SECOND RESTATED AND AMENDED INVESTMENT ADVISORY AGREEMENT
SECOND RESTATED AND AMENDED AGREEMENT made this 1st day of June, 2007 by
and between CONTINENTAL ASSURANCE COMPANY SEPARATE ACCOUNT (B) (the "Separate
Account") and CONTINENTAL ASSURANCE COMPANY (the "Company").
1. The Company will furnish the Separate Account with investment advisory
services, statistical services, pricing services, research facilities and
services, will supervise the composition of the Separate Account's portfolio
continuously and will effect such changes therein as the Company deems
advisable, including the nature, timing and manner of effectuating such
changes. The Company, at its own expense, shall furnish office space to the
Separate Account and shall pay the salaries and fees of all Officers and
Committee Members of the Separate Account employed by the Company and all
other employees of the Company who perform services for the Separate Account.
The compensation for those services shall be an investment advisory fee
payable monthly, computed at the annual rate of 1/2 of 1% of the average
daily net asset value of the Separate Account (the "Advisory Fee").
2. The Company shall bear, without compensation, the following expenses
of the Separate Account:
(a) All costs and expenses relating to the printing or other
reproduction and distribution of preliminary and final prospectuses to
persons who, at the time of the distribution of such prospectuses, are not
participants in the Separate Account;
(b) All costs and expenses relating to the advertising of Investment
Units of the Separate Account, including without limitation, the overhead
allocated to the supervision of brokers and dealers selling Investment Units
and the printing and mailing of sales literature;
(c) All costs and expenses relating to the printing or other
reproduction and distribution of any underwriting documents incident to a
public offering of Investment Units of the Separate Account, and review by
the National Association of Securities Dealers, Inc. of any underwriting
arrangement; and
(d) All other expenses primarily intended to result in the sale of
Investment Units of the Separate Account.
3. Investment companies (including money market funds) charge fees based
on assets under management. If the Separate Account is permitted to have
its assets invested in securities contracts of investment companies
(including money market funds), the Separate Account would bear its ratable
share of the investment companies' expenses, including their advisory and
administrative fees. These fees would be separate and in addition to the
Advisory Fee charged by the Company to the Separate Account hereunder.
Notwithstanding the foregoing, if the amount of expenses borne by the
Separate Account for assets invested in securities contracts of investment
companies (excluding assets invested in money market funds) exceeds 0.2%
of the average daily net asset value of the Separate Account on any business
day, then the Company shall reimburse the Separate Account for such excess.
4. The Separate Account shall bear all fees and expenses related to the
Separate Account (including without limitation all fees and expenses
attributable to the lending of its portfolio securities) that are not
specifically set forth above as being borne by the Company.
5. In selecting brokers to execute portfolio transactions, the Company's
primary criterion in selecting a broker or dealer to execute portfolio
transactions is the expected ability of such broker or dealer to make the
best possible execution on orders. If several brokers are expected to be
able to provide equally good execution, the Company may give preference to
those brokers who provide statistical research, assistance in pricing
portfolio securities or other services. Commissions on all transactions will
be negotiated, and the primary basis of the commission agreed to by the
Company will be the quality of execution. The Company will seek to act in a
fair and reasonable manner in allocating suitable investment and trading
opportunities among the Separate Account and any other accounts managed by
the Company, its parent company or any of its affiliates, but the Separate
Account acknowledges that equality of treatment cannot be assured in all
situations. When the Company determines that it would be appropriate for the
Separate Account and any such other accounts to participate in an
investment opportunity, the Company is authorized to place orders for the
Separate Account and each such other account simultaneously, and if all such
orders are not filled at the same price, the Company may cause the Separate
Account to pay or receive a price that is no less favorable than the
average of the prices at which the orders were filled for the Separate
Account and the other managed accounts. If all such orders cannot be fully
executed under the prevailing market conditions, the Company may allocate
among the Separate Account and such other accounts the orders that are
capable of being executed in a fair and equitable manner.
6. It is expected that the Company will provide investment advisory
services for the Company's other customers and for its parent company and
its affiliates. Nothing herein shall restrict the ability of the Company
(or any of its associated persons) to engage in any transactions for its
(or their) own account and for the account of others which are not in
breach of its (or their) fiduciary duty to the Separate Account.
7. This Agreement shall not be materially amended without the affirmative
vote or written consent of the holders of a majority of the outstanding
Investment Units of the Separate Account.
8. This Agreement may be terminated at any time by either party, without
the payment of any penalty, on sixty days written notice. Such action may
be taken by the Company or by either the Committee of the Separate Account
or the holders of a majority of its outstanding Investment Units.
9. This Agreement shall terminate automatically in the event of its
assignment.
10.This Agreement shall become effective at the close of business on June 1,
2007 and shall continue in force for one year from such date and indefinitely
thereafter, but only so long as the continuance after such year shall be
specifically approved at least annually by the vote of a majority of the members
of the Committee of the Separate Account who are not parties to the Agreement
or interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval.
IN WITNESS WHEREOF, the Separate Account and the Company have caused this
Agreement to be duly executed the day and year above written.
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (B)
/S/ Xxxxxx X. Xxxxx
By:__________________________
Chairperson
/S/ Xxxxx Xxxxxxxxx
ATTEST: ______________________________
Secretary
CONTINENTAL ASSURANCE COMPANY
/S/ Xxxxxxx X. XxXxxx
By:__________________________
Vice President
/S/ Xxxxxx X. Xxxxxxx
ATTEST: _______________________________
Assistant Secretary
