EXHIBIT 99-B.8.49
FUND PARTICIPATION AGREEMENT
EXHIBIT 99-B.8.49
FUND PARTICIPATION AGREEMENT
BETWEEN
LORD XXXXXX SERIES FUND, INC.
AND
AETNA LIFE INSURANCE AND ANNUTIY COMPANY
Aetna Life Insurance and Annuity Company ("Aetna"), Lord Xxxxxx Series
Fund, Inc. (the "Fund") and Lord Xxxxxx Distributor LLC (the "Distributor")
hereby agree to an arrangement whereby the Fund shall be made available to serve
as underlying investment media for Variable Annuity or Variable Life Contracts
("Contracts") to be issued by Aetna.
1. Establishment of Accounts; Availability of Fund.
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(a) Aetna represents that it has established Variable Annuity Accounts
B, C, D and Variable Life Accounts B and C and may establish such
other accounts as may be set forth in Schedule A attached hereto
and as may be amended from time to time with the mutual consent
of the parties hereto (the "Accounts"), each of which is a
separate account under Connecticut Insurance law, and has
registered or will register each of the Accounts (except for such
Accounts for which no such registration is required) as a unit
investment trust under the Investment Company Act of 1940 (the
"1940 Act"), to serve as an investment vehicle for the Contracts.
Each Contract provides for the allocation of net amounts received
by Aetna to an Account for investment in the shares of one of
more specified open-end management investment companies available
through that Account as underlying investment media. Selection of
a particular investment management company and changes therein
from time to time are made by the participant or Contract owner,
as applicable under a particular Contract.
(b) The Fund and the Distributor represent and warrant that the
investments of the series of the Fund (each designated a
"Portfolio"), including those in existence at the date of this
Agreement and those created subsequent to such date, will at all
times be adequately diversified within the meaning of Section
817(h) of the Internal Revenue Service Code of 1986, as amended
(the "Code"), and the Regulations thereunder, and that at all
times while this agreement is in effect, all beneficial interests
will be owned by one or more insurance companies or by any other
party permitted under Section 1.817-5(f)(3) of the Regulations
promulgated under the Code or by the successor thereto, or by any
other party permitted under a Revenue Ruling or private letter
ruling granted by the Internal Revenue Service.
2. Pricing Information; Orders; Settlement.
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(a) The Fund and/or the Distributor will make Fund shares available to
be purchased by Aetna, and will accept redemption orders from
Aetna, on behalf of each Account at the net asset value applicable
to each order on those days on which the Fund
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calculates its net asset value (a "Business Day"). Fund shares
shall be purchased and redeemed in such quantity and at such time
determined by Aetna to be necessary to meet the requirements of
those Contracts for which the Fund serve as underlying investment
media, provided, however, that the Board of Directors of the Fund
(hereinafter the "Board") may upon reasonable notice to Aetna,
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 Directors,
acting in good faith and in the best interests of the shareholders
of any Portfolio and is acting in compliance with their fiduciary
obligations under federal and/or any applicable state laws.
(b) The Fund will provide to Aetna closing net asset values, dividend
and capital gain information for each Portfolio in which any of
the Accounts has an investment at the close of trading each day
that the New York Stock Exchange the "Exchange" is open (each such
day a "Business Day"). The Fund will use its best efforts to
provide such information by 6:30 p.m. Eastern Standard time on
such Business Day, but shall in no event provide such information
later than 7:00 p.m. Eastern Standard time absent extraordinary
circumstances. In the event of an anticipated delay past 7:00 p.m,
the Fund shall notify Aetna by 7:00 p.m. of the anticipated delay.
Aetna will send via facsimile (orally confirmed) or electronic
transmission to the Fund or its specified agent orders to purchase
and/or redeem Fund shares by 9:00 a.m. Eastern Standard Time the
following business day. Payment for net purchases will be wired by
Aetna to an account designated by the Fund or the Distributor to
coincide with the order for shares of the Fund.
