Exhibit 8(jj)(i)
[GRAPHIC]
Federated
WORLD-CLASS INVESTMENT MANAGER(R)
FUND PARTICIPATION
AGREEMENT
This AGREEMENT is made this ___ day of _____________, 2009, by and between
Jefferson National Life Insurance Company (the "Insurer"), a life insurance
company domiciled in Texas, on its behalf and on behalf of certain segregated
asset accounts of the Insurer listed on Exhibit A to this Agreement (the
"Separate Accounts"); Federated Insurance Series (the "Investment Company"), a
Massachusetts business trust; and Federated Securities Corp. (the
"Distributor"), a Pennsylvania corporation.
WHEREAS, the Investment Company is registered with the Securities and
Exchange Commission ("SEC") as an open-end management investment company under
the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Investment Company is authorized to issue separate classes of
shares of beneficial interest ("shares"), each representing an interest in a
separate portfolio of assets (a "Fund") and each Fund has its own investment
objective, policies, and limitations; and shares of the Funds are registered
under the Securities Act of 1933, as amended ("1933 Act"); and
WHEREAS, the Investment Company is available to offer shares of one or
more of its Funds to separate accounts of insurance companies that fund variable
annuity contracts and variable life insurance policies and to serve as an
investment medium for variable annuity contracts and variable life insurance
policies offered by insurance companies that have entered into participation
agreements substantially similar to this agreement ("Participating Insurance
Companies"); and
WHEREAS, the Insurer has issued or will issue variable annuity contracts
and variable life insurance policies ("Variable Contracts") supported wholly or
partially by the Separate Accounts; and
WHEREAS, the Separate Accounts are duly established and maintained as
segregated asset accounts by the Insurer to set aside and invest assets
attributable to the aforesaid Variable Contracts; and
WHEREAS, the Investment Company has obtained an order from the SEC dated
December 29, 1993 (File No. 812-8620), granting Participating Insurance
Companies and variable annuity and variable life insurance 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 Investment Company to be sold to and held by
variable annuity and variable life insurance separate accounts of life insurance
companies that may or may not be affiliated with one another (hereinafter the
"Mixed and Shared Funding Exemptive Order"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended ("1934 Act"), and is a
member in good standing of the Financial Industry Regulatory Authority
("FINRA"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Insurer intends to purchase shares of one or more of the
Investment Company's portfolios on behalf of its Separate Accounts to serve as
an investment medium for Variable Contracts funded by the Separate Accounts, and
the Distributor is authorized to sell shares of the Funds;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants set forth, the parties hereby agree as follows:
1. SALE OF INVESTMENT COMPANY SHARES
---------------------------------
(a) The Distributor agrees to sell to the Insurer those shares of the Funds
offered and made available by the Investment Company and identified on Exhibit C
that the Insurer orders on behalf of its Separate Accounts, and agrees to
execute such orders on each day on which the Investment Company calculates its
net asset value pursuant to rules of the SEC ("business day") at the net asset
value determined as described in the Investment Company's registration
statement, next computed after receipt and acceptance by the Investment Company
or its agent of the order for the shares of the Investment Company.
(b) The Investment Company agrees to make available on each business day shares
of the Funds for purchase at the applicable net asset value per share by the
Insurer on behalf of its Separate Accounts; provided, however, that the Board of
Trustees of the Investment Company or its designee may refuse to sell shares of
any Fund to any person, or suspend or terminate the offering of shares of any
Fund, if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Trustees, or their designee,
acting in good faith and in light of the Trustees'
PGHLIB-2340111.1-GCJONES-999921-50001
fiduciary duties under applicable law, necessary in the best interests of the
shareholders of any Fund.
(c) The Investment Company and the Distributor agree that shares of the Funds of
the Investment Company will be sold only to Participating Insurance Companies,
their separate accounts, and other persons consistent with applicable law. No
shares of any Fund will be sold directly to the general public to the extent not
permitted by applicable law.
(d) The Investment Company and the Distributor will not sell shares of the Funds
to any insurance company or separate account unless an agreement containing
provisions substantially the same as the provisions in Section 4 of this
Agreement is in effect to govern such sales.
(e) Upon receipt of a request for redemption in proper form from the Insurer,
the Investment Company agrees to redeem any full or fractional shares of the
Funds held by the Insurer, ordinarily executing such requests on each business
day at the net asset value next computed after receipt and acceptance by the
Investment Company or its agent of the request for redemption, except that the
Investment Company reserves the right to suspend the right of redemption,
consistent with Section 22(e) of the 1940 Act and any rules thereunder. Such
redemption shall be paid consistent with Section 22(e) of the 1940 Act and any
rules, regulations or orders thereunder, and the procedures and policies of the
Investment Company as described in the current registration statement for the
Investment Company.
(f) Any purchase or redemption request for any Fund shares held or to be held in
the Insurer's general account shall be effected at the net asset value per share
next determined after the receipt and acceptance of such request by the
Investment Company.
(g) The Insurer agrees to purchase and redeem the shares of each Fund in
accordance with the provisions of Exhibit B to this Agreement and the current
prospectus for the Fund.
(h) Issuance and transfer of shares of the Funds will be by book entry only
unless otherwise agreed by the Investment Company. Stock certificates will not
be issued to the Insurer or the Separate Accounts unless otherwise agreed by the
Investment Company. Shares ordered from the Investment Company will be recorded
in an appropriate title for the Separate Accounts or the appropriate
sub-accounts of the Separate Accounts.
(i) The Investment Company shall furnish same day notice to the Insurer of any
income, dividends or capital gain distributions payable on the shares of the
Funds. The Insurer hereby elects to reinvest in the Fund all such dividends and
distributions as are payable on a Fund's shares and to receive such dividends
and distributions in additional shares of that Fund. The Insurer reserves the
right to revoke this election in writing and to receive all such dividends and
distributions in cash. The Investment Company shall notify the Insurer of the
number of shares so issued as payment of such dividends and distributions.
(j) The Investment Company shall instruct its recordkeeping agent to advise the
Insurer on each business day of the net asset value per share for each Fund.
Neither the Investment Company, any Fund nor the Distributor, nor any of their
affiliates shall be liable for any information provided to the Insurer pursuant
to this Agreement which information is based on incorrect information supplied
by the Insurer or any other Participating Insurance Company to the Investment
Company or the Distributor.
2. REPRESENTATIONS AND WARRANTIES
------------------------------
(a) The Insurer represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that it is taxed as an
insurance company under Subchapter L of the Internal Revenue Code of 1986, as
amended, (the "Code").
(b) The Insurer represents and warrants that it has legally and validly
established each of the Separate Accounts as a segregated asset account under
the applicable state Insurance Code, and that each of the Separate Accounts is a
validly existing segregated asset account under applicable federal and state
law.
(c) The Insurer represents and warrants that the Variable Contracts issued by
the Insurer or interests in the Separate Accounts under such Variable Contracts
(i) are or, prior to issuance, will be registered as securities under the 1933
Act or, alternatively, (ii) are not registered because they are properly exempt
from registration under the 1933 Act or will be offered exclusively in
transactions that are properly exempt from registration under the 1933 Act.
(d) The Insurer represents and warrants that each of the Separate Accounts (i)
has been registered as a unit investment trust in accordance with the provisions
of the 1940 Act or, alternatively, (ii) has not been registered in proper
reliance upon an exclusion from registration under the 1940 Act.
(e) The Insurer represents that it believes, in good faith, that the Variable
Contracts issued by the Insurer are currently treated as annuity contracts or
life insurance policies (which may include modified endowment contracts),
whichever is appropriate, under applicable provisions of the Code.
(f) The Investment Company represents and warrants that it is duly organized as
a business trust under the laws of the Commonwealth of Massachusetts, and is in
good standing under applicable law.
(g) The Investment Company represents and warrants that the shares of the Funds
are duly authorized for issuance in accordance with applicable law and that the
Investment Company is registered as an open-end management investment company
under the 1940 Act.
(h) The Investment Company represents that it believes, in good faith, that the
Funds currently comply with the diversification provisions 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.
(i) The Distributor represents and warrants that it is a member in good standing
of the FINRA and is registered as a broker-dealer with the SEC.
