PARTICIPATION AGREEMENT
Among
XXXXX XXXXXX CONCERT SERIES INC.,
TRAVELERS INVESTMENT ADVISER, INC.
and
________________________________________
THIS AGREEMENT, made as of the ____ day of ___, 199_ by and among
_________________ (hereinafter the "Company"), on its own behalf and on
behalf of each segregated asset account of the Company set forth on
Schedule A hereto as may be amended from time to time (each such account
hereinafter referred to as the "Account"), the XXXXX XXXXXX CONCERT
SERIES INC., a Maryland corporation (hereinafter the "Fund"), and
TRAVELERS INVESTMENT ADVISER, INC. (hereinafter the "Adviser"), a
Delaware corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable annuity contracts and,
subject to an order expected to be obtained from the Securities and
Exchange Commission (the "SEC"), expects to be available to act as the
investment vehicle for certain qualified pension and retirement plans
("Qualified Plans") and for separate accounts established for variable
life insurance policies (such variable life insurance policies and
variable annuity contracts are herein, collectively, the "Variable
Insurance Products") to be offered by insurance companies which have
entered into participation agreements with the Fund and the Adviser
(hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interests in the Fund are divided into
several series of shares, each representing the interest in a particular
managed portfolio of securities and other assets; and
WHEREAS, the Fund desires to make shares of such managed
portfolios as are listed on Schedule B attached hereto, as such Schedule
B may be amended from time to time hereafter by mutual written agreement
of all the parties hereto, available to the Company for purchase (each
such listed portfolio, a "Portfolio"); and
WHEREAS, the Fund is seeking and expects to obtain an order from
the SEC, granting Participating Insurance Companies and variable annuity
and variable insurance separate accounts exemptions from the provisions
of Sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act
of 1940, as amended, (hereinafter the "l940 Act") and Rules 6e-2(b)(15)
and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares
of the Fund to be sold to and held by variable annuity and variable life
insurance separate accounts of both affiliated and unaffiliated life
insurance companies (hereinafter the "Mixed and Shared Funding Exemptive
Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the l940 Act and its shares are registered
under the Securities Act of 1933, as amended (hereinafter the "1933
Act"); and
WHEREAS, the Adviser is duly registered as an Investment Adviser
under the Federal Investment Advisers Act of 1940 and any applicable
state securities law; and
WHEREAS, the Company has registered or will register certain
variable life and variable annuity contracts under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of
Directors of the Company, on the date shown for such Account on Schedule
A hereto, to set aside and invest assets attributable to one or more
variable life and annuity contracts; and
WHEREAS, the Company has registered or will register each Account
as a unit investment trust under the l940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on
behalf of each Account to fund certain of the aforesaid variable life
and variable annuity contracts,
NOW, THEREFORE, in consideration of their mutual promises the
Company, the Fund and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to the Company those shares of the
Fund which each Account orders, executing such orders on a daily basis
at the net asset value next computed after receipt by the Fund or its
designee of the order for the shares of the Fund. For purposes of this
Section l.l, the Company shall be the designee of the Fund for receipt
of such orders from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice
of such order by 10:00 a.m. Eastern 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 Fund calculates its net
asset value pursuant to the rules of the Securities and Exchange
Commission.
1.2. The Fund agrees to make its shares available indefinitely
for purchase at the applicable net asset value per share by the Company
and its Accounts on those days on which the Fund calculates its net
asset value pursuant to rules of the SEC and the Fund shall use
reasonable efforts to calculate such net asset value on each day which
the New York Stock Exchange is open for trading. Notwithstanding the
foregoing, the Board of Directors of the Fund (hereinafter the "Board")
may refuse to sell shares of any Portfolio to any person, or suspend or
terminate the offering of shares of any Portfolio 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 interest of the shareholders of such Portfolio.
1.3. The Fund and the Adviser agree that shares of the Fund will
be sold only to Participating Insurance Companies and their separate
accounts and, in accordance with the terms of the Mixed and Shared
Funding Exemptive Order, certain Qualified Plans. No shares of any
Portfolio will be sold to the general public.