(c) The Fund hereby appoints Aetna as its agent for the limited
purpose of accepting purchase and redemption orders for Fund
shares relating to the Contracts from Contract owners or
participants. Orders from Contract owners or participants received
from any distributor of the Contracts (including affiliates of
Aetna) by Aetna, acting as agent for the Fund, prior to the close
of the Exchange on any given business day will be executed by the
Fund at the net asset value determined as of the close of the
Exchange on such Business Day, provided that the Fund receives
written (or facsimile orally confirmed)) notice of such order by 9
a.m. Eastern Standard Time on the next following Business Day. Any
orders received by Aetna acting as agent on such day but after the
close of the Exchange will be executed by the Fund at the net
asset value determined as of the close of the Exchange on the next
business day following the day of receipt of such order, provided
that the Fund receives written (or facsimile orally confirmed))
notice of such order by 9 a.m. Eastern Standard Time within two
days following the day of receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired
by the Fund to an account designated by Aetna, and payments for
net purchase of the Fund will be wired by Aetna to an account
designated by the Fund, on the same Business Day as Aetna places
an order to purchase or redeem Fund shares. Payments shall be in
federal funds transmitted by wire.
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(e) In lieu of applicable provisions set forth in paragraphs 2(a)
through 2(d) above, the parties may agree to provide pricing
information, execute orders and wire payments for purchases and
redemptions through National Securities Clearing Corporation's
Fund/SERV system in which case such activities will be governed by
the provisions set forth in Exhibit I to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other
party), and shall not be liable in the event that an error is a
result of any misinformation supplied by the other party.
(g) Aetna agrees to purchase and redeem the shares of the Portfolios
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. Aetna shall
not permit any person other than a Contract owner or Participant
to give instructions to Aetna which would require Aetna to redeem
or exchange shares of the Fund. This provision shall not be
construed to prohibit Aetna from substituting shares of another
fund, as permitted by law.
3. Expenses.
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(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by the Fund under this Agreement shall
be paid by the Fund, including the cost of registration of Fund
shares with the Securities and Exchange Commission (the "SEC") and
in states where required. The Fund and Distributor shall pay no
fee or other compensation to Aetna under this Agreement, and Aetna
shall pay no fee or other compensation to the Fund or Distributor,
except as provided herein and in Schedule C attached hereto and
made a part of this Agreement as may be amended from time to time
with the mutual consent of the parties hereto. All expenses
incident to performance by each party of its respective duties
under this Agreement shall be paid by that party, unless otherwise
specified in this Agreement.
(b) The Fund or the Distributor shall provide to Aetna Post Script
files of periodic Fund reports to shareholders and other materials
that are required by law to be sent to Contract owners. In
addition, the Fund or the Distributor shall provide Aetna with a
sufficient quantity of its prospectuses, statements of additional
information and any supplements to any of these materials, to be
used in connection with the offerings and transactions
contemplated by this Agreement. In addition, the Fund, at its own
expense, shall provide Aetna with a sufficient quantity of its
proxy material that is required to be sent to Contract owners. The
cost associated with proxy preparation, group authorization
letters, programming for tabulation and necessary materials
(including postage) will be paid by the Fund, subject to the
maximum amount allowed under applicable law.
(c) The Fund or the Distributor shall pay for the cost of typesetting
and printing periodic fund reports to shareholders, prospectuses,
prospectus supplements, statements of additional information and
other materials that are required by law to be sent to Contract
owners or participants, as well as the cost of distributing such
materials.
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Aetna shall pay for the cost of prospectuses and statements of
additional information and the distribution thereof for
prospective Contract owners or participants. Each party shall be
provided with such supporting data as may reasonably be requested
for determining expenses under this Section 3.
(d) In lieu of the Fund's or Distributor's providing printed copies of
prospectuses, statements of additional information and any
supplements to any of these materials, and periodic fund reports
to shareholders, Aetna shall have the right to request that the
Fund transmit a copy of such materials in an electronic format
(Post Script files), which Aetna may use to have such materials
printed together with similar materials of other Account funding
media that Aetna or any distributor will distribute to existing or
prospective Contract owners or participants.
4. Representations.
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Aetna agrees that it and its agents shall not, without the written
consent of the Fund or the Distributor, make representations concerning
the Fund, or its shares except those contained in the then current
prospectuses and in current printed sales literature approved by or
deemed approved by the Fund or the Distributor.
5. Termination.
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This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either Aetna, the Distributor or the Fund, upon
sixty days advance written notice to the other parties;
(b) at the option of Aetna, upon one week advance written notice to
the Distributor and the Fund, if Fund shares are not available for
any reason to meet the requirement of Contracts as determined by
Aetna. Reasonable advance notice of election to terminate shall be
furnished by Company;
(c) at the option of either Aetna, the Distributor or the Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the
Account, Aetna, the Fund or the Distributor by the National
Association of Securities Dealers, Inc. (the "NASD"), the SEC or
any other regulatory body;
(d) upon the determination of the Accounts to substitute for the
Fund's shares the shares of another investment company in
accordance with the terms of the applicable Contracts. Aetna will
give 60 days written notice to the Fund and the Distributor of any
decision to replace the Fund's' shares;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
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(f) if Fund shares are not registered, issued or sold in conformance
with Federal law or such law precludes the use of Fund shares as
an underlying investment medium for Contracts issued or to be
issued by Aetna. Prompt notice shall be given by the appropriate
party should such situation occur.
