PARTICIPATION AGREEMENT
By and Among
XXXXX FARGO VARIABLE TRUST
And
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
And
XXXXXXXX INC.
THIS AGREEMENT, made and entered into this 20th day of August, 2001, by and
among The Lincoln National Life Insurance Company, an Indiana corporation (the
"Company"), on its own behalf and on behalf of each separate account of the
Company named in Exhibit A to this Agreement, as may be amended from time to
time (each separate account, a "Separate Account"), and Xxxxx Fargo Variable
Trust, an open-end diversified management investment company organized under the
laws of the State of Delaware (the "Trust"), and Xxxxxxxx Inc., an Arkansas
corporation (the "Underwriter").
WHEREAS, the Trust engages in business as an open-end diversified,
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance contracts and variable annuity contracts to be offered by insurance
companies which have entered into participation agreements substantially similar
to this Agreement ("Participating Insurance Companies"); and
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WHEREAS, beneficial interests in the Trust are divided into several series
of shares, each representing the interest in a particular managed portfolio of
securities and other assets (each, a "Fund"); and
WHEREAS, an order from the U.S. Securities and Exchange Commission (the
"SEC" or "Commission"), dated Sept. 28, 1998 (File No. 812-11158), grants
Participating Insurance Companies and variable annuity separate accounts and
variable life insurance separate accounts relief from the provisions of Sections
9(a), 13(a), 15(a) and 15(b) of the Investment Company Act of 1940, as amended
(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 Trust to be sold to and held by
variable annuity separate accounts and variable life insurance separate accounts
of both affiliated and unaffiliated Participating Insurance Companies and
qualified pension and retirement plans ("Mixed and Shared Funding Order"), and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Company has registered or will register certain variable
annuity and variable life insurance contracts under the 1933 Act, unless exempt
therefrom, and named in Exhibit A to this Agreement, as it may be amended from
time to time (the "Contracts"); and
WHEREAS, the Separate Accounts are duly organized, validly existing
segregated asset accounts, established by resolution of the Board of Directors
of the Company under the insurance laws of the State of Indiana, to set aside
and invest assets attributable to the Contracts; and
WHEREAS, the Company has registered the Separate Accounts as unit
investment trusts under the 1940 Act, unless exempt therefrom; and
WHEREAS, the Underwriter is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (hereinafter the "1934
Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (hereinafter "NASD");
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Funds named in
Exhibit B on behalf of the Separate Accounts to fund the Contracts, and the
Underwriter is authorized to sell such shares to unit investment trusts such as
the Separate Accounts at net asset value;
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NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Trust, and the Underwriter agree as follows:
ARTICLE I SALE OF TRUST SHARES
1.1. The Underwriter agrees to sell to the Company those shares of the Trust
which the Company orders on behalf of the Separate Accounts, executing such
orders on a daily basis at the net asset value next computed after receipt
and acceptance by the Trust or its designee of the order for the shares of
the Trust. For purposes of this Section 1.1, the Company shall be the
designee of the Trust for receipt of such orders from each Separate Account
and receipt by such designee shall constitute receipt by the Trust;
provided that the Trust receives notice of such order by 9:30 a.m. New York
Time on the next following Business Day. "Business Day" shall mean any day
on which the New York Stock Exchange is open for trading. Exceptions will
be approved on a case by case basis. The Trust will confirm receipt of each
trade (ending share balance by account and fund) by 11:00 am New York Time
on the day the trade is placed with the Trust using a mutually agreed upon
format.
1.2. The Trust agrees to make its shares available indefinitely for purchase at
the applicable net asset value per share by Participating Insurance
Companies and their separate accounts on each Business Day; provided,
however, that the Board of Trustees of the Trust (hereinafter the
"Trustees") may refuse to sell shares of any Fund to any person, or suspend
or terminate the offering of shares of any Fund, if such action is required
by law or by regulatory authorities having jurisdiction, or is, in the sole
discretion of the Trustees, acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, necessary in
the best interests of the shareholders of such Fund.
1.3. The Trust and the Underwriter agree that shares of the Trust will be sold
only to Participating Insurance Companies and their separate accounts, and
to qualified pension and retirement plans. No shares of the Trust will be
sold to the general public.
1.4. The Trust and the Underwriter will not sell Trust shares to any insurance
company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII, and Section 2.8 of
Article II of this Agreement are in effect to govern such sales.
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1.5. The Trust will not accept a purchase order from qualified pension or
retirement plan if such purchase would make the plan shareholder an owner
of 10 percent or more of the assets of a Fund unless such plan executes an
agreement with the Trust governing participation in such Fund that includes
the conditions set forth herein to the extent applicable. A qualified
pension or retirement plan will execute an application containing an
acknowledgment of this condition at the time of its initial purchase of
shares of any Fund.
1.6. The Trust agrees to redeem for cash, upon the Company's request, any full
or fractional shares of the Trust held by the Company, executing such
requests on a daily basis at the net asset value next computed after
receipt and acceptance by the Trust or its designee of the request for
redemption. For purposes of this Section 1.6, the Company shall be the
designee of the Trust for receipt of requests for redemption from each
Separate Account and receipt by such designee shall constitute receipt by
the Trust; provided the Trust receives notice of request for redemption by
9:30 a.m. New York Time on the next following Business Day. Payment shall
be made on the same Business Day that the Trust receives notice of the
order in federal funds initiated by wire to the Company's account as
designated by the Company in writing no later than the end of that Business
Day as long as the banking system is open for business. If the banking
system is closed, payment will be initiated the next day the banking system
is open for business. If payment is not received by the Company by the end
of the Business Day, the Trust shall, upon the Company's request, promptly
reimburse the Company for any charges, costs, fees, interest or other
expenses incurred in connection with advances, borrowing or overdrafts.
