Exhibit 8(b)(xiii)
FUND PARTICIPATION AGREEMENT
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
HARTFORD FUNDS MANAGEMENT COMPANY, LLC
HARTFORD FUNDS DISTRIBUTORS, LLC
HARTFORD ADMINISTRATIVE SERVICES COMPANY
AND
EACH OF THE INVESTMENT COMPANIES
LISTED ON SCHEDULE A ATTACHED HERETO
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS 6
ARTICLE II. SALE OF FUND SHARES 7
ARTICLE III. REPRESENTATIONS AND WARRANTIES 14
ARTICLE IV. PROSPECTUSES, PROXY MATERIALS
AND INFORMATION STATEMENTS; VOTING 19
ARTICLE V. SALES MATERIAL AND INFORMATION 22
ARTICLE VI. FEES AND EXPENSES 24
ARTICLE VII. DIVERSIFICATION AND QUALIFICATION 24
ARTICLE VIII. POTENTIAL CONFLICTS AND COMPLIANCE
WITH MIXED AND SHARED FUNDING EXEMPTIVE ORDER 27
ARTICLE IX. INDEMNIFICATION 30
ARTICLE X. APPLICABLE LAW 38
ARTICLE XI. TERMINATION 38
ARTICLE XII. NOTICES 42
ARTICLE XIII. MISCELLANEOUS 43
SCHEDULE A 49
SCHEDULE B 50
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FUND PARTICIPATION AGREEMENT
Among
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
HARTFORD FUNDS MANAGEMENT COMPANY, LLC
HARTFORD FUNDS DISTRIBUTORS, LLC
HARTFORD ADMINISTRATIVE SERVICES COMPANY
AND
EACH OF THE INVESTMENT COMPANIES
LISTED ON SCHEDULE A ATTACHED HERETO
THIS AGREEMENT, made and entered into as of this 30th day of April, 2014,
by and among LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK, a New York life
insurance company (together, the "Company"), on its own behalf and on behalf of
each separate account set forth on attached Schedule A, as the same may be
amended from time to time (the "Accounts"); Each Investment Company Listed on
SCHEDULE A, as it may be amended from time to time, each an open-end management
investment company organized under the laws of the State of Maryland (each, a
"Fund" and, collectively, the "Funds"); HARTFORD FUNDS MANAGEMENT COMPANY, LLC
("HFMC"), a Delaware limited liability company; HARTFORD FUNDS DISTRIBUTORS, LLC
("HFD"), a Delaware limited liability company; and HARTFORD ADMINISTRATIVE
SERVICES COMPANY ("HASCO"), a Minnesota corporation. HFMC in its capacity as
investment adviser to the Funds is referred to herein as the "Adviser." HFD in
its capacity as primary underwriter to the Funds is referred to herein as the
"Distributor." HASCO in its capacity as transfer agent to the Funds is referred
to herein as the "Transfer Agent."
WHEREAS, each Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established by insurance companies to fund variable life
insurance policies and/or variable annuity contracts; and
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WHEREAS, the common stock of each Fund is divided into several separate
series of shares, each designated herein as a "Portfolio" and representing an
interest in a particular managed portfolio of securities and other assets; and
WHEREAS, the Funds have obtained an order from the Securities and Exchange
Commission, dated November 1, 2000 (File No. IC-24724), 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 Investment Company Act of 1940, as amended, (hereinafter 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 Funds 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 and qualified
pension and retirement plans ("Qualified Plans") (hereinafter the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, each Fund is registered as an open-end management investment
company under the 1940 Act and shares of each Portfolio are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in
good standing of the Financial Industry Regulatory Authority ("FINRA"); and
WHEREAS, the Transfer Agent is duly registered as a transfer agent under
the 1934 Act; and
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WHEREAS, the Company is an insurance company that has issued and plans to
continue to issue certain variable life insurance policies and variable annuity
contracts supported wholly or partially by the Accounts (the "Contracts"); and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company under the insurance laws of the State of New York, to set aside and
invest assets attributable to the Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to continue to purchase shares in the
portfolios listed on Schedule A attached hereto and incorporated herein by
reference, as such schedule may be amended from time to time by mutual written
agreement of the parties (the "Portfolios"), on behalf of the Accounts to fund
the Contracts, and each Fund is authorized to sell such shares to unit
investment trusts such as the Accounts at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company also intends to continue to purchase shares in other
open-end investment companies or series thereof not affiliated with the Funds on
behalf of the Accounts to fund the Contracts; and
WHEREAS, this Agreement shall create a separate participation agreement
for each Fund, as though the Company, the Adviser and the Distributor had
executed a separate, identical form of participation agreement with each Fund;
and
Whereas, except as otherwise provided in regard to that certain Rule 22c-2
Agreement with the Funds contemporaneously entered into as may be amended from
time to time (the "Rule 22c-2 Agreement"), this Agreement, including the any
schedules hereto, is intended to constitute the entire agreement by and among
the parties with respect to the specific matters dealt with herein, and
supersedes all previous agreements among the parties, written or oral, with
respect to such matters; and
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WHEREAS, the parties desire the Funds to receive, and the Company to
transmit, purchase and redemption orders of Portfolio shares using the National
Securities Clearing Corporation's ("NSCC") Mutual Fund Settlement, Entry and
Registration Verification ("Fund/SERV") system.
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Funds, the Distributor and the Adviser agree as follows:
ARTICLE I. DEFINITIONS
1.1. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which a Portfolio calculates its net asset
value pursuant to the rules of the Securities and Exchange Commission.
1.2. "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor thereto.
1.3. "Contract Owners" shall mean the owners of Contracts, as
distinguished from all other product owners.
1.4. "Independent Directors" shall mean those members of a Fund's Board
of Directors who are not interested persons of the Fund, the Distributor, the
Adviser or any sub-adviser to any of the Portfolios.
1.5. "IRS" shall mean the U.S. Internal Revenue Service.
1.6. "NAV" shall mean a Portfolio's net asset value per share ("NAV").
1.7. "Prospectus" with respect to shares of a Portfolio or with respect
to a Contract through which interests in an Account registered as a unit
investment trust under the 1940 Act are offered and issued, which interests are
registered as securities under the 1933 Act, shall mean
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each version of the effective prospectus, including any supplements thereto,
filed with the SEC under the 1933 Act. Unless otherwise indicated, the term
"Prospectus" shall include any private placement memo or other similar
disclosure document used in connection with the offer or sale of Contracts
through which interests in unregistered Accounts are offered and issued. With
respect to any provision of this Agreement requiring a party to take action in
accordance with a Prospectus, such reference will be to the version of the
Prospectus last filed and effective prior to the taking of such action,
including any supplements thereto. The term Prospectus shall include any
statement of addition information incorporated by reference therein.
1.8. "SEC" shall mean the U.S. Securities and Exchange Commission.
1.9. "SAI" shall mean each version of the effective Statement of
Additional Information, including any supplements thereto, filed with the SEC
under the 1933 Act. With respect to any provision of this Agreement requiring a
party to take action in accordance with a SAI, such reference will be to the
version of the SAI last filed and effective prior to the taking of such action,
including any supplements thereto. The term SAI shall include any Prospectus
incorporated by reference therein.
1.10. "Valuation Time" shall mean the time as of which a Fund calculates
net asset value for the shares of its Portfolios on the relevant Business Day.
ARTICLE II. SALE OF FUND SHARES
2.1. (a) Each Fund and the Distributor shall make shares of the
Portfolios available to the Accounts. The Company shall be the designee of each
Fund for receipt of such orders and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund receives notice in accordance with
the operational procedures set forth in Section 2.5 below.
2.2. Each Fund reserves the right to refuse any purchase order or to
suspend or terminate the offering of shares of any Portfolio for any reason. All
orders accepted by the Company shall be subject to the terms of the then current
Prospectus of the applicable Fund. The
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Company shall use its best efforts, and shall reasonably cooperate with a Fund,
to enforce stated Prospectus policies regarding transactions in Portfolio
shares. The Company acknowledges that orders accepted by it in violation of a
Fund's stated policies may be subsequently revoked or canceled by the Fund and
that the Fund shall not be responsible for any losses incurred by the Company,
the Account or the Contract Owner as a result of such cancellation.
2.3. Each Fund will redeem for cash any full or fractional shares of any
Portfolio when requested by the Company on behalf of an Account. The Company
shall be the designee of each Fund for receipt of requests for redemption and
receipt by such designee shall constitute receipt by the Fund, provided that the
Fund receives notice of any such request for redemption in accordance with the
operational procedures set forth in Section 2.5 below.
