EXHIBIT 23(H)(5)
FORM OF
MASTER FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is entered into as of this day of , 2010 among
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY, LINCOLN LIFE & ANNUITY COMPANY OF
NEW YORK, on behalf of itself and certain of its separate accounts (together
with The Lincoln National Life Insurance Company "Insurance Company"); on
behalf of itself and certain of its separate accounts; Lincoln Variable
Insurance Products Trust ("Trust"), an open-end investment company organized
under the laws of Delaware; AMERICAN FUNDS INSURANCE SERIES ("Series"), an
open-end management investment company organized under the laws of the
Commonwealth of Massachusetts; and CAPITAL RESEARCH AND MANAGEMENT COMPANY
("CRMC"), a corporation organized under the laws of the State of Delaware.
WITNESSETH:
WHEREAS, Insurance Company proposes to issue, now and in the future,
certain multi-manager variable annuity contracts and/or variable life policies
(the "Contracts");
WHEREAS, Insurance Company has established pursuant to applicable
insurance law one or more separate accounts (each, an "Account") for purposes
of issuing the Contracts and has or will register each Account (unless the
Account is exempt from such registration) with the United States Securities and
Exchange Commission (the "Commission") as a unit investment trust under the
Securities Act of 1933, as amended (the "1933 Act") and the Investment Company
Act of 1940, as amended (the "1940 Act");
WHEREAS, the Contracts, which are or will be registered by Insurance
Company (unless exempt from such registration) with the Commission for offer
and sale, will be in compliance with all applicable laws prior to being offered
for sale;
WHEREAS, the Series has received a "Mixed and Shared Funding Order" from
the Commission granting relief from certain provisions of the 1940 Act and the
rules thereunder to the extent necessary to permit shares of the Series to be
sold to variable annuity and life insurance separate accounts of unaffiliated
insurance companies;
WHEREAS, the Series is divided into various funds (the "Master Funds"),
and each Master Fund is subject to certain fundamental investment policies
which may not be changed without a majority vote of the shareholders of such
Master Fund;
WHEREAS, the Trust is divided into various series (the "Funds"), and
each Fund has its own assets and liabilities and invests in securities in
accordance with its investment objectives and policies, as described in the
registration statement for the Funds;
WHEREAS, certain Funds propose to hold as their only investment shares
of a
corresponding Master Fund as set forth in Attachment A, as such Attachment may
____________
be amended from time to time by mutual agreement in writing, with each
such Fund having the same investment objective and compatible fundamental
investment restrictions and policies as the corresponding Master Fund as
described in the registration statement for the Master Fund;
WHEREAS, certain Master Funds (through the Funds) listed in Attachment A
____________
to this Agreement will serve as certain of the underlying investment
mediums for the Contracts issued with respect to the Accounts listed on
Attachment B; and
____________
WHEREAS, CRMC is the investment adviser for the Series.
NOW, THEREFORE, in consideration of the foregoing and of mutual
covenants and conditions set forth herein and for other good and valuable
consideration, Insurance Company, the Trust, the Series and CRMC hereby agree
as follows:
1. (a) The Series and CRMC each represents and warrants to Insurance
Company and the Trust that: (i) a registration statement under
the 1933 Act and under the 1940 Act (collectively, the "SEC
Filings") with respect to the Series has been filed with the
Commission in the form previously delivered to Insurance
Company and the Trust, and copies of any and all amendments
thereto will be forwarded to Insurance Company and the Trust
at the time that they are filed with the Commission; (ii) the
Series is, and shall be at all times while this Agreement is
in force, lawfully organized, validly existing, and properly
qualified in accordance with the laws of the Commonwealth of
Massachusetts; (iii) the shares of the Master Funds sold
pursuant to this Agreement will be registered under the 1933
Act and duly authorized for issuance in accordance with
applicable law and that the Series will remain registered as
an open-end management investment company under the 1940 Act
for as long as such shares of the Master Funds are sold;
(iv) the Series will amend the registration statement for its
shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its
shares and the Series' registration statement and any further
amendments thereto will, when they become effective, and all
definitive prospectuses and statements of additional
information and any further supplements thereto (the
"Prospectus") shall, conform in all material respects to the
requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder, and will not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statement therein not misleading;
provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Series by Insurance Company and the Trust expressly for use
therein; and (v) the Series and CRMC will comply in all
material respects with all applicable laws and regulations,
including, without limitation, the 1933 Act and the 1940 Act
and the rules and regulations thereunder.
(b) The Series and CRMC represent and warrant that all of the
Series trustees,
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officers, employees, investment advisers, and other
individuals/entities having access to the funds and/or
securities of the Series are and continue to be at all times
covered by a blanket fidelity bond or similar coverage for the
benefit of the Series in an amount not less than the minimal
coverage as required currently by Rule 17g-(1) of the 1940 Act
or related provisions as may be promulgated from time to time.
The aforesaid bond includes coverage for larceny and
embezzlement and is issued by a reputable bonding company.
(c) CRMC represents and warrants that it is lawfully organized and
validly existing under the laws of its state of organization;
it is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and will remain
duly registered under all applicable federal and state
securities laws; and that it will perform its obligations for
the Series in accordance in all material respects with the
laws of the State of Massachusetts and any applicable state
and federal securities laws.
