FUND PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the ____day of _____________, 2004, by and
between Lord Xxxxxx Series Fund, Inc. (the "Fund"), a Maryland Corporation, on
its behalf and on behalf of each separate investment series thereof, whether
existing as of the date above or established subsequent thereto, (each a
"Portfolio" and collectively, the "Portfolios"), Lord Xxxxxx Distributor LLC, a
New York limited liability company (the "Distributor"), and
_______________________[insert name of insurance company] (the "Company"), a
life insurance company organized under the laws of the State of _____________.
WHEREAS, the Fund is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended (the " `40 Act"),
as an open-end, diversified management investment company; and WHEREAS, the Fund
is organized as a series fund comprised of separate investment series, namely
the Portfolios; and WHEREAS, the Fund was organized to act as the funding
vehicle for certain variable life insurance and/or variable annuity contracts
("Variable Contracts") offered by life insurance companies through separate
accounts of such life insurance companies and also offers its shares to certain
qualified pension and retirement plans; and
WHEREAS, the Fund has filed an application with the SEC requesting an order
granting relief from various provisions of the `40 Act and the rules thereunder
to the extent necessary to permit Fund shares to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated participating insurance companies accounts ("Participating
Companies") and qualified pension and retirement plans outside the separate
account context (including, without limitation, those trusts, plans, accounts
contracts or annuities described in Sections 401(a), 403(a), 403(b), 408(a),
408(b), 414(d), 457(b), 408(k), 501(c)(18) of the Internal Revenue Code of 1986,
as amended (the "Code") and any other trust, plan, account, contract or annuity
trust that is determined to be within the scope of Treasury Regulation
ss.1.817.5(f)(3)(iii)("Plans"); and
WHEREAS, the Company has established or will establish one or more separate
accounts ("Separate Accounts") to offer Variable Contracts and is desirous of
having the Fund as one of the underlying funding vehicles for such Variable
Contracts; and
WHEREAS, the Distributor is registered with the SEC as a broker-dealer
under the Securities Exchange Act of 1934, as amended and acts as the Fund's
principal underwriter; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Fund to fund the
aforementioned Variable Contracts and the Fund is authorized to sell such shares
to the Company at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, and the Distributor agree as follows:
Article I. SALE OF FUND SHARES
1.1 The Fund agrees to make Variable Contract Class shares ("Shares") of the
Fund available to the Separate Accounts of the Company for investment of
purchase payments of Variable Contracts allocated to the designated
Separate Accounts as provided in the Fund's then current prospectus and
statement of additional information. The Company agrees to purchase and
redeem the Shares of the Portfolios offered by the then current prospectus
and statement of additional information of the Fund in accordance with the
provisions of such prospectus and statement of additional information. The
Company shall not permit any person other than a Variable Contract owner to
give instructions to the Company which would require the Company to redeem
or exchange Shares of the Fund.
1.2 The Fund agrees to sell to the Company those Shares of the selected
Portfolios of the Fund which the Company orders, executing such orders on a
daily basis at the net asset value next computed after receipt by the Fund
or its designee of the order for the Shares of the Fund. For purposes of
this Section 1.2, the Company shall be the designee of the Fund for receipt
of such orders from the designated Separate Account and receipt by such
designee shall constitute receipt by the Fund; provided, to the extent not
inconsistent with regulatory requirements, that the Company receives the
order by 4:00 p.m. Eastern time and the Fund receives notice from the
Company by telephone, facsimile (orally confirmed) or by such other means
as the Fund and the Company may mutually agree of such order by 9:00 a.m.
Eastern time on the next following Business Day. "Business Day" shall mean
any day on which the New York Stock Exchange is open for trading and on
which the Fund calculates its net asset value pursuant to the rules of the
SEC.
1.3 The Fund agrees to redeem on the Company's request, any full or fractional
Shares of the Fund held by the Company, executing such requests on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the request for redemption, in accordance with the provisions
of this agreement and the Fund's then current registration statement. For
purposes of this Section 1.3, the Company shall be the designee of the Fund
for receipt of requests for redemption from the designated Separate Account
and receipt by such designee shall constitute receipt by the Fund;
provided, to the extent not inconsistent with regulatory requirements, that
the Company receives the request for redemption by 4:00 p.m. Eastern time
and the Fund receives notice from the Company by telephone, facsimile
(orally confirmed) or by such other means as the Fund and the Company may
mutually agree of such request for redemption by 9:00 a.m. Eastern time on
the next following Business Day.