2.4. The Distributor and each Fund agree that shares of the Portfolios
will be sold only to insurance companies for use in conjunction with variable
life insurance policies or variable annuities or Qualified Plans. Further, each
Fund will not sell shares of the Portfolios to any other participating insurance
company separate account unless an agreement containing provisions the substance
of which are the same as Sections 3.1(a), 3.1(b) (except with respect to
designation of applicable law), 4.6, 4.7, 4.8 (Sections 4.6, 4.7 and 4.8 shall
be required to the extent necessary by applicable law), and Article VIII of this
Agreement is in effect to govern such sales. The parties hereto acknowledge that
the arrangement contemplated by this Agreement is not exclusive; a Portfolio's
shares may be sold to other insurance companies and the cash value of the
Contracts may be invested in other investment companies.
2.5. The Company will receive instructions from the Accounts for the
purchase, redemption and exchange of shares of the Portfolios ("Instructions"),
and shall aggregate and calculate the net purchase and redemption orders for
each Account received each Business Day prior to the close of the New York Stock
Exchange (generally 4:00 p.m. Eastern Time) ("Market Close"). The Company will
not aggregate Instructions received from the Accounts after Market Close with
Instructions it received before Market Close, and warrants that its internal
control structure concerning the processing and transmission of Instructions is
suitably designed to
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prevent or detect on a timely basis Instructions received after Market Close
from being aggregated with Instructions received before Market Close and to
minimize errors that could result in late transmission of Instructions.
Instructions received by the Company before Market Close on any Business Day
will receive that day's NAV. Instructions received by the Company after Market
Close on any Business Day will be treated as received on the next Business Day
and will be executed at the next Business Day's NAV.
(a) FUND/SERV TRANSACTIONS: The parties will ordinarily use the NSCC
Fund/SERV system and will follow the applicable operating procedures of the NSCC
Defined Contribution Clearance & Settlement (DCC&S) Cycle 8 (generally, 6:30
a.m. Eastern Time) as the preferred method of processing the transactions
described herein. If the Company is unable to meet NSCC DCC&S Cycle 8
(generally, 6:30 a.m. Eastern Time), the Company will immediately notify the
Fund or its designee, but in no event shall such notice be provided later than
6:45 a.m. Eastern Time on the applicable day. Upon such notice, the Fund or its
designee will agree to allow the Company additional time; provided that the
Company shall provide trade amounts no later than 8:30 a.m. Eastern Time. If the
NSCC Fund/SERV system is used, the following provisions will apply: (i) On each
Business Day, the Company shall communicate by Fund/SERV, the aggregate purchase
or redemption orders (if any) of Portfolio shares, based on Instructions
received for each Account by the prior Business Day's Market Close, by no later
than NSCC DCC&S Cycle 8 (generally, 6:30 a.m. Eastern Time) or such other time
as may be agreed upon by the parties from time to time as described above. All
Instructions received by the Company after Market Close on a Business Day shall
not be transmitted to NSCC prior to the conclusion of NSCC DCC&S Cycle 8 on the
following Business Day, or such other time as may be agreed upon by the parties
from time to time as described above, and the Company represents that orders it
receives after Market Close on any given Business Day will be transmitted using
the following Business Day's NAV. The Fund or its designee may process orders
received after NSCC DCC&S Cycle 8 deadline, or such other time as may be agreed
upon by the parties from time to time as described above, using the NAV next
determined. (ii) When transmitting purchase or redemption orders for shares of
the Portfolios, the Company shall submit one order for all Account purchase
transactions and one order for all Account redemption transactions,
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unless otherwise agreed to by the Company the Fund or its designee. (iii) All
orders are subject to acceptance by the Fund or its designee and become
effective only upon confirmation by the Fund or its designee. Upon confirmation,
the Fund or its designee will verify total purchases and redemptions and the
closing share position for each Account. In the case of delayed settlement, the
Fund or its designee shall make arrangements for the settlement of redemptions
by wire no later than the time permitted for settlement of redemption orders by
the 1940 Act. (iv) The Company's payment for purchases of Portfolio shares shall
be from the designated NSCC Settling Bank on behalf of the Company by the time
specified by the Transfer Agent. "Settling Bank" shall mean the entity appointed
by the party to perform such settlement services which entity agrees to abide by
NSCC's then current rules and procedures insofar as they related to funds
settlement. (v) Each Fund shall pay and transmit the proceeds of redemptions of
Portfolio shares from the designated NSCC Settling Bank on behalf of the Fund in
accordance with NSCC's then current rules and procedures; provided, however,
that the Fund may delay payment in extraordinary circumstances to the extent
permitted under Section 22(e) of the 1940 Act.
(b) MANUAL TRANSACTIONS: The parties will process manual
transactions via facsimile (or by other agreed electronic means) if there are
technical problems with Fund/SERV, or if the parties are not able to transmit or
receive information through Fund/SERV. If manual transactions are used, the
following provisions will apply: (i) On each Business Day, by 8:30 a.m. Eastern
Time, the Company shall communicate to the Fund or its designee the aggregate
amounts for purchase or redemption orders (if any) of Portfolio shares, based on
Instructions received for each Account by the prior Business Day's Market Close.
All Instructions received by the Company after Market Close on a Business Day
shall not be communicated to the Fund or its designee until after 8:30 a.m.
Eastern Time on the following Business Day, and the Company represents that
orders it receives after Market Close on any given Business Day will be
transmitted using the following Business Day's NAV. The Fund or its designee
will process orders received after the 8:30 a.m. Eastern Time deadline using the
NAV next determined. (ii) The Company will communicate orders to purchase or
redeem shares of each Portfolio separately, and submit one order for all Account
purchase transactions, reflecting the net dollar amount to be invested in each
Portfolio, and one order for all Account redemption transactions,
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reflecting the net dollar amount to be redeemed from each Portfolio, unless
otherwise agreed to by the Company the Fund or its designee. (iii) All orders
are subject to acceptance by the Fund or its designee and become effective only
upon confirmation by the Fund or its designee. Upon confirmation, the Fund or
its designee will verify total purchases and redemptions and the closing share
position for each Account. In the case of delayed settlement, the Fund or its
designee shall make arrangements for the settlement of redemptions by wire no
later than the time permitted for settlement of redemption orders by the 1940
Act. (iv) The Company shall pay for Portfolio shares by 3:00 p.m. Eastern Time
on the next Business Day after an order to purchase Portfolio shares is received
in accordance with the provisions of this Section 2.5(b). Payment shall be in
federal funds transmitted by wire and/or by a credit for any shares redeemed the
same day as the purchase. (v) Each Fund shall pay and transmit the proceeds of
redemptions of Portfolio shares by 3:00 p.m. Eastern Time on the next Business
Day after a redemption order is received in accordance with this Section 2.5(b);
provided, however, that the Fund may delay payment in extraordinary
circumstances to the extent permitted under Section 22(e) of the 1940 Act.
Payment shall be in federal funds transmitted by wire and/or a credit for any
shares purchased the same day as the redemption.
2.6. Issuance and transfer of a Portfolio's shares will be by book entry
only. Stock certificates will not be issued to the Company or the Accounts.
Shares purchased from a Portfolio will be recorded in an appropriate title for
the relevant Account or the relevant sub-account of an Account. Each Fund will
furnish to the Company the CUSIP number assigned to each Portfolio identified in
Schedule A hereto, as it may be amended from time to time.
2.7. The Distributor shall notify the Company in advance, but not later
than same day notice (by electronic communication or telephone, followed by
electronic confirmation) to the Company, of any income, dividends or capital
gain distributions payable on a Portfolio's shares. The Company hereby elects to
receive all such income dividends and capital gain distributions as are payable
on a Portfolio's shares in additional shares of that Portfolio. A Fund shall
notify the Company by the end of the next following Business Day of the number
of shares so issued as payment of such dividends and distributions.
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2.8. Each Fund shall make the NAV for each Portfolio available to the
Company on each Business Day as soon as reasonably practicable after the NAV is
calculated and shall use its best efforts to make such NAV available by 6:30
p.m. Eastern Time. In the event of an error in the computation of a Portfolio's
NAV or any dividend or capital gain distribution (each, a "pricing error"), the
applicable Fund shall immediately notify the Company as soon as possible after
discovery of the error. Such notification may be verbal, but shall be confirmed
promptly in writing. A pricing error shall be corrected as follows: (a) if the
pricing error results in a difference between the erroneous NAV and the correct
NAV of less than $0.01 per share, then no corrective action need be taken; (b)
if the pricing error results in a difference between the erroneous NAV and the
correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of
the Portfolio's NAV at the time of the error, then the Adviser shall reimburse
the Portfolio for any loss, after taking into consideration any positive effect
of such error; however, no adjustments to Contract Owner accounts need be made;
and (c) if the pricing error results in a difference between the erroneous NAV
and the correct NAV equal to or greater than 1/2 of 1% of the Portfolio's NAV at
the time of the error, then the Adviser shall reimburse the Portfolio for any
loss (without taking into consideration any positive effect of such error) and
shall reimburse the Company for the costs of adjustments made to correct
Contract Owner accounts in accordance with the provisions of the Adviser's
current pricing policy. If an adjustment is necessary to correct a material
error that has caused Contract Owners to receive less than the amount to which
they are entitled, the number of shares of the applicable sub-account of such
Contract Owners will be adjusted and the amount of any underpayments shall be
credited by the Adviser to the Company for crediting of such amounts to the
applicable Contract Owner's accounts. Upon notification by the Adviser of any
overpayment due to a material error, the Company shall promptly remit to the
Adviser any overpayment that has not been paid to Contract Owners. A pricing
error within categories (b) or (c) above shall be deemed to be "materially
incorrect" or constitute a "material error" for purposes of this Agreement. The
Fund or Adviser shall reimburse the costs for such errors or omissions as
reflected on Schedule B. The standards set forth in this Section 2.8 are based
on the parties' understanding of the views expressed by the staff of the SEC as
of the date of this Agreement. In the event the views of the SEC staff are
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later modified or superseded by SEC or judicial interpretation, the parties
shall amend the foregoing provisions of this Agreement to comport with the
appropriate applicable standards, on terms mutually satisfactory to all parties.