6. Continuation of Agreement.
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Termination as the result of any cause listed in Section 5 shall not
affect the Fund's obligation to furnish its shares to Contracts then in force
for which its shares serve or may serve as the underlying medium unless such
further sale of Fund shares is prohibited by law or the SEC or other regulatory
body, or is determined by the Fund's Board to be necessary to remedy or
eliminate an irreconcilable conflict pursuant to Section 10 hereof.
7. Advertising Materials; Filed Documents.
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(a) Advertising and sales literature with respect to the Fund prepared
by Aetna or its agents for use in marketing its Contracts will be
submitted to the Fund or its designee for review before such
material is submitted to any regulatory body for review. The Fund
or its designee shall advise the submitting part in writing within
ten (10) Business Days of its approval or disapproval of such
materials. If and to the extent required by securities laws, Aetna
will file and clear such advertising and literature with the NASD,
SEC or any other required regulatory body. If such filing and
clearance is required, Aetna will provide satisfactory evidence of
such filing and clearance to the Fund upon request, and will
provide to the Fund copies of any SEC or NASD comment letters
relating to such materials when and if they are received.
(b) The Fund will provide additional copies of its financials as soon
as available to Aetna and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and
all amendments or supplements to any of the above that relate to
the Fund promptly after the filing of such document with the SEC
or other regulatory authorities. At the Distributor's request,
Aetna will provide to the Distributor at least one complete copy
of all registration statements, prospectuses, statements of
additional information, annual and semi-annual reports, proxy
statements, and all amendments or supplements to any of the above
that relate to the Account promptly after the filing of such
document with the SEC or other regulatory authority.
(c) The Fund or the Distributor will provide via Excel spreadsheet
diskette format or in electronic transmission to Aetna information
necessary to update Fund profiles, including the Fund's top ten
holdings, within fifteen (15) calendar days following the end of
each quarter. Such information will not include the Portfolis'
full portfolio information, but the Fund or the Distributor will
provide full portfolio information to Aetna within 30 days
following the end of each quarter.
8. Proxy Voting.
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(a) Aetna shall provide pass-through voting privileges on Fund shares
held by registered separate accounts to all Contract owners and
participants to the extent the SEC continues to interpret the 1940
Act as requiring such privileges. Aetna shall provide pass-through
voting privileges on Fund shares held by unregistered separate
accounts to all Contract owners.
(b) Aetna will distribute to Contract owners and participants, as
appropriate, all proxy material furnished by the Fund and will
vote Fund shares in accordance with instructions received from
such Contract owners and participants. If and to the extent
required by law, Aetna, with respect to each group Contract and in
each Account, shall vote Fund shares for which no instructions
have been received in the same proportion as shares for which such
instructions have been received. Aetna and its agents shall not
oppose or interfere with the solicitation of proxies for Fund
shares held for such Contract owners and participants.
9. Indemnification.
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(a) Aetna agrees to indemnify and hold harmless the Fund and the
Distributor, and its directors, officers, employees, agents and
each person, if any, who controls the Fund or its Distributor
within the meaning of the Securities Act of 1933 (the "1933 Act")
against any losses, claims, damages or liabilities to which the
Fund or any such director, officer, employee, agent, or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectus or sales
literature of Aetna 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, or arise out of or as a result of conduct,
statements or representations (other than statements or
representations contained in the prospectuses or sales literature
of the Fund and used in a context that does not cause such
statements or representations to be untrue or allegedly untrue or
omit or allegedly omit informaiton otherwise contained in such
prospectuses or sales literature required to be stated or
necessary to make the statements or representations not
misleading) of Aetna or its agents, with respect to the sale and
distribution of Contracts for which Fund shares are the underlying
investment. Aetna will reimburse any legal or other expenses
reasonably incurred by the Fund or any such director, officer,
employee, agent, investment adviser, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that Aetna will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon (i) an
untrue statement or omission or alleged omission made in such
Registration Statement or prospectus in conformity with written
materials furnished to Aetna by the Fund specifically for use
therein or (ii) the willful misfeasance, bad faith, or gross
negligence by the Fund or Distributor in the performance of its
duties or the Fund's or Distributor's reckless disregard of
obligations or duties under this Agreement or to Aetna, whichever
is applicable. This indemnity agreement will be in addition to any
liability which Aetna may otherwise have.
