FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made as of this 7th day of April, 1995, by and among
Xxxxxxxxx & Xxxxxx Advisers Management Trust (the "Trust"), an open-end
management investment company organized as a Massachusetts business trust,
Connecticut General Life Insurance Company, a life insurance company organized
as a corporation under the laws of the State of Connecticut (the "Company"), on
its own behalf and on behalf of each segregated asset account of the Company set
forth in Schedule A, as may be amended from time to time (the "Accounts"), and
Xxxxxxxxx & Xxxxxx Management Incorporated a New York corporation, the Trust's
investment adviser ("Adviser") and principal underwriter.
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of l940, as amended (the "1940 Act"), and has an
effective registration statement relating to the offer and sale of the various
series of its shares under the Securities Act of 1933, as amended (the "1933
Act");
WHEREAS, the Trust and the Adviser desire that Trust shares be used as an
investment vehicle for separate accounts established for variable life insurance
policies and variable annuity contracts to be offered by life insurance
companies which have entered into fund participation agreements with the Trust
(the "Participating Insurance Companies");
WHEREAS, shares of beneficial interest in the Trust are divided into
several series of shares, each series representing an interest in a
particular managed portfolio of securities and other assets and certain of
those series named in Schedule B (the "Portfolios") are to be made available
for purchase by the Company for the Accounts;
WHEREAS, the Trust has received an order from the Commission, dated
February 26, 1992 (File No. 812-7589), 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
Portfolios 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
"Mixed and Shared Funding Exemptive Order");
WHEREAS, the Company has registered or will register under the 1933 Act
certain variable life insurance policies and variable annuity contracts to be
issued by the Company under which the Portfolios are to be made available as
investment vehicles (the "Contracts");
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act unless an exemption from registration
under the 1940 Act is available and the Trust has been so advised;
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WHEREAS, the Company desires to use shares of one or more Portfolios as
investment vehicles for the Accounts;
NOW THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE I.
Purchase and Redemption of Trust Portfolio Shares
1.1. For purposes of this Article I, the Company shall be the Trust's
agent for the receipt from each account of purchase orders and requests for
redemption pursuant to the Contracts relating to each Portfolio, provided that
the Company notifies the Trust of such purchase orders and requests for
redemption by 9:30 a.m. Eastern time on the next following Business Day, as
defined in Section 1.3.
1.2. The Trust shall make shares of the Portfolios available to the
Accounts at the net asset value next computed after receipt of a purchase order
by the Trust (or its agent), as established in accordance with the provisions of
the then current prospectus of the Trust describing Portfolio purchase
procedures. The Company will transmit orders from time to time to the Trust for
the purchase and redemption of shares of the Portfolios. 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 if, 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, such action is
deemed in the best interests of the shareholders of such Portfolio.
1.3. The Company shall pay for the purchase of shares of a Portfolio on
behalf of an Account with federal funds to be transmitted by wire to the Trust,
with the reasonable expectation of receipt by the Trust by 2:00 p.m. Eastern
time on the next Business Day after the Trust (or its agents) receives the
purchase order. Upon receipt by the Trust of the federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become the
responsibility of the Trust for this purpose. "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 Commission.
1.4. The Trust will redeem for cash 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 describing Portfolio redemption
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procedures. The Trust shall make payment for such shares in the manner
established from time to time by the Trust. Proceeds of redemption with
respect to a Portfolio will normally be paid to the Company for an
Account in federal funds transmitted by wire to the Company by order of
the Trust with the reasonable expectation of receipt by the Company by
2:00 p.m. Eastern time on the next Business Day after the receipt by the
Trust (or its agent) of the request for redemption, but in no event shall
payment be delayed for a greater period than is permitted by the 1940 Act.
1.5. Payments for the purchase of shares of the Trust's Portfolios by the
Company under Section 1.3 and payments for the redemption of shares of the
Trust's Portfolios under Section 1.4 on any Business Day may be netted against
one another for the purpose of determining the amount of any wire transfer.
1.6. Issuance and transfer of the Trust's Portfolio shares will be by book
entry only. Stock certificates will not be issued to the Company or the
Accounts. Portfolio Shares purchased from the Trust will be recorded in the
appropriate title for each Account or the appropriate subaccount of each
Account.