2.9. The parties agree that the Contracts are not intended to serve as
vehicles for frequent transfers among the Portfolios in response to short-term
stock market fluctuations. Each Fund and the Company agree to cooperate with one
another to deter and detect transfer activity in the Portfolios where such
activity occurs through the Contracts and has been identified either by the
Company or a Fund as abusive or following a market-timing pattern ("Abusive
Transfers").
(a) The Company agrees to provide, promptly upon request by a Fund,
the taxpayer identification number or other identifying information contained in
the Company's records, of all Contract Owners that purchased, redeemed,
transferred or exchanged shares of a Portfolio, and the amount and dates of such
purchases, redemptions, transfers and exchanges.
(b) Each Fund agrees to notify the Company of transfer activity that
the Fund deems to be Abusive Transfer activity. After receiving such notice from
a Fund, the Company agrees that it will cooperate with the Fund to restrict or
prohibit further purchases or exchanges of Portfolio shares by a Contract Owner
who has been identified by the Fund as having engaged in transactions of such
shares held directly or indirectly by the Company that violate the Fund's
policies established for the purpose of eliminating or reducing Abusive
Transfers to the extent permissible under the terms and conditions of Contract
Owner prospectuses, Contracts and other governing laws.
(c) Each Fund represents that it will make a good faith effort to
furnish information to the Company about each Fund not otherwise available to
the Company that is required by state insurance law to enable the Company to
obtain the authority needed to issue the Contracts in any applicable state to
the extent permissible under the terms and conditions of Funds' prospectuses and
other governing laws.
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2.10. The Company agrees to notify a Fund of any investment restrictions
imposed by state insurance law and contracts applicable to the Fund. The parties
agree to mutually cooperate with respect to any state insurance law restriction
or requirement applicable to a Fund's investments to the extent such cooperation
is permissible under the terms and conditions of Funds' prospectuses and other
governing laws.
ARTICLE III . REPRESENTATIONS AND WARRANTIES
3.1. The Company represents and warrants that:
(a) (i) The securities deemed to be issued by the Accounts under the
Contracts are or will be registered under the 1933 Act, or are not so registered
in proper reliance upon an exemption from such registration requirements; (ii)
the Contracts will be issued and sold in compliance in all material respects
with all applicable federal and state laws; and (iii) the Contracts will be sold
only by duly licensed and appointed parties with which the Company has written
agreements that require, among other things, that the sale of the Contracts
shall comply in all material respects with applicable FINRA Conduct Rules.
(b) (i) It is an insurance company duly organized and in good
standing under applicable law; (ii) it has legally and validly established each
Account prior to any issuance or sale of units thereof as a segregated asset
account under New York law; and (iii) it has registered each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts and will maintain such
registration for so long as any Contracts are outstanding as required by
applicable law or, alternatively, the Company has not registered one or more
Accounts in proper reliance upon an exclusion from such registration
requirements.
(c) It has reviewed a copy of the Mixed and Shared Funding Exemptive
Order, and, in particular, has reviewed the conditions to the requested relief
set forth therein. As long as applicable, the Company agrees to be bound by the
responsibilities of a participating insurance company as set forth in the Mixed
and Shared Funding Exemptive Order, including,
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without limitation, the requirement that the Company report any potential or
existing conflicts of interest of which it is aware to each Fund's Board of
Directors. The Company will assist each Board of Directors in carrying out its
responsibilities in monitoring such conflicts under the Mixed and Shared Funding
Exemptive Order by providing the Board in a timely manner with all information
reasonably necessary for the Board to consider any issues raised. This includes,
but is not limited to, an obligation by the Company to inform each applicable
Board whenever Contract Owner voting instructions are disregarded and by
confirming in writing, at a Fund's request, that the Company is unaware of any
such potential or existing material irreconcilable conflicts.
(d) For purposes other than diversification under Section 817 of the
Code, that the Contracts are currently and at the time of issuance will be
treated as annuity contracts or life insurance policies under applicable
provisions of the Code, and that it will make every effort to maintain such
treatment and that it will notify the Funds, the Distributor and the Adviser
immediately upon having a reasonable basis for believing that the Contracts have
ceased to be so treated or that they might not be so treated in the future. In
addition, the Company represents and warrants that each Account is a "segregated
asset account" and that interests in each Account are offered exclusively
through the purchase of or transfer into a "variable contract" within the
meaning of such terms under Section 817 of the Code and the regulations
thereunder. The Company will use every effort to continue to meet such
definitional requirements, and it will notify the Funds, the Distributor and the
Adviser immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the future.
The Company represents and warrants that it will not purchase Fund shares with
assets derived from tax-qualified retirement plans except, indirectly, through
Contracts purchased in connection with such plans.
(e) The Company will comply with its obligations under applicable
anti-money laundering ("AML") laws, rules and regulations, including but not
limited to its obligations under the United States Bank Secrecy Act of 1970, as
amended (by the USA Patriot Act of 2001 and other laws), and the rules,
regulations and official guidance issued thereunder.
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The Company agrees to undertake inquiry and due diligence regarding the
customers to whom the Company offers and/or sells Shares or on whose behalf the
Company purchases Shares and that the inquiry and due diligence is reasonably
designed to determine that the Company is not prohibited from dealing with any
such customer by (i) any sanction administered by the Office of Foreign Asset
Control of the U.S. Department of the Treasury; (ii) and of the Special
Measures.
(f) It is currently in material compliance, and will seek to remain
in material compliance, with all applicable laws, rules and regulations relating
to consumer privacy, including, but not limited to, SEC Regulation S-P and the
Xxxxx-Xxxxx-Xxxxxx Act.
(g) (i) It operates in compliance with and will continue to operate
in compliance with its duties and obligations under the Rule 22c-2 Agreement.
(ii) It has adopted, and will at all times during the term of
this Agreement maintain, reasonable and appropriate procedures ("Late Trading
Procedures") designed to ensure that any and all orders relating to the
purchase, sale or exchange of Portfolio shares communicated to the applicable
Fund to be treated in accordance with Article I of this Agreement as having been
received on a Business Day have been received by the Valuation Time on such
Business Day and were not modified after the Valuation Time, and that all orders
received from Contract Owners, but not rescinded by the Valuation Time, were
communicated to the Fund or its agent as received for that Business Day. Each
transmission of orders by the Company shall constitute a representation by the
Company that such orders are accurate and complete and relate to orders received
by the Company by the Valuation Time on the Business Day for which the order is
to be priced and that such transmission includes all orders relating to Fund
shares received from Contract Owners but not rescinded by the Valuation Time.
The Company agrees to provide each Fund or its designee with a copy of the Late
Trading Procedures and such certifications and representations regarding the
Late Trading Procedures as the Fund or its designee may reasonably request. The
Company will promptly notify the Funds in writing of any material change to the
Late Trading Procedures.
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(iii) It has adopted, and will at all times during the term of
this Agreement maintain, reasonable and appropriate procedures ("Market Timing
Procedures") designed to minimize excessive trading in its Contracts. The
Company agrees to provide each Fund or its designee with a copy of the Market
Timing Procedures and such certifications and representations regarding the
Market Timing Procedures as the Fund or its designee may reasonably request. The
Company will promptly notify the Funds of any material change to the Market
Timing Procedures. The parties agree to make reasonable efforts to address any
conflict between the Market Timing Procedures and actions taken or policies
adopted by a Fund designed to minimize any adverse impact on other Fund
investors due to excessive trading.
3.2. Each Fund and the Distributor represent and warrant that:
(a) (i) The Portfolio shares sold pursuant to this Agreement shall
be registered under the 1933 Act; (ii) the Portfolio shares sold pursuant to
this Agreement shall be duly authorized for issuance and sold in compliance with
all applicable federal securities laws including without limitation the 1933
Act, the 1934 Act, and the 1940 Act; (iii) the Fund is and shall remain
registered under the 1940 Act; and (iv) the Fund shall amend the registration
statement for its Portfolios' shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of the
shares.