Fund Participation Agreement
April 30, 2008 Page 2
(j) The Insurer represents and warrants that all of its directors, officers,
employees, and other individuals/entities employed or controlled by the Insurer
dealing with the money and/or securities of the Separate Accounts are covered by
a blanket fidelity bond or similar coverage for the benefit of the Separate
Accounts, in an amount not less than the amount that would be required by Rule
17g-1 of the 1940 Act or related provisions as may be promulgated from time to
time as if the Separate Accounts were subject to such rule. The aforesaid bond
includes coverage for larceny and embezzlement and is issued by a reputable
bonding company. The Insurer agrees to hold for the benefit of the Investment
Company and to pay to the Investment Company any amounts lost from larceny,
embezzlement or other events covered by the aforesaid bond to the extent such
amounts properly belong to the Investment Company pursuant to the terms of this
Agreement. The Insurer agrees to make all reasonable efforts to see that this
bond or another bond containing there provisions is always in effect, and agrees
to notify the Investment Company and the Distributor in the event that such
coverage no longer applies.
(k) The Investment Company represents and warrants that all of its trustees,
officers, employees, and other individuals or entities dealing with the money
and/or securities of the Investment Company are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage for the benefit of
the Investment Company in an amount not less than the minimum coverage as
required currently by Rule 17g-1 of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
(l) The Insurer acknowledges that, pursuant to Form 24f-2, the Investment
Company is not required to pay fees to the SEC for registration of its shares
under the 1933 Act with respect to its shares issued to Separate Accounts that
are unit investment trusts that offer interests that are registered under the
1933 Act and on which a registration fee has been or will be paid to the SEC
("Registered Separate Accounts"). The Insurer agrees to provide the Investment
Company each year within 60 days of the end of the Investment Company's fiscal
year, or when reasonably requested by the Investment Company, information as to
the number of shares purchased by Registered Separate Accounts and Separate
Accounts the interests of which are not registered under the ▇▇▇▇ ▇▇▇. The
Insurer acknowledges that the Investment Company intends to rely on the
information so provided and represents and warrants that such information shall
be accurate.
(m) The parties shall each be deemed to repeat all the foregoing representations
and warranties made by it at the time of any transaction subject to this
Agreement.
3. GENERAL DUTIES
--------------
(a) The Investment Company shall take all such actions as are necessary to
permit the sale of the shares of each Fund to the Separate Accounts, including
maintaining its registration as an investment company under the 1940 Act, and
registering the shares of the Funds sold to the Separate Accounts under the 1933
Act for so long as required by applicable law. The Investment Company shall
amend its Registration Statement filed with the SEC under the 1933 Act and the
1940 Act from time to time as required in order to effect the continuous
offering of the shares of the Funds. The Investment Company shall register and
qualify the shares for sale in accordance with the laws of the various states to
the extent deemed necessary by the Investment Company or the Distributor.
(b) The Investment Company shall use its best efforts to maintain qualification
of each Fund as a Regulated Investment Company under Subchapter M of the Code
(or any successor or similar provision) and shall notify the Insurer immediately
upon having a reasonable basis for believing that a Fund has ceased to so
qualify or that it might not so qualify in the future.
(c) The Investment Company shall use its best efforts to enable each Fund to
comply with the diversification provisions 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 any
prospective amendments or other modifications to Section 817 or regulations
thereunder, and shall notify the Insurer immediately upon having a reasonable
basis for believing that any Fund has ceased to comply.
(d) The Insurer shall take all such actions as are necessary under applicable
federal and state law to permit the sale of the Variable Contracts issued by the
Insurer, including registering each Separate Account as an investment company to
the extent required under the 1940 Act, and registering the Variable Contracts
or interests in the Separate Accounts under the Variable Contracts to the extent
required under the 1933 Act, and obtaining all necessary approvals to offer the
Variable Contracts from state insurance commissioners.
(e) The Insurer shall use its best efforts to maintain the treatment of the
Variable Contracts issued by the Insurer as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code, and
shall notify the Investment Company and the Distributor immediately upon having
a reasonable basis for believing that such Variable Contracts have ceased to be
so treated or that they might not be so treated in the future.
(f) The Insurer shall offer and sell the Variable Contracts issued by the
Insurer in accordance with applicable provisions of the 1933 Act, the 1934 Act,
the 1940 Act, the regulations promulgated by the FINRA ("FINRA Conduct Rules"),
and state law respecting the offering of variable life insurance policies and
variable annuity contracts.
(g) The Distributor shall sell and distribute the shares of the Funds of the
Investment Company in accordance with the applicable provisions of the 1933 Act,
the 1934 Act, the 1940 Act, the FINRA Conduct Rules, and state law.
(h) During such time as the Investment Company engages in Mixed Funding or
Shared Funding, a majority of the Board of Trustees of the Investment Company
shall consist of persons who are not "interested persons" of the Investment
Company ("disinterested Trustees"), as defined by Section 2(a)(19) of the 1940
Act and the rules thereunder, and as modified by any
Fund Participation Agreement
April 30, 2008 Page 3
applicable orders of the SEC, except that if this provision of this Section 3(h)
is not met by reason of the death, disqualification, or bona fide resignation of
any Trustee or Trustees, then the operation of this provision shall be suspended
(i) for a period of 45 days if the vacancy or vacancies may be filled by the
Investment Company's Board; (ii) for a period of 60 days if a vote of
shareholders is required to fill the vacancy or vacancies; or (iii) for such
longer period as the SEC may prescribe by order upon application.
(i) The Insurer and its agents will not in any way recommend any proposal or
oppose or interfere with any proposal submitted by the Investment Company at a
meeting of owners of Variable Contracts ("Variable Contract Owners") or
shareholders of the Investment Company, and will in no way recommend, oppose, or
interfere with the solicitation of proxies for Investment Company shares held by
Variable Contract Owners, without the prior written consent of the Investment
Company, which consent may be withheld in the Investment Company's sole
discretion.
(j) Each party hereto shall cooperate with each other party and all appropriate
governmental authorities having jurisdiction (including, without limitation, the
SEC, the FINRA, 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.
(k) (i) The parties acknowledge that the SEC and the United States Treasury
Department have adopted a series of rules and regulations arising out of the USA
PATRIOT Act (together with such rules and regulations, the "AML-CIP
Regulations"), specifically requiring certain financial institutions, including
the Investment Company, Distributor and Insurer, to establish a written
anti-money laundering and customer identification program (an "AML-CIP
Program").
(ii) The Investment Company, Distributor and Insurer each represent,
warrant and certify that they have established, and covenant that at all
times during the existence of this Agreement they will maintain, an
AML-CIP Program in compliance with the AML-CIP Regulations.
(iii) Insurer covenants that it will perform all activities, including the
establishment and verification of customer identities as required by the
AML-CIP Regulations and/or its AML-CIP Program, with respect to all
customers on whose behalf Insurer maintains a direct account with the
Investment Company.
(iv) The parties agree that (A) accounts in the Investment Company
beneficially owned by Insurer's customers shall be accounts of the Insurer
for all purposes under Insurer's AML-CIP Program and that (B) Insurer's
customers will be customers of Insurer for all purposes under Insurer's
AML-CIP Program.
(l) (i) The parties acknowledge that:
(A) the SEC has adopted Regulation S-P at 17 CFR Part 248 to protect
the privacy of individuals who obtain a financial product or service
for personal, family or household use;
(B) Regulation S-P permits financial dealers, such as Insurer and
Distributor, to disclose "nonpublic personal information" ("NPI") of
its "customers" and "consumers" (as those terms are therein defined
in Regulation S-P) to affiliated and nonaffiliated third parties,
without giving such customers and consumers the ability to opt out
of such disclosure, for the limited purposes of processing and
servicing transactions (17 CFR ss. 248.14); for specified law
enforcement and miscellaneous purposes (17 CFR ss. 248.15); and to
service providers or in connection with joint marketing arrangements
(17 CFR ss. 248.13);
(C) Regulation S-P provides that the right of a customer and
consumer to opt out of having his or her NPI disclosed pursuant to
17 CFR ss. 248.7 and 17 CFR ss. 248.10 does not apply when the NPI
is disclosed to service providers or in connection with joint
marketing arrangements, provided the Insurer and third party enter
into a contractual agreement that prohibits the third party from
disclosing or using the information other than to carry out the
purposes for which the Insurer disclosed the information (17 CFR ss.
248.13);
(D) NPI of Insurer's consumers and customers that have no
independent customer relationship with Distributor may be disclosed
to Distributor during the term of the Agreement ("Insurer Customer
NPI");
(E) certain consumers and customers of Insurer may also be consumers
and customers of Distributor as fully-disclosed shareholders of
Federated mutual funds ("Joint Customer"); and
(F) NPI of Joint Customers may be disclosed and exchanged during the
term of this Agreement ("Joint Customer NPI").
