AIM VARIABLE INSURANCE FUNDS, INC.
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this 25th day of February, 1993 by
and between CONNECTICUT GENERAL LIFE INSURANCE COMPANY ("CG LIFE") on its own
behalf and on behalf of CG VARIABLE ANNUITY SEPARATE ACCOUNT (the "SEPARATE
ACCOUNT"), and the AIM VARIABLE INSURANCE FUNDS, INC. (the "FUND") and AIM
DISTRIBUTORS, INC. ("DISTRIBUTOR").
WITNESSETH
WHEREAS, CG LIFE and A I M MANAGEMENT GROUP INC. have entered into an
agreement dated June 30, 1992 entitled "PRODUCT DEVELOPMENT AGREEMENT" to
jointly develop a variable annuity product; and
WHEREAS, the FUND has been organized for investment of life insurance
companies' customers through separate accounts; and
WHEREAS, CG LIFE intends to purchase shares in the FUND on behalf of the
SEPARATE ACCOUNT; and
WHEREAS, DISTRIBUTOR is authorized to sell such shares to the SEPARATE
ACCOUNT;
NOW, THEREFORE, in consideration of the covenants, mutual promises herein
contained and other good and valuable consideration the receipt and legal
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 The Parties agree that the following terms shall have the meanings set
forth below:
Board - The Board of Directors of the FUND.
Business Day - Any day on -which the FUND computes its net asset value
pursuant to rules of the SEC and as described in the Prospectus for the FUND;
Code - The Internal Revenue Code of 1986, as amended;
Contract(s) - Any individual or group variable annuity contract or
combination fixed and variable annuity contract or certificate issued under a
group contract by CG LIFE or any of its affiliates which provides for the FUND
as an investment through the SEPARATE ACCOUNT;
Distribution Agreement - The Agreement between the FUND and DISTRIBUTOR
dated _______________ concerning the sale and distribution of FUND shares;
General Account - The assets of CG LIFE other than those allocated to the
SEPARATE ACCOUNT or any other separate accounts of CG LIFE established under
Connecticut insurance statutes;
NASD - The National Association of Securities Dealers, Inc.;
Owners - The person, persons, entity, or entities entitled to the ownership
rights stated in the Contracts;
Participants - Individuals who participate under group Contracts;
Portfolio - A separate class or series of shares of the FUND constituting
an investment sub-account as described in the FUND Prospectus with investment
objectives, policies and restrictions distinct from the other investment
sub-accounts of the FUND;
Prospectus - The current prospectus and corresponding statement of
additional information for either the FUND or the Contracts;
Sales Literature - 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 (such as any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, seminar texts, or reprints or excerpts of any other advertisement,
sales literature, or published article), registration statements, prospectuses,
statements of additional information, shareholder reports and proxy materials,
and any other material constituting sales literature or advertising under NASD
rules, the 1940 Act or the 0000 Xxx.
XXX - Xxx Xxxxxx Xxxxxx Securities and Exchange Commission;
1940 Act - The Investment Company Act of 1940 including the rules
thereunder;
1933 Act - The Securities Act of 1933 including the rules thereunder;
1934 Act - The Securities Exchange Act of 1934 including the rules
thereunder;
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 CG LIFE represents and warrants that:
(a) It is a life insurance company duly organized and in good standing
under the laws of the State of Connecticut with the right to do business and
proper authority to issue fixed and variable annuity contracts in 50 states.
(b) The SEPARATE ACCOUNT has been legally and validly established as a
segregated asset account of CG LIFE by resolution of the Board of Directors of
CG LIFE on May 15, 1992 under Section 38a-433 of the Connecticut Insurance
Statutes, to set aside and invest assets attributed to the Contracts and that
the income, gains and losses, whether or not realized, from assets allocated to
the SEPARATE ACCOUNT are, in accordance with state law and the Contracts, to be
credited to or charged against such SEPARATE ACCOUNT without regard to other
income, gains or losses from assets allocated to any other accounts of CG LIFE.