1.4. The Fund will not sell Fund shares to any insurance company
or separate account unless an agreement containing provisions
substantially the same as Articles I and VII, Section 2.5 of Article II
and Sections 3.4 and 3.5 of Article III of this Agreement is in effect
to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's
request, any full or fractional shares of the Fund held by the Company,
executing such requests on a daily basis at the net asset value next
computed after receipt by the Fund or its designee of the request for
redemption. For purposes of Sections 2.10 and 2.11, upon the payment by
the Fund to the Company of the proceeds of such redemptions, such
proceeds shall cease to be the responsibility of the Fund and shall
become the responsibility of the Company. For purposes of this Section
1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee
shall constitute receipt by the Fund; provided that the Fund receives
notice of such request for redemption by 10:00 a.m. Eastern time on the
next following Business Day.
1.6. The Company agrees to purchase and redeem the shares of each
Portfolio offered by the then current prospectus of the Fund in
accordance with the provisions of such prospectus. The Company agrees
that all net amounts available under the variable life and variable
annuity contracts with the form number(s) which are listed on Schedule C
attached hereto and incorporated herein by this reference, as such
Schedule C may be amended from time to time hereafter by mutual written
agreement of all the parties hereto and which such contracts have been
sold pursuant to an Annuity Selling Agreement dated __________, 199_, by
and between the Company and ___________________. (the "Contracts"),
shall be invested in the Portfolios, in such other funds advised by the
Adviser as may be mutually agreed to in writing by the parties hereto,
or in the Company's general account, provided that such amounts may also
be invested in an investment company other than the Fund if (a) such
other investment company, or series thereof, has investment objectives
or policies that are substantially different from the investment
objectives and policies of the Portfolios of the Fund; or (b) the
Company gives the Fund and the Adviser 60 days' written notice of its
intention to make such other investment company available as a funding
vehicle for the Contracts; or (c) such other investment company was
available as a funding vehicle for the Contracts prior to the date of
this Agreement and the Company so informs the Fund and Adviser prior to
their signing this Agreement; or (d) the Fund or Adviser consents to the
use of such other investment company.
1.7. The Company shall pay for Fund shares on the next Business
Day after an order to purchase Fund shares is made in accordance with
the provisions of Section 1.1 hereof. Payment shall be in federal funds
transmitted by wire. For purpose of Section 2.9 and 2.10, upon receipt
by the Fund of the federal funds so wired, such funds shall cease to be
the responsibility of the Company and shall become the responsibility of
the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book
entry only. Stock certificates will not be issued to the Company or any
Account. Shares ordered from the Fund will be recorded in an
appropriate title for each Account or the appropriate subaccount of each
Account.
1.9. The Fund shall furnish notice (by wire or telephone,
followed by written confirmation) as soon as is reasonably practicable
to the Company of any income, dividends or capital gain distributions
payable on the Fund's shares. The Company hereby elects to receive all
such income dividends and capital gain distributions as are payable on
the Portfolio shares in additional shares of that Portfolio. The
Company reserves the right to revoke this election and to receive all
such income dividends and capital gain distributions in cash. The Fund
shall notify the Company of the number of shares so issued as payment of
such dividends and distributions.
1.10. The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon as
reasonably practical after the net asset value per share is calculated
(normally 6:30 p.m. Eastern time) and shall use its best efforts to make
such net asset value per share available by 7:00 p.m. Eastern time. If
the Fund provides the Company with the incorrect share net asset value
information, the Company on behalf of the Account shall be entitled to a
prompt adjustment to the number of shares purchased or redeemed to
reflect the correct share net asset value. Upon a final determination
that there has been an error in the calculation of net asset value,
dividend or capital gain, the Fund shall report such error to the
Company.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are
or will be registered under the 1933 Act; that the Contracts will be
issued and sold in compliance in all material respects with all
applicable Federal and State laws and that the sale of the Contracts
shall comply in all material respects with state insurance suitability
requirements. The Company further represents and warrants that it is an
insurance company duly organized and in good standing under applicable
law and that it has legally and validly established each Account prior
to any issuance or sale thereof as a segregated asset account under Iowa
Code Section 508A.1 and has registered or, prior to any issuance or sale
of the Contracts, will register each Account as a unit investment trust
in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts.
2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act, shall
be duly authorized for issuance and sold in compliance with the laws of
the State of Maryland and all applicable federal and state securities
laws and that the Fund is and shall remain registered under the 0000
Xxx. The Fund shall amend the Registration Statement for its shares
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 Fund shall
register and qualify the shares for sale where necessary as determined
by the Fund or the Adviser in accordance with the laws of the various
states.