(b) Each Fund has adopted a plan pursuant to Rule 12b-1 under the
1940 Act (a "Rule 12b-1 Plan") for certain classes of its shares, including
Class IC shares. The Funds have not adopted a Rule 12b-1 Plan for Class IA
shares. The parties acknowledge that each Fund reserves the right to modify or
terminate its existing plan or to adopt additional Rule 12b-1 Plans (including
with respect to its shares for which it has not currently adopted a Rule 12b-1
plan) and to impose an asset-based or other charge to finance distribution
expenses as permitted by applicable law and regulation. The Fund and the Adviser
agree to comply with applicable provisions and SEC interpretation of the 1940
Act with respect to any distribution plan.
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(c) Each Fund shall register and qualify the shares for sale in
accordance with the laws of the various states if and to the extent required by
applicable law.
(d) Each Fund is lawfully organized and validly existing under the
laws of the State of Maryland and that it does and will comply in all material
respects with the 1940 Act.
(e) Each Fund and the Distributor shall comply with all applicable
laws and regulations designed to prevent money laundering and, if required by
such laws or regulations, share with the Company information about individuals,
entities, organizations and countries suspected of possible terrorist or money
laundering activities.
3.3. The Adviser represents and warrants that it is and shall remain duly
registered under all applicable federal and state securities laws and that it
shall perform its obligations for each Fund and Portfolio in compliance in all
material respects with any applicable state and federal securities laws.
3.4. The Distributor represents and warrants that it is and shall remain
duly registered under all applicable federal and state securities laws and that
it shall perform its obligations for each Fund and Portfolio in compliance in
all material respects with the laws of any applicable state and federal
securities laws.
3.5. Each Fund and the Adviser represent and warrant that:
(a) All of their respective officers, employees, investment
advisers, and other individuals or entities dealing with the money and/or
securities of a Fund are, and shall continue to be at all times, covered by one
or more blanket fidelity bonds or similar coverage for the benefit of the Fund
in an amount not less than the minimal coverage required by Rule 17g-1 under the
1940 Act or related provisions as may be promulgated from time to time. The
aforesaid bonds shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
18
(b) They will use their best efforts to provide the Company with as
much advance notice as is reasonably practicable of any material change
affecting the Portfolios (including, but not limited to, any material change in
the registration statement or prospectus affecting the Portfolios) and any proxy
solicitation or information statement affecting the Portfolios and consult with
the Company in order to implement any such change in an orderly manner,
recognizing the expenses of changes and attempting to minimize such expenses by
implementing them in conjunction with regular annual updates of the Prospectus
for the Contracts.
(c) The Funds have obtained the Mixed and Shared Funding Exemptive
Order from the SEC granting participating insurance companies and variable
insurance products separate accounts exemptions from the provisions of the 1940
Act and the rules thereunder to the extent necessary to permit shares of the
Funds and/or their Portfolios to be sold to and held by variable insurance
product separate accounts of both affiliated and unaffiliated life insurance
companies.
(d) The Funds are currently in material compliance, and will seek to
remain in material compliance, with all applicable laws, rules and regulations
relating to consumer privacy, including, but not limited to, SEC Regulation S-P
and the Xxxxx-Xxxxx-Xxxxxx Act.
3.6 Notwithstanding anything possibly to the contrary in this Agreement or
the Rule 22c-2 Agreement entered into by the parties, the Funds hereby waive
enforcement rights of fund policies regarding market timing or frequent trading
with respect to transfers of assets into or from Company sponsored dynamic or
static asset allocation models.
ARTICLE IV. PROSPECTUSES, PROXY MATERIALS AND INFORMATION STATEMENTS; VOTING
4.1. At least annually, the Distributor shall provide the Company with as
many copies of a Fund's current Prospectus as the Company may reasonably
request, with expenses to be borne in accordance with Schedule B hereof. If
requested by the Company in lieu thereof, the
19
Distributor or Fund shall provide such documentation (including an electronic
version of the current prospectus) and other assistance as is reasonably
necessary in order for the Company once each year (or more frequently if the
prospectus for the Fund is amended) to have the prospectus for the Contracts and
the Prospectus for the Fund printed together in one document.
4.2. If applicable state or federal laws or regulations require that the
SAI for a Fund be distributed to all Contract Owners, then the Fund and/or the
Distributor shall provide the Company with copies of the Fund's SAI in such
quantities, with expenses to be borne in accordance with Schedule B hereof, as
the Company may reasonably require to permit timely distribution thereof to
Contract Owners. The Distributor and/or the Fund shall also provide an SAI to
any Contract Owner or prospective owner who requests such SAI from the Fund.
4.3. Each Fund and/or the Distributor shall provide the Company with
copies of the Fund's proxy material, information statements, reports to
shareholders and other communications to shareholders in such quantity, with
expenses to be borne in accordance with Schedule B hereof, as the Company may
reasonably require to permit timely distribution thereof to Contract Owners.
4.4. It is understood and agreed that, except with respect to information
regarding the Company provided in writing by that party, the Company shall not
be responsible for the content of the Prospectus or SAI for a Fund. It is also
understood and agreed that, except with respect to information regarding a Fund,
the Distributor, the Adviser or the Portfolios provided in writing by a Fund,
the Distributor or the Adviser, neither the Fund, the Distributor nor Adviser
are responsible for the content of the prospectus or SAI for the Contracts.
4.5. Each Fund or its designee will use its best efforts to provide the
Company with notice as soon as is reasonably practicable of any change for a
Fund or Portfolio, including but not limited to: (a) fund objective changes; (b)
anticipated fund reorganizations or substitutions; (c) no action or exemptive
requests granted by the SEC; (d) Fund and/or Portfolio name changes;
20
(e) Fund or Portfolio adviser, sub-adviser and/or portfolio manager changes;
and/or (f) conditions or undertakings that affect the Company's rights or
obligations under this Agreement.
4.6. If and to the extent required by law the Company shall:
(a) solicit voting instructions from Contract Owners;
(b) vote the Portfolio shares held in the Accounts in accordance
with instructions received from Contract Owners;
(c) vote Portfolio shares held in the Accounts for which no
instructions have been received in the same proportion as Portfolio shares for
which instructions have been received from Contract Owners, so long as and to
the extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for variable contract owners; and
(d) vote Portfolio shares held in its general account or otherwise
in the same proportion as Portfolio shares for which instructions have been
received from Contract Owners, so long as and to the extent that the SEC
continues to interpret the 1940 Act to require such voting by an insurance
company. The Company reserves the right to vote Portfolio shares in its own
right, to the extent permitted by law.
4.7. The Company shall be responsible for assuring that each of its
separate accounts holding shares of a Portfolio calculates voting privileges as
directed by the applicable Fund and agreed to by the Company and the Fund. Each
Fund agrees to promptly notify the Company of any changes of interpretations or
amendments of the Mixed and Shared Funding Exemptive Order.
4.8. Each Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular each Fund will either provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the 1940
Act not to require such meetings) or, as each
21
Fund currently intends, comply with Section 16(c) of the 1940 Act (although no
Fund is one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b). Further, each Fund will
act in accordance with the SEC's interpretation of the requirements of Section
16(a) with respect to periodic elections of directors or trustees and with
whatever rules the SEC may promulgate with respect thereto.
ARTICLE V. SALES MATERIAL AND INFORMATION
5.1. (a) The Company shall not disclose any information or make any
representations or statements relating to a Fund or Portfolio in connection with
the sale of the Contracts other than the information, representations or
statements contained in the registration statement, including a Fund's
Prospectus or SAI, as the same may be amended or supplemented from time to time.
This provision shall not apply to internal meetings about the Accounts'
investment in the Portfolios.
(b) The Company shall furnish, or cause to be furnished, to each
Fund, as applicable, prior to use each piece of sales literature or other
promotional material prepared by the Company in which a Fund, the Distributor,
the Adviser and/or any of their respective affiliates is described. No sales
literature or advertising will be used if the Fund reasonably objects to its use
within ten (10) Business Days following receipt by the Company.
(c) The Company is hereby granted a non-exclusive, royalty-free,
U.S. license to use, print, broadcast and otherwise display in any print or
electronic medium with respect to the annuity Contracts, the Fund's or the
Distributor's service marks, trade names and logos solely with respect to such
sales literature or other promotional material created and published by the
Company with respect to the Contracts.
5.2. (a) Each Fund, the Distributor and the Adviser shall not disclose any
information or make any representations relating to the Company or concerning
the Company, the Accounts, or the Contracts in connection with the Accounts'
investment in the Portfolios other than the information or representations or
statements contained in a registration statement,
22
including the prospectus or SAI, for the Contracts, as the same may be amended
or supplemented from time to time. This provision shall not apply to internal
meetings about the Accounts' investment in the Portfolios.