2. (a) The Trust represents and warrants to the Series and CRMC that
(i) the shares of the Funds are or will be registered under
the 1933 Act and that the shares will be issued, sold and
distributed in compliance in all material respects with all
applicable federal securities laws; (ii) the Trust is, and
shall be at all times while this Agreement is in force,
lawfully organized and validly existing under the laws of
Delaware; (iii) the Trust is and shall remain at all times
while this Agreement is in force, registered as an open-end
management investment company under the 1940 Act; (d) the SEC
Filings (including the registration statement) of the Trust
conform or, when they become effective, will conform in all
material respects to the requirements of the 1933 Act and the
1940 Act, and the rules and regulations of the Commission
thereunder, and will not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished
in writing to the Trust by CRMC or the Series expressly for
use therein; and the Trust will comply in all material
respects with all applicable laws and regulations, including,
without limitation, the 1933 Act and the 1940 Act and the
rules and regulations thereunder.
(b) Insurance Company represents and warrants to the Series and
CRMC that:
(i) it has the corporate power and the authority to enter
into and perform all of its duties and obligations under
this Agreement;
(ii) this Agreement constitutes its legal, valid and binding
obligation, enforceable against each above-named party
in accordance with its terms;
(iii) no consent or authorization of, filing with, or other
act by or in respect of any governmental authority is
required in connection with the execution,
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delivery, performance, validity or enforceability of
this Agreement;
(iv) The Lincoln National Life Insurance Company will or has
established the Accounts as separate accounts under
Indiana law;
(v) Lincoln Life & Annuity Company of New York will or has
established the Accounts as separate accounts under New
York law;
(vi) it has registered the Accounts as unit investment trusts
under the 1940 Act to serve as investment vehicles for
certain Contracts or, alternatively, has not registered
one or more of the Accounts in proper reliance upon an
exclusion from registration under the 1940 Act;
(vii) the Contracts are or will be and at the time of issuance
will be treated as annuity contracts and life insurance
policies, as applicable, under applicable provisions of
the Internal Revenue Code of 1986, as amended, and the
regulations thereunder (the "Code"), that Insurance
Company will maintain such treatment and that it will
notify the Series 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;
(viii) the offer of the Contracts has been registered with the
SEC under the Securities Act of 1933, unless exempt from
registration, and each such registration statement and
any further amendments or supplements thereto will, when
they become effective, conform in all material respects
to the requirements of the 1933 Act, and the rules and
regulations of the Commission thereunder, and will not
contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein
or necessary to make the statements therein not
misleading; provided, however, that this representation
and warranty shall not apply to any statement or
omission made in reliance upon and in conformity with
the information furnished in writing to Insurance
Company by CRMC or the Series expressly for use therein;
(ix) any information furnished in writing by Insurance
Company for use in the registration statement or annual
report of the Series will not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make
the statements therein not misleading, nor result in the
Series' registration statement's failing to materially
conform in all respects to the requirements of the 1933
Act and 1940 Act and the rules and regulations
thereunder;
(x) investment by each Account in a Fund is in reliance on
and consistent with the terms of the Series' Mixed and
Shared Funding Order; and
(xi) the Accounts invest in the Funds in reliance on the
status of each Account as a "Permitted Investor" within
the meaning of Section 817(h)(4)(A) of
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the Internal Revenue Code of 1986, as amended.
3. (a) The Series will furnish to Insurance Company and the Trust
such information with respect to the Series in such form and
signed by such of its officers as Insurance Company and the
Trust may reasonably request, and will warrant that the
statements therein contained when so signed will be true and
correct. The Series will advise Insurance Company and the
Trust immediately of: (i) the issuance by the Commission of
any stop order suspending the effectiveness of the
registration statement of the Series or the initiation of any
proceeding for that purpose; (ii) the institution of any
proceeding, investigation or hearing involving the offer or
sale of the Contracts or the Series of which it becomes aware;
or (iii) the happening of any material event, if known, which
makes untrue any statement made in the registration statement
of the Series or which requires the making of a change therein
in order to make any statement made therein not misleading.
(b) The Series will register for sale under the 1933 Act and, if
required, under state securities laws, such additional shares
of the Series as may reasonably be necessary for use as the
funding vehicle for the Contracts.
4. The Series or the Transfer Agent will compute the closing net
asset value, and any distribution information (including the
applicable ex-date, record date, payable date, distribution
rate per share, income accrual and capital gains information)
for each Master Fund as of the close of regular trading on the
New York Stock Exchange (normally 4:00 p.m. Eastern Time) on
each day the New York Stock Exchange is open for business (a
"Business Day") or at such other time as the net asset value
of a Master Fund is calculated, as disclosed in the relevant
Master Funds' current prospectuses. The Series or the Transfer
Agent will use their best efforts to communicate to the Trust
such information by 6:30 p.m. Eastern Time on each Business
Day. Such information shall be accurate and true in all
respects and updated continuously.
5. In the event an adjustment is made to the computation of the
net asset value of Master Fund shares as reported to Trust
under paragraph 4, the correction will be handled in a manner
consistent with SEC guidelines and the 1940 Act and the Series
or Transfer Agent shall notify Trust as soon as practicable
after discovering the need for any such adjustment.
