EXHIBIT 28(H)(4)
MASTER FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is entered into as of this 30/th/ day of June, 2010 among THE
LINCOLN NATIONAL LIFE INSURANCE COMPANY on behalf of itself and certain of its
separate accounts; LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK (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; CAPITAL RESEARCH AND MANAGEMENT COMPANY ("CRMC"), a corporation
organized under the laws of the State of Delaware; and AMERICAN FUNDS SERVICE
COMPANY (the "Transfer Agent"), a corporation organized under the laws of the
State of California.
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
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as a "Permitted Investor" within the meaning of
Section 817(h)(4)(A) of 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.
(c) The parties agree that with regard to shares of the Series subject to
this agreement, the Insurance Company, Trust and/or their affiliates
do not control the management or policies of the Series or CRMC.
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 commercially reasonable 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. Such information shall be
communicated by electronic transmission acceptable to the parties or
other mutually agreeable method.
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 by electronic transmission
acceptable to the parties or other mutually agreeable method.
6. To the extent a price adjustment results in a deficiency or excess to a
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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. The Trust will use the NSCC's Fund/SERV system
and other such NSCC systems as soon as reasonably practicable. The
Trust will use its best efforts to use NSCC systems by October 1,
2010, for transmission and settlement of orders. Additionally, once
the Trust has adopted the use of the NSCC's Fund/SERV and related
systems for submitting transactions, manual transactions may be
submitted by the Trust only in the event that the Trust is in receipt
of orders for purchase and redemption of shares and is unable to
transmit the orders to Transfer Agent via the NSCC 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. 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 by 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
8:00 a.m. 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.
(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. From the effective
date of this
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Agreement through September 30, 2010 and thereafter if the Trust
regularly uses Fund/SERV but submits manual trades pursuant to
paragraph 7(a) above: (i) for orders received by the Transfer
Agent by the 8:00 a.m. deadline Transfer Agent will use
commercially reasonable efforts to initiate payment by wire to
the Trust or its designee of proceeds of such redemptions on the
next Business Day following Trade Date, but in no event shall
such payment be initiated later than two Business Days following
Trade Date (T+2) and (ii) for orders received after the 8:00 a.m.
deadline Transfer Agent will initiate payment by wire to the
Trust or its designee of proceeds of such redemptions two
Business Day following Trade Date (T+2). On or after October 1,
2010, if the Trust does not regularly use Fund/SERV to submit
transactions and regularly submits trades manually, Transfer
Agent will initiate payments by wire of such redemption proceeds
two Business Days following Trade Date (T+2).
(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 the
NSCC's Defined Contribution Clearance & Settlement ("DCC&S")
Cycle 8 (generally, 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 Insurance Company after the close of trading on a
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Business Day shall not be transmitted to NSCC prior to the
conclusion of the DCC&S Cycle 8 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 DCC&S Cycle 8 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 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 will be communicated separately.
Such wires for Transfer Agent should be sent to:
XXXXX FARGO BANK
ABA#: 000000000
ACCOUNT#: 4100060532
AFS ACCOUNT # AND FUND #
FBO LINCOLN NATIONAL LIFE
000 XXXXXXXX XXXX, 00/XX/ XXXXX
XXX XXXXXXX, XX 00000
(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
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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 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 determined in accordance with this Agreement, unless
rejected by Transfer Agent or the respective Master 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
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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 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
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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 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 Trust may distribute the prospectuses of the Master Funds within
the Series pursuant to Rule 498 of the Securities Act of 1933 ("Rule
498"). For purposes of this Agreement, the terms Summary Prospectus
and Statutory Prospectus shall have the same meaning as set forth in
Rule 498.
(i) The Series represents and warrants that the Summary Prospectuses
and the hosting of such Summary Prospectuses will comply in all
material respects with the requirements of Rule 498 applicable to the
Series and its fund.
(ii) The Series agrees that the URL indicated on each Summary
Prospectus will lead contract owners directly to the web page used for
hosting Summary Prospectuses and that such web page will host the
current Series and fund documents required to be posted in compliance
with Rule 498.
(iii) The Series and CRMC represent and warrant that they will be
responsible for compliance with the provisions of Rule 498(f)(1)
involving contract owner requests for additional Master Fund documents
made directly to the Series, CRMC or one of their affiliates.
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(iv) Insurance Company represents and warrants that any bundling of
Summary Prospectuses and Statutory Prospectuses will be done in
compliance with Rule 498.