(b) Each Fund, the Distributor and the Adviser shall furnish, or
cause to be furnished, to the Company prior to use each piece of sales
literature or other promotional material prepared by the Fund, the Distributor
and the Adviser in which the Company and/or any of its affiliates is described.
No piece of such sales literature or other promotional material shall be used by
the Fund, the Distributor and the Adviser without the prior approval of the
Company, which approval will not be unreasonably withheld. The Company agrees
that it will use its best efforts to respond promptly to any request by a Fund,
the Distributor or the Adviser for such prior approval.
5.3. For purposes of this Article V and Article IX, the phrase "sales
literature and other promotional material" includes, but is not limited to,
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;
E.G., on-line networks such as the Internet or other electronic 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, and shareholder reports, and proxy
materials (including solicitations for voting instructions), information
statements and any other material constituting sales literature or advertising
under the FINRA rules, the 1933 Act or the 0000 Xxx.
5.4. At the request of any party to this Agreement, each other party will
make available to the requesting party's independent auditors and/or
representatives of the appropriate regulatory agencies, all records, data and
access to operating procedures that may be reasonably requested in
23
connection with compliance and regulatory requirements related to this Agreement
or any party's obligations under this Agreement.
ARTICLE VI. FEES AND EXPENSES
6.1. Each Fund, the Distributor, the Transfer Agent and the Adviser shall
pay no fee or other compensation to the Company under this Agreement, and the
Company shall pay no fee or other compensation to a Fund, the Distributor, the
Transfer Agent or the Adviser under this Agreement; provided, however, that (a)
the parties will bear their own expenses as reflected in Schedule B and other
provisions of this Agreement, and (b) the parties may enter into other
agreements relating to the Company's investment in a Fund or Portfolio,
including services agreements. Notwithstanding the foregoing, pursuant to the
distribution plans adopted by each Fund pursuant to Rule 12b-1 under the 1940
Act for certain classes of its shares, including Class IC shares and excluding
Class IA shares, and as contemplated by Section 3.2(b) of this Agreement, each
Fund or Portfolio or class of shares thereof, with the exception of Class IA
shares, may pay the Distributor and the Distributor may pay the Company for
activities primarily intended to result in the sale of Contracts or of Fund
shares to the Accounts through which such Contracts are issued and/or
shareholder services. In addition, if a Fund or Portfolio or any class of shares
thereof implements a service fee, such Fund or Portfolio or class of shares
thereof may pay the Company for administrative support services.
ARTICLE VII. DIVERSIFICATION AND QUALIFICATION
7.1. Each Fund, the Distributor and the Adviser represent and warrant that
each Fund and each Portfolio thereof will at all times comply with Section
817(h) of the Code and Treasury Regulation ss.1.817-5 or any other regulations
promulgated under Section 817(h), as amended from time to time, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts and any amendments or
other modifications or successor provisions to such Section or Regulations. Each
Fund, the Distributor or the Adviser will notify the Company immediately upon
having a reasonable basis for believing that a Fund or any Portfolio has ceased
to comply with the Section 817(h)
24
diversification or might not so comply in the future. To the extent that a Fund
or Portfolio ceases to so qualify, the Fund and the Adviser will use their best
efforts to take all steps necessary to adequately diversify the affected
Portfolio so as to achieve compliance within the grace period afforded by
Treasury Regulation ss.1.817-5.
7.2. Each Fund, the Distributor and the Adviser represent and warrant that
each Fund and each Portfolio is currently qualified as a Regulated Investment
Company under Subchapter M of the Code, and that each Portfolio will maintain
such qualification (under Subchapter M or any successor or similar provisions)
as long as this Agreement is in effect. Each Fund, the Distributor or the
Adviser will notify the Company immediately upon having a reasonable basis for
believing that a Fund or any Portfolio has ceased to comply with the Subchapter
M qualification requirements or might not so comply in the future.
7.3. Without in any way limiting the effect of Sections 9.2, 9.3 and 9.4
hereof and without in any way limiting or restricting any other remedies
available to the Company, the Adviser or the Distributor will pay all costs
associated with or arising out of any failure, or any anticipated or reasonably
foreseeable failure, of a Fund or any Portfolio to comply with Sections 7.1 or
7.2, hereof, including all costs associated with reasonable and appropriate
corrections or responses to any such failure; such costs may include, but are
not limited to, the costs involved in creating, organizing, and registering a
new investment company as a funding medium for the Contracts and/or the costs of
obtaining whatever regulatory authorizations are required to substitute shares
of another investment company for those of the failed Portfolio (including but
not limited to an order pursuant to Section 26(c) of the 1940 Act). In addition,
the Distributor or the Adviser shall bear the costs of bringing Contracts into
compliance with section 817(h) of the Code following a diversification failure,
and the costs of adverse tax consequences to affected Contract holders if the
Contracts cannot be brought into compliance.
7.4. The Company agrees that if the IRS asserts in writing in connection
with any governmental audit or review of the Company (or, to the Company's
knowledge, of any Contract Owner) that any Portfolio has failed to comply with
the diversification requirements of Section
25
817(h) of the Code or the Company otherwise becomes aware of any facts that
could give rise to any claim against a Fund, the Distributor or the Adviser as a
result of such a failure or alleged failure:
(a) The Company shall promptly notify the Fund, the Distributor and
the Adviser of such assertion or potential claim;
(b) The Company shall consult with the Fund, the Distributor and the
Adviser as to how to minimize any liability that may arise as a result of such
failure or alleged failure;
(c) The Company shall use its best efforts to minimize any liability
of the Fund, the Distributor and the Adviser resulting from such failure,
including, without limitation, demonstrating, pursuant to Treasury Regulations,
Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was
inadvertent;
(d) Any written materials to be submitted by the Company to the IRS,
any Contract Owner or any other claimant in connection with any of the foregoing
proceedings or contests (including, without limitation, any such materials to be
submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2))
shall be provided by the Company to the Fund, the Distributor and the Adviser
(together with any supporting information or analysis) within a reasonable time
after submission;
(e) The Company shall provide the Fund, the Distributor and the
Adviser with such cooperation as the Fund, the Distributor and the Adviser shall
reasonably request (including, without limitation, by permitting the Fund, the
Distributor and the Adviser to review the relevant books and records of the
Company) in order to facilitate review by the Fund, the Distributor and the
Adviser of any written submissions provided to it or its assessment of the
validity or amount of any claim against it arising from such failure or alleged
failure;
26
(f) The Company shall not with respect to any claim of the IRS or any
Contract Owner that would give rise to a claim against the Fund, the Distributor
and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment
on audit, or (iii) forego any allowable administrative or judicial appeals,
without the express written consent of the Fund, the Distributor and the
Adviser, which shall not be unreasonably withheld; provided that, the Company
shall not be required to appeal any adverse judicial decision unless the Fund
and the Adviser shall have provided an opinion of independent counsel to the
effect that a reasonable basis exists for taking such appeal; and further
provided that the Fund, the Distributor and the Adviser shall bear the costs and
expenses, including reasonable attorney's fees, incurred by the Company in
complying with this clause (f).
ARTICLE VIII. POTENTIAL CONFLICTS AND COMPLIANCE WITH MIXED AND
SHARED FUNDING EXEMPTIVE ORDER
8.1. Each Fund's Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the Contract Owners of
all separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including, but not limited to: (a) an action
by any state insurance regulatory authority; (b) a change in applicable federal
or state insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any similar action
by insurance, tax, or securities regulatory authorities; (c) an administrative
or judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio is being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners or by contract owners of different participating insurance
companies; or (f) a decision by a participating insurance company to disregard
the voting instructions of contract owners. The Board shall promptly inform the
Company if it determines that an irreconcilable material conflict exists and the
implications thereof.
8.2. The Company will monitor its operations and those of the Funds for
purposes of identifying any actual or potential material irreconcilable
conflicts between the interests of the Contract Owners of all separate accounts
investing in a Fund. The Company will report any
27
potential or existing conflicts of which it is aware to the applicable Board.
The Company will assist each Board in carrying out its responsibilities under
the Mixed and Shared Funding Exemptive Order, by providing the Board at least
annually with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to (i) inform the Board whenever Contract Owner voting instructions are
to be disregarded and (ii) provide such other information and reports as the
Board may reasonably request. Such responsibilities shall be carried out by the
Company with a view only to the interests of its Contract Owners.
8.3. If it is determined by a majority of a Board, or a majority of its
Independent Directors, that a material irreconcilable conflict exists due to
issues relating to the Contracts, the Company and other participating insurance
companies shall, at their expense and to the extent reasonably practicable (as
determined by a majority of the Independent Directors), take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict, up to and
including: (1) withdrawing the assets allocable to some or all of the separate
accounts from a Fund or any Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Fund or Portfolio, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract Owners and, as appropriate, segregating the assets of
any appropriate group (I.E., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more participating insurance
companies) that votes in favor of such segregation, or offering to the affected
Contract Owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account. Such
actions will be taken by the Company with a view only to the interests of its
Contract Owners.
