JANUS ASPEN SERIES
FUND PARTICIPATION AGREEMENT
(Service Shares)
THIS AGREEMENT is made this ____ day of __________, 1999, between JANUS
ASPEN SERIES, an open-end management investment company organized as a Delaware
business trust (the "Trust"), JANUS CAPITAL CORPORATION, a Colorado corporation
(the "Adviser"), and XXXX XXXXXXX LIFE INSURANCE COMPANY, a life insurance
company organized under the laws of the State of Massachusetts (the "Company"),
on its own behalf and on behalf of each segregated asset account of the Company
set forth on Schedule A, as may be amended from time to time (the "Accounts").
W I T N E S S E T H:
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WHEREAS, the Trust has registered with the Securities and Exchange
Commission as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and has registered the offer
and sale of its shares under the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Trust desires to act as an investment vehicle for separate
accounts established for variable life insurance policies and variable annuity
contracts to be offered by insurance companies that have entered into
participation agreements with the Trust (the "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each series representing an interest in a particular managed
portfolio of securities and other assets (the "Portfolios") and each Portfolio
offering a class of shares designated Service Shares (referred to in this
Agreement as "shares"); and
WHEREAS, the Trust has received an order from the Securities and Exchange
Commission granting Participating Insurance Companies and their separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(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 certain qualified
pension and retirement plans (the "Participating Plans") (the "Exemptive
Order"); and
WHEREAS, the Adviser serves as the Trust investment adviser; and
WHEREAS, the Company has registered or will register (unless registration
is not required under applicable law) certain variable life insurance policies
and/or variable annuity contracts under the 1933 Act (the "Contracts"); and
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WHEREAS, the Company has registered or will register (unless registration
is not required under applicable law in proper reliance on Sections 3(c)(1),
3(c)(7) or 3(c)(11) of the 0000 Xxx) each Account as a unit investment trust
under the 1940 Act; and
WHEREAS, the Company desires to utilize shares of one or more Portfolios as
an investment vehicle of the Accounts;
NOW, THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE I
Sale of Trust Shares
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1.1 The Trust shall make shares of its Portfolios available to the
Accounts at the net asset value next computed after receipt of such purchase
order by the Trust (or its agent), as established in accordance with the
provisions of the then current prospectus of the Trust. Shares of a particular
Portfolio of the Trust shall be ordered in such quantities and at such times as
determined by the Company to be necessary to meet the requirements of the
Contracts. The Trustees of the Trust (the "Trustees") may refuse to sell shares
of any Portfolio to any person, or suspend or terminate the offering of shares
of any Portfolio, upon prior written notice to the Company, if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
reasonable discretion of the Trustees 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 such Portfolio.
1.2 The Trust will redeem any full or fractional shares of any Portfolio
when requested by the Company on behalf of an Account at the net asset value
next computed after receipt by the Trust (or its agent) of the request for
redemption, as established in accordance with the provisions of the then current
prospectus of the Trust. The Trust shall make payment for such shares in the
manner reasonably established from time to time by the Trust, but in no event
shall payment be delayed for a greater period than is permitted by the 0000 Xxx.
1.3 For the purposes of Sections 1.1 and 1.2, the Trust hereby appoints
the Company as its agent for the limited purpose of receiving and accepting
purchase and redemption orders resulting from investment in and payments and
other transactions under the Contracts that are not within the Company's
discretion. Receipt by the Company shall constitute receipt by the Trust
provided that (i) such orders are received by the Company in good order prior to
the time the net asset value of each Portfolio is priced in accordance with its
prospectus and (ii) the Trust receives notice of such orders by 11:00 a.m. New
York time on the next following Business Day. "Business Day" shall mean any day
on which the New York Stock Exchange is open for trading and on which the Trust
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission.
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1.4 Purchase orders that are transmitted to the Trust in accordance with
Section 1.3 shall be paid for no later than 12:00 noon New York time on the same
Business Day that the Trust receives notice of the order. Payments of purchase
orders and redemptions shall be made in federal funds transmitted by wire.