Interest will bear a rate per annum equal to the Federal Funds Rate.
1.7. Purchase, redemption, and exchange orders placed by the Company shall be
placed separately for each Fund and shall not be netted with respect to any
Fund With respect to payment of the purchases by the Company and of
redemption proceeds by the Trust, the Company and the Trust shall not net
purchases and redemptions. The trust will send one wire for all redemptions
and the company will transmit one payment for all purchases for all Funds
in accordance with Section 1.8.
1.8. The Trust, Underwriter and Company agree that all amounts available under
the Contracts shall be invested in the Funds, in such other Funds managed
by Xxxxx Fargo
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Bank as may be mutually agreed to in writing by the parties hereto, in the
Company's general account, or in investment companies other than the Trust.
1.9. In the event of net purchase, the Company shall pay for shares in federal
funds initiated by wire no later than end of business New York Time on the
next Business Day after an order to purchase the Shares is deemed to be
received in accordance with the provisions of Section 1.1 hereof as long as
the banking system is open for business. If the banking system is closed,
payment will be initiated the next day that the banking system is open for
business. If payment is not received by Trust by the end of the Business
Day, the Company shall, upon the Trust's request, promptly reimburse the
Trust for any charges, costs, fees, interest or other expenses incurred in
connection with advances, borrowing or overdrafts. Interest will bear a
rate per annum equal to the Federal Funds Rate. For purposes of Section 2.4
and Section 2.11, upon receipt by the Trust of the federal funds so wired,
such funds shall cease to be the responsibility of the Company and shall
become the responsibility of the Fund.
1.10. Issuance and transfer of the Trust's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Separate
Account. Purchase and redemption orders for Trust shares will be recorded
in an appropriate title for each Separate Account or the appropriate
subaccount of each Separate Account.
1.11. The Trust shall furnish notice on or before ex-dividend date using a
mutually agreed upon format to the Company of any income, dividends, or
capital gain distributions payable on the Trust's shares. The Company
hereby elects to receive all such dividends and distributions as are
payable on the Fund shares in the form of additional shares of that Fund.
The Company reserves the right to revoke this election and to receive all
such dividends and distributions in cash. The Trust shall notify the
Company of the number of shares so issued as payment of such dividends and
distributions. Each year the Trust will provide the Company with a dividend
and capital gain payment schedule.
1.12. The Trust shall make the net asset value per share for each Fund available
to the Company on a daily basis as soon as reasonably practical after the
net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 6:00 p.m. New York Time
each Business Day. The Trust will notify the
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Company when and if Trust does not communicate the net asset value per
share by 6:00 p.m. New York Time.
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ARTICLE II REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act, unless exempt therefrom, and that the
Contracts will be issued and sold in compliance with all applicable federal
and state laws. The Company further represents and warrants that: (i) it is
an insurance company duly organized and validly existing under applicable
law; (ii) it has legally and validly established each Separate Account as a
segregated asset account under applicable state law and has registered each
Separate Account as a unit investment trust in accordance with the
provisions of the 1940 Act, unless exempt therefrom, to serve as segregated
investment accounts for the Contracts; and (iii) it will maintain such
registration, if required, for so long as any Contracts are outstanding.
The Company shall amend any registration statement under the 1933 Act for
the Contracts and any registration statement under the 1940 Act for the
Separate Accounts from time to time as required in order to effect the
continuous offering of the Contracts or as may otherwise be required by
applicable law. The Company shall register and qualify the Contracts for
sale in accordance with the securities laws of the various states only if,
and to the extent, deemed necessary by the Company.
2.2. Subject to Article VI hereof, the Company represents that the Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment, or annuity contracts under applicable provisions of the Internal
Revenue Code and that it will maintain such treatment and that it will
notify the Trust and the Underwriter 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.
2.3. The Company represents and warrants that all of its directors, officers,
employees, investment advisers, and other individuals/entities dealing with
the money and/or securities of the Trust are covered by a blanket fidelity
bond or similar coverage in an amount not less than $5 million. The
aforesaid includes coverage for larceny and embezzlement and is issued by a
reputable bonding company. The Company agrees that any amounts received
under such bond in connection with claims that derive from arrangements
described in this Agreement will be held by the Company for the prorata
benefit of the Trust. The Company agrees to see that this bond or another
bond
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containing these provisions is always in effect, and agrees to notify the
Trust and the Underwriter in the event that such coverage no longer
applies.
2.4. The Trust represents and warrants that Trust shares sold pursuant to this
Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law, and that the Trust is and shall
remain registered under the 1940 Act for as long as the Trust shares are
sold. The Trust shall amend the registration statement for its shares under
the 1933 and the 1940 Acts from time to time as required in order to effect
the continuous offering of its shares. The Trust shall register and qualify
the shares for sale in accordance with the laws of the various states only
if, and to the extent, deemed advisable by the Trust or the Underwriter.
2.5. The Trust and Underwriter represent and warrant that Trust is currently
qualified as a Regulated Investment Company under Subchapter M of the
Internal Revenue Code, and that Trust will make every effort to maintain
such qualification (under Subchapter M or any successor or similar
provision).
2.6. The Trust makes no representations as to whether any aspect of its
operations, including but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the
various states, except that the Trust represents that it is and shall at
all times remain in compliance with the laws of the state of Delaware to
the extent required to perform this Agreement.
2.7. The Trust represents and warrants that to the extent that it has decided to
finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act,
and its Board of Trustees, a majority of whom are not interested persons of
the Trust, have approved a plan under Rule 12b-1 ("Rule 12b-1 Plan") to
finance distribution expenses.
