Exhibit 8.1(a)
JANUS ASPEN SERIES
FUND PARTICIPATION AGREEMENT
(Institutional Shares)
THIS AGREEMENT is made this day of , between
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JANUS ASPEN SERIES, an open-end management investment company organized as a
Delaware business trust (the "Trust"), and Janus Capital Management LLC, a
Delaware limited liability company (the "Adviser"), and FEDERAL XXXXXX LIFE
ASSURANCE COMPANY, a life insurance company organized under the laws of the
State of (the "Company"), on its own behalf and on behalf of each
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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:
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 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
WHEREAS, the Trust has registered the offer and sale of a class of shares
designated the Institutional Shares ("Shares") of each of its Portfolios 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 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 "Exemptive Order"); 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) each Account as a unit investment trust
under the 1940 Act; and
WHEREAS, the Company desires to utilize the 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
1.1 The Trust shall make Shares of its Portfolios listed on Schedule B
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 if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole 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 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 under the
Contracts. 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 10:00 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.
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. The Trust shall pay
and transmit the proceeds of redemption
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orders that are transmitted to the Trust in accordance with Section 1.3 no later
than 12:00 noon New York time on the same Business Day that the Trust receives
notice of the redemption, except that the Trust reserves the right to postpone
payment upon redemption consistent with Section 22(e) of the 1940 Act and any
rules thereunder. Payments for such purchase orders will be made net of any
redemptions received on the same day as the purchase. Payments 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 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. If the
Trust provides the Company with materially incorrect share net asset value
information, the Trust shall make an adjustment to the number of shares
purchased or redeemed for the Accounts to reflect the correct net asset value
per share and the Trust or the Adviser shall bear the cost of correcting such
errors. Any error of a lesser amount shall be corrected in the next Business
Day's net asset value per share. Any material error in the calculation or
reporting of net asset value per share, dividend or capital gains information
shall be reported promptly upon discovery to the Company.
1.8 The Trust agrees that its Shares will be sold only to Participating
Insurance Companies and their separate accounts and to certain qualified pension
and retirement 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 2.9 and Article IV of
this Agreement.
1.10 The Company shall use its best efforts, and shall reasonably cooperate
with, the Trust to enforce stated prospectus policies regarding transactions in
Shares, particularly those related to market timing. The Company will develop,
implement and maintain policies and procedures reasonably designed to prevent
the use of the Accounts by entities or persons engaged in market timing,
short-term trading or excessive trading. If the Company proposes to modify
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such policies and procedures following their implementation, the Company will
notify the Trust and the Adviser of proposed changes, and will adjust such
changes to the extent reasonably practicable and consistent with the terms of
the Contracts and applicable law to address the Trust and the Adviser's
concerns.
In addition to the foregoing, the Company will develop, implement and
maintain procedures as reasonably achievable and consistent with the terms of
the Contracts and applicable law to further any specific policies and procedures
of the Trust or the Adviser concerning transactions in Shares for one or more
Portfolios in regard to market timing, short-term trading or excessive trading.
The Company represents and warrants that it will not actively promote the
sale of Contracts to entities or persons who appear likely to engage in market
timing.
If, notwithstanding the foregoing, the Trust or the Adviser notifies the
Company that a pattern or patterns of transactions involving market timing,
short-term trading or excessive trading in one or more Accounts is having or may
have, in their sole discretion, an adverse effect on a Portfolio, the Company
will promptly take such actions and implement such procedures as are reasonably
practicable and consistent with the Contracts and applicable law to prevent such
trading. If the Company does not take adequate actions to limit market-timing,
the Trustees reserve the right to refuse to sell shares of a Portfolio if such
sale would be disruptive to a Portfolio. Any such action by the Trustees must be
done pursuant to and consistent with the provisions of Section 1.1, hereof.
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 shareholder reports, notices, proxy materials (or similar materials
such as voting instruction solicitation materials), 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 Shares'
current prospectus, annual report, 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. The Trust
shall provide the Company with a copy of the Shares' statement of additional
information in a form suitable for duplication by the Company. The Trust (at its
expense) shall provide the
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Company with copies of any Trust-sponsored proxy materials in such quantity as
the Company shall reasonably require for distribution to Contract owners.
2.3 (a) The Company shall bear the costs of printing and distributing the
Trust's Shares' prospectus, statement of additional information, shareholder
reports and other shareholder communications to owners of and applicants for
policies for which Shares of the Trust are serving or are to serve as an
investment vehicle. The Company shall bear the costs of distributing proxy
materials (or similar materials such as voting solicitation instructions) to
Contract owners. The Company assumes sole responsibility for ensuring that such
materials are delivered to Contract owners in accordance with applicable federal
and state securities laws.
(b) 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 in any other computer or electronic format, the Company
assumes sole responsibility for maintaining such materials in the form provided
by the Trust and for promptly replacing such materials with all updates provided
by the Trust.
