EXHIBIT 99 (8) (s)
PARTICIPATION AGREEMENT
BY AND AMONG
AIM VARIABLE INSURANCE FUNDS,
A I M DISTRIBUTORS, INC.,
JEFFERSON NATIONAL LIFE INSURANCE COMPANY,
ON BEHALF OF ITSELF AND
ITS SEPARATE ACCOUNTS,
AND
INVIVA SECURITIES CORPORATION
TABLE OF CONTENTS
DESCRIPTION PAGE
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SECTION 1. AVAILABLE FUNDS 2
1.1 AVAILABILITY. 2
1.2 ADDITION, DELETION OR MODIFICATION OF FUNDS 2
1.3 NO SALES TO THE GENERAL PUBLIC 2
SECTION 2. PROCESSING TRANSACTIONS 2
2.1 TIMELY PRICING AND ORDERS 2
2.2 TIMELY PAYMENTS 3
2.3 APPLICABLE PRICE 3
2.4 DIVIDENDS AND DISTRIBUTIONS 4
2.5 BOOK ENTRY 4
SECTION 3. COSTS AND EXPENSES 4
3.1 GENERAL 4
3.2 PARTIES TO COOPERATE 4
SECTION 4. LEGAL COMPLIANCE 4
4.1 TAX LAWS 4
4.2 INSURANCE AND CERTAIN OTHER LAWS 7
4.3 SECURITIES LAWS 7
4.4 NOTICE OF CERTAIN PROCEEDINGS AND OTHER CIRCUMSTANCES 8
4.5 LIFE COMPANY TO PROVIDE DOCUMENTS; INFORMATION ABOUT AVIF 9
4.6 AVIF TO PROVIDE DOCUMENTS; INFORMATION ABOUT LIFE COMPANY 10
SECTION 5. MIXED AND SHARED FUNDING 10
5.1 GENERAL 10
5.2 DISINTERESTED TRUSTEES 11
5.3 MONITORING FOR MATERIAL IRRECONCILABLE CONFLICTS 11
5.4 CONFLICT REMEDIES 12
5.5 NOTICE TO LIFE COMPANY 13
5.6 INFORMATION REQUESTED BY BOARD OF TRUSTEES 13
5.7 COMPLIANCE WITH SEC RULES 13
5.8 OTHER REQUIREMENTS 14
SECTION 6. TERMINATION 14
6.1 EVENTS OF TERMINATION 14
6.2 NOTICE REQUIREMENT FOR TERMINATION 15
6.3 FUNDS TO REMAIN AVAILABLE 15
6.4 SURVIVAL OF WARRANTIES AND INDEMNIFICATIONS 16
6.5 CONTINUANCE OF AGREEMENT FOR CERTAIN PURPOSES 16
SECTION 7. PARTIES TO COOPERATE RESPECTING TERMINATION 16
SECTION 8. ASSIGNMENT 16
SECTION 9. NOTICES 16
SECTION 10. VOTING PROCEDURES 17
SECTION 11. FOREIGN TAX CREDITS 17
SECTION 12. INDEMNIFICATION 17
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12.1 OF AVIF AND AIM BY LIFE COMPANY AND UNDERWRITER 18
12.2 OF LIFE COMPANY AND UNDERWRITER BY AVIF AND AIM 20
12.3 EFFECT OF NOTICE 22
12.4 SUCCESSORS 22
SECTION 13. APPLICABLE LAW 22
SECTION 14. EXECUTION IN COUNTERPARTS 23
SECTION 15. SEVERABILITY 23
SECTION 16. RIGHTS CUMULATIVE 23
SECTION 17. HEADINGS 23
SECTION 18. CONFIDENTIALITY 23
SECTION 19. TRADEMARKS AND FUND NAMES 24
SECTION 20. PARTIES TO COOPERATE 24
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PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of May, 2003
("Agreement"), by and among AIM Variable Insurance Funds, a
Delaware Trust
("AVIF"), A I M Distributors, Inc., a
Delaware corporation (""AIM") Jefferson
National Life Insurance Company, a Texas life insurance company "JNL"), on
behalf of itself and each of its segregated asset accounts listed in Schedule A
hereto, as the parties hereto may amend from time to time (each, an "Account,"
and collectively, the "Accounts"); and Inviva Securities Corporation, an
affiliate of JNL and the principal underwriter of the Contracts ("UNDERWRITER")
(collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, AVIF is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, AVIF currently consists of eighteen separate series ("Series"),
shares ("Shares") each of which are registered to the extent required under the
Securities Act of 1933, as amended (the "1933 Act") and are currently sold to
one or more separate accounts of life insurance companies to fund benefits under
variable annuity contracts and variable life insurance contracts; and
WHEREAS, AVIF will make Shares of each Series listed on Schedule A hereto
as the Parties hereto may amend from time to time (each a "Fund"; reference
herein to "AVIF" includes reference to each Fund, to the extent the context
requires) available for purchase by the Accounts; and
WHEREAS, JNL will be the issuer of certain variable annuity contracts
and/or variable life insurance contracts ("Contracts") as set forth on Schedule
A hereto, as the Parties hereto may amend from time to time, which Contracts
(hereinafter collectively, the "Contracts"), if required by applicable law, will
be registered under the 1933 Act; and
WHEREAS, JNL will fund the Contracts through the Accounts, each of which
may be divided into two or more subaccounts ("Subaccounts"; reference herein to
an "Account" includes reference to each Subaccount thereof to the extent the
context requires); and
WHEREAS, JNL will serve as the depositor of the Accounts, each of which is
registered as a unit investment trust investment company under the 1940 Act (or
exempt therefrom), and the security interests deemed to be issued by the
Accounts under the Contracts will be registered as securities under the 1933 Act
(or exempt therefrom); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, JNL intends to purchase Shares in one or more of the Funds on
behalf of the Accounts to fund the Contracts; and
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WHEREAS, UNDERWRITER is a broker-dealer registered with the SEC under the
1934 Act and a member in good standing of the NASD;
WHEREAS, AIM is a broker-dealer registered with the SEC under the
Securities Exchange Act of 1934 ("1934 Act") and a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD");
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
SECTION 1. AVAILABLE FUNDS
1.1 AVAILABILITY.
AVIF will make Shares of each Fund available to JNL for purchase and
redemption at net asset value and with no sales charges, subject to the terms
and conditions of this Agreement. The Board of Trustees of AVIF may refuse to
sell Shares of any Fund to any person, or suspend or terminate the offering of
Shares of any Fund if such action is required by law or by regulatory
authorities having jurisdiction or if, in the sole discretion of the Trustees
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, such action is deemed in the best interests of the
shareholders of such Fund.
1.2 ADDITION, DELETION OR MODIFICATION OF FUNDS.
The Parties hereto may agree, from time to time, to add other Funds to
provide additional funding media for the Contracts, or to delete, combine, or
modify existing Funds, by amending Schedule A hereto. Upon such amendment to
Schedule A, any applicable reference to a Fund, AVIF, or its Shares herein shall
include a reference to any such additional Fund. Schedule A, as amended from
time to time, is incorporated herein by reference and is a part hereof.
1.3 NO SALES TO THE GENERAL PUBLIC.
AVIF represents and warrants that no Shares of any Fund have been or will
be sold to the general public.
SECTION 2. PROCESSING TRANSACTIONS
2.1 TIMELY PRICING AND ORDERS.
(a) AVIF or its designated agent will use its best efforts to provide
JNL with the net asset value per Share for each Fund by 6:00 p.m. Central Time
on each Business Day. As used herein, "Business Day" shall mean any day on which
(i) the New York Stock Exchange is open for regular trading, (ii) AVIF
calculates the Fund's net asset value, and (iii) JNL is open for business.
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(b) JNL will use the data provided by AVIF each Business Day pursuant to
paragraph (a) immediately above to calculate Account unit values and to process
transactions that receive that same Business Day's Account unit values. JNL will
perform such Account processing the same Business Day, and will place
corresponding orders to purchase or redeem Shares with AVIF by 9:00 a.m. Central
Time the following Business Day; PROVIDED, however, that AVIF shall provide
additional time to JNL in the event that AVIF is unable to meet the 6:00 p.m.
time stated in paragraph (a) immediately above. Such additional time shall be
equal to the additional time that AVIF takes to make the net asset values
available to JNL.
