FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is entered into as of this 1st day of April, 2003 among
Jefferson Pilot LifeAmerica Insurance Company ("JPLA"), a life insurance company
organized under the laws of the State of New Jersey (on behalf of itself and
certain of its separate accounts); AMERICAN FUNDS iNSURANCE SERIES ("Series"),
an open-end management investment company organized under the laws of the
Commonwealth of Massachusetts; and CAPITAL RESEARCH AND MANAGEMENT COMPANY
("CRMC"), a corporation organized under the laws of the State of Delaware.
WITNESSETH:
WHEREAS, JPLA proposes to issue, now and in the future, certain
multi-manager variable life insurance policies that provide certain funds
("Funds") of the Series as investment options (the "Contracts");
WHEREAS, JPLA has established pursuant to New Jersey insurance law one or
more separate accounts (each, an "Account") for purposes of issuing the
Contracts and has or will register each Account (unless the Account is exempt
from such registration) with the United States Securities and Exchange
Commission (the "Commission") as a unit investment trust under the Securities
Act of 1933 (the "1933 Act") and the Investment Company Act of 1940 (the "1940
Act") as set forth in Attachment B;
WHEREAS, the Contracts, which are or will be registered by JPLA with the
Commission for offer and sale, will be in compliance with all applicable laws
prior to being offered for sale as set forth in Attachment C;
WHEREAS, the Series has received a "Mixed and Shared Funding Order" from
the Commission granting relief from certain provisions of the 1940 Act and the
rules thereunder to the extent necessary to permit shares of the Series to be
sold to variable annuity and life insurance separate accounts of unaffiliated
insurance companies;
WHEREAS, the Series is divided into various Funds, each Fund being subject
to certain fundamental investment policies which may not be changed without a
majority vote of the shareholders of such Fund;
WHEREAS, certain Funds listed in Attachment A to this Agreement will serve
as certain of the underlying investment mediums for the Contracts; and
WHEREAS, CRMC is the investment adviser for the Series.
NOW, THEREFORE, in consideration of the foregoing and of mutual covenants
and conditions set forth herein and for other good and valuable consideration,
JPLA, the Series and CRMC hereby agree as follows:
1. The Series and CRMC each represents and warrants to JPLA that: (a) a
registration statement under the 1933 Act and under the 1940 Act with respect to
the Series has been filed with the Commission in the form previously delivered
to JPLA, and copies of any and all amendments thereto will be forwarded to JPLA
at the time that they are filed with the Commission; (b) the Series is, and
shall be at all times while this Agreement is in force, lawfully organized,
validly existing, and properly qualified as an open-end management investment
company in accordance with the laws of the Commonwealth of Massachusetts; and
(c) the Series' registration statement and any further amendments thereto will,
when they become effective, and all definitive prospectuses and statements of
additional information and any further supplements thereto (the "Prospectus")
shall, conform in all material respects to the requirements of the 1933 Act and
the 1940 Act and the rules and regulations of the Commission thereunder, and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statement
therein not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Series by JPLA expressly
for use therein.
2. The Series will furnish to JPLA such information with respect to the
Series in such form and signed by such of its officers as JPLA may reasonably
request, and will warrant that the statements therein contained when so signed
will be true and correct. The Series will advise JPLA immediately of: (a) the
issuance by the Commission of any stop order suspending the effectiveness of the
registration statement of the Series or the initiation of any proceeding for
that purpose; (b) the institution of any proceeding, investigation or hearing
involving the offer or sale of the Contracts or the Series of which it becomes
aware; or (c) the happening of any material event, if known, which makes untrue
any statement made in the registration statement of the Series or which requires
the making of a change therein in order to make any statement made therein not
misleading.
3. The Series will use best efforts to register for sale under the 1933 Act
and, if required, under state securities laws, such additional shares of the
Series as may reasonably be necessary for use as the funding vehicle for the
Contracts.