2.8. The Trust and Underwriter represent and warrant that the Trust is lawfully
organized and validly existing under the laws of Delaware and that the
Trust does and will comply with applicable provisions of the 0000 Xxx.
2.9. The Trust represents and warrants that it and all of its trustees,
officers, employees and other individuals/entities having access to the
funds and/or securities of the Trust are and continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of
the Trust 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
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time. The aforesaid bond includes coverage for larceny and embezzlement and
is issued by a reputable bonding company.
2.10.The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Trust's
shares in accordance with all applicable federal and state securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.11.The Underwriter represents and warrants that the Trust's investment
manager, Xxxxx Fargo Funds Management, LLC, is registered as an investment
adviser under all applicable federal and state securities laws and that the
investment manager will perform its obligations to the Trust in accordance
with any applicable state and federal securities laws.
ARTICLE III PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Underwriter shall provide the Company, at the Trust's expense, with as
many copies of the Trust's current prospectus as the Company may reasonably
request. If requested by the Company in lieu thereof, the Trust shall
provide such documentation including a final copy of a current prospectus
set in type at the Trust's expense and other assistance as is reasonably
necessary in order for the Company at least annually (or more frequently if
the Trust's prospectus is amended more frequently) to have the new
prospectus for the Contracts and the Trust's new prospectus printed
together in one document; in such case at the Trust's expense.
3.2. The Trust's prospectus shall state that the statement of additional
information for the Trust is available from the Underwriter (or, in the
Trust's discretion, the Prospectus shall state that such statement is
available from the Trust).
3.3. The Trust, at its expense, shall provide the Company with copies of its
proxy material, if any, reports to shareholders and other communications to
shareholders in such quantity as the Company shall reasonably require and
the Trust shall bear the costs of distributing them to existing Contract
owners or participants.
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3.4. The Trust hereby notifies the Company that it is appropriate to include in
the prospectuses pursuant to which the Contracts are offered disclosure
regarding the potential risks of mixed and shared funding.
3.5. To the extent required by law the Company shall:
(1) solicit voting instructions from Contract owners or
participants;
(2) vote the Trust shares held in each Separate Account in
accordance with instructions received from Contract owners
or participants; and
(3) vote Trust shares held in each Separate Account for which no
timely instructions have been received, in the same
proportion as Trust shares of such Fund for which
instructions have been received from the Company's Contract
owners or participants;
for so long as and to the extent that the 1940 Act requires pass-through
voting privileges for variable contract owners. The Company reserves the
right to vote Trust shares held in any segregated asset account in its own
right, to the extent permitted by law. Participating Insurance Companies
shall be responsible for assuring that each of their separate accounts
participating in the Trust calculates voting privileges in a manner
consistent with other Participating Insurance Companies and as required by
the Mixed and Shared Funding Order. The Trust will notify the Company of
any changes of interpretation or amendment to the Mixed and Shared Funding
Order.
3.6. The Trust will comply with all provisions of the 1940 Act requiring voting
by shareholders, and in particular, the Trust will either provide for
annual meetings (except to the extent that the Commission may interpret
Section 16 of the 1940 Act not to require such meetings) or comply with
Section 16(c) of the 1940 Act (although the Trust is not 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) of the 1940 Act. Further, the Trust will act
in accordance with the Commission's interpretation of the requirements of
Section 16(a)
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with respect to periodic elections of Trustees and with whatever rules the
Commission may promulgate with respect thereto.
3.7. The Trust and the Underwriter agree to provide the Company all Trust
proxies, reports, and prospectuses (including supplements) in HTML, PDF and
hard copy in final form no later than 15 calendar days before they must be
mailed: Reports - February 13th and August 14th, Prospectuses - April 15th.
The Trust will customize prospectuses (including supplements), reports and
proxies to include only fund(s) offered in each of the contracts.
ARTICLE IV SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to the Trust or
the Underwriter, each piece of sales literature or other promotional
material in which the Trust or the Trust's investment manager, sub-advisers
or Underwriter is named, at least five Business Days prior to its use. No
such material shall be used if the Trust or the Underwriter reasonably
objects in writing to such use within five Business Days after receipt of
such material.
4.2. The Company represents and agrees that sales literature for the Contracts
prepared by the Company or its affiliates will be consistent with every
law, rule, and regulation of any regulatory agency or self-regulatory
agency that applies to the Contracts or to the sale of the Contracts,
including, but not limited to, NASD Conduct Rule 2210 and IM-2210-2
thereunder.
4.3. The Company shall not give any information or make any representations or
statements on behalf of the Trust or concerning the Trust in connection
with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for
the Trust shares as such registration statement and prospectus may be
amended or supplemented from time to time, or in reports or proxy
statements for the Trust, or in sales literature or other promotional
material approved by the Trust or by the Underwriter, except with the
permission of the Trust or the Underwriter. The Trust and the Underwriter
agree to respond to any request for approval on a prompt and timely basis.
The Company shall adopt and implement procedures reasonably designed to
ensure that information concerning the Trust, the Underwriter, or any of
their affiliates which is intended for use by brokers or agents selling the
Contracts (I.E., information that
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is not intended for distribution to Contract owners or prospective Contract
owners) is so used, and neither the Trust, the Underwriter, nor any of
their affiliates shall be liable for any losses, damages, or expenses
relating to the improper use of such broker only materials by agents of the
Company or its affiliates who are unaffiliated with the Trust or the
Underwriter. The parties hereto agree that this Section 4.3 is not intended
to designate nor otherwise imply that the Company is an underwriter or
distributor of the Trust's shares.