2.3. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue
Code of 1986, as amended, (the "Code") and that it will make every
effort to maintain such qualification (under Subchapter M or any
successor or similar provision) and that it will notify the Company
immediately upon having a reasonable basis for believing that it has
ceased to so qualify or that it might not so qualify in the future.
2.4. The Company represents that the Contacts are currently
treated as endowment, annuity or life insurance contacts, under
applicable provisions of the Code and that it will make every effort to
maintain such treatment and that it will notify the Fund and the Adviser
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.
2.5. The Fund currently does not intend to make any payments to
finance distribution expenses pursuant to Rule 12b-1 under the 1040 Act
or otherwise, although it may make such payments in the future. To the
extent that it decides to finance distribution expenses pursuant to Rule
12b-1, the Fund undertakes to have a board of directors, a majority of
whom are not interested persons of the Fund, formulate and approve any
plan under Rule 12b-1 to finance distribution expenses.
2.6. The Fund makes no representation as to whether any aspect of
its operations (including, but not limited to, fees and expenses and
investment polices) complies with the insurance laws or regulations of
the various states except that the Fund and the Adviser represent that
their respective operations are and shall at all times remain in
material compliance with the laws of the State of Maryland to the extent
required to perform this Agreement.
2.7. The Fund represents that it is lawfully organized and
validly existing under the laws of the State of Maryland and that it
does and will comply in all material respects with the 1940 Act.
2.8. The Adviser represents and warrants that the Adviser is and
shall remain duly registered in all material respects under all
applicable federal and state securities laws and that the Adviser shall
perform its obligations for the Fund in compliance in all material
respects with the laws of the State of Maryland and any applicable state
and federal securities laws.
2.9. The Fund and Adviser represent and warrant that all of their
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the
Fund are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Fund in an
amount not less than the minimal coverage as required currently by Rule
17g-1 of the 1940 Act or related provisions as may be promulgated from
time to time. The aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.10. The Company represents and warrants that all if any of its
directors, officers, employees, investment advisers, and other
individuals/entities deal with the money and/or securities of the Fund
they will at all such times be covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund, in an amount not less than
the minimal coverage as required by Rule 17g-1 of the 1940 Act or
related provisions as may be promulgated from time to time. The
aforesaid Bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Adviser and the Fund shall provide to the Company such
documentation (including a final copy of the Fund's most current
prospectus as set in type at the Fund's expense) and other assistance as
is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus for the Fund is amended) to have the
prospectus for the Contracts and the Portfolios' prospectus printed
(such printing to be at the Company's expense except as provided in
Section 5.3 hereof).
3.2. The Fund's prospectus shall state that the Statement of
Additional Information ("SAI") for the Fund is available from the
Adviser (or in the Fund's discretion, the Prospectus shall state that
such SAI is available from the Fund), and the Adviser (or the Fund), at
its expense, shall print and provide one copy of such SAI free of charge
to the Company and to any owner of a Contract or prospective owner who
requests such Statement. The Company may make additional copies of the
SAI at its expense.
3.3. The Fund, at its expense, shall provide the Company with
copies of its proxy material, reports to shareholders, and other
communications to shareholders in such quantity as the Company shall
reasonably require for distributing to Contract owners; provided,
however, that the Company shall bear the expenses for the costs of
printing and distributing any proxy material, reports to shareholders
and other communications to shareholders that are prepared at the
request of the Company.
3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares
of such Portfolio for which instructions have
been received;
so long as and to the extent that the SEC continues to interpret the
1940 Act to require pass-through voting privileges for owners of
Variable Insurance Products. The Company reserves the right to vote
Fund shares held in any segregated asset account in its own right, to
the extent permitted by law. Participating Insurance Companies shall be
responsible for assuring that each of their separate accounts
participating in the Fund calculates voting privileges in a manner
consistent with this Section.
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee, each piece of sales literature or other
promotional material in which the Fund, the Adviser, or the Fund's
underwriter is named, at least ten Business Days prior to its use. No
such material shall be used if the Fund or its designee object to such
use within ten Business Days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the
Fund in connection with the sale of the Contracts other than the
information or representations contained in the registration statement
or prospectus for the Fund shares, as such registration statement and
prospectus may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or
other promotional material approved by the Fund or its designee or by
the Adviser, except with the permission of the Fund or the Adviser or
the designee of either.
4.3. The Fund, and the Adviser, or its designee 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
and/or its separate account(s), is named at least ten Business Days
prior to its use. No such material shall be used if the Company or its
designee object to such use within ten Business Days after receipt of
such material.
