PARTICIPATION AGREEMENT
BETWEEN
JEFFERSON NATIONAL LIFE INSURANCE COMPANY
AND
CITIGROUP GLOBAL MARKETS INC.
THIS AGREEMENT, dated as of the ___ day of April, 2004 by and between
Jefferson National Life Insurance Company (the "Company"), a Texas stock life
insurance company, on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule A hereto, as may be amended from
time to time (each account hereinafter referred to as the "Account") and
Citigroup Global Markets Inc. ("CGM") (the "Distributor") on its own behalf and
on behalf of the funds set forth on Schedule A hereto ,
WHEREAS, Each Fund set forth in Schedule A hereto engages in business as an
open-end management investment company and is available to act as the investment
vehicle for separate accounts established for variable life insurance and
variable annuity contracts (the "Variable Insurance Products") to be offered by
insurance companies ("Participating Insurance Companies");
WHEREAS, Each Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and shares of each fund a registered under the Securities Act of 1933, as
amended (the "1933 Act");
WHEREAS, Salomon Brothers Variable Series Funds Inc on behalf of each fund
((the "Designated Funds"), has received an order from the Securities and
Exchange Commission ("SEC") granting Participating Insurance Companies and their
separate accounts exemptions from the provisions of Sections 9(a), 13(a) and
15(b) of the 1940 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to
the extent necessary to permit shares of the Trust to be sold to and held by
variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies and trustees of certain
qualified pension and retirement plans (the "Exemptive Order");
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by the
Account (the "Contracts"), and said Contracts are listed in Schedule A hereto,
as it may be amended from time to time by mutual written agreement;
WHEREAS, the Account is duly established and maintained as a segregated
asset account by the Company to set aside and invest assets attributable to the
aforesaid Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Funds managed by the
Adviser listed in Schedule A hereto, as it may be amended from time to time by
mutual written agreement on behalf of the Account to fund the aforesaid
Contracts;
WHEREAS, CGM serves as the distributor of the shares of each Designated Fund
and is authorized to sell such shares to the Company on behalf of the Account at
net asset value; and
NOW, THEREFORE, in consideration of their mutual promises, the Company and
CGM agree as follows:
ARTICLE I. SALE AND REDEMPTION OF FUNDS SHARES
1.1. Each Fund has granted to CGM authority to distribute the
Funds' shares, and has agreed to instruct, and has so instructed, CGM to make
available to the Company, for purchase on behalf of any Account, Fund shares of
the Designated Funds. Pursuant to such authority and instructions, the
Distributor agrees to make available to the Company for purchase on behalf of
the Account, shares of the Designated Funds such purchases to be effected at net
asset value in accordance with Section 1.3 of this Agreement. Notwithstanding
the foregoing, (i) Funds (other than those listed on Schedule A) in existence
now or that may be established in the future will be made available to the
Company only as CGM may so provide, and (ii) the Board of a Fund (the "Board")
may suspend or terminate the offering of shares of any Designated Fund or class
thereof, if such action is required by law or by regulatory authorities having
jurisdiction or if, in the sole discretion of the Board acting in good faith and
in light of its fiduciary duties under federal and any applicable state laws,
suspension or termination is necessary in the best interests of the shareholders
of such Designated Fund. CGM reserves the right, upon prior written notice to
the Company (given at the earliest practicable time), to take all actions,
including but not limited to, the dissolution, reorganization, liquidation,
merger or sale of all assets of a Fund upon the sole authorization of the Board,
acting in good faith.
1.2. CGM on behalf of the Funds shall accept for redemption, at
the Company's request, any full or fractional Designated Fund shares held by the
Company on behalf of the Account, such redemptions to be effected at net asset
value in accordance with Section 1.3 of this Agreement. Notwithstanding the
foregoing, (i) the Company shall not redeem Fund shares attributable to Contract
owners except in the circumstances permitted in Section 10.3 of this Agreement,
and (ii) the Funds may delay redemption of such shares of any Designated Fund to
the extent permitted by the 1940 Act and any rules, regulations or orders
thereunder.
1.3. Purchase and Redemption Procedures
(a) For purposes of Sections 1.1 and 1.2, the Company
shall be an agent of the Funds for the limited purpose of receiving and
accepting purchase and redemption requests on behalf of the Account (but not
with respect to any Fund shares that may be held in the general account of the
Company) for shares of those Designated Funds made available hereunder, based on
allocations of amounts to the Account or subaccounts thereof under the Contracts
and other transactions relating to the Contracts or the Account. Receipt and
acceptance of any such request (or relevant transactional information therefor)
on any day the New York Stock Exchange, Inc. is open for trading and on which a
Designated Fund calculates its net asset value (a "Business Day") pursuant to
the rules of the SEC by the Company as such limited agent of the Funds prior to
the time that the Funds ordinarily calculates its net asset value as described
from time to time in each Designated Fund's prospectus shall constitute receipt
and acceptance by the Designated Fund on that same Business Day, provided that
the Fund or its agent receives notice of such request by 8:30 a.m. Eastern Time
on the next following Business Day.