(m) Each party hereby covenants that any Joint Customer NPI which a party
receives from the other party will be subject to the following limitations and
restrictions:
(i) Each party may redisclose Joint Customer NPI to its own affiliates,
who will be limited by the same disclosure and use restrictions that are
imposed on the parties under this Agreement; and
(ii) Each party may redisclose and use Joint Customer NPI only as
necessary in the ordinary course of business to provide the services
identified in this Agreement except as permitted under Regulation S-P and
as required by any applicable federal or state law.
(iii) Distributor covenants that:
(A) Distributor may redisclose Insurer Customer NPI to its own
affiliates, who will be limited by the same disclosure and use
restrictions that are imposed on Distributor under this Agreement;
and
Fund Participation Agreement
April 30, 2008 Page 4
(B) Distributor may redisclose and use Insurer Customer NPI only as
necessary in the ordinary course of business to provide the services
identified in this Agreement and to third-party service providers as
permitted under Regulation S-P.
(iv) Each party represents and warrants that, in accordance with 17 CFR ss.
248.30, it has implemented, and will continue to carry out for the term of the
Agreement, policies and procedures reasonably designed to:
(A) Insure the security and confidentiality of records and
customers' NPI;
(B) Protect against any anticipated threats or hazards to the
security or integrity of customer records and NPI; and
(C) Protect against unauthorized access or use of such customer
records or NPI that could result in substantial harm or
inconvenience to any customer.
(v) The provisions of Section 3(m) shall survive the termination of the
Agreement.
(n) (i) Insurer shall not directly or indirectly offer, adopt, implement,
conduct or participate in any program, plan, arrangement, advice or
strategy that Distributor or the Investment Company reasonably deem to be
harmful to Shareholders or potentially disruptive to the management of the
Funds, as communicated to Insurer by Distributor in writing from time to
time, or which violates the policies and procedures of the Funds as
disclosed in each Fund's Prospectus; including without limitation, any
activity involving market timing, programmed transfer, frequent transfer
and similar investment programs. Insurer, at all times during the term of
this Agreement, shall have active, formal policies and procedures aimed at
deterring "market timers." Such policies and procedures shall provide for
Insurer's ongoing review of its customers' account activity and prescribe
effective actions to deter or detect and stop disruptive activities. In
addition, Insurer shall not knowingly permit any customer to invest in any
of the Funds if that customer has been identified to Insurer as a "market
timer" by another fund company;
(ii) With respect to Shares held by Insurer on an omnibus basis with the
Funds, Insurer shall upon Distributor `s request, promptly provide the
Taxpayer Identification Number of each shareholder that purchased,
redeemed, transferred or exchanged shares of a Fund and the amount and
dates of such shareholder purchases, redemptions, transfers and exchanges;
and
(iii) Insurer shall follow Distributor 's instructions to restrict or
prohibit further purchases or exchanges of Shares by a shareholder that
has been identified by Distributor as having engaged in transactions of
Shares (whether directly or through Insurer) that violate the policies and
procedures of the Investment Company as disclosed in each Fund's
Prospectus or that are deemed disruptive to a Fund as determined by
Distributor in its sole discretion.
(o) Insurer will forward for processing on each day only those purchase and
redemption orders received by Insurer prior to the daily cut-off times
disclosed in each Fund's prospectus. Insurer has, and will maintain at all
times during the term of this Agreement, appropriate internal controls for
the segregation of purchase and redemption orders received prior to the
daily cut-off times disclosed in each Fund's Prospectus, from purchase and
redemption orders received after the daily cut-off times disclosed in each
Fund's prospectus as and to the extent required by the 1940 Act.
(p) Insurer acknowledges that the Funds are only registered for sale in the
United States of America and that no action has been taken by or on behalf
of Distributor or the Investment Company in any other jurisdiction to
permit a public offering or sale of Shares, or the possession or
distribution of any Prospectus in any jurisdiction where action for such
purposes is required. Insurer agrees not to make the Funds available for
sale to persons in any jurisdiction in which such offer is unlawful.
Should Insurer undertake to offer and/or sell Shares of the Investment
Company in any jurisdiction other than the United States of America,
Insurer shall inform itself of, and shall comply with, at its own expense,
any and all applicable law and regulation relating thereto, and none of
Distributor, the Investment Company, or their respective authorized agents
shall have any responsibility or liability in connection therewith. As
used herein, "United States of America" shall be deemed to include any
state of the United States, the District of Columbia, Puerto Rico, the
Virgin Islands, and any other possession of the United States.
(q) The Insurer agrees that the Investment Company and the Distributor shall
bear no responsibility for any act or omission of any fund or portfolio
that serves as an investment option under the Variable Contracts other
than the Funds hereunder.
(r) (i) The Parties may agree from time to time to set appropriate security
procedures and to perform electronically certain of their obligations
under this Agreement, including without limitation, the delivery of
Disclosure Documents, opening accounts, transmitting purchase, exchange,
and redemption orders, and delivering and maintaining shareholder
communications.
(ii) Where Insurer (A) has obtained the informed consent of the underlying
beneficial owner of an account in the Funds, and (B) is the record owner
of such account in the Funds, Insurer hereby consents to the electronic
delivery, via Distributor's website ("Website"), of all Disclosure
Documents. Insurer acknowledges that Distributor utilizes portable
document format ("PDF") files for Disclosure Documents on the Website, and
that Insurer might incur costs in connection with the delivery of
Disclosure Documents (e.g. on-line time). If Insurer does not already have
access to the Adobe Acrobat Reader software necessary to view PDF files of
Disclosure
Fund Participation Agreement
April 30, 2008 Page 5
Documents on the Website, Insurer acknowledges that such software can be
obtained for free through the Help tab on the Website. Insurer further
acknowledges that notice of updates to the Disclosure Documents shall be
provided by Distributor, as appropriate, on the account statement that is
regularly provided to Insurer.
(iii) Insurer acknowledges and agrees that Distributor (A) offers the Website
solely as a convenience on an "as is" and "as available" basis; (B) may
discontinue the Website's availability at any time; and (C) disclaims all
express and implied warranties regarding the Website, including without
limitation any warranty of merchantability, fitness for a particular purpose, or
arising from course of dealing or performance. Insurer further acknowledges and
agrees that in no event shall Distributor, any Fund or its officers and
directors, or any of their affiliates or employees be liable (in contract, tort,
or otherwise) to Insurer, its registered representatives, or third parties for
(D) Insurer's use or non-use of the Website and any data or information in
connection therewith; (E) any delay, malfunction, or lack of security associated
with, or caused by, the Website; or (F) acts or omissions of third parties,
including without limitation any entity which has licensed software or systems
to Distributor or any of its affiliates in connection with the Website. Except
as strictly necessary pursuant to this Agreement, Insurer shall not make or
permit any disclosure or use of the Website or any related documentation or
information without Distributor's prior written consent. Insurer agrees to
provide such security necessary to prevent any unauthorized use of the Website.
The provisions of this paragraph shall survive the termination of this
Agreement.
(iv) As a condition to using the Website, Insurer shall complete and regularly
update, or cause the same, all such applications, authorizations, and other
documents that may be required from time to time by Distributor and any entity
that has licensed software or systems to Distributor in connection with the
Website. In addition, Insurer shall immediately notify Distributor if any
password issued to Insurer in connection herewith is or may be jeopardized.
(v) Insurer agrees to provide such security as is necessary to prevent any
unauthorized use of the Investment Company's recordkeeping system, accessed via
any computer hardware or software provided to Insurer by Distributor. Insurer
represents and warrants that it has examined and tested the internal systems
that it has developed to support the services outlined in this Agreement and, as
of the date of this Agreement, has no knowledge of any situation or circumstance
that will inhibit the system's ability to perform the expected functions or
inhibit Insurer's ability to provide the expected services.
4. POTENTIAL CONFLICTS
-------------------
(a) During such time as the Investment Company engages in Mixed Funding or
Shared Funding, the parties hereto shall comply with the conditions in this
Section 4.
