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EX. 99-B.8.50
FUND PARTICIPATION AGREEMENT
BETWEEN
FEDERATED SERVICES COMPANY, FEDERATED SECURITIES CORP.,
WACHOVIA BANK, N.A. AND ALIAC
Aetna Life Insurance and Annuity Company (the "Company"), Federated
Services Company (the "Transfer Agent"), Wachovia Bank, N.A. ("Wachovia") and
Federated Securities Corp. (the "Distributor") hereby agree to an arrangement
whereby The Wachovia Funds ("Fund") shall be made available to serve as
underlying investment media for Variable Annuity Contracts ("Contracts") to be
issued by the Company.
1. ESTABLISHMENT OF ACCOUNTS; AVAILABILITY OF FUND.
The Company represents that it has established Variable Annuity Accounts
B, C, D and F and may establish such other accounts as may be set forth
in Schedule A attached hereto and as may be amended from time to time
with the mutual consent of the parties hereto (the "Accounts"), each of
which is a separate account under Connecticut Insurance law, and has
registered or will register each of the Accounts (except for such
Accounts for which no such registration is required) as a unit investment
trust under the Investment Company Act of 1940 (the "1940 Act"), to serve
as an investment vehicle for the Contracts. Each Contract provides for
the allocation of net amounts received by the Company to an Account for
investment in the shares of one of more specified open-end management
investment companies available through that Account as underlying
investment media. Selection of a particular investment company and
changes therein from time to time are made by the participant or Contract
owner, as applicable under a particular Contract.
2. PRICING INFORMATION; ORDERS; SETTLEMENT.
(a) Subject to the terms and conditions of the Fund's current
registration statement, the Transfer Agent and the Distributor
will make shares of those series and classes thereof on Schedule
B attached hereto, as it may be amended from time to time,
available to be purchased by the Company, and will accept
redemption orders from the Company, on behalf of each Account at
the net asset value applicable to each order on those days on
which the Fund calculates its net asset value (a "Business Day").
Fund shares shall be purchased and redeemed in such quantity and
at such time determined by the Company to be necessary to meet
the requirements of those Contracts for which the Fund(s) serve
as underlying investment media, provided, however, that the Board
of Trustees of the Fund (hereinafter the "Trustees") may refuse
to sell shares of any Portfolio to any person, or suspend or
terminate the offering of shares of any Portfolio if such action
is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Trustees,
acting in
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good faith and in the best interests of the shareholders of any
Portfolio in accordance with their fiduciary obligations under
federal and/or any applicable state laws. The Distributor shall
provide prompt notice to the Company of any such action.
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(b) The Transfer Agent will provide to the Company closing net asset
value, dividend and capital gain information after the close of
trading each day that the New York Stock Exchange (the
"Exchange") is open (each such day a "Business Day"), and the
Transfer Agent will use its best efforts to provide such
information no later than 6:30 p.m. Eastern Standard time on such
Business Day, and in no event later than 7:00 Eastern Standard
time, except for delays due to extraordinary circumstances. The
Company will send via facsimile or electronic transmission to the
Transfer Agent orders to purchase and/or redeem Fund shares by
10:00 a.m. Eastern Standard Time the following business day.
Payment for net purchases will be wired by the Company to an
account designated by the Transfer Agent to coincide with the
order for shares of the Fund.