(b) The Company shall pay for shares of each Designated
Fund on the same day that it notifies the Fund or its agent of a purchase
request for such shares. Payment for Designated Fund shares shall be made in
federal funds transmitted to the Fund or other designated person by wire to be
received by 2:00 p.m. Eastern Time on the day the Fund is notified of the
purchase request for Designated Fund shares (which request may be net of
redemptions of shares). If federal funds are not received on time, such funds
will be invested, and Designated Fund shares purchased thereby will be issued,
as soon as practicable and the Company shall promptly, upon the Fund's request,
reimburse the Fund or CGM, as
2
appropriate, for any charges, costs, fees, interest or other expenses incurred
by the Funds or CGM in connection with any advances to, or borrowing or
overdrafts by, the Funds, or any similar expenses incurred by the Funds, as a
result of Fund transactions effected by the Fund based upon such purchase
request. Upon receipt of federal funds so wired, such funds shall cease to be
the responsibility of the Company and shall become the responsibility of the
Fund.
(c) Payment for Designated Fund shares redeemed by the
Account or the Company shall be made in federal funds transmitted by wire to the
Company or any other designated person on the next Business Day after the Fund
or its agent is properly notified of the redemption order of such shares (which
order shall be net of any purchase orders), except that the Fund may redeem
Designated Fund shares in assets other than cash and delay payment of redemption
proceeds to the extent permitted under Section 22(e) of the 1940 Act and any
rules thereunder, and in accordance with the procedures and policies of the Fund
as described in the then current prospectus and/or statement of additional
information ("SAI"). The Fund shall not bear any responsibility whatsoever for
the proper disbursement or crediting of redemption proceeds by the Company, the
Company alone shall be responsible for such action.
(d) Any purchase or redemption request for Designated
Fund shares held or to be held in the Company's general account shall be
effected at the net asset value per share next determined after the receipt and
acceptance of such request by the Fund or its agent, provided that, in the case
of a purchase request, payment for Fund shares so requested is received by the
Fund in federal funds prior to close of business for determination of such
value, as defined from time to time in each Designated Fund's prospectus.
(e) The Company shall not redeem Fund shares attributable
to the Contracts (as opposed to Fund shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract owner
initiated or approved transactions, (ii) as required by state and/or federal
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), (iii) upon 45 days
prior written notice to CGM, as permitted by an order of the SEC pursuant to
Section 26(c) of the 1940 Act, but only if a substitution of other securities
for the shares of the Designated Funds is consistent with the terms of the
Contracts, or (iv) as permitted under the terms of the Contract. Upon request,
the Company will promptly furnish to the Funds reasonable assurance that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contracts,
the Company shall not prevent Contract owners from allocating payments to a
Designated Fund that was otherwise available under the Contracts without first
giving the Funds 45 days notice of its intention to do so.
1.4. CGM on behalf of the Funds shall use its best efforts
to make the net asset value per share for each Designated Fund available to the
Company by 6:30 p.m. Eastern Time each Business Day, and in any event, as soon
as reasonably practicable after the net asset value per share for such
Designated Fund is calculated, and each Fund shall calculate such net asset
value in accordance with the Fund's prospectus. Neither any Designated Fund,
CGM, , nor any of their affiliates shall be liable for any information provided
to the Company pursuant to this Agreement, or any loss resulting from such
information, if such information is based on incorrect information supplied by
the Company or any other Participating Insurance Company to the Funds, or CGM.
1.4(a) If CGM provides materially incorrect share net asset value
information through no fault of the Company, the Separate Accounts shall be
entitled to an adjustment with respect to the Series shares purchased or
redeemed to reflect the correct net asset value per share.
3
1.4(b) The determination of the materiality of any net asset value
pricing error and its correction shall be based on the SEC's recommended
guidelines regarding these errors. Any material error in the calculation or
reporting of net asset value per share, dividend or capital gain information
shall be reported promptly to the Company upon discovery. CGM shall indemnify
and hold harmless the Company for such pricing error where the Company is
required to pay Contract Owners, participants or beneficiaries that have
selected a Fund as an investment option ("Contract owners"), and which amount is
due to the Fund's or its agents' material miscalculation and/or incorrect
reporting of the daily net asset value, dividend rate or capital gains
distribution rate. The Company shall submit an invoice to CGM or its agents for
such losses incurred as a result of the above. Should a material miscalculation
by the Fund or its agents result in a gain to the Company, the Company shall
immediately reimburse the applicable Funds or its agents for any material losses
incurred by the Fund or its agents as a result of the incorrect calculation.
Should a material miscalculation by the Fund or its agents result in a gain to
Contract owners, the Company will consult with CGM or its designee as to what
reasonable efforts shall be made to recover the money and repay the Fund, or its
agents. The Company shall then make such reasonable effort, to recover the money
and repay the Fund or its agents; but the Company shall not be obligated to take
legal action against Contract owners.
With respect to the material errors or omissions described above, this section
shall control over other indemnification provisions in this Agreement.
1.5. CGM on behalf of the Funds shall furnish notice (by wire or
telephone followed by written confirmation) to the Company as soon as reasonably
practicable of any income dividends or capital gain distributions payable on any
Designated Fund shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any Designated Fund shares in the form of additional shares of that Designated
Fund. The Company reserves the right, on its behalf and on behalf of the
Account, to revoke this election and to receive all such dividends and capital
gain distributions in cash. CGM or its agent on behalf of the Funds shall notify
the Company promptly of the number of Designated Fund shares so issued as
payment of such dividends and distributions.
1.6. Issuance and transfer of Fund shares shall be by book entry
only. Share certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Fund shares shall be recorded in an
appropriate ledger for the Account or the appropriate sub-account of the
Account.