4. The Series agrees to make Class 2 shares of the Funds listed on
Attachment A hereto available to the Contracts. JPLA will be entitled to a Rule
12b-1 service fee paid by the Series and to be accrued daily and paid monthly at
an annual rate of 0.25% of the average daily net assets of the Class 2 shares of
each Fund attributable to the Contracts for personal services and account
maintenance services for Contract owners with investments in subaccounts
corresponding to the Class 2 shares of each Fund (each, a "Subaccount") for as
long as the Series' Plan of Distribution pursuant to Rule 12b-l under the 1940
Act (the "12b-1 plan") remains in effect. Fund shares to be made available to
Accounts for the Contracts shall be sold by the Series and purchased by JPLA for
a given Account at the net asset value of the respective class of the respective
Fund (without the imposition of a sales load) next computed after receipt of
each order by the Series or its designee, as established in accordance with the
provisions of the then current Prospectus of the Series. For purposes of this
Xxxxxxxxx 0, XXXX shall be a designee of the Series for receipt of such orders
from each Account, and receipt by such designee by 4:00
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p.m. Eastern time (or other such time the Board of Trustees of the Series shall
so designate) shall constitute receipt by the Series; provided that the Series
receives notice of such order by 10:00 a.m. Eastern time on the following
Business Day ("Next Business Day"). "Business Day" shall mean any day on which
the New York Stock Exchange ("NYSE") is open for trading and on which the Series
calculates the net asset values of each class of shares of each Fund pursuant to
the rules of the Commission. The Series will make the shares of each class of
each Fund available indefinitely for purchase at the applicable net asset value
per share by JPLA and its Accounts on those days on which the Series calculates
the net asset values of each such class pursuant to the rules of the Commission,
and the Series shall use its best efforts to calculate such net asset values on
each day on which the NYSE is open for trading. The Series shall make the net
asset value per share for each class of each Fund available to JPLA on a daily
basis as soon as reasonably practical after the Series calculates such net asset
values per share, and the Series shall use its best efforts to make such net
asset values per share available by 6:30 p.m. Eastern time. If the Series
provides incorrect net asset values to JPLA with respect to any class of shares
of any Fund on any Business Day, JPLA shall be entitled (on behalf of each
affected Account) to an adjustment to the number of shares purchased or redeemed
of such class of shares to reflect the correct net asset value per share. Any
error in the calculation or reporting of net asset values per share, dividends,
or capital gain information shall be reported promptly to JPLA. Any costs
incurred by JPLA with respect to correcting Contract owner accounts, including,
but not limited to, amounts paid to Contract owners and administrative expenses,
shall be promptly reimbursed by CRMC. The Series and CRMC are responsible for
maintaining net asset values for each class of each Fund in accordance with the
requirements of the 1940 Act and the Series' then current Prospectus. Payments
for shares purchased will be made in federal funds transmitted by wire on the
Next Business Day, and JPLA and the Fund shall each use commercially reasonable
efforts to wire (or cause to be wired) funds to the other, for the purpose of
settling net purchase orders or orders of redemption, by 3:00 p.m. Eastern time
on the Next Business Day.
The Series reserves the right to temporarily suspend sales if the Board of
Trustees of the Series deems it appropriate and in the best interests of the
Series or in response to the order of an appropriate regulatory authority. JPLA
reserves the right to refuse, to impose limitations on, or to limit any
transaction request if the request would tend to disrupt Contract administration
or is not in the best interest of the Contract holders or an Account or
Subaccount.
5. The Contracts funded through each Account will provide for the
allocation of net amounts among certain Subaccounts for investment in shares of
a class of the Funds as may be offered from time to time in the Contracts. The
selection of the particular Subaccount is to be made by the Contract owner and
such selection may be changed in accordance with the terms of the Contracts.
6. Transfer of the Series' shares will be by book entry only. No stock
certificates will be issued to the Account. Shares ordered from a particular
Fund will be recorded by the Series as instructed by JPLA in an appropriate
title for the corresponding Account or Subaccount.