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(b) The Fund and the Distributor agree to indemnify and hold harmless
Aetna and its directors, officers, employees, agents and each
person, if any, who controls Aetna within the meaning of the 1933
Act against any losses, claims, damages or liabilities to which
Aetna or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectuses or sales
literature of the Fund 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 material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Fund will reimburse any legal or other expenses
reasonably incurred by Aetna or any such director, officer,
employee, agent, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Fund will not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
omission or alleged omission made in such Registration Statement
or prospectuses which are in conformity with written materials
furnished to the Fund by Aetna specifically for use therein.
(c) Aetna will hold the Fund the Distributor harmless for errors,
error correction costs, and liabilities resulting from the acts or
omsissions of Aetna or its agents. In addition, in the event of
any error or delay with respect to information regarding the
purchase, redemption, transfer or registration of shares of the
Funds, the parties agree that each is obligated to make Accounts
and/or the Funds, respectively, whole for any error or delay that
it causes, subject in each case to the related Fund's policies on
materiality or pricing errors, if applicable. In addition, the
parties specifically agree that each may require compensation for
the reasonable costs of any reprocessing necessary to adjust its
respective accounting and/or record-keeping systmes as a result of
an error or delay caused by the other party, subject to the
limitations described in the following paragraph. Each party
agrees to provide the other with prompt notice of any errors or
delays of the type referred to in this Section 9 and to use
reasonable efforts to take such action as may be appropriate to
avoid or mitigate any such costs or losses.
(d) The following limits shall apply to the collective liabilities of
the parties for systems and out of pocket costs incurred if such
costs or expenses are a result of the failure of a party to
provide another party with correct or timely information: (i)
$1,000 per day for each day that incorrect information provided is
not corrected, if such period does not include a month-end or a
fiscal quarter-end, (ii)$ 1,500 per day for each day that such
information provided is not corrected, if such period does include
a month-end or a fiscal quarter-end, and (iii) up to $5,000 per
occurrence in the aggregate under (i) or (ii) above. However,
Aetna's postage costs resulting from mailing corrected
communications to Contract owners or participants resulting from
the error shall not be subject to the $5,000 per occurrence limit,
but shall be subject to the daily limits. Any incorrect
information that has a common nexus any single error shall be
deemed to be one occurrence for these purposes provided all
corrections are provided at the same time.
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(e) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 10. In case
any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to
the extent that it may wish to, assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section 9
for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
10. Potential Conflicts.
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(a) The parties acknowledge that Fund filed an application with the
SEC to request an order granting relief from various provisions of
the 1940 Act and the rules thereunder to the extent necessary to
permit Fund shares to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and
unaffiliated participating insurance companies accounts
("Participating Companies") and qualified pension and retirement
plans outside the separate account context (including, without
limitation, those trusts, plans, accounts contracts or annuities
described in Sections 401(a), 403(a), 403(b), 408(a), 408(b),
414(d), 457(b), 408(k), 501(c)(18) of the Internal Revenue Code)
and any other trust, plan, account, contract or annuity trust that
is determined to be within the scope of Treasury
Regulationss.1.817.5(f)(3)(iii)("Plans"). It is anticipated that
such exemptive order (the "Mixed and Shared Funding Exemptive
Order"), when and if issued, shall require Fund and each
Participating Company and Plan to comply with conditions and
undertakings substantially as provided in this Section 10. If the
Mixed and Shared Funding Exemptive Order imposes conditions
materially different from those provided for in this Section 10,
the conditions and undertakings imposed by the Mixed and Shared
Funding Exemptive Order shall govern this Agreement and the
parties hereto agree to amend this Agreement consistent with the
Mixed and Shared Funding Exemptive Order.
(b) The Fund's Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the
contract owners of all Participating Companies and Plans investing
in the Fund. An irreconcilable material conflict may arise for a
variety of reasons, including: (i) an action by any state
insurance regulatory authority; (ii) 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 actions by insurance, tax
or securities regulatory authorities; (iii) an administrative or
judicial decision in any relevant proceeding; (iv) the manner in
which the investments of any portfolio are being managed; (v) a
difference in voting instructions given by variable annuity
contract owners and variable life insurance
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contract owners; or (vi) a decision by an insurer to disregard the
voting instructions of contract owners. The Board shall promptly
inform Aetna if it determines that an irreconcilable material
conflict exists and the implications thereof.