Notification may be made in the following manner:
(a) The parties agree that they will ordinarily choose to use the
National Securities Clearing Corporation's Mutual Fund
Settlement, Entry and Registration Verification ("Fund/SERV")
system, and if Fund/SERV is used, any corrections to the fund
prices for the prior trade date will be submitted through the
Mutual Fund Profile with the correct fund prices and
applicable date. If the corrections are dated greater than
trade date plus one, a facsimile should be sent in addition to
the Mutual Fund Profile submission; or
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(b) If there are technical problems with Fund/SERV, or if the
parties are not able to transmit or receive information
through Fund/SERV, any corrections to Master Fund prices
should be communicated by facsimile or by electronic
transmission acceptable to Transfer Agent.
6. To the extent a price adjustment results in a deficiency or
excess to a Contractholder's account, Insurance Company and
Transfer Agent agree to evaluate the situation together on a
case-by-case basis with the goal towards pursuing an
appropriate course of action. To the extent the price
adjustment was due to Transfer Agent's error, Transfer Agent
shall reimburse Contractholder's account. Any administrative
costs incurred for correcting Contractholder accounts will be
at Insurance Company's expense.
7. Purchases and redemptions of shares shall be handled in the
following manner:
(a) Manual transactions via facsimile shall be used by the Trust
only in the event that the Trust is in receipt of orders for
purchase or redemption of shares and is unable to transmit the
orders to AFS due to unforeseen circumstances such as system
wide computer failures experienced by the Trust or the NSCC or
other events beyond the Trust's reasonable control. The Trust
will notify CRMC as soon as its NSCC application is approved.
Manual transactions will occur prior to that time. In the
event manual transactions are used, the following provisions
shall apply:
(i) The Trust will notify the Transfer Agent by 8:00 a.m.
Eastern Time, on the next Business Day the aggregate
amounts of purchase orders and redemption orders, that
were placed with the Insurance Company Contractholders
for each Fund by 4:00 p.m. Eastern time on the prior
Business Day (the "Trade Date"). Insurance Company
represents that orders it receives after 4:00 p.m.
Eastern time on any given Business Day will be
transmitted to the Transfer Agent using the following
Business Day's net asset value. Transfer Agent may
process orders it receives after the 10:00 a.m. (our
existing agreement says 10:00) deadline using the
following Business Day's net asset value.
(ii) All orders received by Insurance Company by 4:00 p.m. on
a Business Day and communicated by the Trust to the
Transfer Agent by the 8:00 a.m. deadline shall be
treated by the Transfer Agent as if received as of the
close of trading on the Trade Date and the Transfer
Agent will therefore execute orders at the net asset
values determined as of the close of trading on the
Trade Date. The Trust will initiate payment by wire
transfer to a custodial account designated by the Series
for the aggregate purchase amounts prior to 4:00 p.m.
Eastern time on the next Business Day following Trade
Date. Dividends and capital gain distributions shall be
automatically reinvested in additional shares at the
ex-dividend-date net asset value.
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(iii) Aggregate orders for redemption of shares of the Master
Funds will be paid in cash and wired from the Master
Funds' custodial account to an account designated by the
Trust. Transfer Agent will initiate payment by wire to
the Trust or its designee of proceeds of such
redemptions on the next Business Day following Trade
Date.
(b) For transactions via the Fund/SERV system, the following provisions
shall apply:
(i) The Trust and Transfer Agent will be bound by the terms
of the Fund/SERV Agreement filed by each with the NSCC.
Without limiting the generality of the following
provisions of this section, the Trust and Transfer Agent
each will perform any and all duties, functions,
procedures and responsibilities assigned to it and as
otherwise established by the NSCC applicable to
Fund/SERV and the Networking Matrix Level utilized.
(ii) Any information transmitted through Networking by any
party to the other and pursuant to this Agreement will
be accurate, complete, and in the format prescribed by
the NSCC. Each party will adopt, implement and maintain
procedures reasonably designed to ensure the accuracy of
all transmissions through Networking and to limit the
access to, and the inputting of data into, Networking to
persons specifically authorized by such party.
(iii) On each Business Day, the Trust shall aggregate and
calculate the purchase orders and redemption orders for
each Account received by the Insurance Company prior to
the Close of Trading on each Business Day. The Trust
shall communicate to Transfer Agent for that Business
Day, by Fund/SERV, the aggregate purchase orders and
redemption orders (if any) for each Account received by
the Close of Trading such Business Day (the "Trade
Date") by no later than 6:30 a.m. Eastern Time on the
following Business Day. Transfer Agent shall treat all
trades communicated to Transfer Agent in accordance with
the foregoing as if received prior to the Close of
Trading on the Trade Date. All orders received by the
Trust after the close of trading on a Business Day shall
not be transmitted to NSCC prior to 6:30 a.m. Eastern
Time on the following Business Day, and Insurance
Company represents that orders received by it after 4:00
p.m. Eastern time on any given Business Day will be
transmitted to the Transfer Agent using the following
Business Day's net asset value. Transfer Agent may
process orders it receives after the 6:30 a.m. deadline
using the net asset value determined on the Business Day
following the Trade Date.