4.4. The Fund and the Adviser shall not give any information or
make any representations on behalf of the Company or concerning the
Company, each Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus for
the Contracts, as such registration statement and prospectus may be
amended or supplemented from time to time, or in published reports for
each Account which are in the public domain or approved by the Company
for distribution to Contract owners, or in sales literature or other
promotional material approved by the Company or its designee, except
with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, Statements of
Additional Information, reports, proxy statements, sales literature and
other promotional materials, applications for exemptions, requests for
no-action letters, and all amendments to any of the above, that relate
to the Fund or its shares, as soon as is reasonably practicable after
the filing of such document with the SEC or other regulatory
authorities.
4.6. The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses, Statements of
Additional Information, annual and semi-annual reports, solicitations
for voting instructions, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate to
the Contracts or each Account, as soon as is reasonably practicable
after the filing of such document with the SEC or other regulatory
authorities.
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is not limited
to, advertisements (such as materials published, or designed for use in,
in a newspaper, magazine, or other periodical, radio, television,
telephone or tape recording, videotape display, signs or billboards,
motion pictures, or other public media), sales literature (i.e., any
written communication distributed or made generally available to
customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications
distributed or made generally available to some or all agents or
employees, and registration statements, prospectuses, Statements of
Additional Information, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
5.1. The Fund and Adviser shall pay no fee or other compensation
to the Company under this Agreement, except that if the Fund or any
Portfolio adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, then the underwriter may make payments to the
Company for the Contracts if and in amounts agreed to by the Adviser in
writing and such payments will be made out of existing fees otherwise
payable to the Adviser, past profits of the Adviser or other resources
available to the Adviser, or by the Fund, to the extent permitted.
Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. Except as provided in sections
3.1, 3.2, 3.3 and 5.3 hereof, the Fund shall bear the expenses for the
cost of registration and qualification of the Fund's shares, preparation
and filing of the Fund's prospectus and registration statement, proxy
materials and reports, setting the prospectus in type, setting in type
and printing the proxy materials and reports to shareholders (including,
if so elected, the costs of printing a prospectus that constitutes an
annual report), the preparation of all statements and notices required
by any federal or state law, all taxes on the issuance or transfer of
the Fund's shares.
5.3. The printing and distributing of the prospectus for the
Portfolios (or that portion of a prospectus relating to the Portfolios
should the Company determine to print a combined prospectus) to existing
owners of Contracts shall be at the expense of the Fund.
ARTICLE VI. Diversification
6.1. Subject to the following sentence, the Fund 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, or life insurance contracts and any amendments or
other modifications to such Section or Regulations. In the event of any
changes to such Section or Regulations relating to the treatment of
variable contracts, the Company will advise the Fund of such changes.
ARTICLE VII. Potential Conflicts
7.1 The parties to this Agreement acknowledge that the Fund has
filed an application with the SEC to request an order (the "Exemptive
Order") granting relief from various provisions of the 1940 Act and the
rules thereunder to the extent necessary to permit Fund shares to be
sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated Participating
Insurance Companies and Qualified Plans. It is anticipated that the
Exemptive Order, when and if issued, shall require the Fund and each
Participating Insurance Company to comply with conditions and
undertakings substantially as provided in this Article VII. If the
Exemptive Order imposes conditions on the Company materially different
from those provided for in this Article VII, the conditions and
undertakings imposed by the Exemptive Order shall govern this Agreement.
The Fund will not enter into a participation agreement with any other
Participating Insurance Company unless it imposes the same conditions
and undertakings as are imposed on the Company hereby.
7.2 The Company will report any potential or existing conflicts
promptly to the Board, and in particular whenever contract owner voting
instructions are disregarded, and recognizes that it shall be
responsible for assisting the Board in carrying out its responsibilities
in connection with the Exemptive Order. The Company agrees to carry out
such responsibilities with a view to the interests of contract owners.
7.3. If it is determined by a majority of the Board, or a
majority of its disinterested directors that a material irreconcilable
conflict exists, the Company and other Participating Insurance Companies
shall, at their expense and to the extent reasonably practicable (as
determined by a majority of the disinterested trustees), take whatever
steps are necessary to remedy or eliminate the irreconcilable material
conflict, including but not limited to: (1) withdrawing the assets
allocable to some or all of the separate accounts from the Fund or any
Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Fund, or
submitting the question whether 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 (2) establishing a new registered
management investment company or managed separate account.