(c) The assets of the SEPARATE ACCOUNT are and will be kept separate from
the assets of the General Account and any other separate account of CG LIFE, and
will not be charged with liabilities from any business that CG LIFE may conduct
or the liabilities of any companies affiliated with CG LIFE.
(d) The SEPARATE ACCOUNT is an insurance company separate account under the
1940 Act and is registered as a unit investment trust in accordance with
provisions of the 1940 Act to the extent required by said Act.
(e) The Contracts or interests therein have been duly registered under the
1933 Act and will be issued and sold in compliance with the 1933 Act, the 1934
Act, NASD rules and regulations, and applicable state law.
(f) The Contracts are currently treated as annuity contracts under the Code
and CG LIFE will make every effort to maintain such treatment and will notify
the FUND and DISTRIBUTOR immediately upon having a reasonable basis for
believing that the Contracts have ceased to be so treated or that they might not
be so treated in the future.
(g) CG LIFE will not on its own behalf or on behalf of the SEPARATE ACCOUNT
directly or indirectly transfer or otherwise convey shares of the FUND to any
party including another insurance company separate account without the prior
written consents of DISTRIBUTOR and the FUND, which consents will not be
unreasonably withheld.
(h) All legal and regulatory licenses, approvals and consents have been
obtained and shall be maintained, as required, to offer the Contracts for sale.
2.2 The FUND represents and warrants that:
(a) It is a series type open end management investment company registered
under the 1940 Act to the extent required by said Act.
(b) FUND shares sold pursuant to this Agreement are registered under the
1933 Act to the extent required by said Act and are duly authorized for issuance
and sold in compliance with all applicable federal securities laws. FUND will
register and qualify its shares for sale in accordance with the laws of the
various states only if and to the extent deemed advisable by the FUND or
DISTRIBUTOR.
(c) Interests in the FUND are currently divided into seven Portfolios each
representing a separately managed portfolio of securities and other assets.
(d) It possesses and shall maintain, all legal and regulatory licenses,
approvals and consents required to offer its shares as an investment for the
SEPARATE ACCOUNT under the Contracts.
(e) It is currently qualified as a Regulated Investment Company under
Subchapter M of the Code; and it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify CG LIFE immediately upon having a reasonable basis for
believing that it no longer qualifies or that it might not so qualify in the
future.
(f) The assets of the FUND are currently managed and invested in a manner
that complies with section 817(h) of the Code.
2.3 DISTRIBUTOR represents and warrants that:
(a) It is registered as a broker-dealer with the SEC and is a member in
good standing of the NASD.
(b) It is authorized, pursuant to the Distribution Agreement, to sell
shares of the FUND to CG LIFE and the SEPARATE ACCOUNT at net asset value.
ARTICLE III
SALE, ISSUANCE, AND REDEMPTION OF FUND SHARES
3.1 DISTRIBUTOR will, subject to the terms of the Distribution Agreement,
sell to CG LIFE those shares of the FUND that CG LIFE orders on behalf of the
SEPARATE ACCOUNT based on transactions under the Contracts, executing such
orders on a daily basis at the FUND's net asset value per share computed as of
the close of business on the Business Day immediately prior to the date the
order is received by DISTRIBUTOR, provided that DISTRIBUTOR receives notice of
such orders by 11:00 a.m., Eastern Time. Any orders to purchase shares of the
FUND not based on transactions under Contracts will be effected at the FUND's
net asset value per share next computed after the order is received by the
DISTRIBUTOR.
3.2 The FUND, pursuant to the FUND's Prospectus, will redeem for cash, upon
request, any full or fractional shares that CG LIFE holds on behalf of the
SEPARATE ACCOUNT based on transactions under the Contracts, executing such
requests on a daily basis at the FUND's net asset value per share computed as of
the close of business on the Business Day immediately prior to the date the
order is received by the FUND provided said order to redeem is received by the
FUND by 11:00 a.m. Eastern Time. Any orders to redeem shares of the FUND not
based on transactions under Contracts will be effected at the FUND's net asset
value per share next computed after the order is received by the FUND.