1.7. The Trust shall furnish, on or before the ex-dividend date, notice to
the Company of any income dividends or capital gain distributions payable on the
shares of any Portfolio of the Trust. 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.
1.8. The Trust shall calculate the net asset value of each Portfolio on
each Business Day, as defined in Section 1.3. The Trust shall make the net asset
value per share for each Portfolio available to the Company or its designated
agent 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 to the Company by 6:30 p.m. Eastern time each Business
Day.
1.9. The Trust agrees that its Portfolio shares will be sold only to
Participating Insurance Companies and their segregated asset accounts and to
certain qualified pension and retirement plans to the extent permitted by the
Mixed and Shared Funding Exemptive Order. No shares of any Portfolio will be
sold directly to the general public. The Company agrees that it will use Trust
shares only for the purposes of funding the Contracts through the Accounts
listed in Schedule A, as amended from time to time.
1.10. 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.
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ARTICLE II.
Obligations of the Parties
2.1. The Trust shall prepare and be responsible for filing with the
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 shares of the Portfolios, 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 with as many copies of portions of the Trust's current prospectuses,
annual report, semi-annual report and other shareholder communications,
including any amendments or supplements to any of the foregoing, pertaining
specifically to the Portfolios 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. Should the Company wish to print any such document in a
different format than that provided by the Trust, the Company shall bear the
cost associated with any format change. The Trust shall provide the Company
with a copy of its current statement of additional information, including any
amendments or supplements, in a form suitable for duplication by the Company.
The Trust (at its expense) shall provide the Company with copies of any
Trust-sponsored proxy materials in such quantity as the Company shall reasonably
require for distribution to Contract owners.
2.3. The Trust shall bear its proportionate share of the costs of printing
and mailing documents including the Trust's current prospectuses, shareholder
reports and other shareholder communications from the Trust to owners of
Contracts for which a Portfolio or Portfolios of the Trust is serving as an
investment vehicle, using the number of pages as a guide. The Company will use
its best efforts to control those costs, will submit bills therefor to the Trust
for reimbursement, and will advise the Trust semi-annually, or more frequently
as reasonably requested by the Trust, of how many Contract owners are using the
Trust as a funding vehicle. The Company shall bear the costs of mailing proxy
materials (or similar materials such as voting solicitation instructions) and
statements of additional information to Contract owners, as well as printing and
mailing costs relating to prospective owners of Contracts. The Company assumes
sole responsibility for ensuring that such materials are delivered to Contract
owners in accordance with applicable federal and state securities laws.
2.4. The Company agrees and acknowledges that the Adviser and the Trust,
or either of them, is the sole owner of the name and xxxx "Xxxxxxxxx & Xxxxxx
Advisers Management Trust" and that all use of any designation comprised in
whole or part of such name or xxxx under this Agreement shall inure to the
benefit of the Adviser. Except as provided in section 2.5, the Company shall not
use any such name or 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 the Adviser. Upon termination of this Agreement for any reason, the
Company shall cease all use of any such name or xxxx as soon as reasonably
practicable.
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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 describing the Contracts, each report to Contract owners, proxy
statement, application for exemption or request for no-action letter in which
the Trust or the Adviser is named contemporaneously with the filing of such
document with the 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, including "broker only" material, in which the Trust or
the Adviser is named, at least seven Business Days prior to its use. 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 Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust or
the 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), annual and
semi-annual 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, the Adviser or their respective designees. The
Trust and the Adviser agree to respond to any request for approval on a prompt
and timely basis. The Company shall adopt and implement procedures to prevent
distribution of "broker only" materials including information therein about the
Trust or the Adviser to existing or prospective Contract owners.
2.7. The Trust shall use its best efforts to provide the Company, on a
timely basis, with such information about the Trust, the Portfolios and the
Adviser as the Company shall reasonably request in connection with the
preparation of registration statements, prospectuses and annual and semi-annual
reports pertaining to the Contracts.
2.8. The Trust and the Adviser shall not give, and agree that no affiliate
of either of them shall 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. The Company agrees to respond to any request for
approval on a prompt and timely basis.