7.4 If a material irreconcilable conflict arises as a result of a
decision by the Company to disregard contract owner voting instructions
and said decision represents a minority position or would preclude a
majority vote by all contract owners having an interest in the Fund, the
Company may be required, at the Board's election, to withdraw the
Account's investment in the Fund.
7.5 For purposes of this Article VII, a majority of the
disinterested directors shall determine whether or not any proposed
action adequately remedies any irreconcilable material conflict, but in
no event shall the Fund be required to bear the expense of establishing
a new funding medium for any Contract. The Company shall not be
required by this Article VII to establish a new funding medium for any
Contract if an offer to do so has been declined by vote of a majority of
the contract owners materially adversely affected by the irreconcilable
material conflict. In the event that the Board determines that any
proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the
Fund and terminate this Agreement within six (6) months after the Board
informs 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 members of the Board.
7.6. 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 Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Mixed and Shared Funding
Exemptive Order) on terms and conditions materially different from those
contained in the Shared Funding Exemptive Order, then (a) the Fund
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; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4 and 7.5 of
this Agreement shall continue in effect only to the extent that terms
and conditions substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
8.1(a). The Company agrees to indemnify and hold harmless
the Fund and each of its directors and officers and each person,
if any, who controls the Fund within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 8.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written
consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar
as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale
or acquisition of the Fund's shares or the Contracts and:
(i) 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 Contract or contained in the Contracts or sales
literature for the Contracts (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that
this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and
in conformity with information furnished to the Company by
or on behalf of the Fund for use in the Registration
Statement or prospectus for the Contracts or in the
Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale
of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or sales
literature of the Fund not supplied by the Company, or
persons under its control) or wrongful conduct of the
Company or persons under its control, with respect to the
sale or distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
Registration Statement, prospectus, 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 to
the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company
to provide the services and furnish the materials under the
terms of this Agreement; or
(v) arise out of or result from any material breach
of any representation and/or warranty made by the Company in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Company.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against an
Indemnified Party as such may arise from 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 the Fund, whichever is
applicable.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against
an Indemnified Party unless such Indemnified Party shall have
notified the Company in writing within a reasonable time after the
summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified
Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify
the Company of any such claim shall not relieve the Company from
any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to
participate, at its own expense, in the defense of such action.
The Company also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After
notice from the Company to such party of the Company's election to
assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and
the Company will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such
party independently in connection with the defense thereof other
than reasonable costs of investigation.
8.1(d). The indemnification provided by this Section 8.1
shall survive the termination of this Agreement and shall be in
addition to any other liability the Company may have.
8.2. Indemnification by the Adviser
8.2(a). The Adviser agrees to indemnify and hold harmless
the Company and each of its directors and officers and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Adviser) or litigation
(including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the Registration Statement or prospectus or sales literature
of the Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished to the Adviser or Fund
by or on behalf of the Company for use in the Registration
Statement or prospectus for the Fund or in sales literature
(or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or sales
literature for the Contracts not supplied by the Adviser or
persons under its control) or wrongful conduct of the Fund
or Adviser or persons under their control; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration
Statement, prospectus or sales literature covering the
Contracts, or any amendment thereof or supplement thereto,
or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the
Fund; or
(iv) arise as a result of (a) any failure by the Fund to
provide the services and furnish the material under the
terms of this Agreement; or (b) a failure to comply with
Article VI of this Agreement with respect to diversification
requirements; or (c) failure to qualify as a registered
investment company under Subchapter M of the Code; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser or the
Fund in this Agreement or arise out of or result from any
other material breach of this Agreement by the Adviser or
the Fund.
8.2(b). The Adviser shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation to which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Company or Account,
whichever, is applicable.
8.2(c). The Adviser shall not be able under this
indemnification provision with respect to any claim made against
an Indemnified Party unless such Indemnified Party shall have
notified the Adviser in writing within a reasonable time after the
summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified
Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify
the Adviser of any such claim shall not relieve the Adviser from
any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought
against the Indemnified Parties, the Adviser will be entitled to
participate, at its own expense, in the defense thereof. The
Adviser also shall be entitled to assume the defense thereof with
counsel satisfactory to the party named in the action. After
notice from the Adviser to such party of the Adviser's election to
assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and
the Adviser 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.