8.4. If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract Owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the affected Fund's election, to withdraw the Account's
investment in the Fund and terminate this Agreement; provided, however, that
such withdrawal and termination shall be limited to the extent required by the
28
foregoing material irreconcilable conflict as determined by a majority of the
Independent Directors. No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal and termination must take place within six (6)
months after a Fund gives written notice that this provision is being
implemented, and until the end of that six-month period the Adviser, the
Distributor and the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.
8.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
Account's investment in a Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing that it has determined
that such decision has created an irreconcilable material conflict; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the Independent Directors. No charge or penalty will be imposed as a
result of such withdrawal. Until the end of the foregoing six-month period, a
Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
8.6. For purposes of Sections 8.3 through 8.5 of this Agreement, a
majority of the Independent Directors shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will a Fund be required to establish a new funding medium for the Contracts. The
Company shall not be required by Section 8.3 to establish a new funding medium
for the Contracts if an offer to do so has been declined by vote of a majority
of Contract Owners affected by the irreconcilable material conflict. In the
event that the Board determines that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the Independent Directors.
29
8.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Mixed and Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Mixed and Shared
Funding Exemptive Order, then (a) each Fund and/or the participating insurance
companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable: and (b) Sections 4.5, 4.6, 4.7, 8.1, 8.2, 8.3,
8.4, and 8.5 of this Agreement shall continue in effect only to the extent that
terms and conditions substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
8.8 The parties hereto agree that the conditions or undertakings required
by the Mixed and Shared Funding Exemptive Order that may be imposed on any party
hereto by virtue of such order by the SEC: (i) shall apply only upon the sale of
shares of the applicable Portfolios to the Account(s) (and then only to the
extent required under the 1940 Act); (ii) will be incorporated herein by
reference; and (iii) all parties hereto agree to comply with such conditions and
undertakings to the extent applicable to each such party notwithstanding any
provision of this Agreement to the contrary.
ARTICLE IX. INDEMNIFICATION
9.1. INDEMNIFICATION BY THE COMPANY
(a) The Company agrees to indemnify and hold harmless each Fund, the
Distributor, and the Adviser and each of their respective officers and directors
or trustees and each person, if any, who controls the Fund, the Distributor or
the Adviser within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 9.1) against any and all
losses, claims, expenses, damages and liabilities (including amounts paid in
settlement with the written consent of the Company) or litigation (including
reasonable 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, expenses, damages or
30
liabilities (or actions in respect thereof) or settlements are related, directly
or indirectly, to the sale or acquisition of the Fund's shares or the 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 or SAI covering the
Contracts or contained in the Contracts or sales literature or
other promotional material for the 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 in writing to the
Company by or on behalf of the Adviser, Distributor or Fund
for use in the registration statement or prospectus for the
Contracts or in the Contracts or sales literature or other
promotional material (or any amendment or supplement to any of
the foregoing) or otherwise for use in connection with the
sale of the 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, SAI or
sales literature or other promotional material 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 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, SAI, or sales literature or other
promotional material of a 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 a statement or omission was made in reliance upon
information furnished in writing 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 required under
the terms of this Agreement; or
(v) arise out of or result from any material breach of this
Agreement by the Company, including without limitation Section
3.11 and Section 8.6 hereof,
31
as limited by and in accordance with the provisions of Sections 9.1(b) and
9.1(c) hereof.
(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
(i) any violation of insurance law, compliance with which is a responsibility of
the Indemnified Parties under this Agreement or as to which the Indemnified
Parties failed to inform the Company or (ii) such Indemnified Party's willful
misfeasance, bad faith, or negligence in the performance of such Indemnified
Party's duties or by reason of such Indemnified Party's reckless disregard of
its obligations or duties under this Agreement or to any of the Indemnified
Parties.
(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 that it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision, except to the extent that the Company
has been prejudiced by such failure to give notice. In case any such action is
brought against the Indemnified Parties, 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.
32
(d) The Indemnified Parties will promptly notify the Company of the
commencement of any material litigation or proceedings against them in
connection with the issuance or sale of Fund shares or the Contracts or the
operation of a Fund.
9.2. INDEMNIFICATION BY THE ADVISER
(a) The Adviser agrees to indemnify and hold harmless the Company
and its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 9.2) against any and all losses, claims,
expenses, damages, liabilities (including amounts paid in settlement with the
written consent of the Adviser) or litigation (including reasonable 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, directly or indirectly, to the sale or acquisition of a
Fund's shares or the 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 or SAI or sales
literature or other promotional material of a Fund prepared by
the Fund or the Adviser (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 in writing to the Adviser or the Fund by
or on behalf of the Company for use in the registration
statement, Prospectus or SAI for the Fund or in sales
literature or other promotional material (or any amendment or
supplement to any of the foregoing) or otherwise for use in
connection with the sale of the 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, SAI or
sales literature or other promotional material for the
Contracts not supplied by the Fund or the Adviser or persons
under their control) or wrongful conduct of a Fund or the
Adviser or persons under their control, with respect to the
sale or distribution of the Contracts or Fund shares; or
33
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI, or sales literature or other
promotional material covering the 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 statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished in
writing to the Company by or on behalf of the Adviser or a
Fund; or
(iv) arise as a result of any failure by a Fund or the Adviser
to provide the services and furnish the materials required
under the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise, to comply
with the diversification and other qualification requirements
specified in Article VII of this Agreement); or
(v) arise out of or result from any material breach of this
Agreement by the Adviser or the Fund; or
(vi) arise out of or result from the incorrect or untimely
calculation or reporting by a Fund or the Adviser of the daily
NAV (subject to Section 2.8 of this Agreement) or dividend or
capital gain distribution rate;
as limited by and in accordance with the provisions of Sections 9.2(b) and
9.2(c) hereof.
(b) The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason of
(i) any violation of insurance law, compliance with which is a responsibility of
the Company under this Agreement or as to which the Company failed to inform the
Adviser or (ii) such Indemnified Party's willful misfeasance, bad faith, or
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of its obligations or duties under
this Agreement or to any of the Indemnified Parties.
(c) The Adviser 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 Adviser in writing within a
reasonable time after the summons or other first legal
34
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
Adviser of any such claim shall not relieve the Adviser from any liability that
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision, except to the
extent that the Adviser has been prejudiced by such failure to give notice. In
case any such action is brought against the Indemnified Parties, the Adviser
will be entitled to participate, at its own expense, in the defense thereof. The
Adviser also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Adviser to
such party of the Adviser'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 Adviser 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.
(d) The Company agrees promptly to notify the Adviser of the
commencement of any material litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of Fund shares or
the Contracts or the operation of the Account.
9.3. INDEMNIFICATION BY THE DISTRIBUTOR
(a) The Distributor agrees to indemnify and hold harmless the
Company and its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 9.3) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Distributor) or litigation (including
reasonable 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, directly or indirectly, to the sale or
acquisition of a Fund's shares or the Contracts and:
35
(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 or SAI or sales
literature or other promotional material of a Fund prepared by
the Distributor (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 in writing to the Distributor by or on behalf of the
Company for use in the registration statement, Prospectus or
SAI for a Fund or in sales literature or other promotional
material (or any amendment or supplement to any of the
foregoing) or otherwise for use in connection with the sale of
the 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, SAI or
sales literature or other promotional material for the
Contracts not supplied by the Distributor or persons under its
control) or wrongful conduct of the Distributor or persons
under its control, with respect to the sale or distribution of
the 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, SAI, or sales literature or other
promotional material covering the 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 statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished in
writing to the Company by or on behalf of the Distributor; or
(iv) arise as a result of any failure by the Distributor to
provide the services and furnish the materials required under
the terms of this Agreement; or
(v) arise out of or result from any material breach of this
Agreement by the Distributor; or
as limited by and in accordance with the provisions of Sections 9.3(b) and
9.3(c) hereof.
(b) The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an
36
Indemnified Party would otherwise be subject by reason of (i) any violation of
insurance law, compliance with which is a responsibility of the Company under
this Agreement or as to which the Company failed to inform the Distributor or
(ii) such Indemnified Party's willful misfeasance, bad faith, or negligence in
the performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of its obligations or duties under this
Agreement or to any of the Indemnified Parties.
(c) The Distributor 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 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 Indemnified 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 that it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision, except to the extent that the
Distributor has been prejudiced by such failure to give notice. In case any such
action is brought against the Indemnified Parties, the Distributor will be
entitled to participate, at its 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 expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
(d) The Company agrees promptly to 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 Fund shares or the
Contracts or the operation of the Account.
37
10.1. The Transfer Agent and the Company each represents and warrants to
the other that it: (a) has entered into an agreement with NSCC, (b) has met and
will continue to meet all of the requirements to participate in Fund/SERV and
Networking, and (c) intends to remain at all times in compliance with the then
current rules and procedures of NSCC to the extent necessary or appropriate to
facilitate such communications, processing, and settlement of Portfolio share
transactions.
ARTICLE X. APPLICABLE LAW
10.1. This Agreement and all related documents including all schedules
attached hereto, and all matters arising out of or relating to this Agreement,
are governed by, and construed in accordance with, the laws of the State of New
York, without regard to the conflict of laws provisions thereof to the extent
such principles or rules would require or permit the application of the laws of
any jurisdiction other than those of the State of New York.
10.2. 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.
ARTICLE XI. TERMINATION
11.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, with respect
to some or all Portfolios, upon sixty (60) days' prior written notice delivered
to the other parties; or
(b) at the option of the Company by written notice to the other
parties with respect to any Portfolio based upon the Company's determination
that shares of such Portfolio are not reasonably available to meet the
requirements of the Contracts; or
38
(c) at the option of the Company by written notice to the other
parties with respect to any Portfolio in the event any of the Portfolio's shares
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 Contracts issued or to be issued by the Company; or
(d) at the option of a Fund, the Distributor or the Adviser in the
event that formal administrative proceedings are instituted against the Company
by FINRA, the SEC, the Insurance Commissioner or like official of any state or
any other regulatory body regarding the Company's duties under this Agreement or
related to the sale of the Contracts, the operation of any Account, or the
purchase of Fund shares, if, in each case, the Fund, Distributor or Adviser, as
the case may be, reasonably determines in its sole judgment exercised in good
faith, that any such administrative proceedings will have a material adverse
effect upon the ability of the Company to perform its obligations under this
Agreement; or
(e) at the option of the Company in the event that formal
administrative proceedings are instituted against a Fund, the Distributor or the
Adviser by FINRA, the SEC, or any state securities or insurance department or
any other regulatory body, if the Company reasonably determines in its sole
judgment exercised in good faith, that any such administrative proceedings will
have a material adverse effect upon the ability of the Fund, the Distributor or
the Adviser to perform their obligations under this Agreement; or
(f) at the option of the Company by prior written notice to a Fund
with respect to any Portfolio if the Company reasonably believes that the
Portfolio will fail to meet the Section 817(h) diversification requirements or
Subchapter M qualifications specified in Article VII hereof; or
(g) at the option of any non-defaulting party hereto in the event of
a material breach of this Agreement by any party hereto (the "defaulting party")
other than as described in
39
Section 11.1(a)-(h); provided, that the non-defaulting party gives written
notice thereof to the defaulting party, with copies of such notice to all other
non-defaulting parties, and if such breach shall not have been remedied within
thirty (30) days after such written notice is given, then the non-defaulting
party giving such written notice may terminate this Agreement by giving thirty
(30) days' written notice of termination to the defaulting party; or
(h) At the option of a Fund or the Adviser if the Contracts cease to
qualify as annuity contracts or life insurance contracts, as applicable, under
the Code, or if the Fund or Adviser reasonably believe that the Contracts may
fail to so qualify; or
(i) At the option of a Fund or the Adviser, if the Contracts are not
registered (if registration is required), issued or sold in accordance with
applicable federal and/or state law; or
(j) At the option of the party from which consent was not obtained,
in the event this Agreement is assigned without the prior written consent of all
parties hereto; or
(k) At the option of a Fund, by a vote of the majority of the Fund's
Board, Adviser or Company, upon a reasonable determination by the Fund's Board
that a material irreconcilable conflict exists among the interests of (i) all
Contract Owners of all Accounts, or (ii) the interests of participating
insurance companies investing in the Fund; or
(l) At any time upon written agreement of all parties to this
Agreement.
11.2. This Agreement may be terminated as to one or more Funds or one or
more Portfolios of a Fund (but less than all Portfolios) by delivery of an
amended Schedule A deleting such Fund or Portfolio pursuant to Section 13.12
hereof, in which case termination as to such deleted Fund or Portfolio shall
take effect thirty (30) days after the date of such delivery. The execution and
delivery of an amended Schedule A that deletes one or more Funds or one or more
Portfolios shall constitute a termination of this Agreement only with respect to
such deleted Fund or Portfolio and shall not affect the obligations of the
Company and any Fund hereunder with respect to the other Funds and Portfolios
set forth in Schedule A, as amended from time to time.
40
11.3. NOTICE REQUIREMENT
No termination of this Agreement shall be effective unless and until the
party terminating this Agreement gives prior written notice to all other parties
of its intent to terminate, which notice shall set forth the basis for the
termination. Furthermore,
(a) in the event any termination is based upon the provisions of
Article VIII, or the provisions of Section 11.1(a) of this Agreement, the prior
written notice shall be given in advance of the effective date of termination as
required by those provisions unless such notice period is shortened by mutual
written agreement of the parties;
(b) in the event any termination is based upon the provisions of
Section 11.1(d), 11.1(e) or 11.1(g) of this Agreement, the prior written notice
shall be given at least sixty (60) days before the effective date of
termination; and
(c) in the event any termination is based upon the provisions of
Section 11.1(b), 11.1(c), 11.1(f), 11.1(h), 11.1(i), 11.1(j) or 11.1(k), the
prior written notice shall be given in advance of the effective date of
termination, which date shall be determined by the party sending the notice.
11.4. EFFECT OF TERMINATION
Notwithstanding any termination of this Agreement, other than as a result
of a failure by either a Fund or a Portfolio or the Company to meet Section
817(h) of the Code diversification requirements, upon mutual agreement of the
parties hereto, the Fund will continue to make available additional shares of
the Fund or Portfolio pursuant to the terms and conditions of this Agreement,
for all Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
without limitation, if the Fund and its designees agree to make additional
Portfolio shares available, the owners of the Existing Contracts shall be
permitted to reallocate investments in a Fund or Portfolio, redeem investments
41
in a Fund or Portfolio and/or invest in a Fund or Portfolio upon the making of
additional purchase payments under the Existing Contracts. The parties agree
that this Section 11.4 shall not apply to any terminations under Article VIII
and the effect of such Article VIII terminations shall be governed by Article
VIII of this Agreement.
11.5. SURVIVING PROVISIONS
Notwithstanding any termination of this Agreement, each party's
obligations under Article IX to indemnify other parties shall survive and not be
affected by any termination of this Agreement. In addition, with respect to
Existing Contracts, all provisions of this Agreement shall also survive and not
be affected by any termination of this Agreement.
ARTICLE XII. 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 parties.
If to the Company:
Lincoln Life & Annuity Company of New York
0000 X. Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Funds Management, Xxxxx X. Xxxxxxx
Telephone: (000) 000 0000
Facsimile: 260) 455 4641
If to the Adviser:
Hartford Funds Management Company, LLC
0 Xxxxxx Xxxxxxxxx Xxxxxx, Xxx 000
100 Matsonford Rd
Radnor PA 19087
Attention: General Counsel
If to the Distributor:
42
Hartford Funds Distributors, LLC
0 Xxxxxx Xxxxxxxxx Xxxxxx, Xxx 000
100 Matsonford Rd
Radnor PA 19087
Attention: General Counsel
If to the Transfer Agent:
Hartford Administrative Services Company
0 Xxxxxx Xxxxxxxxx Xxxxxx, Xxx 000
100 Matsonford Rd
Radnor PA 19087
Attention: General Counsel
If to a Fund:
0 Xxxxxx Xxxxxxxxx Xxxxxx, Xxx 000
000 Xxxxxxxxxx Xx
Xxxxxx XX 00000
Attention: Chief Legal Counsel
ARTICLE XIII. MISCELLANEOUS
13.1. CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by one party to one or more of the other parties regarding its business
and operations. All confidential information provided by a party hereto,
including non-public personal information within the meaning of SEC Regulation
S-P and/or the Xxxxx-Xxxxx-Xxxxxx Act, whichever is applicable, shall be used by
any other party hereto solely for the purpose of rendering services pursuant to
this Agreement and, except as may be required in carrying out this Agreement,
shall not be disclosed to any third party without the prior written consent of
such providing party. Without limiting the foregoing, no party hereto shall
disclose any information that another party has designated as proprietary. The
foregoing shall not be applicable to any information that is required to be
disclosed by any auditor of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation.
43
13.2. CAPTIONS. 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.
13.3. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which taken together shall constitute one and the
same instrument.
13.4. INTERPRETATION. In connection with the operation of this Agreement,
the Company, the Adviser, the Distributor and any Fund may agree from time to
time on such provisions interpretative of or in addition to the provisions of
this Agreement with respect to any party as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretative or
additional provisions shall be in a writing signed by all parties and shall be
annexed hereto, provided that no such interpretative or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the articles of incorporation or analogous governing document of any party. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement or affect any
other party.
13.5. SURVIVAL OF TERMS. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
13.6. ASSIGNMENT. This Agreement shall be binding on and shall inure to
the benefit of each Fund severally, the Distributor, the Adviser and the
Company, and their respective successors and assigns, provided that neither the
Company, the Distributor, the Adviser nor any Fund may assign this Agreement or
any of its rights or obligations hereunder without the prior written consent of
the other parties.