2.9. So long as, and to the extent that, the Commission interprets the
1940 Act to require pass trough voting privileges for Contract owners, the
Company will provide pass-through voting privileges to Contract owners whose
cash values are invested, through the registered Accounts, in shares of one
or more Portfolios 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
registered Account, the Company will
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vote shares of each Portfolio of the Trust held by a registered Account and for
which no timely voting instructions from Contract owners are received in the
same proportion as those shares for which voting instructions are received. The
Company reserves the right, to the extent permitted by law, or interpretations
by the Commission's staff, to vote shares held in any Account in its sole
discretion.
2.10 In the event of an error in the net asset value per share of any
Portfolio, other than an error caused by some act or omission of the Company, or
the failure to compute any such net asset value per share, the Trust and the
Adviser shall take the following steps. Any such error shall be reported
promptly upon discovery to the Company. Notification can be made orally or by
direct or indirect systems access but must be confirmed in writing. The letter
shall be written on the Adviser's letterhead and must state for each day for
which an error occurred the incorrect price, the correct price, and the reason
for the price change. If an adjustment is necessary to correct an error which
has caused any Account to receive less than that to which it is entitled, the
Trust shall make all necessary adjustments to the number of shares of the
affected Portfolio owned in the Account and distribute to the Company any and
all amounts of the underpayment. The Company will credit the appropriate amount
of such payment to the Account. If an Account due to such error has received
amounts in excess of the amounts to which it is entitled, the Company, when
requested by the Trust, shall make adjustments to the Account to reflect the
change in the values of the shares as reflected in the unit values of the
affected Contract owners who still have values in the Portfolio. When making
adjustments for an error, the Adviser shall not net same day transactions in an
Account. No adjustment for an error shall be taken in any Account until such
time as the parties hereto have agreed to a resolution of the error, but the
parties shall use all reasonable efforts to reach such agreement within two
business days after discovery of the error.
2.11. No compensation shall be paid by the Trust to the Company, or by
the Company to the Trust, under this Agreement (except for specified expense
reimbursements). However, nothing herein shall prevent the parties hereto
from otherwise agreeing to perform, and arranging for appropriate
compensation for, other services relating to the Trust, the Accounts or both.
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 Connecticut
and that it has legally and validly established each Account as a segregated
asset account under such law as of the date set forth in Schedule A, and that
CIGNA Financial Advisors, Inc., the principal underwriter for the Contract, is
registered as a broker-dealer under the Securities Exchange Act of 1934.
3.2. The Company represents and warrants that it 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 and cause
each Account to remain so registered to serve as a segregated asset account for
the Contracts, unless an exemption from registration is available.
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3.3. The Company represents and warrants that the Contracts will be
registered under the 1933 Act unless an exemption from registration is available
prior to any issuance or sale of the Contracts; 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
Will state insurance law suitability requirements.
3.4. The Trust represents and warrants that it is duly organized and
validly existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act and the rules
and regulations thereunder.
3.5. The Trust and the Adviser represent and warrant that the Portfolio
shares offered and sold pursuant to this Agreement will be registered under the
1933 Act and sold in accordance with all applicable federal and state laws, and
the Trust shall be registered under the 1940 Act prior to and at the time of any
issuance or sale of such shares. The Trust shall amend its registration
statement under the 1933 Act and the 1940 Act from time to time as required in
order to effect the continuous offering of its shares. The Trust shall register
and quality 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 for variable
annuity, endowment or life insurance contracts set forth in Section 817(h) of
the Internal Revenue Code of 1986, as amended ("Code"), and the rules and
regulations thereunder, including without limitation Treasury Regulation
1.817-5, and will notify the Company immediately upon having a reasonable basis
for believing any Portfolio has ceased to comply or might not so comply and will
immediately take all reasonable steps to adequately diversify the Portfolio to
achieve compliance within the grace period afforded by Regulation 1.817-5.
3.7. The Trust represents and warrants that it is currently qualified as a
"regulated investment company" under Subchapter M of the Code, that it will make
every effort to maintain such qualification and will notify the Company
immediately upon having a reasonable basis for believing it has ceased to so
qualify or might not so qualify in the future.
3.8. The Trust represents and warrants that it, its directors, officers,
employees and others dealing with the money or securities, or both, of a
Portfolio shall at all times be covered by a blanket fidelity bond or similar
coverage for the benefit of the Trust in an amount not less than the minimum
coverage required by Rule 17g-1 or other regulations under the 1940 Act. Such
bond shall include coverage for larceny and embezzlement and be issued by a
reputable bonding company.