8.2(d). The indemnification provided by this Section 8.2
shall survive the termination of this Agreement and shall be in
addition to any other liability the Fund or Adviser may have.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New
York.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE X. Term and Termination
10.1. The Agreement is effective as of the date hereof and will
remain in effect until terminated in accordance with the provisions
herein.
10.2. This Agreement shall terminate:
(a) at the option of any party upon 180 days advance
written notice to the other parties unless otherwise agreed in a
separate written agreement among the parties; or
(b) at the option of the Company if shares of the
Portfolios delineated in Schedule 2 are not reasonably available to meet
the requirements of the Contracts as determined by the Company;
provided, however, that such termination shall only apply to the
Portfolio(s) not reasonably available. Prompt notice of the election to
terminate for such cause shall be furnished by the Company; or
(c) at the option of the Fund upon institution of formal
proceedings against the Company by the NASD, the SEC, the insurance
commission of any state or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of the
Contracts, the administration of the Contracts, the operation of the
Account, or the purchase of the Fund shares, the expected or anticipated
ruling, judgment or outcome of which would, in the Fund's reasonable
judgment, materially impair the Company's ability to perform its
obligation and duties hereunder; or
(d) at the option of the Company upon institution of
formal proceedings against the Fund by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body, the
expected or anticipated ruling, judgment or outcome of which would, in
the Company's reasonable judgment, materially impair the Fund's ability
to perform its obligation and duties hereunder; or
(e) at the option of the Company or the Fund upon receipt
of any necessary regulatory approvals and/or the vote of the contract
owners having an interest in the Account (or any subaccount) to
substitute the shares of another investment company for the
corresponding Portfolio shares of the Fund in accordance with the terms
of the Contracts for which those Portfolio shares had been selected to
serve as the underlying investment media. The Company will give 30
days' prior written notice to the Fund of the date of any proposed vote
or other action
taken to replace the Fund's shares; or
(f) at the option of the Company or the Fund upon a
determination by a majority of the Fund Board, or a majority of the
disinterested Fund Board members, that an irreconcilable material
conflict exists among the interests of (i) all contractowners of
variable insurance products of all separate accounts or (ii) the
interests of the Participating Insurance Companies investing in the Fund
as delineated in Article VII of this Agreement; or
(g) at the option of the Company if the Fund ceases to
qualify as a Regulated Investment Company under Subchapter M of the
Code, or under any successor or similar provision, or if the Company
reasonably believes that the Fund may fail to so qualify; or
(h) at the option of the Company if the Fund fails to
meet the diversification requirements specified in Article VI hereof; or
(i) at the option of any party to this Agreement, upon
another party's material breach of any provision of this Agreement; or
(j) at the option of the Company, if the Company
determines in its sole judgment exercised in good faith, that either the
Fund or the Adviser has suffered a material adverse change in its
business, operations or financial condition since the date of this
Agreement or is the subject of material adverse publicity and such
material adverse change or material adverse publicity is likely to have
a material adverse impact upon the business and operations of the
Company; or
(k) at the option of the Fund or Adviser, if the Fund or
Adviser respectively, shall determine in its sole judgment exercised in
good faith, that the Company has suffered a material adverse change in
its business, operations or financial condition since the date of this
Agreement or is the subject of material adverse publicity and such
material adverse change or material adverse publicity is likely to have
a material adverse impact upon the business and operations of the Fund
or Adviser; or
(l) at the option of the Fund in the event any of the
Contracts are not issued or sold in accordance with applicable federal
and/or state law. Termination shall be effective immediately upon such
occurrence without notice, or
(m) automatically upon its assignment by any party without
the other parties' prior written consent; or
(n) in the event the Fund's shares are not registered,
issued or sold in accordance with applicable state or federal law, or
such law precludes the use of such shares for the underlying investment
medium of variable contracts issued or to be issued by the Company.
Termination shall be effective immediately upon such occurrence without
notice.
10.3. Notice Requirement
(a) In the event that any termination of this Agreement
is based upon the provisions of Article VII such prior written notice
shall be given in advance of the effective date of termination as
required by such provisions.
(b) In the event that any termination of this Agreement
is based upon the provisions of Sections 10.2(b)- (d) or 10.2(g) - (i),
prior written notice of the election to terminate this Agreement for
cause shall be furnished by the party terminating the Agreement to the
non-terminating parties, with said termination to be effective upon
receipt of such notice by the non-terminating parties.