(c) The Transfer Agent hereby appoints the Company as its agent for
the limited purpose of accepting purchase and redemption orders
for Fund shares relating to the Contracts from Contract owners or
participants. Orders from Contract owners or participants
received from any distributor of the Contracts (including
affiliates of the Company) by the Company, acting as agent for
the Transfer Agent, prior to the close of the Exchange on any
given business day will be executed by the Transfer Agent at the
net asset value determined as of the close of the Exchange on
such Business Day, provided that the Transfer Agent receives
written (or facsimile) notice of such order by 10 a.m. Eastern
Standard Time on the next following Business Day. Any orders
received by the Company acting as agent on such day but after the
close of the Exchange will be executed by the Transfer Agent at
the net asset value determined as of the close of the Exchange on
the next business day following the day of receipt of such order,
provided that the Transfer Agent receives written (or facsimile)
notice of such order by 10 a.m. Eastern Standard Time within two
days following the day of receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired
by the Transfer Agent to an account designated by the Company on
the same Business Day the Company places an order to redeem Fund
Shares. Payments for net purchases of the Fund will be wired by
the Company to an account designated by the Transfer Agent or the
Fund on the same Business Day the Company places an order to
purchase Fund shares. Payments shall be in federal funds
transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a)
through 2(d) above, the parties may agree to provide pricing
information, execute orders and wire payments for purchases and
redemptions through National Securities Clearing Corporation's
Fund/SERV system in which case such activities will be governed by
the provisions set forth in an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other
party), and shall not be liable in the event that an error is a
result of any misinformation supplied by the other party
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(g) The Transfer Agent shall indemnify and hold the Company harmless,
from the effective date of this Agreement, against any amount the
Company is required to pay to Contract owners or participants due
to: (i) an incorrect calculation of a Fund's daily net asset
value, dividend rate, or capital gains distribution rate or (ii)
incorrect or late reporting of the daily net asset value,
dividend rate, or capital gain distribution rate of a Fund, upon
written notification by the Company, with supporting data, to
Transfer Agent ; provided, however, that no such amounts shall be
returned if they are not deemed material pursuant to the then
prevailing pricing error guidelines as set forth by the
Securities and Exchange Commission and its staff.
In addition, Transfer Agent shall be liable to the Company for
any costs the Company incurs in the preparation, printing and
mailing of communications to Contract holders or participants, if
such costs or expenses are a result of the failure to provide
timely or correct net asset values, dividend and capital gains or
financial information and if such information is not corrected by
4:00 p.m. East Coast time of the next business day after
releasing such incorrect information provided the incorrect NAV
as well as the correct NAV for each date that the error occurred
is provided. If a mistake is caused in supplying such information
or confirmations, which results in a reconciliation with
incorrect information, the amount required to make a Contract
owner's or a participant's account whole shall be borne by the
party providing the incorrect information, regardless of when the
error is corrected.
(h) The Company shall indemnify the Transfer Agent and the Distributor
and hold them harmless, from the effective date of this Agreement,
against any loss or liability resulting from its errors in the
management of the Contracts and the Accounts.
(i) The Company agrees to purchase and redeem the shares of the Funds
named in Schedule B offered by the then current prospectuses and
statements of additional information of the Fund in accordance
with the provisions of such prospectus and statement of additional
information.
3. FEES.
In consideration of services provided by the Company under this
Agreement, Wachovia shall pay fees to the Company as set forth in
Schedule C.
4. EXPENSES.
(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by the Transfer Agent or the
Distributor under this Agreement shall be paid by the Transfer
Agent, the Distributor or the Fund, including the cost of
registration of Fund shares with the Securities and Exchange
Commission (the "SEC") and in states where required. The
Transfer Agent and the Distributor shall pay no fee or other
compensation to the Company under this Agreement, and the
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Company shall pay no fee or other compensation to the Transfer
Agent or the Distributor, except as provided herein as may be
amended from time to time with the mutual consent of the parties
hereto. All expenses incident to performance by each party of
its respective duties under this Agreement shall be paid by that
party, unless otherwise specified in this Agreement.
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(b) The Distributor shall provide to the Company, at the location
designated by the Company, periodic fund reports to shareholders
and other materials that are required by law to be sent to
Contract owners or participants. In addition, the Distributor
shall provide the Company upon its request with reasonable
quantities of its prospectuses, statements of additional
information and any supplements to any of these materials, to be
used in connection with the offerings and transactions
contemplated by this Agreement.
(c) The Distributor shall provide the company with a sufficient
quantity of its proxy material that is required to be sent to
Contract owners or participants. The cost associated with proxy
preparation, group authorization letters, programming for
tabulation and necessary materials (including postage) will be
paid by the Distributor or the Fund.