7. The Series shall furnish notice promptly to JPLA of any dividend or
distribution payable on any shares underlying Subaccounts. JPLA hereby elects to
receive all such dividends
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and distributions as are payable on shares of a Fund recorded in the title for
the corresponding Subaccount in additional shares of that Fund. The Series shall
notify JPLA of the number of shares so issued. JPLA reserves the right to revoke
this election and to receive all such income dividends and capital gain
distributions in cash.
8. The Series shall redeem its shares in accordance with the terms of its
then current Prospectus. For purposes of this Xxxxxxxxx 0, XXXX shall be a
designee of the Series for receipt of requests for redemption from each Account,
and receipt by such designee by 4:00 p.m. Eastern time (or other such time the
Board of Trustees of the Series shall so designate) shall constitute receipt by
the Series; provided that the Series receives notice of such request for
redemption by 10:00 a.m. Eastern time on the Next Business Day. JPLA shall
purchase and redeem the shares of Funds offered by the then current Prospectus
of the Series in accordance with the provisions of such Prospectus.
9. The Series shall pay all expenses incidental to its performance under
this Agreement. The Series shall see to it that all of its shares are registered
and authorized for issue in accordance with applicable federal and state laws
prior to their purchase for the Account. The Series shall bear the expenses for
the cost of registration of its shares, preparation of prospectuses and
statements of additional information to be sent to existing Contract owners
(upon request in the case of the statement of additional information), proxy
statements and related materials and annual and semi-annual shareholder reports,
the printing and distribution of such items to each Contract owner who has
allocated net amounts to any Subaccount, the preparation of all statements and
notices required from it by any federal or state law, and taxes on the issue or
transfer of the Series' shares subject to this Agreement. The Series will
provide JPLA, at least once a year, with enough copies of its Statement of
Additional Information to be able to distribute one to each Contract owner or
prospective Contract owner who requests such Statement of Additional
Information.
10. JPLA shall bear the expenses for the cost of preparation and delivery
of Series prospectuses (and supplements thereto) to be sent to prospective
Contract owners. The Series shall provide, at its expense, such documentation
(in camera-ready or other mutually agreeable form) and other assistance as is
reasonably necessary in order for JPLA once each year (or more frequently if the
prospectus for the Series is amended), and twice each year in the case of the
annual and semi-annual shareholder reports, to have the prospectus or
prospectuses, and the annual and semi-annual shareholder reports for the
Contracts and the Series, printed together in one or more documents (such
printing to be done at JPLA's expense with respect to prospective investors).
11. JPLA represents and warrants to the Series that any information
furnished in writing by JPLA to the Series for use in the registration statement
of the Series will not result in the registration statement's failing to conform
in all respects to the requirements of the 1933 Act and the 1940 Act and the
rules and regulations thereunder or containing any untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
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12. JPLA and its affiliates shall make no representations concerning the
Series' shares except those contained in the then current Prospectus of the
Series, in such printed information subsequently issued on behalf of the Series
or other funds managed by CRMC as supplemental to the Series' Prospectus, in
information published on the Series' or CRMC's internet site, or in materials
approved by AFD, as provided in the Business Agreement in effect among JPLA, AFD
and CRMC dated as of April 1, 2003 (the "Business Agreement").
13. Shares of the Series may be offered to separate accounts of various
insurance companies in addition to JPLA. The Series represents, warrants and
covenants that no shares of the Series shall be sold to the general public in
contravention of Section 817 of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder (the "Code"). The Series agrees that each Fund
will comply with the diversification requirements of Section 817. The Series
also agrees to maintain each Fund's qualification as a "regulated investment
company" ("RIC") under the Code. The Series will provide JPLA with securities
holdings reports for each Fund within ten days after each calendar quarter.
