AMENDMENT NO. 2 TO
AMENDED AND RESTATED PARTICIPATION AGREEMENT
Franklin Xxxxxxxxx Variable Insurance Products Trust
Franklin/Xxxxxxxxx Distributors, Inc.
Commonwealth Annuity and Life Insurance Company
Epoch Securities, Inc.
Franklin Xxxxxxxxx Variable Insurance Products Trust (the "Trust"),
Franklin/Xxxxxxxxx Distributors, Inc. (the "Underwriter," and together with
the Trust, "we" or "us"), Commonwealth Annuity and Life Insurance Company
(the "Company" or "you"), on your behalf and on behalf of certain Accounts,
have previously entered into an Amended and Restated Participation Agreement
dated September 25, 2006 and subsequently amended June 5, 2007 (the
"Agreement"). The parties now desire to amend the Agreement by this
amendment (the "Amendment").
Except as modified hereby, all other terms and conditions of the
Agreement shall remain in full force and effect. Unless otherwise indicated,
the terms defined in the Agreement shall have the same meaning in this
Amendment.
For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend the Agreement as follows:
1. Epoch Securities, Inc, the principal underwriter of the Company, is
hereby added as a party to the Agreement (the "Distributor").
2. The term "National Association of Securities Dealers, Inc. (the "NASD")
is hereby replaced with "Financial Industry Regulatory Authority ("FINRA")"
throughout the Agreement in sections 2.1.6, 2.3.1, 10.7, 10.8 and Schedule
F, respectively.
3. Section 10.12 is amended and restated in its entirety as follows:
"10.12 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. Notwithstanding the foregoing: (i) the Site Terms may be
separately amended as provided therein and, as so amended and in effect
from time to time, shall be a part of this Agreement; and (ii) Schedule C
may be separately amended as provided therein and, as so amended shall be
a part of this Agreement."
4. Schedules A, B, C, D, F and G of the Agreement are deleted and replaced
in their entirety with the Schedules A, B, C, D, F and G attached hereto,
respectively.
IN WITNESS WHEREOF, each of the parties has caused its duly authorized
officers to execute this Amendment effective as of May 1, 2009.
The Trust: FRANKLIN XXXXXXXXX VARIABLE INSURANCE PRODUCTS TRUST
ONLY ON BEHALF OF
EACH PORTFOLIO LISTED
ON SCHEDULE C OF
THE AGREEMENT. By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
The Underwriter: FRANKLIN/XXXXXXXXX DISTRIBUTORS, INC.
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
The Company: COMMONWEALTH ANNUITY AND LIFE NSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President and Chief Executive Office
The Distributor: EPOCH SECURITIES, INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
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SCHEDULE A
THE COMPANY AND ITS DISTRIBUTOR
THE COMPANY
Commonwealth Annuity and Life Insurance Company
000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxxx 00000
A life insurance company organized under the laws of the Commonwealth of
Massachusetts
THE DISTRIBUTOR
Epoch Securities, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxxx 00000
A corporation organized under the laws of the State of Delaware.
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SCHEDULE B
ACCOUNTS OF THE COMPANY
NAME OF ACCOUNT SEC REGISTRATION
--------------- Yes/No
----------------
1. Separate Account FUVUL of Commonwealth Annuity and Life Insurance Company Yes
2. Separate Account VA-P of Commonwealth Annuity and Life Insurance Company Yes
3. Separate Account VA-K of Commonwealth Annuity and Life Insurance Company Yes
4. Commonwealth Annuity Select Separate Account of Commonwealth Annuity and Life Insurance Company Yes
5. Group VEL Separate Account of Commonwealth Annuity and Life Insurance Company Yes
6. VEL Account of Commonwealth Annuity and Life Insurance Company Yes
7. VEL II Separate Account of Commonwealth Annuity and Life Insurance Company Yes
8. Inheiritage Separate Account of Commonwealth Annuity and Life Insurance Company Yes
9. VEL III Separate Account of Commonwealth Annuity and Life Insurance Company Yes
10. Commonwealth Annuity Select Separate Account III of Commonwealth Annuity and Life Insurance Company Yes
11. Commonwealth Annuity Select Separate Account II of Commonwealth Annuity and Life Insurance Company Yes
12. Separate Account IMO of Commonwealth Annuity and Life Insurance Company Yes
13. Separate Account A of Commonwealth Annuity and Life Insurance Company Yes
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SCHEDULE C
AVAILABLE PORTFOLIOS AND CLASSES OF SHARES OF THE TRUST
1. Franklin Global Communications Securities Fund, Class 2
2. Franklin Growth and Income Securities Fund, Class 2