1.5 Issuance and transfer of the Trust's shares will be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Shares ordered from the Trust will be recorded in the appropriate title for each
Account or the appropriate subaccount of each Account.
1.6 The Trust shall furnish prompt notice to the Company of any income
dividends or capital gain distributions payable on the Trust's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares of
that Portfolio. The Trust shall notify the Company of the number of shares so
issued as payment of such dividends and distributions.
1.7 The Trust shall make the net asset value per share for each Portfolio
available to the Company on a daily basis in accordance with mutually agreed
upon guidelines for electronic transmission (which transmission will be by
electronic file) 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 p.m. New York time.
1.8 The Trust agrees that its shares will be sold only to Participating
Insurance Companies and their separate accounts and to certain Participating
Plans to the extent permitted by the Exemptive Order. No shares of any
Portfolio will be sold directly to the general public. The Company agrees that
Trust shares will be used only for the purposes of funding the Contracts and
Accounts listed in Schedule A, as amended from time to time.
1.9 The Trust agrees that all Participating Insurance Companies shall have
the obligations and responsibilities regarding pass-through voting and conflicts
of interest corresponding to those contained in Section 2.8 and Article IV of
this Agreement.
1.10 The Trust and the Adviser agree that Trust shares will not be sold to
any Participating Insurance Company or Plan that owns more than 10% of the
outstanding shares of the Trust that has not entered into an agreement that
imposes on that purchaser substantially the same obligations as are imposed on
the Company by the following provisions of this Agreement: 1.8, 5.1, 6.2, 6.3.
ARTICLE II
Obligations of the Parties
--------------------------
2.1 The Trust shall prepare and be responsible for filing with the
Securities and Exchange Commission and any state regulators requiring such
filing all reports and other documentation for which filing is required,
including but not limited to shareholder reports, notices, proxy materials (or
similar materials such as voting instruction solicitation materials),
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prospectuses and statements of additional information of the Trust. The Trust
shall bear the costs of registration and qualification of its shares,
preparation and filing of the documents listed in this Section 2.1 and all taxes
to which an issuer is subject on the issuance and transfer of its shares.
2.2 At the option of the Company, the Trust shall either (a) provide the
Company (at the Company's expense) with as many copies of the Trust's current
prospectus, annual report for any specific Portfolio, semi-annual report and
other shareholder communications, including any amendments or supplements to any
of the foregoing, as the Company shall reasonably request; or (b) provide the
Company with a camera ready copy of such documents in a form suitable for
printing, or in a computer diskette or Internet format that cannot be changed by
the Company (i.e. read-only or PDF format). The Trust will provide the Company
----
with the prospectus (pursuant to either (a) or (b) above) as soon as reasonably
possible after it receives final SEC comments and before the date of the
prospectus (if reasonably possible). If the Company elects to include any
materials provided by the Trust, specifically prospectuses, SAIs, shareholder
reports and proxy materials, on its web site or any other computer or electronic
format, the Company assumes sole responsibility for maintaining such materials
in the form provided by the Trust and for replacing such materials with all
updates provided by the Trust. The prospectus will contain only those
Portfolios specified by the Company, upon reasonable notice by the Company. The
Trust shall provide the Company with a copy of its statement of additional
information in a form suitable for duplication by the Company. The Trust (at
its expense) shall provide the Company with copies of any Trust-sponsored proxy
materials in such quantity as the Company shall reasonably require for
distribution to Contract owners. The Trust or the Adviser shall bear the costs
of distributing such proxy materials (or similar materials such as voting
solicitation instructions) to the Company's Contract owners, including expenses
associated with the production and personalization of the voting instruction
materials.
2.3 The Company shall bear the costs of printing and distributing the
Trust's prospectus, statement of additional information, shareholder reports and
other shareholder communications to owners of and applicants for policies for
which the Trust is serving or is to serve as an investment vehicle. The Company
assumes responsibility for ensuring the delivery of such materials as well as
proxy materials to Contract owners in accordance with applicable federal and
state securities laws.