14. The parties to this Agreement recognize that due to differences in tax
treatment or other considerations, the interests of various Contract owners
participating in one or more Funds might, at some time, be in conflict. Each
party shall report to the other party any potential or existing conflict of
which it becomes aware. The Board of Trustees of the Series shall promptly
notify JPLA of the existence of irreconcilable material conflict and its
implications. If such a conflict exists, JPLA will, at its own expense, take
whatever action it deems necessary to remedy such conflict; in any case,
Contract owners will not be required to bear such expenses.
15. JPLA agrees to indemnify and hold the Series harmless against, any and
all losses, claims, damages, liabilities or litigation (including legal and
other expenses) to which the Series may be subject under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements arising as a result of
JPLA: (a) making untrue statements of material facts or omitting material facts
in a Contract's registration statement, prospectus, statement of additional
information, semi-annual or annual reports to Contract owners and sales
literature for the Contracts; (b) making untrue statements of material facts
that the Series includes in the same materials of the Series, provided that
Series relies on information supplied by JPLA; (c) unlawful conduct, bad faith,
willful malfeasance, or gross negligence by JPLA with respect to the sale of the
Contracts or Fund shares; and (d) breaching this Agreement or a representation
or warranty.
16. The Series and CRMC each agrees to indemnify and hold JPLA harmless
against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses) to which JPLA may be subject under any
statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements arising
as a result of the Series', or CRMC's: (a) making untrue statements of material
facts or omitting material facts in the Series' registration statement,
prospectuses or statements of additional information, semi-annual and annual
reports to shareholders, and sales literature; (b) making untrue statements of
material facts that the Series includes in its materials, provided JPLA relies
on information supplied by the Series; (c) unlawful conduct, bad faith, willful
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malfeasance, or gross negligence by the Series with respect to the sale of the
Contracts or Fund shares or the operation of the Series or a Fund; (d) failure
of the Series to comply with any Fund's investment objectives, policies and
restrictions; and (e) breaching this Agreement or a representation or warranty,
including, but not limited to, the representations, warranties and covenants in
Paragraph 13.
17. JPLA shall be responsible for assuring that the Account calculates
pass-through voting privileges of Contract owners in a manner consistent with
the method of calculating pass-through voting privileges set forth in the
current Contract.
18. The parties understand that there is no intention to create a joint
venture in the subject matter of this Agreement. Accordingly, the right to
terminate this Agreement and to engage in any activity not inconsistent with
this Agreement is absolute. This Agreement will terminate:
(a) by mutual agreement at any time; or
(b) any party at any time upon six months written notice to the other
parties; or
(c) at the option of JPLA or the Series upon ten calendar days' prior
written notice to the other party if a final non-appealable
administrative or judicial decision is entered against the other party
which has a material impact on the Contracts;
(d) at the option of JPLA, upon ten calendar days' prior written notice,
if shares of the Series are not reasonably available;
(e) at the option of JPLA, immediately upon written notice, if the Series
or CRMC fails to meet the requirements for either diversification
under Section 817 or RIC status under the Code, or if the Board of the
Series terminates the 12b-1 plan; or
(f) in the event the Series' shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such law
precludes the use of such shares as an underlying investment for the
Contracts issued or to be issued by JPLA; in such event prompt notice
shall be given by JPLA or the Series to the other party.
(g) at JPLA's option by written notice to AFD and/or CRMC if JPLA shall
determine in its sole judgment exercised in good faith, that either
AFD or CRMC has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity.
(h) at the option of AFD or CRMC by written notice to JPLA if AFD or CRMC
shall determine in its sole judgment exercised in good faith, that
JPLA has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse
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publicity.
The effective date for termination pursuant to any notice given under this
Paragraph shall be calculated beginning with the date of receipt of such notice.