1.4 The Fund shall furnish, on or before the ex-dividend date, notice to the
Company of any income dividends or capital gain distributions payable on
the Shares of any Portfolios of the Fund. The Company hereby elects to
receive all such income dividends and capital gain distributions as are
payable on a Portfolio's Shares in additional Shares of the Portfolio. The
Fund shall notify the Company or its designee of the number of Shares so
issued as payment of such dividends and distributions.
1.5 The Fund shall make the net asset value per share for the selected
Portfolios available to the Company on a daily basis, via a mutually
agreeable form, as soon as reasonably practicable after the net asset value
per share is calculated but shall use its best efforts to make such net
asset value available by 6:30 p.m. Eastern time.
1.6 At the end of each Business Day, the Company shall use the information
described in Section 1.5 to calculate Separate Account unit values for the
day. Using these unit values, the Company shall process each such Business
Day's Separate Account transactions based on requests and premiums received
by it by the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m. Eastern time) to determine the net dollar amount of
Fund Shares which shall be purchased or redeemed at that day's closing net
asset value per share. To the extent not inconsistent with regulatory
requirements, the net purchase or redemption orders so determined shall be
transmitted to the Fund by the Company by 9:00 a.m. Eastern time on the
Business Day next following the Company's receipt of such requests and
premiums in accordance with the terms of Sections 1.2 and 1.3 hereof.
1.7 If the Company's order requests the purchase of Fund Shares, the Company
shall pay for such purchase by wiring federal funds to the Fund or its
designated custodial account on the day the order is transmitted by the
Company. If the Company's order requests a net redemption resulting in a
payment of redemption proceeds to the Company, the Fund shall use its best
efforts to wire the redemption proceeds to the Company by the next Business
Day, unless doing so would require the Fund to dispose of Portfolio
securities or otherwise incur additional costs. In any event, proceeds
shall be wired to the Company within three Business Days or such longer
period permitted by the '40 Act or the rules, orders or regulations
thereunder and the Fund shall notify the person designated in writing by
the Company as the recipient for such notice of such delay by 3:00 p.m.
Eastern time the same Business Day that the Company transmits the
redemption order to the Fund.
1.8 The Fund agrees that all Shares of the Portfolios of the Fund will be sold
only to Participating Insurance Companies which have agreed to participate
in the Fund to fund their Separate Accounts and/or to Plans, all in
accordance with the requirements of Section 817(h) of the Code and Treasury
Regulation 1.817-5. Shares of the Portfolios of the Fund will not be sold
directly to the general public.
1.9 The Fund may refuse to sell Shares of any Portfolios to any person, or
suspend or terminate the offering of the Shares of any Portfolios if such
action is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the Board of Directors/Trustees of the
Fund (the "Board"), deemed necessary, desirable or appropriate. Without
limiting the foregoing, it has been determined that there is a significant
risk that the Fund and its shareholders may be adversely affected by
short-term or excessive trading activity, particularly activity used to try
and take advantage of short-term swings in the market. Accordingly, the
Fund reserves right to reject any purchase order, including those purchase
orders with respect to shareholders or accounts whose trading has been or
may be disruptive to the Fund or that may otherwise adversely affect the
Fund. The Company agrees to use its reasonable best efforts to render
assistance to, and to cooperate with, the Fund to achieve compliance with
the Fund's policies and restrictions on short-term or excessive trading
activity as they may be amended from time to time, or to the extent
required by applicable regulatory requirements.
1.10 Issuance and transfer of Portfolio Shares will be by book entry only. Stock
certificates will not be issued to the Company or the Separate Accounts.
Shares ordered from Portfolios will be recorded in appropriate book entry
titles for the Separate Accounts.
Article II. Fees and Expenses
2.1 Except as otherwise provided under this Agreement, the Fund and the
Distributor shall pay no fee or other compensation to the Company under
this Agreement, and the Company shall pay no fee or other compensation to
the Fund or the Distributor, except as made a part of this Agreement as it
may be amended from time to time with the mutual consent of the parties
hereto. All expenses incident to performance by each party of its
respective duties under this Agreement shall be paid by that party, unless
otherwise specified in this Agreement
Article III. REPRESENTATIONS AND WARRANTIES
3.1 The Company represents and warrants that it is an insurance company duly
organized and in good standing under the laws of
________________________and that it has legally and validly established
each Separate Account as a segregated asset account under such laws.