2.4
The Adviser represents that it is the sole owner of the name and xxxx
"Janus." Based on that representation the Company agrees that all use of any
designation comprised in whole or part of Janus (a "Xxxxx Xxxx") under this
Agreement shall inure to the benefit of the Adviser. Upon termination of this
Agreement for any reason, the Company shall cease all use of any Xxxxx Xxxx(s)
as soon as reasonably practicable.
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(b) The Company represents that it (together with its parent, affiliates
and subsidiaries) is the sole owner of the name and xxxx "Xxxx Xxxxxxx." Based
on that representation the Trust agrees that all use of any designation
comprised in whole or part of Xxxx Xxxxxxx (a "Xxxx Xxxxxxx Xxxx") under this
Agreement shall inure to the benefit of the Company. Upon termination of this
Agreement for any reason, the Trust shall cease all use of any Xxxx Xxxxxxx
Xxxx(s) as soon as reasonably practicable.
2.5
The Company shall furnish, or cause to be furnished, to the Trust or its
designee, a copy of each Contract prospectus or statement of additional
information in which the expenses or investment policies of Trust or its
investment adviser is described prior to the filing of such document with the
Securities and Exchange Commission. The Company shall furnish, or shall cause
to be furnished, to the Trust or its designee, each piece of sales literature or
other promotional material in which the Trust or its investment adviser is
described in a material manner, at least ten Business Days prior to its use. No
such material shall be used if the Trust or its designee reasonably objects to
such use within ten Business Days after receipt of such material.
(b) The Trust shall furnish, or cause to be furnished, to the Company or
its designee, a copy of each Trust prospectus or statement of additional
information in which the Company is named prior to the filing of such document
with the Securities and Exchange Commission. The Trust shall furnish, or shall
cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company is described in a
material manner, at least ten Business Days prior to its use. No such material
shall be used if the Company or its designee reasonably objects to such use
within ten Business Days after receipt of such material.
(c) The Company intends to create and provide Contract owners with "fact
sheets" of participating funds on a regular basis. The Company will initially
provide a template fact sheet to the Trust prior to use of such materials for
the Trust's approval which shall not be unreasonably withheld. Thereafter, the
Company will provide the Trust with samples of the fact sheets for approval by
the Trust only if the content or format of the report changes substantially.
Generally, the Trust and the Company agree to good faith mutual cooperation in
the resolution of novel or controversial issues concerning sales literature that
may arise pursuant to this Agreement. The Trust and the Adviser agree to
provide the Company with the information necessary to complete the fact sheet no
later than 7 to 10 business days after the end of a calendar quarter.
2.6 The Company shall not give any material information or make any
representations or statements on behalf of the Trust or concerning the Trust or
its investment adviser in connection with the sale of the Contracts other than
information or representations contained in and accurately derived from the
registration statement or prospectus for the Trust shares (as such registration
statement and prospectus may be amended or supplemented from time to time),
reports of the Trust, Trust-sponsored proxy statements, or in sales literature
or
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other promotional material approved by the Trust or its designee, the
Advisor, or the Trust's Distributor (Janus Distributors, Inc.) except as
required by legal process or regulatory authorities or with the written
permission of the Trust or its designee. The Company assumes all responsibility
for filing with the NASD of advertising and sales literature created by the
Company pursuant to this Agreement.
2.7 So long as, and to the extent that the Securities and Exchange
Commission interprets the 1940 Act to require pass-through voting privileges for
variable policyowners, the Company will provide pass-through voting privileges
to owners of policies whose cash values are invested, through the Accounts, in
shares of the Trust. The Trust shall require all Participating Insurance
Companies to calculate voting privileges in the same manner and the Company
shall be responsible for assuring that the Accounts calculate voting privileges
in the manner established by the Trust. With respect to each Account, the
Company will vote shares of the Trust held by the Account and for which no
timely voting instructions from policyowners are received as well as shares it
owns that are held by that Account, in the same proportion as those shares for
which voting instructions are received.