19. All notices, consents, waivers, and other communications under this
Agreement must be in writing, and will be deemed to have been duly received: (a)
when delivered by hand (with written confirmation of receipt); (b) when sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested; or (c) the day after it is
sent by a nationally recognized overnight delivery service, in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and facsimile numbers as a party may designate by notice to the other
parties):
IF TO:
Jefferson Pilot LifeAmerica Insurance Company
Xxx Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxxxxx 00000
Xxxxxxxx Xxxxx, Assistant Vice President and Associate Counsel
WITH A COPY TO:
Xxxx X. Xxxxxx, Vice President
Jefferson Pilot LifeAmerica Insurance Company
Xxx Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxxxxx 00000
IF TO SERIES:
American Funds Insurance Series
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President
Facsimile No.: (000) 000-0000
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Vice President and Senior Counsel,
Fund Business Management Group
Facsimile No.: (000) 000-0000
IF TO CRMC:
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Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President and Legal Counsel,
Fund Business Management Group, and Secretary
Facsimile No.: (000) 000-0000
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Vice President and Senior Counsel,
Fund Business Management Group
Facsimile No.: (000) 000-0000
20. If this Agreement terminates, any provision of this Agreement necessary
to the orderly windup of business under it will remain in effect as to that
business, after termination.
21. If this Agreement terminates, the Series, at JPLA's option, will
continue to make additional shares of the Series available for all existing
Contracts as of the effective date of termination (under the same terms and
conditions as were in effect prior to termination of this Agreement with respect
to existing Contract owners), unless the Series liquidates or applicable laws
prohibit further sales. JPLA agrees not to redeem shares unless: (i) the
Agreement is terminated pursuant to Paragraph 18(e) or 18(f); (ii) legitimately
required to do so according to a Contract owner's request; or (iii) under an
order from the Commission or pursuant to a vote of Contract owners.
22. The obligations of the Series under this Agreement are not binding upon
any of the Trustees, officers, employees or shareholders (except CRMC if it is a
shareholder) of the Series individually, but bind only the Series' assets. When
seeking satisfaction for any liability of the Series in respect of this
Agreement, JPLA and the Account agree not to seek recourse against said
Trustees, officers, employees or shareholders, or any of them, or any of their
personal assets for such satisfaction. Notwithstanding the foregoing, if JPLA
seeks satisfaction for any liability of the Series in respect of this Agreement,
JPLA (on behalf of itself or any Account) may seek recourse against CRMC.
23. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
24. This Agreement and the parties' rights, duties and obligations under
this Agreement are not transferable or assignable by any of them without the
express, prior written consent of the other parties hereto. Any attempt by a
party to transfer or assign this Agreement or any of its rights, duties or
obligations under this Agreement without such consent is void; provided,
however, that a merger of, reinsurance arrangement by, or change of control of a
party shall not be deemed to be an assignment for purposes of this Agreement.
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25. The following Paragraphs shall survive any termination of this
Agreement: 4, 15-16, 19-25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested as of the date first above written.
JEFFERSON PILOT LIFEAMERICA
INSURANCE COMPANY (ON BEHALF OF ITSELF
AND EACH ACCOUNT)
Attest: /s/ Xxxxx Xxxxxxxx
-------------------------
By: /s/ Xxxxxxxx Xxxxx
------------------------
Its: Assistant Vice President and
Associate Counsel
AMERICAN FUNDS INSURANCE SERIES
Attest: /s/ Illegible
-------------------------
By: /s/ Illegible
------------------------
Its: Secretary
CAPITAL RESEARCH AND MANAGEMENT
COMPANY
Attest: /s/ Illegible
-------------------------
By: /s/ Xxxxxxx Xxxxxxx
------------------------
Its: Vice President and Secretary
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ATTACHMENT A
American Funds Insurance Series:
Growth Fund (Class 2 Shares)
Growth-Income Fund (Class 2 Shares)
ATTACHMENT B
JPF Separate Account B `40 Act Registration No. 811-08470
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ATTACHMENT C
Ensemble II Variable Universal Life Insurance `33 Act Registration No. 033-77496
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