3.2 The Company represents and warrants that it has registered or, prior to any
issuance or sale of the Variable Contracts, will register each Separate
Account as a unit investment trust ("UIT") in accordance with the
provisions of the `40 Act and cause each Separate Account to remain so
registered to serve as a segregated asset account for the Variable
Contracts, unless an exemption from registration is available.
3.3 The Company represents and warrants that the income, gains and losses,
whether or not realized, from assets allocated to each Separate Account
are, in accordance with the applicable Variable Contracts, to be credited
to or charged against such Separate Account without regard to other income,
gains or losses from assets allocated to any other accounts of the Company.
The Company represents and warrants that the assets of the Separate Account
are and will be kept separate from the General Account of the Company and
any other separate accounts the Company may have, and will not be charged
with liabilities from any business that the Company may conduct or the
liabilities of any companies affiliated with the Company.
3.4 The Company represents and warrants that the Variable Contracts will be
registered under the Securities Act of 1933 (the "'33 Act") unless an
exemption from registration is available prior to any issuance or sale of
the Variable Contracts and that the Variable Contracts will be issued and
sold in compliance in all material respects with all applicable federal and
state laws and further that the sale of the Variable Contracts shall comply
in all material respects with state insurance law suitability requirements.
The Company agrees to notify the Fund promptly of any investment
restrictions imposed by state insurance law applicable to the Fund.
3.5 The Company represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code,
that it will maintain such treatment and that it will notify the Fund
immediately upon having a reasonable basis for believing that the Variable
Contracts have ceased to be so treated or that they might not be so treated
in the future.
3.6 The Fund represents and warrants that the Portfolio Shares offered and sold
pursuant to this Agreement will be registered under the `33 Act and sold in
accordance with all applicable federal and state laws, and the Fund shall
be registered under the `40 Act prior to and at the time of any issuance or
sale of such Shares. The Fund, subject to Section 1.9 above, shall amend
its registration statement under the `33 Act and the x00 Xxx from time to
time as required in order to effect the continuous offering of its Shares.
The Fund shall register and qualify its Shares for sale in accordance with
the laws of the various states only if and to the extent deemed advisable
by the Fund.
3.7 The Fund represents and warrants that each Portfolio will comply with the
diversification requirements set forth in Section 817(h) of the Code, and
the rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify the Company immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might
not so comply and will immediately take all reasonable steps to adequately
diversify the Portfolio to achieve compliance.
3.8 The Fund represents and warrants that each Portfolio invested in by the
Separate Account intends to elect to be treated as a "regulated investment
company" under Subchapter M of the Code, and to qualify for such treatment
for each taxable year and will notify the Company immediately upon having a
reasonable basis for believing it has ceased to so qualify or might not so
qualify in the future.
3.9 The Distributor represents and warrants that it is and will be a member in
good standing of the National Association of Securities Dealers, Inc.
("NASD") and is and will be registered as a broker-dealer with the SEC. The
Distributor further represents that it will sell and distribute Portfolio
Shares in accordance with all applicable state and federal laws and
regulations, including without limitation the '33 Act, the '34 Act and the
'40 Act.
3.10 The Distributor represents and warrants that it will remain duly registered
and licensed in all material respects under all applicable federal and
state securities laws and shall perform its obligations hereunder in
compliance in all material respects with any applicable state and federal
laws.
3.11 The Fund represents and warrants that all its directors, trustees,
officers, employees, and other individuals/entities who deal with the money
and/or securities of the Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of
the Fund in an amount not less than that required by Rule 17g-1 under the
'40 Act. The aforesaid bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company. The Fund
shall make all reasonable efforts to see that this bond or another bond
containing these same provisions is always in effect, and each agrees to
notify the Company in the event such coverage no longer applies.
3.12 The Company represents and warrants that all of its employees and agents
who deal with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage in an amount not less than that required to be maintained by
entities subject to the requirements of Rule 17g-1 of the '40 Act . The
aforesaid bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company. The Company shall make all
reasonable efforts to see that this bond or another bond containing these
same provisions is always in effect, and each agrees to notify the Fund in
the event such coverage no longer applies.