(b) The Investment Company's Board of Trustees shall monitor the Investment
Company for the existence of any material irreconcilable conflict (i) between
the interests of owners of variable annuity contracts and variable life
insurance policies, and (ii) between the interests of owners of variable annuity
contracts and variable life insurance policies issued by different Participating
Life Insurance Companies that invest in the Investment Company. A 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, no-action or interpretive 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 Fund of the Investment Company are being
managed; (E) a difference in voting instructions given by variable annuity and
variable life insurance contract owners; or (F) a decision by a Participating
Insurance Company to disregard the voting instructions of owners of variable
annuity contracts and variable life insurance policies.
(c) The Insurer agrees that it shall report any potential or existing conflicts
of which it is aware to the Investment Company's Board of Trustees. The Insurer
will be responsible for assisting the Board of Trustees of the Investment
Company in carrying out its responsibilities under the Mixed and Shared Funding
Exemptive Order, or, if the Investment Company is engaged in Mixed Funding or
Shared Funding in reliance on Rule 6e-2, 6e-3(T), or any other regulation under
the 1940 Act, the Insurer will be responsible for assisting the Board of
Trustees of the Investment Company in carrying out its responsibilities under
such regulation, by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. This includes, but is not
limited to, an obligation by the Insurer to inform the Board whenever Variable
Contract Owner voting instructions are disregarded. The Insurer shall carry out
its responsibility under this Section 4(c) with a view only to the interests of
the Variable Contract Owners.
(d) The Insurer agrees that in the event that it is determined by a majority of
the Board of Trustees of the Investment Company or a majority of the Investment
Company's disinterested Trustees that a material irreconcilable conflict exists,
the Insurer shall, at its expense and to the extent reasonably practicable (as
determined by a majority of the disinterested Trustees of the Board of the
Investment Company), take whatever steps are necessary to remedy or eliminate
the irreconcilable material conflict, up to and including: (i) withdrawing the
assets allocable to some or all of the Separate Accounts from the Investment
Company or any Fund and reinvesting such assets in a different investment
medium, including another portfolio of the 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., annuity contract owners or life insurance contract
owners of contracts issued by one or more Participating Insurance Companies),
that votes in favor
Fund Participation Agreement
April 30, 2008 Page 6
of such segregation, or offering to the affected Variable Contract Owners the
option of making such a change; and (ii) establishing a new registered
management investment company or managed separate account. If a material
irreconcilable conflict arises because of the Insurer's decision to disregard
Variable Contract Owners' voting instructions and that decision represents a
minority position or would preclude a majority vote, the Insurer shall be
required, at the Investment Company's election, to withdraw the Separate
Accounts' investment in the Investment Company, 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, and no charge or penalty will be imposed as a result of
such withdrawal. These responsibilities shall be carried out with a view only to
the interests of the Variable Contract Owners. A majority of the disinterested
Trustees of the Investment Company shall determine whether or not any proposed
action adequately remedies any material irreconcilable conflict, but in no event
will the Investment Company or its investment adviser or the Distributor be
required to establish a new funding medium for any Variable Contract. The
Insurer shall not be required by this Section 4(d) to establish a new funding
medium for any Variable Contract if any offer to do so has been declined by vote
of a majority of Variable Contract Owners materially adversely affected by the
material irreconcilable conflict.
(e) The Insurer, at least annually, shall submit to the Investment Company's
Board of Trustees such reports, materials, or data as the Board reasonably may
request so that the Trustees of the Investment Company may fully carry out the
obligations imposed upon the Board by the conditions contained in the
application for the Mixed and Shared Funding Exemptive Order and said reports,
materials, and data shall be submitted more frequently if deemed appropriate by
the Board.
(f) All reports of potential or existing conflicts received by the Investment
Company's Board of Trustees, and all Board action with regard to determining the
existence of a conflict, notifying Participating Insurance Companies of a
conflict, and determining whether any proposed action adequately remedies a
conflict, shall be properly recorded in the minutes of the Board of Trustees of
the Investment Company or other appropriate records, and such minutes or other
records shall be made available to the SEC upon request.
(g) The Board of Trustees of the Investment Company shall promptly notify the
Insurer in writing of its determination of the existence of an irreconcilable
material conflict and its implications.
(h) The Investment Company and the Insurer agree that if and to the extent Rule
6e-2 or Rule 6e-3(T) under the 1940 Act is amended or if Rule 6e-3 is adopted in
final form, to the extent applicable, the Investment Company and the Insurer
shall each take such steps as may be necessary to comply with the Rule as
amended or adopted in final form. If, in the future, the Mixed and Shared
Funding Exemptive Order should no longer be necessary under applicable law, then
this Section 4(h) shall continue in effect, and the remainder of Section 4 shall
no longer apply.
5. PROSPECTUSES AND PROXY STATEMENTS; VOTING
-----------------------------------------
(a) The Insurer shall distribute such prospectuses, proxy statements and
periodic reports of the Investment Company to the owners of Variable Contracts
issued by the Insurer as required to be distributed to such Variable Contract
Owners under applicable federal or state law.
(b) The Distributor shall provide the Insurer with as many copies of the current
prospectus of the Investment Company as the Insurer may reasonably request. If
requested by the Insurer in lieu thereof, the Investment Company shall provide
such documentation (including a final copy of the Investment Company's
prospectus as set in type or in camera-ready copy) and other assistance as is
reasonably necessary in order for the Insurer to either print a stand-alone
document or print together in one document the current prospectus for the
Variable Contracts issued by the Insurer and the current prospectus for the
Investment Company, or a document combining the Investment Company prospectus
with prospectuses of other funds in which the Variable Contracts may be
invested. The Investment Company shall bear the expense of printing copies of
its current prospectus that will be distributed to existing Variable Contract
Owners, and the Insurer shall bear the expense of printing copies of the
Investment Company's prospectus that are used in connection with offering the
Variable Contracts issued by the Insurer.
(c) The Investment Company and the Distributor shall provide, at the Investment
Company's expense, such copies of the Investment Company's current Statement of
Additional Information ("SAI") as may reasonably be requested, to the Insurer
and to any owner of a Variable Contract issued by the Insurer who requests such
SAI.
(d) The Investment Company, at its expense, shall provide the Insurer with
copies of its proxy statements, periodic reports to shareholders, and other
communications to shareholders in such quantity as the Insurer shall reasonably
require for purposes of distributing to owners of Variable Contracts issued by
the Insurer. The Investment Company, at the Insurer's expense, shall provide the
Insurer with copies of its periodic reports to shareholders and other
communications to shareholders in such quantity as the Insurer shall reasonably
request for use in connection with offering the Variable Contracts issued by the
Insurer. If requested by the Insurer in lieu thereof, the Investment Company
shall provide such documentation (including a final copy of the Investment
Company's proxy statements, periodic reports to shareholders, and other
communications to shareholders, as set in type or in camera-ready copy) and
other assistance as reasonably necessary in order for the Insurer to print such
shareholder communications for distribution to owners of Variable Contracts
issued by the Insurer.
(e) It is understood and agreed that, except with respect to information
regarding the Investment Company, the Funds, the Distributor, or an investment
adviser to the Investment Company or the Funds ("Adviser") provided in writing
by the
Fund Participation Agreement
April 30, 2008 Page 7
Investment Company, the Distributor or the Adviser and used in conformity
therewith, none of the Investment Company, the Funds, the Distributor, or the
Adviser is responsible for the content of the prospectuses or statements of
additional information for the Variable Contracts.
(f) As required by the Mixed and Shared Funding Exemptive Order, the Insurer
shall be responsible for calculating voting privileges in a manner consistent
with other Participating Insurance Companies. Towards this end, the Investment
Company agrees to provide written instructions on the calculation of voting
privileges, and the Insurer agree to vote consistent with any reasonable
standards that the Investment Company may adopt and provide in writing (which
writing may consist of the Investment Company's proxy statement).
(g) For so long as the SEC interprets the 1940 Act to require pass-through
voting by Participating Insurance Companies whose Separate Accounts are
registered as investment companies under the 1940 Act, the Insurer shall vote
shares of each Fund of the Investment Company held in a Separate Account or a
sub-account thereof, whether or not registered under the 1940 Act, at regular
and special meetings of the Investment Company in accordance with instructions
timely received by the Insurer (or its designated agent) from owners of Variable
Contracts funded by such Separate Account or sub-account thereof having a voting
interest in the Fund. The Insurer shall vote shares of a Fund of the Investment
Company held in a Separate Account or a sub-account thereof that are
attributable to the Variable Contracts as to which no timely instructions are
received, as well as shares held in such Separate Account or subaccount thereof
that are not attributable to the Variable Contracts and owned beneficially by
the Insurer (resulting from charges against the Variable Contracts or
otherwise), in the same proportion as the votes cast by owners of the Variable
Contracts funded by that Separate Account or subaccount thereof having a voting
interest in the Fund from whom instructions have been timely received. The
Insurer shall vote shares of each Fund of the Investment Company held in its
general account, if any, in the same proportion as the votes cast with respect
to shares of the Fund held in all Separate Accounts of the Insurer or
sub-accounts thereof, in the aggregate.