5. REPRESENTATIONS.
(a) The Company agrees that it and its agents shall not, without the
written consent of the Distributor, make representations
concerning the Fund, or its shares except those contained in the
then current prospectuses and in current printed sales literature
approved by or deemed approved by the Fund or the Distributor.
(b) The Company represents that its offering and management of the
Contracts and the Accounts is in accordance with all applicable
laws and regulations, including, without limitation, state and
federal insurance laws and tax laws and regulations, and that the
purchase of Fund shares by the Contracts and the Accounts will not
result in any violation of any such law or regulation by the Fund.
6. TERMINATION.
This agreement shall terminate:
(a) as to the sale and issuance of new Contracts, at the option of
either the Company, the Distributor or the Fund, upon sixty days
advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written
notice to the Distributor and the Fund, if Fund shares are not
available for any reason to meet the requirement of Contracts as
determined by the Company. Reasonable advance notice of election
to terminate shall be furnished by Company;
(c) as to a given Account, upon the determination of the Account to
substitute for the Fund's shares the shares of another investment
company in accordance with the terms of the applicable Contracts.
The Company will give 60 days written notice to the Fund and the
Distributor of any decision to replace the Fund's' shares;
(d) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
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(e) if Fund shares are not registered, issued or sold in conformance
with Federal law or such law precludes the use of Fund shares as
an underlying investment medium for Contracts issued or to be
issued by the Company. Prompt notice shall be given by the
appropriate party should such situation occur.
7. CONTINUATION OF AGREEMENT.
Termination as the result of any cause listed in Section 6, which, by its
terms implies or requires that Contract holders will continue to hold or
purchase shares of the Funds shall not affect the Fund's obligation to
furnish its shares to Contracts then in force for which its shares serve
as the underlying medium unless such further sale of Fund shares is
prohibited by law or the SEC or other regulatory body. In such event, all
provisions of this Agreement shall continue to apply to such sales. In
the event of termination of this Agreement, the parties agree that the
requirements of Section 10 of the Agreement shall survive.
8. ADVERTISING MATERIALS; FILED DOCUMENTS.
(a) Advertising and sales literature with respect to the Fund prepared
by the Company or its agents for use in marketing its Contracts
will be submitted to the Distributor for review before such
material is submitted to any regulatory body for review. No such
material shall be used if the Distributor reasonably objects to
such use in writing, transmitted by facsimile within three
business days after receipt of such material.
(b) The Distributor will provide copies of the Fund's financials as
soon as available to the Company and at least one complete copy
of all registration statements, prospectuses, statements of
additional information, annual and semi-annual reports, proxy
statements and all amendments or supplements to any of the above
that relate to the Fund promptly after the filing of such
document with the SEC or other regulatory authorities. The
Company will provide to each of the Distributor and the Transfer
Agent at least one complete copy of all registration statements,
prospectuses, statements of additional information, annual and
semi-annual reports, proxy statements, and all amendments or
supplements to any of the above that relate to the Accounts
promptly after the filing of such document with the SEC or other
regulatory authority.
(c) At the request of the Company, the Distributor will provide via
Excel spreadsheet diskette format or in electronic transmission to
the Company quarterly portfolio information necessary to update
Fund profiles with fourteen business days following the end of
each quarter.
9. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract
owners and participants to the extent the SEC continues to
interpret the 1940 Act as requiring such privileges. The Company
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shall provide pass-through voting privileges on Fund shares held
by unregistered separate accounts to all Contract owners.
(b) The Company will distribute to Contract owners and participants,
as appropriate, all proxy material furnished by the Fund and will
vote Fund shares in accordance with instructions received from
such Contract owners and participants. If and to the extent
required by law, the Company, with respect to each group Contract
and in each Account, shall vote Fund shares for which no
instructions have been received in the same proportion as shares
for which such instructions have been received. The Company and
its agents shall not oppose or interfere with the solicitation of
proxies for Fund shares held for such Contract owners and
participants.
10. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Fund, the
Transfer Agent, Wachovia and the Distributor, and its directors,
officers, employees, agents and each person, if any, who controls
the Fund or its Distributor within the meaning of the Securities
Act of 1933 (the "1933 Act") against any losses, claims, damages
or liabilities to which the Fund or any such director, officer,
employee, agent, or controlling person may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, prospectus or sales literature of the Company or the
Accounts or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or arise out of or as a result of conduct, statements
or representations (other than statements or representations
contained in the prospectuses or sales literature of the Fund) of
the Company or its agents, with respect to the sale and
distribution of Contracts for which Fund shares are the
underlying investment. The Company will reimburse any legal or
other expenses reasonably incurred by the Fund, the Transfer
Agent, Wachovia, or the Distributor or any of their directors,
officers, employees, agents, or controlling persons in connection
with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not
be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon (i) an
untrue statement or omission or alleged omission made in such
Registration Statement or prospectus in conformity with written
materials furnished to the Company by the Fund, the Transfer
Agent, Wachovia or the Distributor specifically for use therein
or (ii) the willful misfeasance, bad faith, or gross negligence
by the Fund, the Transfer Agent, Wachovia or the Distributor in
the performance of their duties or the Fund's, Transfer Agent's,
Wachovia's or Distributor's reckless disregard of obligations or
duties under this Agreement or to the Company, whichever is
applicable. This indemnity agreement will be in addition to any
liability that Company may otherwise have.
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(b) The Transfer Agent, Wachovia and the Distributor agree to
indemnify and hold harmless the Company and its directors,
officers, employees, agents and each person,
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if any, who controls the Company within the meaning of the 1933
Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectuses or sales
literature of the Fund or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Transfer Agent, Wachovia, or the Distributor will
reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, employee, agent, or
controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; PROVIDED,
however, that the Transfer Agent, Wachovia or the Distributor will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon (i) an
untrue statement or omission or alleged omission made in such
Registration Statement or prospectuses which are in conformity
with written materials furnished to the Fund, the Transfer Agent,
Wachovia or the Distributor by the Company specifically for use
therein or (ii) the willful misfeasance, bad faith, or gross
negligence by the Company in the performance of its duties or the
Company's reckless disregard of obligations or duties under this
Agreement or to the Transfer Agent, Wachovia, or Distributor,
whichever is applicable.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of action, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party of
the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under this
Section 10. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish to,
assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party
to such indemnified party of its election to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party under this Section 10 for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs
of investigation.
11. MISCELLANEOUS.
(a) AMENDMENT AND WAIVER. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally,
but only by an instrument in writing signed by all parties hereto.
(b) NOTICES. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or
sent by telex, telecopier or registered or
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certified mail, postage prepaid, return receipt requested, or
recognized overnight
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courier service to the party or parties to whom they are directed
at the following addresses, or at such other addresses as may be
designated by notice from such party to all other parties.
To the Company:
Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
Attention: Julie E. Rockmore, Counsel
To the Transfer Agent:
Federated Services Company
1099 Hingham Street
Rockland, MA 02370
Attn: John Sheehan
To the Distributor:
Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 1522
Attn: Kirk Montgomery
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by
signing any such counterpart.
(e) SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby.
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(f) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all
prior agreement and understandings relating to the subject matter
hereof.
(g) GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) NON EXCLUSIVITY. It is understood by the parties that this
Agreement is not an exclusive arrangement in any respect.
(i) CONFIDENTIALITY. The terms of this Agreement and the Schedules
thereto will be held confidential by each party except to the
extent that either party or its counsel may deem it necessary to
disclose such terms.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 15TH day of AUGUST, 2000.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Laurie M. LeBlanc
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Name: Laurie M. LeBlanc
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Title: Vice President
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TRANSFER AGENT
By: /s/ John Sheehanr
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Name: John Sheehan
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Title: Vice President
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DISTRIBUTOR
By: /s/ David M. Taylor
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Name: David M. Taylor
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Title: Executive Vice President
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WACHOVIA BANK, N.A.
By: /s/ R. Edward Bowling
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Name:
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Title:
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SCHEDULE A
(For any future separate accounts - See Section 1)
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SCHEDULE B
Wachovia Balanced Fund (Class A)
Wachovia Special Values Fund (Class A)
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