Subject to the applicable rules and regulations, if any, of the SEC, and
pursuant to the FUND's Prospectus, the FUND may pay the redemption price, in
whole or in part, by a distribution in kind of securities from the respective
Portfolios of the FUND in lieu of money when such payment is pursuant to a
change in advisor or a reclassification, substitution, merger or other
restructuring of the FUND or its shares.
3.3 To the extent the purchase of FUND shares on a given Business Day
pursuant to &3.1 herein, exceeds the redemption of FUND shares, pursuant to &3.2
herein, CG LIFE shall make all reasonable efforts to transmit to the FUND
payment in Federal Funds of the net purchase amount by 3:00 p.m. Eastern Time on
the Business Day DISTRIBUTOR receives the notice of the order, but in any event
not later than the close of business hours of the bank designated by the FUND
for receipt of said payment. A purchase request that does not satisfy the
conditions specified within this Article III will be effected at the net asset
value per share computed on the Business Day prior to the Business Day upon
which such conditions have been satisfied.
3.4 The FUND will make its shares available to CG LIFE and the SEPARATE
ACCOUNT for purchase at the applicable net asset value per share on any Business
Day.
3.5 Notwithstanding &3.4 above, the FUND may suspend the sale or redemption
of shares pursuant to the conditions set forth in the FUND's Prospectus and the
Board may refuse to sell shares of the FUND, or suspend or terminate the
offering of shares of the FUND if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of the
Board acting in good faith and in light of their fiduciary duties under federal
and any applicable state laws, necessary in the best interests of the
shareholders of the FUND. The FUND or its designee will provide CG LIFE advance
notice of any such suspension or refusal to sell whenever possible.
3.6 Issuance and transfer of FUND shares will be by book entry only. Stock
certificates will not be issued to CG LIFE or the SEPARATE ACCOUNT. Shares
ordered from the FUND will be recorded by the FUND's transfer agent in an
appropriate title for CG LIFE on behalf of the SEPARATE ACCOUNT.
3.7 The FUND shall furnish same day notice (by wire or telephone, followed
by written confirmation) to CG LIFE of any income dividends or capital gain
distributions payable on the shares of the FUND. CG LIFE hereby elects to
receive all such income dividends and capital gain distributions as are payable
on FUND shares in the form of additional shares of the FUND. CG LIFE reserves
the right to revoke this election and to receive all income dividends and
capital gain distributions in cash. The FUND shall notify CG LIFE of the number
of shares so issued as payment of such dividends and distributions.
3.8 The FUND shall make the net asset value per share for the FUND
available to CG LIFE, on a daily basis, as soon as reasonably practical after
the net asset value per share is calculated, and shall use its best efforts to
make such net asset value Per share available by 6:00 p.m. Eastern Time.
In the event that the FUND is unable to meet the 6:00 p.m. time stated
herein it shall provide additional time for CG LIFE to place orders for the
purchase (pursuant to &3.1) or redemption (pursuant to &3.2) of FUND shares.
Said additional time shall be equal to the additional time which the FUND takes
to make the net asset value per share available to CG LIFE.
3.9 The FUND, on behalf of the Portfolios, agrees at all times to invest
money from the SEPARATE ACCOUNT in such a manner as to ensure that the Contracts
will be treated as variable annuity contracts under the Code and the regulations
issued thereunder in so far as such investment is required for such treatment.
CG LIFE undertakes to promptly notify the FUND, in writing, of any change in the
Code and regulations with respect to the requirements for annuity tax treatment.
3.10 The FUND may, but is not required to, establish additional Portfolios
to provide additional investments for the SEPARATE ACCOUNT, and may delete
existing Portfolios. The shares of any additional Portfolios of the FUND may be
made available to the SEPARATE ACCOUNT by DISTRIBUTOR, pursuant to the terms of
this Agreement, and any reference to Portfolio of the FUND or its shares herein
shall include any such new Portfolio of the FUND.