(h) During such time as the Investment Company engages in Mixed Funding or
Shared Funding, the Investment Company shall disclose in its prospectus that (i)
the Investment Company is intended to be a funding vehicle for variable annuity
and variable life insurance contracts offered by various insurance companies,
(ii) material irreconcilable conflicts possibly may arise, and (iii) the Board
of Trustees of the Investment Company will monitor events in order to identify
the existence of any material irreconcilable conflicts and to determine what
action, if any, should be taken in response to any such conflict. The Investment
Company hereby notifies the Insurer that prospectus disclosure may be
appropriate regarding potential risks of offering shares of the Investment
Company to separate accounts funding both variable annuity contracts and
variable life insurance policies and to separate accounts funding Variable
Contracts of unaffiliated life insurance companies.
6. SALES MATERIAL AND INFORMATION
------------------------------
(a) The Insurer shall furnish, or shall cause to be furnished, to the Investment
Company or its designee, each piece of sales literature or other promotional
material in which the Investment Company (or any Fund thereof) or its investment
adviser or the Distributor is named at least 15 days prior to the anticipated
use of such material, and no such sales literature or other promotional material
shall be used unless the Investment Company and the Distributor or the designee
of either approve the material or do not respond with comments on the material
within 10 days from receipt of the material.
(b) The Insurer agrees that neither it nor any of its affiliates or agents shall
give any information or make any representations or statements on behalf of the
Investment Company or concerning the Investment Company other than the
information or representations contained in the Registration Statement or
prospectus for the Investment Company shares, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports or
proxy statements for the Investment Company, or in sales literature or other
promotional material approved by the Investment Company or its designee and by
the Distributor or its designee, except with the permission of the Investment
Company or its designee and the Distributor or its designee.
(c) The Investment Company or the Distributor or the designee of either shall
furnish to the Insurer or its designee, each piece of sales literature or other
promotional material in which the Insurer or its Separate Accounts are named at
least 15 days prior to the anticipated use of such material, and no such
material shall be used unless the Insurer or its designee approves the material
or does not respond with comments on the material within 10 days from receipt of
the material.
(d) The Investment Company and the Distributor agree that each and the
affiliates and agents of each shall not give any information or make any
representations on behalf of the Insurer or concerning the Insurer, the Separate
Accounts, or the Variable Contracts issued by the Insurer, other than the
information or representations contained in a registration statement or
prospectus for such Variable Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports for
the Separate Accounts or prepared for distribution to owners of such Variable
Contracts, or in sales literature or other promotional material approved by the
Insurer or its designee, except with the permission of the Insurer.
(e) The Investment Company will provide to the Insurer at least one complete
copy of all prospectuses, Statements of Additional Information, reports, proxy
statements and other voting solicitation materials, and all amendments and
supplements to any of the above, that relate to the Investment Company or its
shares, promptly after the filing of such document with the SEC or other
regulatory authorities. Upon Insurer's request, Distributor will provide a copy
of the Mixed and Shared Funding Exemptive Application and any amendments
thereto.
(f) The Insurer will provide to the Investment Company all prospectuses (which
shall include an offering memorandum if
Fund Participation Agreement
April 30, 2008 Page 8
the Variable Contracts issued by the Insurer or interests therein are not
registered under the 1933 Act), Statements of Additional Information, reports,
solicitations for voting instructions relating to the Investment Company, and
all amendments or supplements to any of the above that relate to the Variable
Contracts issued by the Insurer or the Separate Accounts which utilize the
Investment Company as an underlying investment medium, promptly after the filing
of such document with the SEC or other regulatory authority.
(g) For purposes of this Section 6, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use on the Internet, in a newspaper,
magazine, or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, computerized media, or
other public media), sales literature (i.e., any written communication
distributed or made generally available to customers or the public, including
brochures, circulars, research reports, market letters, form letters, seminar
texts, reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other communications
distributed or made generally available to some or all agents or employees.
7. INDEMNIFICATION
---------------
(a) Indemnification by the Insurer
(i) The Insurer agrees to indemnify and hold harmless each of the
Investment Company, any affiliated person of the Investment Company within
the meaning of Section 2(a)(3) of the 1940 Act, (other than the Insurer),
and the Distributor, and each of their trustees/directors and officers,
and each person, if any, who controls the Investment Company or the
Distributor within the meaning of Section 15 of the 1933 Act or who is
under common control with the Investment Company or the Distributor
(collectively, the "Indemnified Parties" for purposes of this Section
7(a)) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Insurer) or
litigation expenses (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages,
liabilities or litigation expenses are related to the sale or acquisition
of the Investment Company's shares or the Variable Contracts issued by the
Insurer and:
(A) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus (which shall include an offering memorandum)
for the Variable Contracts issued by the Insurer or sales literature
for such Variable Contracts (or any amendment or supplement to any
of the foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Insurer by or on behalf
of the Investment Company for use in the registration statement or
prospectus for the Variable Contracts issued by the Insurer or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of such Variable Contracts or Investment
Company shares; or
(B) arise out of or as a result of any statement or representation
(other than statements or representations contained in the
registration statement, prospectus or sales literature of the
Investment Company not supplied by the Insurer or persons under its
control) or wrongful conduct of the Insurer or any of its
affiliates, employees or agents with respect to the sale or
distribution of the Variable Contracts issued by the Insurer or the
Investment Company shares; or
(C) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement, prospectus,
or sales literature of the Investment Company or any amendment
thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such a
statement or omission was made in reliance upon information
furnished to the Investment Company by or on behalf of the Insurer;
or (D) arise out of or result from any material breach of any
representation and/or warranty made by the Insurer in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Insurer;
except to the extent provided in Sections 7(a)(ii) and 7(a)(iii) hereof.
(ii) The Insurer shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of the Indemnified Party's duties or by reason of the
Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Investment Company.
(iii) The Insurer shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Party shall have notified the Insurer in writing within a reasonable time
after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or
after such Party shall have received notice of such service on any
designated agent), but failure to notify the Insurer of any such claim
shall not relieve the Insurer from any liability
Fund Participation Agreement
April 30, 2008 Page 9
which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the
Insurer shall be entitled to participate, at its own expense, in the
defense of such action. The Insurer also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Insurer to such party of the Insurer's
election to assume the defense thereof, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it, and the
Insurer will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently
in connection with the defense thereof other than reasonable costs of
investigation.
(iv) The Indemnified Parties shall promptly notify the Insurer of the
commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Investment Company shares or the Variable
Contracts issued by the Insurer or the operation of the Investment
Company.
(b) Indemnification By the Distributor
(i) The Distributor agrees to indemnify and hold harmless the Insurer and
its directors and officers and each person, if any, who controls the
Insurer within the meaning of Section 15 of the 1933 Act or who is under
common control with the Insurer (collectively, the "Indemnified Parties"
for purposes of this Section 7(b)) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the
written consent of the Distributor) or litigation expenses (including
legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or litigation
expenses are related to the sale or acquisition of the Investment
Company's shares or the Variable Contracts issued by the Insurer and:
(A) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus or sales literature of the Investment
Company (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished to the Distributor or the Investment
Company or the designee of either by or on behalf of the Insurer for
use in the registration statement or prospectus for the Investment
Company or in sales literature (or any amendment or supplement) or
otherwise for use in the registration statement or prospectus for
the Investment Company or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of the
Variable Contracts issued by the Insurer or Investment Company
shares; or
(B) arise out of or as a result of any statement or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for the
Variable Contracts not supplied by the Distributor or any employees
or agents thereof) or wrongful conduct of the Investment Company or
Distributor, or the affiliates, employees, or agents of the
Investment Company or the Distributor with respect to the sale or
distribution of the Variable Contracts issued by the Insurer or
Investment Company shares; or
(C) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement, prospectus,
or sales literature covering the Variable Contracts issued by the
Insurer, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement or
statements therein not misleading, if such statement or omission was
made in reliance upon information furnished to the Insurer by or on
behalf of the Investment Company; or
(D) arise out of or result from any material breach of any
representation and/or warranty made by the Distributor in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Distributor;
except to the extent provided in Sections 7(b)(ii) and 7(b)(iii) hereof.