2.8 The Company shall notify the Trust of any applicable state insurance
laws of which it is aware that restrict the Portfolios' investments or otherwise
materially affect the operation of the Trust and shall notify the Trust of any
material changes in such laws.
2.9 The Adviser agrees to establish and carry out written procedures
reasonably designed to ensure that (a) all contracts of any Participating
Insurance Company that invest in the Trust are and will continue to be treated
as annuity, life insurance or endowment contracts, under applicable provisions
of the Internal Revenue Code of 1986, as amended (the "Code") and the
regulations thereunder; (b) each separate account that funds any such contracts
is and will be a "segregated asset account" and that interests in such 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; and (c) each Participating Plan is a "qualified
pension or retirement plan" within the meaning of those terms under such
regulations. The Adviser will notify the Company immediately upon having a
reasonable basis for believing that any of such requirements has ceased to be
met or might not be met in the future.
2.10 At the request of any party to this Agreement, each other party will
make available to the other party's independent auditors and/or representative
of the appropriate regulatory agencies, all relevant records, data and access to
operating procedures that may be reasonably requested. Trust agrees that
Company shall have the right to inspect, audit and copy all relevant records
pertaining to the performance of services under this Agreement pursuant to the
requirements of any state insurance regulator(s). However, Trust and Adviser
shall own and control all of their respective records pertaining to their
performance of the services under this Agreement.
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2.11 The Trust shall send to the Company, monthly confirmations of activity
in the Separate Account detailing activity in the Account, and shall provide
daily electronic account look-up functions.
2.12 The Trust and Adviser shall provide the Company with any information
it reasonably requests from time to time, in connection with the Company's
performance of this Agreement, and reporting to management and customers. This
information will be provided by the Trust or Adviser within a commercially
reasonable time after receiving any such request from the Company.
ARTICLE III
Representations and Warranties
------------------------------
3.1 The Company represents and warrants that it is an insurance company
duly organized and in good standing under the laws of the State of Massachusetts
and that it has legally and validly established each Account as a segregated
asset account under such law on the date set forth in Schedule A.
3.2 The Company represents and warrants that each Account (1) has been
registered or, prior to any issuance or sale of the Contracts, will be
registered as a unit investment trust in accordance with the provisions of the
1940 Act or, alternatively (2) has not been registered in proper reliance upon
an exclusion from registration under either 3(c)(1), 3(c)(7) or 3(c)(11) of the
1940 Act. The Company further represents and warrants that in order to comply
with section 12(d)(1)(E) of the 1940 Act, with respect to any Accounts that are
not registered in reliance on 3(c)(1), or 3(c)(7):
(1) The Company represents that either the Company or the principal
underwriter of any unregistered separate account holding Portfolio shares
is a broker or dealer registered under the Securities Exchange Act of 1934
(the "1934 Act") or is controlled (as defined in the 0000 Xxx) by a broker
or dealer registered under the 1934 Act; (2) The Company will not hold any
other investment security (as defined in Section 3 of the 0000 Xxx) in an
unregistered separate account that holds shares of a Portfolio; (3) The
Company will seek instructions from holders of interests in an unregistered
separate account holding Portfolio shares with regard to the voting of all
proxies solicited in connection with a Portfolio and will vote those
proxies only in accordance with those instructions or the Company will vote
--
Portfolio shares held in its unregistered separate accounts in the same
proportion as the vote of all of the Portfolio's other shareholders; and
(4) The Company will not substitute another security for shares of a
Portfolio held in an unregistered separate account unless the Securities
and Exchange Commission approves the substitution in the manner provided in
Section 26 of the 0000 Xxx.
3.3 The Company represents and warrants that the interests in the Accounts
(1) are or, prior to issuance, will be registered as securities under the 1933
Act or, alternatively (2)
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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 and state laws; and the sale of
the Contracts shall comply in all material respects with state insurance
suitability requirements.