3.11 FUND shares will not be sold directly to the general public. In
addition, FUND shares will not be sold to separate accounts of life insurance
companies other than CG LIFE, Nationale-Nederlanden (XXX@), or affiliates of
either CG LIFE or NN in accordance with the Product Development Agreement
(APDA@) dated June 30, 1992, between AIM Management Group Inc. and CG LIFE,
provided the market place acceptance levels, as defined in the PDA, are met. In
accordance with 120 of the PDA, if said acceptance levels are not met,
DISTRIBUTOR and the FUND may, but are not required to, sell FUND shares to other
life insurance company separate accounts and CG LIFE agrees that the
restrictions contained in the PDA are hereby amended to correspond with this
provision.
3.12 The FUND shall provide a monthly statement of account to CG LIFE as of
the end of each month by the fifteenth (15th) Business Day of the following
month. FUND shall also provide daily performance reports for each Portfolio to
CG LIFE.
ARTICLE IV
PROSPECTUS, PROXY STATEMENTS, AND VOTING
4.1 DISTRIBUTOR will provide CG LIFE or its designee with copies of the
FUND's current prospectus as the same may be amended or supplemented from time
to time in such quantities as CG LIFE may reasonably request. In lieu thereof,
DISTRIBUTOR and CG LIFE may agree to have the new prospectus for the Contracts
and the new prospectus for the FUND printed together in one document. In this
event, the FUND will produce a final copy of the new prospectus for the FUND and
any amendments or supplements thereto (set in type) and CG LIFE will produce a
final copy of the prospectus for the Contracts and any amendments or supplements
thereto (set in type) and the FUND or CG LIFE will have the two prospectuses
printed in one document.
4.2 The FUND Prospectus will state that the Statement of Additional
Information ("SAI") for the FUND is available from DISTRIBUTOR (or the
Prospectus will state that the SAI is available from the FUND), and DISTRIBUTOR
or the FUND will provide the SAI free of charge to CG LIFE and to any Owner or
Participant who requests same.
4.3 The FUND will provide CG LIFE or its designee with copies of its proxy
materials, reports to shareholders, other communications to shareholders,
including amendments or revisions thereto, in such quantity as CG LIFE may
reasonably require for delivery to Owners or Participants.
4.4 CG LIFE or its designee will deliver in a timely manner all materials
described in &4.1 and &4.3 herein to Owners and Participants in compliance with
the requirements of relevant provisions of federal and state law and any rules
or interpretations thereof.
4.5 The FUND, in complying with all provisions of the 1940 Act requiring
voting by shareholders, will solicit the vote of CG LIFE by means of proxy
material.
4.6 CG LIFE will, so long as and to the extent that the SEC continues to
interpret the 1940 Act to require pass-through and echo voting,
(a) solicit voting instructions from Owners or Participants,
(b) vote FUND shares held in the SEPARATE ACCOUNT attributable to Contracts
in accordance with instructions received from Owners or Participants, and
(c) vote FUND shares for which no instructions have been received in the
same proportion as the FUND shares for which instructions have been received.
4.7 CG LIFE will vote FUND shares held in its own right (not attributable
to Contracts) in the SEPARATE ACCOUNT or held by the General Account, in any
manner which would comply with the 1940 Act, the regulations thereunder, and
current interpretations of SEC staff.
ARTICLE V
SALES MATERIAL AND INFORMATION
5.1 CG LIFE will furnish, or will cause to be furnished, to the FUND or
DISTRIBUTOR or other designee, each piece of Sales Literature or other
promotional material in which the FUND or its investment adviser or DISTRIBUTOR
is named, at least thirty (30) business days prior to its intended use. No such
material will be used if the FUND or DISTRIBUTOR or other designee object to
such use in writing within thirty (30) business days after receipt of such
material.
5.2 CG LIFE will not give any information or make any representations or
statements, or cause such information to be given or representations to be made,
on behalf of the FUND or concerning any Portfolio of the FUND in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or Prospectus for FUND shares, as such
registration statement and Prospectus may be amended or supplemented from time
to time, or in reports or proxy materials for the FUND, or in Sales Literature
or other promotional material prepared by the FUND or its designee or by
DISTRIBUTOR, except with the written permission of the FUND or DISTRIBUTOR or
other designee.
