BUSINESS AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of April, 2003 (the
"Effective Date") by and 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); Jefferson
Pilot Variable Corporation (the "Distributor"), a corporation organized under
the laws of the State of North Carolina; AMERICAN FUNDS DISTRIBUTORS, INC.
("AFD"), a corporation organized under the laws of the State of California; 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 American Funds Insurance Series (the "Series") as investment
options (the "Contracts");
WHEREAS, JPLA has established pursuant to the insurance law of the State of
New Jersey one or more separate accounts (each, an "Account") with respect to
the Contracts and has or will register each Account 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") (unless the Account is exempt from such registration);
WHEREAS, the Contracts, which are or will be registered (unless exempt from
such registration) by JPLA with the Commission for offer and sale, will be in
compliance with all applicable laws prior to being offered for sale;
WHEREAS, the Distributor, a broker-dealer registered under the Securities
Exchange Act of 1934 (the "1934 Act") and a member of the National Association
of Securities Dealers, Inc. (the "NASD"), will serve as principal underwriter of
the Contracts and will arrange for the distribution of the Contracts;
WHEREAS, AFD, a broker-dealer registered under the 1934 Act, a member of
the NASD, and the principal underwriter of the shares of the Series, will
provide certain marketing assistance in connection with the Contracts;
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, 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, Class 2 shares of certain Funds in the Series will be available as
an underlying investment to the Contracts pursuant to the terms of a Fund
Participation Agreement among the Series, CRMC and JPLA to be executed in the
form attached hereto as EXHIBIT A (the "Fund Participation Agreement"); and
WHEREAS, CRMC, by virtue of an Investment Advisory and Service Agreement
between CRMC and the Series, will serve as investment adviser to the Series, as
the term "investment adviser" is defined in the 1940 Act.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants and conditions set forth herein, and for other good and valuable
consideration, JPLA, (on behalf of itself and each Account), the Distributor,
AFD and CRMC hereby agree as follows:
DUTIES OF JPLA
1. CRMC will make available for use in the Contracts certain Funds that it
has in the Series, as described in the Fund Participation Agreement.
2. JPLA will administer the Contracts and the Accounts, including all
Contract owner service and communication activities, such as: filing any reports
or other filings required by any law or regulation; establishing each Account;
creating the Contracts, confirmation and other administrative forms or
documents; and obtaining all required regulatory approvals to permit the sale
and maintenance of the Contracts.
3. JPLA will not distribute any prospectus, sales literature, advertising
material or any other printed matter or material relating to the Contracts or
the Series, if, to its knowledge, any of the foregoing contains any material
misstatements.
4. JPLA will provide to AFD and/or CRMC, upon AFD's and/or CRMC's request,
at least one complete copy of all registration statements, prospectuses,
statements of additional information, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions or requests for no-action letters that may have a material impact on
the operation of the Series, and all amendments to any of the above, that relate
to the Contracts. JPLA will advise AFD and CRMC immediately of:
(a) the issuance by the Commission of any stop order suspending the
effectiveness of the registration statement of the Contracts or
the initiation of any proceedings for that purpose;
(b) the institution of any regulatory proceeding, investigation or
hearing involving the offer or sale of the Contracts of which it
becomes aware; or
(c) the occurrence of any material event that, if known, makes untrue
any statement made in the registration statement of the Contracts
or the Series
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or which requires the making of a change therein in order to make
any statement made therein not misleading.
5. Other than the 12b-1 fees provided for in the Fund Participation
Agreement and as provided below, JPLA and the Distributor will bear their
respective expenses under this Agreement, including:
(a) the cost of providing service to Contract owners;
(b) the expenses and fees of registering or qualifying the
Contracts and the Account under federal or state laws;
(c) any expenses incurred by JPLA employees in assisting AFD
and/or CRMC in performing AFD's and/or CRMC's duties
hereunder;
provided, however, that pursuant to Paragraph 9 of the Fund Participation
Agreement, 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 the Fund Participation Agreement.
6. JPLA or its agents will receive and process applications and purchase
payments in accordance with the terms of the Contracts and the current
prospectus. All applications for Contracts are subject to acceptance or
rejection by JPLA in its sole discretion.
