTION 1.04. Other Definitional Provisions . . . . . . . . . . . . . 5
ARTICLE II REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties of Anchor. . . . . . . . 5
SECTION 2.02. Representations and Warranties of the Initial Servicer. 6
ARTICLE III GENERAL COVENANTS
SECTION 3.01. Affirmative Covenants of Anchor . . . . . . . . . . . . 8
SECTION 3.02. Negative Covenants of Anchor. . . . . . . . . . . . . . 8
SECTION 3.03. Affirmative Covenants of the Initial Servicer . . . . . 8
SECTION 3.04. Reporting Requirements of the Initial Servicer. . . . . 9
SECTION 3.05. Negative Covenants of the Initial Servicer. . . . . . . 10
SECTION 3.06. Reporting Requirements of ANLIC (Hawaii). . . . . . . . 11
SECTION 3.07. Reporting Requirements of AIC . . . . . . . . . . . . . 11
ARTICLE IV ADMINISTRATION AND COLLECTION
SECTION 4.01. Designation of Servicer . . . . . . . . . . . . . . . . 12
SECTION 4.02. Duties of Servicer. . . . . . . . . . . . . . . . . . . 14
SECTION 4.03. Rights of ANLIC (Hawaii). . . . . . . . . . . . . . . . 15
SECTION 4.04. Responsibilities of Anchor. . . . . . . . . . . . . . . 15
SECTION 4.05. Further Action. . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V SERVICER REMEDY EVENTS
SECTION 5.01. Servicer Remedy Event . . . . . . . . . . . . . . . . . 16
ARTICLE VI MISCELLANEOUS
SECTION 6.01. Amendments, Etc.. . . . . . . . . . . . . . . . . . . . 18
SECTION 6.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . 18
SECTION 6.04. Binding Effect; Assignability . . . . . . . . . . . . . 18
SECTION 6.05. Consent to Jurisdiction . . . . . . . . . . . . . . . . 18
SECTION 6.06. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.07. No Proceedings. . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.08. Confidentiality . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.09. Payments and Computations, Etc. . . . . . . . . . . . . 20
SECTION 6.10. Execution in Counterparts; Severability . . . . . . . . 21
SECTION 6.11. Judgment. . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.12. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . 22
EXHIBITS & SCHEDULES
EXHIBIT 1.01A Form of Daily Reinsurance Servicer Report
EXHIBIT 1.01B Form of Reinsurance Servicer Report
SCHEDULE 2.01(e) List of Annuity contracts together with a form of each
Annuity agreement
SCHEDULE 2.01(f) CARVM reserve methodology