Article IV. PROSPECTUS AND PROXY STATEMENTS
4.1 The Fund shall prepare and be responsible for filing with the SEC and any
state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction
solicitation materials), prospectuses and statements of additional
information of the Fund.
4.2 At least annually, the Fund or its designee shall provide the Company, free
of charge, with as many copies of the current prospectus for the Shares of
the Portfolios as the Company may reasonably request for distribution to
existing Variable Contract owners whose Variable Contracts are funded by
such Shares. The Fund or its designee shall provide the Company, at the
Company's expense, with as many more copies of the current prospectus for
the Shares as the Company may reasonably request for distribution to
prospective purchasers of Variable Contracts. If requested by the Company
in lieu thereof, the Fund or its designee shall provide such documentation
in a mutually agreeable form and such other assistance as is reasonably
necessary in order for the parties hereto once a year (or more frequently
if the prospectus for the Shares is supplemented or amended) to have the
prospectus for the Variable Contracts and the prospectus for the Fund
Shares and any other fund shares offered as investments for the Variable
Contracts printed at the Company's expense together in one document,
provided however that the Company shall ensure that, except as expressly
authorized in writing by the Fund, no alterations, edits or changes
whatsoever are made to prospectuses or other Fund documentation after such
documentation has been furnished to the Company or its designee, and the
Company shall assume liability for any and all alterations, errors or other
changes that occur to such prospectuses or other Fund documentation after
it has been furnished to the Company or its designee.
4.3 The Fund shall provide the Company with copies of the Fund's proxy
statements, Fund reports to shareholders, and other Fund communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Variable Contract owners. Alternatively and in lieu
thereof, the Company may elect to print at its own expense any of the
Fund's proxy statements, Fund reports to shareholders, and other Fund
communications to shareholders.
4.4 The Fund will provide the Company with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, and all amendments or supplements to any of the
above that relate to the Portfolios promptly after the filing of each such
document with the SEC or other regulatory authority. The Company will
provide the Fund with at least one complete copy of all prospectuses,
statements of additional information, annual and semi-annual reports, proxy
statements, and all amendments or supplements to any of the above that
relate to a Separate Account promptly after the filing of each such
document with the SEC or other regulatory authority.
Article V. SALES MATERIALS
5.1 The Company will furnish, or will cause to be furnished, to the Fund or the
Distributor, each piece of sales literature or other promotional material
in which the Fund, the Distributor or any affiliate thereof is named, at
least fifteen (15) Business Days prior to its intended use. No such
material shall be used unless the Fund or the Distributor approves such
material. Such approval shall be presumed given if notice to the contrary
is not received by the Company within fifteen Business Days after receipt
by the Fund or the Distributor of such material.
5.2 The Fund or the Distributor will furnish, or will cause to be furnished, to
the Company, each piece of sales literature or other promotional material
in which the Company or its Separate Accounts are named, at least fifteen
(15) Business Days prior to its intended use. No such material shall be
used unless the Company approves such material. Such approval shall be
presumed given if notice to the contrary is not received by the Fund or
within fifteen Business Days after receipt by the Company of such material.
5.3 Except with the permission of the Company, neither the Fund nor the
Distributor shall give any information or make any representations on
behalf of the Company or concerning the Company, the Separate Accounts, or
the Variable Contracts other than the information or representations
contained in the 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 of the Separate Accounts for
distribution to owners of such Variable Contracts, or in sales literature
or other promotional material approved by the Company or its designee.
Neither the Fund nor the Distributor shall give such information or make
such representations or statements in a context that causes the
information, representations or statements to be false or misleading.
5.4 Except with the permission of the Fund or the Distributor, neither the
Company nor its affiliates or agents shall give any information or make any
representations or statements on behalf of the Fund, the Distributor or any
affiliate thereof or concerning the Fund, the Distributor or any affiliate
thereof, other than the information or representations contained in the
registration statements or prospectuses for the Fund, as such registration
statements and prospectuses may be amended or supplemented from time to
time, or in reports to shareholders or proxy statements for the Fund, or in
sales literature or other promotional material approved by the Fund or the
Distributor or designee thereof. Neither the Company nor its affiliates or
agents shall give such information or make such representations or
statements in a context that causes the information, representations or
statements to be false or misleading.