(c) Aetna will report any potential or existing conflicts of which it
is aware to the Board. Aetna will assist the Board in carrying out
its responsibilities under the Mixed and Shared Funding Exemptive
Order by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. This
includes, but is not limited to, an obligation by Aetna to inform
the Board whenever contract owner voting instructions are
disregarded.
(c) If a majority of the Board, or a majority of its disinterested
Board members, determines that a material irreconcilable conflict
exists with regard to contract owner investments in a Fund, the
Board shall give prompt notice to all Participating Companies and
Plans. If the Board determines that Aetna is a relevant
Participating Company or Plan with respect to said conflict, Aetna
shall at its sole cost and expense, and to the extent reasonably
practicable (as determined by a majority of the disinterested
Board members), take such action as is necessary to remedy or
eliminate the irreconcilable material conflict. Such necessary
action may include but shall not be limited to:
(i) withdrawing the assets allocable to the Account from the
Fund and reinvesting such assets in a different
investment medium;
(ii) submitting the question of 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., annuity contract owners, life
insurance contract owners, or variable contract owners of
one or more Participating Companies) that votes in favor
of such segregation, or offering to the affected contract
owners the option of making such a change; and
(iii) establishing a new registered management investment
company or managed separate account.
(d) If a material irreconcilable conflict arises as a result of a
decision by Aetna to disregard its contract owner voting
instructions and said decision represents a minority position or
would preclude a majority vote by all of its contract owners
having an interest in the Fund, Aetna may be required, at the
Board's election, to withdraw an Account's investment in the Fund
and no charge or penalty will be imposed as a result of such
withdrawal.
(e) For the purpose of this Section 10, a majority of the
disinterested Board members shall determine whether or not any
proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Fund, Distributor or any
investment adviser of the Fund be required to establish a new
funding medium for any Contract. Aetna shall not be required by
this Section 10 to establish a new funding medium for any Contract
if an offer to do so has been declined by vote of a majority of
the Contract owners or participants materially adversely affected
by the irreconcilable material conflict.
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(f) No less than annually, Aetna shall submit to the Board such
reports, materials or data as the Board may reasonably request so
that the Board may fully carry out its obligations. Such reports,
materials, and data shall be submitted more frequently if deemed
appropriate by the Board.
11. Miscellaneous.
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(a) Amendment and Waiver. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally,
but only by an instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or
sent by telex, facsimile (orally confirmed) or registered or
certified mail, postage prepaid, return receipt requested, or
recognized overnight courier service to the party or parties to
whom they are directed at the following addresses, or at such
other addresses as may be designated by notice from such party to
all other parties.
To Aetna:
Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Counsel
To the Fund:
Lord Xxxxxx Series Fund, Inc.
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: General Counsel
To the Distributor:
Lord, Xxxxxx & Co.
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: General Counsel
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt
(subject to oral confirmation of receipt in the case of facsimiles).
(c) Successors and Assigns. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
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(d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by
signing any such counterpart.
(e) Severability. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby.
(f) Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all
prior agreement and understandings relating to the subject matter
hereof.
(g) Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of New York.
(h) It is understood by the parties that this Agreement is not an
exclusive arrangement in any respect.
(i) The terms of this Agreement and the Schedules thereto will be held
confidential by each party except to the extent that either party
or its counsel may deem it necessary to disclose such terms.
