PARTICIPATION AGREEMENT
By and Among
▇▇▇▇▇▇▇▇▇▇▇ VARIABLE ACCOUNT FUNDS,
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
and
OPPENHEIMERFUNDS, INC.
THIS AGREEMENT, made and entered into as of the 20th day of
April, 2000 by and among Lincoln Life & Annuity Company of New York, a New
York corporation (hereinafter the "Company") on its own behalf and on behalf
of each separate account of the Company named in Schedule 1 to this
Agreement, as may be amended from time to time by mutual consent (each
account referred to as an "Account"), ▇▇▇▇▇▇▇▇▇▇▇ Variable Account Funds, an
open-end diversified management investment company organized under the laws
of the State of Massachusetts (hereinafter the "Fund") and OppenheimerFunds,
Inc., a Colorado Corporation (hereinafter the "Adviser").
WHEREAS, the Fund engages in business as an open-end
management investment company and was established for the purpose of serving
as the investment vehicle for separate accounts established for variable life
insurance policies and variable annuity contracts to be offered by insurance
companies (hereinafter "Participating Insurance Companies"); and
WHEREAS, beneficial interests in the Fund are divided into
several series of shares, each representing the interest in a particular
managed portfolio (collectively the "Portfolios") of securities and other
assets (the Portfolios covered by this Agreement are specified in Schedule 2
attached hereto, as may be amended from time to time by mutual consent); and
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WHEREAS, the Fund has obtained an order from the Securities
and Exchange Commission (alternatively referred to as the "SEC" or the
"Commission"), dated July 16, 1986 (File No. 812-6234), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold
to and held by variable annuity and variable life insurance separate accounts
of both affiliated and unaffiliated life insurance companies (hereinafter the
"Mixed and Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940 and serves as the investment
adviser to the Fund;
WHEREAS, the Company has registered or will register certain
variable annuity and/or life insurance contracts (hereinafter "Contracts")
under the 1933 Act (unless an exemption from registration is available); and
WHEREAS, the Account is a duly organized, validly existing
segregated asset account, established pursuant to resolution of the Board of
Directors of the Company under the insurance laws of the State of New York,
to set aside and invest assets attributable to the Contracts. (The
Contract(s) and the Account(s) covered by the Agreement are specified in
Schedule 1 attached hereto, as may be amended from time to time by mutual
consent); and
WHEREAS, the Company has registered each Account as a unit
investment trust under the 1940 Act (unless an exemption from registration is
available); and
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WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares in the Portfolios
named in Schedule 2 on behalf of one or more Accounts ot fund certain of the
Contracts named in Schedule 1 and the Fund is authorized to sell such shares
to unit investment trusts such as the Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises,
the Fund, the Adviser and the Company agree as follows:
ARTICLE I. PURCHASE AND REDEMPTION OF FUND SHARES
1.1. The Fund agrees to sell to the Company those shares of
the Fund which the Company orders on behalf of the Account, executing such
orders on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the order for the shares of the Fund. For
purposes of this Section 1.1, the Company shall be the designee of the Fund
for receipt of such orders from each Account and receipt by such designee
shall constitute receipt by the Fund; provided that the Fund receives written
(or facsimile) notice of such order on the next following Business Day by no
later than 10:30 A.M. New York time; however, the Company undertakes to use
its best efforts to provide such notice to the Fund by no later than 10:00
A.M. New York time. The Fund will confirm receipt of each order to the
Company by 1:00 P.M. New York time on the date of receipt by telecopier or
electronic mail. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the SEC.
1.2. The Company shall pay for Fund shares on the next
Business Day after an order to purchase Fund shares si made in accordance
with Section 1.1 hereof. Payment shall be in federal funds transmitted by
wire prusuant to instructions of the Fund's Treasurer or by a credit for any
shares redeemed.
1.3. The Fund agrees to make an indefinite number of Fund
shares available for purchase at the applicable net asset value per share by
the Company for the Accounts listed in Schedule 1, on each Business Day;
provided, however, that the Board of Trustees of the Fund (hereinafter the
"Trustees") may
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refuse to sell shares of any Portfolio to any person, or suspend or terminate
the offering of shares of any Portfolio if such action is required by law or
by regulatory authorities having jurisdiction or is, in the sole discretion
of the Trustees, acting in good faith and in light of their fiduciary duties
under federal and any applicable state laws, in the best interests of the
shareholders of any Portfolio.
1.4. The Fund agrees that shares of the Fund will be sold
only to Participating Insurance Companies and their separate accounts,
qualified pension and retirement plans or such other persons as are permitted
under applicable provisions of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code"), and regulations promulgated thereunder
(collectively, "Qualified Investors"), and/or to one or more registered
investment companies that restrict the sale of shares of such registered
investment companies to Qualified Investors, the sale of which will not
impair the tax treatment currently afforded the Contracts.
1.5. The Fund shall not sell Fund shares to any insurance
company or separate account unless a contractual obligation is in effect with
respect to such sales to abide by the conditions of the Mixed and Shared
Funding Exemptive Order that are addressed in Section 3.4 and Article VII of
this Agreement.
1.6. The Fund agrees to redeem for cash, upon the Company's
request, any full or fractional shares of the Fund held by the Company,
executing such requests on a daily basis at the net asset value next computed
after receipt by the Fund or its designee of the request for redemption. For
purposes of this Section 1.6, the Company shall be the designee of the Fund
for receipt of requests for redemption and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives written (or
facsimile) notice of such request for redemption on the next following
Business Day by no later than 10:00 A.M. New York time; however the Company
undertakes to use its best efforts to provide such notice to the Fund by no
later than 10:00 A.M. New York time.
1.7. The Fund shall pay for the Fund shares that are redeemed
within the time period specified in the Fund's prospectus or statement of
additional information, provided, however, that if the Fund does not pay for
the Fund shares that are redeemed on the next Business Day after a request to
redeem shares is
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made, then the Fund shall apply any such delay in redemptions uniformly to
all holders of shares of that Portfolio. Payment shall be in federal funds
transmitted by wire pursuant to the instructions of the Company or by a
credit toward any shares purchased on the Business Day on which the
redemption payment is made.
1.8. The Company agrees to purchase and redeem the shares of
the Portfolios named in Schedule 2 offered by the then current prospectus and
statement of additional information of the Fund in accordance with the
provisions of such prospectus and statement of additional information. The
Fund will use its best efforts to notify the Company in advance of any
modification to the provisions of its prospectus and statement of additional
information relating to the purchase and redemption of its shares.
1.9. Issuance and transfer of the Funds' shares will be by
book entry only. Stock certificates will not be issued to the Company or the
Account. The Fund or its agent will record purchase and redemption orders
for Fund shares in an appropriate title for each Account or the appropriate
subaccount of each Account upon receipt from the Company of information
relating to the appropriate title for each Account .
1.10. The Fund shall furnish notice as soon as reasonably
practicable to the Company of any income, dividends or capital gain
distributions payable on the Portfolio's shares. The Company hereby elects
to receive all such dividends and distributions as are payable on the
Portfolio shares in additional shares of that Portfolio. The Company
reserves the right to revoke this election and thereafter to receive all such
dividends and distributions in cash. The Fund shall notify the Company of the
number of shares so issued as payment of such dividends and distributions.
1.11. The Fund shall make the net asset value per share for
each Portfolio available to the Company on a daily basis as soon as
reasonably practical after the net asset value per share is calculated and
shall use its best efforts to make such net asset value per share available
by 6:30 p.m. New York time. In the event the Fund is unable to meet the 6:30
p.m. time stated herein, it shall provide additional time for the Company to
place orders for the purchase and redemption of shares. Such additional time
shall be equal to the additional time which the Fund takes to make the
closing net asset value available to the Company. If the Fund
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provides materially incorrect share net asset value information for any
Portfolios, the Fund shall make an adjustment to the number of shares
purchased or redeemed for the Accounts to reflect the correct net asset value
per share. Any material error in the calculation or reporting of net asset
value per share, dividend or capital gains information shall be reported
promptly upon discovery to the Company.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts
are or will be registered under the 1933 Act (unless an exemption from
registration is available) and, that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state
laws including, but not limited to, state insurance laws relating to
suitability requirements. The Company further represents and warrants that
it is an insurance company duly organized and validly existing under
applicable state law and that it has registered each Account as a unit
investment trust in accordance with the provisions of the 1940 Act (unless an
Account is exempt from such registration requirements) to serve as a
segregated investment account for the Contracts, and that (unless an Account
is and continues to be exempt from such registration requirements) it will
maintain such registration for so long as any Contracts are outstanding or
until registration is no longer required under federal and state securities
laws. The Company shall amend the registration statements under the 1933 Act
for the Contracts and the registration statement under the 1940 Act for the
Account from time to time as required in order to effect the continuous
offering of the Contracts or as may otherwise be required by applicable law.
The Company shall register and qualify the Contracts for sale in accordance
with the securities laws of the various states only if and to the extent
deemed necessary by the Company.
2.2. Subject to Article VI hereof, the Company represents and
warrants that it believes that the Contracts are currently and at the time of
issuance will be treated as life insurance or annuity contracts under
applicable provisions of the Internal Revenue Code and that it will make
every effort to maintain such
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treatment and that it will notify the Fund and the Adviser immediately upon
having a reasonable basis for believing that the Contracts have ceased to be
so treated or that they might not be so treated in the future.
2.3. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance and sold in accordance with applicable state and
federal law and that the Fund is and shall remain registered under the 1940
Act for as long as the Fund shares are sold. The Fund shall amend the
registration statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of
its shares. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund.
2.4. The Fund represents and warrants that it is currently
qualified as a Regulated Investment Company under Subchapter M of the
Internal Revenue Code and that it will maintain such qualification (under
Subchapter M or any successor or similar provision) and that it will notify
the Company immediately upon having a reasonable basis for believing that it
has ceased to so qualify or that it might not so qualify in the future.
2.5. If the Fund considers the adoption of one or more plans
under Rule 12b-1 under the 1940 Act to finance distribution expenses (a
"12b-1 Plan"), the Company agrees to provide the Trustees any information as
may be reasonably be requested by the Fund or the Adviser for the Trustees
to determine whether to adopt a 12b-1 Plan or Plans. The Fund shall notify
the Company prior to commencing to finance distribution expenses pursuant to
Rule 12b-1.
2.6. The Fund represents and warrants that it is lawfully
organized and validly existing under the laws of the Commonwealth of
Massachusetts and that it does and will comply with applicable provisions of
the 1940 Act.
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2.7. The Adviser represents and warrants that it is and will
remain duly registered under all applicable federal and state securities laws
and that it shall perform its obligations for the Fund in compliance with any
applicable state and federal securities laws.
2.8. The Fund and Adviser each represent and warrant that all
of their respective Directors, Trustees, officers, employees, investment
advisers, and the transfer agent of the Fund are and shall continue to be at
all times covered by a blanket fidelity bond (which may, at the Fund's
election, be in the form of a joint insured bond) or similar coverage for the
benefit of the Fund in an amount not less than the coverage required by
Section 17(g) and Rule 17g-1 of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid Bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable insurance
company. The Adviser agrees to make all reasonable efforts to see that this
bond or another bond containing these provisions is always in effect, and
agrees to notify the Company in the event that such coverage no longer
applies.
2.9. The Company represents and warrants that all of its
directors, officers, employees, agents, investment advisers, and other
individuals and entities dealing with the money and/or securities of the Fund
are covered by a blanket fidelity bond or similar coverage in an amount not
less than the equivalent of U.S. $3 million. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable insurance company. The Company agrees that any amount received
under such bond in connection with claims concerning losses of the Fund's
assets that derive from arrangements described in this Agreement will be paid
by the Company for the benefit of the Fund. In the event that claims of more
than one entity exceed coverage limits under such bond, amounts received
under such bond are to be shared pro rata in accordance with such losses. The
Company agrees to make all reasonable efforts to see that this bond or
another bond containing these provisions is always in effect, and agrees to
notify the Fund and the Adviser in the event that such coverage no longer
applies.
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2.10. The Fund and Adviser represent that the Fund's
investment policies, fees and expenses are and shall at all times remain in
compliance with applicable state securities laws, if any, and the Fund and
Adviser represent that their respective operations are and shall at all times
remain in material compliance with applicable state securities laws to the
extent required to perform this Agreement. The Fund and the Adviser also
represent that they will comply with any applicable state insurance law
restrictions, as provided in advance and in writing by the Company to the
Fund and the Adviser, including the furnishing of information about the Fund
not otherwise available to the Company which is required by state insurance
law to enable the Company to obtain the authority needed to issue the
Contracts in any applicable state.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
3.1. At least annually, the Fund or the Adviser shall provide
the Company, free of charge, with as many copies of the current prospectuses
for the Portfolios as the Company may reasonably request for distribution to
existing Contract owners whose Contracts are eligible to be funded by such
Portfolios. The Fund or the Adviser shall provide the Company, at the
Company's expense, with as many copies of the current prospectuses for the
Portfolios as the Company may reasonably request for distribution to
prospective purchasers of Contracts. If requested by the Company in lieu
thereof, the Fund shall provide such documentation (including a "camera
ready" copy of the new prospectuses dated on or after May 1, 1999 as set in
type or, at the request of the Company, as a diskette in the form sent to the
financial printer) and other assistance as is reasonably necessary in order
for the parties hereto once each year (or more frequently if the prospectuses
for the Portfolios are supplemented or amended) to have the prospectus for
the Contracts and the prospectuses for the Portfolios printed together in one
document. With respect to any prospectuses for the Portfolios that are
printed in combination with any one or more Contract prospectus (the
"Prospectus Booklet"), the costs of printing Prospectus Booklets for
distribution to existing Contract owners whose contracts are eligible to be
funded by such Portfolios shall be prorated to the Fund based on the ratio of
the number of pages of the prospectuses included for the Portfolios in the
Prospectus Booklets to the number of
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pages in the Prospectus Booklet as a whole; provided, however, that the
Company shall bear all printing expenses of such combined documents where
used for distribution to prospective purchasers.
3.2. The Fund's prospectus shall state that the statement of
additional information for the Fund is available from the Fund (or its
transfer agent). The Fund or its designee shall prepare and provide such
Statement to the Company and to any owner of a Contract or prospective owner
who requests such Statement at the Fund's expense.
3.3. The Fund or the Adviser, at its expense, shall provide
the Company with copies of the Fund's communications to shareholders and with
copies of the Fund's proxy material and semi-annual and annual reports to
shareholders (or may, at the Fund or the Adviser's option, reimburse the
Company for the pro rata cost of printing such materials) in such quantities
as the Company shall reasonably require, for distributing to Contract owners
at the Company's expense. Upon reasonable request, the Adviser shall be
permitted to review and approve (within 24 hours, or if such time period does
not end on a Business Day, by 12:00 noon on the following Business Day) the
typeset form of such proxy material, communications and shareholder reports
prior to such printing.
3.4. If and to the extent required by law (or the Mixed and
Shared Funding Exemptive Order) the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners or participants; and
(iii) vote Fund shares of a portfolio in an Account for which
no instructions have been received in the same
proportion as Fund shares of such Portfolio in that
Account for which instructions have been received
from the Company's Contract owners;
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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. The
Company reserves the right to vote Fund shares held in any Account in its own
right, to the extent permitted by law.
3.5. The Fund will comply with all applicable provisions of
the 1940 Act requiring voting by shareholders.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee, each piece of sales literature or
other promotional material in which the Fund or the Adviser is named, at
least ten business days prior to its use. No such material shall be used if
the Fund or its designee reasonably objects in writing to such use within
seven business days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or the Adviser concerning
either of them in connection with the sale of the Contracts other than the
information or representations contained in the registration statement or
prospectus for the Fund shares, as such registration statement and prospectus
may be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other promotional material
approved by the Fund or its designee, except with the permission of the Fund.
The Fund agrees to respond to any request for approval in a prompt and timely
basis. The Company shall adopt and implement procedures reasonably designed
to ensure that information promulgated or distributed by the Company or a
subsidiary thereof, or their respective employees or agents, concerning the
Fund or the Adviser which is intended only for use only by brokers or agents
selling the Contracts (i.e., information that is not intended for
distribution to Contract owners or prospective Contract owners) is so used,
by their employees and neither the Fund nor the Adviser shall be liable for
any losses, damages, or expenses relating to the improper use of such broker
only materials. The parties hereto agree that this section is not intended
to designate or otherwise imply that the Company is an underwriter or
distributor of the Fund's shares.
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4.3. The Adviser or Fund shall furnish or cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material which the Adviser or Fund prepared or caused to be
prepared, in which the Company or its separate account is named, at least ten
business days prior to its use. No such material shall be used if the
Company or its designee reasonably objects in writing to such use within
seven business days after receipt of such material.
4.4. Neither the Fund nor the Adviser or any related entity
under the control of the Adviser ("Affiliate") and shall give any
information or make any representations on behalf of the Company or
concerning the Company, each Account, or the Contracts, other than
information or representations contained in (i) the registration statement or
prospectus for the Contracts, as such registration statement and prospectus
may be amended or supplemented from time to time, (ii) reports for the
Account which are in the public domain or approved by the Company for
distribution to Contract owners or participants, or (iii) sales literature or
other promotional material approved by the Company or its designee, except
with the permission of the Company. The Company agrees to respond to any
request for approval on a prompt and timely basis. The Adviser shall adopt
and implement procedures reasonably designed to ensure that information
promulgated or distributed by the Fund and/or the Adviser or any Affiliate,
or their respective employees or agents, concerning the Company, any of its
affiliates, or the Contracts which is intended only for use only by brokers
or agents selling the shares (i.e., information that it not intended for
distribution to shareowners or prospective shareowners) is so used by their
employees and agents, and neither the Company nor any of its affiliates shall
be liable for any losses, damages, or expenses relating to the improper use
of such broker only materials. The parties agree that this section is not
intended to designate or otherwise imply that the Adviser is an underwriter
or distributor of the Contracts.
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4.5. The Adviser will provide to the Company at least one
complete copy of all registration statements and supplements thereto,
prospectuses, statements of additional information, reports, proxy
statements, and other promotional materials prepared by or at the request of
the Fund, the Adviser, or any Affiliate, in which the Company or any Account
is named, applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to any Portfolio or its
shares, within 20 days of the filing of such document with the SEC or other
regulatory authorities or as soon as practicable thereafter.
4.6. The Company will provide to the Fund at least one
complete copy of all registration statements, prospectuses, statements of
additional information, reports, solicitations for voting instructions, sales
literature and other promotional materials in which the Fund (or any
Portfolio) or the Adviser is named, applications for exemptions, requests for
no action letters, and all amendments to any of the above, that relate to the
Fund within 20 days of the filing of such document with the SEC or other
regulatory authorities or as soon as practicable thereafter.
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone or
tape recording, videotape display, signs or billboards, motion pictures,
electronic media, or other public media), sales literature (i.e., any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters,
form letters, seminar texts, reprints or excerpts of any other advertisement,
sales literature, or published article), educational or training materials or
other communications distributed or made generally available to some or all
agents or employees, and proxy materials and any other material constituting
sales literature or advertising under NASD rules, the 1940 Act or the ▇▇▇▇
▇▇▇.
4.8. The Company agrees and acknowledges that the Adviser is
the sole owner of the OppenheimerFunds, Inc. clasped hands ▇▇▇▇ and that all
use of any designation comprised in whole or part of
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such ▇▇▇▇ under this Agreement shall inure to the benefit of the Adviser or
the Fund. The Company shall not use such ▇▇▇▇ on its own behalf or on behalf
of any Account in connection with marketing the Contracts without prior
written consent of the Adviser for that specific use, which consent shall not
be unreasonably withheld, delayed or conditioned. Upon termination of this
Agreement for any reason, the Company shall cease all use of any such ▇▇▇▇.
4.9. Except as required by applicable law or regulation,
neither the Fund nor the Adviser, nor any subsidiary of the Adviser shall use
any trademark, trade name, service ▇▇▇▇ or logo of the Company or any of its
affiliates, or any variation of any such trademark, trade name, service ▇▇▇▇
or logo, without the Company's prior written consent, the granting of which
shall be at the Company's sole option.
ARTICLE V. FEES AND EXPENSES
5.1. The Fund and Adviser shall pay no fee or other
compensation to the Company under this Agreement, and the Company shall pay
no fee or other compensation to the Fund or Adviser, except as provided
herein or in any other written agreement.
5.2. All expenses incident to performance by each party of
its respective duties under this Agreement shall be paid by that party. The
Fund shall see to it that all its shares are registered and authorized for
issuance in accordance with applicable federal law and, if and to the extent
advisable by the Fund, in accordance with applicable state laws prior to
their sale.
5.3. The Company shall bear the expenses of distributing the
Fund's prospectus, proxy materials, communications and reports to Contract
owners and of printing and distributing the Fund's prospectus to prospective
Contract owners. The Fund and the Adviser agree to use their reasonable best
efforts in scheduling the effective dates of any material changes to the
Fund, (if any) so as not to unnecessarily increase the frequency of such
distributions.
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ARTICLE VI. DIVERSIFICATION
6.1. The Fund will at all times invest money from the
Contracts in such a manner as to ensure that the Contracts will be treated as
variable contracts under the Internal Revenue Code and the regulations issued
thereunder. Without limiting the scope of the foregoing, each the Fund and
the Adviser represents and warrants that each Portfolio of the Fund will
comply with Section 817(h) of the Internal Revenue Code and Treasury
Regulation 1.817-5, relating to the diversification requirements for variable
annuity, endowment, or life insurance contracts and any amendments or other
modifications to such Section or Regulations (and any revenue rulings,
revenue procedures, notices, and other published announcements of the
Internal Revenue Service interpreting these sections). In the event of a
breach of this Article VI, each the Fund and the Adviser will take all
reasonable steps (a) to notify the Company of such breach and (b) to
adequately diversify each Portfolio of the Fund so as to achieve compliance
within the grace period afforded by Treasury Regulation 1.817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Board of Trustees of the Fund (the "Board") will
monitor the Fund for the existence of any material irreconcilable conflict
between the interests of the Contract owners of all separate accounts
investing in the Fund. An irreconcilable material conflict may arise for a
variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative
or judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by Participating Insurance Companies or by variable
annuity contract and variable life insurance Contract owners; or (f) a
decision by an insurer to disregard the voting instructions of Contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
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7.2. The Company has received a copy of the Mixed and Shared
Funding Exemptive Order, and in particular, has reviewed the conditions to
the requested relief set forth therein. The Company agrees to be bound by
the responsibilities of a participating insurance company as set forth in the
Mixed and Shared Funding Exemptive Order, including without limitation the
requirement that the Company report any potential or existing conflicts of
which it is aware to the Board. The Company agrees to assist the Board in
carrying out its responsibilities in monitoring such conflicts under the
Mixed and Shared Funding Exemptive Order, by providing the Board in a timely
manner with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by
the Company to inform the Board whenever it or its affiliates disregard
Contract owner voting instructions and by confirming in writing, at the
Fund's request, that the Company is unaware of any such potential or existing
material irreconcilable conflicts.
7.3. If it is determined by a majority of the Board, or a
majority of its disinterested Trustees, that a material irreconcilable
conflict exists, the Company and the relevant Participating Insurance
Companies shall, at their expense and to the extent reasonably practicable
(as determined by a majority of the disinterested Trustees), take whatever
steps are necessary to remedy or eliminate the irreconcilable material
conflict, up to and including: (1) withdrawing the assets allocable to some
or all of the separate accounts from the Fund or any Portfolio and
reinvesting such assets in a different investment medium, including (but not
limited to) another Portfolio of the Fund, or submitting the question whether
such segregation should be implemented to a vote of all affected Contract
owners and, as appropriate, segregating the assets of any appropriate group
(i.e., variable annuity Contract owners or life insurance Contract owners, of
one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected Contract owners the option of making
such a change; and (2) establishing a new registered management investment
company or managed separate account.
16
7.4. If the Company's (or its affiliates') disregard of
voting instructions would conflict with the majority of its Contract owners'
voting instructions, and if the Company and/or the Fund and the Adviser
reasonably determine that a material irreconcilable conflict (as set forth in
the Mixed and Shared Funding Exemptive Order) may arise as a result, then the
Company may be required, at the Fund's election, to withdraw the Account's
investment in the Fund and terminate this Agreement. Any such withdrawal and
termination must take place within six (6) months after the Fund gives
written notice that this provision is being implemented (unless the Fund or
the Adviser is advised by their respective legal counsel or by the SEC staff
that the effective date of such withdrawal and termination is permitted to be
extended). Until such withdrawal and termination is implemented, the Fund
shall continue to accept and implement orders by the Company for the purchase
and redemption of shares of the Fund. Such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the
Board.
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the Account's investment in the Fund and terminate this Agreement
within six (6) months after the Fund informs the Company in writing that it
has determined that such decision has created an irreconcilable material
conflict (unless the Fund or the Adviser is advised by their respective legal
counsel or by the SEC staff that the effective date of such withdrawal and
termination is permitted to be extended). Until such withdrawal and
termination is implemented, the Fund shall continue to accept and implement
orders by the Company for the purchase and redemption of shares of the Fund,
subject to applicable regulatory limitation. Such withdrawal and termination
shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board.
7.6. For purposes of Sections 7.3 through 7.6 of this
Agreement, a majority of the disinterested members of the Board shall
determine whether any proposed action adequately remedies any
17
irreconcilable material conflict, but in no event will the Fund be required
to establish a new funding medium for the Contracts. The Company shall not
be required by Section 7.3 to establish a new funding medium for the
Contracts if an offer to do so has been declined by vote of a majority of
Contract owners materially adversely affected by the irreconcilable material
conflict. In the event that the Board determines that any proposed action
does not adequately remedy any irreconcilable material conflict, then the
Company will withdraw the Account's investment in the Fund and terminate this
Agreement within six (6) months after the Board informs the Company in
writing of the foregoing determination (unless the Fund or the Adviser is
advised by their respective legal counsel or by the SEC staff that the
effective date of such withdrawal and termination is permitted to be
extended) provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict
as determined by a majority of the disinterested members of the Board.
7.7. Upon request, the Company shall at least annually submit
to the Board such reports, materials or data as the Board may reasonably
request so that the Board may fully carry out the duties imposed upon it as
delineated in the Mixed and Shared Funding Exemptive Order, and said reports,
materials and data shall be submitted more frequently if deemed appropriate
by the Board.
7.8. If and to the extent that 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 Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive
Order) on terms and conditions materially different from those contained in
the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the
Participating Insurance Companies (including the Company), as appropriate,
shall take such reasonable steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4, 7.1, 7.2, 7.3, 7.4 and 7.5 of
this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
18
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY THE COMPANY
(a). The Company agrees to indemnify and hold harmless
the Fund and the Adviser, each member of their Board of Trustees or Board of
Directors, each of their officers and each person, if any, who controls the
Fund within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Company) or litigation (including reasonable
legal and other expenses), to which the Indemnified Parties may become
subject under any statute, regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts and:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the registration statement, prospectus
or statement of additional information for the
Contracts or contained in sales literature or other
promotional material for the Contracts (or any
amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission or
the alleged omission to state therein a material
fact required to be stated therein or necessary to
make the statements therein not misleading in light
of the circumstances which they were made; provided
that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or
omission or such alleged statement or omission was
made in reliance upon and in conformity with
information furnished to the Company by or on
behalf of the Fund or the Adviser for use in the
registration statement, prospectus or statement of
additional information for the Contracts or sales
literature (or any amendment or supplement) or
otherwise for use in connection with the sale of
the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations by or on behalf of the Company
(other than statements or representations contained
in the Fund registration statement, Fund prospectus
or sales literature or other promotional material
of the Fund not supplied by the Company or persons
under its control) or wrongful conduct of the
Company or persons under its control, with respect
to the sale or distribution of the Contracts or
Fund shares, provided any such statement or
19
representation or such wrongful conduct was not made
in reliance upon and in conformity with
information furnished to the Company by or on
behalf of the Adviser or the Fund; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Fund
registration statement, Fund prospectus, statement
of additional information or sales literature or
other promotional material of the Fund or any
amendment thereof or supplement thereto or the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading in light of the circumstances in which
they were made, if such statement or omission was
made in reliance upon information furnished to the
Fund or the Adviser by or on behalf of the Company
or persons under its control; or
(iv) arise out of or result from any material breach of
any representation and/or warranty made by the
Company in this Agreement or arise out of or result
from any other material breach of this Agreement by
the Company.
except to the extent provided in Sections 8.1(b) and 8.3 hereof. This
indemnification shall be in addition to any liability which the Company may
otherwise have.
(b). The Company 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 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.
8.2. INDEMNIFICATION BY ADVISER AND FUND
8.2(a)(1). The Adviser agrees to indemnify and hold harmless
the Company and each of its directors and officers and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Adviser) or litigation
(including reasonable legal and other expenses) to which the Indemnified
Parties may
20
become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) or settlements are related to the sale or
acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the registration statement,
prospectus, statement of additional information or
sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged
omission to state therein a material fact required
to be stated therein or necessary to make the
statements therein not misleading in light of the
circumstances in which they were made; provided
that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or
omission or such alleged statement or omission was
made in reliance upon and in conformity with
information furnished to the Adviser or the Fund by
or on behalf of the Company for use in the Fund
registration statement, prospectus or statement of
additional information, or sales literature or
other promotional material for the Contracts or of
the Fund; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Contracts or in
the Contract registration statement, the Contract
prospectus, statement of additional information, or
sales literature or other promotional material for
the Contracts not supplied by the Adviser or the
Fund or persons under the control of the Adviser or
the Fund respectively) or wrongful conduct of the
Adviser or persons under its control, with respect
to the sale or distribution of the Contracts,
provided any such statement or representation or
such wrongful conduct was not made in reliance upon
and in conformity with information furnished to the
Adviser or the Fund by or on behalf of the Company;
or
(iii) arise out of any untrue statement or allegedly
untrue statement of a material fact contained in a
registration statement, prospectus, statement of
additional information 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 in
light of the circumstances in which they were made,
if such statement or omission was made in reliance
upon information furnished to the Company by or on
behalf of the Fund or persons under the control of
the Adviser; or
21
(iv) arise out of or result from any material breach of
any representation and/or warranty made by the
Adviser or the Fund in this Agreement or arise out
of or result from any other material breach of this
Agreement by the Adviser or the Fund; (including a
failure, whether unintentional or in good faith or
otherwise, to comply with the diversification
requirements specified in Article VI of this
Agreement);
except to the extent provided in Sections 8.2(b) and 8.3 hereof. This
indemnification shall be in addition to any liability which the Adviser may
otherwise have.
8.2(a)(2) The Fund agrees to indemnify and hold harmless the
Indemnified Parties [as defined in Section 8.2(a)(1)] against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Fund) or litigation (including reasonable
legal and other expenses) to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the operations of the Fund or the sale
or acquisition of the Fund's shares and:
(i) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of any
material fact or (b) the omission or the alleged
omission to state therein a material fact required
to be stated therein or necessary to make the
statements made therein, in light of the
circumstances in which they were made, not
misleading, if such fact, statement or omission is
contained in the registration statement for the
Fund or the Contracts, or in the prospectus or
statement of additional information for the
Contracts or the Fund, or in any amendment to any
of the foregoing, or in sales literature or other
promotional material for the Contracts or of the
Fund, provided, however, that this agreement to
indemnify shall not apply as to any Indemnified
Party if such statement, fact or omission or such
alleged statement, fact or omission was made in
reliance upon and in conformity with information
furnished to the Adviser or the Fund by or on
behalf of the Indemnified Party; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Contracts or in
the Contract registration statement, the Contract
prospectus, statement of additional information, or
sales literature or other promotional material for
the Contracts not supplied by the Adviser or the
Fund or persons under the control of the Adviser or
the Fund respectively) or wrongful conduct of the
Fund or persons under its control with respect to
the sale
22
or distribution of Contracts, provided any
such statement or representation or such wrongful
conduct was not made in reliance upon and in
conformity with information furnished to the
Adviser or the Fund by or on behalf of the Company;
or
(iii) arise out of or result from any material breach of
any representation and/or warranty made by the Fund
in this Agreement or arise out of or result from
any other material breach of this Agreement by the
Fund (including a failure, whether unintentional or
in good faith or otherwise, to comply with the
diversification requirements specified in Article
VI of this Agreement);
except to the extent provided in Section 8.2(b) and 8.3 hereof. This
indemnification shall be in addition to any liability which the Fund may
otherwise have.
(b). The Fund and 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.
8.3 INDEMNIFICATION PROCEDURE
Any person obligated to provide indemnification under this
Article VIII ("indemnifying party" for the purpose of this Section 8.3) shall
not be liable under the indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to indemnification under
this Article VIII ("indemnified party" for the purpose of this Section 8.3)
unless such indemnified party shall have notified the indemnifying party in
writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been served
upon such indemnified party (or after such party shall have received notice
of such service on any designated agent), but failure to notify the
indemnifying party of any such claim shall not relieve the indemnifying party
from any liability which it may have to the indemnified party against whom
such action is brought under the indemnification provisions of this Article
VIII, except to the extent that the failure to notify results in the failure
of actual notice to the indemnifying party and such indemnifying
23
party is damaged solely as a result of failure to give such notice. In case
any such action is brought against the indemnified party, the indemnifying
party will be entitled to participate, at its own expense, in the defense
thereof. The indemnifying party also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from the indemnifying party to the indemnified party of the
indemnifying party's election to assume the defense thereof, the indemnified
party shall bear the fees and expenses of any additional counsel retained by
it, and the indemnifying party will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation, unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party from and against any loss or liability by reason of
such settlement or judgment.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this Article
VIII. The indemnification provisions contained in this Article VIII shall
survive any termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the State of New
York.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules
24
and regulations as the SEC may grant (including, but not limited to, the
Mixed and Shared Funding Exemptive Order) and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1 This Agreement shall terminate:
(a) at the option of any party upon six months' advance
written notice to the other parties unless otherwise agreed in a separate
written agreement among the parties; or
(b) at the option of the Company to the extent that
shares of Portfolios are not reasonably available to meet the requirements of
the Contracts as determined by the Company reasonably and in good faith; or
(c) at the option of the Fund or the Adviser upon
institution of formal proceedings against the Company by the NASD, the SEC,
the insurance commission of any state or any other regulatory body regarding
the Company's duties under this Agreement or related to the sale of the
Contracts, the administration of the Contracts, the operation of any Account,
or the purchase of Fund shares, which would, in the judgment of counsel,
after a reasonable opportunity for consultation with Company counsel, have a
material adverse effect on the Company's ability to perform its obligations
under this Agreement; or
(d) at the option of the Company upon institution of
formal proceedings against the Fund or the Adviser by the NASD, the SEC, or
any state securities or insurance department or any other regulatory body,
which would, in the judgment of counsel, after a reasonable opportunity for
consultation with the Adviser's or the Fund's counsel, have a material
adverse effect on the Adviser's or the Fund's ability to perform its
obligations under this Agreement; or
(e) at the option of the Company or the Fund upon receipt
of any necessary regulatory approvals or the vote of the Contract owners
having an interest in the Account (or any subaccount) to substitute the
shares of another investment company for the corresponding Portfolio shares
of the Fund in accordance with the terms of the Contracts for which those
Portfolio shares had been selected to serve as the
25
underlying investment media. The Company will give at least 45 days prior
written notice to the Fund of the date of any proposed vote or other action
taken to replace the Fund's shares; or
(f) at the option of the Company or the Fund upon a
determination by a majority of the Board, or a majority of the disinterested
Board members, that an irreconcilable material conflict exists among the
interests of (i) all Contract owners of variable insurance products of all
separate accounts or (ii) the interests of the Participating Insurance
Companies investing in the Fund as delineated in Article VII of this
Agreement. The Fund or the Adviser will notify the Company no later than the
first date on which the Board is notified of such irreconcilable material
conflict; or
(g) at the option of the Company if the Fund ceases to
qualify as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code, or under any successor or similar provision, or if the Company
reasonably believes that the Fund may fail to so qualify; or
(h) at the option of the Company if the Fund fails to meet
the diversification requirements specified in Article VI hereof or if the
Company reasonably believes that the Fund will fail to meet such
requirements; or
(i) at the option of any party to this Agreement, upon
another party's failure to cure a material breach of any provision of this
Agreement within thirty days after written notice thereof; or
(j) at the option of the Company, if the Company determines
in its sole judgment exercised in good faith, that either the Fund or the
Adviser has suffered a material adverse change in its business, operations or
financial condition since the date of this Agreement or is the subject of
material adverse publicity which is likely to have a material adverse impact
upon the business and operations of the Company; or
(k) at the option of the Fund or the Adviser, if the Fund
or Adviser respectively, shall determine in its sole judgment exercised in
good faith, that the Company has suffered a material adverse change in its
business, operations or financial condition since the date of this Agreement
or is
26
the subject of material adverse publicity which is likely to have a material
adverse impact upon the business and operations of the Fund or the Adviser;
(l) subject to the Fund's compliance with Article VI
hereof, at the option of the Fund in the event any of the Contracts are not
issued or sold in accordance with applicable requirements of federal and/or
state law;
(m) upon assignment of this Agreement, unless made with the
written consent of the parties hereto.
10.2 NOTICE REQUIREMENT.
(a) In the event that any termination of this Agreement
is based upon the provisions of Article VII, such prior written notice shall
be given in advance of the effective date of termination as required by such
provisions.
(b) In the event that any termination of this Agreement
is based upon the provisions of Sections 10.1(b) - (d) or 10.1(g) - (i),
prompt written notice of the election to terminate this Agreement for cause
shall be furnished by the party terminating the Agreement to the
non-terminating parties, with said termination to be effective upon receipt
of such notice by the non-terminating parties.
(c) In the event that any termination of this Agreement
is based upon the provisions of Sections 10.1(j) or 10.1(k), prior written
notice of the election to terminate this Agreement for cause shall be
furnished by the party terminating this Agreement to the non-terminating
parties. Such prior written notice shall be given by the party terminating
this Agreement to the non-terminating parties at least 30 days before the
effective date of termination.
10.3 It is understood and agreed that the right to terminate
this Agreement pursuant to Section 10.1(a) may be exercised for any reason or
for no reason.
10.4. EFFECT OF TERMINATION.
27
(a) Notwithstanding any termination of this Agreement
pursuant to Section 10.1 of this Agreement and subject to Section 1.3 of this
Agreement, the Company may require the Fund to continue to make available
additional shares of the Fund pursuant to the terms and conditions of this
Agreement as provided in paragraph (b) below, for all Contracts in effect on
the effective date of termination of this Agreement (hereinafter referred to
as "Existing Contracts"). Specifically, without limitation, the owners of
the Existing Contracts shall be permitted to reallocate investments in the
Fund, redeem investments in the Fund and/or invest in the Fund upon the
making of additional purchase payments under the Existing Contracts. The
parties agree that this Section 10.4 shall not apply to any terminations
under Article VII and the effect of such Article VII terminations shall be
governed by Article VII of this Agreement.
(b) If shares of the Fund continue to be made available
after termination of this Agreement pursuant to this Section 10.4, the
provisions of this Agreement shall remain in effect except for Section
10.1(a) and thereafter the Fund, the Adviser, or the Company may terminate
the Agreement, as so continued pursuant to this Section 10.4, upon written
notice to the other party, such notice to be for a period that is reasonable
under the circumstances but need not be for more than 90 days.
10.5 Except as necessary to implement Contract owner
initiated or approved transactions, or as required by state insurance laws or
regulations, the Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets
held in the Account), and the Company shall not prevent Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Contracts, until 45 days after the Company shall have notified the Fund or
the Adviser of its intention to do so.
ARTICLE XI. NOTICES
Any notice shall be deemed duly given only if sent by hand,
evidenced by written receipt or by certified mail, return receipt requested,
to the other party at the address of such party set forth below or at
28
such other address as such party may from time to time specify in writing to
the other party. All notices shall be deemed given on the date received or
rejected by the addressee.
If to the Fund:
▇▇▇▇▇▇▇▇▇▇▇ Variable Account Funds
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Treasurer
If to the Adviser:
OppenheimerFunds, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Executive Vice President and General Counsel
If to the Company:
Lincoln Life & Annuity Company of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Senior Counsel
The Lincoln National Life Insurance Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ARTICLE XII. MISCELLANEOUS
12.1. The Company and the Adviser each understand and agree
that the obligations of the Fund under this Agreement are not binding upon
any shareholder or Trustee of the Fund personally, but bind only the Fund and
the Fund's property; the Company and the Adviser each represent that it has
notice of
29
the provisions of the Declaration of Trust of the Fund disclaiming
shareholder and Trustee liability for acts or obligations of the Fund.
12.2. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential and all
information reasonably identified as confidential in writing by any other
party hereto (including without limitation the names and addresses of the
owners of the Contracts) and, except as contemplated by this Agreement, shall
not disclose, disseminate or utilize such confidential information until such
time as it may come into the public domain without the express written
consent of the affected party .
12.3. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
12.4. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
12.5. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6. This Agreement shall not be assigned by any party hereto
without the prior written consent of all the parties.
12.7. Each party hereto shall cooperate with each other party
and all appropriate governmental authorities (including without limitation
the SEC, the NASD and state insurance regulators) and shall permit such
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
12.8. Each party represents that the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein
have been duly authorized by all necessary corporate or trust action, as
applicable, by such party and when so executed and delivered this Agreement
will be the valid and binding obligation of such party enforceable in
accordance with its terms.
30
12.9. Except as may otherwise be required under Article VII,
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.
12.10. It is understood by the parties that this Agreement is
not an exclusive arrangement in any respect.
12.11. The foregoing constitutes the entire Agreement between
the parties hereto, and shall not be modified, amended or assigned except by
an Agreement in writing signed by an authorized representative of each such
party.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed as of the date specified
below.
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By its authorized officer,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Date: March 29, 2000
▇▇▇▇▇▇▇▇▇▇▇ VARIABLE ACCOUNT FUNDS
By its authorized officer,
By: /s/ illegible
Title: Assistant Secretary
Date: March 23, 2000
OPPENHEIMERFUNDS, INC.
By its authorized officer,
31
By: /s/ illegible
Title: Senior Vice President
Date: March 23, 2000
32
SCHEDULE 1
LLANY Separate Account S for Flexible Premium Variable Life Insurance
33
SCHEDULE 2
Portfolios of ▇▇▇▇▇▇▇▇▇▇▇ Variable Account Funds:
▇▇▇▇▇▇▇▇▇▇▇ Main Street Growth & Income Fund/VA
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SCHEDULE 3
Lincoln Corporate Variable Universal Life ("CVUL and" "CVUL Series III")
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AMENDMENT NO. 1 TO
PARTICIPATION AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇▇▇▇▇ VARIABLE ACCOUNT FUNDS,
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
AND
OPPENHEIMERFUNDS, INC.
This Amendment No. 1 to the Participation Agreement ("Agreement") by
and among ▇▇▇▇▇▇▇▇▇▇▇ Variable Account Funds (the "Fund"), Lincoln Life &
Annuity Company of New York ("the Company"), and OppenheimerFunds, Inc. (the
"Adviser" is effective as of April 2, 2007, regardless of when executed.
WHEREAS, a merger of Lincoln Life & Annuity Company of New York and
Jefferson Pilot LifeAmerica Insurance Company ("JPLA") is expected to occur
on or about April 2, 2007; and
WHEREAS, effective on or about ▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇▇ will change its
state of domicile from New Jersey to New York and will change its name to
Lincoln Life & Annuity Company of New York;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Adviser agree to amend the Agreement as follows:
1. The parties consent to an assignment of the responsibilities of the
former Lincoln Life & Annuity Company of New York under this Agreement
to the new Lincoln Life & Annuity Company of New York.
2. All other terms of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 1 to be executed in its name and on its behalf by its duly
authorized representative as of the date specified below.
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Second Vice President
▇▇▇▇▇▇▇▇▇▇▇ VARIABLE ACCOUNT FUNDS
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
OPPENHEIMERFUNDS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
37
AMENDMENT NO. 2 TO
PARTICIPATION AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇▇▇▇▇ VARIABLE ACCOUNT FUNDS,
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
AND
OPPENHEIMERFUNDS, INC.
This Amendment No. 2 to the Participation Agreement ("Agreement") by
and among ▇▇▇▇▇▇▇▇▇▇▇ Variable Account Funds (the "Fund"), Lincoln Life &
Annuity Company of New York ("the Company"), and OppenheimerFunds, Inc. (the
"Adviser" is effective as of December 1, 2008, regardless of when executed.
WHEREAS, the parties wish to amend the Participation Agreement to
add additional Separate Accounts and additional portfolios;
For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend the Agreement as follows:
3. Schedules 1, 2 and 3 are hereby amended and replaced by the
attached Schedules 1, 2 and 3.
4. All other terms of the Agreement shall remain in full force and
effect.
Each of the parties has caused this Amendment to be executed in its
name and on behalf of its duly authorized officer on the date specified below.
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Second Vice President
Date: 12/29/08
▇▇▇▇▇▇▇▇▇▇▇ VARIABLE ACCOUNT FUNDS
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
Date:12/5/08
OPPENHEIMERFUNDS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
Date:12/12/08
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SCHEDULE 1
LLANY Separate Account S for Flexible Premium Variable Life Insurance
Lincoln New York Account N for Variable Annuities
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SCHEDULE 2
PORTFOLIOS OF ▇▇▇▇▇▇▇▇▇▇▇ VARIABLE ACCOUNT FUNDS:
▇▇▇▇▇▇▇▇▇▇▇ Main Street Fund/VA
▇▇▇▇▇▇▇▇▇▇▇ Global Securities Fund/VA
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SCHEDULE 3
Lincoln Corporate Variable Universal Life ("CVUL" and "CVUL Series III")
Lincoln ChoicePlus Assurance (A Class)
Lincoln ChoicePlus Assurance (B Class)
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