7. JPLA shall amend its registration statement for its Contracts under the
1933 Act and the 1940 Act from time to time as required by law, and, should it
ever be required, under the state securities laws, in order to effect the
continuous offering of its Contracts; and JPLA shall file for approval of the
Contracts under state insurance laws, when necessary, and to maintain
registration of the Accounts (unless the Accounts are exempt from such
registration) under the 1940 Act.
8. JPLA may invoke its then existing limits on transfers as stated in the
Contracts or in a Contract's prospectus. 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.
DUTIES OF DISTRIBUTOR
9. JPLA acknowledges that the distribution of Contracts pursuant to this
Agreement will take place primarily through its registered representatives. AFD
and CRMC each acknowledge, however, that the Distributor and JPLA have selling
agreements with certain non-
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affiliated broker-dealers ("Members") for additional distribution of the
Contracts through the Members' registered representatives. Subject to the
following paragraph, JPLA agrees to provide to AFD and CRMC on a monthly basis
in writing information on a Fund basis regarding the volume of sales of the
Contracts and the name of each registered representative of the Members selling
the Contracts.
Any selling agreement between Distributor and a Member and affiliated or
unaffiliated broker-dealers ("Members") described in this Paragraph 9 will
provide that:
(a) each Member will distribute the Contracts only in those
jurisdictions in which the Contracts are registered or
qualified for sale and only through duly licensed registered
representatives of the Members who are properly insurance
licensed with JPLA to sell the Contracts in the applicable
jurisdiction(s);
(b) all applications and initial and subsequent payments under
the Contracts collected by the Member will be remitted
promptly by the Member to JPLA at such address as it may
from time to time designate; and
(c) each Member will comply with all applicable federal and
state laws, rules and regulations.
10. The Distributor represents that any exchanges or replacements of
existing variable insurance policies and contracts with the Contracts will be
effected in compliance with all applicable federal and state securities rules
and regulations.
11. The Distributor will promptly provide Members with current
prospectuses, and any supplements thereto, for the Contracts and for the Series.
The Distributor will use reasonable efforts to ensure that its registered
representatives deliver only the currently effective prospectuses of the
Contracts and the Series to existing clients.
12. The Distributor will use reasonable efforts to provide information and
marketing assistance to its registered representatives and to Members, including
preparing and providing such registered representatives with advertising
materials and sales literature, and other promotional or marketing materials.
The Distributor will provide wholesaling and marketing services with respect to
the Contracts.
13. The Distributor will use reasonable efforts to ensure that any sales
literature and advertising materials it disseminates with respect to the
Contracts conforms with the requirements of all pertinent federal and state laws
and rules and regulations thereunder. AFD shall have the right to approve all
sales material that mentions AFD's name and/or the Series (the "AFD Material")
prior to its use. The Distributor shall send all AFD Material to AFD's Marketing
Coordinator (Xxxxx Xxxx) at the AFD address listed in Paragraph 46 of this
Agreement or such other person as AFD may direct the Distributor in writing (any
such person shall be referred to as the "AFD Reviewer"). The AFD Material will
be deemed approved unless the
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AFD Reviewer notifies the JPLA Reviewer (as herein defined) of any required
changes within five business days of his/her receipt of the AFD Material. No
review of sales material produced by JPLA shall be necessary if all references
contained in such materials regarding AFD and/or the Series are identical to
those references that appear in the Series' current prospectus or statement of
additional information.
JPLA shall have the right to approve all sales material that mentions
JPLA's and/or the Distributor's name (the "JPF Material") prior to its use. AFD
and/or CRMC shall send all JPF Material to JPLA's Marketing Representative at
the New Hampshire address listed in Paragraph 46 of this Agreement or such other
person as JPLA may direct AFD and/or CRMC in writing. JPF Material will be
deemed approved unless the reviewer for JPLA notifies the AFD and/or CRMC of any
required changes within five business days of his/her receipt of JPF Material.
No review of sales material produced by the AFD and/or the Series shall be
necessary if all references contained in such materials regarding JPLA and/or
the Distributors are identical to those references that appear in JPLA's current
Contract prospectus(es) or statement(s) of additional information.
14. The Distributor will be responsible for filing sales literature and
advertising materials, where necessary, with appropriate regulatory authorities,
including the NASD, used in connection with its marketing efforts for the
Contracts.
15. The Distributor will not distribute any prospectus, sales literature,
advertising material or any other printed matter or material relating to the
Contracts or the Series, if, to its knowledge, any of the foregoing contains any
material misstatements.