(c) In the event that any termination of this Agreement
is based upon the provisions of Sections 10.2(j) or 10.2(k), prior
written notice of the election to terminate this Agreement for cause
shall be furnished by the party terminating this Agreement to the non-
terminating parties. Such prior written notice shall be given by the
party terminating this Agreement to the non-terminating parties at least
30 days before the effective date of termination.
10.4. It is understood and agreed that the right to terminate
this Agreement pursuant to Section 10.2(a) may be exercised for any
reason or for no reason.
10.5. Effect of Termination
(a) Notwithstanding any termination of this Agreement
pursuant to Section 10.2 of this Agreement, the Fund may, at its option,
or in the event of termination of this Agreement by the Fund or the
Adviser pursuant to Section 10.2(a) of this Agreement, the Company may
require the Fund and the Adviser to, continue to make available
additional shares of the Fund for so long after the termination of this
Agreement as the Fund or the Company, if the Company is so requiring,
desires pursuant to the terms and conditions of this Agreement as
provided in paragraph (b) below for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to
as "Existing Contracts"). Specifically, without limitation, if the Fund
so elects to make available additional shares of the Fund or if the
Company is so requiring, the owners of the Existing Contracts shall be
permitted to reallocate investments in the Fund, redeem investments in
the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that
this Section 10.5 shall not apply to any terminations under Article VII
and the effect of such Article VII terminations shall be governed by
Article VII of this Agreement.
(b) In the event of a termination of this Agreement
pursuant to Section 10.2 of this Agreement, the Fund shall promptly
notify the Company whether the Fund will continue to make available
shares of the Fund after such termination, except that, with respect to
a termination by the Fund or the Adviser pursuant to Section 10.2(a) of
this Agreement, the Company shall promptly notify the Fund whether it
wishes the Fund to continue to make available additional shares of the
Fund. If shares of the Fund continue to be made available after such
termination, the provisions of this Agreement shall remain in effect
except for Section 10.2(a) and thereafter the Fund or the Company may
terminate the Agreement, as so continued pursuant to this Section 10.5
upon written notice to the other party, such notice to be for a period
that is reasonable under the circumstances.
(c) In determining whether to make available additional
Fund shares, the Fund shall act in good faith, giving due consideration
to the interest of the existing shareholders, including holders of the
existing Contracts.
[10.6. Except (a) as necessary to implement contractowner
initiated or approved transactions, or (b) as required by state
insurance laws or regulations (a "Legally Required Redemption"), the
Company shall not redeem Fund shares attributable to the Contracts (as
opposed to Fund shares attributable to the Company's assets held in the
Account), and the Company shall not prevent contractowners from
allocating payments to a Portfolio that was otherwise available under
the Contracts, until 90 days after the Company shall have notified the
Fund or Adviser of its intention to do so. Upon request, the Company
will promptly furnish to the Fund and Adviser the opinion of counsel for
the Company (which counsel shall be reasonably satisfactory to the Fund
and the Adviser) to the effect that a particular redemption is a Legally
Required Redemption.]
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time
specify in writing to the other party.
If to the Fund:
Xxxxx Xxxxxx Concert Series Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxx, Secretary
If to the Company:
If to the Adviser:
Travelers Investment Adviser, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxx, General Counsel
ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund
as neither the Board, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Fund.
12.2. Subject to the requirement of legal process and regulatory
authority, each party hereto shall treat as if confidential the names
and addresses of the owners of the Contracts and all information
reasonably identified as confidential in writing by any other party
hereto and, except as permitted by this Agreement shall not disclose
disseminate or utilize such names and addresses and other confidential
information until such time as it may come into the public domain
without the express written consent of the affected party.
12.3. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provision
hereof or otherwise affect their construction or effect.
12.4. This Agreement maybe executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
12.5. 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.
12.6. Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation
the SEC, the NASD and state insurance regulators) and shall permit such
authorities reasonable access to its books and records in connection
with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
12.7. 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 stat and federal laws.
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.
[NAME OF LIFE INSURANCE
COMPANY]
By its authorized officer
By:________________________
Title:_____________________
Date:______________________
XXXXX XXXXXX CONCERT
SERIES INC.
By its authorized officer
By:________________________
Title:_____________________
Date:______________________
TRAVELERS INVESTMENT ADVISER, INC.
By its authorized officer
By:________________________
Title:_____________________
Date:______________________
EXHIBIT B
Vintage High Growth Portfolio
Vintage Growth Portfolio
Vintage Balanced Portfolio
Vintage Conservative Portfolio
Vintage Income Portfolio