3.9.The Adviser represents that it is duly organized and validly existing
under the laws of the State of New York and that it is registered and will
during the term of this Agreement
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remain registered as an investment adviser under the Investment Advisers Act of
1940, as amended, and as a broker-dealer under the Securities Exchange Act of
1934.
ARTICLE IV.
Potential Conflicts
4.1. Company agrees to inform the Board of Trustees of the Trust of the
existence of or any potential for any material irreconcilable conflict of
interest between the interests of the Contract owners of the separate accounts
of any other insurance company investing in the Trust.
Any material irreconcilable 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,
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 owners and variable life insurance Contract owners or by Contract
owners of different life insurance companies utilizing the Trust (in the
event pass-through voting is required pursuant to Section 2.9 of this
Agreement); or
(f) a decision by the Company to disregard the voting instructions
of Contract Owners (in the event pass-through voting is required pursuant
to Section 2.9 of this Agreement).
4.2 The Company will be responsible for assisting the Board of Trustees of
the Trust in carrying out its responsibilities by providing the Board with all
information reasonably necessary for the Board to consider any issue raised,
including information as to a decision by the Company to disregard voting
instructions of Contract owners.
4.3 It is agreed that if it is determined by a majority of the members of
the Board of Trustees of the Trust or a majority of its disinterested Trustees
that a material irreconcilable conflict exists affecting the Company, the
Company shall, at its own expense, take whatever steps are necessary to remedy
or eliminate the irreconcilable material conflict, which steps may include, but
are not limited to,
(a) withdrawing the assets allocable to some or all of the separate
accounts from the Trust or any Portfolio and reinvesting such assets in a
different investment medium, including another Portfolio of the Trust or
submitting the questions of whether
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such segregation should be implemented to a vote of all affected Contract
owners and, as appropriate, segregating the assets of any particular group
(i.e. annuity Contract owners, life insurance Contract owners or qualified
Contract owners) that votes in favor of such segregation, or offering to
the affected Contract owners the option of making such a change;
(b) establishing a new registered management investment company or
managed separate account.
4.4 If a material irreconcilable conflict arises because of the Company's
decision 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 its separate account
investments in the Trust. No charge or penalty will be imposed against a
separate account as a result of such a withdrawal. The Company agrees that any
remedial action taken by it in resolving any material conflicts of interest will
be carried out with a view only to the interests of Contract owners.
4.5 For purposes hereof, a majority of the disinterested members of the
Board of Trustees of the Trust shall determine whether or not any proposed
action adequately remedies any material irreconcilable conflict. In no event
will the Trust be required to establish a new funding medium for any Variable
Contracts. The Company shall not be required by the terms hereof to establish a
new funding medium for any Variable Contracts if an offer to do so has been
declined by vote of a majority of affected Contract owners.
4.6 The Trust agrees to inform the Company of the existence or the
potential of any material irreconcilable conflict of interest between the
interests of the contractholders or the separate accounts of the Company
investing in the Trust and/or any other separate account of any other insurance
company investing in the Trust (upon the Trust having knowledge of same)
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, 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 owners and variable life
insurance Contract owners or by Contract owners of different participating
insurance companies (in the event pass-through voting is required pursuant to
Section 2.9 of this Agreement); or (f) a decision by an insurer to disregard the
voting instructions of Contract owners (in the event pass-through voting is
required pursuant to Section 2.9 of this Agreement. The Board of Trustees of the
Trust shall promptly inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
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 Mixed and
Shared Funding Exemptive Order, and said reports, materials and data shall be
submitted more frequently if reasonably deemed appropriate by the
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Trustees.
4.8. If and to the extent that Rule 6e-3(T) is 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 Mixed and Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Mixed and Shared Funding
Exemptive Order, then the Trust and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with Rule
6e-3(T), as amended, or 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, directors,
officers, employees and agents and each person, if any, who controls the Trust
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Article V) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Company, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal counsel
fees incurred in connection therewith) (collectively, "Losses"), to which the
Indemnified Parties may become subject under any statute or regulation, or at
common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in a registration
statement or prospectus for the Contracts or in the Contracts themselves
or in sales literature generated or approved by the Company on behalf of
the Contracts or Accounts (or any amendment or supplement to any of the
foregoing) (collectively, "Company Documents" for the purposes of this
Article V), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, provided that
this indemnity shall not apply as to any Indemnified 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 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
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omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon and
accurately derived from written information furnished to the Trust by or
on behalf of the Company; or
(d) arise out of or result from any failure by the Company to
provide the services or furnish the materials required under the terms of
this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement by
the Company.