5.3 DISTRIBUTOR or its designee will furnish, or will cause to be
furnished, to CG LIFE or its designee, each piece of Sales Literature or other
promotional material of the FUND in which CG LIFE or the SEPARATE ACCOUNT is
named, at least thirty (30) business days prior to its intended use. No such
material will be used if CG LIFE or its designee object to such intended use in
writing within thirty (30) business days after receipt of such material.
5.4 DISTRIBUTOR will not give any information or make any representations
or statements, or cause such information to be given or representations to be
made, on behalf of or concerning CG LIFE, the SEPARATE ACCOUNT or the Contracts
other than the information or representations contained in a registration
statement or Prospectus for such Contracts, as such registration statement and
Prospectus may be amended or supplemented from time to time, or in reports for
the SEPARATE ACCOUNT that are prepared and approved by CG LIFE for distribution
to Owners and Participants, or in Sales Literature or other promotional material
approved by CG LIFE or its designee, except with the written permission of CG
LIFE.
5.5 The FUND will provide to CG LIFE one complete copy of all registration
statements, Prospectuses, reports (other than reports to shareholders), any
preliminary proxy material, Sales Literature and other promotional material,
applications for exemptions, requests for no-action letters, and all amendments
or supplements to any of the above, that relate to the FUND or its shares,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
5.6 CG Life will provide to the FUND and DISTRIBUTOR one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, Sales Literature and other
promotional material, applications for exemptions, requests for no-action
letters, and all amendments or supplements to any of the above, that relate to
the Contracts or the SEPARATE ACCOUNT, contemporaneously with the filing of such
document with the SEC or other regulatory authorities.
ARTICLE VI
FEES AND EXPENSES
6.1 All expenses incident to performance by the FUND under this Agreement
will be paid by the FUND or the FUND's designee. The FUND will bear, or arrange
for others to bear, the expenses of registration and qualification of its
shares, preparation and filing of its Prospectus and registration statement,
proxy material and reports to shareholders. The Fund will also bear, or arrange
for others to bear, the costs of setting in type the FUND Prospectus, proxy
material and reports to shareholders, SAI, and printing FUND materials described
in this &6.1 in quantities sufficient for delivery to Contract Owners and
Participants, and delivery of said materials to CG LIFE or the SEPARATE ACCOUNT.
The FUND will also bear, or arrange for others to bear, the costs associated
with preparation of all FUND statements and FUND notices required by any federal
or state law, and all taxes on the issuance or transfer of FUND shares.
6.2 All expenses incident to performance by CG LIFE and the SEPARATE
ACCOUNT under this Agreement will be paid by CG LIFE or CG LIFE's designee. CG
LIFE shall bear or arrange for others to bear the expenses of registration and
qualification of the units of interests in the SEPARATE ACCOUNT and for the
Contracts, preparation and filing of the corresponding Prospectus and
registration statement, voting instructions forms and related correspondence for
Contract Owners and Participants, and CG LIFE reports to Contract Owners and
Participants. CG LIFE will also bear, or arrange for others to bear, the costs
of setting in type the SEPARATE ACCOUNT or Contract Prospectus, the voting
instructions forms and related correspondence, the SEPARATE ACCOUNT or Contract
SAI, printing SEPARATE ACCOUNT or Contract materials described in this &6.2 in
quantities sufficient for delivery to Contract Owners and Participants, and
delivery of said materials to Contract Owners and/or Participants. CG LIFE will
also bear, or arrange for others to bear, the costs associated with preparation
of all SEPARATE ACCOUNT or Contract statements and SEPARATE ACCOUNT or Contract
notices required by any federal or state law, and all taxes on the issuance or
transfer of the units of interest of the SEPARATE ACCOUNT or the Contracts.