(c) With respect to payment of the purchase price by JNL and of
redemption proceeds by AVIF, JNL and AVIF shall net purchase and redemption
orders with respect to each Fund and shall transmit one net payment per Fund in
accordance with Section 2.2, below.
(d) If AVIF provides materially incorrect Share net asset value
information (as determined under SEC guidelines), JNL shall be entitled to an
adjustment to the number of Shares purchased or redeemed to reflect the correct
net asset value per Share. Any material error in the calculation or reporting of
net asset value per Share, dividend or capital gain information shall be
reported promptly upon discovery to JNL. Materiality and reprocessing cost
reimbursement shall be determined in accordance with standards established by
the Parties as provided in Schedule B, attached hereto and incorporated herein.
2.2 TIMELY PAYMENTS.
JNL will wire payment for net purchases to a custodial account designated
by AVIF by 1:00 p.m. Central Time on the same day as the order for Shares is
placed, to the extent practicable. AVIF will wire payment for net redemptions to
an account designated by JNL by 1:00 p.m. Central Time on the same day as the
Order is placed, to the extent practicable, but in any event within five (5)
calendar days after the date the order is placed in order to enable JNL to pay
redemption proceeds within the time specified in Section 22(e) of the 1940 Act
or such shorter period of time as may be required by law.
2.3 APPLICABLE PRICE.
(a) Share purchase payments and redemption orders that result from
purchase payments, premium payments, surrenders and other transactions under
Contracts (collectively, "Contract transactions") and that JNL receives prior to
the close of regular trading on the New York Stock Exchange on a Business Day
will be executed at the net asset values of the appropriate Funds next computed
after receipt by AVIF or its designated agent of the orders. For purposes of
this Section 2.3(a), JNL shall be the designated agent of AVIF for receipt of
orders relating to Contract transactions on each Business Day and receipt by
such designated agent shall constitute receipt by AVIF; PROVIDED that AVIF
receives notice of such orders by 9:00 a.m. Central Time on the next following
Business Day or such later time as computed in accordance with Section 2.1(b)
hereof.
(b) All other Share purchases and redemptions by JNL will be effected at
the net asset values of the appropriate Funds next computed after receipt by
AVIF or its designated agent of the order therefor, and such orders will be
irrevocable.
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2.4 DIVIDENDS AND DISTRIBUTIONS.
AVIF will furnish notice by wire or telephone (followed by written
confirmation) on or prior to the payment date to JNL of any income dividends or
capital gain distributions payable on the Shares of any Fund. JNL hereby elects
to reinvest all dividends and capital gains distributions in additional Shares
of the corresponding Fund at the ex-dividend date net asset values until JNL
otherwise notifies AVIF in writing, it being agreed by the Parties that the
ex-dividend date and the payment date with respect to any dividend or
distribution will be the same Business Day. JNL reserves the right to revoke
this election and to receive all such income dividends and capital gain
distributions in cash.
2.5 BOOK ENTRY.
Issuance and transfer of AVIF Shares will be by book entry only. Stock
certificates will not be issued to JNL. Shares ordered from AVIF will be
recorded in an appropriate title for JNL, on behalf of its Account.
SECTION 3. COSTS AND EXPENSES
3.1 GENERAL.
Except as otherwise specifically provided in Schedule C, attached hereto
and made a part hereof, each Party will bear, or arrange for others to bear, all
expenses incident to its performance under this Agreement.
3.2 PARTIES TO COOPERATE.
Each Party agrees to cooperate with the others, as applicable, in arranging
to print, mail and/or deliver, in a timely manner, combined or coordinated
prospectuses or other materials of AVIF and the Accounts.
SECTION 4. LEGAL COMPLIANCE
4.1 TAX LAWS.
(a) AVIF represents and warrants that each Fund is currently qualified
as a regulated investment company ("RIC") under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and represents that it will use
its best efforts to qualify and to maintain qualification of each Fund as a RIC.
AVIF will notify JNL immediately upon having a reasonable basis for believing
that a Fund has ceased to so qualify or that it might not so qualify in the
future.
(b) AVIF represents that it will use its best efforts to comply and to
maintain each Fund's compliance with the diversification requirements set forth
in Section 817(h) of the Code and Section
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1.817-5(b) of the regulations under the Code. AVIF will notify JNL immediately
upon having a reasonable basis for believing that a Fund has ceased to so comply
or that a Fund might not so comply in the future. In the event of a breach of
this Section 4.1(b) by AVIF, it will take all reasonable steps to adequately
diversify the Fund so as to achieve compliance within the grace period afforded
by Section 1.817-5 of the regulations under the Code.
(c) Notwithstanding any other provision of this Agreement, JNL agrees
that if the Internal Revenue Service ("IRS") asserts in writing in connection
with any governmental audit or review of JNL or, to JNL's knowledge, of any
Contract owners, annuitants, insureds or participants (as appropriate) under the
Contracts (collectively, "Participants"), that any Fund has failed to comply
with the diversification requirements of Section 817(h) of the Code or JNL
otherwise becomes aware of any facts that could give rise to any claim against
AVIF or its affiliates as a result of such a failure or alleged failure:
(i) JNL shall promptly notify AVIF of such assertion or
potential claim (subject to the Confidentiality provisions
of Section 18 as to any Participant);
(ii) JNL shall consult with AVIF as to how to minimize any
liability that may arise as a result of such failure or
alleged failure;
(iii) JNL shall use its best efforts to minimize any liability of
AVIF or its affiliates resulting from such failure,
including, without limitation, demonstrating, pursuant to
Treasury Regulations Section 1.817-5(a)(2), to the
Commissioner of the IRS that such failure was inadvertent;
(iv) JNL shall permit AVIF, its affiliates and their legal and
accounting advisors to participate in any conferences,
settlement discussions or other administrative or judicial
proceeding or contests (including judicial appeals thereof)
with the IRS, any Participant or any other claimant
regarding any claims that could give rise to liability to
AVIF or its affiliates as a result of such a failure or
alleged failure; PROVIDED, however, that JNL will retain
control of the conduct of such conferences discussions,
proceedings, contests or appeals;
(v) any written materials to be submitted by JNL to the IRS, any
Participant or any other claimant in connection with any of
the foregoing proceedings or contests (including, without
limitation, any such materials to be submitted to the IRS
pursuant to Treasury Regulations Section 1.817-5(a)(2)), (a)
shall be provided by JNL to AVIF (together with any
supporting information or analysis); subject to the
confidentiality provisions of Section 18, at least ten (10)
business days or such shorter period to which the Parties
hereto agree prior to the day on which such proposed
materials are to be submitted, and (b) shall not be
submitted by JNL to any such person without the express
written consent of AVIF which shall not be unreasonably
withheld;
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(vi) JNL shall provide AVIF or its affiliates and their
accounting and legal advisors with such cooperation as AVIF
shall reasonably request (including, without limitation, by
permitting AVIF and its accounting and legal advisors to
review the relevant books and records of JNL) in order to
facilitate review by AVIF or its advisors of any written
submissions provided to it pursuant to the preceding clause
or its assessment of the validity or amount of any claim
against its arising from such a failure or alleged failure;
(vii) JNL shall not with respect to any claim of the IRS or any
Participant that would give rise to a claim against AVIF or
its affiliates (a) compromise or settle any claim, (b)
accept any adjustment on audit, or (c) forego any allowable
administrative or judicial appeals, without the express
written consent of AVIF or its affiliates, which shall not
be unreasonably withheld, PROVIDED that JNL shall not be
required, after exhausting all administrative remedies, to
appeal any adverse judicial decision unless AVIF or its
affiliates shall have provided an opinion of independent
counsel to the effect that a reasonable basis exists for
taking such appeal; and PROVIDED FURTHER that the costs of
any such appeal shall be borne equally by the Parties
hereto; and
(viii) AVIF and its affiliates shall have no liability as a result
of such failure or alleged failure if JNL fails to comply
with any of the foregoing clauses (i) through (vii), and
such failure could be shown to have materially contributed
to the liability.