3. Franklin Income Securities Fund, Class 2
4. Franklin Large Cap Growth Securities Fund, Class 2
5. Franklin Small-Mid Cap Growth Securities Fund, Class 2
6. Franklin Small Cap Value Securities Fund, Class 2
7. Mutual Discovery Securities Fund, Class 2
8. Mutual Shares Securities Fund, Class 2
9. Templeton Developing Market Securities Fund, Class 2
10. Xxxxxxxxx Foreign Securities Fund, Class 2
11. Templeton Global Asset Allocation Fund, Class 2
12. Xxxxxxxxx Growth Securities Fund, Class 2
In addition to portfolios and classes of shares listed above, any additional
Portfolios and classes of shares other than Class 3 shares are included in
this Schedule C listing provided that:
(1) the General Counsel of Franklin Xxxxxxxxx Investments receives
from a person authorized by you a written notice in the form
attached (which may be electronic mail or sent by electronic mail)
("Notice") identifying this Agreement as provided in the Notice and
specifying: (i) the names and classes of shares of additional
Portfolios that you propose to offer as investment options of the
Separate Accounts under the Contracts; and (ii) the date that you
propose to begin offering Separate Account interests investing in
the additional Portfolios under the Contracts; and
(2) we do not within ten (10) Business Days following receipt of the
Notice send you a writing (which may be electronic mail) objecting
to your offering such Separate Accounts investing in the additional
Portfolios and classes of shares under the Contracts.
Provided that we do not object as provided above, your Notice shall amend,
supplement and become a part of this Schedule C and the Agreement.
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FORM OF NOTICE PURSUANT TO SCHEDULE C OF
PARTICIPATION AGREEMENT
To: General Counsel c/o
Xxxxx Xxx (Xxxx@xxx.xxx;) or Xxxxx Xxxxxxxx (xxxxxxx@xxx.xxx)
Fax: 000 000-0000
Franklin Xxxxxxxxx Investments
0 Xxxxxxxx Xxxxxxx,
Xxxx. 000, 0xx Xxxxx
Xxx Xxxxx, XX 00000
With respect to the following agreement(s) (collectively, the "Agreement")
(please reproduce and complete table for multiple agreements):
DATE OF
PARTICIPATION AGREEMENT:
INSURANCE COMPANY(IES):
INSURANCE COMPANY DISTRIBUTOR(S):
As provided by Schedule C of the Agreement, this Notice proposes to Franklin
Xxxxxxxxx Variable Insurance Products Trust, and Franklin/Xxxxxxxxx
Distributors, Inc. the addition as of the offering date(s) listed below of
the following Portfolios as additional investment options listed on Schedule
C:
NAMES AND CLASSES OF SHARES OF ADDITIONAL PORTFOLIOS OFFERING DATE(S)
Listing of current classes for your reference:
Class 1 (no 12b-1 fee);
Class 2 (12b-1 fee of 25 bps); or
Class 4 (12b-1 fee of 35 bps).
NAME AND TITLE OF AUTHORIZED PERSON OF INSURANCE COMPANY:
CONTACT INFORMATION:
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SCHEDULE D
CONTRACTS OF THE COMPANY
All variable life and variable annuity contracts issued by separate accounts
listed on Schedule B of this Agreement.
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SCHEDULE F
RULE 12b-1 PLANS OF THE TRUST
COMPENSATION
Each Class 2 or Class 4 Portfolio named or referenced on Schedule C of
this Agreement may make payments at a rate stated in its prospectus pursuant
to the terms and conditions of its Rule 12b-1 distribution plan.
AGREEMENT PROVISIONS
If the Company, on behalf of any Account, purchases Trust Portfolio
shares ("Eligible Shares") that are subject to a Rule 12b-1 plan adopted
under the 1940 Act (the "Plan"), the Company, on behalf of its Distributor,
may participate in the Plan.
To the extent the Company or its affiliates, agents or designees
(collectively "you") provide any activity or service that is primarily
intended to assist in the promotion, distribution or account servicing of
Eligible Shares ("Rule 12b-1 Services") or variable contracts offering
Eligible Shares, the Underwriter, the Trust or their affiliates
(collectively, "we") may pay you a Rule 12b-1 fee. "Rule 12b-1 Services" may
include, but are not limited to, printing of prospectuses and reports used
for sales purposes, preparing and distributing sales literature and related
expenses, advertisements, education of dealers and their representatives, and
similar distribution-related expenses, furnishing personal services to owners
of Contracts which may invest in Eligible Shares ("Contract Owners"),
education of Contract Owners, answering routine inquiries regarding a
Portfolio, coordinating responses to Contract Owner inquiries regarding the
Portfolios, maintaining such accounts or providing such other enhanced
services as a Trust Portfolio or Contract may require, or providing other
services eligible for service fees as defined under FINRA rules.