6.3 CG LIFE will bear the expenses of delivery of the FUND proxy materials,
proxy cards and voting instruction forms (collectively "proxy information) to
Contract Owners and Participants, tabulating the results of proxy solicitations
to Owners and Participants, delivery of the FUND prospectuses as they may be
amended or supplemented from time to time to Owners and Participants, and any
expenses associated with preparation of, filing for state approvals, issuance,
shareholder service, and administration of the Contracts otherwise contemplated
by this Agreement.
6.4 The FUND, at its expense, will provide the monthly statement of account
and daily performance reports required by &3.12 of this Agreement.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification By CG LIFE
(a) CG LIFE will indemnify and hold harmless the FUND and DISTRIBUTOR
and each of its Board members, officers and employees and each person, if
any, who controls the FUND within the meaning of Section 15 of the 1933 Act
(collectively, the AIndemnified Parties@ for purposes of this &7.1.)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of CG LIFE) or litigation
(including legal and other expenses), to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise,
and which:
(i) arise out of or are based upon any failure by CG LIFE to
perform the duties or assume the general business responsibilities of
CG LIFE with respect to the design, drafting, state approvals,
issuance, servicing and administration of the Contracts, or the
establishment and maintenance of the SEPARATE ACCOUNTS; or
(ii) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement or Prospectus for the Contracts or the SEPARATE
ACCOUNT or contained in the Contracts or Sales Literature for the
Contracts or the SEPARATE ACCOUNT (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 a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided that this indemnification will not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished in writing to CG LIFE by or on behalf of the
FUND or DISTRIBUTOR for use in the registration statement or
Prospectus for the Contracts or the SEPARATE ACCOUNT or in the
Contracts or Sales Literature (or any amendment or supplement thereto)
or otherwise for use in connection with the Contracts or the SEPARATE
ACCOUNT; or
(iii) arise out of, or are based upon, statements or
representations (other than statements or representations contained in
the registration statement, Prospectus or Sales Literature of the FUND
not supplied by CG LIFE, or persons under its control) made by CG Life
or persons under its control; or arise out of or are based upon
failure to supervise persons under CG LIFE'S control or entities or
individuals with which CG LIFE contracts; or arise out of, or are
based upon, wrongful conduct of CG LIFE or persons under its control;
with respect to the sale or distribution of the Contracts or the
SEPARATE ACCOUNT; or
(iv) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement--
Prospectus, or Sales Literature of the FUND 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 in writing to
the FUND or the DISTRIBUTOR by or on behalf of CG LIFE; or
(v) arise out of or result from any failure by CG LIFE to provide
the services and furnish the materials contemplated by this Agreement;
or
(vi) arise out of or result from any material breach of any
representation and/or warranty made by CG LIFE in this Agreement or
arise out of or result from any other material breach of this
Agreement by CG LIFE: except to the extent provided in &7.1(b) and
&7.1(c) hereof.
(b) CG LIFE will 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 obligations or duties under this
Agreement or to CG LIFE, whichever is applicable.
(c) CG LIFE will not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified CG LIFE 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 CG
LIFE of any such claim will not relieve CG LIFE from any liability that 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 the Indemnified Parties, CG LIFE shall be
entitled to participate, at its own expense, in the defense of such action.
CG LIFE also will be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from CG LIFE to
such party of CG LIFE'S election to assume the defense thereof, the
Indemnified Party will bear the fees and expenses of any additional counsel
retained by it, and CG LIFE 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.
(d) The Indemnified Parties will promptly notify CG LIFE of the
commencement of any litigation or proceeding against them in connection
with the transactions which are the subject of this Agreement whether or
not indemnification is being sought hereunder.
7.2 Indemnification By DISTRIBUTOR
(a) DISTRIBUTOR will indemnify and hold harmless CG LIFE and each of
its Board members, officers and employees and each person, if any, who
controls CG LIFE within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this &7.2) against
any and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of DISTRIBUTOR) or litigation
(including legal and other expenses), to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise,
and which:
(i) arise out of or are based upon any failure by the DISTRIBUTOR
to perform the duties or assume the general business responsibilities
of the DISTRIBUTOR with respect to the sale of shares of the FUND to
CG LIFE on behalf of the SEPARATE ACCOUNTS; or
(ii) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the Sales
Literature for the FUND and/or the Sales Literature prepared by
DISTRIBUTOR for the Contracts, or arise out of or are based upon the
omission or the alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, provided that this Agreement to indemnify will not apply
as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in
conformity with information furnished in writing to DISTRIBUTOR by or
on behalf of CG LIFE for use in the Sales Literature or otherwise for
use in connection with the sale of FUND shares: or
(iii) arise out of or are based upon statements or
representations (other than statements or representations contained in
the registration statement, Prospectus or Sales Literature of the FUND
or the Contracts not supplied by DISTRIBUTOR, or persons under its
control) made by DISTRIBUTOR or persons under its control; or arise
out of or are based upon failure to supervise persons under
DISTRIBUTOR'S control or arise out of or are based upon wrongful
conduct of DISTRIBUTOR or persons under its control; all of the
foregoing with respect to the sale or distribution of FUND shares; or
(iv) arise out of any untrue statement or alleged untrue
statement of a material fact contained in Sales Literature designed
and produced by CG LIFE for the Contracts or the FUND 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
in writing to CG LIFE by or on behalf of DISTRIBUTOR; or
(v) arise out of or result from any failure by DISTRIBUTOR to
provide the services and furnish the materials contemplated by this
Agreement; or
(vi) arise out of or result from any material breach of any
representation and/or warranty made by DISTRIBUTOR in this Agreement
or arise out of or result from any other material breach of this
Agreement by DISTRIBUTOR.
(b) DISTRIBUTOR will 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 obligations or
duties under this Agreement or to DISTRIBUTOR, whichever is applicable.
(c) DISTRIBUTOR will not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless such Indemnified Party shall have notified DISTRIBUTOR 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
DISTRIBUTOR of any such claim will not relieve DISTRIBUTOR from any
liability that 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 the Indemnified
Parties, DISTRIBUTOR shall be entitled to participate, at its own expense,
in the defense of such action. DISTRIBUTOR also will be entitled to assume
the defense thereof, with counsel satisfactory to the party named in the
action. After notice from DISTRIBUTOR to such party of DISTRIBUTOR's
election to assume the defense thereof, the Indemnified Party will bear the
fees and expenses of any additional counsel retained by it, and DISTRIBUTOR
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.
(d) The Indemnified Parties will promptly notify DISTRIBUTOR of the
commencement of any litigation or proceeding against them in connection
with the transactions which are the subject of this Participation Agreement
whether or not indemnification is being sought hereunder.
ARTICLE VIII
TERMINATION OF THIS AGREEMENT
8.1 Termination. This Agreement will terminate:
(a) as to any party hereto, at the option of that party, for any
reason or for no reason upon prior written notice to the other parties as
provided in &8.2 herein; or
(b) at the option of the FUND or DISTRIBUTOR in the event that formal
administrative proceedings are instituted against CG LIFE by the NASD, the
SEC, any insurance commissioner or any other regulatory body regarding CG
LIFE's duties under this Agreement or related to the sale of the Contracts,
with respect to the operation of the SEPARATE ACCOUNT, or the purchase of
the FUND shares, provided, however, that the FUND determines, in its sole
judgment exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of CG LIFE to perform
its obligations under this Agreement; or
(c) at the option of CG LIFE in the event that formal administrative
proceedings are instituted against the FUND or the DISTRIBUTOR by the NASD,
the SEC, or any state securities or insurance commission or any other
regulatory body, regarding the duties of the FUND or the DISTRIBUTOR under
this Agreement or related to the operation of the FUND or' with respect to
the sale of FUND shares provided, however, that CG LIFE 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
FUND or the DISTRIBUTOR to perform its respective obligations under this
Agreement; or
(d) at the option of CG LIFE with respect to the SEPARATE ACCOUNT,
upon receipt of any requisite regulatory authority to substitute the shares
of another investment company for shares of the FUND in accordance with the
terms of the Contracts and in accordance with the investment policy or
standards of conduct of the SEPARATE ACCOUNT.
