EX-99.h(i)
PARTICIPATION AGREEMENT
BY AND AMONG
THRIVENT FINANCIAL FOR LUTHERANS
AND
LB SERIES FUND, INC.,
DATED DECEMBER 15, 2003
TABLE OF CONTENTS
Page
1. Sale of FUND Shares.................................................... 2
2. Representations and Warranties......................................... 4
3. Prospectus and Proxy Statements Voting................................. 5
4. Sales Materials and Information........................................ 5
5. Fees and Expenses...................................................... 6
6. Diversification........................................................ 6
7. Monitoring for Material Irreconcilable Conflicts....................... 7
8. Indemnification........................................................ 9
9. Term and Termination Of This Agreement................................. 13
10. Notices................................................................ 15
11. Miscellaneous.......................................................... 16
PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT, is made and entered into as of this 15th day of
December, 2003, by and among THRIVENT FINANCIAL FOR LUTHERANS ("Thrivent
Financial"), on its own behalf and on behalf of each separate account of
THRIVENT FINANCIAL named in Exhibit A to this Agreement (the "ACCOUNTS"), and LB
SERIES FUND, INC. (the "FUND"), (collectively the "Parties").
WITNESSETH:
WHEREAS, THRIVENT FINANCIAL is a fraternal benefit society organized under the
laws of the State of Wisconsin engaged in the writing of life insurance, annuity
contracts, and other insurance products, and serves as sponsor and depositor of
the ACCOUNTS ;
WHEREAS, the ACCOUNTS are legally segregated asset accounts of THRIVENT
FINANCIAL, established pursuant to the laws of the State of Wisconsin, with
several subaccounts (the "Subaccounts"), for the purpose of funding certain
variable universal life insurance contracts and variable annuity contracts
(collectively the "Contracts");
WHEREAS, the FUND, is registered with the Securities and Exchange Commission
(the "SEC"), as an open-end management investment company under the Investment
Company Act of 1940 (the "1940 Act"), and its shares are registered with the SEC
under the Securities Act of 1933 (the "1933 Act");
WHEREAS, the FUND is a series company, meaning its Board of Directors may
designate various series ("Portfolios") into which the FUND's authorized shares
are to be divided from time to time, with each such Portfolio consisting of a
specific number of the FUND's authorized shares, representing an interest in a
separate portfolio of securities and other assets, and having its own investment
objectives, policies and restrictions;
WHEREAS, to the extent permitted by applicable insurance, tax and other laws and
regulations, THRIVENT FINANCIAL intends to purchase shares in the FUND on behalf
of the ACCOUNTS to fund the Contracts or on its own behalf for related purposes,
and the FUND is authorized to sell such shares to the ACCOUNTS and to THRIVENT
FINANCIAL at net asset value;
NOW, THEREFORE, in consideration of the covenants and mutual promises contained
herein, and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the Parties agree as follows:
1. Sale of FUND Shares
A. The Contracts funded through the ACCOUNTS will provide for the
allocation of net amounts among certain Subaccounts for investment in
such shares of the Portfolios as may be offered from time to time in
the prospectus of the ACCOUNTS for 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.
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B. The FUND will sell to THRIVENT FINANCIAL those shares of each
available Portfolio that THRIVENT FINANCIAL orders based on
transactions under Contracts, effecting such orders on a daily basis
at the Portfolio's net asset value per share next computed as provided
in the FUND prospectus.
C. The Board of Directors of the FUND (the "Board") may refuse to sell
shares of any Portfolio to THRIVENT FINANCIAL, or suspend or terminate
the offering of shares of any Portfolio, if such action is required by
law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board, 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 the FUND.
D. The FUND agrees that its shares will be sold only to: (a) THRIVENT
FINANCIAL, on its own behalf and on behalf of separate accounts that
it establishes from time to time and maintains to fund variable
annuity contracts and variable life insurance contracts of THRIVENT
FINANCIAL, including the ACCOUNTS; (b) other life insurance companies,
whether affiliated or unaffiliated with THRIVENT FINANCIAL, on behalf
of separate accounts funding variable annuity contracts and variable
life insurance contracts of such other insurance companies; and (c)
qualified pension or retirement plans, whether for the benefit of
employees of THRIVENT FINANCIAL and/or its affiliates or for the
benefit of unaffiliated entities ("Qualified Plans"). THRIVENT
FINANCIAL separate accounts (including the ACCOUNTS) and separate
accounts of other life insurance companies eligible to purchase shares
of the FUND are referred to in this Agreement as "Separate Accounts."
No shares of any Portfolio will be sold to the general public or to
any life insurance company (on its own behalf, as opposed to a
Separate Account maintained by such other insurance company) other
than THRIVENT FINANCIAL.
E. The FUND will redeem for cash from THRIVENT FINANCIAL those full or
fractional shares of each Portfolio that THRIVENT FINANCIAL requests
based on transactions under Contracts, effecting such requests on a
daily basis at the Portfolio's net asset value per share next computed
as provided in the FUND prospectus.
F. Issuance and transfer of the FUND's shares will be by book entry only.
Stock Contracts will not be issued to THRIVENT FINANCIAL. Shares
ordered from the FUND will be recorded in an appropriate title for
THRIVENT FINANCIAL.
G. The FUND shall furnish notice promptly to THRIVENT FINANCIAL of any
income, dividends or capital gain distributions payable on the shares
of any Portfolio. THRIVENT FINANCIAL hereby elects to receive all such
income, dividends and capital gain distributions as are payable on
FUND shares in additional shares of that Portfolio. THRIVENT FINANCIAL
reserves the right to revoke this election and to receive all such
income, dividends and capital gain distributions in cash. The FUND
shall notify THRIVENT FINANCIAL of the number of shares so issued as
payment of such income, dividends and distributions.
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H. The FUND shall make the net asset value per share for each Portfolio
available to THRIVENT FINANCIAL on a daily basis, as soon as
reasonably practical after the net asset value per share is
calculated.
I. The FUND may establish additional Portfolios to provide additional
funding media for the Contracts, or delete, combine, or modify
existing Portfolios. The shares of any additional Portfolio may be
made available to the ACCOUNTS by the FUND, pursuant to the terms of
this Agreement, and any applicable reference to any Portfolio, the
FUND or its shares herein shall include a reference to any such
Portfolio.
2. Representations and Warranties
A. THRIVENT FINANCIAL represents and warrants that interests in the
ACCOUNTS under the Contracts are or will be registered under the 1933
Act to the extent required by the 1933 Act, that the Contracts will be
issued and sold in compliance in all material respects with all
applicable federal and state laws and that the sale of the Contracts
will comply in all material respects with state insurance and federal
securities law suitability requirements. THRIVENT FINANCIAL further
represents and warrants that it is a fraternal benefit society
organized under the laws of the State of Wisconsin and engaged in the
writing of life insurance, annuity contracts, and other insurance
products; that it has legally and validly established its ACCOUNTS as
segregated asset accounts under Wisconsin insurance law; and that it
has registered or will register the ACCOUNTS as unit investment trusts
in accordance with the provisions of the 1940 Act to serve as
segregated investment accounts for the Contracts, to the extent
required by the 1940 Act.
X. XXXXXXXX FINANCIAL represents and warrants that any interests in the
ACCOUNTS being offered for sale under the Contracts are or will be
registered under the 1933 Act to the extent required by the 1933 Act,
that the Contracts will be issued and sold in compliance in all
material respects with all applicable federal and state laws, and that
the sale of the Contracts will comply in all material respects with
state insurance law, and federal securities laws, including the rules
of the National Association of Securities Dealers, Inc. ("NASD").
C. The FUND represents and warrants that its shares sold pursuant to this
Agreement are or will be registered under the 1933 Act to the extent
required by the 1933 Act, duly authorized for issuance and sold in
compliance with the laws of the state of Maryland and all applicable
federal securities laws and that the FUND is or will be registered
under the 1940 Act to the extent required by the 1940 Act. The FUND
will amend the registration statement for its shares under the 1933
Act, as well as its registration statement under the 1940 Act, as
required in order to effect the continuous offering of its shares. The
FUND will register or qualify the shares for sale in accordance with
the laws of the various states only if and to the extent deemed
advisable by the FUND.
X. XXXXXXXX FINANCIAL represents and warrants that its Contracts are
currently treated as annuity contracts and universal life insurance
contracts under applicable provisions of the Code and that it will
make every effort to maintain such treatment.
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E. The FUND represents and warrants that each of its Portfolios will
qualify as a regulated investment company under Subchapter M of the
Code and that the investments of each of its Portfolios will comply
with the diversification requirements of Section 817(h) of the Code
and the regulations thereunder, and that it will notify THRIVENT
FINANCIAL immediately upon having a reasonable basis for believing
that it has ceased to so qualify or that it might not so qualify in
the future.
3. Prospectus and Proxy Statements: Voting
A. The FUND will provide such documentation (including a final copy of
any new prospectus, statement of additional information ("SAI") or
supplement) and other assistance as is reasonably necessary in order
for THRIVENT FINANCIAL or its designee to timely distribute the
current FUND prospectus, SAI and any supplement thereto.
B. The FUND will provide such documentation (including a final copy of
any proxy material, report to shareholders, and other communication to
shareholders) and other assistance as is reasonably necessary for
THRIVENT FINANCIAL or its designee to timely distribute the proxy
material, report to shareholders, and other communication (such
printing and distribution to be the FUND's expense, as provided in
Section 5.1).
C. To the extent required by law, THRIVENT FINANCIAL shall:
1. solicit voting instructions from Contract owners;
2. vote Portfolio shares in accordance with instructions received
from Contract owners;
3. vote Portfolio shares for which no instructions have been
received, as well as Portfolio shares attributable to THRIVENT
FINANCIAL other than under Contracts, in the same proportion as
shares of such Portfolio for which instructions have been
received, so long as and to the extent that the SEC continues to
interpret the 1940 Act to require pass-through voting privileges.
THRIVENT FINANCIAL reserves the right to vote Portfolio shares
held in any segregated asset accounts or in general accounts in
its own right, to the extent permitted by law.
D. The FUND reserves the right to take all actions, including but not
limited to the dissolution, merger, and sale of all assets of the FUND
solely upon the authorization of its Board and/or shareholders as
required by the 1940 Act.
4. Sales Material and Information
A. THRIVENT FINANCIAL and the FUND will cause to be furnished to each
other each piece of sales literature or other promotional material in
which the FUND or THRIVENT FINANCIAL is named, at least three (3) days
prior to its intended use.
B. Neither THRIVENT FINANCIAL nor the FUND will give any information or
make any representation or statement, or cause such information to be
given or representation to be
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made, on behalf of the PARTIES other than the information or
representations contained in the registration statements,
prospectuses, and SAIs for FUND and the Accounts, as such registration
statements, prospectuses, and SAIs may be amended or supplemented from
time to time, or in reports or proxy materials for the FUND or
ACCOUNTS, or in sales literature or other promotional material
approved by the FUND or its designee, except with the permission of
the FUND or its designee.
5. Fees and Expenses
A. The FUND will pay all expenses incident to the FUND's performance
under this Agreement. In addition to the investment advisory fee, each
Portfolio will bear all of its operating expenses that are not
specifically assumed by THRIVENT FINANCIAL, including the following:
(i) interest and taxes (ii) brokerage commissions; (iii) insurance
premiums; (iv) compensation and expenses for those Directors who are
not "interested" persons under Section 2(a)(19) of the Act; (v)
independent legal and audit expenses; (vi) fees and expenses of the
FUND's custodian, shareholder servicing or transfer agent and
accounting services agent; (vii) expenses incident to the issuance of
its shares, or reinvestment of dividends; (viii) fees and expenses
incident to the registration under Federal or state securities laws of
the FUND or its shares; (ix) FUND or portfolio organizational
expenses; (x) FUND expenses of preparing, printing and mailing reports
and notices, proxy material and prospectuses to shareholders of the
FUND; (xi) all other expenses incidental to holding meetings of the
FUND's shareholders; (xii) dues or assessments of or contributions to
the Investment Company Institute or any successor or other industry
association; (xiii) such non-recurring expenses as may arise,
including litigation affecting the FUND and the legal obligations
which the FUND may have to indemnify its officers and Directors with
respect thereto; and (xiv) cost of daily valuation of each of the
Portfolio's securities and net asset value per share.
X. XXXXXXXX FINANCIAL will pay all expenses incident to THRIVENT
FINANCIAL's performance under this Agreement. In addition, THRIVENT
FINANCIAL will bear the expenses of printing and distributing to its
Contract owners the FUND proxy materials, proxy cards and voting
instruction forms (collectively "proxy information"), tabulating the
results of proxy solicitations to its Contract owners, printing and
distributing to its Contract owners the FUND prospectus, SAI,
supplement, proxy material, report to shareholders, and other
communication to shareholders, and any expenses associated with
administration of its Contracts.
6. Diversification
A. The FUND will make every effort to be invested in such a manner as to
ensure that the Contracts will be treated as variable life insurance
contracts and variable annuity contracts under the Code and the
regulations thereunder insofar as such investment is required for such
treatment. Without limiting the scope of the foregoing, the FUND will
at all times comply with Section 817(h) of the Code and Treasury
Regulations Section 1.817-5 relating to the diversification
requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications to such Section or
Regulations.
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7. Monitoring for Material Irreconcilable Conflicts
A. The FUND's Board of Directors will monitor the FUND for the existence
of any material irreconcilable conflict between and among the
interests of the Contractholders of the Separate Accounts (including
the ACCOUNTS) investing in the FUND and the participants of any of the
Qualified Plans investing in the FUND. A material irreconcilable
conflict may arise for a variety of reasons, including: (a) 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 interpretive
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 investment of the
FUND are being managed; (e) a difference in voting instructions given
by variable annuity Contract owners, variable life insurance Contract
owners, and trustees of the Qualified Plans; (f) a decision by
THRIVENT FINANCIAL or another life insurance company to disregard the
voting instructions of Contract owners in one or more Separate
Accounts; or (g) if applicable, a decision by the trustee of a
Qualified Plan to disregard the voting instructions of the
participants of such Qualified Plan. A determination by the FUND's
Board that a material irreconcilable conflict exists will be a final
determination.
B. If it is determined by a majority of the FUND's Board, or by a
majority of its disinterested directors, that a material
irreconcilable conflict exists, the FUND promptly shall notify
THRIVENT FINANCIAL in writing of any determination by the FUND's Board
as to the existence of a material irreconcilable conflict and its
implications. THRIVENT FINANCIAL (on behalf of the ACCOUNTS) shall, at
its expense and to the extent reasonably practicable (as determined by
a majority of the disinterested directors of the FUND), take whatever
steps are necessary to remedy or eliminate the material irreconcilable
conflict. Such steps could include: (a) withdrawing the assets
allocable to some or all of the ACCOUNTS from the FUND or any
Portfolio of the FUND and reinvesting such assets in a different
investment medium, including another portfolio of the FUND; (b)
submitting the question as to whether such segregation should be
implemented to a vote of all affected Contract owners and, as
appropriate, segregating the assets of any appropriate (i.e., variable
annuity Contract owners or variable life insurance Contract owners of
one or more of THRIVENT FINANCIAL and any other insurance companies
with Separate Accounts investing in the FUND) that votes in favor of
such segregation, or offering to the affected Contract owners the
option of making such change; or (c) establishing a new registered
management investment company or managed separate account. If a
material irreconcilable conflict arises because of a decision by
THRIVENT FINANCIAL to disregard voting instructions of owners of
Contracts in one or more of the ACCOUNTS, and that decision represents
a minority position or would preclude a majority vote with respect to
the vote being taken by shareholders of the FUND, then THRIVENT
FINANCIAL shall, at the election and direction of the FUND's Board,
withdraw each affected ACCOUNT's investment in the FUND (but no charge
or penalty shall be imposed as a result of such withdrawal).
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X. XXXXXXXX FINANCIAL is responsible, to the extent permitted by
applicable law, for taking remedial action on behalf of the affected
ACCOUNT(s) in the event that the FUND's Board determines a material
irreconcilable conflict exists. THRIVENT FINANCIAL will take remedial
action only as it pertains to assets of the affected ACCOUNT(s) and in
accordance with its fiduciary responsibility to Contract owners in
such affected ACCOUNT(s). THRIVENT FINANCIAL, as the sponsor of the
affected ACCOUNT(s), will be responsible for the cost of any such
remedial action. For the purpose of this Section, a majority of the
disinterested members of the FUND's Board will determine whether or
not any proposed action adequately remedies any material
irreconcilable conflict. In no event shall the FUND, or THRIVENT
FINANCIAL in its capacity as advisor to the FUND, be required to
establish a Portfolio or new funding medium for any Contract or any
ACCOUNT. Nor, in its capacity as sponsor of any ACCOUNT, shall
THRIVENT FINANCIAL be required to establish a new funding medium for
any Contract or any ACCOUNT if any offer to do so has been declined by
a vote of a majority of the Contract owners materially and adversely
affected by the material irreconcilable conflict.
D. All reports of potential or existing conflicts received by the FUND's
Board and all Board actions with regard to or determining the
existence of a conflict of interest, notifying THRIVENT FINANCIAL of a
conflict, and determining whether any proposed action adequately
remedies a conflict, will be properly recorded in the minutes of the
FUND's Board or other appropriate records, and such minutes or other
records will be made available to the SEC upon request.
E. The FUND will disclose in its prospectus that (a) shares of the FUND
may be offered to Separate Accounts and Qualified Plans; (b) material
irreconcilable conflicts may arise between the interest of various
Contract owners investing in the Separate Accounts and the interests
of participants in the Qualified Plans investing in the FUND; and (c)
the FUND's Board will monitor events in order to identify the
existence of any material conflict and determine what action, if any,
should be taken in response to such material irreconcilable conflict.
F. No less than annually, THRIVENT FINANCIAL will submit to the FUND's
Board such reports, materials and data as the Board may reasonably
request so that the Board may carry out fully its obligations under
this Section. Such reports, materials and data will be submitted more
frequently if deemed appropriate by the FUND's Board. In any event,
THRIVENT FINANCIAL will promptly notify the FUND's Board in writing if
it becomes aware of any facts or circumstances that could give rise to
a material irreconcilable conflict between the interests of various
Contract owners in the ACCOUNTS and the interests of Qualified Plan
participants investing in the FUND. All reports submitted to the
FUND's Board under this Section 7.7 shall include all information
reasonably necessary for the Board to consider the conflict issues
raised. In this regard, THRIVENT FINANCIAL promptly shall notify the
FUND's Board whenever THRIVENT FINANCIAL has determined to disregard
voting instructions of the Contract
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owners of any ACCOUNT(s) on any matter submitted to a vote of
shareholders of the FUND.
8. Indemnification
A. Indemnification by THRIVENT FINANCIAL
1. THRIVENT FINANCIAL will indemnify and hold harmless the FUND and
each of its Directors, officers, and employees and each person,
if any, who controls the FUND within the meaning of Section 15 of
the 1933 Act (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 THRIVENT FINANCIAL) or litigation
(including legal and other expenses), to which the Indemnified
Parties may become subject under any statute, regulation, at
common law or otherwise, and which:
(a) arise out of or are based upon any failure by THRIVENT
FINANCIAL to perform the duties or assume the general
business responsibilities of THRIVENT FINANCIAL with respect
to the design, drafting, state approvals, issuance,
servicing and administration of the Contracts, or the
establishment and maintenance of the ACCOUNTS; or
(b) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statement, prospectus, or SAI for the
Contracts, or the ACCOUNTS, or contained in the Contracts or
sales literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this Agreement to indemnify will not apply as
to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon
and in conformity with information furnished in writing to
THRIVENT FINANCIAL by or on behalf of the FUND for use in
the registration statement, prospectus, or SAI for the
Contracts or the ACCOUNTS 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 FUND
shares; or
(c) arise out of or are based upon statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI, or sales literature
of the FUND not supplied by THRIVENT FINANCIAL, or persons
under its control) or wrongful conduct of THRIVENT FINANCIAL
or persons under its control, or failure to supervise
persons under THRIVENT FINANCIAL's control or entities or
individuals with which THRIVENT FINANCIAL contracts, with
respect to the sale or distribution of the Contracts or FUND
shares; or
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(d) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the FUND or
any amendment thereof or supplement thereto or the omission
or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was made in reliance upon information furnished in
writing to the FUND by or on behalf of THRIVENT FINANCIAL;
or
(e) arise out of or result from any failure by THRIVENT
FINANCIAL to provide the services and furnish the materials
contemplated by this Agreement; or
(f) arise out of or result from any material breach of any
representation and/or warranty made by THRIVENT FINANCIAL in
this Agreement or arise out of or result from any other
material breach of this Agreement by THRIVENT FINANCIAL, as
limited by and in accordance with the provisions of Sections
8.1(b). and 8.1(c) hereof.
2. THRIVENT FINANCIAL will not be liable under this indemnification
provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would be
subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of
such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this
Agreement or to the FUND, whichever is applicable.
3. THRIVENT FINANCIAL will not be liable under this indemnification
provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified THRIVENT
FINANCIAL in writing within a reasonable time after the summons
or other first legal process giving information of the nature of
the claim shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify THRIVENT
FINANCIAL of any such claim will not relieve THRIVENT FINANCIAL
from any liability that it may have to the Indemnified Party
against whom such action is brought otherwise than on account of
this indemnification provision. In case any such action is
brought against the Indemnified Parties, THRIVENT FINANCIAL shall
be entitled to participate, at its own expense, in the defense
thereof. THRIVENT FINANCIAL also will be entitled to assume the
defense thereof, with counsel satisfactory to the party named in
the action. After notice from THRIVENT FINANCIAL to such party of
THRIVENT FINANCIAL's election to assume the defense thereof, the
Indemnified Party will bear the fees and expenses of any
additional counsel retained by it, and THRIVENT FINANCIAL 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.
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4. The Indemnified Party will promptly notify THRIVENT FINANCIAL of
the commencement of any litigation or proceeding against it or
any of its respective officers or directors in connection with
transactions that are the subject of this Agreement whether or
not indemnification is being sought hereunder.
B. Indemnification By the FUND
1. The FUND will indemnify and hold harmless THRIVENT FINANCIAL and
each of its directors, officers and employees and each person, if
any, who controls THRIVENT FINANCIAL within the meaning of
Section 15 of the 1933 Act (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 written consent of FUND) or litigation
(including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, regulation, at
common law or otherwise, which:
(a) arise out of or are based upon any failure by the FUND to
perform the duties or assume the general business
responsibilities required by this Agreement with respect to
the sale of shares of the FUND to THRIVENT FINANCIAL; or
(b) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the sales literature for the FUND and/or the Contracts, or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, provided that this agreement to indemnify
will not apply as to any Indemnified Party if such statement
or omission or such alleged statement or omission was made
in reliance upon and in conformity with information
furnished in writing to the FUND by or on behalf of THRIVENT
FINANCIAL for use in the registration statement, prospectus,
or SAI for use in the sales literature or otherwise for use
in connection with the sale of Portfolio shares; or
(c) arise out of or are based upon statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI, or sales literature
of the FUND not supplied by the FUND, or persons under its
control) or wrongful conduct of the FUND or persons under
its control, or failure to supervise persons under the
FUND's control or entities or individuals with which the
FUND contracts, with respect to the sale or distribution of
the Contracts or FUND shares; or
(d) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the FUND or
any amendment thereof or supplement thereto or the omission
or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was
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made in reliance upon information furnished in writing to
THRIVENT FINANCIAL by or on behalf of THRIVENT FINANCIAL; or
(e) arise out of or result from any failure by the FUND to
provide the services and furnish the materials contemplated
by this Agreement; or
(f) arise out of or result from any material breach of any
representation and/or warranty made by the FUND in this
Agreement or arise out of or result from any other material
breach of this Agreement by the FUND, except to the extent
provided in Section 8.2(b) and 8.2(c) hereof.
2. The FUND will not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would be subject by
reason of such Indemnified Party's willful misfeasance, bad
faith, or gross negligence in the performance of such Indemnified
Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to the
FUND, whichever is applicable.
3. The FUND will not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party
unless such Indemnified Party shall have notified the FUND in
writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on
any designated agent), but failure to notify the FUND of any such
claim will not relieve the FUND from any liability that it may
have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties,
the FUND shall be entitled to participate, at its own expense, in
the defense thereof. The FUND also will be entitled to assume the
defense thereof, with counsel satisfactory to the party named in
the action. After notice from the FUND to such party of the
FUND's election to assume the defense thereof, the Indemnified
Party will bear the fees and expenses of any additional counsel
retained by it, and the FUND 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.
4. The Indemnified Party will promptly notify the FUND of the
commencement of any litigation or proceeding against it or any of
its respective officers or directors in connection with
transactions that are the subject of this Agreement whether or
not indemnification is being sought hereunder.
9. Term and Termination of this Agreement
A. This Agreement will terminate:
1. as to any party hereto, at the option of that party, upon prior
written notice to the other party as provided in Section 9.3
herein; or
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2. at the option of the FUND in the event that formal administrative
proceedings are instituted against THRIVENT FINANCIAL by the
NASD, the SEC, any state securities or insurance commissioner or
any other regulatory body regarding THRIVENT FINANCIAL's duties
under this Agreement or related to the sale of the Contracts, the
operation of the ACCOUNTS, or the purchase of FUND shares,
provided, however, that the FUND determines, in its sole judgment
exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of THRIVENT
FINANCIAL to perform its obligations under this Agreement; or
3. at the option of THRIVENT FINANCIAL in the event that formal
administrative proceedings are instituted against the FUND by the
NASD, the SEC, or any state securities or insurance commission or
any other regulatory body, regarding the FUND's duties under this
Agreement or related to the sale of FUND shares or the operation
of the FUND, provided, however, that THRIVENT FINANCIAL
determines, in its sole judgment exercised in good faith, that
any such administrative proceedings will have a material adverse
effect upon the ability of the FUND to perform its obligations
under this Agreement; or
4. at the option of THRIVENT FINANCIAL with respect to the ACCOUNTS,
upon requisite authority to substitute the shares of another
investment company for shares of the FUND in accordance with the
terms of the Contracts or in accordance with the ACCOUNTS
investment policy or standards of conduct; or
5. at the option of THRIVENT FINANCIAL, in the event any of the
FUND's shares are not registered, issued, or sold in accordance
with applicable federal and any state law or such law precludes
the use of such shares as the underlying investment media of the
Contracts issued or to be issued by THRIVENT FINANCIAL; or
6. at the option of THRIVENT FINANCIAL, if the FUND fails to meet
the requirements specified in Sections 2.3 or 2.6 hereof; or
7. at the option of the FUND, if the investments of the ACCOUNTS
fail to satisfy the diversification requirements of the Code and
the regulations thereunder, or
8. at the option of THRIVENT FINANCIAL, if the FUND dissolves or
becomes otherwise unable to sell shares to fund the ACCOUNTS.
B. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 9.1(a) may be exercised
for any reason or for no reason.
C. Notice Requirement for Termination
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No termination of this Agreement will be effective unless and until
the party terminating this Agreement gives prior written notice to the
other party to this Agreement of its intent to terminate, and such
notice shall set forth the basis for such termination. Furthermore,
1. in the event that any termination is based upon the provisions of
Section 9.1(a) hereof, such prior written notice shall be given
at least one hundred eighty (180) days in advance of the
effective date of termination as required by such provision;
2. in the event that any termination is based upon the provisions of
Section 9.1(b) or Section 9.1(c) hereof, such prior written
notice shall be given at least ninety (90) days in advance of the
effective date of termination;
3. in the event that any termination is based upon the provisions of
Section 9.1(d) hereof, THRIVENT FINANCIAL will give at least
sixty (60) days prior written notice to the FUND of the date of
any proposed action to substitute FUND shares, including the
filing of any applicable exemptive application under the 1940 Act
relating to the ACCOUNTS; and THRIVENT FINANCIAL will provide the
FUND with a copy of any such exemptive application; and
4. in the event that any termination is based upon the provisions of
Section 9.1(e), Section 9.1(f), or Section 9.1(g) hereof, such
prior written notice shall be given as soon as possible within
twenty-four (24) hours after the terminating party learns of the
event causing termination to be required.
D. Partial Termination
It is also understood that this Agreement may be terminated with
regard to a specific Portfolio or Portfolios of the FUND, or the
entire FUND at the discretion of the terminating party.
Notwithstanding any termination of this Agreement, the FUND, or any
Portfolio, provided its shares are then available for sale to any
persons, shall at the option of THRIVENT FINANCIAL, continue to make
available additional shares of the FUND pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred
to as "Existing Contracts"). Specifically, without limitation, the
owners of the Existing Contracts shall be permitted to transfer or
reallocate investments under the Contracts, redeem investments in the
FUND and/or invest in the FUND upon the making of additional purchase
payments under the Existing Contracts.
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10. Notices
Any notice will be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at
such other address as such party may from time to time specify in writing
to the other party.
If to THRIVENT FINANCIAL: 000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxx
Secretary, Senior Vice President and General
Counsel
If to the FUND: 000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Secretary
11. Miscellaneous
A. This Agreement will be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Minnesota;
provided, however, that if such laws or any of the provisions of this
Agreement conflict with applicable Provisions of the 1940 Act, the
latter shall control.
B. If any provision of this Agreement will be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement will not be effected thereby.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative and
its seal to be hereunder affixed hereto as of the 15th day of December, 2003.
THRIVENT FINANCIAL FOR LUTHERANS LB SERIES FUND, INC.
By: By:
----------------------------------- ----------------------------------
Xxxxx X. Xxxxxxxxx Xxxxxx X. Xxxxx
President and President
Chief Executive Officer
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EXHIBIT A
TO
PARTICIPATION AGREEMENT
(Effective December 15, 2003)
1. AAL Variable Annuity Account I
2. AAL Variable Annuity Account II
3. LB Variable Annuity Account I
4. LB Variable Insurance Account I
5. Thrivent Variable Annuity Account I
6. Thrivent Variable Life Account I
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