Should AVIF or any of its affiliates refuse to give its written consent to
any compromise or settlement of any claim or liability hereunder, JNL may, in
its discretion, authorize AVIF or its affiliates to act in the name of JNL in,
and to control the conduct of, such conferences, discussions, proceedings,
contests or appeals and all administrative or judicial appeals thereof, and in
that event AVIF or its affiliates shall bear the fees and expenses associated
with the conduct of the proceedings that it is so authorized to control;
PROVIDED, that in no event shall JNL have any liability resulting from AVIF's
refusal to accept the proposed settlement or compromise with respect to any
failure caused by AVIF. As used in this Agreement, the term "affiliates" shall
have the same meaning as "affiliated person" as defined in Section 2(a)(3) of
the 1940 Act.
(d) JNL represents and warrants that the Contracts currently are and
will be treated as annuity contracts or life insurance contracts under
applicable provisions of the Code and that it will use its best efforts to
maintain such treatment; JNL will notify AVIF immediately upon having a
reasonable basis for believing that any of the Contracts have ceased to be so
treated or that they might not be so treated in the future.
(e) JNL represents and warrants that each Account is a "segregated asset
account" and that interests in each Account are offered exclusively through the
purchase of or transfer into a "variable contract," within the meaning of such
terms under Section 817 of the Code and the regulations thereunder. JNL will use
its best efforts to continue to meet such definitional requirements, and it will
notify AVIF immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the future.
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4.2 INSURANCE AND CERTAIN OTHER LAWS.
(a) AVIF will use its best efforts to comply with any applicable state
insurance laws or regulations, to the extent specifically requested in writing
by JNL, including, the furnishing of information not otherwise available to JNL
which is required by state insurance law to enable JNL to obtain the authority
needed to issue the Contracts in any applicable state.
(b) JNL represents and warrants that (i) it is an insurance company duly
organized, validly existing and in good standing under the laws of the State of
New York and has full corporate power, authority and legal right to execute,
deliver and perform its duties and comply with its obligations under this
Agreement, (ii) it has legally and validly established and maintains each
Account as a segregated asset account under Section 4240 of the New York
Insurance Law and the regulations thereunder, and (iii) the Contracts comply in
all material respects with all other applicable federal and state laws and
regulations.
(c) AVIF represents and warrants that it is lawfully organized, validly
existing, and in good standing under the laws of the State of
Delaware and has
full power, authority, and legal right to execute, deliver, and perform its
duties and comply with its obligations under this Agreement.
4.3 SECURITIES LAWS.
(a) JNL represents and warrants that (i) interests in each Account
pursuant to the Contracts will be registered under the 1933 Act to the extent
required by the 1933 Act, (ii) the Contracts will be duly authorized for
issuance and sold in compliance with all applicable federal and state laws,
including, without limitation, the 1933 Act, the 1934 Act, the 1940 Act and the
law(s) of JNL"s state(s) of organization and domicile, (iii) each Account is and
will remain registered under the 1940 Act, to the extent required by the 1940
Act, (iv) each Account does and will comply in all material respects with the
requirements of the 1940 Act and the rules thereunder, to the extent required,
(v) each Account's 1933 Act registration statement relating to the Contracts,
together with any amendments thereto, will at all times comply in all material
respects with the requirements of the 1933 Act and the rules thereunder, (vi)
JNL will amend the registration statement for its Contracts under the 1933 Act
and for its Accounts under the 1940 Act from time to time as required in order
to effect the continuous offering of its Contracts or as may otherwise be
required by applicable law, and (vii) each Account Prospectus will at all times
comply in all material respects with the requirements of the 1933 Act and the
rules thereunder.
(b) AVIF represents and warrants that (i) Shares sold pursuant to this
Agreement will be registered under the 1933 Act to the extent required by the
1933 Act and duly authorized for issuance and sold in compliance with
Delaware
law, (ii) AVIF is and will remain registered under the 1940 Act to the extent
required by the 1940 Act, (iii) AVIF will amend the registration statement for
its Shares under the 1933 Act and itself under the 1940 Act from time to time as
required in order to effect the continuous offering of its Shares, (iv) AVIF
does and will comply in all material respects with the requirements of the 1940
Act and the rules thereunder, (v) AVIF's 1933 Act registration statement,
together with any amendments thereto, will at all times comply in all material
respects
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with the requirements of the 1933 Act and rules thereunder, and (vi) AVIF"s
Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(c) AVIF will at its expense register and qualify its Shares for sale in
accordance with the laws of any state or other jurisdiction if and to the extent
reasonably deemed advisable by AVIF.
(d) AVIF represents and warrants that all of its trustees, officers,
employees, investment advisers, and other individuals/entities having access to
the funds and/or securities of the Fund are and continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund in an amount not less than the minimal coverage as required currently by
Rule 17g-(1) of the 1940 Act or related provisions as may be promulgated from
time to time. The aforesaid bond includes coverage for larceny and embezzlement
and is issued by a reputable bonding company.
4.4 NOTICE OF CERTAIN PROCEEDINGS AND OTHER CIRCUMSTANCES.
(a) AVIF or AIM will immediately notify JNL of (i) the issuance by any
court or regulatory body of any stop order, cease and desist order, or other
similar order with respect to AVIF's registration statement under the 1933 Act
or AVIF Prospectus, (ii) any request by the SEC for any amendment to such
registration statement or AVIF Prospectus that may affect the offering of Shares
of AVIF, (iii) the initiation of any proceedings for that purpose or for any
other purpose relating to the registration or offering of AVIF's Shares, or (iv)
any other action or circumstances that may prevent the lawful offer or sale of
Shares of any Fund in any state or jurisdiction, including, without limitation,
any circumstances in which (a) such Shares are not registered and, in all
material respects, issued and sold in accordance with applicable state and
federal law, or (b) such law precludes the use of such Shares as an underlying
investment medium of the Contracts issued or to be issued by JNL. AVIF and AIM
will make every reasonable effort to prevent the issuance, with respect to any
Fund, of any such stop order, cease and desist order or similar order and, if
any such order is issued, to obtain the lifting thereof at the earliest possible
time.
(b) JNL or UNDERWRITER will immediately notify AVIF of (i) the issuance
by any court or regulatory body of any stop order, cease and desist order, or
other similar order with respect to each Account's registration statement under
the 1933 Act relating to the Contracts or each Account Prospectus, (ii) any
request by the SEC for any amendment to such registration statement or Account
Prospectus that may affect the offering of Shares of AVIF, (iii) the initiation
of any proceedings for that purpose or for any other purpose relating to the
registration or offering of each Account's interests pursuant to the Contracts,
or (iv) any other action or circumstances that may prevent the lawful offer or
sale of said interests in any state or jurisdiction, including, without
limitation, any circumstances in which said interests are not registered and, in
all material respects, issued and sold in accordance with applicable state and
federal law. JNL and UNDERWRITER will make every reasonable effort to prevent
the issuance of any such stop order, cease and desist order or similar order
and, if any such order is issued, to obtain the lifting thereof at the earliest
possible time.
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4.5 JNL TO PROVIDE DOCUMENTS; INFORMATION ABOUT AVIF.
(a) JNL will provide to AVIF or its designated agent at least one (1)
complete copy of all SEC registration statements, Account Prospectuses, reports,
any preliminary and final voting instruction solicitation material, applications
for exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to each Account or the Contracts, contemporaneously with the
filing of such document with the SEC or other regulatory authorities.
(b) JNL will provide to AVIF or its designated agent at least one (1)
complete copy of each piece of sales literature or other promotional material in
which AVIF or any of its affiliates is named, at least five (5) Business Days
prior to its use or such shorter period as the Parties hereto may, from time to
time, agree upon. No such material shall be used if AVIF or its designated agent
objects to such use within five (5) Business Days after receipt of such material
or such shorter period as the Parties hereto may, from time to time, agree upon.
AVIF hereby designates AIM as the entity to receive such sales literature, until
such time as AVIF appoints another designated agent by giving notice to JNL in
the manner required by Section 9 hereof.
(c) Neither JNL nor any of its affiliates, will give any information or
make any representations or statements on behalf of or concerning AVIF or its
affiliates in connection with the sale of the Contracts other than (i) the
information or representations contained in the registration statement,
including the AVIF Prospectus contained therein, relating to Shares, as such
registration statement and AVIF Prospectus may be amended from time to time; or
(ii) in reports or proxy materials for AVIF; or (iii) in published reports for
AVIF that are in the public domain and approved by AVIF for distribution; or
(iv) in sales literature or other promotional material approved by AVIF, except
with the express written permission of AVIF.
(d) JNL shall adopt and implement procedures reasonably designed to
ensure that information concerning AVIF and its affiliates that is intended for
use only by brokers or agents selling the Contracts (I.E., information that is
not intended for distribution to Participants) ("broker only materials") is so
used, and neither AVIF nor any of its affiliates shall be liable for any losses,
damages or expenses relating to the improper use of such broker only materials.
(e) For the purposes of Sections 4.5 and 4.6 hereof, the phrase "sales
literature or other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public media,
(E.G., on-line networks such as the Internet or other electronic messages),
sales literature (I.E., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, prospectuses, statements of
additional information, shareholder reports, and proxy materials and any other
material constituting sales literature or advertising under the NASD rules, the
1933 Act or the 1940 Act.
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4.6 AVIF TO PROVIDE DOCUMENTS; INFORMATION ABOUT JNL.
(a) AVIF will provide to JNL at least one (1) complete copy of all SEC
registration statements, AVIF Prospectuses, periodic reports to shareholders,
any preliminary and final proxy material, applications for exemptions, requests
for no-action letters, and all amendments to any of the above, that relate to
AVIF or the Shares of a Fund, contemporaneously with the filing of such document
with the SEC or other regulatory authorities.
(b) AVIF will provide to JNL a camera ready copy of all AVIF
prospectuses and printed copies, in an amount specified by JNL, of AVIF
statements of additional information, proxy materials, periodic reports to
shareholders and other materials required by law to be sent to Participants who
have allocated any Contract value to a Fund. AVIF will provide such copies to
JNL in a timely manner so as to enable JNL, as the case may be, to print and
distribute such materials within the time required by law to be furnished to
Participants. If requested by JNL, AVIF shall provide copies of the foregoing
documents to JNL electronically, subject to Section 22 hereof.
(c) AVIF will provide to JNL or its designated agent at least one (1)
complete copy of each piece of sales literature or other promotional material in
which JNL, or any of its respective affiliates is named, or that refers to the
Contracts, at least five (5) Business Days prior to its use or such shorter
period as the Parties hereto may, from time to time, agree upon. No such
material shall be used if JNL or its designated agent objects to such use within
five (5) Business Days after receipt of such material or such shorter period as
the Parties hereto may, from time to time, agree upon. JNL shall receive all
such sales literature until such time as it appoints a designated agent by
giving notice to AVIF in the manner required by Section 9 hereof.
(d) Neither AVIF nor any of its affiliates will give any information or
make any representations or statements on behalf of or concerning JNL, each
Account, or the Contracts other than (i) the information or representations
contained in the registration statement, including each Account Prospectus
contained therein, relating to the Contracts, as such registration statement and
Account Prospectus may be amended from time to time; or (ii) in published
reports for the Account or the Contracts that are in the public domain and
approved by JNL for distribution; or (iii) in sales literature or other
promotional material approved by JNL or its affiliates, except with the express
written permission of JNL.
(e) AVIF shall cause its principal underwriter to adopt and implement
procedures reasonably designed to ensure that information concerning JNL, and
its respective affiliates that is intended for use only by brokers or agents
selling the Contracts (I.E., information that is not intended for distribution
to Participants) ("broker only materials") is so used, and neither JNL, nor any
of its respective affiliates shall be liable for any losses, damages or expenses
relating to the improper use of such broker only materials.
SECTION 5. MIXED AND SHARED FUNDING
5.1 GENERAL.
10
The SEC has granted an order to AVIF exempting it from certain provisions
of the 1940 Act and rules thereunder so that AVIF may be available for
investment by certain other entities, including, without limitation, separate
accounts funding variable annuity contracts or variable life insurance
contracts, separate accounts of insurance companies unaffiliated with JNL, and
trustees of qualified pension and retirement plans (collectively, "Mixed and
Shared Funding"). The Parties recognize that the SEC has imposed terms and
conditions for such orders that are substantially identical to many of the
provisions of this Section 5. Sections 5.2 through 5.8 below shall apply
pursuant to such an exemptive order granted to AVIF. AVIF hereby notifies JNL
that, in the event that AVIF implements Mixed and Shared Funding, it may be
appropriate to include in the prospectus pursuant to which a Contract is offered
disclosure regarding the potential risks of Mixed and Shared Funding.
5.2 DISINTERESTED TRUSTEES.
AVIF agrees that its Board of Trustees shall at all times consist of
trustees a majority of whom (the "Disinterested Trustees") are not interested
persons of AVIF within the meaning of Section 2(a)(19) of the 1940 Act and the
rules thereunder and as modified by any applicable orders of the SEC, except
that if this condition is not met by reason of the death, disqualification, or
bona fide resignation of any director, then the operation of this condition
shall be suspended (a) for a period of forty-five (45) days if the vacancy or
vacancies may be filled by the Board;(b) for a period of sixty (60) days if a
vote of shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the SEC may prescribe by order upon application.
5.3 MONITORING FOR MATERIAL IRRECONCILABLE CONFLICTS.
AVIF agrees that its Board of Trustees will monitor for the existence of
any material irreconcilable conflict between the interests of the Participants
in all separate accounts of life insurance companies utilizing AVIF
("Participating Insurance Companies"), including each Account, and participants
in all qualified retirement and pension plans investing in AVIF ("Participating
Plans"). JNL agrees to inform the Board of Trustees of AVIF of the existence of
or any potential for any such material irreconcilable conflict of which it is
aware. The concept of a "material irreconcilable conflict" is not defined by the
1940 Act or the rules thereunder, but the Parties recognize that such a conflict
may arise for a variety of reasons, including, without limitation:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or securities
laws or regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax or securities
regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Fund are being managed;
11
(e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract Participants or by Participants of
different Participating Insurance Companies;
(f) a decision by a Participating Insurance Company to disregard the
voting instructions of Participants; or
(g) a decision by a Participating Plan to disregard the voting
instructions of Plan participants.
Consistent with the SEC's requirements in connection with exemptive orders
of the type referred to in Section 5.1 hereof, JNL will assist the Board of
Trustees in carrying out its responsibilities by providing the Board of Trustees
with all information reasonably necessary for the Board of Trustees to consider
any issue raised, including information as to a decision by JNL to disregard
voting instructions of Participants. JNL"s responsibilities in connection with
the foregoing shall be carried out with a view only to the interests of
Participants.
5.4 CONFLICT REMEDIES.
(a) It is agreed that if it is determined by a majority of the members
of the Board of Trustees or a majority of the Disinterested Trustees that a
material irreconcilable conflict exists, JNL will, if it is a Participating
Insurance Company for which a material irreconcilable conflict is relevant, at
its own expense and to the extent reasonably practicable (as determined by a
majority of the Disinterested Trustees), take whatever steps are necessary to
remedy or eliminate the material irreconcilable conflict, which steps may
include, but are not limited to:
(i) withdrawing the assets allocable to some or all of the
Accounts from AVIF or any Fund and reinvesting such assets
in a different investment medium, including another Fund of
AVIF, or submitting the question whether such segregation
should be implemented to a vote of all affected Participants
and, as appropriate, segregating the assets of any
particular group (E.G., annuity Participants, life insurance
Participants or all Participants) that votes in favor of
such segregation, or offering to the affected Participants
the option of making such a change; and
(ii) establishing a new registered investment company of the type
defined as a "management company" in Section 4(3) of the
1940 Act or a new separate account that is operated as a
management company.
(b) If the material irreconcilable conflict arises because of JNL's
decision to disregard Participant voting instructions and that decision
represents a minority position or would preclude a majority vote, JNL may be
required, at AVIF's election, to withdraw each Account's investment in AVIF or
any Fund. No charge or penalty will be imposed as a result of such withdrawal.
Any such withdrawal must take place within six (6) months after AVIF gives
notice to JNL that this provision is being implemented, and until such
withdrawal AVIF shall continue to accept and implement orders by JNL for the
purchase and redemption of Shares of AVIF.