5.2. Indemnification By the Adviser. The Adviser agrees to indemnify and
hold harmless the Company and each of its directors, officers, employees, and
agents and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively the "Indemnified Parties" for the
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, which consent shall not be unreasonably withheld) 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 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
Portfolio 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
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on behalf of the Trust; or
(d) arise out of or result from any failure by the Trust to provide
the services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or
arise out of or result from any other material breach of this Agreement by
the Trust.
5.3. Neither the Company 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 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.
5.4. Neither the Company 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 or
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 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 may be terminated by any party in its entirety or with
respect to one, some or all Portfolios for any reason by sixty (60) days
advance written notice delivered to the other parties, and shall terminate
immediately in the event of its assignment.
6.2. Notwithstanding any termination of this Agreement, except termination
under
12
Article IV which shall be governed by Article IV, the Trust shall, at the option
of the Company, continue to make available additional shares of any Portfolio
and redeem shares of 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.
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 or its Adviser:
Xxxxxxxxx & Xxxxxx Advisers Management Trust
Xxxxxxxxx & Xxxxxx Management Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx, Counsel
If to the Company:
Connecticut General Life Insurance Company
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Chief Counsel,
Individual Insurance Operations
ARTICLE VIII.
Miscellaneous
13
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 constriction 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 the State of New York. It
shall also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the Commission granting
exemptive relief therefrom and the conditions of such orders. Copies of any such
orders shall be promptly forwarded by the Trust to the Company.
8.5. 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 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 Commission, the
National Association of Securities Dealers, Inc 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.
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. 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.
14
8.11 Each party hereto shall, except as required by law or otherwise
permitted by this Agreement treat as 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 shall not disclose such
confidential information without the written consent of the affected party
unless such information has become publicly available.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Fund Participation Agreement as of the date and year first above
written.
Xxxxxxxxx & Xxxxxx Advisers Management
Trust
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name:
Title:
Xxxxxxxxx & Xxxxxx Management
Incorporated
By: /s/ [ILLEGIBLE]
-------------------------------------
Name:
Title:
Connecticut General Life Insurance
Company
By: /s/ Xxx X. Xxxxx
-------------------------------------
Name: Xxx X. Xxxxx
Title: Senior Vice President
15
SCHEDULE A
CG Variable Annuity Separate Account II January 25, 1994
CG Variable Life Insurance Separate
Account I July 6, 1994
16
SCHEDULE B
Partners Portfolio
Limited Maturity Bond Portfolio
Balanced Portfolio
17
ASSIGNMENT AND MODIFICATION AGREEMENT
This Agreement is made by and between Xxxxxxxxx & Xxxxxx Advisers
Management Trust ("Trust"), a Massachusetts business trust, Xxxxxxxxx & Xxxxxx
Management Incorporated ("N&B Management"), a New York corporation, Xxxxxxxxx &
Xxxxxx Advisers Management Trust ("Successor Trust"), a Delaware business trust,
Advisers Managers Trust ("Managers Trust") and Connecticut General Life
Insurance Company ("Life Company"), a life insurance company organized under the
Laws of the State of Connecticut.
WHEREAS, the Life Company has previously entered into a Fund Participation
Agreement dated April 7,1995 (the "Fund Participation Agreement") with the Trust
and N&B Management regarding the purchase of shares of the Trust by Life
Company; and
WHEREAS, as part of the reorganization into a "master-feeder" fund
structure (the "Reorganization"), the Trust will be converted into the Successor
Trust, a Delaware business trust; and
WHEREAS, as part of the Reorganization, each Portfolio of the Trust will
transfer all of its assets to the corresponding Portfolio of the Successor Trust
("Successor Portfolio") and each Successor Portfolio will invest all of its net
investable assets in a corresponding series of Managers Trust; and
WHEREAS, as part of the Reorganization, an Order under Section 6(c) of the
Investment Company Act of 1940 ("'40 Act") is expected to be issued by the
Securities and Exchange Commission ("SEC") granting exemptions from Sections
9(a), 13(a), 15(a) and 15(b) of the '40 Act and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder; and
WHEREAS, the Order is expected to require that certain conditions (the
Conditions") as set forth in the Notice (Investment Company Act Release No.