(ii) The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation expenses to which an Indemnified Party would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of the Indemnified Party's duties or by reason of the
Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Insurer or the Separate Accounts.
(iii) The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless such Party shall have notified the Distributor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Party shall have received notice of such
service on any designated agent), but failure to notify the Distributor of
any such claim shall not relieve the Distributor from any liability which
it may have to the Indemnified Party
Fund Participation Agreement
April 30, 2008 Page 10
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Distributor will be entitled to participate, at
is own expense, in the defense thereof. The Distributor also shall be
entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Distributor to such party
of the Distributor's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Distributor will not be liable to such
party under this Agreement for any legal or other expense subsequently
incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
(iv) The Insurer shall promptly notify the Distributor of the commencement
of any litigation or proceedings against it or any of its officers or
directors in connection with the issuance or sale of the Variable
Contracts issued by the Insurer or the operation of the Separate Accounts.
(c) Indemnification by the Investment Company
(i) The Investment Company agrees to indemnify and hold harmless the
Insurer, and its directors and officers and each person, if any, who
controls the Insurer within the meaning of Section 15 of the 1933 Act or
who is under common control with the Insurer (collectively, the
"Indemnified Parties" for purposes of this Section 7(c)) against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Investment Company) or
litigation expenses (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages,
liabilities or litigation expenses are related to the sale or acquisition
of the Investment Company's shares or the Variable Contracts issued by the
Insurer and arise out of or result from any material breach of any
representation and/or warranty made by the Investment Company in this
Agreement or arise out of or result from any other material breach of this
Agreement by the Investment Company,
except to the extent provided in Sections 7(c)(ii) and 7(c)(iii) hereof.
(ii) The Investment Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation expenses to which an Indemnified Party would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of the Indemnified Party's duties or by reason of the
Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Insurer or the Separate Accounts.
(iii) The Investment Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such party shall have notified the Investment
Company in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Party shall
have received notice of such service on any designated agent), but failure
to notify the Investment Company of any such claim shall not relieve the
Investment Company from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of
this indemnification provision. In case any such action is brought against
the Indemnified Parties, the Investment Company will be entitled to
participate, at its own expense, in the defense thereof. The Investment
Company also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
Investment Company to such party of the Investment Company's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Investment
Company will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently
in connection with the defense thereof other than reasonable costs of
investigation.
(iv) The Insurer shall promptly notify the Investment Company of the
commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the
Variable Contracts issued by the Insurer or the sale of the Investment
Company's shares.
8. APPLICABLE LAW
--------------
(a) This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Pennsylvania.
(b) This Agreement shall be subject to the provisions of the 1933, 1934, and
1940 Acts, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Mixed and Shared Funding Exemptive Order),
and the terms hereof shall be interpreted and construed in accordance therewith.
9. TERMINATION
-----------
(a) This Agreement shall terminate:
(i) at the option of any party upon 180 days advance written notice to the
other parties; or
(ii) at the option of the Insurer, immediately upon written notice, if
shares of the Funds are not reasonably available to meet the requirements
of the Variable Contracts issued by the Insurer, as determined by the
Insurer, and upon prompt notice by the Insurer to the other parties; or
(iii) at the option of the Investment Company or the Distributor,
immediately upon written notice, upon institution of formal proceedings
against the Insurer or its agent by the FINRA, the SEC, or any state
securities or insurance department or any other regulatory body
Fund Participation Agreement
April 30, 2008 Page 11
regarding the Insurer's duties under this Agreement or related to the sale
of the Variable Contracts issued by the Insurer, the operation of the
Separate Accounts, or the purchase of the Investment Company shares;
provided, however, that the Investment Company or the Distributor has
determined in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon the
ability of the Insurer to perform its obligations under this Agreement,
including as a result of material adverse publicity, or
(iv) at the option of the Insurer, immediately upon written notice, upon
institution of formal proceedings against the Investment Company or the
Distributor by the FINRA, the SEC, or any state securities or insurance
department or any other regulatory body; provided, however, that the
Insurer determined in its sole judgment exercised in good faith, that any
such administrative proceedings will have a material adverse effect upon
the ability of the Distributor or the Investment Company to perform its
obligations under this Agreement, including as a result of material
adverse publicity; or
(v) upon requisite vote of the Variable Contract Owners having an interest
in the Separate Accounts (or any sub-accounts thereof) to substitute the
shares of another investment company for the corresponding shares of the
Investment Company or a Fund in accordance with the terms of the Variable
Contracts for which those shares had been selected or serve as the
underlying investment media; or
(vi) at the option of any party to the Agreement, immediately upon written
notice, in the event any of the shares of a Fund are not registered,
issued or sold in accordance with applicable state and/or federal law, or
such law precludes the use of such shares as the underlying investment
media of the Variable Contracts issued or to be issued by the Insurer; or
(vii) at the option of any party to the Agreement, immediately upon
written notice, in the event of a determination by a majority of the
Trustees of the Investment Company, or a majority of its disinterested
Trustees, that an irreconcilable conflict, as described in Section 4
hereof, exists; or
(viii) at the option of the Insurer, immediately upon written notice, if
the Investment Company or a Fund fails to meet the requirements under
Subchapter M of the Code for qualification as a Regulated Investment
Company specified in Section 3(b) hereof or the diversification
requirements specified in Section 3(c) hereof; or
(ix) at the option of the Investment Company or the Distributor,
immediately upon written notice, in the event that any or all Variable
Contracts fail to meet the qualifications specified in Sections 3(d) and
3(e) hereof; or
(x) at the option of the Investment Company or the Distributor, upon 30
days' written notice, if the Investment Company or the Distributor shall
determine, in its sole judgment exercised in good faith, that the Insurer
has suffered a material adverse change in its business operations,
financial condition, or prospects since the date of this Agreement or is
subject of material adverse publicity; or
(xi) at the option of the Insurer, upon 30 days' written notice, if the
Insurer shall determine, in its sole judgment exercised in good faith,
that the Investment Company or the Distributor has suffered a material
adverse change in its business operations, financial condition, or
prospects since the date of this Agreement or is the subject of material
adverse publicity; or
(xii) at the option of the Insurer upon the Investment Company's or
Distributor's material breach of any provision of this Agreement, upon 30
days' written notice and the opportunity to cure within such notice
period; or
(xiii) at the option of the Investment Company or the Distributor upon the
Insurer's material breach of any provision of this Agreement, upon 30
days' written notice and the opportunity to cure within such notice
period; or
(xiv) at the option of any party to the Agreement, immediately upon
written notice, if the Board of Trustees of the Investment Company has
decided to (A) refuse to sell shares of any Fund to the Insurer and/or any
of its Separate Accounts; (B) suspend or terminate the offering of shares
of any Fund; or (C) dissolve or liquidate the Investment Company or any
Fund.
(b) Each party to this Agreement shall promptly notify the other parties to the
Agreement of the institution against such party of any such formal proceedings
as described in Sections 9(a) (iii) and (iv) hereof. The Insurer shall give 60
days prior written notice to the Investment Company of the date of any proposed
vote of Variable Contract Owners to replace the Investment Company's shares as
described in Section 9(a)(v) hereof.
(c) The Investment Company and the Distributor acknowledge that the Insurer may
have the right to substitute shares of other securities for shares of the Funds
under certain circumstances. The Insurer agrees not to exercise this right until
after at least 60 days' written notice to the Investment Company and the
Distributor. In the event that the Insurer exercises its right to substitute
shares of other securities for shares of the Funds, the Insurer shall furnish,
or shall cause to be furnished, to the Investment Company and the Distributor,
or their designees, any application for an order seeking approval of the
substitution or any other written material related to such substitution,
including the notice of the substitution to be sent to Variable Contract Owners,
at least 15 days prior to the filing or delivery of such application or written
material with the SEC or any other regulatory body or entity or to Variable
Contract Owners. If, in any such application or other written material, the
Investment Company (or any Fund thereof) or its investment adviser or the
Distributor is named, no such application or other written material shall be
filed or delivered unless the Investment Company and the Distributor, or the
designee of either,
Fund Participation Agreement
April 30, 2008 Page 12
approve the material or do not respond with comments on the material within 10
days from receipt of the material.
(d) (i) Notwithstanding any termination of this Agreement, and except as
provided in Section 9(e), the Investment Company and the Distributor
shall, at the option of the Insurer, continue, until the one year
anniversary from the date of termination, and from year to year thereafter
if deemed appropriate by the Investment Company and the Distributor, to
make available additional shares of the Investment Company pursuant to the
terms and conditions of this Agreement, for all Variable Contracts in
effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, based on instructions
from the owners of the Existing Contracts, the Separate Accounts shall be
permitted to reallocate investments in the Funds of the Investment Company
and redeem investments in the Funds, and shall be permitted to invest in
the Funds in the event that owners of the Existing Contracts make
additional premium payments under the Existing Contracts.
(ii) Insurer agrees, promptly after any termination of this Agreement, to
take all steps necessary to redeem the investment of the Separate Accounts
in the Funds within one year from the date of termination of the Agreement
as provided in Section 9. Such steps shall include, but not be limited to,
obtaining an order pursuant to Section 26(c) of the 1940 Act to permit the
substitution of other securities for the shares of the Funds. The
Investment Company or the Distributor may, in their discretion, permit the
Separate Accounts to continue to invest in the Funds beyond such one year
anniversary for an additional year beginning on the first annual
anniversary of the date of termination, and from year to year thereafter;
provided that the Investment Company or the Distributor agrees in writing
to permit the Separate Accounts to continue to invest in the Funds prior
to the beginning of any such year.
(e) In the event (i) the Agreement is terminated pursuant to Sections 9(a) (vii)
or (ix), at the option of the Investment Company or the Distributor; or (ii) the
one year anniversary of the termination of the Agreement is reached or, after
waiver as provided in Section 9(d), such subsequent anniversary is reached (each
of (i) and (ii) referred to as a "triggering event" and the date of termination
as provided in (i) or the date of the anniversary as provided in (ii) referred
to as the "request date"), the parties agree that such triggering event shall be
considered as a request for immediate redemption of shares of the Funds held by
the Separate Accounts, received by the Investment Company as of the request
date, and the Investment Company agrees to process such redemption request in
accordance with the 1940 Act and the regulations thereunder and the Investment
Company's registration statement.
(f) If this Agreement terminates, the parties agree that Section 7 and Sections
3(a)(j), 8(a) and 8(b), and, to the extent that all or a portion of the assets
of the Separate Accounts continue to be invested in the Investment Company or
any Fund of the Investment Company, Sections 1, 2, 3, and 4 and Sections 5(f),
5(g) and 5(h) will remain in effect after termination.
10. 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 Investment Company:
Federated Insurance Series
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
If to the Distributor:
Federated Securities Corp.
Federated Investors Tower
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
If to Contract Administration:
Client Contract Administration
Federated Investors ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Unless otherwise notified in writing, all notices to Insurer shall be given or
sent to the address shown on the signature page of this Agreement.
11. MISCELLANEOUS
-------------
(a) A copy of the Investment Company's Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts and notice is hereby given that
any agreements that are executed on behalf of the Investment Company by any
Trustee or officer of the Investment Company are executed in his or her capacity
as Trustee or officer and not individually. The obligations of this Agreement
shall only be binding upon the assets and property of the Investment Company and
shall not be binding upon any Trustee, officer or shareholder of the Investment
Company individually. No Fund shall be liable for any obligations properly
attributable to any other Fund.
(b) Nothing in this Agreement shall impede the Investment Company's Trustees or
shareholders of the shares of the Investment Company's Funds from exercising any
of the rights provided to such Trustees or shareholders in the Investment
Company's Declaration of Trust, as amended, a copy of which will be provided to
the Insurer upon request.
(c) Administrative services to Variable Contract Owners shall be the
responsibility of Insurer. Insurer, on behalf of its separate accounts will be
the sole shareholder of record of Investment Company shares. Investment Company
and Distributor recognize that they will derive a substantial savings in
administrative expense by virtue of having a sole
Fund Participation Agreement
April 30, 2008 Page 13
shareholder rather than multiple shareholders. In consideration of the
administrative savings resulting from having a sole shareholder rather than
multiple shareholders, with respect to share held in sub-accounts for which
Insurer provides administrative services, Distributor agrees to pay to Insurer
an amount computed at an annual rate equal to the percentage of average daily
net asset value set forth in Exhibit C to this Agreement. These payments to
Insurer are for administrative services only and do not constitute payment in
any manner for any other service. Insurer agrees to disclose the receipt of
administrative fees pursuant to this Agreement to Variable Contract Owners to
the extent required by law.
(d) The Investment Company reserves the right, upon written notice to the
Insurer (given at the earliest practicable time), to take all actions,
including, but not limited to, the dissolution, reorganization, liquidation,
merger or sale of all assets of the Investment Company or any Fund upon the sole
authorization of the Board of Trustees, acting in good faith.
(e) It is understood that the name "Federated" or any derivative thereof or logo
associated with that name is the valuable property of the Distributor and its
affiliates, and that the Insurer has the right to use such name (or derivative
or logo) only so long as this Agreement is in effect. Upon termination of this
Agreement the Insurer shall forthwith cease to use such name (or derivative or
logo).
(f) 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.
(g) This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
(h) 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.
(i) This Agreement may not be assigned by any party to the Agreement except with
the written consent of the other parties to the Agreement.
(j) Except as provided in this paragraph 11(j), this Agreement may be amended
only by a writing signed by both parties. Distributor may amend Exhibit C from
time to time by posting an amended Exhibit C on Distributor's website. Any such
amendment shall be effective as of the date indicated on the amended Exhibit C.
Insurer may amend Exhibit A by mailing the amended Exhibit A to Federated
Contract Administration at the address set forth above. Any such amendment shall
be effective as of the earlier of (i) its receipt by Distributor or (ii) the
date indicated on the amended Exhibit A.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
FEDERATED INSURANCE SERIES
By:
---------------------
Name:
---------------------
Title:
---------------------
Date:
---------------------
FEDERATED SECURITIES CORP.
By:
---------------------
Name:
---------------------
Title:
---------------------
Date:
JEFFERSON NATIONAL LIFE INSURANCE COMPANY
By:
---------------------
▇▇▇▇▇ ▇. Hewley
General Counsel
Date:
---------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fund Participation Agreement
April 30, 2008 Page 14
Exhibit A
INSURER SEPARATE ACCOUNTS
Accounts: Forms:
Jefferson National Life Annuity Account C 22-4025 (Individual)
32-4000 (Group)
Jefferson National Life Annuity Account E 22-4047/32-4003 (Achievement)
22-4048/32-4002 (Educator)
Jefferson National Life Annuity Account F 22-4061
Jefferson National Life Annuity Account G 22-4056, JNL-2300, ▇▇▇▇-▇▇▇▇-▇,
▇▇▇-▇▇▇▇-▇
Jefferson National Life Annuity Account H CVIC-2000 or -2001 (state specific)
Jefferson National Life Annuity Account I CVIC-2004 or -2005 (state specific)
Jefferson National Life Annuity Account J JNL-2100
Jefferson National Life Annuity Account K JNL-2200
Jefferson National Life Account L CVIC-1001 and -1003
Fund Participation Agreement
April 30, 2008
EXHIBIT A-1
Exhibit B
OPERATIONAL PROCEDURES
(a) Insurer shall, on behalf of the Investment Company, receive instructions
from the Separate Accounts for acceptance prior to the Close of Trading on each
Business Day. Insurer shall, upon its acceptance of any such instructions,
communicate such acceptance to the Separate Accounts.
(b) Insurer or its designee shall communicate to Investment Company, by means of
electronic transmission or other mutually acceptable means, a report of
Insurer's trading activity in each of the Funds for the most recent Business Day
in accordance with each Fund's prospectus. However, if Insurer will be
communicating such information after the Close of Trading, then the Insurer
shall be considered the Investment Company's agent for purposes of Rule 22c-1 of
the Investment Company Act of 1940, as amended. To the extent that each of the
parties is a member of, and/or has access to, the National Securities Clearing
Corporation's ("NSCC") systems and services, including Fund/SERV and Networking,
the parties agree to utilize such services for all transactions contemplated
hereunder and agree that all such dealings and transactions shall be processed
in accordance with, and governed by, the NSCC's Rules and Procedures (as the
same may be amended from time to time) and the Networking Agreement executed by
each such party. In the event of the unavailability of the NSCC at any time, the
following procedures shall apply:
(i) The Investment Company shall use its best efforts to provide
information listed in Sections 1(i) and 1(j) of the Agreement to Insurer
by means of electronic transmission or other mutually acceptable means by
7:00 p.m. Eastern Time on each Business Day.