2.4 The Company agrees and acknowledges that the Trust's adviser, Janus
Capital Management LLC or its affiliates ("Janus Capital") is the sole owner of
the name and xxxx "Xxxxx" and 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 Janus Capital. Except as provided in Section 2.5, the Company shall
not use any Xxxxx Xxxx on its own behalf or on behalf of the Accounts or
Contracts in any registration statement, advertisement, sales literature or
other materials relating to the Accounts or Contracts without the prior written
consent of Janus Capital. All references contained in this Agreement to "the
name or xxxx `Xxxxx'" shall include but not be limited to the Janus logo, the
website xxx.xxxxx.xxx and any and all electronic links relating to such website.
The Company will make no use of the name or xxxx "Xxxxx" except as expressly
provided in this Agreement or expressly authorized by Janus Capital in writing.
All goodwill associated with the name and xxxx "Xxxxx" shall inure to the
benefit of Janus Capital or its affiliates. Upon termination of this Agreement
for any reason, the Company shall cease any and all use of any Xxxxx 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 Trust or its investment adviser is named concurrently
with 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 named, at least five Business Days prior
to its use or concurrently with the filing of such document with the National
Association of Securities Dealers, Inc. ("NASD"), whichever is greater. No such
material shall be used if the Trust or its designee reasonably objects to such
use within five Business Days after receipt of such material.
2.6 The Trust shall furnish, or cause to be furnished, to the Company (or
its designee), a copy of any initial Trust prospectus and statement of
additional information in which the
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Company is first named prior to the filing of such document with the SEC. The
Trust shall furnish, or shall cause to be furnished, to the Company (or its
designee) a copy of each subsequent Trust prospectus and statement of additional
information in which the Company is named concurrently with the filing of such
document with the SEC provided that there are no material changes in disclosure
related to the Company. The Company may, in its reasonable discretion, request
that the Trust modify any references to the Company in subsequent filings. 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 named, at least five Business Days prior to its use or
concurrently with the filing of such document with the NASD, whichever is
greater. No such material shall be used if the Company (or its designee)
reasonably objects to such use within five Business Days after receipt of such
material.
2.7 The Company shall not give any 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 other
promotional material approved by the Trust or its designee, except as required
by legal process or regulatory authorities or with the written permission of the
Trust or its designee.
2.8 The Trust shall not give any information or make any representations or
statements on behalf of the Company or concerning the Company, the Accounts or
the Contracts other than information or representations contained in and
accurately derived from the registration statement or prospectus for the
Contracts (as such registration statement and prospectus may be amended or
supplemented from time to time), or in materials approved by the Company for
distribution including sales literature or other promotional materials, except
as required by legal process or regulatory authorities or with the written
permission of the Company.
2.9 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. The Company and its agents will in no
way recommend or oppose or interfere with the solicitation of proxies for Trust
shares held by Contract owners without the prior written consent of the Trust,
which consent may be withheld in the Trust's sole discretion, except in the
event that the Company determines, in reliance on an opinion of counsel, that a
proxy proposal would result in a violation of applicable insurance laws.
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2.10 The Company shall notify the Trust of any applicable state insurance
laws that restrict the Portfolios' investments or otherwise affect the operation
of the Trust and shall notify the Trust of any changes in such laws.
2.11 The Trust and the Adviser agree to maintain a blanket fidelity bond or
similar coverage for the benefit of the Trust in an amount not less than the
minimal coverage required by Section 17g-(1) of the 1940 Act or related
provisions as may be promulgated from time to time under the 0000 Xxx.
2.12 The Trust and Adviser shall use their best efforts to maintain
qualification of each Portfolio as a Regulated Investment Company under
Subchapter M of the Internal Revenue Code of 1986, as amended ("Code") and shall
notify the Company immediately upon having a reasonable basis for believing that
a Portfolio has ceased to so qualify or that it might not so qualify in the
future. The Trust and the Adviser acknowledge that compliance with Subchapter M
is an essential element of compliance with Section 817(h).
2.13 The Trust and Adviser shall use their best efforts to enable each
Portfolio to comply with the requirements of Section 817(h) of the Code and the
regulations issued thereunder relating to the diversification requirements for
variable life insurance policies and variable annuity contracts, and shall
notify the Company immediately upon having a reasonable basis for believing that
any Portfolio has ceased or might cease to comply.
2.14 The Trust shall provide the Company or its designee with reports
certifying compliance with the aforesaid Section 817(h) diversification and
Subchapter M qualification requirements on a quarterly basis.
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
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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 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 has not been registered in proper reliance upon an
exclusion from registration under the 0000 Xxx.
3.3 The Company represents and warrants that the Contracts or interests in
the Accounts (1) are or, prior to issuance, will be registered as securities
under the 1933 Act or, alternatively (2) are not registered because they are
properly exempt from registration under the
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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 is registered under the 0000 Xxx. 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 and warrants that the investments of each
Portfolio will comply with the diversification requirements set forth in Section
817(h) of the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder.