12. Limitation on Liability of Directors, etc.
------------------------------------------
This agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund. The
obligations of this agreement shall be binding upon the assets and property of
the Fund and each respective Portfolio thereof only and shall not be binding on
any Director, officer or shareholder of the Fund individually. In addition,
notwithstanding any other provision of this Agreement, no Portfolio shall be
liable for any loss, expense, fee, charge or liability of any kind relating to
or arising from the actions or omissions of any other Portfolio or from the
application of this Agreement to any other Portfolio.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 20th day of July, 2001.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
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LORD XXXXXX SERIES FUND, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
LORD XXXXXX DISTRIBUTOR LLC
BY: LORD, XXXXXX & CO., MANAGING MEMBER
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Partner
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SCHEDULE A
(For any future separate accounts - See Section 1(a))
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EXHIBIT I
TO
PARTICIPATION AGREEMENT
Procedures for Pricing and Order/Settlement Through National Securities
Clearing Corporation's Mutual Fund Profile System and Mutual Fund
Settlement, Entry and Registration Verification System
1. As provided in Section 2(e) of the Fund Participation Agreement, the
parties hereby agree to provide pricing information, execute orders and
wire payments for purchases and redemptions of Fund shares through National
Securities Clearing Corporation ("NSCC") and its subsidiary systems as
follows:
(a) Distributor or the Fund will furnish to Aetna or its affiliate through
NSCC's Mutual Fund Profile System ("MFPS") (1) the most current net asset
value information for each Portfolio, (2) a schedule of anticipated
dividend and distribution payment dates for each Portfolio, which is
subject to change without prior notice, ordinary income and capital gain
dividend rates on the Fund's ex-date, and (3) in the case of fixed income
funds that declare daily dividends, the daily accrual or the interest rate
factor. All such information shall be furnished to Aetna or its affiliate
by 6:30 p.m. Eastern Time on each business day that the Fund is open for
business (each a "Business Day") or at such other time as that information
becomes available. Changes in pricing information will be communicated to
both NSCC and Aetna.
(b) Upon receipt of Fund purchase, exchange and redemption instructions for
acceptance as of the time at which a Portfolio's net asset value is
calculated as specified in the Fund's prospectus ("Close of Trading") on
each Business Day ("Instructions"), and upon its determination that there
are good funds with respect to Instructions involving the purchase of
Shares, Aetna or its affiliate will calculate the net purchase or
redemption order for each Portfolio. Orders for net purchases or net
redemptions derived from Instructions received by Aetna or its affiliate
prior to the Close of Trading on any given Business Day will be sent to the
Defined Contribution Interface of NSCC's Mutual Fund Settlement, Entry and
Registration Verification System ("Fund/SERV") by 5:00 a.m. Eastern Time on
the next Business Day. Subject to Aetna's or its affiliate's compliance
with the foregoing, Aetna or its affiliate will be considered the agent of
the Distributor and the Fund, and the Business Day on which Instructions
are received by Aetna or its affiliate in proper form prior to the Close of
Trading will be the date as of which shares of the Portfolios are deemed
purchased, exchanged or redeemed pursuant to such Instructions.
Instructions received in proper form by Aetna or its affiliate after the
Close of Trading on any given Business Day will be treated as if received
on the next following Business Day. Dividends and capital gains
distributions will be automatically reinvested at net asset value in
accordance with the Fund's then current prospectuses.
(c) Aetna or its affiliate will wire payment for net purchase orders by the
Portfolio's NSCC Firm Number, in immediately available funds, to an NSCC
settling bank account designated by Aetna or its affiliate no later than
5:00 p.m. Eastern time on the same Business Day such
14
purchase orders are communicated to NSCC. For purchases of shares of daily
dividend accrual funds, those shares will not begin to accrue dividends
until the day the payment for those shares is received.
(d) NSCC will wire payment for net redemption orders by Portfolio, in
immediately available funds, to an NSCC settling bank account designated by
Aetna or its affiliate, by 5:00 p.m. Eastern Time on the Business Day such
redemption orders are communicated to NSCC, except as provided in the
Fund's prospectus and statement of additional information.
(e) With respect to (c) or (d) above, if Distributor does not send a
confirmation of Aetna's or its affiliate's purchase or redemption order to
NSCC by the applicable deadline to be included in that Business Day's
payment cycle, payment for such purchases or redemptions will be made the
following Business Day.
(f) If on any day Aetna or its affiliate, or Distributor is unable to meet the
NSCC deadline for the transmission of purchase or redemption orders, it may
at its option transmit such orders and make such payments for purchases and
redemptions directly to Distributor or Aetna or its affiliate, as
applicable, as is otherwise provided in the Agreement.
(g) These procedures are subject to any additional terms in the Fund's
prospectus and the requirements of applicable law. The Funds reserves the
right, at its discretion and without notice, to suspend the sale of shares
or withdraw the sale of shares of any Portfolio.
2. Aetna or its affiliate, Distributor and clearing agents (if applicable) are
each required to have entered into membership agreements with NSCC and met all
requirements to participate in the MFPS and Fund/SERV systems before these
procedures may be utilized. Each party will be bound by the terms of their
membership agreement with NSCC and will perform any and all duties, functions,
procedures and responsibilities assigned to it and as otherwise established by
NSCC applicable to the MFPS and Fund/SERV system and the Networking Matrix Level
utilized.
3. Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect. Unless otherwise indicated herein, the
terms defined in the Agreement shall have the same meaning as in this Exhibit.
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