5.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for
use, in a newspaper, magazine or other periodical, radio, television,
telephone or tape recording, videotape display, signs or billboards, motion
pictures or other public media), sales literature (such as any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters,
form letters, seminar texts, or 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, registration statements,
prospectuses, statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under NASD rules, the `40 Act or the x00 Xxx.
Article VI. POTENTIAL CONFLICTS
6.1 The parties acknowledge that the Fund has received an exemptive order from
the SEC granting relief from various provisions of the '40 Act and the
rules thereunder to the extent necessary to permit the Fund Shares to be
sold to and held by variable annuity and variable life insurance separate
accounts of Participating Companies and Plans. The terms of such exemptive
order (the "Mixed and Shared Funding Exemptive Order"), require the Fund
and each Participating Company and Plan to comply with conditions and
undertakings substantially as provided in this Article. In the event of any
inconsistencies between the terms of the Mixed and Shared Funding Exemptive
Order and those provided for in this Article, the conditions and
undertakings imposed by the Mixed and Shared Funding Exemptive Order shall
govern this Agreement.
6.2 The Fund's Board will monitor the Fund for the existence of any material
irreconcilable conflict between and among the interests of the Variable
Contract owners of all Participating Companies and of Plan Participants and
Plans investing in the Fund, and determine what action, if any, should be
taken in response to such conflicts. An irreconcilable material conflict
may arise for a variety of reasons, which may include: (a) an action by any
state insurance regulatory authority; (b) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public
ruling, private letter ruling or any similar action by insurance, tax or
securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the
investments of the Fund are being managed; (e) a difference in voting
instructions given by variable annuity and variable life insurance contract
owners; (f) a decision by a Participating Insurance Company to disregard
the voting instructions of Variable Contract owners and (g) if applicable,
a decision by a Plan to disregard the voting instructions of plan
participants.
6.3 The Company will report any potential or existing conflicts to the Board.
The Company will be obligated to assist the Board in carrying out its
duties and responsibilities under the Mixed and Shared Funding Exemptive
Order by providing the Board with all information reasonably necessary for
the Board to consider any issues raised. The responsibility includes, but
is not limited to, an obligation by the Company to inform the Board
whenever it has determined to disregard Variable Contract owner voting
instructions.
6.4 If a majority of the Board, or a majority of its disinterested Board
members, determines that a material irreconcilable conflict exists with
regard to contract owner investments in the Fund, the Board shall give
prompt notice of the conflict and the implications thereof to all
Participating Companies and Plans. If the Board determines that the Company
is a relevant Participating Company or Plan with respect to said conflict,
the Company shall at its sole cost and expense, and to the extent
reasonably practicable (as determined by a majority of the disinterested
Board members), take such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may include but
shall not be limited to: (a) withdrawing the assets allocable to some or
all of the Separate Accounts from the Fund or any Portfolio thereof and
reinvesting those assets in a different investment medium, which may
include another Portfolio of the Fund, or another investment company; (b)
submitting the question as to whether such segregation should be
implemented to a vote of all affected Variable Contract owners and as
appropriate, segregating the assets of any appropriate group (i.e.,
variable annuity or variable life insurance contract owners of one or more
Participating Insurance Companies) that votes in favor of such segregation,
or offering to the affected Variable Contract owners the option of making
such a change; and (c) establishing a new registered management investment
company (or series thereof) or managed separate account. If a material
irreconcilable conflict arises because of the Company's decision to
disregard Variable Contract owner voting instructions, and that decision
represents a minority position or would preclude a majority vote, the
Company may be required, at the election of the Fund to withdraw the
Separate Account's investment in the Fund, and no charge or penalty will be
imposed as a result of such withdrawal. The responsibility to take such
remedial action shall be carried out with a view only to the interests of
the Variable Contract owners.
For the purposes of this Article, a majority of the disinterested members
of the Board shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict but in no event will the Fund
or its investment adviser (or any other investment adviser of the Fund) be
required to establish a new funding medium for any Variable Contract.
Further, the Company shall not be required by this Article to establish a
new funding medium for any Variable Contracts if any offer to do so has
been declined by a vote of a majority of Variable Contract owners
materially and adversely affected by the irreconcilable material conflict.