3.7 The Adviser represents and warrants that it is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended, and
any applicable state securities laws.
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. 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 promptly inform the Company 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
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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 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,
at its expense and to the extent reasonably practicable (as determined by the
Trustees) take whatever steps are necessary 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
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 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
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 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 inform the Company in
writing that it has determined 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 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
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Contract owners materially adversely affected by the irreconcilable material
conflict. In the event that the Trustees 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.
4.7 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 fully carry out the duties imposed upon them by the Exemptive
Order, and said reports, materials and data shall be submitted more frequently
if deemed appropriate by the Trustees.
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, the Adviser, and each of their Trustees or Directors,
officers, employees and agents and each person, if any, who controls the Trust
or the Adviser within the meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" for purposes of this Article V) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) 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
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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 furnished to the Company by or on behalf of the
Trust or the Adviser 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 or the Adviser 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 and the Adviser. The Trust and Adviser
agree 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 Article V) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Adviser) 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 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 furnished to the Trust by or on
behalf of the Company for use in
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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 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 Adviser in this
Agreement or arise out of or result from any other material breach of this
Agreement by the Trust or Adviser.
5.3 Neither the Company, Trust, nor the Adviser shall be liable under the
indemnification provisions of Sections 5.1 or 5.2, 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.
5.4 Neither the Company, Trust, nor the Adviser shall be liable under the
indemnification provisions of Sections 5.1 or 5.2, 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, 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 and 5.2.
5.5 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. 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
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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.
ARTICLE VI
Termination
6.1 This Agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of any party, for any reason upon ninety (90) days
advance written notice to the other parties, unless a shorter time period
is agreed to in writing by the parties to this Agreement;
(b) at the option of the Company, upon one week advance written notice
to the Trust, if the Trust shares are not reasonably available to meet the
requirements of the Contracts as determined by the Company;
(c) at the option of the Company, immediately upon institution of
formal proceedings against the Trust or Adviser by the NASD, SEC, or any
other regulatory body that are deemed by the Company to materially affect
the performance of the obligations under this Agreement;
(d) at the option of the Trust or the Adviser, immediately upon
institution of formal proceedings against the broker-dealer or
broker-dealers marketing the Contracts, the Account, or the Company by the
NASD, SEC, or any other regulatory body that are deemed by the Trust or
Adviser to materially affect the performance of the obligations under this
Agreement;
(e) upon the requisite vote of Contract owners having an interest in
the Trust, or SEC approval of an application pursuant to Section 26(b) of
the 1940 Act, to substitute for the Trust's shares the shares of another
investment company in accordance with the terms of the applicable
Contracts. The Company will give sixty (60) days written notice to the
Trust of any proposed application or vote to replace the Trust's shares.
The Trust and Adviser shall cooperate with the Company in connection with
such application;
(f) upon assignment (as defined in Section 2(a)(4) of the 0000 Xxx) of
the Agreement, unless made with the written consent of all other parties
hereto;
(g) if the Trust's shares are not registered, issued or sold in
conformance with Federal law or such law precludes the use of the Trust's
shares as an underlying investment medium for Contracts issued or to be
issued by the Company. Prompt notice shall be given by each party should
such situation occur;
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(h) by any party to the Agreement upon a determination by a majority
of the Trustees of the Trust, or a majority of its disinterested Trustees,
that an irreconcilable material conflict exists;
(i) at the option of the Trust or Adviser if the Contracts cease to
qualify as annuity contracts or life insurance contracts, as applicable,
under the Code or if the Contracts are not registered, issued or sold in
accordance with applicable state and/or federal law; or
(j) if the need for substitution of the shares of another investment
company, pursuant to Section 26(b) of the 1940 Act, arises out of the
Trust's failure to be registered, issued or sold in conformance with
federal law, including applicable tax law, the expenses of obtaining such
order shall be reimbursed by the Trust or Adviser. The Trust and Adviser
shall cooperate with the Company in connection with such application.
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 costs set forth in
Section 2.3.
6.3 The provisions of Article V shall survive the termination of this
Agreement, and the provisions of Article IV and Section 2.9 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.
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
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If to the Company:
----------------------------
----------------------------
----------------------------
----------------------------
Attention:
------------
If to the Adviser:
Janus Capital Management LLC
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
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
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authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
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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.
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: Xxxxxx X. Xxxx
Title: Vice President
JANUS CAPITAL MANAGEMENT LLC
By:
---------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
FEDERAL XXXXXX LIFE ASSURANCE COMPANY
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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Schedule A
Separate Accounts and Associated Contracts
Contracts Funded
Name of Separate Account By Separate Account
------------------------ -------------------
FKLA Variable Annuity Separate Account
(Established _______________)
Schedule B
List of Portfolios
Name of Portfolio
All Portfolios of Janus Aspen Series (Institutional Shares) open to new
investors (as set forth in the current prospectus of Janus Aspen Series) except
Global Technology Portfolio and Global Life Sciences Portfolio.