3.4 The Trust represents and warrants that it is duly organized and
validly existing under the laws of the State of Delaware.
3.5 The Trust represents and warrants that the Trust shares offered and
sold pursuant to this Agreement will be registered under the 1933 Act and the
Trust shall be registered under the 1940 Act prior to any issuance or sale of
such shares. The Trust shall amend its registration statement under the 1933
Act and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Trust shall 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 Trust.
3.6 The Trust represents, warrants and covenants that the Trust is managed
so that each Account may "look through" to the investments of each Portfolio in
which it holds shares in accordance with the "look through" rules found in
Treasury Regulation 1.817-5 and that each Portfolio will at all times comply
with Section 817(h) of the Code and Treasury Regulation 1.817-5 relating to the
diversification requirements for variable annuity, endowment, modified endowment
or life insurance contracts and any amendments or other modifications to that
Section or Regulation. Upon the request of the Company, the Trust shall provide
the Company with a certificate of compliance with such diversification
requirement for each Portfolio within 20 days of the close of each calendar
quarter in substantially the form attached hereto as Schedule B.
3.7 The Trust represents and warrants that the investments of each
Portfolio will comply with the diversification requirements set forth in Section
817(h) of the Code, and the rules and regulations thereunder; that each
Portfolio of the Trust does and will at all times continue to qualify as a
regulated investment company under subchapter M of the Code, and that no other
Participating Insurance Company or Participating Plan will purchase shares in
any Portfolio for any purpose or under any circumstances that would preclude the
Company from "looking through" to the investment of each Portfolio in which it
invests, pursuant to the "look through" rules found in Treasury Regulation
1.817-5; and the Trust and the Adviser will promptly notify the Company if at
any time they have a reasonable basis for believing that any of such
representations and warranties have become, or are likely to become, untrue.
3.8 The Trust represents and warrants that it has received an order from
the Securities and Exchange Commission granting Participating Insurance
Companies and their separate accounts exemptions from the provisions of Sections
9(a), 13(a), 15(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
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separate accounts of both affiliated and unaffiliated life insurance companies
and certain Participating Plans.
3.9 The Adviser represents and warrants that the investment advisory or
management fees paid to the Adviser by the Trust are and will be legitimate and
not excessive and are derived from an advisory contract which does not result in
a breach of fiduciary duty.
3.10 The Trust represents and warrants that any distribution fees paid
to Participating Insurance Companies, out of Trust assets attributable to
Service Shares shall be paid in compliance with Rule 12b-1 under the 1940 Act.
ARTICLE IV
Potential Conflicts
-------------------
4.1 The parties acknowledge that the Trust's shares may be made available
for investment to other Participating Insurance Companies and Plans. In such
event, the Trustees will monitor the Trust 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 Portfolio 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. The Trustees shall immediately inform the Company in writing if they
determine that an irreconcilable material conflict exists and the implications
thereof.
4.2 The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Trustees. The Company will assist the
Trustees in carrying out their responsibilities under the Exemptive Order by
providing the Trustees with all information reasonably necessary for the
Trustees to consider any issues raised including, but not limited to,
information as to a decision by the Company to disregard Contract owner voting
instructions.
4.3 If it is reasonably determined by a majority of the Trustees, or a
majority of its disinterested Trustees, 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, and any affected Participating Plans, at its expense and to
the extent reasonably practicable (as determined by the Trustees) take
commercially reasonable steps 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 the Trust or any Portfolio and reinvesting such
assets in a different investment medium, including (but not limited to) another
Portfolio of the Trust, or submitting the question of
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whether or not such segregation should be implemented to a vote of all affected
Contract 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.
4.4 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 the Trust's reasonable election, to withdraw the affected
Account's investment in the Trust 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 reasonably determined by a majority of the disinterested Trustees. Any such
withdrawal and termination must take place within six (6) months after the Trust
gives written notice that this provision is being implemented. Until the end of
such six (6) month period, the Trust shall continue to accept and implement
orders by the Company in accordance with the terms of this Agreement for the
purchase and redemption of shares of the Trust.