16. Subject to Paragraph 5 herein, the Distributor will bear all its
expenses of providing services under this Agreement, including the costs
attributable to wholesaling efforts, advertising, and producing and distributing
sales literature and prospectuses used by its registered representatives and the
Members with prospective Contract owners, provided that, pursuant to Paragraph 9
of the Fund Participation Agreement, the Series shall bear the expenses for the
cost of registration of its shares, preparation of its 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 the Fund Participation Agreement.
17. The Distributor will provide to AFD and/or CRMC, upon AFD's and/or
CRMC's request, at least one complete copy of all registration statements,
prospectuses, statements of additional information, reports, solicitations for
voting instructions, sales literature and other promotional materials,
applications for exemptions or requests for no-action letters, and all
amendments to any of the above, that relate to the Contracts and materially
impact the Series. The Distributor will advise AFD and CRMC upon becoming aware
of:
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(a) the institution of any regulatory proceeding, investigation
or hearing involving the offer or sale of the Contracts of
which they become aware and which materially impact the
Series; or
(b) the occurrence of any material event, if known, which makes
untrue any statement made in the registration statement of
the Contracts or the Series or which requires the making of
a change therein in order to make any statement made therein
not misleading.
DUTIES OF AFD
18. AFD will bear its expenses of providing services under this Agreement.
AFD will conduct training of JPLA wholesalers regarding CRMC's approach to
investment management and specific Subaccount positioning and sales. Training
will include initial hire training, and from time to time, refresher training.
19. AFD will furnish to JPLA and/or the Distributor such information with
respect to the Series in such form as JPLA and/or the Distributor may reasonably
request. AFD will advise JPLA and/or the Distributor upon becoming aware 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 proceedings for that
purpose;
(b) the institution of any proceeding, investigation or hearing
involving the offer or sale of the Series of which it
becomes aware; or
(c) the occurrence 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.
DUTIES OF CRMC
20. CRMC agrees to allow JPLA to include in the Contracts certain Funds
described in the Fund Participation Agreement. CRMC will cause the Series: (a)
to make available for use in the Contracts the Funds in the Series, as described
in the Fund Participation Agreement and (b) to adequately diversify the Funds of
the Series, pursuant to the requirements of Section 817(h) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder relating to the
diversification requirements for variable annuity, endowment and life insurance
contracts.
21. CRMC will furnish to JPLA and/or the Distributor such information with
respect to the Series in such form as JPLA and/or the Distributor may reasonably
request. CRMC will advise JPLA and the Distributor upon becoming aware of:
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(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 proceedings for that
purpose;
(b) the institution of any proceeding, investigation or hearing
involving the offer or sale of the Series of which it
becomes aware; or
(c) the occurrence 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.
22. CRMC will bear its expenses of providing services under this Agreement.
23. The Series will pay JPLA a Rule 12b-l service fee to be accrued daily
and paid monthly at an annual rate of 0.25% of the average daily net assets of
the Class 2 assets 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 so long as the
Series' 12b-1 plan is effective with respect to the Class 2 shares of a Fund.
Such payments shall be calculated by the Series and be paid by the Series to
JPLA as soon as practicable after the end of each month and in any event within
thirty days.
JOINT DUTIES
24. All the parties to this Agreement will cooperate in the development of
advertising, sales literature and all other sales materials to be used with
respect to the Funds.
25. The parties shall coordinate with each other in the filing with the
Commission of amendments to the registration statements for the Contracts (if
required by law) and for the Series, respectively.
26. Each of the parties hereto agrees: (a) to comply with all laws
applicable to it in the sale of Contracts and (b) to refrain from participating,
cooperating, or assisting in any way with its or any third party's (i)
development of marketing programs or other activities (written or oral) which
directly encourage exchanges from the Contracts or (ii) creation of broker
and/or client marketing tools which provide direct comparisons between the
Contracts and any other investment products directly targeting the holders of
the Contracts to exchange or transfer assets from the Contracts, unless such
marketing programs or other activities or broker or client tools relate to
variable insurance products issued by JPLA or an affiliate; or if agreed to by
the parties.