12
(c) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to JNL conflicts with the
majority of other state regulators, then JNL will withdraw each Account's
investment in AVIF within six (6) months after AVIF's Board of Trustees informs
JNL that it has determined that such decision has created a material
irreconcilable conflict, and until such withdrawal AVIF shall continue to accept
and implement orders by JNL for the purchase and redemption of Shares of AVIF.
No charge or penalty will be imposed as a result of such withdrawal.
(d) JNL agrees that any remedial action taken by it in resolving any
material irreconcilable conflict will be carried out at its expense and with a
view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Trustees will
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event, however, will AVIF or any of its
affiliates be required to establish a new funding medium for any Contracts. JNL
will not be required by the terms hereof to establish a new funding medium for
any Contracts if an offer to do so has been declined by vote of a majority of
Participants materially adversely affected by the material irreconcilable
conflict.
5.5 NOTICE TO JNL.
AVIF will promptly make known in writing to JNL the Board of Trustees'
determination of the existence of a material irreconcilable conflict, a
description of the facts that give rise to such conflict and the implications of
such conflict.
5.6 INFORMATION REQUESTED BY BOARD OF TRUSTEES.
JNL and AVIF (or its investment adviser) will at least annually submit to
the Board of Trustees of AVIF such reports, materials or data as the Board of
Trustees may reasonably request so that the Board of Trustees may fully carry
out the obligations imposed upon it by the provisions hereof or any exemptive
order granted by the SEC to permit Mixed and Shared Funding, and said reports,
materials and data will be submitted at any reasonable time deemed appropriate
by the Board of Trustees. All reports received by the Board of Trustees of
potential or existing conflicts, and all Board of Trustees actions with regard
to determining the existence of a conflict, notifying Participating Insurance
Companies and Participating Plans of a conflict, and determining whether any
proposed action adequately remedies a conflict, will be properly recorded in the
minutes of the Board of Trustees or other appropriate records, and such minutes
or other records will be made available to the SEC upon request.
5.7 COMPLIANCE WITH SEC RULES.
If, at any time during which AVIF is serving as an investment medium for
variable life insurance Contracts, 1940 Act Rules 6e-3(T) or, if applicable,
6e-2 are amended or Rule 6e-3 is adopted to provide exemptive relief with
respect to Mixed and Shared Funding, AVIF agrees that it will comply with the
terms and conditions thereof and that the terms of this Section 5 shall be
13
deemed modified if and only to the extent required in order also to comply with
the terms and conditions of such exemptive relief that is afforded by any of
said rules that are applicable.
5.8 OTHER REQUIREMENTS.
AVIF will require that each Participating Insurance Company and
Participating Plan enter into an agreement with AVIF that contains in substance
the same provisions as are set forth in Sections 4.1(b), 4.1(d), 4.3(a), 4.4(b),
4.5(a), 5, and 10 of this Agreement.
SECTION 6. TERMINATION
6.1 EVENTS OF TERMINATION.
Subject to Section 6.4 below, this Agreement will terminate as to a Fund:
(a) at the option of any Party, with or without cause with respect to
the Fund, upon six (6) months advance written notice to the other Parties, or,
if later, upon receipt of any required exemptive relief from the SEC, unless
otherwise agreed to in writing by the Parties; or
(b) at the option of AVIF upon institution of formal proceedings against
JNL or its affiliates by the NASD, the SEC, any state insurance regulator or any
other regulatory body regarding JNL's obligations under this Agreement or
related to the sale of the Contracts, the operation of each Account, or the
purchase of Shares, if, in each case, AVIF reasonably determines that such
proceedings, or the facts on which such proceedings would be based, have a
material likelihood of imposing material adverse consequences on the Fund with
respect to which the Agreement is to be terminated; or
(c) at the option of JNL upon institution of formal proceedings against
AVIF, its principal underwriter, or its investment adviser by the NASD, the SEC,
or any state insurance regulator or any other regulatory body regarding AVIF's
obligations under this Agreement or related to the operation or management of
AVIF or the purchase of AVIF Shares, if, in each case, JNL reasonably determines
that such proceedings, or the facts on which such proceedings would be based,
have a material likelihood of imposing material adverse consequences on JNL, or
the Subaccount corresponding to the Fund with respect to which the Agreement is
to be terminated; or
(d) at the option of any Party in the event that (i) the Fund's Shares
are not registered and, in all material respects, issued and sold in accordance
with any applicable federal or state law, or (ii) such law precludes the use of
such Shares as an underlying investment medium of the Contracts issued or to be
issued by JNL; or
(e) upon termination of the corresponding Subaccount's investment in the
Fund pursuant to Section 5 hereof; or
14
(f) at the option of JNL if the Fund ceases to qualify as a RIC under
Subchapter M of the Code or under successor or similar provisions, or if JNL
reasonably believes that the Fund may fail to so qualify; or
(g) at the option of JNL if the Fund fails to comply with Section 817(h)
of the Code or with successor or similar provisions, or if JNL reasonably
believes that the Fund may fail to so comply; or
(h) at the option of AVIF if the Contracts issued by JNL cease to
qualify as annuity contracts or life insurance contracts under the Code (other
than by reason of the Fund's noncompliance with Section 817(h) or Subchapter M
of the Code) or if interests in an Account under the Contracts are not
registered, where required, and, in all material respects, are not issued or
sold in accordance with any applicable federal or state law; or
(i) upon another Party's material breach of any provision of this
Agreement.
6.2 NOTICE REQUIREMENT FOR TERMINATION.
No termination of this Agreement will be effective unless and until the
Party terminating this Agreement gives prior written notice to the other Party
to this Agreement of its intent to terminate, and such notice shall set forth
the basis for such termination. Furthermore:
(a) in the event that any termination is based upon the provisions of
Sections 6.1(a) or 6.1(e) hereof, such prior written notice shall be given at
least six (6) months in advance of the effective date of termination unless a
shorter time is agreed to by the Parties hereto;
(b) in the event that any termination is based upon the provisions of
Sections 6.1(b) or 6.1(c) hereof, such prior written notice shall be given at
least ninety (90) days in advance of the effective date of termination unless a
shorter time is agreed to by the Parties hereto; and
(c) in the event that any termination is based upon the provisions of
Sections 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i) hereof, such prior written
notice shall be given as soon as possible within twenty-four (24) hours after
the terminating Party learns of the event causing termination to be required.
6.3 FUNDS TO REMAIN AVAILABLE.
Notwithstanding any termination of this Agreement with respect to any Fund,
AVIF will, at the option of JNL, continue to make available additional shares of
the Fund pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, the owners of the Existing Contracts will be permitted to reallocate
investments in the Fund (as in effect on such date), redeem investments in the
Fund and/or invest in the Fund upon the making of additional purchase payments
under the Existing Contracts. The Parties agree that this Section 6.3 will not
apply to any terminations under Section 5 and the effect of such terminations
will be governed by Section 5 of this Agreement.
15
6.4 SURVIVAL OF WARRANTIES AND INDEMNIFICATIONS.
All warranties and indemnifications will survive the termination of this
Agreement.
6.5 CONTINUANCE OF AGREEMENT FOR CERTAIN PURPOSES.
If any Party terminates this Agreement with respect to any Fund pursuant to
Sections 6.1(b), 6.1(c), 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i) hereof, this
Agreement shall nevertheless continue in effect as to any Shares of that Fund
that are outstanding as of the date of such termination (the "Initial
Termination Date"). This continuation shall extend to the earlier of the date as
of which an Account owns no Shares of the affected Fund or a date (the "Final
Termination Date") six (6) months following the Initial Termination Date, except
that JNL may, by written notice shorten said six (6) month period in the case of
a termination pursuant to Sections 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i).
SECTION 7. PARTIES TO COOPERATE RESPECTING TERMINATION
The Parties hereto agree to cooperate and give reasonable assistance to one
another in taking all necessary and appropriate steps for the purpose of
ensuring that an Account owns no Shares of a Fund after the Final Termination
Date with respect thereto, or, in the case of a termination pursuant to Section
6.1(a), the termination date specified in the notice of termination. Such steps
may include combining the affected Account with another Account, substituting
other mutual fund shares for those of the affected Fund, or otherwise
terminating participation by the Contracts in such Fund.
SECTION 8. ASSIGNMENT
This Agreement may not be assigned by any Party, except with the written
consent of each other Party.
SECTION 9. NOTICES
Notices and communications required or permitted will be given by means
mutually acceptable to the Parties concerned. Each other notice or communication
required or permitted by this Agreement will be given to the following persons
at the following addresses and facsimile numbers, or such other persons,
addresses or facsimile numbers as the Party receiving such notices or
communications may subsequently direct in writing:
AIM VARIABLE INSURANCE FUNDS
A I M DISTRIBUTORS, INC.
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
16
JEFFERSON NATIONAL LIFE INSURANCE COMPANY
INVIVA SECURITIES CORPORATION
0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attn: General Counsel
with copy to Chief Compliance Officer
SECTION 10. VOTING PROCEDURES
Subject to the cost allocation procedures set forth in Section 3 hereof,
JNL will distribute all proxy material furnished by AVIF to Participants to whom
pass-through voting privileges are required to be extended and will solicit
voting instructions from Participants. Subject to Section 22 hereof, JNL may
distribute such proxy material electronically. JNL will vote Shares in
accordance with timely instructions received from Participants. JNL will vote
Shares that are (a) not attributable to Participants to whom pass-through voting
privileges are extended, or (b) attributable to Participants, but for which no
timely instructions have been received, in the same proportion as Shares for
which said instructions have been received from Participants, so long as and to
the extent that the SEC continues to interpret the 1940 Act to require pass
through voting privileges for Participants. Neither JNL nor any of its
affiliates will in any way recommend action in connection with or oppose or
interfere with the solicitation of proxies for the Shares held for such
Participants. JNL reserves the right to vote shares held in any Account in its
own right, to the extent permitted by law. JNL shall be responsible for assuring
that each of its Accounts holding Shares calculates voting privileges in a
manner consistent with that of other Participating Insurance Companies or in the
manner required by the Mixed and Shared Funding exemptive order obtained by
AVIF. AVIF will notify JNL of any changes of interpretations or amendments to
Mixed and Shared Funding exemptive order it has obtained. AVIF will comply with
all provisions of the 1940 Act requiring voting by shareholders, and in
particular, AVIF either will provide for annual meetings (except insofar as the
SEC may interpret Section 16 of the 1940 Act not to require such meetings) or
will comply with Section 16(c) of the 1940 Act (although AVIF is not one of the
trusts described in Section 16(c) of that Act) as well as with Sections 16(a)
and, if and when applicable, 16(b). Further, AVIF will act in accordance with
the SEC's interpretation of the requirements of Section 16(a) with respect to
periodic elections of trustees and with whatever rules the SEC may promulgate
with respect thereto.
SECTION 11. FOREIGN TAX CREDITS
AVIF agrees to consult in advance with JNL concerning any decision to elect
or not to elect pursuant to Section 853 of the Code to pass through the benefit
of any foreign tax credits to its shareholders.
SECTION 12. INDEMNIFICATION
17
12.1 OF AVIF AND AIM BY JNL AND UNDERWRITER.
(a) Except to the extent provided in Sections 12.1(b) and 12.1(c),
below, JNL and UNDERWRITER agree to indemnify and hold harmless AVIF, AIM, their
affiliates, and each person, if any, who controls AVIF, AIM, or their affiliates
within the meaning of Section 15 of the 1933 Act and each of their respective
trustees and officers, (collectively, the "Indemnified Parties" for purposes of
this Section 12.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of JNL and
UNDERWRITER) or actions in respect thereof (including, to the extent reasonable,
legal and other expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise; PROVIDED, the Account
owns shares of the Fund and insofar as such losses, claims, damages, liabilities
or actions:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
any Account's 1933 Act registration statement, any Account
Prospectus, the Contracts, or sales literature or
advertising for the Contracts (or any amendment or
supplement to any of the foregoing), 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;
PROVIDED, that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon
and in conformity with information furnished to JNL or
UNDERWRITER by or on behalf of AVIF or AIM for use in any
Account's 1933 Act registration statement, any Account
Prospectus, the Contracts, or sales literature or
advertising or otherwise for use in connection with the sale
of Contracts or Shares (or any amendment or supplement to
any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in AVIF's 1933 Act registration statement, AVIF
Prospectus, sales literature or advertising of AVIF, or any
amendment or supplement to any of the foregoing, not
supplied for use therein by or on behalf of JNL, UNDERWRITER
or their respective affiliates and on which such persons
have reasonably relied) or the negligent, illegal or
fraudulent conduct of JNL, UNDERWRITER or their respective
affiliates or persons under their control (including,
without limitation, their employees and "persons associated
with a member," as that term is defined in paragraph (q) of
Article I of the NASD's By-Laws), in connection with the
sale or distribution of the Contracts or Shares; or
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
AVIF's 1933 Act registration statement, AVIF Prospectus,
sales literature or advertising of AVIF, or any
18
amendment or supplement to any of the foregoing, or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was made in reliance upon and in conformity with
information furnished to AVIF, AIM or their affiliates by or
on behalf of JNL, UNDERWRITER or their respective affiliates
for use in AVIF's 1933 Act registration statement, AVIF
Prospectus, sales literature or advertising of AVIF, or any
amendment or supplement to any of the foregoing; or
(iv) arise as a result of any failure by JNL or UNDERWRITER to
perform the obligations, provide the services and furnish
the materials required of them under the terms of this
Agreement, or any material breach of any representation
and/or warranty made by JNL or UNDERWRITER in this Agreement
or arise out of or result from any other material breach of
this Agreement by JNL or UNDERWRITER; or
(v) arise as a result of failure by the Contracts issued by JNL
to qualify as annuity contracts or life insurance contracts
under the Code, otherwise than by reason of any Fund's
failure to comply with Subchapter M or Section 817(h) of the
Code.
(b) Neither JNL nor UNDERWRITER shall be liable under this Section 12.1
with respect to any losses, claims, damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of that Indemnified Party's reckless disregard of
obligations or duties (i) under this Agreement, or (ii) to AVIF or AIM.
(c) Neither JNL nor UNDERWRITER shall be liable under this Section 12.1
with respect to any action against an Indemnified Party unless AVIF or AIM shall
have notified JNL and UNDERWRITER in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify JNL and UNDERWRITER of any such action shall not
relieve JNL and UNDERWRITER from any liability which they may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this Section 12.1. Except as otherwise provided herein, in case any such
action is brought against an Indemnified Party, JNL and UNDERWRITER shall be
entitled to participate, at their own expense, in the defense of such action and
also shall be entitled to assume the defense thereof, with counsel approved by
the Indemnified Party named in the action, which approval shall not be
unreasonably withheld. After notice from JNL or UNDERWRITER to such Indemnified
Party of JNL's or UNDERWRITER's election to assume the defense thereof, the
Indemnified Party will cooperate fully with JNL and UNDERWRITER and shall bear
the fees and expenses of any additional counsel retained by it, and neither LIFE
COMPANY nor UNDERWRITER will be liable to such Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof, other
than reasonable costs of investigation.
19
12.2 OF JNL AND UNDERWRITER BY AVIF AND AIM.
(a) Except to the extent provided in Sections 12.2(c), 12.2(d) and
12.2(e), below, AVIF and AIM agree to indemnify and hold harmless JNL,
UNDERWRITER, their respective affiliates, and each person, if any, who controls
JNL, UNDERWRITER or their respective affiliates within the meaning of Section 15
of the 1933 Act and each of their respective trustees and officers,
(collectively, the "Indemnified Parties" for purposes of this Section 12.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of AVIF and/or AIM) or actions in respect
thereof (including, to the extent reasonable, legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law, or otherwise; PROVIDED, the Account owns shares of the Fund and
insofar as such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
AVIF's 1933 Act registration statement, AVIF Prospectus or
sales literature or advertising of AVIF (or any amendment or
supplement to any of the foregoing), 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;
PROVIDED, that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon
and in conformity with information furnished to AVIF or its
affiliates by or on behalf of JNL, UNDERWRITER or their
respective affiliates for use in AVIF's 1933 Act
registration statement, AVIF Prospectus, or in sales
literature or advertising or otherwise for use in connection
with the sale of Contracts or Shares (or any amendment or
supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in any Account's 1933 Act registration statement,
any Account Prospectus, sales literature or advertising for
the Contracts, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of
AVIF, AIM or their affiliates and on which such persons have
reasonably relied) or the negligent, illegal or fraudulent
conduct of AVIF, AIM or their affiliates or persons under
their control (including, without limitation, their
employees and "persons associated with a member" as that
term is defined in Section (q) of Article I of the NASD
By-Laws), in connection with the sale or distribution of
AVIF Shares; or
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
any Account's 1933 Act registration statement, any Account
Prospectus, sales literature or advertising covering the
Contracts, or any amendment or supplement to any of the
20
foregoing, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon and in
conformity with information furnished to JNL, UNDERWRITER or
their respective affiliates by or on behalf of AVIF or AIM
for use in any Account's 1933 Act registration statement,
any Account Prospectus, sales literature or advertising
covering the Contracts, or any amendment or supplement to
any of the foregoing; or
(iv) arise as a result of any failure by AVIF to perform the
obligations, provide the services and furnish the materials
required of it under the terms of this Agreement, or any
material breach of any representation and/or warranty made
by AVIF in this Agreement or arise out of or result from any
other material breach of this Agreement by AVIF.
(b) The Parties agree that the indemnification by AVIF under this
Section 12.2 shall not apply to any acts or omissions of AIM. Except to the
extent provided in Sections 12.2(c), 12.2(d) and 12.2(e) hereof, AVIF and AIM
agree to indemnify and hold harmless the Indemnified Parties from and against
any and all losses, claims, damages, liabilities (including amounts paid in
settlement thereof with, the written consent of AVIF and/or AIM) or actions in
respect thereof (including, to the extent reasonable, legal and other expenses)
to which the Indemnified Parties may become subject directly or indirectly under
any statute, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or actions directly or indirectly result from or arise out
of the failure of any Fund to operate as a regulated investment company in
compliance with (i) Subchapter M of the Code and regulations thereunder, or (ii)
Section 817(h) of the Code and regulations thereunder, including, without
limitation, any income taxes and related penalties, rescission charges,
liability under state law to Participants asserting liability against JNL
pursuant to the Contracts, the costs of any ruling and closing agreement or
other settlement with the IRS, and the cost of any substitution by JNL of Shares
of another investment company or portfolio for those of any adversely affected
Fund as a funding medium for each Account that JNL reasonably deems necessary or
appropriate as a result of the noncompliance.
(c) Neither AVIF nor AIM shall be liable under this Section 12.2 with
respect to any losses, claims, damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of such Indemnified Party's reckless disregard of its
obligations and duties (i) under this Agreement, or (ii) to JNL, UNDERWRITER,
each Account or Participants.
(d) Neither AVIF nor AIM shall be liable under this Section 12.2 with
respect to any action against an Indemnified Party unless the Indemnified Party
shall have notified AVIF and/or AIM in writing within a reasonable time after
the summons or other first legal process giving information of the nature of the
action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify AVIF or AIM of any such action shall not relieve
AVIF or AIM from any liability
21
which it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this Section 12.2. Except as otherwise provided
herein, in case any such action is brought against an Indemnified Party, AVIF
and/or AIM will be entitled to participate, at its own expense, in the defense
of such action and also shall be entitled to assume the defense thereof (which
shall include, without limitation, the conduct of any ruling request and closing
agreement or other settlement proceeding with the IRS), with counsel approved by
the Indemnified Party named in the action, which approval shall not be
unreasonably withheld. After notice from AVIF and/or AIM to such Indemnified
Party of AVIF's or AIM's election to assume the defense thereof, the Indemnified
Party will cooperate fully with AVIF and AIM and shall bear the fees and
expenses of any additional counsel retained by it, and AVIF and AIM will not be
liable to such Indemnified Party under this Agreement for any legal or other
expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof, other than reasonable costs of
investigation.
(e) In no event shall AVIF or AIM be liable under the indemnification
provisions contained in this Agreement to any individual or entity, including,
without limitation, JNL, UNDERWRITER or any other Participating Insurance
Company or any Participant, with respect to any losses, claims, damages,
liabilities or expenses that arise out of or result from (i) a breach of any
representation, warranty, and/or covenant made by JNL or UNDERWRITER hereunder
or by any Participating Insurance Company under an agreement containing
substantially similar representations, warranties and covenants; (ii) the
failure by JNL or any Participating Insurance Company to maintain its segregated
asset account (which invests in any Fund) as a legally and validly established
segregated asset account under applicable state law and as a duly registered
unit investment trust under the provisions of the 1940 Act (unless exempt
therefrom); or (iii) the failure by JNL or any Participating Insurance Company
to maintain its variable annuity or life insurance contracts (with respect to
which any Fund serves as an underlying funding vehicle) as annuity contracts or
life insurance contracts under applicable provisions of the Code.
12.3 EFFECT OF NOTICE.
Any notice given by the indemnifying Party to an Indemnified Party referred
to in Sections 12.1(c) or 12.2(d) above of participation in or control of any
action by the indemnifying Party will in no event be deemed to be an admission
by the indemnifying Party of liability, culpability or responsibility, and the
indemnifying Party will remain free to contest liability with respect to the
claim among the Parties or otherwise.
12.4 SUCCESSORS.
A successor by law of any Party shall be entitled to the benefits of the
indemnification contained in this Section 12.
SECTION 13. APPLICABLE LAW
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with
Delaware law, without regard for that state's
principles of conflict of laws.
22
SECTION 14. EXECUTION IN COUNTERPARTS
This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
SECTION 15. SEVERABILITY
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
SECTION 16. RIGHTS CUMULATIVE
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, that the Parties are entitled to under federal and state
laws.
SECTION 17. HEADINGS
The Table of Contents and headings used in this Agreement are for purposes
of reference only and shall not limit or define the meaning of the provisions of
this Agreement.
SECTION 18. CONFIDENTIALITY
AVIF acknowledges that the identities of the customers of JNL or any of its
affiliates (collectively, the "JNL Protected Parties" for purposes of this
Section 18), information maintained regarding those customers, and all computer
programs and procedures or other information developed by the JNL Protected
Parties or any of their employees or agents in connection with JNL's performance
of its duties under this Agreement are the valuable property of the JNL
Protected Parties. AVIF agrees that if it comes into possession of any list or
compilation of the identities of or other information about the JNL Protected
Parties' customers, or any other information or property of the JNL Protected
Parties, other than such information as may be independently developed or
compiled by AVIF from information supplied to it by the JNL Protected Parties'
customers who also maintain accounts directly with AVIF, AVIF will hold such
information or property in confidence and refrain from using, disclosing or
distributing any of such information or other property except: (a) with JNL's
prior written consent; or (b) as required by law or judicial process. JNL
acknowledges that the identities of the customers of AVIF or any of its
affiliates (collectively, the "AVIF Protected Parties" for purposes of this
Section 18), information maintained regarding those customers, and all computer
programs and procedures or other information developed by the AVIF
23
Protected Parties or any of their employees or agents in connection with AVIF's
performance of its duties under this Agreement are the valuable property of the
AVIF Protected Parties. JNL agrees that if it comes into possession of any list
or compilation of the identities of or other information about the AVIF
Protected Parties' customers or any other information or property of the AVIF
Protected Parties, other than such information as may be independently developed
or compiled by JNL from information supplied to it by the AVIF Protected
Parties' customers who also maintain accounts directly with JNL, JNL will hold
such information or property in confidence and refrain from using, disclosing or
distributing any of such information or other property except: (a) with AVIF's
prior written consent; or (b) as required by law or judicial process. Each party
acknowledges that any breach of the agreements in this Section 18 would result
in immediate and irreparable harm to the other parties for which there would be
no adequate remedy at law and agree that in the event of such a breach, the
other parties will be entitled to equitable relief by way of temporary and
permanent injunctions, as well as such other relief as any court of competent
jurisdiction deems appropriate.
SECTION 19. TRADEMARKS AND FUND NAMES
(a) Except as may otherwise be provided in a License Agreement among
A I M Management Group Inc., JNL and UNDERWRITER, neither JNL nor UNDERWRITER or
any of their respective affiliates, shall use any trademark, trade name, service
xxxx or logo of AVIF, AIM or any of their respective affiliates, or any
variation of any such trademark, trade name, service xxxx or logo, without
AVIF's or AIM's prior written consent, the granting of which shall be at AVIF's
or AIM's sole option.