21003 (April 12, 1995)) be made a part of the Fund Participation Agreement;
and
WHEREAS, the parties hereto desire to assign the Fund Participation
Agreement from the Trust to the Successor Trust and to modify the Fund
Participation Agreement to include the Conditions; and
WHEREAS, Managers Trust will become a party to the Fund Participation
Agreement as modified hereby, due to and for purposes of its obligations under
the Conditions.
NOW THEREFORE, in consideration of their mutual promises, Trust, N&B
Management Successor Trust, Managers Trust and Life Company agree as follows:
1
1. The Fund Participation Agreement is hereby assigned by the Trust to the
Successor Trust.
2. Pursuant to such assignment, the Successor Trust hereby accepts all
rights and benefits of the Trust under the Fund Participation Agreement and
agrees to perform all duties and obligations of the Trust under the Fund
Participation Agreement. Upon the effectiveness of this Assignment and
Modification Agreement, the Trust will be released from all obligations and
duties under the Fund Participation Agreement.
3. The Fund Participation Agreement is hereby modified to include the
Conditions as follows:
A. Section 2.9 of the Fund Participation Agreement is deleted.
B. Article IV of the Fund Participation Agreement is replaced with the
following:
4.1 The Board of Trustees of each of the Successor Trust and
Managers Trust (the "Boards") will monitor the Successor Trust and Managers
Trust, respectively, (collectively the "Funds") for the existence of any
material irreconcilable conflict between the interests of the contract owners
of all insurance company separate accounts investing in the Funds. A material
irreconcilable conflict may arise for a variety of reasons, including: (a)
state insurance regulatory authority action; (b) a change in applicable
federal or state insurance, tax, or securities laws or regulations, or a
public ruling, private letter ruling, 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 the Funds are being managed; (e) a difference in voting instructions given
by variable annuity and variable life insurance contract owners or by
contract owners of different participating insurance companies; or (f) a
decision by a participating insurance company to disregard voting
instructions of contract owners.
4.2 Life Company, other participating insurance companies, N&B
Management (or any other manager or administrator of the Funds), and any
qualified pension and retirement plan that executes a fund participation
agreement upon becoming an owner of 10% or more of the assets of the Funds
(collectively, "Participants") will report any potential or existing conflicts
to the Boards. Participants will be responsible for assisting the appropriate
Board in carrying out its responsibilities under these Conditions by providing
the Board with all information reasonably necessary for it to consider any
issues raised. This responsibility includes, but is not limited to, an
obligation by each Participant to inform the Board whenever variable contract
owner voting instructions are disregarded. These responsibilities will be
carried out with a view only to the interests of the contract owners.
2
4.3 If a majority of the Board of a Fund or a majority of its
disinterested trustees or directors, determines that a material irreconcilable
conflict exists, the relevant Participant, at its expense and to the extent
reasonably practicable (as determined by a majority of disinterested trustees or
directors), will take any steps necessary to remedy or eliminate the
irreconcilable material conflict, including: (a) withdrawing the assets
allocable to some or all of the separate accounts from the Funds or any series
thereof and reinvesting those assets in a different investment medium, which may
include another series of the Successor Trust or Managers Trust, or another
investment company or submitting the question as to whether such segregation
should be implemented to a vote of all affected variable contract owners and,
as appropriate, segregating the assets of any appropriate group (i.e., variable
annuity or variable annuity contract owners of one or more Participants) that
votes in favor of such segregation, or offering to the affected variable
contract owners the option of making such a change; and (b) establishing a new
registered management investment company or managed separate account. If a
material irreconcilable conflict arises because of a Participant's decision to
disregard contract owner voting instructions, and that decision represents a
minority position or would preclude a majority vote, the Participant may be
required, at the election of the relevant Fund, to withdraw its separate
account's investment in such Fund, and no charge or penalty will be imposed as a
result of such withdrawal.
The responsibility to take remedial action in the event of a Board
determination of an irreconcilable material conflict and to bear the cost of
such remedial action shall be a contractual obligation of all Participants under
their agreements governing their participation in the Funds, The responsibility
to take such remedial action shall be carried out with a view only to the
interests of the contract owners.