6.5 The Board's determination of the existence of an irreconcilable material
conflict and its implications shall be made known promptly and in writing
to the Company.
6.6 No less than annually, the Company shall submit to the Board such reports,
materials or data as the Board may reasonably request so that the Board may
fully carry out its obligations. Such reports, materials, and data shall be
submitted more frequently if deemed appropriate by the Board.
6.7 If and to the extent that the SEC promulgates new rules or regulations with
respect to mixed or shared funding on terms and conditions materially
different from those contained in the Mixed and Shared Funding Exemptive
Order, then (a) the Fund and/or the Participating Insurance Companies as
appropriate, shall take such steps as may be necessary to comply with such
rules and regulations, as adopted, to the extent such rules are applicable;
and (b) this Article VI shall be deemed to incorporate such new terms and
conditions, and any term or condition of this Article VI that is
inconsistent therewith, shall be deemed to be succeeded thereby.
6.8 The Company acknowledges it has been advised by the Fund that it may be
appropriate for the Company to disclose the potential risks of mixed and
shared funding in prospectuses or other applicable disclosure documents.
Article VII. VOTING
7.1 The Company will provide pass-through voting privileges to all Variable
Contract owners so long as the SEC continues to interpret the `40 Act as
requiring pass-through voting privileges for Variable Contract owners.
Accordingly, the Company, where applicable, will vote Shares of the
Portfolio held in its Separate Accounts in a manner consistent with voting
instructions timely received from its Variable Contract owners. The Company
will be responsible for assuring that each of its Separate Accounts that
participates in the Fund calculates voting privileges in a manner
consistent with other Participating Insurance Companies. The Company will
vote Shares for which it has not received timely voting instructions, as
well as Shares it owns, in the same proportion as its votes those Shares
for which it has received voting instructions. The Company and its agents
shall not oppose or interfere with the solicitation of proxies for Fund
Shares held for such Variable Contract owners.
Article VIII. INDEMNIFICATION
8.1 Indemnification by the Company.
(a) Subject to Section 8.3 below, the Company agrees to indemnify and hold
harmless the Fund and the Distributor, and each of their trustees,
directors, members, principals, officers, partners, employees and
agents and each person, if any, who controls the Fund or the
Distributor within the meaning of Section 15 of the `33 Act
(collectively, the "Indemnified Parties" for purposes of this Article)
against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Company,
which consent shall not be unreasonably withheld) or litigation
(including legal and other expenses), to which the Indemnified Parties
may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to
the sale or acquisition of the Fund's Shares or the Variable Contracts
and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
registration statement or prospectus for the Variable Contracts
or contained in the 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 Company by or on behalf of an
Indemnified Party for use in the registration statement or
prospectus for the Variable Contracts or in the Variable
Contracts or sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Variable
Contracts or Fund Shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature of the
Fund not supplied by the Company, or persons under its control)
or wrongful conduct of the Company or persons under its control,
with respect to the sale or distribution of the Variable
Contracts or Fund Shares; or
(iii)arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, or sales literature of the Fund or any amendment
thereof or supplement thereto or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information
furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arises out of information or instructions from the Company or its
agents concerning the purchase, redemption, transfer or other
transaction in Fund Shares; or
(vi) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company.
(b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise
from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations
or duties under this Agreement.
(c) The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent),
but failure to notify the Company of any such claim shall not relieve
the Company from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of
this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to
participate at its own expense in the defense of such action. The
Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice
from the Company to such party of the Company's election to assume the
defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company
will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2 Indemnification by the Fund and the Distributor.
(a) Subject to Section 8.3 below, the Fund and the Distributor agree to
indemnify and hold harmless the Company and each of its directors,
officers, employees, and agents and each person, if any, who controls
the Company within the meaning of Section 15 of the `33 Act
(collectively, the "Indemnified Parties" for the purposes of this
Article) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Fund and the Distributor which consent shall not be unreasonably
withheld) or litigation (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 expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the
Fund's Shares or the Variable Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus of the Fund (or any
amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished to the Fund or the Distributor by or
on behalf of the Company for use in the registration statement or
prospectus for the Fund (or any amendment or supplement) or
otherwise for use in connection with the sale of the Variable
Contracts or Fund Shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for the
Variable Contracts not supplied by the Fund or the Distributor or
persons under its control) or wrongful conduct of the Fund or the
Distributor or persons under its control, with respect to the
sale or distribution of the Variable Contracts or Fund Shares; or
(iii)arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement or
prospectus covering the Variable Contracts, or any amendment
thereof or supplement thereto or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information
furnished to the Company for inclusion therein by or on behalf of
the Fund or the Distributor; or
(iv) arise as a result of a failure by the Fund or the Distributor to
provide the services and furnish the materials under the terms of
this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund or the
Distributor in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund or the
Distributor.