REPRESENTATIONS AND WARRANTIES
27. JPLA represents and warrants to AFD and CRMC that:
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(a) each of the recitals applicable to it and/or each Account is
true and correct;
(b) a registration statement under the 1933 Act and under the 1940
Act (if required by law) with respect to the Contracts and each
Account has been or will be filed with the Commission (a copy of
which will be delivered to AFD, upon request, when effective),
and copies of any and all amendments thereto will be forwarded to
AFD, upon request, at the time that they are filed with the
Commission (if required by law);
(c) each such registration statement (if required by law) and any
further amendments or supplements thereto will, when they become
effective, 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 statements
therein not misleading; provided, however, that this
representation and warranty shall not apply to any statement or
omission made in reliance upon and in conformity with the
information furnished in writing to JPLA or the Distributor by
AFD or CRMC expressly for use therein;
(d) JPLA is validly existing as a mutual life insurance company under
the laws of the state of New Jersey, with power (corporate or
other) to own its properties and conduct its business, as
described in the prospectus for the Contracts, and has been duly
qualified for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business to the extent such
qualification is required;
(e) the Contracts to be issued through the Account have been duly and
validly authorized and, when issued and delivered against payment
therefor as provided in the prospectus (if a prospectus is
required by law) and in the Contracts, will be duly and validly
issued, and will conform to the description of the Contracts
contained in the prospectuses (if a prospectus is required by
law);
(f) the performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any statute, any indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to which
JPLA is a party or by which JPLA is bound, JPLA's charter as a
life insurance company or By-Laws or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over JPLA or any of their properties; and no
consent, approval, authorization or order of any court or
governmental agency or body which
8
has not been obtained by the Effective Date of this
Agreement is required for the consummation by JPLA of the
transactions contemplated by this Agreement;
(g) there are no material legal or governmental proceedings
pending to which JPLA or the Account is a party or of which
any property of JPLA or the Account is subject, other than
as set forth in the prospectus relating to the Contracts,
and other than litigation incidental to the kind of business
conducted by JPLA which, if determined adversely to JPLA,
would not individually or in the aggregate have a material
adverse effect on the financial position, surplus or
operations of JPLA;
(h) any information furnished in writing by JPLA to AFD or CRMC
for use in the registration statement or annual report of
the Series 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 statements
therein not misleading, nor result in the Series'
registration statement's failing to materially conform in
all respects to the requirements of the 1933 Act and 1940
Act and the rules and regulations thereunder; and
(i) JPLA will materially comply with all applicable requirements
of state insurance laws and regulations in connection with
the Contracts.
28. The Distributor represents and warrants to AFD and CRMC that:
(a) each of the recitals applicable to it is true and correct;
(b) The Distributor is validly existing as a corporation under
the laws of the State of North Carolina, and it is a
broker-dealer duly registered with the Commission pursuant
to the 1934 Act and is a member in good standing of the
NASD, with power (corporate or other) to own its properties
and conduct its business, and has been duly qualified for
the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business to the extent
such qualification is required;
(c) there are no material legal or governmental proceedings
pending to which the Distributor is a party or of which any
property of the Distributor is subject, other than as set
forth in the prospectus relating to the Contracts, and other
than litigation incidental to the kind of business conducted
by the Distributor which, if determined adversely to the
Distributor, would not individually or in the aggregate have
a material adverse effect on the financial position, surplus
or operations of the Distributor;
(d) any information furnished in writing by the Distributor to
AFD or CRMC
9
for use in the registration statement or annual report of
the Series 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 statements
therein not misleading, nor result in the registration
statement's failing to conform materially in all respects to
the requirements of the 1933 Act and 1940 Act and the rules
and regulations thereunder;
(e) the Distributor will comply with all applicable requirements
of state insurance laws and regulations in connection with
the sale of the Contracts; and
(f) the Distributor will not pay commissions to persons who, to
the best of the Distributor's knowledge, are not
appropriately licensed in a manner as to comply with
applicable state insurance laws and regulations.
29. AFD and CRMC represent and warrant to JPLA and the Distributor
that:
(a) each of the recitals applicable to it, them, and/or the
Series is true and correct;
(b) a registration statement under the 1933 Act (File
No. 2-86838) and under the 1940 Act (File No. 811-3857) with
respect to the Series has been filed with the Commission in
the form previously delivered to JPLA and the Distributor,
and copies of any and all amendments thereto will be
forwarded to JPLA at the time that they are filed with the
Commission;
(c) the registration statement for the Series and any further
amendments or supplements thereto will, when they become
effective, 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 statements therein not misleading;
provided, however, that this representation and warranty
shall not apply to any statement or omission made in
reliance upon and in conformity with the information
furnished in writing to AFD or CRMC by JPLA or the
Distributor expressly for use therein;
(d) AFD is validly existing as a corporation under the laws of
the State of California and it is a broker-dealer duly
registered with the Commission pursuant to the 1934 Act and
is a member in good standing of the NASD, with power
(corporate or other) to own its properties and conduct its
business, and has been duly qualified for the transaction of
business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or
conducts any business to the extent such qualification is
required;
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(e) CRMC is validly existing as a corporation under the laws of
the State of Delaware and it is an investment adviser duly
registered with the Commission pursuant to the Investment
Advisers Act of 1940, with power (corporate or other) to own
its properties and conduct its business, and has been duly
qualified for the transaction of business and is in good
standing under the laws of each other jurisdiction in which
it owns or leases properties, or conducts any business to
the extent such qualification is required;
(f) the shares to be issued by the Series have been duly and
validly authorized and, when issued and delivered against
payment therefor as provided in the Series prospectus, will
be duly and validly issued, and will conform to the
description of such shares contained in that prospectus;
(g) the performance of duties under this Agreement by AFD and
CRMC will not result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
statute, any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which AFD or
CRMC is a party or by which AFD or CRMC is bound, the
Articles of Incorporation or By-Laws of AFD or CRMC, or any
order, rule or regulation of any court or governmental
agency or body having jurisdiction over AFD or CRMC or its
property;
(h) there are no material legal or governmental proceedings
pending to which AFD or CRMC is a party or of which any
property of AFD or CRMC is subject, other than as set forth
in the prospectus relating to the Series, and other than
litigation incidental to the kind of business conducted by
AFD or CRMC which, if determined adversely to AFD or CRMC,
would not individually or in the aggregate have a material
adverse effect on the financial position, surplus or
operations of AFD or CRMC;
(i) CRMC and AFD will use reasonable efforts to ensure that no
offering, sale or other disposition of the Contracts will be
made until it has been notified by JPLA that the subject
registration statements (if required by law) have been
declared effective and that the Contracts have been released
for sale by JPFinancial, and that such offer, sale or other
disposition shall be limited to those jurisdictions that
have approved or otherwise permit the offer and sale of the
Contracts by JPLA;
(j) any information furnished in writing by AFD or CRMC to JPLA
or the Distributor for use in a registration statement (if
required by law) of the Contracts 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 statements therein not misleading, nor result in
the registration
11
statement's failing to materially conform in all respects to
the requirements of the 1933 Act and the rules and
regulations thereunder; and
(k) AFD will comply with all applicable requirements of state
broker-dealer regulations and the 1934 Act as each applies
to AFD and shall conduct its affairs in accordance with the
rules of the NASD.
INDEMNIFICATION
30. AFD and/or CRMC agree to indemnify JPLA and/or the Distributor (or any
affiliate, control person, shareholder, director, officer, employee or agent of
JPLA and/or the Distributor) from, and hold them harmless against, any and all
losses, claims, liabilities incurred (including amounts paid in settlement with
the written consent of AFD and/or CRMC) or litigation (including reasonable
legal fees and costs relating to the investigation and/or defense of any action)
arising out of any act or omission of AFD and/or CRMC (or those of its
affiliates) relating to:
(a) rendering services under, or breaching, this Agreement;
(b) the failure by the Series or CRMC to adequately diversify
the various Funds of the Series, pursuant to the
requirements of Section 817(h) of the Internal Revenue Code
of 1986, as amended, and the regulations thereunder relating
to the diversification requirements for variable annuity,
endowment and life insurance contracts;
(c) the failure by the Series or CRMC to supply JPLA with
information sufficient to adequately calculate its
accumulation and/or annuity unit values as required by law
and the registration statement (if required by law) for the
Account;
(d) unlawful conduct, bad faith, willful misfeasance, or gross
negligence on the part of AFD and/or CRMC; or
(e) the failure by the Series and CRMC to invest the assets of
each Fund in accordance with the Fund's investment
objective, policies and restrictions;
provided, however, that indemnification will not be provided hereunder for any
such liability that results from the actions of JPLA and/or the Distributor or
from JPLA's and/or the Distributor's failure to fulfill their respective duties
and obligations arising under this Agreement.
31. JPLA and/or the Distributor agree to indemnify AFD and/or CRMC (or
any affiliate, control person, shareholder, director, officer, employee or agent
of AFD and/or CRMC) from, and hold them harmless against, any and all losses,
claims, liabilities incurred (including amounts paid in settlement with the
written consent of JPLA and/or the Distributor) or litigation (including
reasonable legal fees and costs relating to the defense of any action) arising
out of any
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act or omission of JPLA and/or the Distributor (or of its affiliates) relating
to:
(a) rendering services under, or breaching, this Agreement; or
(b) unlawful conduct, bad faith, willful misfeasance, or gross
negligence on the part of JPLA and/or the Distributor;
provided, however, that indemnification will not be provided hereunder for any
such liability that results from the actions of AFD and/or CRMC or from AFD's
and/or CRMC's failure to fulfill their respective duties and obligations arising
under this Agreement.
32. Any party seeking indemnification (the "Potential Indemnitee") will
promptly notify any party from whom they intend to seek indemnification (each a
"Potential Indemnitor") of all demands made and/or actions commenced against the
Potential Indemnitee which may require a Potential Indemnitor to provide such
indemnification. At its option and expense, a Potential Indemnitor may retain
counsel and control any litigation for which it may be responsible to indemnify
a Potential Indemnitee under this Agreement.
33. With respect to any claim, the parties each shall give the other
reasonable access during normal business hours to its books, records and
employees and those books, records and employees within its control pertaining
to such claim and shall otherwise cooperate with one another in the defense of
any claim. Regardless of which party defends a particular claim, the defending
party shall give the other parties written notice of any significant development
in the case as soon as practicable, and such other party, at all times, shall
have the right to intervene in the defense of the case.
34. If a party is defending a claim and indemnifying the other party
hereto, and: (a) a settlement proposal is made by the claimant or (b) the
defending party desires to present a settlement proposal to the claimant, then
the defending party promptly shall notify the other party hereto of such
settlement proposal together with its counsel's recommendation. If the defending
party desires to enter into the settlement and the other party fails to consent
within five business days (unless such period is extended, in writing, by mutual
agreement of the parties hereto), then the other party, from the time it fails
to consent forward, shall defend the claim and shall further indemnify the
defending party for all costs associated with the claim which are in excess of
the proposed settlement amount.
Regardless of which party is defending the claim, if a settlement requires
an admission of liability by the non-defending party or would require the
non-defending party to either take action (other than purely ministerial action)
or refrain from taking action (due to an injunction or otherwise) (a "Specific
Performance Settlement"), the defending party may agree to such settlement only
after obtaining the express, written consent of the non-defending party. If a
non-defending party fails to consent to a Specific Performance Settlement, the
consequences described in the last sentence of the first paragraph of this
Paragraph 34 shall NOT apply.
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35. The parties shall use good faith efforts to resolve any dispute
concerning this indemnification obligation. Should those efforts fail to resolve
the dispute, the ultimate resolution shall be determined in a DE NOVO
proceeding, separate and apart from the underlying matter complained of, before
a court of competent jurisdiction. Either party may initiate such proceedings
with a court of competent jurisdiction at any time following the termination of
the efforts by such parties to resolve the dispute (termination of such efforts
shall be deemed to have occurred thirty days from the commencement of the same
unless such time period is extended by the written agreement of the parties).
The prevailing party in such a proceeding shall be entitled to recover
reasonable attorneys' fees, costs and expenses.
RULE 12b-1 FEE
36. If the Series 12b-1 plan is no longer effective or is no longer
applicable to the Funds in the Contracts (the "12b-1 Termination"), AFD, CRMC
and the Series shall discuss with JPLA, in good faith, alternate fee
arrangements and/or a reallocation of marketing expenses. If no new agreement is
reached within thirty days after the 12b-1 Termination (or at such later date
mutually acceptable to all of the parties), JPLA, at its option, may elect to
terminate this Agreement, and/or may elect to obtain an order of exemption
pursuant to Section 26(b) of the 1940 Act ("Substitution Order") for the Fund(s)
or a vote of Contract owners authorizing redemption and substitution of Fund
shares. The Series, AFD and CRMC shall cooperate with JPLA in obtaining and
implementing any such Substitution Order.
TERMINATION
37. This Agreement may be terminated:
(a) by mutual agreement at any time; or
(b) by any party at any time upon six months written notice to
the other parties; or
(c) at JPLA's option, pursuant to Paragraph 36 hereof.
(d) 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.
(e) at AFD or CRMC's option 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 publicity.
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38. If this Agreement terminates, the parties shall cooperate after
termination to effect an orderly windup of the business.
MISCELLANEOUS
39. This Agreement shall be governed by the laws of the State of
California.
40. This Agreement (along with the Fund Participation Agreement)
constitutes the entire agreement among the parties pertaining to the Contracts,
and supersedes any and all prior agreements, understandings, documents,
projections, financial data, statements, representations and warranties, oral or
written, express or implied, between the parties hereto and their respective
affiliates, representatives and agents in respect of the subject matter hereof.
If there should be any conflict between the terms of this Agreement and those of
the Fund Participation Agreement, the terms of the Fund Participation Agreement
shall govern.
41. This Agreement may be amended from time to time only by agreement in
writing of the parties.
42. No waiver of any provision nor consent to any exceptions to the terms
of this Agreement shall be effective unless that waiver or consent is executed
in writing by the parties and then only for the specific purpose, extent and
instance so provided.
43. 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 party 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.
44. This Agreement shall inure to the benefit of and be binding upon JPLA,
the Distributor, AFD and CRMC, and their respective successors and permitted
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person or corporation, other than the parties hereto
and their respective successors and permitted assigns, any legal or equitable
right, remedy or claim in respect of this Agreement or any provision herein
contained.
45. This Agreement and any amendment to it may be executed in one or more
counterparts. All of those counterparts shall constitute one and the same
agreement. Neither this Agreement nor any amendment shall become effective until
all counterparts have been fully executed and delivered.
46. All notices, requests, demands and/or other communications permitted or
required hereunder shall be in writing and shall be sent by nationally
recognized overnight courier, andlor by certified mail, return receipt
requested, addressed to each party (other than the Distributor) to
15
the individuals and at the address shown in the notice provisions of the Fund
Participation Agreement, or at such other address as a party has directed in
writing.
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
IF TO THE DISTRIBUTOR:
Jefferson Pilot Variable Corporation
Xxx Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxxxxx 00000
W. Xxxxxx Xxxxxxx, Vice President
IF TO AFD:
American Funds Distributors, Inc.
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, President
Facsimile No.: (000) 000-0000
WITH A COPY TO:
American Funds Distributors, Inc.
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Vice President and Senior Counsel,
Fund Business Management Group
Facsimile No.: (000) 000-0000
IF TO CRMC:
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:
16
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
A notice shall be presumed to have been received: (a) on the day after it
was sent if sent by overnight courier, so long as a receipt evidencing that it
was sent, in fact, by overnight courier is obtained or (b) on the day that the
recipient signs the receipt if sent by certified mail.
47. The provisions of this Agreement are severable. Should any provision
hereof be held unlawful or invalid by any competent authority, the remainder of
the Agreement shall remain in full force and effect.
48. The provisions contained in Paragraphs 2, 4, 5-8, 17, 19-23, 25-26,
30-35 and 38-48 shall survive the termination of this Agreement for so long as
any of the Series shares remain as investment options in any of the Contracts.
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 LIFE AMERICA INSURANCE COMPANY
(ON BEHALF OF ITSELF AND EACH ACCOUNT)
Attest:
/s/ XXXXX XXXXXXXX
--------------------------- By: /s/ XXXXXXXX XXXXX
----------------------
Its: AVP
THE DISTRIBUTOR
JEFFERSON PILOT VARIABLE CORPORATION
Attest:
/s/ XXXX XXXXX XXXXXXXX
--------------------------- By: /s/ ILLEGIBLE
----------------------
Its: VP
AMERICAN FUNDS DISTRIBUTORS, INC.
Attest:
/s/ ILLEGIBLE
--------------------------- By: /s/ XXXXXXX XXXXXXX
----------------------
Its: Secretary
17
CAPITAL RESEARCH AND MANAGEMENT
COMPANY
Attest:
/s/ ILLEGIBLE
--------------------------- By: XXXXXXX XXXXXXX
----------------------
Its: Vice President and Secretary
18