4.4. The Trust or the Underwriter shall furnish, or shall cause to be furnished,
to the Company or its designee, each piece of sales literature or other
promotional material in which the Company, its Separate Account, or the
Contracts are named, at least five Business Days prior to its use. No such
material shall be used if the Company reasonably objects in writing to such
use within five Business Days after receipt of such material.
4.5. The Trust represents and agrees that sales literature for the Trust
prepared by the Trust or its affiliates in connection with the sale of the
Contracts will be consistent with every law, rule, and Regulation of any
regulatory agency or self regulatory agency that applies to the Trust or to
the sale of Trust shares, including, but not limited to, NASD Conduct Rule
2210 and IM-2210-2 thereunder.
4.6. The Trust and the Underwriter shall not give any information or make any
representations on behalf of the Company or concerning the Company, each
Separate Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus for the
Contracts, as such registration statement and prospectus may be amended or
supplemented from time to time, or in published reports for each Separate
Account which are in the public domain or approved by the Company for
distribution to Contract owners or participants, or in sales literature or
other promotional material approved by the Company, except with the
permission of the Company. The Company agrees to respond to any request for
approval on a prompt and timely basis. The Trust and the Underwriter shall
xxxx information produced by or on behalf of the Trust "FOR BROKER USE
ONLY" if it is intended for use only by brokers or agents selling the
Contracts (I.E., information that is not intended for distribution to
Contract owners or prospective Contract owners)`, and neither the Company
nor any of its affiliates shall be liable for any losses, damages, or
expenses
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arising on account of the use by brokers of such information with third
parties in the event that is not so marked.
4.7. The Trust will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional
information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Trust
or its shares, within 20 Business Days of the filing of such document with
the SEC or other regulatory authorities. The Trust or Underwriter shall
promptly inform the Company of the results of any examination by the SEC
(or other regulatory authorities) that relates to the Trust, and the Trust
or Underwriter shall provide the Company with a copy of relevant portions
of any "deficiency letter" or other correspondence or written report
regarding any such examination.
4.8. The Company will provide to the Trust at least one complete copy of all
registration statements, prospectuses, statements of additional
information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no action letters, and all amendments to any of the above,
that relate to the Trust within 20 Business Days of the filing of such
document with the SEC or other regulatory authorities. The Company shall
promptly inform the Trust of the results of any examination by the SEC (or
other regulatory authorities) that relates to the Contracts and their
investment in the Trust, and the Company shall provide the Trust with a
copy of relevant portions of any "deficiency letter" or other
correspondence or written report regarding any such examination.
4.9. For purposes of this Article IV, the phrase "sales literature or 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),
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, registration
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statements, prospectuses, statements of additional information, shareholder
reports, and proxy materials and any other material constituting sales
literature or advertising under NASD Conduct Rules, the 1940 Act or the
1933 Act.
0.00.Xxxxx or Underwriter will provide a signed compliance report, as
reasonably requested by Company or its designee, on a quarterly basis to
include but not limited to: 817(h), subchapter M, and Prospectus guidelines
Trust or Underwriter will provide fund statistics and commentaries (as
reasonably required by Company) in electronic format each calendar quarter,
no later than the 15th of the month following quarter-end.
ARTICLE V FEES AND EXPENSES
5.1. The Trust and Underwriter shall pay no fee or other compensation to the
Company under this Agreement, except subject a Rule 12b-1 Plan to finance
distribution expenses, in which case, subject to obtaining any required
exemptive orders or other regulatory approvals, the Underwriter may make
payments to the Company or to the underwriter for the Contracts if and in
amounts agreed to by the Underwriter in writing. Each party, however,
shall, in accordance with the allocation of expenses specified in this
Agreement, reimburse other parties for expenses initially paid by one party
but allocated to another party. In addition, nothing herein shall prevent
the parties hereto from otherwise agreeing to perform, and arranging for
appropriate compensation for, other services relating to the Trust and/or
to the Separate Accounts.
5.2. All expenses incident to performance by the Trust of this Agreement shall
be paid by the Trust to the extent permitted by law. All Trust shares will
be duly authorized for issuance and registered in accordance with
applicable federal law and to the extent deemed advisable by the Trust, in
accordance with applicable state law, prior to sale. The Trust shall bear
the expenses for the cost of registration and qualification of the Trust's
shares, preparation and filing of the Trust's prospectus and registration
statement, Trust proxy materials and reports, printing and mailing of Trust
prospectuses (including supplements thereto), proxy materials and reports
for existing Contract owners, setting in type the Trust's prospectuses, the
preparation of all statements and notices required by any federal or state
law, all taxes on the issuance or transfer of the Trust's shares, and any
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expenses permitted to be paid or assumed by the Trust pursuant to any Rule
12b-1 Plan under the 1940 Act duly adopted by the Trust.
5.3. The Company shall bear the expenses of printing and distributing the Trust
prospectuses and proxy statements and shareholder reports used in
connection with new sales. The Company shall bear all expenses associated
with the registration, qualification, and filing of the Contracts under
applicable federal securities and state insurance laws; the cost of
preparing, printing, and distributing the Contracts' prospectuses and
statements of additional information; and the cost of printing and
distributing annual individual account statements for Contract owners as
required by state insurance laws.
ARTICLE VI DIVERSIFICATION
6.1. The Trust and Underwriter represent and warrant that, at all times, the
Funds will comply with Section 817 of the Code and all regulations thereof,
relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts and any amendments or other
modifications to such Section or Regulations. In the event a Fund ceases to
so qualify, the Trust will take all reasonable steps (a) to notify Lincoln
immediately of such event and (b) to adequately diversify the Fund so as to
achieve compliance with the grace period afforded by Treasury Regulation
1.817-5.