For the purposes of Condition (c), a majority of the disinterested
members of the applicable Board shall determine whether or not any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the relevant Fund or N&B Management (or any other investment adviser of the
Funds) be required to establish a new funding medium for any variable contract.
Further, no Participant shall be required by this condition (c) to establish a
new funding medium for any variable contract if any offer to do so has been
declined by a vote of a majority of contract owners materially affected by the
irreconcilable material conflict.
4.4 Any Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to all Participants.
4.5 Participants will provide pass-through voting privileges to all
contract owners so long as the SEC continues to interpret the `40 Act as
requiring pass-through voting privileges for variable contract owners. This
condition will apply to UIT-separate accounts investing in the Successor Trust
and to managed separate accounts investing
3
in Managers Trust to the extent a vote is required with respect to matters
relating to Managers Trust. Accordingly, the Participants, where applicable,
will vote shares of a Fund held in their separate accounts in a manner
consistent with voting instructions timely received from variable contract
owners. Participants will be responsible for assuring that each of their
separate accounts that participates in the Funds calculates voting privileges in
a manner consistent with other Participants. The obligation to calculate voting
privileges in a manner consistent with all other separate accounts investing in
the Funds will be a contractual obligation of all Participants under the
agreements governing participation in the Funds. Each Participant will vote
shares for which it has not received timely voting instructions, as well as
shares it owns, in the same proportion as its votes those shares for which it
has received voting instructions.
4.6 If and to the extent 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 `40
Act or the rules thereunder with respect to mixed and shared funding on terms
and conditions materially different from any exemptions granted in the order
requested, then the Successor Trust, Managers Trust and/or the Participants, as
appropriate, shall take such steps as may be necessary to comply with Rule 6e-2
and Rule 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
Rules are applicable.
4.7 No less than annually, the Participants shall submit to the
Boards such reports, materials or data as such Boards may reasonably request so
that the Boards may fully carry out the obligations imposed upon them by these
Conditions. Such reports, materials, and data shall be submitted more frequently
if deemed appropriate by the applicable Boards.
4. This Assignment and Modification Agreement shall be effective on May
1, 1995, the closing date of the conversion. In the event of a conflict between
the terms of this Assignment and Modification Agreement and the terms of the
Fund Participation Agreement, the terms of this Assignment and Modification
Agreement shall control.
5. All other terms and conditions of the Fund Participation Agreement
remain in full force and effect.
4
Executed this 1st day of May, 1995.
Xxxxxxxxx & Xxxxxx Advisers
Management Trust
(a Massachusetts business trust)
Attest: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxx
---------------------------- -------------------------------------
Xxxxxxx Xxxxxx, Chairman
Xxxxxxxxx & Xxxxxx Advisers
Management Trust
(a Delaware business trust)
Attest: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxx
---------------------------- -------------------------------------
Xxxxxxx Xxxxxx, Chairman
Advisers Managers Trust
Attest: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxx
---------------------------- -------------------------------------
Xxxxxxxxx & Xxxxxx
Management Incorporated
Attest: /s/ Xxxxx Xxxxxxx By: /s/ [ILLEGIBLE]
---------------------------- -------------------------------------
Connecticut General Life insurance
Company
Attest: /s/ Xxxxx X. Xxxx By: /s/ Xxx X. Xxxxx
------------------------------ -------------------------------------
Xxx X. Xxxxx
Senior Vice President
5
AMENDMENT TO THE
FUND PARTICIPATION AGREEMENT
This AMENDMENT, dated as of May 1, 2000, between CONNECTICUT
GENERAL LIFE INSURANCE COMPANY, a life insurance company organized under the
laws of the State of Connecticut ("Life Company"), and XXXXXXXXX XXXXXX
ADVISERS MANAGEMENT TRUST, a Delaware business trust ("Trust"), ADVISERS
MANAGERS TRUST, a New York common law trust ("Managers Trust"), and XXXXXXXXX
XXXXXX MANAGEMENT INC., a New York corporation ("NB Management"), is made to
the Fund Participation Agreement, dated as of April 7, 1995, as amended among
Life Company, Trust, Managers Trust and NB Management (the "Agreement").
Terms defined in the Agreement are used herein as therein defined.
WHEREAS, the parties desire to amend Schedule A to the Agreement to
add a new Separate Account;
WHEREAS, the parties wish to amend certain other provisions of the
Agreement.
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the parties agree as follows:
1. Schedule A of the Agreement is hereby deleted and replaced with new
Schedule A attached hereto.
2. Article III, paragraph 3.1, of the Agreement is hereby amended by
deleting the reference to "CIGNA Financial Services, Inc." in its place.
3. Article VII is hereby amended to provided to provide that notices to
Life Company under the Agreement shall be given to:
Connecticut General Life Insurance Company
000 Xxxxxxxx Xxxxxx, X00X
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx, Product Manager
Corporate Insurance
4. All references in the Agreement to "Xxxxxxxxx & Xxxxxx Advisers
Management Trust" or "Xxxxxxxxx & Xxxxxx Management Incorporate" shall be
changed to "Xxxxxxxxx Xxxxxx Advisors Management Trust" or "Xxxxxxxxx Xxxxxx
Management Inc.", respectively.
5. Except as modified hereby, all other terms and conditions of the
Agreement shall remain in full force and effect.
5. Except as modified hereby, all other terms and conditions of the
Agreement shall remain in full force and effect.
3. This Amendment may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same Amendment.
XXXXXXXXX XXXXXX XXXXXXXXX XXXXXX MANAGEMENT
ADVISERS MANAGEMENT TRUST INC.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
---------------------- ----------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Vice President Title: Vice President
ADVISERS MANAGERS TRUST CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx By: Xxxxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President Title: Assistant Vice President
2
SCHEDULE A
----------
CG Variable Annuity January 25, 1994
Separate Account II
CG Variable Life Insurance July 6, 1994
Separate Account I
Connecticut General Life March 20, 1997
Insurance Company
Separate Account FE
Connecticut General Life Insurance Company May 1, 2000
Separate Account 02
3
ADDENDUM TO FUND PARTICIPATION AGREEMENT
This ADDENDUM dated as of May 1, 2000 amends the Fund Participation
Agreement among Connecticut General Life Insurance Company ("Company"),
Xxxxxxxxx Xxxxxx Advisers Management Trust ("Trust"), Advisers Managers Trust
("Managers Trust"), and Xxxxxxxxx Xxxxxx Management Inc. ("NBMI").
WHEREAS, the Company, Turst, Managers Trust, and NBMI are parties to a
Fund Participation Agreement ("Agreement") pursuant to which separate
accounts of the Company invest proceeds from variable annuity and/or variable
life insurance policies in the one or more portfolios of the Trust
("Portfolios"); and
WHEREAS, the Trust, through the Portfolios, currently invests all of
its net investable assets in corresponding series of Managers Trust in a
"master-feeder" structure; and
WHEREAS, the Boards of Trustees of the Trust and Managers Trust have
approved a transaction to eliminate the current master-feeder structure in
which Trust will receive the portfolio securities held by Managers Trust in
redemption of the interests of Managers Trust held by the Trust (this
transaction is referred to as the "In-Kind Redemption"); and
WHEREAS, the In-Kind Redemption is currently scheduled to be effected
on or about May 1, 2000 (the date on which the In-Kind Redemption is effected
is referred to as the "Effective Date"); and
WHEREAS, upon completion of the In-Kind Redemption, the Trust will hold
and invest directly in its own portfolio of securities and Managers Trust
will cease investment operations and be dissolved; and
WHEREAS, the parties wish to amend the Agreement to reflect the In-Kind
Redemption and the elimination of the master-feeder structure.
NOW THEREFORE, effective on the Effective Date, the Trust assumes all
of the rights, obligations, and liabilities of Managers Trust under the
Agreement.
The undersigned hereby consents to the assignment described in the
preceding paragraph.
CONNECTICUT GENERAL LIFE ADVISERS MANAGERS TRUST
INSURANCE COMPANY
By: /s/ Xxxxxxxx X. Xxxxxxx By:
----------------------- -----------------------
Name: Xxxxxxxx X. Xxxxxxx Name:
Title: Assistant Vice President Title:
XXXXXXXXX XXXXXX ADVISERS XXXXXXXXX XXXXXX
MANAGEMENT TRUST MANAGEMENT INC.
By: By:
---------------------- ----------------------
Name: Name:
Title: Title:
