PARTICIPATION AGREEMENT
as of May 1, 2000
Franklin Xxxxxxxxx Variable Insurance Products Trust
Franklin Xxxxxxxxx Distributors, Inc.
Lincoln Life & Annuity Company of New York
CONTENTS
SECTION SUBJECT MATTER
1. Parties and Purpose
2. Representations and Warranties
3. Purchase and Redemption of Trust Portfolio Shares
4. Fees, Expenses, Prospectuses, Proxy Materials and Reports
5. Voting
6. Sales Material, Information and Trademarks
7. Indemnification
8. Notices
9. Termination
10. Miscellaneous
SCHEDULES TO THIS AGREEMENT
A. The Company
B. Accounts of the Company
C. Available Portfolios and Classes of Shares of the Trust;
Investment Advisers
D. Contracts of the Company
E. Other Portfolios Available under the Contracts
F. Rule 12b-1 Plans of the Trust
G. Addresses for Notices
H. Shared Funding Order
1. PARTIES AND PURPOSE
This agreement (the "Agreement") is between certain portfolios,
specified below and in Schedule C, of Franklin Xxxxxxxxx Variable Insurance
Products Trust, an open-end management investment company organized as a
business trust under Massachusetts law (the "Trust"), Franklin Xxxxxxxxx
Distributors, Inc., a California corporation which is the principal
underwriter for the Trust (the "Underwriter," and together with the Trust,
"we" or "us") and the insurance company identified on Schedule A ("you"), on
your own behalf and on behalf of each segregated asset account maintained by
you that is listed on Schedule B, as that schedule may be amended from time
to time ("Account" or "Accounts").
The purpose of this Agreement is to entitle you, on behalf of the
Accounts, to purchase the shares, and classes of shares, of portfolios of the
Trust ("Portfolios") that are identified on Schedule C, solely for the
purpose of funding benefits of your variable life insurance policies or
variable annuity contracts ("Contracts") that are identified on Schedule D.
This Agreement does not authorize any other purchases or redemptions of
shares of the Trust.
2. REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES BY YOU
You represent and warrant that:
2.1.1 redacted
2.1.2 All of your directors, officers, employees, and other
individuals or entities dealing with the money and/or securities of the Trust
are and shall be at all times covered by a blanket fidelity bond or similar
coverage, in an amount not less than $5 million. Such bond shall include
coverage for larceny and embezzlement and shall be issued by a reputable
bonding company. You agree to make all reasonable efforts to see that this
bond or another bond containing such provisions is always in effect, and you
agree to notify us in the event that such coverage no longer applies.
2.1.3 Each Account is a duly organized, validly existing
segregated asset account under applicable insurance law and interests in each
Account are offered exclusively through the purchase of or transfer into a
"variable contract" within the meaning of such terms under Section 817 of the
Internal Revenue Code of 1986, as amended ("Code") and the regulations
thereunder. You will use your best efforts to continue to meet such
definitional requirements, and will notify us immediately upon having a
reasonable basis for believing that such requirements have ceased to be met
or that they might not be met in the future.
2.1.4 Each Account either: (i) has been registered or,
prior to any issuance or sale of the Contracts, will be registered as a unit
investment trust under the Investment Company Act of 1940 ("1940 Act"); or
(ii) has not been so registered in proper reliance upon an exemption from
registration under Section 3(c) of the 1940 Act; if the Account is exempt
from registration as an investment company under Section 3(c) of the 1940
Act, you will use your best efforts to maintain such exemption and will
notify us immediately upon having a reasonable basis for believing that such
exemption no longer applies or might not apply in the future.
2.1.5 The Contracts or interests in the Accounts: (i) are
or, prior to any issuance or sale will be, registered as securities under the
Securities Act of 1933, as amended (the "1933 Act"); or (ii) are not
registered because they are properly exempt from registration under Section
3(a)(2) of the 1933 Act or will be offered exclusively in transactions that
are properly exempt from registration under Section 4(2) or Regulation D of
the 1933 Act, in which case you will make every effort to maintain such
exemption and will notify us immediately upon having a reasonable basis for
believing that such exemption no longer applies or might not apply in the
future.
2.1.6 redacted
2
2.1.7 The Contracts currently are treated as annuity
contracts or life insurance contracts under applicable provisions of the Code
and you will use your best efforts to maintain such treatment; you will
notify us immediately upon having a reasonable basis for believing that any
of the Contracts have ceased to be so treated or that they might not be so
treated in the future.
2.1.8 The fees and charges deducted under each Contract, in
the aggregate, are reasonable in relation to the services rendered, the
expenses expected to be incurred, and the risks assumed by you.
2.1.9 You will use shares of the Trust only for the purpose
of funding benefits of the Contracts through the Accounts.
2.1.10 redacted
2.1.11 With respect to any Accounts which are exempt from
registration under the 1940 Act in reliance on 3(c)(1) or Section 3(c)(7)
thereof:
2.1.11.1 the principal underwriter for each
such Account and any subaccounts
thereof is a registered
broker-dealer with the SEC under the
1934 Act;
2.1.11.2 the shares of the Portfolios of the
Trust are and will continue to be
the only investment securities held
by the corresponding subaccounts; and
2.1.11.3 with regard to each Portfolio, you,
on behalf of the corresponding
subaccount, will:
(a) vote such shares held by it in
the same proportion as the vote
of all other holders of such
shares; and
(b) refrain from substituting
shares of another security
for such shares unless the
SEC has approved such
substitution in the manner
provided in Section 26 of
the 0000 Xxx.
2.1.12 You and the principal underwriter for each of the
Contracts will comply in all material respects with the 1933 and 1940 Acts
and the rules and regulations thereunder.
2.2 REPRESENTATIONS AND WARRANTIES BY THE TRUST
The Trust represents and warrants that:
2.2.1 It is duly organized and in good standing under the
laws of the State of Massachusetts.
3
2.2.2 All of its directors, officers, employees and others
dealing with the money and/or securities of a Portfolio, that are so required
by Rule 17g-1 under the 1940 Act, are and shall be at all times covered by a
blanket fidelity bond or similar coverage in an amount not less that the
minimum coverage required by Rule 17g-1 or other regulations under the 1940
Act. Such bond shall include coverage for larceny and embezzlement and be
issued by a reputable bonding company.
2.2.3 It is registered as an open-end management
investment company under the 0000 Xxx.
2.2.4 Each class of shares of the Portfolios of the
Trust is registered under the 0000 Xxx.
2.2.5 redacted
2.2.6 redacted
2.2.7 redacted
2.2.8 redacted
2.2.9 It currently intends for one or more classes of
shares (each, a "Class") to make payments to finance its distribution
expenses, including service fees, pursuant to a plan ("Plan") adopted under
rule 12b-1 under the 1940 Act ("Rule 12b-1"), although it may determine to
discontinue such practice in the future.
2.3 REPRESENTATIONS AND WARRANTIES BY THE UNDERWRITER
The Underwriter represents and warrants that:
2.3.1 It is registered as a broker dealer with the SEC
under the 1934 Act, and is a member in good standing of the NASD.
2.3.2 Each investment adviser listed on Schedule C (each,
an "Adviser") is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state
securities law.
2.3.3 All of its directors, officers, employees and others
dealing with the money and/or securities of a Portfolio, that are so required
by Rule 17g-1 under the 1940 Act, are and shall be at all times covered by a
blanket fidelity bond or similar coverage in an amount not less that the
minimum coverage required by Rule 17g-1 or other regulations under the 1940
Act. Such bond shall include coverage for larceny and embezzlement and be
issued by a reputable bonding company. You agree to make all reasonable
efforts to see that this bond or another bond containing such provisions is
always in effect, and you agree to notify us in the event such coverage no
longer applies.
4
2.3.4 It will comply in all material respects with the
1933 and 1940 Acts and the rules and regulations thereunder.
2.3.5 redacted
2.3.6 redacted
2.4 WARRANTY AND AGREEMENT BY BOTH YOU AND US
We received an order from the SEC dated November 16, 1993 (file no.
812-8546), which was amended by a notice and an order we received on
September 17, 1999 and October 13, 1999, respectively (file no. 812-11698)
(collectively, the "Shared Funding Order," attached to this Agreement as
Schedule H). The Shared Funding Order grants exemptions from certain
provisions of the 1940 Act and the regulations thereunder to the extent
necessary to permit shares of the Trust to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated life insurance companies and qualified pension and retirement
plans outside the separate account context. You and we both warrant and agree
that both you and we will comply with the "Applicants' Conditions" prescribed
in the Shared Funding Order as though such conditions were set forth verbatim
in this Agreement, including, without limitation, the provisions regarding
potential conflicts of interest between the separate accounts which invest in
the Trust and regarding contract owner voting privileges. In order for the
Trust's Board of Trustees to perform its duty to monitor for conflicts of
interest, you agree to inform us of the occurrence of any of the events
specified in condition 2 of the Shared Funding Order to the extent that such
event may or does result in a material conflict of interest as defined in
that order.
3. PURCHASE AND REDEMPTION OF TRUST PORTFOLIO SHARES
3.1 We will make shares of the Portfolios available to the Accounts
for the benefit of the Contracts. The shares will be available for purchase
at the net asset value per share next computed after we (or our agent)
receive a purchase order, as established in accordance with the provisions of
the then current prospectus of the Trust. For purposes of this Section 3, you
shall be the Trust's agent or designee for receipt of purchase orders and
requests for redemption. Notwithstanding the foregoing, the Trust's Board of
Trustees ("Trustees") may refuse to sell shares of any Portfolio to any
person, or may suspend or terminate the offering of shares of any Portfolio
if such action is required by law or by regulatory authorities having
jurisdiction or if, in the sole discretion of the Trustees, they deem such
action to be in the best interests of the shareholders of such Portfolio.
Without limiting the foregoing, the Trustees have determined that there is a
significant risk that the Trust and its shareholders may be adversely
affected by investors whose purchase and redemption activity follows a market
timing pattern, and have authorized the Trust, the Underwriter and the
Trust's transfer agent to adopt procedures and take other action (including,
without limitation, rejecting specific purchase orders) as they deem
necessary to reduce, discourage or eliminate market timing activity. You
agree to cooperate with us to the extent possible to assist us in
implementing the Trust's restrictions on purchase and redemption activity
that follows a market timing pattern.
3.2 We agree that shares of the Trust will be sold only to life
insurance companies which have entered into fund participation agreements
with the Trust ("Participating Insurance
5
Companies") and their separate accounts or to qualified pension and
retirement plans in accordance with the terms of the Shared Funding Order. No
shares of any Portfolio will be sold to the general public.
3.3 redacted
3.4 redacted
3.5 We shall calculate the net asset value per share of each
Portfolio on each Business Day, and shall communicate these net asset values
to you or your designated agent on a daily basis after the calculation is
completed (normally by 6:30 p.m. New York time).
3.6 You shall submit payment for the purchase of shares of a
Portfolio on behalf of an Account no later than the close of business on the
next Business Day after we receive the purchase order. Payment shall be made
in federal funds transmitted by wire to the Trust or to its designated
custodian.
3.7 redacted
3.8 Issuance and transfer of the Portfolio shares will be by book
entry only. Stock certificates will not be issued to you or the Accounts.
Portfolio shares purchased from the Trust will be recorded in the appropriate
title for each Account or the appropriate subaccount of each Account.
3.9 We shall furnish, on or before the ex-dividend date, notice to
you of any income dividends or capital gain distributions payable on the
shares of any Portfolio. You hereby elect to receive all such income
dividends and capital gain distributions as are payable on shares of a
Portfolio in additional shares of that Portfolio, and you reserve the right
to change this election in the future. We will notify you of the number of
shares so issued as payment of such dividends and distributions.
6
4. FEES, EXPENSES, PROSPECTUSES, PROXY MATERIALS AND REPORTS
4.1 We shall pay no fee or other compensation to you under this
Agreement except as provided on Schedule F, if attached.
4.2 We shall prepare and be responsible for filing 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. We shall bear the costs of preparation and filing of the documents
listed in the preceding sentence, registration and qualification of the
Trust's shares of the Portfolios.
4.3 redacted
4.4 redacted
4.5 We shall provide you, at our expense, with copies of any
Trust-sponsored proxy materials in such quantity as you shall reasonably
require for distribution to Contract owners who are invested in a designated
subaccount. You shall bear the costs of distributing proxy materials (or
similar materials such as voting solicitation instructions) to Contract
owners.
4.6 You assume sole responsibility for ensuring that the Trust's
prospectuses, shareholder reports and communications, and proxy materials are
delivered to Contract owners in accordance with applicable federal and state
securities laws.
5. VOTING
5.1 All Participating Insurance Companies shall have the obligations
and responsibilities regarding pass-through voting and conflicts of interest
corresponding to those contained in the Shared Funding Order.
5.2 If and to the extent required by law, you shall: (i) solicit
voting instructions from Contract owners; (ii) vote the Trust shares in
accordance with the instructions received from Contract owners; and (iii)
vote Trust shares for which no instructions have been received in the same
proportion as Trust 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 for variable contract
owners. You reserve the right to vote Trust shares held in any Account in
your own right, to the extent permitted by law.
5.3 redacted
6. SALES MATERIAL, INFORMATION AND TRADEMARKS
6.1 For purposes of this Section 6, "Sales literature or other
Promotional material" includes, but is not limited to, portions of the
following that use any logo or other trademark related to the Trust, or
Underwriter or its affiliates, or refer to the Trust: advertisements (such as
material published or designed for use in a newspaper, magazine or other
periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, electronic communication or
other public media), sales literature (I.E., any written communication
distributed
7
or made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts,
reprints or excerpts or any other advertisement, sales literature or
published article or electronic communication), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees in any media, and disclosure documents,
shareholder reports and proxy materials.
6.2 redacted
6.3 redacted
6.4 You and your agents shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust,
the Underwriter or an Adviser, other than information or representations
contained in and accurately derived from the registration statement or
prospectus for the Trust shares (as such registration statement and
prospectus may be amended or supplemented from time to time), annual and
semi-annual reports of the Trust, Trust-sponsored proxy statements, or in
Sales literature or other Promotional material approved by the Trust or its
designee, except as required by legal process or regulatory authorities or
with the written permission of the Trust or its designee.
6.5 We shall not give any information or make any representations
or statements on behalf of you or concerning you, the Accounts or the
Contracts other than information or representations contained in and
accurately derived from Disclosure Documents for the Contracts (as such
Disclosure Documents may be amended or supplemented from time to time), or in
materials approved by you for distribution, including Sales literature or
other Promotional materials, except as required by legal process or
regulatory authorities or with your written permission.
6.6 Except as provided in Section 6.2, you shall not use any
designation comprised in whole or part of the names or marks "Franklin" or
"Xxxxxxxxx" or any logo or other trademark relating to the Trust or the
Underwriter without prior written consent, and upon termination of this
Agreement for any reason, you shall cease all use of any such name or xxxx as
soon as reasonably practicable.
6.7 You shall furnish to us ten (10) Business Days prior to its
first submission to the SEC or its staff, any request or filing for no-action
assurance or exemptive relief naming, pertaining to, or affecting, the Trust,
the Underwriter or any of the Portfolios.
8
7. INDEMNIFICATION
7.1 INDEMNIFICATION BY YOU
7.1.1 You agree to indemnify and hold harmless the
Underwriter, the Trust and each of its Trustees, officers, employees and
agents and each person, if any, who controls the Trust within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" and
individually the "Indemnified Party" for purposes of this Section 7) against
any and all losses, claims, damages, liabilities (including amounts paid in
settlement with your written consent, which consent shall not be unreasonably
withheld) or expenses (including the reasonable costs of investigating or
defending any alleged loss, claim, damage, liability or expense and
reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as
such Losses are related to the sale or acquisition of shares of the Trust or
the Contracts and
7.1.1.1 arise out of or are based upon any untrue
statements or alleged untrue statements of any material fact contained
in a Disclosure Document for the Contracts or in the Contracts
themselves or in sales literature generated or approved by you on
behalf of the Contracts or Accounts (or any amendment or supplement to
any of the foregoing) (collectively, "Company Documents" for the
purposes of this Section 7), 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 indemnity 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 was
accurately derived from written information furnished to you by or on
behalf of the Trust for use in Company Documents or otherwise for use
in connection with the sale of the Contracts or Trust shares; or
7.1.1.2 arise out of or result from statements or
representations (other than statements or representations contained in
and accurately derived from Trust Documents as defined below in
Section 7.2) or wrongful conduct of you or persons under your control,
with respect to the sale or acquisition of the Contracts or Trust
shares; or
7.1.1.3 arise out of or result from any untrue
statement or alleged untrue statement of a material fact contained in
Trust Documents as defined below in Section 7.2 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 was made in reliance upon and
accurately derived from written information furnished to the Trust by
or on behalf of you; or
7.1.1.4 arise out of or result from any failure by
you to provide the services or furnish the materials required under
the terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to have any Contract
qualify as a "variable contract" within the meaning of such term under
Section 817 of the Code, as amended, or any regulations thereunder);
9
7.1.1.5 arise out of or result from any material
breach of any representation and/or warranty made by you in this
Agreement or arise out of or result from any other material breach of
this Agreement by you; or
7.1.1.6 arise out of or result from a Contract
failing to be considered a life insurance policy or an annuity
Contract, whichever is appropriate, under applicable provisions of the
Code thereby depriving the Trust of its compliance with Section 817(h)
of the Code (including a failure, whether unintentional or in good
faith or otherwise).
7.1.2 You shall not be liable under this indemnification
provision with respect to any Losses 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 Trust or
Underwriter, whichever is applicable. You shall also not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified you 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 you of any such claim shall not relieve you 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, you shall be entitled to
participate, at your own expense, in the defense of such action. Unless the
Indemnified Party releases you from any further obligations under this
Section 7.1, you also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from you
to such party of the your election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and you 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.
7.1.3 The Indemnified Parties will promptly notify you of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Trust shares or the Contracts or the
operation of the Trust.
7.2 INDEMNIFICATION BY THE UNDERWRITER
7.2.1 The Underwriter agrees to indemnify and hold harmless
you, and each of your directors and officers and each person, if any, who
controls you within the meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" and individually an "Indemnified Party" for
purposes of this Section 7.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Underwriter, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal
counsel fees incurred in connection therewith) (collectively, "Losses") to
which the Indemnified Parties may become subject under any statute, at common
law or otherwise, insofar as such Losses
10
are related to the sale or acquisition of the shares of the Trust or the
Contracts and:
7.2.1.1 arise out of or are based upon any untrue
statements or alleged untrue statements of any material fact contained
in the Registration Statement, prospectus, statement of additional
information or sales literature of the Trust (or any amendment or
supplement to any of the foregoing) (collectively, the "Trust
Documents") 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 of such
alleged statement or omission was made in reliance upon and in
conformity with information furnished to us by or on behalf of you 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 Contracts or Trust shares; or
7.2.1.2 arise out of or as a result of statements or
representations (other than statements or representations contained in
the Disclosure Documents or sales literature for the Contracts not
supplied by the Underwriter or persons under its control) or wrongful
conduct of the Trust, Adviser or Underwriter or persons under their
control, with respect to the sale or distribution of the Contracts or
Trust shares; or
7.2.1.3 arise out of any untrue statement or alleged
untrue statement of a material fact contained in a Disclosure Document
or sales literature covering the Contracts, or any amendment thereof
or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information furnished
to you by or on behalf of the Trust; or
7.2.1.4 arise as a result of any failure by us to
provide the services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good faith
or otherwise, to comply with the qualification representation
specified above in Section 2.2.7 and the diversification requirements
specified above in Section 2.2.8); or
7.2.1.5 arise out of or result from any material
breach of any representation and/or warranty made by the Underwriter
in this Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter; as limited by and in
accordance with the provisions of Sections 7.2.2 and 7.2.3 hereof.
7.2.2 The Underwriter shall not be liable under this
indemnification provision with respect to any Losses 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 you
or the Accounts, whichever is applicable.
7.2.3 The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have
11
notified the Underwriter 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 Underwriter of any such claim
shall not relieve the Underwriter 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 Underwriter will be entitled to
participate, at its own expense, in the defense thereof. Unless the
Indemnified Party releases the Underwriter from any further obligations under
this Section 7.2, the Underwriter also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Underwriter to such party of the Underwriter's election
to assume the defense thereof, the Indemnified Party shall bear the expenses
of any additional counsel retained by it, and the Underwriter 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.
7.2.4 You agree promptly to notify the Underwriter of the
commencement of any litigation or proceedings against you or the Indemnified
Parties in connection with the issuance or sale of the Contracts or the
operation of each Account.
7.3 INDEMNIFICATION BY THE TRUST
7.3.1 The Trust agrees to indemnify and hold harmless you,
and each of your directors and officers and each person, if any, who controls
you within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 7.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Trust, which consent shall not be
unreasonably withheld) or litigation (including legal and other expenses) to
which the Indemnified Parties may become subject under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements result from the gross
negligence, bad faith or willful misconduct of the Board or any member
thereof, are related to the operations of the Trust, and arise out of or
result from any material breach of any representation and/or warranty made by
the Trust in this Agreement or arise out of or result from any other material
breach of this Agreement by the Trust; as limited by and in accordance with
the provisions of Sections 7.3.2 and 7.3.3 hereof. It is understood and
expressly stipulated that neither the holders of shares of the Trust nor any
Trustee, officer, agent or employee of the Trust shall be personally liable
hereunder, nor shall any resort be had to other private property for the
satisfaction of any claim or obligation hereunder, but the Trust only shall
be liable.
7.3.2 The Trust shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against any 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 and duties under this Agreement or to you, the Trust, the
Underwriter or each Account, whichever is applicable.
12
7.3.3 The Trust 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 Trust
in writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claims 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 Trust of any such claim shall not relieve the Trust 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 Trust
will be entitled to participate, at its own expense, in the defense thereof.
Unless the Indemnified Party releases the Trust from any further obligations
under this Section 7.3, the Trust also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Trust to such party of the Trust's election to assume
the defense thereof, the Indemnified Party shall bear the fees and expenses
of any additional counsel retained by it, and the Trust 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.
7.3.4 You agree promptly to notify the Trust of the
commencement of any litigation or proceedings against you or the Indemnified
Parties in connection with this Agreement, the issuance or sale of the
Contracts, with respect to the operation of the Account, or the sale or
acquisition of shares of the Trust.
8. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth in Schedule G
below or at such other address as such party may from time to time specify in
writing to the other party.
9. TERMINATION
9.1 redacted
9.2 redacted
9.3 If this Agreement is terminated for any reason, except as
required by the Shared Funding Order or pursuant to Section 9.2.5.3, above,
we shall, at your option, continue to make available additional shares of any
Portfolio and redeem shares of any Portfolio pursuant to all of the terms and
conditions of this Agreement for all Contracts in effect on the effective
date of termination of this Agreement. If this Agreement is terminated as
required by the Shared Funding Order, its provisions shall govern.
9.4 The provisions of Sections 2 (Representations and Warranties)
and 7 (Indemnification) shall survive the termination of this Agreement. All
other applicable provisions of this Agreement shall survive the termination
of this Agreement, as long as shares of the Trust are held on behalf of
Contract owners in accordance with Section 9.3, except that we shall have no
further obligation to sell Trust shares with respect to Contracts issued
after termination.
13
9.5 You shall not redeem Trust shares attributable to the Contracts
(as opposed to Trust shares attributable to your assets held in the Account)
except: (i) as necessary to implement Contract owner initiated or approved
transactions; (ii) as required by state and/or federal laws or regulations or
judicial or other legal precedent of general application (hereinafter
referred to as a "Legally Required Redemption"); or (iii) as permitted by an
order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon reasonable
request, you shall promptly furnish to us the opinion of your counsel (which
counsel shall be reasonably satisfactory to us) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the
Contracts, you shall not prevent Contract owners from allocating payments to
a Portfolio that was otherwise available under the Contracts without first
giving us ninety (90) days notice of your intention to do so.
10. MISCELLANEOUS
10.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions of
this Agreement or otherwise affect their construction or effect.
10.2 This Agreement may be executed simultaneously in two or
more counterparts, all of which taken together shall constitute one and the
same instrument.
10.3 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
10.4 This Agreement shall be construed and its provisions
interpreted under and in accordance with the laws of the State of California.
It shall also be subject to the provisions of the federal securities laws and
the rules and regulations thereunder, to any orders of the SEC on behalf of
the Trust granting it exemptive relief, and to the conditions of such orders.
We shall promptly forward copies of any such orders to you.
10.5 The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising, directly or indirectly, under this
Agreement, of any and every nature whatsoever, shall be satisfied solely out
of the assets of the Trust and that no Trustee, officer, agent or holder of
shares of beneficial interest of the Trust shall be personally liable for any
such liabilities.
10.6 The parties to this Agreement agree that the assets and
liabilities of each Portfolio of the Trust are separate and distinct from the
assets and liabilities of each other Portfolio. No Portfolio shall be liable
or shall be charged for any debt, obligation or liability of any other
Portfolio.
10.7 Each party to this Agreement shall cooperate with each other
party and all appropriate governmental authorities (including without
limitation the SEC, the NASD, and state insurance regulators) and shall
permit 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.
14
10.8 Each party to this Agreement shall treat as confidential all
information reasonably identified as confidential in writing by any other
party to this Agreement, and, except as permitted by this Agreement or as
required by legal process or regulatory authorities, shall not disclose,
disseminate, or use such names and addresses and other confidential
information until such time as they may come into the public domain, without
the express written consent of the affected party to this Agreement. Without
limiting the foregoing, no party to this Agreement shall disclose any
information that such party has been advised is proprietary, except such
information that such party is required to disclose by any appropriate
governmental authority (including, without limitation, the SEC, the NASD, and
state securities and insurance regulators).
10.9 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 to this Agreement are
entitled to under state and federal laws.
10.10 The parties to this Agreement acknowledge and agree that
this Agreement shall not be exclusive in any respect, except as provided
above in Section 3.3.
10.11 Neither this Agreement nor any rights or obligations
created by it may be assigned by any party without the prior written approval
of the other parties.
10.12 No provisions of this Agreement may be amended or modified
in any manner except by a written agreement properly authorized and executed
by both parties.
15
IN WITNESS WHEREOF, each of the parties have caused their duly
authorized officers to execute this Agreement.
The Company: LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer and 2nd Vice
President
The Trust: FRANKLIN XXXXXXXXX VARIABLE INSURANCE PRODUCTS TRUST
ONLY ON BEHALF OF EACH
PORTFOLIO LISTED ON
SCHEDULE C HEREOF.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
The Underwriter: FRANKLIN XXXXXXXXX DISTRIBUTORS, INC.
By: /s/ Xxxx Xxxxxx
----------------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
16
SCHEDULE A
THE COMPANY
Lincoln Life & Annuity Company of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxx Xxxx 00000
Incorporated in New York.
17
SCHEDULE B
ACCOUNTS OF THE COMPANY
1. Name: LLANY Separate Account R
for Flexible Premium Variable Life Insurance
Date Established: January 29, 1998
SEC Registration Number: 811-08651
2. Name: Lincoln Life & Annuity Flexible
Premium Variable Life Account M
Date Established: November 24, 1997
SEC Registration Number: 811-08559
3. Name: Lincoln New York Separate Account N
for Variable Annuities
Date Established: March 11, 1999
SEC Registration Number: 811-09763
4. Name: LLANY Separate Account S
for Flexible Premium Variable Life Insurance
Date Established: March 2, 1999
SEC Registration Number: 811-09257
18
SCHEDULE C
AVAILABLE PORTFOLIOS AND CLASSES OF SHARES OF THE TRUST; INVESTMENT ADVISERS
FRANKLIN XXXXXXXXX VARIABLE INSURANCE PRODUCTS TRUST INVESTMENT ADVISER
redacted
19
SCHEDULE D
CONTRACTS OF THE COMPANY
-----------------------------------------------------------------------------------------------------------
CONTRACT 1 CONTRACT 2 CONTRACT 3
-----------------------------------------------------------------------------------------------------------
CONTRACT/PRODUCT NAME SVUL I VUL I Lincoln New York Choice
AND TYPE Plus Variable Annuity
-----------------------------------------------------------------------------------------------------------
REGISTERED (Y/N) Yes Yes Yes
-----------------------------------------------------------------------------------------------------------
SEC REGISTRATION 811-08651 811-08559 811-09763
NUMBER - 1940 ACT
-----------------------------------------------------------------------------------------------------------
REPRESENTATIVE LN650NY LN605NY AN426NY
FORM NUMBERS
-----------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT LLANY Separate Lincoln Life & Annuity Lincoln New York
NAME/DATE Account R for Flexible Flexible Premium Variable Separate Account N for
ESTABLISHED Premium Variable Life Life Account M Variable Annuities
Insurance
-----------------------------------------------------------------------------------------------------------
SEC REGISTRATION 333-46113 333-42507 333-93875
NUMBER - 1933 ACT
-----------------------------------------------------------------------------------------------------------
XXXXXXXXX VARIABLE Redacted Redacted Redacted
PRODUCTS SERIES
FUND ("TVP"),
FRANKLIN XXXXXXXXX
VARIABLE INSURANCE
PRODUCTS TRUST
("VIP") -PORTFOLIOS
AND CLASSES -
ADVISER
-----------------------------------------------------------------------------------------------------------
20
SCHEDULE D (CONTINUED)
CONTRACTS OF THE COMPANY
-----------------------------------------------------------------------------------------------------------
CONTRACT 4 CONTRACT 5 CONTRACT 6
-----------------------------------------------------------------------------------------------------------
CONTRACT/PRODUCT CVUL LVUL - I Lincoln Choice Plus
NAME AND TYPE CVUL Series III VUL Access
-----------------------------------------------------------------------------------------------------------
REGISTERED (Y/N) Yes Yes Yes
-----------------------------------------------------------------------------------------------------------
SEC REGISTRATION 811-09257 811-08559 811-09763
NUMBER - 1940 ACT
-----------------------------------------------------------------------------------------------------------
REPRESENTATIVE LN920NY LN615NY 30296-NY
FORM NUMBERS LN925 LN660NY
-----------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT LLANY Separate Account Lincoln Life & Annuity Lincoln New York
NAME/DATE S for Flexible Premium Flexible Premium Variable Separate Account N for
ESTABLISHED Variable Life Insurance Life Account M Variable Annuities
-----------------------------------------------------------------------------------------------------------
SEC REGISTRATION 333-74325 333-42507 333-37982
NUMBER - 1933 ACT
-----------------------------------------------------------------------------------------------------------
XXXXXXXXX Redacted Redacted Redacted
VARIABLE PRODUCTS
SERIES FUND
("TVP"), FRANKLIN
XXXXXXXXX
VARIABLE INSURANCE
PRODUCTS TRUST -
PORTFOLIOS AND
CLASSES - ADVISER
-----------------------------------------------------------------------------------------------------------
21
SCHEDULE E
OTHER PORTFOLIOS AVAILABLE UNDER THE CONTRACTS
AIM X.X.Xxxxxxx Appreciation Fund Fidelity VIP Equity Income Portfolio
AIM V.I. Diversified Income Fund Fidelity VIP Growth
AIM V.I. Growth Fund Fidelity VIP High Income
AIM V.I. International Fund Fidelity VIP Overseas
AIM V.I. Value Fund Fidelity VIP II Asset Manager Portfolio
Fidelity VIP II Investment Grade Bond Portfolio
Fidelity VIP II Contrafund
Fidelity VIP III Growth Opportunities
Alliance Premier Growth Janus Aspen Balanced Portfolio
Alliance Growth and Income Janus Aspen Global Technology
Alliance Growth Janus Aspen Flexible Income
Alliance Technology Janus Aspen Worldwide Growth Portfolio
AMT Partners Fund Lincoln National Money Market Fund
AMT Mid-cap Growth Fund Lincoln National Bond Fund
Lincoln National Capital Appreciation Fund
Lincoln National Equity-Income Fund
Lincoln National Social Awareness Fund
Lincoln National Global Asset Allocation Fund
Avis Global Small Capitalization MFS Emerging Growth Series
Avis Growth MFS Total Return Series
Avis International MFS Utilities Series
Avis Growth-Income MFS Research
Xxxx Xxxx
Xxxx U.S. Government/AAA-Rated Securities Fund
Baron Capital Asset Fund OpCap Global Equity Portfolio
OpCap Managed Portfolio
BT EAFE Equity Index Fund
BT Equity 500 Index Fund
BT Small Cap Index Fund
Delaware Premium Aggressive Growth Fund
Delaware Devon Series
Delaware Emerging Markets Series
Delaware High Yield Series
Delaware International Series
Delaware Premium Growth & Income
Delaware REIT Series
Delaware Small Cap Value Series
Delaware Trend Series
22
SCHEDULE F
REDACTED
23
SCHEDULE G
ADDRESSES FOR NOTICES
To the Company: Lincoln Life & Annuity Company of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, CFO/2nd Vice President
To the Trust: Franklin Xxxxxxxxx Variable Insurance Products Trust
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
To the Underwriter: Franklin Xxxxxxxxx Distributors, Inc.
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
24
AMENDMENT TO PARTICIPATION AGREEMENT
Franklin Xxxxxxxxx Variable Insurance Products Trust
Franklin Xxxxxxxxx Distributors, Inc.
Lincoln Life & Annuity Company of New York
The participation agreement, dated as of May 1, 2000, by and among Franklin
Templetion Variable Insurance Products Trust, Franklin Xxxxxxxxx
Distributors, Inc. and Lincoln Life & Annuity Company of New York (the
"Agreement") is hereby amended as follows:
Section 4.4 of the Agreement is deleted in its entirety and
replaced with the following provision:
4.4 At your option, we shall provide you, at our expense,
with either: (i) for each Contract owner who is invested through the
Account in a subaccount corresponding to a Portfolio ("designated
subaccount"), one copy of each of the following documents on each
occasion that such document is required by law or regulation to be
delivered to such Contract owner who is invested in a designated
subaccount: the Trust's current prospectus, annual report,
semi-annual report and other shareholder communications, including
any amendments or supplements to any of the foregoing, pertaining
specifically to the Portfolios ("Designated Portfolio Documents"); or
(ii) a camera ready copy of such Designated Portfolio Documents in a
form suitable for printing and from which information relating to
series of the Trust other than the Portfolios has been deleted to the
extent practicable. In connection with clause (ii) of this paragraph,
we will pay for proportional printing costs for such Designated
Portfolio Documents in order to provide one copy for each Contract
owner who is invested in a designated subaccount on each occasion
that such document is required by law or regulation to be delivered
to such Contract owner, and provided the appropriate documentation is
provided and approved by us. We shall provide you with a copy of the
Trust's current statement of additional information, including any
amendments or supplements, in a form suitable for you to duplicate.
The expenses of furnishing, including mailing, to Contract owners the
documents refereed to in this paragraph shall he borne by you. For
each of the documents provided to you in accordance with clause (i)
of this paragraph 4.4, we shall provide you, upon your request and at
your expense, additional copies. In no event shall we be responsible
for the costs of printing or delivery of Designated Portfolio
Documents to potential or new Contract owners or the delivery of
Designated Portfolio Documents to existing contract owners.
All other ten's and provisions of the Agreement not amended herein shall
remain in full force and effect
Effective Date as of May 1,2000.
FRANKLIN XXXXXXXXX VARIABLE INSURANCE PRODUCTS TRUST FRANKLIN XXXXXXXXX DISTRIBUTORS. INC.
---------------------------------------------------- -------------------------------------
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxx
Name: Xxxxx X. Xxxxxxxx Name: Xxxx Xxxxxx
Title: Assistant Vice President Title: Vice President
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
----------------------------------------------------
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President