(b) Except as otherwise expressly provided in this Agreement, neither
AVIF, its investment adviser, its principal underwriter, or any affiliates
thereof shall use any trademark, trade name, service xxxx or logo of JNL,
UNDERWRITER or any of their affiliates, or any variation of any such trademark,
trade name, service xxxx or logo, without JNL's or UNDERWRITER's prior written
consent, the granting of which shall be at JNL's or UNDERWRITER's sole option.
SECTION 20. PARTIES TO COOPERATE
Each party to this Agreement will cooperate with each other party and all
appropriate governmental authorities (including, without limitation, the SEC,
the NASD and state insurance regulators) and will permit each other and such
authorities reasonable access to its books and records (including copies
thereof) in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
SECTION 21. AMENDMENTS
No provision of this Agreement may be amended or modified in any manner
except by a written agreement executed by all parties hereto.
24
SECTION 22. ELECTRONIC DELIVERY
22.1 GENERAL
When using electronic means, as permitted by this Agreement, to deliver or
communicate any information, document, record, or other materials (collectively,
"information") to AVIF, AIM, Fund shareholders, and/or existing or prospective
Contract owners, or to receive the same therefrom, INSURER shall at all times
comply with all applicable laws, regulations, and regulatory agency
pronouncements including, without limitation, the Electronic Signatures in
Global and National Commerce Act ("E-SIGN"), as the same may be amended from
time to time, as well as with the Electronic Delivery Procedures described
below. The foregoing use of electronic means is hereinafter referred to as
"electronic delivery."
22.2 ELECTRONIC DELIVERY PROCEDURES
Following the execution of this Agreement, the Parties shall work
diligently and promptly to develop mutually agreeable procedures regarding
electronic delivery ("Electronic Delivery Procedures" or "Procedures"). The
Procedures shall address matters such as: (a) the security and confidentiality
of information to be transmitted using electronic delivery, (b) the nature of
any systems integration or protocols necessary or appropriate to facilitate the
accurate and timely electronic delivery of information between or among the
Parties or the accurate and timely electronic delivery of any information
required by law to be delivered to Fund shareholders and/or existing or
prospective Contract owners (collectively, "required information"), (c) the
format of any information to be delivered by AVIF or AIM to INSURER and the
timing of such delivery, (d) the maintenance of any books and records to be
stored electronically, and (e) the backup plans to be followed in the event of
any failed electronic delivery. Notwithstanding any other provision herein, in
the absence of an agreement among the Parties on the Electronic Delivery
Procedures, INSURER shall not use electronic delivery to transmit any
information to AVIF or AIM, or to disseminate any required information prepared
by or concerning AVIF, AIM, or any Fund to any Fund shareholder or existing or
prospective Contract owners and shall instead communicate or disseminate the
same using the other means specified in this Agreement.
22.3 FAILED ELECTRONIC DELIVERY
INSURER shall immediately notify AVIF and AIM of any failed electronic
delivery, along with a description of the steps INSURER proposes to take to
rectify the same; provided, however, that in the event of any failed electronic
delivery of any required materials, INSURER shall timely deliver the same in
paper format.
22.4 DEFINITION OF "ELECTRONIC"
As used in this Agreement, the term "electronic" shall have the same
meaning as given to it in Section 106 of E-SIGN, as the same may be amended from
time to time.
25
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
AIM VARIABLE INSURANCE FUNDS
Attest: By:
-------------------------- ------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxx
Title Assistant Secretary Title: Senior Vice President
A I M DISTRIBUTORS, INC.
Attest: By:
-------------------------- ------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxx
Title: Assistant Secretary Title: President
JEFFERSON NATIONAL LIFE INSURANCE
COMPANY, on behalf of itself and
its separate accounts
Attest: By:
-------------------------- ------------------------------
Name: Name:
-------------------------- -------------------------------
Title: Title:
-------------------------- -------------------------------
INVIVA SECURITES CORPORATION
Attest: By:
-------------------------- -------------------------------
Name: Name:
-------------------------- -------------------------------
Title: Title:
-------------------------- -------------------------------
26
SCHEDULE A
FUNDS AVAILABLE UNDER THE CONTRACTS
AIM VARIABLE INSURANCE FUNDS
AIM V.I. (Series II Shares):
Basic Value Fund
Mid Cap Core Fund
SEPARATE ACCOUNTS UTILIZING THE FUNDS
Jefferson National Variable Annuity Account C
Jefferson National Variable Annuity Account E
Jefferson National Variable Annuity Account F
Jefferson National Variable Annuity Account G
Jefferson National Variable Annuity Account H
Jefferson National Variable Annuity Account I
Jefferson National Variable Account L
CONTRACTS FUNDED BY THE SEPARATE ACCOUNTS
CVIC-2000
CVIC-2001
CVIC-2004
CVIC-2005
22-4056
22-4025
32-4000
32-4002
32-4003
22-4047
22-4048
27
SCHEDULE B
AIM'S PRICING ERROR POLICIES
DETERMINATION OF MATERIALITY
In the event that AIM discovers an error in the calculation of a Fund's net
asset value, the following policies will apply:
If the amount of the error is less than $.01 per share, it is considered
immaterial and no adjustments are made.
If the amount of the error is $.01 per share or more, then the following
thresholds are applied:
a. If the amount of the difference in the erroneous net asset value and
the correct net asset value is less than .5% of the correct net asset
value, AIM will reimburse the affected Fund to the extent of any loss
resulting from the error. No other adjustments shall be made.
b. If the amount of the difference in the erroneous net asset value and
the correct net asset value is .5% of the correct net asset value or
greater, then AIM will determine the impact of the error to the
affected Fund and shall reimburse such Fund (and/or JNL, as
appropriate, such as in the event that the error was not discovered
until after JNL processed transactions using the erroneous net asset
value) to the extent of any loss resulting from the error. To the
extent that an overstatement of net asset value per share is detected
quickly and JNL has not mailed redemption checks to Participants, JNL
and AIM agree to examine the extent of the error to determine the
feasibility of reprocessing such redemption transaction (for purposes
of reimbursing the Fund to the extent of any such overpayment).
REPROCESSING COST REIMBURSEMENT
To the extent a reprocessing of Participant transactions is required pursuant to
paragraph (b), above, AIM shall reimburse JNL for JNL's reprocessing costs in an
amount not to exceed $1.00 per Contract affected by $10 or more.
The Pricing Policies described herein may be modified by AVIF as approved by its
Board of Trustees. AIM agrees to use its best efforts to notify JNL at least
five (5) days prior to any such meeting of the Board of Trustees of AVIF to
consider such proposed changes.
28
SCHEDULE C
EXPENSE ALLOCATIONS
LIFE COMPANY AVIF / AIM
----------------------------------------------------------- -------------------------------------------------
preparing and filing the Account's registration Preparing and filing the Fund's registration
statement statement
text composition for Account prospectuses and text composition for Fund prospectuses and
supplements supplements
text alterations of prospectuses (Account) and text alterations of prospectuses (Fund) and
supplements (Account) supplements (Fund)
printing Account and Fund prospectuses and a camera ready Fund prospectus
supplements
text composition and printing Account SAIs text composition and printing Fund SAIs
mailing and distributing Account SAIs to policy mailing and distributing Fund SAIs to policy
owners upon request by policy owners owners upon request by policy owners
mailing and distributing prospectuses (Account and
Fund) and supplements (Account and Fund) to policy
owners of record as required by Federal Securities
Laws and to prospective purchasers
text composition (Account), printing, mailing, and text composition of annual and semi-annual reports
distributing annual and semi-annual reports for (Fund)
Account (Fund and Account as, applicable)
text composition, printing, mailing, distributing, text composition, printing, mailing, distributing
and tabulation of proxy statements and voting and tabulation of proxy statements and voting
instruction solicitation materials to policy instruction solicitation materials to policy
owners with respect to proxies related to the owners with respect to proxies related to the Fund
Account
preparation, printing and distributing sales
material and advertising relating to the Funds,
insofar as such materials relate to the Contracts
and filing such materials with and obtaining
approval from, the SEC, the NASD, any state
insurance regulatory authority, and any other
appropriate regulatory authority, to the extent
required
29