(c) All orders are subject to acceptance by Transfer Agent and become
effective only upon confirmation by Transfer Agent. Upon
confirmation, the Transfer Agent will
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verify total purchases and redemptions and the closing
share position for each Fund/account. In the case of
delayed settlement, Transfer Agent and the Trust 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. Such wires for the
Trust should be sent to:
________________________
________________________
________________________
________________________
________________________
Such wires for Transfer Agent should be sent to:
XXXXX FARGO BANK
000 XXXXX XXXXXX, XXXXX XXXXX
XXX XXXXXXXXX, XX 00000
ABA#: 000000000
ACCOUNT#: 4600-212120
FOR CREDIT TO THE ACCOUNT OF AMERICAN FUNDS SERVICE COMPANY (shareholder
account number)
(d) Processing errors which result from any delay or error
caused by the Trust may be adjusted through the NSCC System
by Trust by the necessary transactions on a current basis.
(e) If applicable, orders for the purchase of Fund shares shall
include the appropriate coding to enable Transfer Agent to
properly calculate commission payments to any broker-dealer
firm assigned to the Trust.
(f) Trust shall reconcile share positions with respect to each
Master Fund for each Fund as reflected on its records to
those reflected on statements from Transfer Agent and
shall, on request, certify that each Fund's share positions
with respect to each Master Fund reported by Transfer Agent
reconcile with Trust's share positions for that Fund. Trust
shall promptly inform Transfer Agent of any record
differences and shall identify and resolve all
non-reconciling items within five business days.
(g) Within a reasonable period of time after receipt of a
confirmation relating to an Instruction, Trust shall verify
its accuracy in terms of such Instruction and shall notify
Transfer Agent of any errors appearing on such confirmation.
(h) Any order by the Trust for the purchase of shares of the
respective Master Funds through Transfer Agent (what
purchases are we referring to?) shall be accepted at the
time when it is received by the Transfer Agent (or any
clearinghouse agency that Transfer Agent may designate from
time to time), and at the offering and sale price next
determined, unless rejected by Transfer Agent or the
respective Master
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Funds. In addition to the right to reject any order, the
Series has reserved the right to withhold shares from sale
temporarily or permanently. Transfer Agent will not accept
any order from the Trust that is placed on a conditional
basis or subject to any delay or contingency prior to
execution. The procedure relating to the handling of orders
shall be subject to instructions that Transfer Agent shall
forward from time to time to the Trust. The shares
purchased will be issued by the respective Master Funds
only against receipt of the purchase price, in collected
New York or Los Angeles Clearing House funds. If payment
for the shares purchased is not received within three days
after the date of confirmation, the sale may be cancelled
by Transfer Agent or by the respective Master Funds without
any responsibility or liability on the part of the Transfer
Agent or the Funds, and the Transfer Agent and/or the
respective Funds may hold the Trust or the Insurance
Company responsible for any loss, expense, liability or
damage, including loss of profit suffered by the Transfer
Agent and/or the respective Funds, resulting from the delay
or failure to make payment as aforesaid.
8. (a) The Series reserves the right to temporarily suspend sales
if the Board of Trustees of the Series, acting in good
faith and in light of its fiduciary duties under federal
and any applicable state laws, deems it appropriate and in
the best interests of shareholders or in response to the
order of an appropriate regulatory authority. Further, the
Board of Trustees of the Series (the "Series Board") may
refuse to sell shares of any Master Fund to any person, or
suspend or terminate the offering of shares of any Master
Fund if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole
discretion of the Series Board, acting in good faith and in
light of its fiduciary duties under federal and any
applicable state law, necessary in the best interests of
the shareholders of such Master Fund, and as consistent
with its anti market-timing and late-trading policies and
procedures.
(b) The Trust has policies and procedures in place to detect
and discourage short-term or disruptive trading practices,
which may include (but is not limited to) monitoring
Contract holder trading activity. Insurance Company and the
Trust reserve the right to refuse, to impose limitations
on, or to limit any transaction request if the request
would tend to disrupt Contract administration or is not in
the best interest of the Contract holders or an Account or
Subaccount.
9. The Trust will make shares of the Funds listed on
Attachment A available only to Insurance Company and will
register for sale under the 1933 Act and, if required,
under state securities laws, such additional shares of the
Funds as may reasonably be necessary for use as the funding
vehicle for the Contracts and to maintain a continuous
offering of the shares of the Funds.
10. The Contracts funded through each Account will provide for
the allocation of net amounts among certain Subaccounts
corresponding to the Fund investing in Class 1 shares of
each Master Fund (each, a "Subaccount") for investment in
shares of the Funds as may be offered from time to time in
the Contracts. The selection of the particular Subaccount
is to be made by the Contract owner and such selection
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may be changed in accordance with the terms of the Contracts.
11. Transfer of the Series' shares will be by book entry only. No
stock certificates will be issued to the Accounts or Funds.
Shares ordered from a particular Master Fund will be recorded
by the Series as instructed by the Trust in an appropriate
title for the corresponding Fund. Shares ordered from a
particular Fund will be recorded by the Trust or the Trust's
transfer agent as instructed by Insurance Company in an
appropriate title for the corresponding Account or Subaccount.