13.7. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
FINRA and state insurance
44
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.
13.8. 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.
13.9. The Company agrees that the obligations assumed by the Fund, the
Distributor, and the Adviser pursuant to this Agreement shall be limited in any
case to the Fund, the Distributor and the Adviser and their respective assets
(and with respect to the Fund, only the assets of applicable Portfolios) and the
Company shall not seek satisfaction of any such obligation from the shareholders
of any other Fund or Portfolio, or from the Distributor or the Adviser, the
Directors, officers, employees or agents of the Fund, the Distributor or the
Adviser, or any of them.
13.10. The Funds, the Distributor and the Adviser agree that the
obligations assumed by the Company pursuant to this Agreement shall be limited
in any case to the Company and its assets and neither the Funds, the Distributor
nor the Adviser shall seek satisfaction of any such obligation from the
shareholders of the Company, the directors, officers, employees or agents of the
Company, or any of them.
13.11. No provision of this Agreement may be waived, amended or terminated
except by a statement in writing signed by the party against which enforcement
of such waiver, amendment or termination is sought; provided, however, that
Schedule A shall be deemed to be automatically amended based on the list of
underlying funds (or series) of the Fund and the mutually acceptable class of
shares thereof, if any, as reflected in Separate Account registration statements
for the Company, as filed with the Securities and Exchange Commission from time
to time. Schedule A may be amended from time to time to add one or more Funds or
one or more Portfolios of one or more Funds, by each applicable Fund's execution
and delivery to the other parties of an amended
45
Schedule A, and the execution of such amended Schedule A by the other parties,
in which case such amendment shall take effect immediately upon execution by the
other parties. Schedule A may also be amended from time to time to delete one or
more Funds or one or more Portfolios (but less than all of the Portfolios) of
one or more Funds, by each applicable Fund's execution and delivery to the other
parties of an amended Schedule A, in which case such amendment shall take effect
thirty (30) days after such delivery, unless otherwise agreed by the parties in
writing.
13.12. No provision of this Agreement may be deemed or construed to modify
or supersede any contractual rights, duties, or indemnifications, as between the
Adviser and the Fund, and the Distributor and the Fund.
13.13. The parties mutually acknowledge that this Agreement represents the
collective drafting efforts of each party and therefore any ambiguity shall not
be interpreted against the interests of any party.
NEXT PAGE IS SIGNATURE PAGE.
46
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative as of the date specified on the cover page of this Agreement.
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By its authorized officer,
By: /s/ Xxxxxx X. Xxxxx
---------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
HARTFORD FUNDS MANAGEMENT COMPANY, LLC
By its authorized officer,
By: /s/ Xxxxxxx Xxxxx
---------------------
Name: Xxxxxxx Xxxxx
Title: Chief Financial Officer
Hartford FUNDS DISTRIBUTORS,
LLC
By its authorized officer,
By: /s/ Xxxxxxx Xxxxx
---------------------
Name: Xxxxxxx Xxxxx
Title: Chief Financial Officer
47
Hartford ADMINISTRATIVE SERVICES COMPANY
By its authorized officer,
By: /s/ Xxxxxxx Xxxxx
------------------------
Name: Xxxxxxx Xxxxx
Title: Chief Financial Officer
EACH INVESTMENT COMPANY LISTED ON SCHEDULE A
By its authorized officer,
By: /s/ Xxxxxx X. XxxXxxxxx
------------------------
Name: Xxxxxx X. XxxXxxxxx
Title: Vice President and Chief Legal Officer
48
SCHEDULE A
INVESTMENT COMPANIES AND PORTFOLIOS
HARTFORD SERIES FUND, INC.
------------------------------------------------------ ------------------
PORTFOLIO NAME SHARE CLASS
------------------------------------------------------ ------------------
Hartford Capital Appreciation HLS Fund IC
------------------------------------------------------ ------------------
Hartford Capital Appreciation HLS Fund IA
------------------------------------------------------ ------------------
HARTFORD HLS SERIES FUND II, INC.
------------------------------------------------------ ------------------
PORTFOLIO NAME SHARE CLASS
------------------------------------------------------ ------------------
None
------------------------------------------------------ ------------------
SEPARATE ACCOUNTS
Lincoln New York Account N for Variable Annuities
SCHEDULE B
EXPENSES
Each Fund and/or the Distributor and/or Adviser, and the Company will coordinate
the functions and pay the costs of the completing these functions based upon an
allocation of costs in the tables below. Costs shall be allocated to reflect a
Fund's share of the total costs determined according to the number of pages of
the Fund's respective portions of the documents.
----------------------------- -------------------------- -------------------------- --------------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
----------------------------- -------------------------- -------------------------- --------------------------
HLS Mutual Fund Prospectus Printing of combined Company Current - Fund
prospectuses
Prospective - Company
----------------------------- -------------------------- -------------------------- --------------------------
Distribution (including Company Fund
postage) to new and
current clients
----------------------------- -------------------------- -------------------------- --------------------------
Distribution (including Company Company
postage) to prospective
clients
----------------------------- -------------------------- -------------------------- --------------------------
Product Prospectus Printing and distribution Company Company
for current and
prospective clients
----------------------------- -------------------------- -------------------------- --------------------------
HLS Mutual Fund Prospectus Update and distribution, Distributor or Adviser Fund, Distributor or
if required by Fund, Adviser
Distributor or Adviser
----------------------------- -------------------------- -------------------------- --------------------------
Update and distribution, Company (Distributor or Company
if required by Company Adviser to provide
Company with document in
PDF format)
----------------------------- -------------------------- -------------------------- --------------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
----------------------------- -------------------------- -------------------------- --------------------------
Product Prospectus Update and distribution, Company Company
if required by Fund,
Distributor or Adviser
----------------------------- -------------------------- -------------------------- --------------------------
Update and Distribution, Company Company
if required by Company
----------------------------- -------------------------- -------------------------- --------------------------
HLS Mutual Fund SAI Printing Distributor or Adviser Fund, Distributor or
Adviser
----------------------------- -------------------------- -------------------------- --------------------------
Distribution (including The party who receives The party who receives
postage) the request the request
----------------------------- -------------------------- -------------------------- --------------------------
Product SAI Printing Company Company
----------------------------- -------------------------- -------------------------- --------------------------
Distribution Company Company
----------------------------- -------------------------- -------------------------- --------------------------
Proxy Material or Printing if proxy Distributor or Adviser Fund, Distributor or
Information Statement for material or information Adviser
HLS Mutual Fund statement required by law
----------------------------- -------------------------- -------------------------- --------------------------
Distribution (including Company Fund, Distributor or
labor) if proxy material Adviser
or information statement
required by law
----------------------------- -------------------------- -------------------------- --------------------------
Printing & distribution Company Company
if required by Company
----------------------------- -------------------------- -------------------------- --------------------------
HLS Mutual Fund Annual & Printing of reports Distributor or Adviser Fund, Distributor or
Semi-Annual Report Adviser
----------------------------- -------------------------- -------------------------- --------------------------
Distribution Company Fund, Distributor or
Adviser
----------------------------- -------------------------- -------------------------- --------------------------
----------------------------- -------------------------- -------------------------- --------------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
----------------------------- -------------------------- -------------------------- --------------------------
Other communication to new Distribution (including Company Company
and prospective clients labor and printing) if
required by the Fund,
Distributor or Adviser
----------------------------- -------------------------- -------------------------- --------------------------
Distribution (including Company Company
labor and printing) if
required by Company
----------------------------- -------------------------- -------------------------- --------------------------
Other communication to Distribution (including Company Fund, Distributor or
current clients labor and printing) if Adviser
required by the Fund,
Distributor or Adviser
----------------------------- -------------------------- -------------------------- --------------------------
Distribution (including Company Company
labor and printing) if
required by Company
----------------------------- -------------------------- -------------------------- --------------------------
Errors in Share Price Cost of error to Company Fund or Adviser
calculation pursuant to participants
Section 2.8
----------------------------- -------------------------- -------------------------- --------------------------
Cost of reasonable Company Fund or Adviser
expenses related to
administrative work to
correct error
----------------------------- -------------------------- -------------------------- --------------------------
----------------------------- -------------------------- -------------------------- --------------------------
ITEM FUNCTION PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
COORDINATION EXPENSE
----------------------------- -------------------------- -------------------------- --------------------------
Operations of the Fund All operations and Distributor or Adviser Fund or Adviser
related expenses,
including the cost of
registration and
qualification of shares,
taxes on the issuance or
transfer of shares, cost
of management of the
business affairs of the
Fund, and expenses paid
or assumed by the fund
pursuant to any Rule
12b-1 plan
----------------------------- -------------------------- -------------------------- --------------------------
Operations of the Accounts Federal registration of Company Company
units of separate account
(24f-2 fees)
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