4.5 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 the Trust and terminate this Agreement with
respect to such Account within six (6) months after the Trustees' reasonable
determination and notice thereof to the Company in writing 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 a majority of the
disinterested Trustees. Until the end of such six (6) month period, the Trust
shall continue to accept and implement orders by the Company for the purchase
and redemption of shares of the Trust.
4.6 For purposes of Sections 4.3 through 4.6 of this Agreement, a majority
of the disinterested Trustees shall reasonably 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 the Trustees reasonably determine that any proposed action does not
adequately remedy any irreconcilable material conflict, then the Company will
withdraw the Account's investment in the Trust and terminate this Agreement
within six (6) months after the Trustees 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 a majority of the disinterested Trustees.
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4.7
(a) The Company shall at least annually submit to the Trustees such
reports, materials or data as the Trustees may reasonably request so that the
Trustees may carry out the duties imposed upon them by the Exemptive Order, and
said reports, materials and data shall be submitted more frequently if
reasonably deemed appropriate by the Trustees.
(b) The Trust shall at least annually submit to the Company such reports,
materials or data as the Company may reasonably request so that the Company may
carry out the duties imposed upon it under this Agreement, and said reports,
materials and data shall be submitted more frequently if reasonably deemed
appropriate by the Company.
4.8 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 Trust and/or the
Participating Insurance Companies, as appropriate, shall take such steps as may
be necessary 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.
ARTICLE V
Indemnification
---------------
5.1 Indemnification By the Company. The Company agrees to indemnify and
------------------------------
hold harmless the Trust and each of its trustees, officers, employees and agents
and each person, if any, who controls the Trust within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 5.1) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Company, which
consent shall not be withheld for any settlement that would be commercially
reasonable for the Indemnified Parties in the absence of this Section 5.1) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal counsel
fees incurred in connection therewith) (collectively, "Losses"), to which the
Indemnified Parties may become subject under any statute or regulation, or at
common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in a registration statement
or prospectus for the Contracts or in the Contracts themselves or in
sales literature generated or approved by the Company on behalf of the
Contracts or Accounts (or any amendment or supplement to any of the
foregoing) (collectively, "Company Documents" for the purposes of this
Article V), 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 indemnity shall not apply as to any
Indemnified
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Party if such statement or omission or such alleged statement or
omission was made in reliance upon and was accurately derived from
written information reasonably believed by the Company to have been
furnished to the Company by or on behalf of the Trust for use in
Company Documents or otherwise for use in connection with the sale of
the Contracts or Trust shares; or
(b) arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived from
Trust Documents as defined in Section 5.2(a)) or wrongful conduct of
the Company or persons under its control, with respect to the sale or
acquisition of the Contracts or Trust shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Trust Documents as defined
in Section 5.2(a) or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission was
made in reliance upon and accurately derived from written information
furnished to the Trust by or on behalf of the Company; or
(d) arise out of or result from any failure by the Company to provide the
services or furnish the materials required under the terms of this
Agreement; or
(e) 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.
5.2 Indemnification By the Trust. The Trust agrees to indemnify and hold
----------------------------
harmless the Company and each of its directors, officers, employees and agents
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 5.2) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Trust, which consent
shall not be withheld for any settlement that would be commercially reasonable
for the Indemnified Parties in the absence of this Section 5.2) or expenses
(including the reasonable costs of investigating or defending any alleged loss,
claim, damage, liability or expense and reasonable legal counsel fees incurred
in connection therewith) (collectively, "Losses"), to which the Indemnified
Parties may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) 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 Trust (or any amendment or supplement
thereto), (collectively, "Trust Documents" for the purposes of this
Article V), 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
12
therein not misleading, provided that this indemnity shall not apply
as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and was
accurately derived from written information reasonably believed by the
Trust or Adviser to have been furnished to the Trust or the Adviser by
or on behalf of the Company for use in Trust Documents or otherwise
for use in connection with the sale of the Contracts or Trust shares;
or
(b) arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived from
Company Documents) or wrongful conduct of the Trust or persons under
its control, with respect to the sale or acquisition of the Contracts
or Trust shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Company Documents or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon and
accurately derived from written information furnished to the Company
by or on behalf of the Trust; or
(d) arise out of or result from any failure by the Trust to provide the
services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any representation
and/or warranty made by the Trust in this Agreement or arise out of or
result from any other material breach of this Agreement by the Trust.
5.3 Indemnification By the Adviser. The Adviser agrees to indemnify and
------------------------------
hold harmless the Company and each of its directors, officers, employees, agents
and Contract owners 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 5.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Adviser, which consent shall not be withheld for any settlement that would
be commercially reasonable for the Indemnified Parties in the absence of this
Section 5.3), or expenses (including the reasonable costs of investigating or
defending any alleged loss, claim, damage, liability or expense and reasonable
legal counsel fees incurred in connection therewith) (collectively, "Losses"),
to which the Indemnified Parties may become subject under any statute or
regulation, or at common law or otherwise, insofar as such losses:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the Trust
Documents, 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 indemnity shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or
13
omission was made in reliance upon and was accurately
derived from written information reasonably believed by the Trust or
Advisor to have been furnished to the Trust or the Adviser by or on
behalf of the Company for use in Trust Documents or otherwise for use
in connection with the sale of the Contracts or Trust shares; or
(b) arise out of or result from statements or representations (other
than statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of the Trust, the Adviser
or persons under their control, with respect to the sale or
acquisition of the Contracts or Trust shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Company documents or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, if such statement or omission was made in reliance upon
and accurately derived from written information furnished to the
Company by or on behalf of the Trust or the Adviser; or
(d) arise out of or result from any failure by the Trust or the
Adviser to provide the services or furnish the materials required
under the terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Trust or the Adviser in
this Agreement or arise out of or result from any other material
breach of this Agreement by the Trust.
Without in any way limiting the effect of this Section 5.3 and without in
any way limiting or restricting any other remedies available to the Company, the
Adviser will pay all costs associated with or arising out of any failure, or any
anticipated or reasonably foreseeable failure, to comply with Section 3.6
hereof, and all costs of the Company associated with correcting or responding to
any such failure on behalf of itself or of Contract owners.
5.4 Neither the Company nor the Trust nor the Adviser shall be liable
under the indemnification provisions of Sections 5.1, 5.2 or 5.3, as applicable,
with respect to any Losses incurred or assessed against an Indemnified Party
that arise from such Indemnified Party's willful misfeasance, bad faith or
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.
5.5 Neither the Company nor the Trust nor the Adviser shall be liable
under the indemnification provisions of Sections 5.1, 5.2 or 5.3, as applicable,
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the other party in writing within a
reasonable time after the summons, or other first written notification,
14
giving information of the nature of the claim shall have been served upon or
otherwise received by such Indemnified Party (or after such Indemnified Party
shall have received notice of service upon or other notification to any
designated agent), but failure to notify the party against whom indemnification
is sought of any such claim shall not relieve that party from any liability
which it may have to the Indemnified Party in the absence of Sections 5.1, 5.2
and 5.3.
5.6 In case any such action is brought against the Indemnified Parties,
the indemnifying party shall be entitled to participate, at its own expense, in
the defense of such action. Unless the Indemnified Party releases indemnifying
party from any further obligation under this Article V the indemnifying party
also shall be entitled to assume the defense thereof, with counsel reasonably
satisfactory to the party named in the action. After notice from the
indemnifying party to the Indemnified Party of an election to assume such
defense, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the indemnifying party will not be liable
to the Indemnified 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. Notwithstanding any other
provision of this Article V, the Company shall be entitled to refuse any request
by the Adviser or the Trust, as the case may be, to assume the defense of any
action brought against the Company by the Internal Revenue Service ("IRS") or
any other tax authority; provided that, following any such refusal, the Adviser
or the Trust, as the case may be, shall be released from any obligation for
further costs of defense under this Article V. If allowed by the applicable
rules of procedure, however, the Adviser and/or the Trust will be entitled to
participate in the defense of any action brought against the Company by the IRS
or any other tax authority, with any and all costs of such participation being
the responsibility of the Adviser and/or the Trust.