12. The Series shall furnish notice of the dividend rate to the
Trust of any dividend or distribution payable on any shares of
the Master Funds held by the Funds prior to the close of
business on the ex-dividend date. The Trust hereby elects to
receive all such dividends and distributions as are payable on
shares of a Master Fund recorded in the title for the
corresponding Fund in additional shares of that Master Fund.
The Series shall notify the Trust of the number of shares so
issued. The Trust reserves the right to revoke this election
and to receive all such income dividends and capital gain
distributions in cash.
13. The Series shall pay all expenses incidental to its
performance under this Agreement. The Series shall see to it
that all of its shares are registered and authorized for issue
in accordance with applicable federal and state laws prior to
their purchase for the Account. The Series shall bear the
expenses for the cost of registration of its shares,
preparation of prospectuses (which in this Agreement shall
include any summary prospectuses unless the context otherwise
requires) and statements of additional information to be sent
to existing Contract owners (upon request in the case of the
statement of additional information), proxy statements and
related materials and annual and semi-annual shareholder
reports, the printing and distribution of such items to each
Contract owner who has allocated net amounts to any
Subaccount, the preparation of all statements and notices
required from it by any federal or state law, and taxes on the
issue or transfer of the Series' shares subject to this
Agreement. The Series will provide Insurance Company, at least
once a year, with enough copies of its Statement of Additional
Information to be able to distribute one to each Contract
owner or prospective Contract owner who requests such
Statement of Additional Information.
With respect to any prospectus and annual and semi-annual
reports (the "Reports") of the Series that are printed in
combination with any one or more such Reports of other
investment options for the Contracts (the "Booklet"), the
Series shall bear the costs of printing and mailing the
Booklet to existing Contract owners based on the ratio of the
number of pages of the Series' Reports included in the Booklet
to the number of pages in the Booklet as a whole.
14. (a) Insurance Company shall bear the expenses for the cost of
preparation and delivery of any Series prospectuses (and
supplements thereto) to be sent to prospective Contract
owners. The Series shall provide, at its expense, such
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documentation, if any as may be required, (in camera-ready or
other mutually agreeable form) and other assistance as is
reasonably necessary in order for Insurance Company once each
year (or more frequently if the prospectus for the Series is
amended), and twice each year in the case of the annual and
semi-annual shareholder reports, to have the prospectus or
prospectuses, and the annual and semi-annual shareholder
reports for the Contracts and the Series, printed together in
one or more documents (such printing to be done at Insurance
Company's expense with respect to prospective investors).
(b) The Series will provide to the Insurance Company and the Trust
at least one complete copy of all registration statements,
prospectuses, SAIs, reports, proxy statements, sales
literature and other promotional materials that pertain to the
Contracts, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate
to the Series or its shares, within a reasonable time after
filing of each such document with the Commission or the
Financial Industry Regulatory Authority.
(c) The Series and CRMC hereby consent to the Insurance Company's
and Trust's use of the names of the Series and CRMC, as well
as the names of the Master Funds set forth in Attachment A of
this Agreement, in connection with marketing the Funds and
Contracts, subject to the terms of this Agreement and that
certain Business Agreement, by and among Insurance Company,
CRMC, and American Funds Distributors. The Company
acknowledges and agrees that CRMC and/or its affiliates own
all right, title and interest in and to the names
[ ], and covenants not, at any time, to
challenge the rights of CRMC and/or its affiliates to such
name or design, or the validity or distinctiveness thereof.
The Series and CRMC hereby consent to the use of any
trademark, trade name, service xxxx or logo used by the Series
and CRMC, subject to the Series', and CRMC's approval of such
use and in accordance with reasonable requirements of the
Series or CRMC. Such consent will terminate with the
termination of this Agreement. The Insurance Company and Trust
agree and acknowledge that all use of any designation
comprised in whole or in part of the name, trademark, trade
name, service xxxx and logo under this Agreement shall inure
to the benefit of the Series and/or CRMC.
15. (a) Insurance Company represents and warrants to the Series that
any information furnished in writing by Insurance Company or
the Trust to the Series for use in the registration statement
and financial statements of the Series will not result in the
registration statement's failing to conform in all respects to
the requirements of the 1933 Act and the 1940 Act and the
rules and regulations thereunder or containing any untrue
statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading.
(b) The Series and CRMC represent and warrant to Insurance Company
and the Trust that any information furnished in writing by the
Series or CRMC to Insurance
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Company or the Trust for use in the registration statement and
financial statements of the Trust or the Contracts will not
result in the registration statement's failing to conform in
all respects to the requirements of the 1933 Act and the 1940
Act and the rules and regulations thereunder or containing any
untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading.
16. (a) Insurance Company, the Trust and their affiliates shall make
no representations concerning the Series' shares except those
contained in the then current registration statement,
Prospectus, or statement of additional information of the
Series, in such printed information subsequently issued on
behalf of the Series or other funds managed by CRMC as
supplemental to the Series' Prospectus, in information
published on the Series' or CRMC's internet site, or in
materials approved by CRMC or its affiliates.
(b) The Series and their affiliates shall make no representations
concerning the Trust's shares or the Contracts except those
contained in the then current registration statement,
Prospectus or statement of additional information of the Trust
or Contract, in such printed information subsequently issued
on behalf of the Trust or Insurance Company as supplemental to
the Trust's or Contract's Prospectus, or in materials approved
by the Insurance Company, the Trust or its affiliates.
17. (a) Shares of the Series may be offered to separate accounts of
various insurance companies ("Participating Insurance
Companies") in addition to Insurance Company. The Series and
CRMC represent and warrant that each Master Fund is currently
qualified as a Regulated Investment Company under Subchapter M
of the Code, and that they will maintain such qualification
(under Subchapter M or any successor or similar provision) and
that no other Participating Insurance Company will purchase
shares in any Master Fund for any purpose or under any
circumstances that would preclude Insurance Company from
"looking through" to the investments of each Master Fund in
which it invests, pursuant to the "look through" rules found
in Treasury Regulation 1.817-5. The Series or CRMC will notify
the Company immediately upon having a reasonable basis for
believing that any Master Fund has ceased to so qualify or
that any might not so qualify in the future.
(c) The Series and CRMC represent and warrant that the Series will
at all times comply with the diversification requirements of
Section 817(h) of the Code and any regulations thereunder
applicable to variable contracts as defined in Section 817(d)
of the Code and any amendments or other modifications or
successor provisions to such Sections or regulations (and any
revenue rulings, revenue procedures, notices, and other
published announcements of the Internal Revenue Service
interpreting those Sections or regulations), as if those
requirements applied directly to each such Master Fund. The
Series will notify the Company immediately upon having a
reasonable basis for believing that the Series or a Master
Fund thereunder has ceased to comply with the diversification
12
requirements or that the Series or Master Fund might not
comply with the diversification requirements in the future. In
the event of a breach of this representation and warranty the
Series will take all reasonable necessary steps to adequately
diversify the Series so as to achieve compliance within the
grace period afforded by Treasury Regulation 1.817-5.
18. The parties to this Agreement recognize that due to
differences in tax treatment or other considerations, the
interests of various Contract owners participating in one or
more of the Funds or Master Funds might, at some time, be in
conflict. Each party shall report to the other party any
potential or existing conflict of which it becomes aware. The
Board of Trustees of the Series shall promptly notify
Insurance Company and the Trust of the existence of
irreconcilable material conflict and its implications. If such
a conflict exists, Insurance Company will, at its own expense,
take whatever action it deems necessary to remedy such
conflict; in any case, Contract owners will not be required to
bear such expenses.
The Series hereby notifies Insurance Company and the Trust
that it may be appropriate to include in the Prospectus
pursuant to which a Contract is offered disclosure regarding
the risks of mixed and shared funding.
19. (a) Insurance Company shall indemnify and hold harmless CRMC, each
of the Master Funds, and each of its affiliates, directors,
officers, employees and agents and each person who controls
them within the meaning of the Securities Act of 1933, as
amended, from and against any and all losses, claims, damages,
liabilities and expenses, including reasonable attorneys' fees
("Losses"), they may incur, insofar as such Losses arise out
of or are based upon (i) Insurance Company's negligence or
willful misconduct in the performance of its duties and
obligations under this Agreement, (ii) Insurance Company's
violation of any Applicable Law in connection with the
performance of its duties and obligations under this
Agreement, and (iii) any breach by Insurance Company of any
provision of this Agreement, including any representation,
warranty or covenant made in the Agreement. Insurance Company
shall also reimburse CRMC, the Master Funds and their
respective affiliates for any legal or other expenses
reasonably incurred by any of them in connection with
investigating or defending against such Losses. This indemnity
provision is in addition to any other liability which
Insurance Company may otherwise have to CRMC, the Master Funds
or their respective affiliates.
(b) CRMC and the Series, as applicable, shall each indemnify and
hold harmless, Insurance Company and its directors, officers,
employees and agents and each person who controls them within
the meaning of the Securities Act of 1933, as amended, and the
Trust and its directors, officers, employees and agents and
each person who controls them within the meaning of the
Securities Act of 1933 as amended from and against any and all
Losses they may incur, insofar as such Losses arise out of or
are based upon (i) CRMC or the Series' negligence or willful
misconduct in the performance of its duties and obligations
under this Agreement, (ii) CRMC or the Series' violation of
Applicable Law in connection
13
with the performance of its duties and obligations under this
Agreement, and (iii) any breach by CRMC or the Series of any
provision of this Agreement, including any representation,
warranty or covenant made in the Agreement by CRMC or the
Series. CRMC or the Series, as applicable, shall also
reimburse Insurance Company for any legal or other expenses
reasonably incurred in connection with investigating or
defending against such Losses. This indemnity provision is in
addition to any other liability which CRMC or the Series may
otherwise have to Insurance Company.
(c) Promptly after receipt by a party entitled to indemnification
under this paragraph 19 (an "Indemnified Party") of notice of
the commencement of an investigation, action, claim or
proceeding, such Indemnified Party will, if a claim in respect
thereof is to be made against the indemnifying party under
this paragraph 19, notify the indemnifying party of the
commencement thereof. The indemnifying party will be entitled
to assume the defense thereof, with counsel satisfactory to
the Indemnified Party. After notice from the indemnifying
party of its intention to assume the defense of an action and
the appointment of satisfactory counsel, Indemnified Party
shall bear the expenses of any additional counsel obtained by
it, and the indemnifying party shall not be liable to such
Indemnified Party under this paragraph for any legal expenses
subsequently incurred by such Indemnified Party in connection
with the defense thereof other than reasonable costs of
investigation. The indemnifying party shall not, without the
prior written consent of the Indemnified Party, settle or
compromise the liability of the Indemnified Party; provided,
however, that in the event that the Indemnified Party fails to
provide its written consent, the indemnifying party shall
thereafter be liable to provide indemnification only to the
extent of the amount for which the action could otherwise have
been settled or compromised.