Your acceptance of such compensation is your acknowledgment that
eligible services have been rendered. All Rule 12b-1 fees, shall be based on
the value of Eligible Shares owned by the Company on behalf of its Accounts,
and shall be calculated on the basis and at the rates set forth in the
compensation provision stated above. The aggregate annual fees paid pursuant
to each Plan shall not exceed the amounts stated as the "annual maximums" in
the Portfolio's prospectus, unless an increase is approved by shareholders as
provided in the Plan. These maximums shall be a specified percent of the
value of a Portfolio's net assets attributable to Eligible Shares owned by
the Company on behalf of its Accounts (determined in the same manner as the
Portfolio uses to compute its net assets as set forth in its effective
Prospectus). The Rule 12b 1 fee will be paid to you within thirty (30) days
after the end of the three-month periods ending in January, April, July and
October.
You shall furnish us with such information as shall reasonably be
requested by the Trust's Boards of Trustees ("Trustees") with respect to the
Rule 12b-1 fees paid to you pursuant to the Plans. We shall furnish to the
Trustees, for their review on a quarterly basis, a written report of the
amounts expended under the Plans and the purposes for which such expenditures
were made.
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The Plans and provisions of any agreement relating to such Plans must be
approved annually by a vote of the Trustees, including the Trustees who are
not interested persons of the Trust and who have no financial interest in the
Plans or any related agreement ("Disinterested Trustees"). Each Plan may be
terminated at any time by the vote of a majority of the Disinterested
Trustees, or by a vote of a majority of the outstanding shares as provided in
the Plan, on sixty (60) days' written notice, without payment of any penalty,
or as provided in the Plan. Continuation of the Plans is also conditioned on
Disinterested Trustees being ultimately responsible for selecting and
nominating any new Disinterested Trustees. Under Rule 12b-1, the Trustees
have a duty to request and evaluate, and persons who are party to any
agreement related to a Plan have a duty to furnish, such information as may
reasonably be necessary to an informed determination of whether the Plan or
any agreement should be implemented or continued. Under Rule 12b-1, the
Trust is permitted to implement or continue Plans or the provisions of any
agreement relating to such Plans from year-to-year only if, based on certain
legal considerations, the Trustees are able to conclude that the Plans will
benefit each affected Trust Portfolio and class. Absent such yearly
determination, the Plans must be terminated as set forth above. In the event
of the termination of the Plans for any reason, the provisions of this
Schedule F relating to the Plans will also terminate. You agree that your
selling agreements with persons or entities through whom you intend to
distribute Contracts will provide that compensation paid to such persons or
entities may be reduced if a Portfolio's Plan is no longer effective or is no
longer applicable to such Portfolio or class of shares available under the
Contracts.
Any obligation assumed by the Trust pursuant to this Agreement shall be
limited in all cases to the assets of the Trust and no person shall seek
satisfaction thereof from shareholders of the Trust. You agree to waive
payment of any amounts payable to you by Underwriter under a Plan until such
time as the Underwriter has received such fee from the Trust.
The provisions of the Plans shall control over the provisions of the
Participation Agreement, including this Schedule F, in the event of any
inconsistency. You agree to provide complete disclosure as required by all
applicable statutes, rules and regulations of all rule 12b-1 fees received
from us in the prospectus of the Contracts.
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SCHEDULE G
ADDRESSES FOR NOTICES
To the Company: Commonwealth Annuity and Life Insurance Company
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx, President and CEO
To the Distributor: Epoch Securities, Inc.
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, President
To the Trust: Franklin Xxxxxxxxx Variable Insurance Products Trust
Xxx Xxxxxxxx Xxxxxxx, Xxxx. 000 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Vice President
To the Underwriter: Franklin/Xxxxxxxxx Distributors, Inc.
000 Xxxxxxxx Xxxxxxx, 0xx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, President
If to the Trust
or Underwriter
with a copy to: Franklin Xxxxxxxxx Xxxxxxxxxxx
Xxx Xxxxxxxx Xxxxxxx, Xxxx. 000 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
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