ARTICLE VII POTENTIAL CONFLICTS
7.1. If and to the extent that the Trust engages in mixed and shared funding as
contemplated by exemptive relief provided by the SEC and applicable to the
Trust, this Article VII shall apply.
7.2. The Board of Trustees of the Trust (the "Trust Board") will monitor the
Trust for the existence of any material irreconcilable conflict among the
interests of the Contract owners of all separate accounts investing in the
Trust. A material irreconcilable conflict may arise for a variety of
reasons, including: (a) an action by any state insurance regulatory
authority; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or 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 Fund are being managed; (e) a difference in
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voting instructions given by variable annuity contract owners, variable
life insurance contract owners, and trustees of qualified pension or
retirement plans; (f) a decision by a Participating Insurance Company to
disregard the voting instructions of Contract owners; or (g) if applicable,
a decision by a qualified pension or retirement plan to disregard the
voting instructions of plan participants. The Trust Board shall promptly
inform the Company if it determines that a material irreconcilable conflict
exists and the implications thereof. A majority of the Trust Board shall
consist of Trustees who are not "interested persons" of the Trust.
7.3. The Company has reviewed a copy of the Mixed and Shared Funding Order, and
in particular, has reviewed the conditions to the requested relief set
forth therein. The Company agrees to assist the Trust Board in carrying out
its responsibilities under the Mixed and Shared Funding Order, by providing
the Trust Board with all information reasonably requested by the Trust
Board to consider any issues raised. This includes, but is not limited to,
an obligation by the Company to inform the Trust Board whenever Contract
owner voting instructions are disregarded. The Trust Board shall record in
its minutes or other appropriate records, all reports received by it and
all action with regard to a conflict.
7.4. If it is determined by a majority of the Trust Board, or a majority of its
disinterested Trustees, that a material irreconcilable conflict exists, the
Company shall, at its expense and to the extent reasonably practicable (as
determined by a majority of the disinterested Trustees), take whatever
steps are necessary to remedy or eliminate the material irreconcilable
conflict, which may include: (a) withdrawing the assets allocable to some
or all of the Separate Accounts from the relevant Fund and reinvesting such
assets in a different investment medium, including another Fund, or in the
case of insurance company participants submitting the question as to
whether such segregation should be implemented by a vote of all affected
Contract owners and, as appropriate, segregating the assets of any
appropriate group (I.E., annuity Contract owners or life insurance 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; or (b) establishing a new registered
management investment company or managed separate account.
16
7.5. If the Company's disregard of voting instructions could conflict with the
majority of Contract owner voting instructions, and the Company's judgment
represents a minority position or would preclude a majority vote, the
Company may be required, at the Trust's election, to withdraw the Separate
Account's investment in the Trust and terminate this Agreement with respect
to such Separate Account, and no charge or penalty will be imposed as a
result of such withdrawal. Any such withdrawal and termination shall take
place within three (3) months, or longer if there is pending SEC approval
of a Substitution Order to effect the withdrawal, after written notice is
given that this provision is being implemented, subject to applicable law
but in any event consistent with the terms of the Mixed and Shared Funding
Order. Until such withdrawal and termination is implemented, the
Underwriter and the Trust shall continue to accept and implement orders by
the Company for the purchase and redemption of shares of the Trust. Such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of
disinterested Trustees.
7.6. If a particular state insurance regulator's decision applicable to the
Company conflicts with the majority of other state insurance regulators,
then the Company will withdraw the Separate Account's investment in the
Trust and terminate this Agreement with respect to such Separate Account
within three months, or longer if there is pending SEC approval of a
Substitution Order to effect the withdrawal after the Trust informs the
Company of a material irreconcilable conflict, subject to applicable law
but in any event consistent with the terms of the Mixed and Shared Funding
Order. Until such withdrawal and termination is implemented, the
Underwriter and the Trust shall continue to accept and implement orders by
the Company for the purchase and redemption of shares of the Trust. Such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of
disinterested Trustees.
7.7. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of
the disinterested members of the Trust Board shall determine whether any
proposed action adequately remedies any material irreconcilable conflict,
but in no event will the Trust or the Underwriter be required to establish
a new funding medium for the Contracts. The
17
Company shall not be required by Section 7.3 to establish a new funding
medium for the Contracts.
7.8. The Trust Board's determination of the existence of a material
irreconcilable conflict and its implication will be made known in writing
to the Company.
7.9. The Company shall at least annually submit to the Trust Board such reports,
materials, or data as the Trust Board may reasonably request so that the
Trustees may fully carry out the duties imposed upon the Trust Board by the
Mixed and Shared Funding Order, and said reports, materials and data shall
be submitted more frequently if deemed appropriate by the Trust Board.
7.10. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3(T) 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 Order) on terms
and conditions materially different from those contained in the Mixed and
Shared Funding Order, the Trust and/or the Company, 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.