20. Insurance Company shall be responsible for assuring that the
Account calculates pass-through voting privileges of Contract
owners in a manner consistent with the method of calculating
pass-through voting privileges set forth in the current
Contract.
21. The parties understand that there is no intention to create a
joint venture in the subject matter of this Agreement.
Accordingly, the right to terminate this Agreement and to
engage in any activity not inconsistent with this Agreement is
absolute. This Agreement will terminate:
(a) by mutual agreement at any time; or
(b) any party at any time, with respect to one, some or all of the
Master Funds, upon sixty (60) days written notice to the other
parties; or
(c) at the option of Insurance Company, the Trust, CRMC or the
Series upon ten calendar days' prior written notice to the
other party if a final non-appealable administrative or
judicial decision is entered against the other party which has
a
14
material impact on the Contracts; or
(d) at the option of Insurance Company or the Trust, upon ten
calendar days' prior written notice, if shares of the Series
are not reasonably available; or
(e) at the option of Insurance Company or the Trust, immediately
upon written notice, if the Series or CRMC fails to meet the
requirements for diversification under Section 817 (or any
successor or similar provision) or to qualify as a RIC under
the Code or if the Insurance Company or Trust reasonably and
in good faith believes a Master Fund may fail to meet such
requirements or qualify; or
(f) in the event the Series' 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 an underlying
investment for the Funds or the Contracts issued or to be
issued by Insurance Company; in such event prompt notice shall
be given by Insurance Company, the Trust or the Series to each
of the other parties; or
(g) at Insurance Company's option by written notice to the Series
and/or CRMC if Insurance Company shall determine in its sole
judgment exercised in good faith, to stop offering a Fund
because either the Series or CRMC has suffered a material
adverse change in its business, operations, financial
condition or prospects since the date of this Agreement or is
the subject of material adverse publicity such termination to
be effective sixty (60) days' after receipt by the other
parties of written notice of the election to terminate; or
(h) at Insurance Company's option by written notice to the Series
and/or CRMC if Insurance Company shall determine in its sole
judgment exercised in good faith, that investment in the Funds
is no longer an appropriate investment under the Contracts or
no longer in the best interests of Contract owners, such
termination to be effective sixty (60) days' after receipt by
the other parties of written notice of the election to
terminate; or
(i) at the option of the Series or CRMC by written notice to
Insurance Company and the Trust if the Series or CRMC shall
determine in its sole judgment exercised in good faith, that
Insurance Company or the Trust has suffered a material adverse
change in its business, operations, financial condition or
prospects since the date of this Agreement or is the subject
of material adverse publicity, such termination to be
effective sixty (60) days' after receipt by the other parties
of written notice of the election to terminate.
The effective date for termination pursuant to any notice
given under this Paragraph shall be calculated beginning with
the date of receipt of such notice.
22. All notices, consents, waivers, and other communications under
this Agreement must be in writing, and will be deemed to have
been duly received: (a) when delivered by hand (with written
confirmation of receipt); (b) when sent by
15
telecopier (with written confirmation of receipt), provided
that a copy is mailed by registered mail, return receipt
requested; or (c) the day after it is sent by a nationally
recognized overnight delivery service, in each case to the
appropriate addresses and telecopier numbers set forth below
(or to such other addresses and facsimile numbers as a party
may designate by notice to the other parties):
IF TO INSURANCE COMPANY:
The Lincoln National Life Insurance Company
0000 X. Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Second Vice President
IF TO THE TRUST:
Lincoln Variable Insurance Products Trust
0000 X. Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
President
IF TO SERIES:
American Funds Insurance Series
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Facsimile No.:
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Facsimile No.:
IF TO CRMC:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention:
Facsimile No.:
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Floor
16
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Facsimile No.:
23. If this Agreement terminates, any provision of this Agreement
necessary to the orderly windup of business under it will
remain in effect as to that business, after termination.
24. If this Agreement terminates, the Series, at the Trust's
option, will continue to make additional shares of the Series
available for all existing Contracts as of the effective date
of termination (under the same terms and conditions as were
in effect prior to termination of this Agreement with respect
to existing Contract owners), unless the Series liquidates or
applicable laws prohibit further sales. The Trust agrees not
to redeem shares of the Series unless: (a) the Agreement is
terminated; (b) legitimately required to do so according to a
Contract owner's request; (c) under an order from the
Commission or pursuant to exemptive relief granted by the
Commission or pursuant to a vote of Contract owners; (d) as
otherwise agreed to or permitted among the parties; or
(e) Insurance Company or the Trust provides at least sixty
(60) days advance written notice.