ARTICLE VI
Termination
-----------
6.1 This Agreement may be terminated by either party for any reason by
ninety (90) days advance written notice delivered to the other party.
6.2 Notwithstanding any termination of this Agreement, the Trust shall, at
the option of the Company, continue to make available additional shares of the
Trust (or any Portfolio) pursuant to the terms and conditions of this Agreement
for all Contracts in effect on the effective date of termination of this
Agreement, provided that the Company continues to pay the applicable costs set
forth in Section 2.3; and all relevant provisions of this Agreement shall remain
in effect for these purposes.
6.3 The provisions of Article V shall survive the termination of this
Agreement, and the provisions of Article IV and Section 2.7 shall survive the
termination of this Agreement as long as shares of the Trust are held on behalf
of Contract owners in accordance with Section 6.2.
15
ARTICLE VII
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 Trust:
Janus Aspen Series
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
If to the Company:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxx Xxxx
Senior Vice President
with a copy to:
Xxxxxx X. Xxxxxx
Vice President & Counsel
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
If to Janus Capital Corporation:
Janus Capital Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
16
ARTICLE VIII
Miscellaneous
-------------
8.1 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.
8.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
8.3 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.
8.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of State of Colorado.
8.5 The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising, directly or indirectly, under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the assets
of the Trust and that no Trustee, officer, agent or holder of shares of
beneficial interest of the Trust shall be personally liable for any such
liabilities.
8.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the Securities and
Exchange Commission, the National Association of Securities Dealers, Inc., and
state insurance regulators) and shall permit such authorities and each other
reasonable access to its relevant
books and records in connection with any investigation or inquiry relating to
this Agreement or the transactions contemplated hereby.
8.7 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.
8.8 The parties to this Agreement acknowledge and agree that this
Agreement shall not be exclusive in any respect.
8.9 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written approval of the other party.
8.10 No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties.
17
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Participation Agreement as of the date and year first above
written.
JANUS ASPEN SERIES
By:
Name:
Title:
XXXX XXXXXXX LIFE INSURANCE
COMPANY
By:
Name:
Title:
JANUS CAPITAL CORPORATION
By:
Name:
Title:
18
Schedule A
----------
Separate Accounts and Associated Contracts
------------------------------------------
Name of Separate Account and Contracts Funded
Date Established by Board of Directors By Separate Account
-------------------------------------- -------------------
Xxxx Xxxxxxx Variable Annuity Account H Revolution Variable Annuity
(April 14, 1997) Revolution Value Variable Annuity
Revolution Extra Variable Annuity
Revolution Access Variable Annuity
Xxxx Xxxxxxx Mutual Variable Life Variable Estate Protector
Insurance Account UV
(Authorized May 10, 1993)
19
SCHEDULE B
CERTIFICATE OF COMPLIANCE
Name of Fund(s):
---------------
Janus Aspen Series -
To:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxx Xxxx
Senior Vice President
with a copy to:
Xxxxxx X. Xxxxxx
Vice President & Counsel
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
We have reviewed compliance of the Fund(s) named above with respect to
certain investment diversification requirements for the Fund(s) for the quarter
ending ____________. The review was limited to verifying whether the Fund
complied with the quarterly diversification requirements described in Section
817(h) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the "Section 817(h) Diversification Requirements").
The Review did not include testing compliance with any other investment
limitations in the prospectus or Statement of Additional Information of the
Fund(s).
As of ________________ the Fund was in compliance with the Section 817(h)
Diversification Requirements.
Dated:
By:
Name:
Title:
20