ARTICLE VIII INDEMNIFICATION
8.1. INDEMNIFICATION BY THE COMPANY
(a) The Company agrees to indemnify and hold harmless the Trust,
the Underwriter, and each of the Trust's or the Underwriter's directors,
officers, employees, or agents and each person, if any, who controls the
Trust or the Underwriter within the meaning of such terms under the federal
securities laws (collectively, the "indemnified parties" for purposes of
this Section 8.1) against any and all losses, claims, damages, 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,
regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Trust's shares or
the Contracts and:
18
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statements, prospectuses or statements of
additional information for 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 in light of the
circumstances in which they were made; provided that this
agreement to indemnify shall not apply as to any indemnified
party if such statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished to the Company by or
on behalf of the Trust for use in the registration
statement, prospectus or statement of information for the
Contracts, or in the Contracts or sales literature (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Trust shares; or
(ii) arise out of or as a result of statements or representations
by or on behalf of the Company (other than statements or
representations contained in the Trust registration
statement, Trust prospectus or sales literature or other
promotional material of the Trust 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 Trust shares;
or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Trust's
registration statement, prospectus, statement of additional
information, or sales literature or other promotional
material of the Trust or any amendment
19
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 in light of the circumstances in which they
were made, if such a statement or omission was made in
reliance upon and in conformity with information furnished
to the Trust by or on behalf of the Company or persons under
its control; or
(iv) arise as a result of any failure by the Company to provide
the services and furnish the materials or to make any
payments under the terms of this Agreement; or
(v) arise out of any material breach of any representation
and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach by the
Company of this Agreement;
except to the extent provided in Sections 8.1(b) and 8.4 hereof. This
indemnification shall be in addition to any liability which the
Company may otherwise have.
(b) No party shall be entitled to indemnification by the Company
if such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard of duty by the party seeking indemnification.
(c) The indemnified parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Trust shares or the
Contracts or the operation of the Trust.
8.2. INDEMNIFICATION BY THE UNDERWRITER
(a) The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors, officers, employees, or agents and each
person, if any, who controls the Company within the meaning of such terms
under the federal securities laws (collectively, the "indemnified parties"
for purposes of this Section 8.2) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the
20
written consent of the Underwriter), or litigation (including reasonable
legal and other expenses) to which the indemnified parties may become
subject under any statute, regulation, at common law or otherwise, insofar
as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements are related to the sale or acquisition of
the Trust'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, prospectus, or statement of
additional information for the Trust, or sales literature or
other promotional material of the Trust (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 in
light of the circumstances in which they were made; provided
that this agreement to indemnify shall not apply as to any
indemnified party if such statement or omission or such
alleged statement or omission was made in reliance upon and
in conformity with information furnished to the Underwriter
or the Trust by or on behalf of the Company for use in the
registration statement, prospectus, or statement of
additional information for the Trust or in sales literature
of the Trust (or any amendment or supplement thereto) or
otherwise for use in connection with the sale of the
Contracts or Trust shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Contracts or in the Contract or Trust registration
statement, the Contract or Trust prospectus, statement of
additional information, or sales literature or other
promotional material for the Contracts or of the Trust not
supplied by the Underwriter or persons under the control of
the Underwriter) or wrongful conduct of the Underwriter or
persons
21
under the control of the Underwriter, with respect to the
sale or distribution of the Contracts or Trust shares; or
(iii)arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, statement of additional information,
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 in light of the circumstances in which they were
made, if such statement or omission was made in reliance
upon and in conformity with information furnished to the
Company by or on behalf of the Underwriter or persons under
the control of the Underwriter; or
(iv) arise as a result of any failure by the Underwriter to
provide the services and furnish the materials under the
terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with
the diversification requirements and procedures related
thereto specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter;
except to the extent provided in Sections 8.2(b) and 8.4 hereof. This
indemnification shall be in addition to any liability which the Underwriter
may otherwise have.
22
(b) No party shall be entitled to indemnification by the
Underwriter if such loss, claim, damage, liability or litigation is due to
the willful misfeasance, bad faith, gross negligence, or reckless disregard
of duty by the party seeking indemnification.
(c) The indemnified parties will promptly notify the Underwriter
of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Contracts or the operation of
each Separate Account.
8.3. INDEMNIFICATION BY THE TRUST
(a) The Trust agrees to indemnify and hold harmless the Company
and each of its directors, officers, employees, or agents and each person,
if any, who controls the Company within the meaning of such terms under the
federal securities laws (collectively, the "indemnified parties" for
purposes of this Section 8.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent
of the Trust), or litigation (including reasonable legal and other
expenses) to which the indemnified parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to provide the
services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the diversification
requirements and procedures related thereto specified in
Article VI of this Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Trust;
except to the extent provided in Sections 8.3(b) and 8.4 hereof. This
indemnification shall be in addition to any liability which the Trust may
otherwise have.
23
(b) No party shall be entitled to indemnification by the Trust
if such loss, claim, damage, liability or litigation is due to the willful
misfeasance, bad faith, gross negligence, or reckless disregard of duty by
the party seeking indemnification.
(c) The indemnified parties will promptly notify the Trust of
the commencement of any litigation or proceedings against it in connection
with the issuance or sale of the Contracts or the operation of each
Separate Account.
8.4. INDEMNIFICATION PROCEDURE
Any person obligated to provide indemnification under this Article VIII
("indemnifying party" for the purpose of this Section 8.4) shall not be
liable under the indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to indemnification under
this Article VIII ("indemnified party" for the purpose of this Section 8.4)
unless such indemnified party shall have notified the indemnifying party in
writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon such indemnified party (or after such party shall have received
notice of such service on any designated agent), but failure to notify the
indemnifying party of any such claim shall not relieve the indemnifying
party from any liability which it may have to the indemnified party against
whom such action is brought under the indemnification provision of this
Article VIII, except to the extent that the failure to notify results in
the failure of actual notice to the indemnifying party and such
indemnifying party is damaged solely as a result of failure to give such
notice. In case any such action is brought against the indemnified party,
the indemnifying party will be entitled to participate, at its own expense,
in the defense thereof. The indemnifying party also shall be entitled to
assume the defense thereof, with consent of the indemnified party and
counsel satisfactory to the party named in the action. After notice from
the indemnifying party to the indemnified party of the indemnifying party'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
indemnifying party 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, unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the
24
named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability
by reason of such settlement or judgment.