(ii) Insurer or its designee shall communicate to the Investment Company,
by means of electronic transmission or other mutually acceptable means, a
report of Insurer's trading activity in each of the Funds for the most
recent Business Day ("Trade Date") by 9:00 a.m. Eastern Time on the
Business Day following the Trade Date ("Settlement Date"). The number of
shares to be purchased or redeemed shall be determined based upon the net
asset value at the Close of Trading on the Trade Date, provided that, if
the Fund receives the trading information called for by this sub-paragraph
after 9:00 a.m. Eastern Time on a Settlement Date, the Investment Company
shall use its best efforts to enter the Insurer's purchase or redemption
order at the net asset value at the Close of Trading on the Trade Date,
but if Investment Company is unable to do so, the transaction shall be
entered at the net asset value next determined after the Investment
Company receives the trading information.
(iii) In the event there is a net purchase in any Fund, Insurer or its
designee shall exercise its best efforts to direct wire payment in the
dollar amount of the net purchase to be received by the Investment Company
by the close of the Federal Reserve Wire Transfer System on the Settlement
Date. If the wire is not received by the Investment Company by such time,
and such delay was not caused by the negligence or willful misconduct of
the Investment Company, the Investment Company shall be entitled to
receive from Insurer the dollar amount of any overdraft plus any
associated bank charges incurred.
(iv) In the event there is a net redemption in any Fund, the Investment
Company shall wire the redemption proceeds to the Insurer's custodial
account, or to the designated depository for the Insurer, specified by
Insurer or its designee. If the Investment Company receives the redemption
information by 9:00 a.m. Eastern Time on the Settlement Date, the
redemption proceeds shall be wired so as to be received on the Settlement
Date. If the Investment Company receives the redemption information after
that time, the Investment Company shall use its best efforts to wire the
redemption proceeds so that they are received by the Close of
Fund Participation Agreement
April 30, 2008
EXHIBIT B-1
Trading on the Settlement Date, but if the Investment Company is unable to
do so, the redemption proceeds shall be wired so as to be received by the
Close of Trading on the Business Day following the Settlement Date. If the
wire is not received by the time specified in this sub-paragraph, and such
delay was not caused by the negligence or willful misconduct of Insurer or
its designee, Insurer or Insurer's designee shall be entitled to receive
from the Investment Company the dollar amount of any overdraft plus any
associated bank charges incurred; provided, however, that if the delay was
due to factors beyond the control of the Investment Company and its
subsidiaries, the Investment Company shall not be liable for any overdraft
or any associated bank charges incurred.
(v) If the dollar amount of the redemption proceeds wired by the
Investment Company exceeds the amount that should have been transmitted,
Insurer shall use its best efforts to have such excess amount returned to
the Investment Company as soon as possible.
(c) All wire payments referenced in this Agreement shall be transmitted via the
Federal Reserve Wire Transfer System. Notwithstanding any other provision of
this Agreement, in the event that the Federal Reserve Wire Transfer System is
closed on any Business Day, the duties of the Investment Company, Insurer, and
their designees under this Agreement shall be suspended, and shall resume on the
next Business Day that the Federal Reserve Wire Transfer System is open as if
such period of suspension had not occurred.
(d) In the event (i) a Fund is required (under the then prevailing pricing error
guidelines of the Investment Company) to recalculate purchases and redemptions
of Shares held in Insurer's account due to an error in calculating the net asset
value of such class of Shares (a "NAV Error") or (ii) there is a dividend rate
error with respect to any Fund held in Insurer's account (a "Rate Error"; Rate
Error and NAV Error individually and collectively shall be referred to as a
"Pricing Error"):
(A) The Investment Company shall promptly notify Insurer in writing of the
Pricing Error, which written notice shall identify the class of Shares,
the Business Day(s) on which the Pricing Error(s) occurred and the
corrected net asset value of the Shares on each Business Day.
(B) Upon such notification, Insurer shall promptly determine, for all
Separate Accounts which purchased or redeemed Shares on each Business Day
on which a Pricing Error occurred, the correct number of Shares purchased
or redeemed using the corrected price and the amount of transaction
proceeds actually paid or received. Following such determination, the
Insurer shall adjust the number of Shares held in each Separate Account to
the extent necessary to reflect the correct number of Shares purchased or
redeemed for the Separate Account. Following such determination, Insurer
shall notify the Fund of the net changes in transactions for the relevant
Separate Account and the Fund shall adjust the Separate Account
accordingly.
(C) If, after taking into account the adjustments required by subparagraph
(d)(B), Insurer determines that some Separate Account customers were still
entitled to additional redemption proceeds (a "Redemption Shortfall"), it
shall notify the Investment Company of the aggregate amount of the
Redemption Shortfalls and provide supporting documentation for such
amount. Upon receipt of such documentation, the Investment Company shall
cause the relevant Fund to remit to Insurer additional redemption proceeds
in the amount of such Redemption Shortfalls and Insurer shall apply such
funds to payment of the Redemption Shortfalls.
(D) If, after taking into account the adjustments required by subparagraph
(d)(B), Insurer determines that a Separate Account customer still received
excess redemption proceeds (a "Redemption Overage"), Insurer shall use its
best efforts to collect the balance of such Redemption Overage from such
Separate Account. In no event, however, shall Insurer be liable to the
Investment Company or any Fund for any Redemption Overage. Nothing in this
subparagraph (d) shall be deemed to limit the right of any Fund to recover
any Redemption Overage directly or to be indemnified by any party for
losses arising from a Pricing Error.
Fund Participation Agreement
April 30, 2008
EXHIBIT B-2
EXHIBIT C TO FUND PARTICIPATION AGREEMENT
As of May 1, 2008
The following lists the Funds and Shares subject to the Fund Participation
Agreement and the compensation payable to Insurer pursuant to the Fund
Participation Agreement. Administrative Service Fees are paid at an annual rate
on the average net asset value of shares held in Fund accounts attributed to
Insurer pursuant to the Fund Participation Agreement. A Fund marked with an
asterisk (*) does not offer separate classes of shares but is subject to the
same fee rates listed for the class that the Fund is grouped under. Each Fund's
prospectus shall control in case of any conflict with this Schedule.
Effective with the distribution of payments for the period ending April 30,
2008, the Administrative Service Fees will be distributed so long as the total
amount payable to Insurer, for each individual transfer agent system financial
intermediary number, for the period is at least $25.00.
CLASS P SHARES
--------------
--------------------------------------------------------------------------------
ADMINISTRATIVE SERVICE FEE: 0.25%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FUND NAME SERIES
--------------------------------------------------------------------------------
Federated Insurance Series Federated American Leaders Fund II
--------------------------------------------------------------------------------
Federated Capital Appreciation Fund II
--------------------------------------------------------------------------------
Federated Capital Income Fund II *
--------------------------------------------------------------------------------
Federated Equity Income Fund II *
--------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities II *
--------------------------------------------------------------------------------
Federated High Income Bond Fund II
--------------------------------------------------------------------------------
Federated ▇▇▇▇▇▇▇▇ Fund II
--------------------------------------------------------------------------------
Federated Mid Cap Growth Strategies Fund II *
--------------------------------------------------------------------------------
Federated Prime Money Fund II *
--------------------------------------------------------------------------------
Federated Quality Bond Fund II
--------------------------------------------------------------------------------
Federated Total Return Bond Fund II *
--------------------------------------------------------------------------------
CLASS SS SHARES
---------------
--------------------------------------------------------------------------------
ADMINISTRATIVE SERVICE FEE: 0.25%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FUND NAME SERIES
--------------------------------------------------------------------------------
Federated Insurance Series Federated American Leaders Fund II
--------------------------------------------------------------------------------
Federated Capital Appreciation Fund II
--------------------------------------------------------------------------------
Federated High Income Bond Fund II
--------------------------------------------------------------------------------
Federated ▇▇▇▇▇▇▇▇ Fund II
--------------------------------------------------------------------------------
Federated Market Opportunity Fund II
--------------------------------------------------------------------------------
Federated Quality Bond Fund II
--------------------------------------------------------------------------------
Fund Participation Agreement Project Number 38511
April 30, 2008
EXHIBIT C-1