1.7. (a) The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; Fund' shares may be sold to
other insurance companies (subject to Section 1.8 hereof) and the cash value of
the Contracts may be invested in other investment companies, provided, however,
that until this Agreement is terminated pursuant to Article X, the Company shall
promote the Designated Funds on the same basis as other funding vehicles
available under the Contracts. Unless otherwise agreed between the Company and
CGM, funding vehicles other than those listed on Schedule A to this Agreement
may be available for the investment of the cash value of the Contracts,
provided, however, (i) any such vehicle or series thereof, has investment
objectives or policies that are substantially different from the investment
objectives and policies of the Designated Funds available hereunder; (ii) the
Company gives the CGM 45 days written notice of its intention to make such other
investment vehicle available as a funding vehicle for the Contracts; and (iii)
unless such other investment company was available as a funding vehicle for the
Contracts prior to the date of this Agreement and the Company has so informed
CGM prior to their signing this Agreement, CGM consents in writing to the use of
such other vehicle, such consent not to be unreasonably withheld.
4
(b) The Company shall not, without prior notice to the
Funds (unless otherwise required by applicable law), take any action to operate
the Account as a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to
CGM(unless otherwise required by applicable law), induce Contract owners to
change or modify the Funds or change the Funds's investment adviser.
(d) The Company shall not, without prior notice to the
CGM, induce Contract owners to vote on any matter submitted for consideration by
the shareholders of the Funds in a manner other than as recommended by the
Board.
1.8. The Company acknowledges that, pursuant to Form 24F-2,
the Funds are not required to pay fees to the SEC for registration of its shares
under the 1933 Act with respect to its shares issued to an Account that is a
unit investment trust that offers interests that are registered under the 1933
Act and on which a registration fee has been or will be paid to the SEC (a
"Registered Account"). The Company agrees to provide the Funds each year within
60 days of the end of the Funds' fiscal year, or when reasonably requested by
CGM on behalf of the Funds, information as to the number of shares purchased by
a Registered Account and any other Account the interests of which are not
registered under the 0000 Xxx. The Company acknowledges that the Funds intends
to rely on the information so provided and represents and warrants that such
information shall be accurate.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. CGM on behalf of the Funds represents and warrants that (i)
the Funds are lawfully organized and validly existing under the laws of the
state of Maryland, (ii) the Funds are and shall remain registered under the 1940
Act, (iii) the Funds doand will comply in all material respects with the 1940
Act, (iv) Designated Fund shares sold pursuant to this Agreement are registered
under the 1933 Act (to the extent required by that Act) and are duly authorized
for issuance, (v) the Funds shall amend the registration statement for the
shares of the Designated Funds under the 1933 Act and the 1940 Act from time to
time as required in order to effect the continuous offering of such shares, (vi)
the Board has elected for each Designated Fund to be taxed as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and (v) shares of the Designated Funds will be sold only
to Participating Insurance Companies and their separate accounts and to persons
or plans that communicate to the Funds that they qualify to purchase shares of
the Designated Funds under Section 817(h) of the Code and the regulations
thereunder without impairing the ability of the Account to consider the Fund
investments of the Designated Funds as constituting investments of the Account
for the purpose of satisfying the diversification requirements of Section 817(h)
("Qualified Persons"). CGM on behalf of the Funds makes no representations or
warranties as to whether any aspect of the Designated Funds' operations,
including, but not limited to, investment policies, fees and expenses, complies
with the insurance laws and other applicable laws of the various states.
2.2. Reserved.
2.3. CGM represents and warrants that each Designated Fund has
complied and will use its best efforts to continue to comply with Section 817(h)
of the Code and Treasury Regulation Section 1.817-5, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts, and any amendments or
other modifications or successor provisions to such Section or Regulation. CGM
will make every reasonable effort (a) to notify the Company immediately upon
having a reasonable basis for believing that a breach of this Section 2.3 has
occurred,
5
and (b) in the event of such a breach, to adequately diversify the Designated
Fund so as to achieve compliance within the grace period afforded by Treasury
Regulation Section 1.817-5.
2.4. CGM represents and warrants that each Designated Fund is or
will be qualified as a Regulated Investment Company under Subchapter M of the
Code, that it or its designee will make every reasonable effort to maintain such
qualification (under Subchapter M or any successor or similar provisions) and
that the CGM will notify the Company immediately upon having a reasonable basis
for believing that a Designated Fund has ceased to so qualify or that it might
not so qualify in the future.
2.5. The Company represents and warrants that the Contracts (a)
are, or prior to issuance will be, registered under the 1933 Act, or (b) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 1933 Act. The Company further represents and warrants
that the Contracts will be issued and sold in compliance in all material
respects with all applicable federal securities and state securities and
insurance laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law, that it has legally and validly established
the Account prior to any issuance or sale thereof as a segregated asset account
under Texas insurance laws, and that it (a) has registered or, prior to any
issuance or sale of the Contracts, will register the Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts, or alternatively (b) has not
registered the Account in proper reliance upon an exclusion from registration
under the 1940 Act. The Company also represents and warrants that it and the
Account are Qualified Persons. The Company shall register and qualify the
Contracts or interests therein as securities in accordance with the laws of the
various states only if and to the extent required by applicable law.
2.6. The Company represents and warrants that the Contracts are
currently, and at the time of issuance shall be, treated as life insurance or
annuity contracts, under applicable provisions of the Code, and that it will
make every reasonable effort to maintain such treatment, and that it will notify
CGM immediately upon having a reasonable basis for believing the Contracts have
ceased to be so treated or that they might not be so treated in the future. In
addition, Company represents and warrants that each of its Accounts is a
"segregated asset account" and that interests in the Accounts 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. Company will use every reasonable effort to continue to
meet such definitional requirements, and it will notify CGM 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.
2.7. CGM represents and warrants that it is registered as a
broker-dealer with the SEC and that it is a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD"). CGM further
represents and warrants that it will sell shares of the Designated Funds in
accordance with applicable state and federal laws in all material respects.
2.8. CGM on behalf of the Funds represents and warrants that all
of its Funds, officers, employees, and other individuals or entities dealing
with the money and/or securities of the Funds are and shall continue to be at
all times covered by a blanket fidelity bond or similar coverage for the benefit
of the Funds in an amount not less than the minimum 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 shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
6
2.9. The Company represents and warrants that all of its
directors, officers, employees, and other individuals/entities employed or
controlled by the Company dealing with the money and/or securities of the
Account are covered by a blanket fidelity bond or similar coverage for the
benefit of the Account, in an amount not less than $5 million. The aforesaid
bond includes coverage for larceny and embezzlement and is issued by a reputable
bonding company. The Company agrees to hold for the benefit of the Funds and to
pay to the Funds any amounts lost from larceny, embezzlement or other events
covered by the aforesaid bond to the extent such amounts properly belong to the
Funds pursuant to the terms of this Agreement. The Company agrees to make all
reasonable efforts to see that this bond or another bond containing these
provisions is always in effect, and agrees to notify the Funds and the Adviser
in the event that such coverage no longer applies.
2.10 The Company agrees that: (a) it is responsible for having
in place anti-money laundering procedures which comply with Title II of the
United States Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism (USA Patriot) Act of 2001, as amended and the
rules promulgated thereunder, and any related state, self-regulatory
organization and SEC anti-money laundering laws, rules and regulations all local
laws in jurisdictions in which shares of the funds are distributed, (b) it is
solely responsible to take all reasonable steps to determine: (1) the true
identity of a plan's client, (2) the source of a plan's client's funds and (3)
that a plan's client is not involved in money laundering activities, and (c) it
is solely responsible to comply with any other "know your customer" requirements
in accordance with applicable law. Company is also responsible for implementing
procedures necessary to monitor a plan's client transactions in order to detect
attempted or actual money laundering in accordance with applicable law. Company
further agrees to provide Distributor, upon reasonable request, with
documentation relating to its anti-money laundering policies and analysis.
2.11 Company shall maintain records sufficient to identify the
date and time of receipt of all participant-level transactions involving its
clients and shall make such records available upon request for examination by
CGM, or its designated representative, at the request of the transfer agent or
by appropriate governmental authorities. Under no circumstances shall Company
change, alter or manipulate any participant-level transactions received by it in
good order.
2.12 Company represents that there are controls in place
designed to monitor and detect market timing.
2.13 Company represents that with respect to the compensation it
receives it will make or cause to be made disclosure of such payments in
accordance with applicable law.
ARTICLE III. VOTING
3.1. The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote Fund shares in accordance with instructions
received from Contract owners; and
7
(iii) vote Fundshares for which no instructions have been
received in the same proportion as Fund shares of
such Fund for which instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners or to the
extent otherwise required by law. The Company will vote Fund shares held in any
segregated asset account in the same proportion as Fund shares of such
Designated Fund for which voting instructions have been received from Contract
owners, to the extent permitted by law.
3.2. Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in a Designated Fund
calculates voting privileges as required by the Exemptive Order and consistent
with any reasonable standards that the Funds may adopt and provide in writing.
ARTICLE IV. PROSPECTUSES AND PROXY STATEMENTS
4.1. The CGM or its agents shall provide the Company with as
many copies of the Funds' current prospectus (describing only the Designated
Funds listed on Schedule A), any supplements thereto or, to the extent permitted
and requested by Company, the Funds's profiles as the Company may reasonably
request. If requested by the Company in lieu thereof, the Funds or their agents
shall provide such documentation (including a "camera ready" final copy of such
documentation on diskette) and other assistance as is reasonably necessary in
order for the Company once each year (or more frequently if the prospectus for
the Funds is amended) to have the prospectus for the Contracts and the Funds's
prospectus or profile printed together in one or more documents. The Funds
agrees to cooperate with Company to provide the documents on a timely basis to
meet Company's reasonable deadline requirements for production.
4.2. The CGM or its agents shall provide the Company with
information regarding the Designated Funds' expenses, which information may
include a table of fees and related narrative disclosure for use in any
prospectus or other descriptive document relating to a Contract. The Company
shall provide prior written notice of any proposed modification of such
information, which notice will describe in detail the manner in which the
Company proposes to modify the information, agrees to provide the Funds or its
agent with an opportunity to review such proposed modification prior to its use
by the Company, and agrees not to use the proposed modification without the
consent of the Funds or its agent, which consent shall not be unreasonably
withheld.
4.3. The CGM or its agents shall provide the Company with copies
of the Designated Funds' proxy material, reports to shareholders (describing
only the Designated Funds listed on Schedule A), and other communications to
shareholders (each, a "Shareholder Communication") in such quantity as the
Company shall reasonably require for distributing to Contract owners. If
requested by the Company in lieu thereof, the CGM or its agents shall provide
Shareholder Communications in "camera ready" format on diskette. The CGM agrees
to cooperate with Company to provide such Shareholder Communications on a timely
basis to meet Company's reasonable deadline requirements for production and
delivery.
ARTICLE V. SALES MATERIAL AND INFORMATION
5.1. The Company shall furnish, or shall cause to be furnished,
to CGM each piece of sales literature or other promotional material that the
Company develops and in which the Funds (or a Designated Fund thereof), CGM or
its affliates are named. No such material shall be used until approved in
writing by CGM in writing, and CGM will use its reasonable best efforts to
review such sales literature or promotional material within ten Business Days
after receipt of such material. CGM reserve the right to
8
reasonably object in writing to the continued use of any such sales literature
or other promotional material in which the Funds (or a Designated Fund thereof),
CGM or its affliates are named, and no such material shall be used if CGM or the
Adviser so objects.
5.2. The Company shall not give any information or make any
representations or statements on behalf of the Funds or CGM or concerning the
Funds or the Adviser or CGM in connection with the sale of the Contracts other
than the information or representations contained in the registration statement
or prospectus or SAI for the Funds shares, as such registration statement and
prospectus or SAI may be amended or supplemented from time to time, or in
reports or proxy statements for the Funds, or in sales literature or other
promotional material approved in writing by CGM, except with the written
permission of the Funds or its designee.
5.3. CGM or its respective designee, shall furnish, or cause to
be furnished, to the Company, each piece of sales literature or other
promotional material that it develops and in which the Company, and/or its
Account, is named. No such material shall be used until approved in writing by
the Company, and the Company will use its best efforts to review such sales
literature or promotional material within ten Business Days after receipt of
such material. The Company reserves the right to reasonably object to the
continued use of any such sales literature or other promotional material in
which the Company and/or its Account is named, and no such material shall be
used if the Company so objects.
5.4. CGM shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account,
or the Contracts other than the information or representations contained in a
registration statement, prospectus (which shall include an offering memorandum,
if any, if the Contracts issued by the Company or interests therein are not
registered under the 1933 Act), or SAI for the Contracts, as such registration
statement, prospectus, or SAI may be amended or supplemented from time to time,
or in published reports for the Account which are in the public domain or
approved in writing by the Company for distribution to Contract owners, or in
sales literature or other promotional material approved in writing by the
Company or its designee, except with the permission of the Company.
5.5. The CGM or its designee will provide to the Company at
least one complete copy of all registration statements, prospectuses, SAIs,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Designated Funds or their shares,
promptly after the filing of such document(s) with the SEC or other regulatory
authorities.
5.6. The Company will provide to CGM at least one complete copy
of all registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Contracts or the Account, promptly after the filing of
such document(s) with the SEC or other regulatory authorities. The Company shall
provide to CGM, any complaints received from the Contract owners pertaining to a
Designated Fund.
5.7. For purposes of this Article IV, the phrase "sales
literature and other promotional materials" includes, but is not limited to, any
of the following that refer to the Funds, any Designated Fund or any affiliate
of the Funds: 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), sales literature (i.e., any written communication
distributed or made generally available to customers or the public, including
brochures, circulars, reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales literature,
9
or published article), educational or training materials or other communications
distributed or made generally available to some or all agents or employees, and
registration statements, prospectuses, SAIs, shareholder reports, proxy
materials, and any other Shareholder Communications distributed or made
generally available with regard to the Funds.
ARTICLE VI. FEES AND EXPENSES
6.1. Except as otherwise provided herein, no party to this
Agreement shall pay any fee or other compensation to any other party to this
Agreement. Except as otherwise provided herein, all expenses incident to
performance by a party under this Agreement shall be paid by such party.
6.2. CGM or its agent will pay the expenses associated with the
following: setting the prospectus and profiles in type; printing copies of the
prospectus and profiles to be delivered to existing Contract owners investing in
the Designated Funds; providing a reasonable number of copies of the SAI to the
Company for itself and for any current owner of a Contract who requests such
SAI; setting in type and printing the proxy materials and reports to
shareholders (including the costs of printing a prospectus that constitutes an
annual report); and the preparation of all statements and notices required by
any federal or state law.
6.3. Unless otherwise agreed, the Company shall bear the
expenses of printing copies of the current prospectus and profiles for the
Contracts; printing copies of the Funds' prospectus and profiles that are used
in connection with offering the Contracts; distributing the Funds' prospectus to
owners of Contracts issued by the Company; and of distributing the Funds' proxy
materials and reports to such Contract owners. If the prospectus for the
Contracts and the Funds' prospectus are printed together in one or more
documents, printing costs shall be allocated to reflect the Funds' share,
pursuant to Section 6.2, of the total costs for printing the Funds'
prospectus(s) to be delivered to existing Contract owners investing in a
Designated Fund, determined according to the number of pages of the Funds'
respective portions of the documents.
ARTICLE VII. POTENTIAL CONFLICTS
7.1 The parties acknowledge that the Designated Funds' shares
may be made available for investment to other Participating Insurance Companies.
In such event, CGM or its designee on behalf of the Designated Funds the will
monitor the Funds for the existence of any material irreconcilable conflict
between the interests of the contract owners of all Participating Insurance
Companies. An irreconcilable material conflict may arise for a variety of
reasons, including: (a) an action by any state insurance 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 Designated
Fund are being managed; (e) a difference in voting instructions given by
variable annuity contract and variable life insurance contract owners; or (f) a
decision by an insurer to disregard the voting instructions of contract owners.
CGM shall promptly inform the Company if they determine that an irreconcilable
material conflict exists and the implications thereof.
7.2 The Company agrees to promptly report any potential or
existing conflicts of which it is aware to CGM. The Company will assist CGM on
behalf of the Designated Funds in carrying out responsibilities under the
Exemptive Order by providing CGM with all information reasonably
10
necessary for them to consider any issues raised including, but not limited to,
information as to a decision by the Company to disregard Contract owner voting
instructions.
7.3 If it is determined by CGM on behalf of the Designated
Funds, that a material irreconcilable conflict exists that affects the interests
of Contract owners, the Company shall, in cooperation with other Participating
Insurance Companies whose contract owners are also affected, at its expense and
to the extent reasonably practicable (as determined by CGM or the Designated
Fund) take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (a) withdrawing the
assets allocable to some or all of the Accounts from any Designated Fund and
reinvesting such assets in a different investment medium, including (but not
limited to) another Designated Fund, or submitting the question of whether or
not such segregation should be implemented to a vote of all affected Contracts
owners and, as appropriate, segregating the assets of any appropriate group
(I.E., annuity contract owners, life insurance contract owners, or variable
contract owners of one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected Contract owners the
option of making such a change; and (b) establishing a new registered management
investment company or managed separate account.
7.4 If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at CGM's or the Designated Fund's election, to
withdraw the affected Account's investment in a Designated Fund and terminate
this Agreement with respect to such Account; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by CGM or the
Designated Fund. Any such withdrawal and termination must take place within 30
days after a Designated Fund gives written notice that this provision is being
implemented, subject to applicable law but in any event consistent with the
terms of the Exemptive Order. Until the end of such 30 day period, the
Designated Fund shall continue to accept and implement orders by the Company for
the purchase and redemption of Fund shares.
7.5 If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the affected Account's investment in a Designated Fund and terminate
this Agreement with respect to such Account within 30 days after the informs the
Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by CGM or the Designated Fund. Until the
end of such 30 day period, CGM on behalf of the Designated Funds shall continue
to accept and implement orders by the Company for the purchase and redemption of
shares of the Funds.
7.6 For purposes of section 7.3 through 7.6 of this Agreement,
CGM on behalf of the Designated Funds will determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Company be required to establish a new funding medium for the Contracts if
an offer to do so has been declined by vote of a majority of Contract owners
materially adversely affected by the irreconcilable material conflict. In the
event that CGM on behalf of the Designated Funds determines that any proposed
action does not adequately remedy any irreconcilable material conflict, then the
Company will withdraw the Account's investment in the Designated Funds and
terminate this Agreement within 30 days after CGM on behalf of the Designated
Funds inform the Company in writing of the foregoing determination; provided,
however, that such withdrawal and termination shall be limited to the extent
required by any such material irreconcilable conflict as determined by CGM.
11
7.7 The Company shall at least annually submit to CGM on
behalf of the Designated Funds such reports, materials or data as the Trustees
may reasonably request so that CGM on behalf of the Designated Funds may fully
carry out the duties imposed upon them by the Exemptive Order, and said reports,
materials and data shall be submitted more frequently if deemed appropriate by
CGM.
7.8 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the 1940 Act or the rules promulgated thereunder with respect to mixed or
shared funding (as defined in the Exemptive Order) on terms and conditions
materially different from those contained in the Exemptive Order, then the
parties to this Agreement, as appropriate, shall take such steps as may be
necessary (a) to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such rules are applicable; or (b) to conform this
Article VII to the terms and conditions contained in the Exemptive Order, as the
case may be.
ARTICLE VIII. INDEMNIFICATION
8.1. Indemnification By the Company
(a) The Company agrees to indemnify and hold harmless
each of the Funds, CGM, and each of their Funds/directors and officers, and each
person, if any, who controls the Funds, CGM, within the meaning of Section 15 of
the 1933 Act or who is under common control with the Funds, (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement
or alleged untrue statements of any material fact
contained in the registration statement, prospectus
(which shall include a written description of a
Contract that is not registered under the 1933 Act),
or SAI for the Contracts or contained in the
Contracts or sales literature 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 to the extent that such statement
or omission or such alleged statement or omission was
made in reliance upon and in conformity with
information furnished to the Company by or on behalf
of the Funds for use in the registration statement,
prospectus or SAI for the Contracts or in the
Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with
the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus, SAI, or sales literature of
the Funds not supplied by the Company or persons
under its control) or wrongful conduct of the
12
Company or its agents or persons under the Company's
authorization or control, with respect to the sale or
distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, SAI, or sales
literature of the Funds or any amendment thereof or
supplement thereto 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 information
furnished to the Funds by or on behalf of the
Company; or
(iv) arise as a result of any material failure by the
Company to provide the services and furnish the
materials required under the terms of this Agreement
(including a material failure, whether unintentional
or in good faith or otherwise, to comply with the
qualification requirements specified in Section 2.6
of this Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Company in this Agreement or arise out of or result
from any other material breach of this Agreement by
the Company; or
(vi) arise out of information provided to the Company
pursuant to this Agreement, or to any other
Participating Insurance Company pursuant to another
participation agreement, which information is based
on incorrect information supplied by the Company to
the Funds, Distributor or Adviser.
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
(b) The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of its obligations or
duties under this Agreement.
(c) The Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim 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 the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation, unless
such Indemnified Party's interests in such legal process are materially adverse
to those of the Company and indemnification is otherwise appropriate under this
Section 8.1, PROVIDED that the Company shall be liable
13
for the costs and expenses of different counsel for separate Indemnified Parties
for related claims or actions only to the extent that such Indemnified Parties'
interest in such legal process are materially adverse to each other. The Company
shall not settle or compromise any action of which it assumes the defense
without the consent of the affected Indemnified Parties unless the Indemnified
Parties are thereby released of all liability, fault and obligation.
(d) The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Funds shares or the Contracts or the
operation of the Funds.
8.2. Indemnification by CGM
(a) CGM agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of CGM) or litigation (including legal
and other expenses) to which the Indemnified Parties may become subject under
any statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements:
(i) arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus, SAI or sales literature for
the Contracts not supplied by the Funds or CGM) or
wrongful conduct of CGM with respect to the sale or
distribution of the Contracts or Fund shares; or
(ii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, SAI or sales
literature covering the Contracts, or any amendment
thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statement or statements therein not misleading,
if such statement or omission was made in reliance
upon information furnished to the Company by or on
behalf of CGM; or
(iii) arise as a result of any material failure by CGM to
provide the services and furnish the materials
required under the terms of this Agreement;
(iv) arise out of or result from any material breach of
any representation and/or warranty made by CGM in
this Agreement or arise out of or result from any
other material breach of this Agreement by CGM;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
(b) CGM shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.
14
(c) CGM shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified CGM in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim 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 CGM of any such claim shall not relieve
CGM from any liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against one or more Indemnified
Parties, CGM will be entitled to participate, at its own expense, in the defense
thereof. CGM also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from CGM to such
party of CGM's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
CGM will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation, unless such
Indemnified Party's interests in such action are materially adverse to those of
Distributor and indemnification is otherwise appropriate under this Section 8.2,
PROVIDED that in no event will Distributor be liable for the costs and expenses
of more than one counsel for all Indemnified Parties for related claims or
actions. Distributor shall not settle or compromise any action of which it
assumes the defense without the consent of the affected Indemnified Parties
unless the Indemnified Parties are thereby released of all liability, fault and
obligation.
(d) The Company agrees promptly to notify CGM of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant (including, but not limited to, the Exemptive Order) and the terms
hereof shall be interpreted and construed in accordance therewith
ARTICLE X. TERMINATION
10.1. This Agreement shall continue in full force and effect
until the first to occur of:
(a) termination by any party, for any reason with respect to
some or all Designated Funds, by three (3) months advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to CGM, based
upon the Company's determination that shares of the Funds
are not reasonably available to meet the requirements of
the Contracts; or
(c) termination by the Company by written notice to CGM, in the
event any of the Designated Fund's shares are not
registered, issued or sold in accordance with applicable
state and/or federal law or such law precludes the use of
such shares as the underlying investment media of the
Contracts issued or to be issued by the Company; or
15
(d) termination by CGM, in the event that formal administrative
proceedings are instituted against the Company by the NASD,
the SEC, an insurance commissioner or like official of any
state or any other regulatory body regarding the Company's
duties under this Agreement or related to the sale of the
Contracts, the operation of any Account, or the purchase of
the Designated Fund's shares; provided, however, that CGM
determines in its sole judgment exercised in good faith,
that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to
perform its obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the
Funds, CGM or the Funds' Adviser by the SEC or any state
securities or insurance department or any other regulatory
body; provided, however, that the Company determines in its
sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse
effect upon the ability of, CGM, the Adviser or the Funds
to perform its obligations under this Agreement; or
(f) termination by the Company by written notice to CGM, with
respect to any Designated Fund in the event that such
Designated Fund ceases to qualify as a Regulated Investment
Company under Subchapter M or fails to comply with the
Section 817(h) diversification requirements specified in
Section 2.3 hereof, or if the Company reasonably believes
that such Designated Fund may fail to so qualify or comply;
or
(g) termination by CGM, by written notice to the Company in the
event that the Contracts fail to meet the qualifications
specified in Section 2.6 hereof; or
(h) termination by CGM, by written notice to the Company, if
CGM shall determine, in its sole judgment exercised in good
faith, that the Company 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; or
(i) termination by the Company by written notice to CGM, , if
the Company shall determine, in its sole judgment exercised
in good faith, that CGM, the Funds or the Funds' Adviser
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; or
(j) termination by CGM by written notice to the Company, if the
Company gives CGM the written notice specified in Section
1.7(a)(ii) hereof and at the time such notice was given
there was no notice of termination outstanding under any
other provision of this Agreement; provided, however, any
termination under this Section 10.1(j) shall be effective
forty-five days after the notice was given; or
(k) termination by CGM if the Board has decided to (i) refuse
to sell shares of any Designated Fund to the Company and/or
any of its Accounts; (ii) suspend or terminate the offering
of shares of any Designated Fund; or (iii) dissolve,
reorganize, liquidate, merge or sell all assets of the
Funds or any Designated Fund, subject to the provisions of
Section 1.1; or
16
(l) termination by the Company upon any substitution of the
shares of another investment company or series thereof for
shares of a Designated Fund of the Funds in accordance with
the terms of the Contracts, provided that the Company has
given at least 45 days prior written notice to the Adviser
and the Funds of the date of substitution;
(m) termination by any party in the event that a Fund Board
determines that a material irreconcilable conflict exists
as provided in Article VII; or
(n) termination with respect to CGM automatically upon
termination of the Distribution Agreement between
Distributor and the Funds.
10.2. (a) Notwithstanding any termination of this Agreement,
and except as provided in Section 10.2(b), the Funds and CGM shall, at the
option of the Company, continue, until the one year anniversary from the date of
termination, and from year to year thereafter if deemed appropriate by CGM, to
make available additional shares of the Designated Funds 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, based on instructions from the owners
of the Existing Contracts, the Accounts shall be permitted to reallocate
investments in the Designated Funds and redeem investments in the Designated
Funds, and shall be permitted to invest in the Designated Funds in the event
that owners of the Existing Contracts make additional premium payments under the
Existing Contracts.
Company agrees, promptly after any termination of
this Agreement, to take all steps necessary to redeem the investment of the
Accounts in the Designated Funds within one year from the date of termination of
the Agreement as provided in Article X. Such steps shall include, but not be
limited to, obtaining an order pursuant to Section 26(c) of the 1940 Act to
permit the substitution of other securities for the shares of the Designated
Funds. The Funds may, in its discretion, permit the Accounts to continue to
invest in the Designated Funds beyond such one year anniversary for an
additional year beginning on the first annual anniversary of the date of
termination, and from year to year thereafter; provided that the Funds agrees in
writing to permit the Accounts to continue to invest in the Designated Funds at
the beginning of any such year.
(b) In the event (i) the Agreement is terminated pursuant
to Sections 10.1(g) or 10.1(m), at the option of CGM; or (ii) the one year
anniversary of the termination of the Agreement is reached or, after waiver as
provided in Section 10.2(a), such subsequent anniversary is reached (each of (i)
and (ii) referred to as a "triggering event" and the date of termination as
provided in (i) or the date of such anniversary as provided in (ii) referred to
as the "request date"), the parties agree that such triggering event shall be
considered as a request for immediate redemption of shares of the Designated
Funds held by the Accounts, received by the Funds and its agents as of the
request date, and CGM on behalf of the Funds agrees to process such redemption
request in accordance with the 1940 Act and the regulations thereunder and the
Funds's registration statement.
(c) The parties agree that this Section 10.2 shall not
apply to any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement. The parties
further agree that, to the extent that all or a portion of the assets of the
Accounts continue to be invested in the Funds or any Designated Fund of the
Funds, Articles I, II, VII, VIII and IX will remain in effect after termination.
17
10.3. Notwithstanding any termination of this Agreement, each
party's obligation under Article VIII to indemnify the other parties shall
survive.
18
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Company: Jefferson National Life Insurance Company
0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx-Xxxxx
If to Distributor _ Citigroup Global Markets Inc.
000 Xxxxx Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx _____________
-
copy to Xxxxxx X. Swartz_____________
______300 First Stamford Place 4th Floor_______
_______Stamford ,CT 06902______________
________________________________
___________________
___________________
___________________
ARTICLE XII. MISCELLANEOUS
12.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information has come into the
public domain.
12.2. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
12.4. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
19
12.5. Each party hereto shall cooperate with each other party
and all appropriate governmental authorities (including without limitation the
SEC, the NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the [insert state] Insurance Commissioner with any information
or reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable insurance
operations of the Company are being conducted in a manner consistent with the
[insert state] insurance laws and regulations and any other applicable law or
regulations.
12.6. 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, which the parties hereto are entitled to
under state and federal laws.
12.7. This Agreement or any of the rights and obligations
hereunder may not be assigned by any party without the prior written consent of
all parties hereto; provided, however, that the Adviser may assign this
Agreement or any rights or obligations hereunder to any affiliate or company
under common control with the Adviser, if such assignee is duly licensed and
registered to perform services under this Agreement. The Company shall promptly
notify, CGM of any change in control of the Company.
12.8. All persons dealing with the Funds must look solely to the
property of the respective Designated Funds listed on Schedule A hereto as
though each such Designated Fund had separately contracted with such party for
the enforcement of any claims against the Funds. The parties agree that neither
the Board, officers, agents or shareholders of the Funds assume any personal
liability or responsibility for obligations entered into by or on behalf of the
Funds. It is expressly agreed that the obligations of the Funds hereunder shall
not be binding upon any of the Funds, shareholders, nominees, officers, agents
or employees of the Funds personally, but shall bind only the Funds property of
the Funds. The execution and delivery of this Agreement have been authorized by
the Funds, and this Agreement has been signed and delivered by an authorized
officer of the Funds, acting as such, and neither such authorization by the
Funds nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but bind only the Funds property of the Funds as provided in the
Fund's Declaration of Funds. The provisions of this section 11.8 shall survive
termination of the Agreement.
20
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
as of the date specified below.
Jefferson National Life Insurance Company: By its authorized officer
By: /s/
---
Title:
-----------------------------
Date:
-----------------------------
Citigroup Global Markets Inc.: By its authorized officer
By: /s/
---
Title:
-----------------------------
Date:
-----------------------------
[
21
[Date]
SCHEDULE A
ACCOUNT(S) CONTRACT(S) DESIGNATED FUND(S)
SALOMON STRATEGIC INCOME
SALOMON BROTHERS VARIABLE ALL CAP VALUE
FUND
SALOMON BROTHERS VARIABLE LARGE CAP GROWTH
FUND
SALOMON VARIABLE TOTAL RETURN FUND
A-1