A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
ARTICLE IX APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Delaware without
giving effect to conflicts of laws provisions thereof.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934, and
1940 Acts, and the rules, 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 Order)
and the terms hereof shall be interpreted and construed in accordance
therewith.
ARTICLE X TERMINATION
10.1.This Agreement shall terminate automatically in the event of its
assignment, unless made with written consent of each party; or:
(a) at the option of any party upon six months advance written
notice to the other parties; or
(b) at the option of the Company if shares of the Funds
delineated in Exhibit B are not reasonably available to meet the
requirements of the Contracts as determined by the Company; or
(c) at the option of the Trust upon institution of formal
proceedings against the Company by the NASD, the SEC, the insurance
commission of any state or
25
any other regulatory body, which would have a material adverse effect on
the Company's ability to perform its obligations under this Agreement; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust or the Underwriter by the NASD, the SEC, or
any state securities or insurance department or any other regulatory body,
which would have a material adverse effect on the Underwriter's or the
Trust's ability to perform its obligations under this Agreement; or
(e) at the option of the Company or the Trust upon a
determination by a majority of the Trust Board, or a majority of the
disinterested Trustees, that a material irreconcilable conflict exists
among the interests of (i) all contract owners of variable insurance
products of all separate accounts, or (ii) the interests of the
Participating Insurance Companies investing in the Trust as delineated in
Article VII of this Agreement; or
(f) at the option of the Company if the Trust ceases to qualify
as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code, or under any successor or similar provision, or if the
Company reasonably believes that the Trust may fail to so qualify; or
(g) at the option of the Company if the Trust fails to meet the
diversification requirements specified in Article VI hereof or if the
Company reasonably believes that the Trust will fail to meet such
requirements; or
(h) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement; or
(i) at the option of the Company, if the Company determines in
its sole judgment exercised in good faith, that either the Trust or the
Underwriter has suffered a material adverse change in its business,
operations, or financial condition since the date of this Agreement or is
the subject of material adverse publicity which is likely to have a
material adverse impact upon the business and operations of the Company or
the Contracts (including the sale thereof); or
(j) at the option of the Trust or Underwriter, if the Trust or
Underwriter respectively, shall determine in its sole judgment exercised in
good faith, that the Company has suffered a material adverse change in its
business, operations, or
26
financial condition since the date of this Agreement or is the subject of
material adverse publicity which is likely to have a material adverse
impact upon the business and operations of the Trust or Underwriter; or
(k) subject to the Trust's compliance with Article VI hereof, at
the option of the Trust in the event any of the Contracts are not issued or
sold in accordance with applicable requirements of federal and/or state
law. Termination shall be effective immediately upon such occurrence
without notice.
10.2. NOTICE REQUIREMENT
(a) In the event that any termination of this Agreement is based
upon the provisions of Article VII, such prior written notice shall be
given in advance of the effective date of termination as required by such
provisions.
(b) In the event that any termination of this Agreement is based
upon the provisions of Sections 10.l(b) - (d) or 10.1(g) - (i), prompt
written notice of the election to terminate this Agreement for cause shall
be furnished by the party terminating the Agreement to the non-terminating
parties, with said termination to be effective upon receipt of such notice
by the non-terminating parties.
(c) In the event that any termination of this Agreement is based
upon the provisions of Sections 10.1(j) or 10. l(k), prior written notice
of the election to terminate this Agreement for cause shall be furnished by
the party terminating this Agreement to the nonterminating parties. Such
prior written notice shall be given by the party terminating this Agreement
to the non-terminating parties at least 30 days before the effective date
of termination.
00.0.Xx is understood and agreed that the right to terminate this Agreement
pursuant to Section 10.1(a) may be exercised for any reason or for no
reason.
10.4.EFFECT OF TERMINATION
(a) Notwithstanding any termination of this Agreement pursuant
to Section 10.1 of this Agreement and subject to Section 1.3 of this
Agreement, the Company may require the Trust and the Underwriter to
continue to make available additional shares of the Trust for so long after
the termination of this Agreement as the Company desires pursuant to the
terms and conditions of this Agreement as provided in paragraph (b) below,
for all Contracts in effect on the effective date of termination of this
27
Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
without limitation, the owners of the Existing Contracts shall be permitted
to reallocate investments in the Trust, redeem investments in the Trust
and/or invest in the Trust upon the making of additional purchase payments
under the Existing Contracts. The parties agree that this Section 10.4
shall not apply to any terminations under Article VII and the effect of
such Article VII terminations shall be governed by Article VII of this
Agreement.
(b) If shares of the Trust continue to be made available after
termination of this Agreement pursuant to this Section 10.4, the provisions
of this Agreement shall remain in effect except for Section 10.l(a) and
thereafter the Trust, the Underwriter, or the Company may terminate the
Agreement, as so continued pursuant to this Section 10.4, upon written
notice to the other party, such notice to be for a period that is
reasonable under the circumstances but need not be for more than 90 days.
10.5.The Company shall not redeem Fund shares attributable to the Contracts (as
opposed to Fund shares attributable to the Company's assets held in the
Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"). Upon request,
the Company will promptly furnish to the Trust and the Underwriter the
opinion of counsel for the Company to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the
Contracts, the Company shall not prevent Contract Owners from allocating
payments to a Fund that was otherwise available under the Contracts without
first giving the Trust or the Underwriter 30 days notice of its intention
to do so.
