EXHIBIT (8)(d)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of June 12, 2009, by and between LINCOLN
VARIABLE INSURANCE PRODUCTS TRUST, a Delaware statutory trust ("Trust"), on its
behalf and on behalf of its investment series set forth in Exhibit A (each, a
"Fund"), LINCOLN FINANCIAL DISTRIBUTORS, INC., a Connecticut corporation
("Distributor"), LINCOLN INVESTMENT ADVISORS CORPORATION, a Tennessee
corporation ("Adviser"), and AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF
NEW YORK ("Life Company"), a life insurance company organized under the laws of
the State of New York.
WHEREAS, the Trust is registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940 ("1940 Act") as an
open-end, diversified management investment company;
WHEREAS, the Trust is organized as a series fund comprised of separate
investment, series, including each Fund;
WHEREAS, the Trust was organized to act as the funding vehicle for
certain variable life insurance and/or variable annuity contracts offered by
life insurance companies through separate accounts of such life insurance
companies and also may offer its shares to certain qualified pension and
retirement plans;
WHEREAS, the Trust operates under an order from the SEC, dated June 4,
2007 (File No. 812-13287) ("Order"), granting relief from various provisions of
the 1940 Act and the rules thereunder to the extent necessary to permit Fund
shares to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated participating insurance
companies accounts ("Participating Insurance Companies") and qualified pension
and retirement plans outside the separate account context and any other trust,
plan, account, contract or annuity trust that is within the scope of Treasury
Regulation (S)1.817.5(f)(3)(iii) (collectively, the "Plans");
WHEREAS, the Life Company has established or will establish one or more
separate accounts ("Separate Accounts") to offer variable annuity contracts
("Variable Contracts"), set forth on Exhibit B, and it seeks to have each Fund
serve as certain of the underlying funding vehicles for such Variable Contracts;
WHEREAS, the Adviser is registered with the SEC as an investment
adviser under the Investment Advisers Act of 1940;
WHEREAS, the Distributor is duly registered as a broker-dealer under
the Securities Exchange Act of 1934 (the "1934 Act") and is a member in good
standing of the Financial Industry Regulatory Authority ("FINRA"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Life Company intends to purchase Fund shares to serve as
investment options under the Variable Contracts and each Fund is authorized to
sell such shares to the Life Company at net asset value ("NAV").
NOW, THEREFORE, in consideration of their mutual promises, the Life
Company, the Trust, the Distributor and the Adviser agree as follows:
Article I. SALE OF FUND SHARES
1.1. The Trust agrees to make available to the Separate Accounts
shares of each Fund as listed in Exhibit B for investment of proceeds from
Variable Contracts allocated to the designated Separate Accounts, such shares to
be offered as provided in Fund's Prospectus.
1.2. The Trust agrees to sell to the Life Company those Fund shares
which the Life Company orders, executing such orders on a daily basis at the NAV
next computed after receipt by the Trust or its designee of the order. For
purposes of this Section, the Life Company shall be the designee of the Trust
for receipt of such orders from the Life Company and receipt by such designee
shall constitute receipt by the Trust; provided that the Trust receives notice
of such order by 8:30 a.m. New York time on the next following Business Day.
"Business Day" shall mean any day on which the New York Stock Exchange is open
for trading and on which the Fund calculates its NAV.
1.3. The Trust agrees to redeem for cash, on the Life Company's
request, any full or fractional Fund shares held by the Life Company, executing
such requests on a daily basis at the NAV next computed after receipt by the
Trust or its designee of the request for redemption. For purposes of this
Section, the Life Company shall be the designee of the Trust for receipt of
requests for redemption from the Life Company and receipt by such designee shall
constitute receipt by the Trust; provided that the Trust receives notice of such
request for redemption by 8:30 a.m. New York time on the next following Business
Day.
1.4. The Trust shall furnish, on or before the ex-dividend date,
notice to the Life Company of any income dividends or capital gain distributions
payable on the shares of any Fund. The Life Company hereby elects to receive all
such income dividends and capital gain distributions as are payable on a Fund's
shares in additional shares of the Fund. The Trust shall notify the Life Company
of the number of shares so issued as payment of such dividends and
distributions. The Life Company reserves the right to revoke this election by
written notice to the Trust.
1.5. The Trust shall make the NAV per share for the selected
Fund(s) available to the Life Company on a daily basis as soon as reasonably
practicable after the NAV per share is calculated but shall use its best efforts
to make such NAV available by 7:00 p.m. New York time. In the event of an error
in the computation of a Fund's NAV or any dividend or capital gain distribution
(each, a "pricing error"), the Distributor or the Fund shall promptly notify the
Life Company as soon as possible after discovery of the error. Such notification
may be verbal, but shall be confirmed promptly in writing. A pricing error shall
be corrected in accordance with the Fund's policy for correction of pricing
errors ("Pricing Policy"); provided such Pricing Policy meets the requirements
of the 1940 Act and any views expressed by the SEC staff. If an adjustment is
necessary to correct a material error which has caused Variable Contract owners
to receive less than the amount to which they are entitled, the number of shares
of the applicable sub-account of such Variable Contract owners will be adjusted
and the amount of any underpayments shall be credited by the Distributor to the
Life Company for crediting of such amounts to the applicable Variable Contract
owners accounts. Upon notification by the
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Distributor of any overpayment due to a material error, the Life Company shall
promptly remit to the Distributor any overpayment that has not been paid to the
Variable Contract owners. A pricing error shall be deemed to be "materially
incorrect" or constitute a "material error" in accordance with the Fund's
Pricing Policy for purposes of this Agreement. The standards set forth in this
Section are based on the parties' understanding of the views expressed by the
staff of the SEC as of the date of this Agreement. In the event the views of the
SEC staff are later modified or superseded by SEC or judicial interpretation,
the parties shall amend the foregoing provisions of this Agreement to comport
with the appropriate applicable standards, on terms mutually satisfactory to all
parties.
1.6. At the end of each Business Day, the Life Company shall use
the information described in Section 1.5 to calculate Separate Account unit
values for the day. Using these unit values, the Life Company shall process each
such Business Day's Separate Account transactions based on requests and premiums
received by it by the time as of which the Fund calculates its share price as
disclosed in the Fund's prospectus to determine the net dollar amount of the
Fund shares which shall be purchased or redeemed at that day's closing NAV per
share. The net share purchase or redemption orders so determined shall be
transmitted to the Trust by the Life Company by 8:30 a.m. New York Time on the
Business Day next following the Life Company's receipt of such requests and
premiums.
1.7. If the Life Company's order requests the net purchase of the
Trust shares, the Life Company shall pay for such purchase by wiring federal
funds to the Trust or its designated custodial account on the day the order is
actually transmitted by the Life Company by the close of the Federal Reserve
wire system. If the Life Company's order requests a net redemption resulting in
a payment of redemption proceeds to the Life Company, the Trust shall wire the
redemption proceeds to the Life Company on the day the order is actually
received by the Trust by the close of the Federal Reserve wire system. If the
Life Company's order requests the application of redemption proceeds from the
redemption of shares to the purchase of shares of another fund administered or
distributed by the Distributor, the Trust shall so apply such proceeds on the
same Business Day that the Life Company transmits such order to the Trust. The
Life Company shall notify the Distributor at least five days in advance of a
single purchase, redemption or exchange order for one million dollars
($1,000,000) or more of which it has prior knowledge.
1.8. Notwithstanding Section 1.7, the Trust reserves the right to
suspend the right of redemption or postpone the date of payment or satisfaction
upon redemption consistent with Section 22(e) of the 1940 Act and any rules
thereunder.
1.9. The Trust agrees that all Fund shares will be sold only to
Participating Insurance Companies which have agreed to purchase Fund shares to
fund their Separate Accounts and/or to certain qualified pension and other
retirement plans, all in accordance with the requirements of Section 817(h) of
the Internal Revenue Code of 1986 ("Code") and Treasury Regulation 1.817-5. Fund
shares will not be sold directly to the general public.
1.10. The Trust may refuse to sell shares of any Fund to any person,
or suspend or terminate the offering of the shares of any Fund if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board of Trustees of the Trust,
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acting in good faith and in light of its fiduciary duties under federal and any
applicable state laws, deemed necessary and in the best interests of the
shareholders of each Fund.
Article II. REPRESENTATIONS AND WARRANTIES
2.1. The Life Company represents and warrants that it is an
insurance company duly organized and in good standing under the laws of New York
and that it has legally and validly established each Separate Account as a
segregated asset account under such laws, and that American General Equity
Services Corporation, the principal underwriter for the Variable Contracts, is
registered as a broker-dealer under the 1934 Act.
2.2. The Life Company represents and warrants that it has
registered each Separate Account as a unit investment trust in accordance with
the provisions of the 1940 Act and cause each Separate Account to remain so
registered to serve as a segregated asset account for the Variable Contracts,
unless an exemption from registration is available. The Life Company represents
and warrants that interests in the Separate Account under the Variable Contracts
will be registered under the Securities Act of 1933 ("1933 Act") unless an
exemption from registration is available prior to any issuance or sale of the
Variable Contracts and that the Variable Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and further that the sale of the Variable Contracts shall comply in all material
respects with state insurance law suitability requirements.
2.3. The Life Company represents and warrants that the Variable
Contracts are currently and at the time of issuance will be treated as life
insurance, endowment or annuity contracts under applicable provisions of the
Code, that it will maintain such treatment and that it will notify the Trust
immediately upon having a reasonable basis for believing that the Variable
Contracts have ceased to be so treated or that they might not be so treated in
the future.
2.4. The Life Company represents and warrants that it shall deliver
such prospectuses, statements of additional information, proxy statements and
periodic reports of each Fund as required to be delivered under applicable
federal or state law in connection with the offer, sale or acquisition of the
Variable Contracts.
2.5. The Trust represents and warrants that the Fund shares offered
and sold pursuant to this Agreement will be registered under the 1933 Act and
shall be duly authorized for issuance and sold in accordance with all applicable
federal and state laws, and the Trust shall be registered under the 1940 Act
prior to and at the time of any issuance or sale of such shares. The Trust shall
amend its registration statement under the 1933 Act and the 1940 Act as required
in order to effect the continuous offering of Fund shares.
2.6. The Adviser represents and warrants that each Fund currently
complies, and will continue to comply with the diversification requirements set
forth in Section 817(h) of the Code, and the rules and regulations thereunder,
and will notify the Life Company immediately upon having a reasonable basis for
believing any Fund has ceased to comply will take reasonable steps to adequately
diversify the Fund to achieve compliance within the grace period afforded by
Regulation 1.817-5.
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2.7. The Adviser represents and warrants that each Fund invested in
by the Separate Account is currently qualified as a "regulated investment
company" under Subchapter M of the Code, that it will maintain such
qualification under Subchapter M (or any successor or similar provisions) and
will notify the Life Company upon having a reasonable basis for believing any
Fund has ceased to so qualify.
2.8. The Life Company hereby consents to the use by the Trust of
the name and telephone number of the Life Company and to the reference by the
Trust to the relationship between the Life Company and the Trust as part of an
informational page on the Trust's site on the World Wide Web portion of the
Internet. The Life Company hereby further consents to the Trust's establishing a
link between the Trust's site and the Life Company's site from the same place
that the Life Company is listed on the Trust's site.
2.9. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware.
2.10. The Trust represents and warrants that its directors,
officers, employees dealing with the money and/or securities of the Trust are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Trust in an amount not less than the
minimum coverage as required by Rule 17g-(1) under the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid blanket
fidelity bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
2.11. The Adviser represents and warrants that it is registered as
an investment adviser and shall remain duly registered under all applicable
federal and state securities laws and that it shall perform its obligations for
the Trust in compliance in all material respects with the applicable laws of the
State of Tennessee and any applicable state and federal securities laws.
2.12. The Distributor represents and warrants that it is registered
as a broker-dealer and shall remain duly registered under all applicable federal
and state securities laws and that it shall perform its obligations for the
Trust in compliance in all material respects with the applicable laws of the
State of Connecticut and any applicable state and federal securities laws.
2.13. Each party represents and warrants that the execution and
delivery of this Agreement and the consummation of the transactions contemplated
herein have been duly authorized by all necessary corporate, partnership or
trust action, as applicable, by such party, and, when so executed and delivered,
this Agreement will be the valid and binding obligation of such party
enforceable in accordance with its terms.
2.14. The Life Company represents and warrants that all orders for
the purchase and sale of Fund shares submitted to the Trust (or counted by the
Life Company in submitting a net order under this Agreement) will have been
received in good order by the Life Company prior to the time as of which the
Fund calculates its NAV on that Business Day, as disclosed in the prospectus for
the pertinent Fund (the "trading deadline"), in accordance with Rule 22c-1 under
the 1940 Act (subject only to exceptions as permitted under Rule 22c-1(c) under
the 1940 Act, respecting initial purchase payments on variable annuity
contracts, and to the established administrative procedures of the Life Company
as described under Rule 6e-3(T)(b)(12)(iii) under the 1940 Act respecting
premium processing for variable life insurance contracts). The Life
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Company will, upon reasonable request, certify to the Trust and the Distributor
that the Life Company is in compliance with this Section.
2.15. The Life Company represents and warrants that it is currently
in compliance, and will remain in compliance, with all applicable anti-money
laundering laws, regulations and requirements, including, but not limited to,
its obligations under the U.S. Bank Secrecy Act of 1970, and the rules and
regulations thereunder.
Article III. PROSPECTUS AND PROXY STATEMENTS
3.1. The Trust shall prepare and file with the SEC and any state
regulators requiring such filing all shareholder reports, notices, proxy
materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of the Trust.
3.2. The Trust will bear the printing costs and mailing costs
associated with the delivery of the following Trust (or individual Fund)
documents, and any supplements thereto, to existing Variable Contract owners of
the Life Company who are invested in the Trust:
(i) Prospectuses and statements of additional
information;
(ii) Annual and semi-annual reports; and
(iii) Proxy materials (including, but not limited to, the
proxy cards, notice and statement, as well as the
costs associated with tabulating votes).
The Life Company will submit any bills for printing,
duplicating and/or mailing costs, relating to the Trust documents described
above, to the Trust for reimbursement by the Trust. The Life Company shall
monitor such costs and shall use its best efforts to control these costs. Upon
request, the Life Company will provide the Trust on a semi-annual basis, or more
frequently as reasonably requested by the Trust, with a current tabulation of
the number of existing Variable Contract owners of the Life Company whose
Variable Contract values are invested in each Fund. This tabulation will be sent
to the Trust in the form of a letter signed by a duly authorized officer of the
Life Company attesting to the accuracy of the information contained in the
letter. If requested by the Life Company, the Trust shall provide such
documentation (including a final copy of the Trust's prospectus as set in type
or in camera-ready copy) and other assistance as is reasonably necessary in
order for the Life Company to print together in one document the current
prospectus for the Variable Contracts issued by the Life Company and the current
prospectus for the Trust. Should the Life Company wish to print any of these
documents in a format different from that provided by the Trust, Life Company
shall provide the Trust with sixty (60) days' prior written notice and the Life
Company shall bear the cost associated with any format change.
3.3. The Trust will provide, at its expense, the Life Company with
the following Trust (or individual Fund) documents, and any supplements thereto,
with respect to existing Contract owners who are prospective purchasers of the
Trust and with respect to prospective Variable Contract owners of the Life
Company:
(i) The current prospectus suitable for printing;
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(ii) The current statement of additional information
suitable for duplication;
(iii) The current proxy material suitable for printing; and
(iv) The current annual and semi-annual reports suitable
for printing.
The Life Company will pay all the expenses for printing and mailing
these documents.
3.4. The Trust will provide the Life Company with at least one
complete copy of all prospectuses, statements of additional information, annual
and semi-annual reports, proxy statements, exemptive applications and all
amendments or supplements to any of the above that relate to the Fund after the
filing of each such document with the SEC or other regulatory authority. The
Life Company will provide the Trust with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to a Separate Account after the
filing of each such document with the SEC or other regulatory authority.
3.5. The Life Company agrees that it will cooperate with the
Distributor and the Trust by providing to the Distributor and the Trust, within
thirty (30) days prior to any deadline imposed by applicable laws, rules or
regulations, information regarding shares sold and redeemed and whether the
Separate Accounts are registered or unregistered under the 1940 Act and any
other information pertinent to enabling the Distributor and the Trust to pay
registration or other fees with respect to the Trust shares sold during the
fiscal year in accordance with Rule 24f-2 or to register and qualify Trust
shares under any applicable laws, rules or regulations in a timely manner.
3.6. Except with respect to information regarding the Life Company
provided in writing by that party, the Life Company shall not be responsible for
the content of the prospectus or statement of additional information for the
Trust. Also, except with respect to information regarding the Trust,
Distributor, Adviser or the Fund provided in writing by the Trust, Distributor
or Adviser, neither the Trust, the Distributor nor Adviser are responsible for
the content of the prospectus or statement of additional information for the
Variable Contracts.
Article IV. SALES MATERIALS; PRIVACY
4.1. The Life Company will furnish, or will cause to be furnished,
to the Trust and the Distributor, each piece of sales literature or other
promotional material in which the Trust, the Distributor or Adviser is named, at
least ten (10) Business Days prior to its intended use. No such material will be
used if the Trust or the Distributor objects to its use in writing within ten
(10) Business Days after receipt of such material.
4.2. The Trust and the Distributor will furnish, or will cause to
be furnished, to the Life Company, each piece of sales literature or other
promotional material in which the Life Company or its Separate Accounts are
named, at least ten (10) Business Days prior to its intended use. No such
material will be used if the Life Company objects to its use in writing within
ten (10) Business Days after receipt of such material.
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4.3. The Trust and its affiliates and agents shall not give any
information or make any representations on behalf of the Life Company or
concerning the Life Company, the Separate Accounts, or the Variable Contracts
issued by the Life Company, other than the information or representations
contained in a registration statement or prospectus for such Variable Contracts,
as such registration statement and prospectus, or in reports of the Separate
Accounts or reports prepared for distribution to owners of such Variable
Contracts, or in sales literature or educational or other promotional material
approved by the Life Company or its designee, except with the written permission
of the Life Company.
4.4. The Life Company and its affiliates and agents shall not give
any information or make any representations on behalf of the Trust or a Fund or
concerning the Trust or a Fund other than the information or representations
contained in a registration statement or prospectus for the Trust, as such
registration statement and prospectus, or in sales literature or other
educational or promotional material approved by the Trust or its designee,
except with the written permission of the Trust.
4.5. Subject to law and regulatory authority, each party to this
Agreement shall treat as confidential all information pertaining to the owners
of the Variable Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
Each party shall be solely responsible for the compliance of their officers,
directors, employees, agents, independent contractors, and any affiliated and
non-affiliated third parties with all applicable privacy-related laws and
regulations including but not limited to the Xxxxx-Xxxxx-Xxxxxx Act and
Regulation S-P. The provisions of this Section shall survive the termination of
this Agreement.
Article V. POTENTIAL CONFLICTS
5.1. The Board of Trustees of the Trust (the "Board") will monitor
the Trust for the existence of any material irreconcilable conflict between the
interests of the Variable Contract owners of Participating Insurance Company
Separate Accounts investing in the Trust. A material irreconcilable conflict may
arise for a variety of reasons, including: (a) state insurance regulatory
authority action; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling, or
any similar action by insurance, tax, or securities regulatory authorities; (c)
an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of the Trust are being managed; (e) a difference
in voting instructions given by variable annuity and variable life insurance
contract owners or by contract owners of different Participating Insurance
Companies; or (f) a decision by a Participating Insurance Company to disregard
voting instructions of Variable Contract owners.
5.2. The Life Company will report any potential or existing
conflicts to the Board. The Life Company will be responsible for assisting the
Board in carrying out its responsibilities under the Conditions set forth in the
notice issued by the SEC for the Trust on May 11, 2007 (the "Notice")
(Investment Company Act Release No. IC-27821), by providing the Board with all
information reasonably necessary for it to consider any issues raised. This
responsibility includes, but is not limited to, an obligation by the Life
Company to inform the Board whenever Variable Contract owner voting instructions
are disregarded by the Life Company. These
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responsibilities will be carried out with a view only to the interests of the
Variable Contract owners.
5.3. If a majority of the Trust's Trustees or a majority of its
disinterested trustees ("Independent Trustees") determines that a material
irreconcilable conflict exists, affecting the Life Company, the Life Company, at
its expense and to the extent reasonably practicable (as determined by a
majority of Independent Trustees), will take any steps necessary to remedy or
eliminate the irreconcilable material conflict, including: (a) withdrawing the
assets allocable to some or all of the Separate Accounts from the Trust or any
Fund thereof and reinvesting those assets in a different investment medium,
which may include another Fund of the Trust or another investment company or
submitting the question as to whether such segregation should be implemented to
a vote of all affected Variable Contract owners and, as appropriate, segregating
the assets of any appropriate group (i.e., Variable Contract owners of one or
more Participating Insurance Companies) that votes in favor of such segregation,
or offering to the affected Variable Contract owners the option of making such a
change; and (b) establishing a new registered management investment company or
managed separate account. If a material irreconcilable conflict arises because
of the Life Company's decision to disregard Variable Contract owner voting
instructions, and that decision represents a minority position or would preclude
a majority vote, the Life Company may be required, at the election of the Trust,
to withdraw its Separate Account's investment in the Trust, and no charge or
penalty will be imposed as a result of such withdrawal. The responsibility to
take such remedial action shall be carried out with a view only to the interests
of the Variable Contract owners.
For the purposes of this Section, a majority of the Independent
Trustees shall determine whether or not any proposed action adequately remedies
any material irreconcilable conflict, but in no event will the Trust be required
to establish a new funding medium for any Variable Contract. Further, the Life
Company shall not be required by this Section to establish a new funding medium
for any Variable Contract if any offer to do so has been declined by a vote of a
majority of Variable Contract owners materially affected by the irreconcilable
material conflict.
5.4. The Board's determination of the existence of a material
irreconcilable conflict and its implications shall be made known promptly and in
writing to the Life Company.
5.5. No less than annually, the Life Company shall submit to the
Board such reports, materials or data as the Board may reasonably request so
that the Board may fully carry out the obligations imposed upon it by these
Conditions. Such reports, materials, and data shall be submitted more frequently
if the Board deems appropriate.
Article VI. VOTING
6.1. To the extent required by Section 12(d)(1)(E)(iii)(aa) of the
1940 Act or Rule 6e-2 or Rule 6e-3(T) thereunder, or other applicable law,
whenever Trust shall have a meeting of shareholders of any series or class of
shares, the Life Company shall:
. Solicit voting instructions from Variable Contract
owners;
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. Vote Trust shares held in each Separate Account at
such shareholder meetings in accordance with
instructions received from Variable Contract owners;
. Vote Trust shares held in each Separate Account for
which it has not received timely instructions in the
same proportion as it votes the applicable series or
class of Trust shares for which it has received
timely instructions; and
. Vote Trust shares held in its general account in the
same proportion as it votes the applicable series or
class of Trust shares held by the Separate Accounts
for which it has received timely instructions.
Except with respect to matters as to which the Life Company has the right under
Rule 6e-2 or Rule 6e-3(T) under the 1940 Act to vote Trust shares without regard
to voting instructions from Variable Contract owners, neither the Life Company
nor any of its affiliates will recommend action in connection with, or oppose or
interfere with, the actions of the Trust Board to hold shareholder meetings for
the purpose of obtaining approval or disapproval from shareholders (and,
indirectly, from Variable Contract owners) of matters put before the
shareholders or a vote recommended by Trust Board. The Life Company shall be
responsible for assuring that it calculates voting instructions and votes Trust
shares at shareholder meetings in a manner consistent with other Participating
Insurance Companies. The Trust shall notify the Life Company of any changes to
the Order or conditions. Notwithstanding the foregoing, the Life Company
reserves the right to vote Trust shares held in any segregated asset account in
its own right, to the extent permitted by law.
6.2. If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules thereunder with respect to mixed and shared funding on
terms and conditions materially different from any exemptions granted in the
Order, then the Trust and/or the Life Company, as appropriate, shall take such
steps as may be necessary to comply with Rule 6e-2 and Rule 6e-3(T), as amended,
and Rule 6e-3, as adopted, to the extent such Rules are applicable.
Article VII. INDEMNIFICATION
7.1. Indemnification by the Life Company. The Life Company agrees
to indemnify and hold harmless the Trust, the Distributor and the Adviser and
each of their Trustees, directors, officers, employees and agents and each
person, if any, who controls the Trust, the Distributor or Adviser within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of Sections 7.1 to 7.3) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Life Company, which consent shall not be unreasonably withheld)
or litigation (including legal and other expenses), to which the Indemnified
Parties may become subject, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements:
(a) 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 sales literature for the Variable Contracts or
contained in
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the Variable Contracts (or any amendment or
supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged
omission to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading, provided that this agreement
to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and
in conformity with information furnished to the Life
Company by or on behalf of the Trust for use in the
registration statement, prospectus or sales
literature for the Variable Contracts or in the
Variable Contracts (or any amendment or supplement)
or otherwise for use in connection with the sale of
the Variable Contracts or Fund shares;
(b) Arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus or sales literature of the
Trust not supplied by the Life Company, or persons
under its control) or wrongful conduct of the Life
Company or any of its directors, officers, employees
or agents, with respect to the sale or distribution
of the Variable Contracts or Fund shares;
(c) Arise out of any untrue statement or alleged untrue
statement of a material fact contained in the
registration statement, prospectus or sales
literature of the Trust 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 statement or omission
or such alleged statement or omission was made in
reliance upon and in conformity with information
furnished to the Trust for inclusion therein by or on
behalf of the Life Company;
(d) Arise as a result of any failure by the Life Company
to substantially provide the services and furnish the
materials under the terms of this Agreement; or
(e) Arise out of or result from any material breach of
any representation and/or warranty made by the Life
Company in this Agreement or arise out of or result
from any other material breach of this Agreement by
the Life Company.
7.2. The Life Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party as
such may arise from 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 Trust, whichever is applicable.
7.3. The Life Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Life Company in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
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Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Life Company of
any such claim shall not relieve the Life Company from any liability which 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 an Indemnified Party, the Life Company shall be entitled to
participate at its own expense in the defense of such action.
7.4. Indemnification by the Adviser. The Adviser agrees to
indemnify and hold harmless the Life Company and each of its directors,
officers, employees, and agents and each person, if any, who controls the Life
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for the purposes of Sections 7.4 to 7.6) against any and
all losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Adviser which consent shall not be unreasonably
withheld) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements:
(a) Arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the registration statement, prospectus
or sales literature of the Trust (or any amendment or
supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged
omission to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading, provided that this agreement
to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and
in conformity with information furnished to the
Adviser, the Distributor or the Trust by or on behalf
of the Life Company for use in the registration
statement or prospectus for the Trust or in sales
literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Variable Contracts or Fund shares;
(b) Arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus or sales literature for the
Variable Contracts not supplied by the Adviser or
persons under its control) or wrongful conduct of the
Trust, the Distributor or the Adviser or persons
under their control, with respect to the sale or
distribution of the Variable Contracts or Fund
shares;
(c) Arise out of any untrue statement or alleged untrue
statement of a material fact contained in the
registration statement, prospectus or sales
literature covering the Variable Contracts, or any
amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, if such statement or omission or such
alleged statement or omission was made in reliance
upon and in conformity with information furnished to
the Life Company for inclusion therein by or on
behalf of the Trust;
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(d) Arise as a result of a failure by the Trust to
substantially provide the services and furnish the
materials under the terms of this Agreement; or
(e) Arise out of or result from any material breach of
any representation and/or warranty made by the
Adviser, the Distributor or the Trust in this
Agreement or arise out of or result from any other
material breach of this Agreement by the Adviser, the
Distributor or the Trust.
7.5. The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise 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 and duties under this Agreement or to
the Life Company.
7.6. The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which 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 Adviser shall be entitled to participate at
its own expense in the defense thereof.
7.7. The provisions of this Article VII shall survive the
termination of this Agreement.
Article VIII. TERM; TERMINATION
8.1. This Agreement shall be effective as of the date hereof and
shall continue in force until terminated in accordance with the provisions
herein.
8.2. This Agreement shall terminate in accordance with the
following provisions:
(a) At the option of the Life Company or the Trust at any
time from the date hereof upon 180 days' notice,
unless a shorter time is agreed to by the parties;
(b) At the option of the Life Company or the Trust, if
Fund shares are not reasonably available to meet the
requirements of the Variable Contracts. Prompt notice
of election to terminate shall be furnished by the
Life Company. The termination will be effective ten
days after receipt of notice unless the Trust makes
available a sufficient number of Fund shares to
reasonably meet the requirements of the Variable
Contracts within the ten-day period;
(c) At the option of the Life Company, upon the
institution of formal proceedings against the Trust,
the Distributor or Adviser by the SEC,
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FINRA, or any other regulatory body, the expected or
anticipated ruling, judgment or outcome of which
would, in the Life Company's reasonable judgment,
materially impair the Trust's, the Distributor's or
the Adviser's ability to meet and perform their
respective obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by
the Life Company with said termination to be
effective upon receipt of notice;
(d) At the option of the Trust, the Distributor or the
Adviser, upon the institution of formal proceedings
against the Life Company by the SEC, FINRA, or any
other regulatory body, the expected or anticipated
ruling, judgment or outcome of which would, in
Trust's reasonable judgment, materially impair the
Life Company's ability to meet and perform its
obligations and duties hereunder. Prompt notice of
election to terminate shall be furnished by Trust
with said termination to be effective upon receipt of
notice;
(e) At the option of the Life Company, in the event the
Trust's shares are not registered, issued or sold in
accordance with applicable state or federal law, or
such law precludes the use of such shares as the
underlying investment medium of Variable Contracts
issued or to be issued by the Life Company.
Termination shall be effective immediately upon
notice to the Trust;
(f) At the option of the Trust if the Variable Contracts
cease to qualify as annuity contracts or life
insurance contracts, as applicable, under the Code,
or if the Trust reasonably believes that the Variable
Contracts may fail to so qualify. Termination shall
be effective upon receipt of notice by the Life
Company;
(g) At the option of the Life Company, upon the Trust's
breach of any material provision of this Agreement,
which breach has not been cured to the satisfaction
of the Life Company within ten days after written
notice of such breach is delivered to the Trust;
(h) At the option of the Trust, upon the Life Company's
breach of any material provision of this Agreement,
which breach has not been cured to the satisfaction
of the Trust within ten days after written notice of
such breach is delivered to the Life Company;
(i) At the option of the Trust, if the Variable Contracts
are not registered, issued or sold in accordance with
applicable federal and/or state law. Termination
shall be effective immediately upon such occurrence
without notice to the Life Company;
(j) At the option of the Life Company in the event that
any Fund ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code or under any
successor or similar provision, or if the Life
Company
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reasonably believes that any Fund may fail to so
qualify. Termination shall be effective immediately
upon notice to the Trust;
(k) At the option of the Life Company in the event that
any Fund fails to meet the diversification
requirements specified in Article II hereof or if the
Life Company reasonably believes that any Fund may
fail to meet such diversification requirements.
Termination shall be effective immediately upon
notice to the Trust; and
(l) In the event this Agreement is assigned without the
prior written consent of the Life Company, the Trust,
the Distributor and the Adviser, termination shall be
effective immediately upon such occurrence without
notice.
8.3. Notwithstanding any termination of this Agreement pursuant to
Section 8.2 hereof, the Trust shall, at the option of the Life Company, continue
to make available additional Fund shares, as provided below, for so long as the
Life Company desires pursuant to the terms and conditions of this Agreement, for
all Variable Contracts in effect on the effective date of termination of this
Agreement ("Existing Contracts"). Specifically, without limitation, if the Life
Company so elects to make additional Fund shares available, the owners of the
Existing Contracts or the Life Company, whichever shall have legal authority to
do so, shall be permitted to reallocate investments in the Trust, redeem
investments in the Trust and/or invest in the Trust upon the payment of
additional premiums under the Existing Contracts. In the event of a termination
of this Agreement, the Life Company, as promptly as is practicable under the
circumstances, shall notify the Trust, the Distributor and the Adviser whether
the Life Company elects to continue to make Fund shares available after such
termination. If Fund shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect.
8.4. Except as necessary to implement Variable Contract owner
initiated transactions, or as required by state insurance laws or regulations,
the Life Company shall not redeem the shares attributable to the Variable
Contracts (as opposed to the shares attributable to the Life Company's assets
held in the Separate Accounts or invested directly), and the Life Company shall
not prevent Variable Contract owners from allocating payments to a Fund that was
otherwise available under the Variable Contracts, until thirty (30) days after
the Life Company shall have notified the Trust of its intention to do so.
Article IX. NOTICES
Any notice hereunder shall be given by registered or certified mail
return receipt requested to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.
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If to the Trust: Lincoln Variable Insurance Products Trust
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
c/o _________________
If to the Distributor: Lincoln Financial Distributors, Inc.
Metro Center, 000 Xxxxxx Xxxxxx
Xxxxxxxx, Xx 00000
c/o _________________
If to the Adviser: Lincoln Investment Advisors Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
c/o _________________
If to the Life Company: American International Life Assurance
Company of New York
c/o American General Life Companies
0000-X Xxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article X. MISCELLANEOUS
10.1. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
10.2. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
10.3. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York
without regard to conflicts of laws principles thereof. It shall also be subject
to the provisions of the federal securities laws and the rules and regulations
thereunder and to any orders of the SEC granting exemptive relief therefrom and
the conditions of such orders.
10.4. The parties agree that the assets and liabilities of each Fund
are separate and distinct from the assets and liabilities of each other Fund. No
Fund shall be liable or shall be charged for any debt, obligation or liability
of any other Fund. No Trustee, officer or agent shall be personally liable for
such debt, obligation or liability of any Fund.
10.5. Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
FINRA and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
- 16 -
10.6. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
10.7. No provision of this Agreement may be amended or modified in
any manner except by a written agreement properly authorized and executed by the
Trust, the Distributor, the Adviser and the Life Company; provided, however,
that the Adviser may from time to time update Exhibit A to this Agreement, with
a copy to the Life Company in due course, to add a new Fund, delete an inactive
or terminated Fund, or reflect the change of name of a Fund. The establishment
by the Life Company of an account in any Fund, whether or not as yet reflected
on an updated Exhibit A, shall constitute the agreement by the Life Company and
the Trust, the Distributor and the Adviser to be bound by the provisions of this
Agreement with respect to that Fund.
10.8. Notwithstanding anything to the contrary contained herein, the
Trust, the Distributor and the Adviser agree that the Life Company shall be
fully entitled to make disclosure of information relating to the structure and
tax aspects of the transactions contemplated by this Agreement, without
limitation of any kind on such disclosure, and all materials of any kind
(including opinions or other tax analysis) that are provided herein related to
such structure and tax aspects as described in Treasury Regulation
Section 301.6111-2(c)(3).
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Fund Participation Agreement as of the date and year
first above written.
LINCOLN VARIABLE INSURANCE LINCOLN INVESTMENT ADVISORS
PRODUCTS TRUST CORPORATION
By: By:
------------------------ ------------------------
Name: Name:
Title: Title:
LINCOLN FINANCIAL DISTRIBUTORS, INC.
By:
------------------------
Name:
Title:
- 17 -
AMERICAN INTERNATIONAL LIFE ATTEST:
ASSURANCE COMPANY OF NEW YORK
By: By:
------------------------ ------------------------
Name: Name:
Title: Title:
(seal)
- 18 -
EXHIBIT A
The currently available Funds of the Trust are:
1. LVIP Delaware Foundation Moderate Allocation Fund
- 19 -
EXHIBIT B
SEPARATE ACCOUNTS OF THE LIFE COMPANY REGISTERED UNDER THE 1940 ACT AS UNIT
INVESTMENT TRUSTS
The following separate accounts are subject to this Agreement:
American International Life Assurance Company of New York Variable
Account A
VARIABLE ANNUITY CONTRACTS AND VARIABLE LIFE INSURANCE CONTRACTS REGISTERED
UNDER THE SECURITIES ACT OF 1933
The following contracts are subject to this Agreement:
Variable Annuity Contracts (SEC Reg. No. 033-09144)
- 20 -