25. The obligations of the Series under this Agreement are not
binding upon any of the Trustees, officers, employees or
shareholders (except CRMC if it is a shareholder) of the
Series individually, but bind only the Series' assets. When
seeking satisfaction for any liability of the Series in
respect of this Agreement, the Trust, Insurance Company and
the Account agree not to seek recourse against said Trustees,
officers, employees or shareholders, or any of them, or any
of their personal assets for such satisfaction.
Notwithstanding the foregoing, if Insurance Company or the
Trust seek satisfaction for any liability of the Series in
respect of this Agreement, Insurance Company (on behalf of
itself or any Account) and/or the Trust may seek recourse
against CRMC. All obligations of the Trust hereunder shall be
binding only upon the assets of Trust and shall not be
binding on any other series of the Trust or on the trustees,
officers or shareholders of the Trust or of any other series
of the Trust.
26. This Agreement shall be construed in accordance with the laws
of the State of New York without reference to its conflicts
of law provisions.
27. This Agreement and the parties' rights, duties and
obligations under this Agreement are not transferable or
assignable by any of them without the express, prior written
consent of the other parties hereto. Any attempt by a party
to transfer or assign this Agreement or any of its rights,
duties or obligations under this Agreement without such
consent is void; provided, however, that a merger of,
reinsurance arrangement by, or change of control of a party
shall not be deemed to be an assignment for purposes of this
Agreement.
28. CRMC and the Series agree that the names, addresses, and
other information
17
relating to the Contractholders or prospects for the sale of
the Contracts developed by Insurance Company are the
exclusive property of the Insurance Company and may not be
used by CRMC, the Series, or their affiliates or agents
without the written consent of the Insurance Company except
for carrying out the terms of this Agreement or as otherwise
provided for in this Agreement and any amendments thereto.
Each party to this Agreement agrees to maintain the
confidentiality of all information (including personal
financial information of the customers of either party)
received from the other party pursuant to this Agreement.
Each party agrees not to use any such information for any
purpose, or disclose any such information to any person,
except as permitted or required by applicable laws, rules and
regulations, including the Xxxxx-Xxxxx-Xxxxxx Act and any
regulations promulgated thereunder.
29. Each party hereto shall cooperate with the other parties and
all appropriate governmental authorities and shall permit
authorities reasonable access to its books and records upon
proper notice in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated
hereby. Each party shall maintain and preserve all records in
its possession as required by law to be maintained and
preserved in connection with the provision of the services
contemplated hereunder. Upon the request of a party, the
other party shall provide copies of all records as may be
necessary to (a) monitor and review the performance of either
party's activities, (b) assist either party in resolving
disputes, reconciling records or responding to auditor's
inquiries, (c) comply with any request of a governmental body
or self-regulatory organization, (d) verify compliance by a
party with the terms of this Agreement, (e) make required
regulatory reports, or (f) perform general customer service.
The parties agree to cooperate in good faith in providing
records to one another under this provision.
30. The following Sections shall survive any termination of this
Agreement: [ ].
31. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein have been duly authorized by all
necessary corporate or board action, as applicable, by such
party and when so executed and delivered this Agreement will
be the valid and binding obligation of such party enforceable
in accordance with its terms, and will not result in its
violating any applicable law or breaching or otherwise
impairing any of its contractual obligations.
32. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement shall not be affected thereby.
33. This Agreement and any amendment to it may be executed in one
or more counterparts. All of those counterparts shall
constitute one and the same agreement.
18
34. In the event of a dispute between the parties with respect to
this Agreement, and in the event the parties are unable to
resolve the dispute between them, such dispute shall be
settled by arbitration; one arbitrator to be named by each
party to the disagreement and a third arbitrator to be
selected by the two arbitrators named by the parties. The
decision of a majority of the arbitrators shall be final and
binding on all parties to the arbitration. The expenses of
such arbitration shall be paid by the non-prevailing party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested as of the date first above written.
THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY (ON BEHALF OF ITSELF AND EACH
ACCOUNT)
Attest:
By: -------------------------------
------------------------------- Its:
THE TRUST
Attest:
By: -------------------------------
------------------------------- Its:
AMERICAN FUNDS INSURANCE SERIES
Attest:
By: -------------------------------
------------------------------- Its: Secretary
CAPITAL RESEARCH AND MANAGEMENT COMPANY
Attest:
By: -------------------------------
------------------------------- Its: Vice President and Secretary
19
LINCOLN LIFE & ANNUITY COMPANY OF NEW
YORK (ON BEHALF OF ITSELF AND EACH
ACCOUNT)
Attest:
By: -------------------------------
------------------------------- Its: -------------------------------
Attachment A
____________
Master Funds and Corresponding Funds
____________________________________
American Funds Insurance Series Trust Funds:
Master Funds:
. AFIS Growth Fund . LVIP American Growth Fund
. AFIS Growth-Income Fund . LVIP American Growth-Income Fund
. AFIS International Fund . LVIP American International Fund
. AFIS Global Growth Fund . LVIP American Global Growth Fund
. AFIS Global Small Cap Fund . LVIP American Global Small Cap
. .
21
Attachment B
____________
LIST OF ACCOUNTS:
_________________
Lincoln Life Variable Annuity Account N
_______________________________________
Lincoln New York Account N for Variable Annuities
_________________________________________________
22