ARTICLE XI NOTICES
Any notice shall be deemed duly given only if sent by hand, evidenced by
written receipt or by certified mail, return receipt requested, to the
other party at the address of such party set forth below or at such other
address as such party may from time to time specify
28
in writing to the other party. All notices shall be deemed given three
Business Days after the date received or rejected by the addressee.
If to the Trust: Xxxxx Fargo Variable Trust
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: C. Xxxxx Xxxxxxx, Secretary
If to the Company: The Lincoln National Life Insurance Company
0000 X. Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Second Vice
President
If to the Underwriter: Xxxxxxxx Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Vice President
ARTICLE XII MISCELLANEOUS
12.1.All persons dealing with the Trust must look solely to the property of the
Trust for the enforcement of any claims against the Trust as neither the
Trustees, officers, agents or shareholders assume any personal liability
for obligations entered into on behalf of the Trust.
12.2.Subject to law and regulatory authority, each party hereto shall treat as
confidential all information reasonably identified as such in writing by
any other party hereto (including without limitation the names and
addresses of the owners of the Contracts) and, except as
29
contemplated by this Agreement, shall not disclose, disseminate, or utilize
such confidential information until such time as it may come into the
public domain without the express prior written consent of the affected
party.
12.3.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.
12.4.This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
12.5.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.
12.6.This Agreement shall not be assigned by any party hereto without the prior
written consent of all the parties.
12.7.Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD, and state insurance regulators) and shall permit each other and
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.
12.8.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 trust 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.
12.9.The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts, the
Separate Accounts or the Funds of the Trust.
12.10.The Trust has filed a Certificate of Trust with the Secretary of State of
The State of Delaware. The Company acknowledges that the obligations of or
arising out of the Trust's Declaration of Trust are not binding upon any of
the Trust's Trustees, officers, employees, agents or shareholders
individually, but are binding solely upon the assets and property of the
Trust in accordance with its proportionate interest hereunder. The Company
further acknowledges that the assets and liabilities of each Fund are
separate
30
and distinct and that the obligations of or arising out of this instrument
are binding solely upon the assets or property of the Fund on whose behalf
the Trust has executed this instrument. The Company also agrees that the
obligations of each Fund hereunder shall be several and not joint, in
accordance with its proportionate interest hereunder, and the Company
agrees not to proceed against any Fund for the obligations of another Fund.
12.11.Except as otherwise expressly provided in this Agreement, neither the
Trust nor the underwriter nor any affiliate thereof shall use any
trademark, trade name, service xxxx or logo of the Company or any of its
affiliates, or any variation of any such trademark, trade name service xxxx
or logo, without the Company's prior consent, the granting of which shall
be at the Company's sole option. Except as otherwise expressly provided in
this Agreement, neither the Company nor any affiliate thereof shall use any
trademark, trade name, service xxxx or logo of the Trust or of the
Underwriter, or any variation of any such trademark, trade name, service
xxxx or logo, without the prior consent of either the Trust or of the
Underwriter, as appropriate, the granting of which shall be at the sole
option of the Trust or of the Underwriter, as applicable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Xxxxx Fargo Variable Trust
By: /s/ C. Xxxxx Xxxxxxx
--------------------
Name: C. Xxxxx Xxxxxxx
Title: Secretary
The Lincoln National Life Insurance Company
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Second Vice President
31
Xxxxxxxx Inc.
By:
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
32
EXHIBIT A
SEPARATE ACCOUNTS AND CONTRACTS
SUBJECT TO THE PARTICIPATION AGREEMENT
SEPARATE ACCOUNT(S):
Lincoln Life Variable Annuity Account W
CONTRACTS:
Xxxxx Fargo New Directions Core
Xxxxx Fargo New Directions Access
Xxxxx Fargo New Directions Access 4
33
EXHIBIT B
FUNDS SUBJECT TO THE PARTICIPATION AGREEMENT
Xxxxx Fargo Asset Allocation
Xxxxx Fargo Corporate Bond
Xxxxx Fargo Equity Value
Xxxxx Fargo Equity Income
Xxxxx Fargo Growth
Xxxxx Fargo International Equity
Xxxxx Fargo Large Company Growth
Xxxxx Fargo Money Market
Xxxxx Fargo Small Cap Growth
The Participation Agreement (the "Agreement"), dated August 20, 2001, by
and among Xxxxx Fargo Variable Trust, The Lincoln National Life Insurance
Company and Xxxxxxxx Inc. is hereby amended as follows:
Exhibit A of the Agreement is hereby deleted in its entirety and replaced
with the attached:
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Exhibit A to be executed in its name and behalf of its duly authorized officer
on the date specified below. All other terms and provisions of the Agreement not
amended herein shall remain in full force and effect.
Xxxxx Fargo Variable Trust
By: /s/ C. Xxxxx Xxxxxxx
-------------------------
Name: C. Xxxxx Xxxxxxx
Title: Secretary
The Lincoln National Life Insurance Company
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Second Vice President
Xxxxxxxx Inc.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------
Name: Xxxxxxx X. Xxxxx Xx.
Title: Senior Vice President
AMENDMENT TO
EXHIBIT A
AS OF MAY 21, 2002
SEPARATE ACCOUNTS AND CONTRACTS
SUBJECT TO THE PARTICIPATION AGREEMENT
SEPARATE ACCOUNT(S):
Lincoln National Variable Annuity Account C
Lincoln Life Variable Annuity Account W
CONTRACTS:
Xxxxx Fargo New Directions Core
Xxxxx Fargo New Directions Access
Xxxxx Fargo New Directions Access 4
MultiFund(R) 5
2