(e) at the option of CG LIFE, in the event any of the FUND's shares
are not registered, issued or sold in accordance with applicable federal
and any state law or such law precludes the use of such shares as the
underlying investment media of the Contracts issued or to be issued by CG
LIFE; or
(f) at the option of CG LIFE, if the FUND fails to meet the
diversification requirements specified in &2.2(f) hereof; or
(g) at the option of the FUND, if the Contracts fail to satisfy the
diversification requirements of the Code and the regulations thereunder, or
fail to be treated as annuity contracts under the Code.
8.2 Notice Requirement for Termination. No termination of this Agreement
will be effective unless and until the party terminating this Agreement gives
prior written notice to all other parties to this Agreement of its intent to
terminate and such notice shall set forth the basis for such termination.
Furthermore,
(a) in the event that any termination is based upon the provisions of
&8.1(a), hereof, such prior written notice shall be given at least 180 days
in advance of the effective date of termination as required by such
provision; and
(b) in the event that any termination is based upon the provisions of
&8.1(b) or &8.1(c) hereof, such prior written notice shall be given at
least ninety (90) days in advance of the effective date of termination.
(c) in the event that any termination is based upon the provisions of
&8.1(d) CG LIFE will give at least 60 days prior written notice to the FUND
of the date of any proposed action to substitute FUND shares, including the
filing of any applicable exemptive application under the 1940 Act relating
to the SEPARATE ACCOUNT; and CG LIFE will provide the FUND and the
DISTRIBUTOR with a copy of any such exemptive application in accordance
with &5.6 of this Agreement.
(d) in the event that any termination is based upon the provisions of
&8.1(e), &8.1(f), or &8.1(9) hereof, such prior written notice shall be
given as soon as possible within 24 hours after the terminating party
learns of the event causing termination to be required.
8.3 Partial Termination. It is also understood that this Agreement may be
terminated with regard to a specific Portfolio or Portfolios of the Fund, or the
entire Fund at the discretion of the terminating party. Notwithstanding any
termination of this Agreement, the FUND and DISTRIBUTOR shall, at the option of
CG LIFE, continue to make available additional shares of the FUND pursuant to
the terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, the Owners of the
Existing Contracts shall be permitted to transfer or reallocate investments
under the Contracts, redeem investments in the FUND and/or invest in the FUND
upon the making of additional purchase payments under the Existing Contracts.
ARTICLE IX
NOTICES
Any notice will 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 CG LIFE Connecticut General Life Insurance Company
or the Xxxxxxxx, Xxxxxxxxxxx 00000
SEPARATE ACCOUNT: Attention: Xxxxxx X. Xxxxxxxxx, Esquire
If to the FUND: AIM VARIABLE INSURANCE FUNDS, INC.
00 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Corporate Secretary
If to DISTRIBUTOR: A I M DISTRIBUTORS, INC.
00 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: General Counsel
ARTICLE X
MISCELLANEOUS
10.1 This Agreement will be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Maryland; provided,
however, that if such laws or any of the provisions of this Agreement conflict
with applicable provisions of the 1940 Act, the latter shall control.
10.2 If any provision of this Agreement will be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement will
not be effected thereby.
10.3 This Agreement contains the entire understanding and agreement with
respect to the subject matter of this Agreement and may not be amended except in
writing by the parties hereto.
10.4 Each party hereto shall cooperate with the other parties and all
appropriate government authorities and shall permit access to its books and
records in connection with any investigation or inquiry relating to the
transactions contemplated by this Agreement.
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
and its seal to be hereunder affixed hereto as of the date specified below.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
by:
Xxxxxxx Xxxxx Xxxxx X. Xxxxxxxxx
Attest Title: Vice President
AIM VARIABLE INSURANCE FUNDS, INC.
by:
Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
Attest Title: President
A I M DISTRIBUTORS, INC.
by:
Xxxxx X. Xxxxxxx Xxxxxxx X. Xxxx
Attest Title: President