(v) CRMC and the Series may provide web links or URLs to the
Insurance Company for use with Insurance Company's electronic delivery
of fund documents or on the Insurance Company's website. Insurance
Company will be solely responsible for the maintenance of such web
links. CRMC and the Series will be responsible for maintaining the
Series' and funds' current documents on the site to which such web
links or URLs originally navigate to.
(vi) Each party agrees to notify the other party promptly upon its
discovery of a failure to comply with the provisions of Rule 498.
(vii) The parties agree that Insurance Company is not required to
distribute Summary Prospectuses to its Contract holders, but rather
use of the Summary Prospectus will be at the discretion of Insurance
Company.
(d) 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 Sections 12, 13 and 14 of that certain
Business Agreement, by and among Insurance Company, CRMC, and American
Funds Distributors. The Insurance Company acknowledges and agrees that
CRMC and/or its affiliates own all right, title and interest in and to
the names Capital Research and Management Company, American Funds,
American Funds Distributors, American Funds Insurance Series and
American Funds Service Company, 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 by the Insurance Company and the Trust
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
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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 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.
(b) 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
13
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 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 and the Trust, as applicable, shall each 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 or Trust'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 or Trust of
any provision of this Agreement, including any representation,
warranty or covenant made in the Agreement. Insurance Company or the
Trust, as applicable, 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 or the Trust 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
14
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
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
15
(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 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
16
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 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, 00/xx/ Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Executive Vice President
Facsimile No.: 000-000-0000
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Senior Vice President and Senior Counsel,
Fund Business Management Group
Facsimile No.: 000-000-0000
17
IF TO CRMC:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President,
Fund Business Management Group and Secretary
Facsimile No.: 000-000-0000
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Senior Vice President and Senior Counsel,
Fund Business Management Group
Facsimile No.: 000-000-0000
IF TO THE TRANSFER AGENT:
American Funds Service Company
000 Xxxxx Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Chairman
Facsimile No.: 000-000-0000
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President,
Fund Business Management Group and Secretary
Facsimile No.: 000-000-0000
and
American Funds Service Company
Attn: HOST - Contract Administration Team
0000 Xxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000-0000
Facsimile No.: 000-000-0000
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.
18
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 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
19
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.
In the event Transfer Agent determines, based on a review of
complaints received in accordance with the paragraph above, that the
Insurance Company has a pattern of not processing Contract holder
transactions accurately, Transfer Agent reserves the right to require
that Insurance Company's data processing activities as they relate to
this Agreement be subject to an audit by an independent accounting
firm to ensure the existence of, and adherence to, proper operational
controls. Insurance Company shall make available upon Transfer Agent's
request a copy of any report by such accounting firm as it relates to
said audit. Insurance Company shall immediately notify Transfer Agent
in the event of a material breach of operational controls.
30. The following Sections shall survive any termination of this
Agreement: 4-7, 19, 23-31.
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.
20
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.
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.
21
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:
/s/ Xxxxxx X. Xxxxx
By: ----------------------------------
/s/ Xxxxxxx X. Xxxxxxxx Its: Vice President
LINCOLN VARIABLE INSURANCE
PRODUCTS TRUST
Attest:
/s/ Xxxxxxx X. Xxxxx, Xx.
By: ----------------------------------
/s/ Xxxxxxx X. Xxxx Its: Second Vice President
LINCOLN LIFE & ANNUITY COMPANY OF
NEW YORK (ON BEHALF OF ITSELF AND EACH
ACCOUNT)
Attest:
/s/ Xxxxxx X. Xxxxx
By: ----------------------------------
/s/ Xxxx Xx Xxxxxxxxx Its: Vice President
AMERICAN FUNDS INSURANCE SERIES
Attest:
/s/ Xxxxxxx Xxxxxx
By: ----------------------------------
/s/ illegible signature Its: Executive Vice President and
Principal Executive Officer
CAPITAL RESEARCH AND MANAGEMENT
COMPANY
Attest:
/s/ Xxxxxxx Xxxxxx
By: ----------------------------------
/s/ illegible signature Its: Senior Vice President and Secretary
22
AMERICAN FUNDS SERVICE COMPANY
Attest:
/s/ Xxxxxxx Xxxxxxxxxx
By: -----------------------
/s/ illegible signature Its: Chairman
23
Attachment A
Master Funds and Corresponding Funds
American Funds Insurance Series Master Funds: Trust 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
24
Attachment B
LIST OF ACCOUNTS:
Lincoln Life Variable Annuity Account N
Lincoln New York Account N for Variable Annuities
25