(b) The Fund or the Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement.
(c) The Fund or the Distributor, as the case may be, shall not be liable
under this indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party shall have
notified the Fund or the Distributor, as the case may be, in writing
within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent),
but failure to notify the Fund or the Distributor of any such claim
shall not relieve the Fund or the Distributor 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 Fund or the Distributor shall be entitled to participate at its
own expense in the defense thereof. The Fund or 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
Fund or the Distributor to such party of the Fund's or 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 Fund or the Distributor will not be liable to
such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.3 Indemnification for Errors. In the event of any error or delay with
respect to information regarding the purchase, redemption, transfer or
registration of Shares of the Fund, the parties agree that each is
obligated to make the Separate Accounts and/or the Fund, respectively,
whole for any error or delay that it causes, subject in the case of
pricing errors to the related Portfolio's policies on materiality of
pricing errors. In addition, each party agrees that neither will
receive compensation from the other for the costs of any reprocessing
necessary as a result of an error or delay. Each party agrees to
provide the other with prompt notice of any errors or delays of the
type referred to in this Section.
Article IX. TERM; TERMINATION
9.1 This Agreement shall be effective as of the date hereof and shall continue
in force until terminated in accordance with the provisions herein.
9.2 This Agreement shall terminate in accordance with the following provisions:
(a) At the option of the Company or the Fund at any time from the date
hereof upon ninety (90) days notice, unless a shorter time is agreed
to by the parties;
(b) At the option of the Company, if Fund Shares are not reasonably
available to meet the requirements of the Variable Contracts as
determined by the Company. Prompt notice of election to terminate
shall be furnished by the Company, said termination to be effective
ten days after receipt of notice unless the Fund makes available a
sufficient number of Shares to reasonably meet the requirements of the
Variable Contracts within said ten-day period;
(c) At the option of the Company, upon the institution of formal
proceedings against the Fund by the SEC, the National Association of
Securities Dealers, Inc., or any other regulatory body, the expected
or anticipated ruling, judgment or outcome of which would, in the
Company's reasonable judgment, materially impair the Fund's ability to
meet and perform the Fund's obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by the Company with
said termination to be effective upon receipt of notice;
(d) At the option of the Fund, upon the institution of formal proceedings
against the Company by the SEC, the NASD, or any other regulatory
body, the expected or anticipated ruling, judgment or outcome of which
would, in the Fund's reasonable judgment, materially impair the
Company's ability to meet and perform its obligations and duties
hereunder. Prompt notice of election to terminate shall be furnished
by the Fund with said termination to be effective upon receipt of
notice;
(e) In the event the Fund's Shares are not registered, issued or sold in
accordance with applicable state or federal law, or such law precludes
the use of such Shares as the underlying investment medium of Variable
Contracts issued or to be issued by the Company. Termination shall be
effective upon such occurrence without notice;
(f) At the option of the Fund if the Variable Contracts cease to qualify
as annuity contracts or life insurance contracts, as applicable, under
the Code, or if the Fund reasonably believes that the Variable
Contracts may fail to so qualify. Termination shall be effective upon
receipt of notice by the Company;
(g) At the option of the Company, upon the Fund's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of the Company within ten days after written notice of
such breach is delivered to the Fund;
(h) At the option of the Fund, upon the Company's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of the Fund within ten days after written notice of such
breach is delivered to the Company;
(i) At the option of the Fund, if the Variable Contracts are not
registered, issued or sold in accordance with applicable federal
and/or state law. Termination shall be effective immediately upon such
occurrence without notice;
(j) In the event this Agreement is assigned without the prior written
consent of the Company, the Fund, and the Distributor, termination
shall be effective immediately upon such occurrence without notice.
9.3 Notwithstanding any termination of this Agreement pursuant to Section 9.2
hereof, the Fund at the option of the Company will continue to make
available additional Fund Shares, as provided below, 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, without limitation, the owners
of the Existing Contracts or the Company, whichever shall have legal
authority to do so, shall be permitted to reallocate investments in the
Fund, redeem investments in the Fund and/or invest in the Fund upon the
payment of additional premiums under the Existing Contracts.
Article X. NOTICES
Any notice hereunder shall be given by registered or certified mail return
receipt requested to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund:
Lord Xxxxxx Family of Funds
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
with a copy to:
Lord, Xxxxxx & Co. LLC
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
If to the Distributor:
Lord Xxxxxx Distributor LLC
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
If to the Company:
================================
--------------------------------
--------------------------------
Attention: _____________________
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article XI. MISCELLANEOUS
11.1 Privacy. Each party hereto acknowledges that, by reason of its performance
under this Agreement, it shall have access to, and shall receive from the
other party (and its affiliates, partners and employees), the confidential
information of the other party (and its affiliates, partners and
employees), including but not limited to the "nonpublic personal
information" of their consumers within the meaning of SEC Regulation S-P
(collectively, "Confidential Information"). Each party shall hold all such
Confidential Information in the strictest confidence and shall use such
Confidential Information solely in connection with its performance under
this Agreement and for the business purposes set forth in this Agreement.
Under no circumstances may a party cause any Confidential Information of
the other party to be disclosed to any third party or reused or
redistributed without the other party's prior written consent.
11.2 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
11.3 Severability. 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.
11.4 Governing Law. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
It shall also be subject to the provisions of the federal securities laws
and the rules and regulations thereunder and to any orders of the SEC
granting exemptive relief therefrom and the conditions of such orders.
11.5 Liability. This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his or her capacity as an officer of the
Fund. The obligations of this Agreement shall be binding upon the assets
and property of the Fund and each respective Portfolio thereof only and
shall not be binding on any Director/Trustee, officer or shareholder of the
Fund individually. In addition, notwithstanding any other provision of this
Agreement, no Portfolio shall be liable for any loss, expense, fee, charge
or liability of any kind relating to or arising from the actions or
omissions of any other Portfolio or from the application of this Agreement
to any other Portfolio. It is also understood that each of the Portfolios
shall be deemed to be entering into a separate Agreement with the Company
so that it is as if each of the Portfolios had signed a separate Agreement
with the Company and that a single document is being signed simply to
facilitate the execution and administration of the Agreement.
11.6 Inquiries and Investigations. Each party shall cooperate with each other
party and all appropriate governmental authorities (including without
limitation the SEC, the NASD and state insurance regulators) and shall
permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or
the transactions contemplated hereby.
11.7 Subcontractors, Agents or Affiliates. The Company may hire or make
arrangements for subcontractors, agents or affiliates to perform the
services set forth in this Agreement. The Company shall provide the Fund
with written notice of the names of any subcontractors, agents or
affiliates the Company hires or arranges to perform such services, and any
specific operational requirements that arise as a result of such
arrangement. The Company agrees that it is and will be responsible for the
acts and omissions of its subcontractors, affiliates, and agents and that
the indemnification provided by the Company in Section 8 of this Agreement
shall be deemed to cover the acts and omissions of such subcontractors,
affiliates, and agents to the same extent as if they were the acts or
omissions of the Company.
11.8 Client Lists. The Company hereby consents to the Distributor's, the Fund's,
or its investment adviser's use or reference to the Company's name in
connection with any full, partial or representative list of clients.
11.9 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior agreement
and understandings relating to the subject matter hereof.
11.10Amendment, Waiver and Other Matters. Neither this Agreement, nor any
provision hereof, may be amended, waived, modified or terminated in any
manner except by a written instrument properly authorized and executed by
all parties hereto. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights,
remedies and obligations, at law or in equity, which the parties hereto are
entitled to under state and federal laws.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Fund Participation Agreement as of the date and year first above
written.
Lord Xxxxxx Series Fund, Inc.
By:_____________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President and Assistant Secretary
Lord Xxxxxx Distributor LLC
By: Lord, Xxxxxx & Co. LLC, its Managing Member
By:_____________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Member and Deputy General Counsel
[insert name of insurance company]
By:______________________________
Name:
Title:
