PARTICIPATION AGREEMENT
By and Among
OCC ACCUMULATION TRUST
And
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
And
OCC DISTRIBUTORS
THIS AGREEMENT, made and entered into this 15 day of May 1998 by and
among The Lincoln National Life Insurance Company, an Indiana Corporation
(hereinafter the "Company"), on its own behalf and on behalf of each separate
account of the Company named in Schedule I to this Agreement, as may be amended
from time to time (each account referred to as the "Account"), OCC ACCUMULATION
TRUST, an open-end diversified management investment company organized tinder
the laws of the State of Massachusetts (hereinafter the "Fund") and OCC
DISTRIBUTORS, a Delaware general partnership (hereinafter the "Underwriter").
WHEREAS, the Fund engages in business as an open-end diversified,
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance contracts and variable annuity contracts to be offered by insurance
companies which have entered into participation agreements substantially
identical to this Agreement (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 of
securities and other assets (the "Portfolios"); and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (alternatively referred to as the "SEC" or the "Commission") dated
February 22, 1995 (File No. 812-9290), granting Participating Insurance
Companies and variable annuity separate accounts and variable life insurance
separate accounts relief 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 separate accounts and variable life insurance separate accounts of both
affiliated and unaffiliated Participating Insurance Companies and qualified
pension and retirement plans (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" 193 3 Act"); and
WHEREAS, the Company has registered or will register certain variable
annuity contracts and variable life insurance policies (the "Contracts") under
the 1933 Act; and
WHEREAS, the Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company under the insurance laws of the State of Indiana, to set aside and
invest assets attributable to the Contracts; and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
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WHEREAS, the Underwriter is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (hereinafter the "1934
Act"), and is a member in GOOD standing of the National Association of
Securities Dealers, Inc. (hereinafter "NASD")and
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 the Accounts named in Schedule 2 to fund the Contracts
and the Underwriter 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 Company,
the Fund and the Underwriter agree as follows:
ARTICLE I. SALE AND REDEMPTION OF FUND SHARES
1.1. The Underwriter agrees to sell to the Company those shares of the
Fund which the Company orders on behalf of each Account, executing such orders
on a daily basis at the net asset value next computed after receipt and
acceptance by the Fund or its agent 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 notice of such
order by 10:00 a.m. Eastern Time on the next following Business Day. "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Fund calculates its net asset value pursuant to the rules of
the SEC.
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1.2. The Company shall pay for Fund shares on the next Business Day
after it places an order to purchase Fund shares in accordance with Section 1. 1
hereof Payment shall be in federal funds transmitted by wire.
1.3. The Fund agrees to make its shares available indefinitely for
purchase at the applicable net asset value per share by Participating Insurance
Companies and their separate accounts on those days on which the Fund calculates
its net asset value pursuant to rules of the SEC; provided, however, that the
Board of Trustees of the Fund (hereinafter the "Directors") may 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 light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of any Portfolio.
1.4. The Fund and the Underwriter agree 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, the sale
to which will not impair the tax treatment currently afforded the contracts. No
shares of any Portfolio will be sold to the general public.
1.5. The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles 1, 111, V, and VII of this Agreement are in
effect to govern such sales. The Fund shall make available upon written request
from the Company (i) a list of all other Participating
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Insurance Companies and (ii) a copy of the Participation Agreement executed by
any other Participating Insurance Company.
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 and
acceptance by the Fund or its agent 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 from each Account and receipt by such designee shall
constitute receipt by the Fund; provided the Fund receives notice of request for
redemption by 10:00 a.m. Eastern Time on the next following Business Day.
Payment shall be in federal funds transmitted by wire to the Company's account
as designated by the Company in writing from time to time, on the same Business
Day the Fund receives notice of the redemption order from the Company, except
that the Fund reserves the right to delay payment of redemption proceeds in the
event that portfolio holdings other than cash equivalents must be liquidated to
pay the redemption proceeds, but in no event may such payment be delayed longer
than the period permitted under Section 22(e) of the 1940 Act. Neither the Fund
nor the Underwriter shall bear any responsibility whatsoever for the proper
disbursement or crediting of redemption proceeds; the Company alone shall be
responsible for such action. If notification of redemption is received after
10:00 a.m. Eastern Time, payment for redeemed shares will be made on the next
following Business Day.
1.7. The Company agrees to purchase and redeem the shares of the
Portfolios named in Schedule 2 offered by the then current prospectus of the
Fund in accordance with the provisions of such prospectus.
1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Purchase and redemption orders
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for Fund shares will be recorded in an appropriate title for each Account or the
appropriate subaccount of each Account.
1.9. The Fund shall furnish notice as soon as reasonably practicable to
the Company of any income, dividends or capital gain distributions payable on
the Fund's shares. The Company hereby elects to receive all such dividends and
distributions as are payable on the Portfolio shares in the form of additional
shares of that Portfolio. The Company reserves the right to revoke this election
and 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.
1.10. 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 5:30 p.m.,
Eastern Time, each business day. Any material error in the calculation of net
asset value per share, dividend or capital gain information shall be reported
promptly to the Company upon discovery by the Fund and the Company shall be
entitled to an adjustment to the number of shares purchased or redeemed to
reflect the correct net asset value.
ARTICLE H. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act and that the Contracts will be issued and sold
in compliance with all applicable federal and state laws. The Company further
represents and warrants that it is an insurance company duly organized and
validly existing under applicable law and that it has legally and validly
established each Account as a segregated asset account under applicable state
law and has
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registered each Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as segregated investment accounts for the
Contracts, and that it will maintain such registration for so long as the 1940
Act requires. The Company shall amend the registration statement 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. The Company represents that it believes that the Contracts are
currently and at the time of issuance will be treated as annuity contracts or
life insurance policies under applicable provisions of the Internal Revenue Code
and that it will make every effort to maintain such treatment and that it will
notify the Fund and the Underwriter 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 in accordance with applicable 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 or the Underwriter.
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2.4. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code, and that it
will make every effort to 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. The Fund represents that its investment objectives, policies and
restrictions comply with applicable state investment laws as they may apply to
the Fund. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws and regulations of any state. The
Company alone shall be responsible for informing the Fund of any investment
restrictions imposed by state insurance laws which are applicable to the Fund.
To the extent feasible and consistent with market conditions, the Fund will
adjust its investments to comply with the aforementioned state insurance laws
upon written notice from the Company of such requirements and proposed
adjustments, it being agreed and understood that in any such case the Fund shall
be allowed a reasonable period of time under the circumstances after receipt of
such notice to make any such adjustment.
2.6. The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule l2b-1 under the 1940 Act or otherwise,
although it may make such payments in the future. To the extent that it decides
to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to
have its Board of Trustees, a majority of whom are not interested persons of the
Fund, formulate and approve any plan under Rule l2b-I to finance distribution
expenses.
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2.7. The Underwriter represents and warrants that it is a member in
good standing of the National Association of Securities Dealers, Inc., ("NASD")
and is registered as a broker-dealer with the SEC. The Underwriter' further
represents that it will sell and distribute the Fund shares in accordance with
all applicable federal and state securities laws, including without limitation
the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.8. The Fund represents that it is lawfully organized and validly
existing under the laws of Massachusetts and that it does and will comply with
applicable provisions of the 0000 Xxx.
2.9. The Underwriter represents and warrants that the Fund's Adviser,
OpCap Advisors, is and shall remain duly registered under federal securities
laws and that the Adviser will perform its obligations to the Fund in accordance
with the laws of Massachusetts and any applicable state and federal securities
laws.
2.10. The Fund and Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other
individuals/entities having access to the funds and/or securities of the Fund
are and continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(I) adopted pursuant to the
1940 Act or related provisions as may be promulgated from time to time. The
aforesaid Bond includes coverage for larceny and embezzlement and is issued by a
reputable bonding company.
2.11. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund,- in an amount not less
than $5 million. The aforesaid includes coverage for larceny and
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embezzlement and is issued by a reputable bonding company. 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
Underwriter in the event that such coverage no longer applies.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Underwriter shall provide the Company, at the Company's
expense, with as many copies of the Fund's current prospectus or, if requested
by the Company, a version of the Fund's prospectus that includes only the
Portfolios of the Fund that are used to fund the Company's contracts, as the
Company may reasonably request for use with prospective contractowners and
applicants. The Underwriter shall print and distribute, at the Fund's or
Underwriter's expense, as many copies of said prospectus as necessary for
distribution to existing contractowners or participants. If requested by the
Company in lieu thereof, the Fund shall provide such documentation including a
final copy of a current prospectus set in type at the Fund's expense and other
assistance as is reasonably necessary in order for the Company at least annually
(or more frequently if the Fund prospectus is amended more frequently) to have
the new prospectus for the Contracts and the Fund's new prospectus printed
together in one document. In such case the Fund shall bear its share of expenses
as described above.
3.2. The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter or alternatively from
the Company (or, in the Fund's discretion, the Prospectus shall state that such
Statement is available from the Fund), and the Underwriter (or the Fund) shall
provide such Statement, at its expense, to the Company-and to any owner of or
participant under a Contract who requests such Statement or, at
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the Company's expense, to any prospective contractowner and applicant who
requests such statement.
3.3. The Fund, at its expense, shall provide the Company with copies of
its proxy material, if any, reports to shareholders and other communications
to shareholders in such quantity as the Company shall reasonably require and
shall bear the costs of distributing them to existing contractowners or
participants.
3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from contractowners or
participants;
(ii) vote the Fund shares held in an Account in accordance
with in structions received from contractowners or
participants; and
(iii) vote Fund shares held in an Account for which no timely
instructions have been received, in the same proportion
as Fund shares of such Portfolio for which instructions
have been received from the Company's contractowners or
participants;
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass through voting privileges for variable contractowners. The Company
reserves the right to vote Fund shares held in any segregated asset account in
its own right, to the extent permitted by law. Participating Insurance Companies
shall be responsible for assuring that each of their separate accounts
participating in the Fund calculates voting privileges in a manner consistent
with other Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular as required, the Fund will either
provide for annual meetings or comply with Section 16(c) of the 1940 Act
(although the Fund is not one of the trusts described in Section 16(c) of that
Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further,
the Fund will act in accordance with the SEC interpretation of the requirements
of
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Section 16(a) with respect to periodic elections of directors and with whatever
rules the Commission may promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or the Underwriter, each piece of sales literature or other promotional
material in which the Fund or the Fund's adviser or the Underwriter is named, at
least fifteen business days prior to its use. No such material shall be used if
the Fund or the Underwriter reasonably objects in writing to such use within ten
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 concerning the Fund 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 by
the Underwriter, except with the permission of the Fund or the Underwriter. The
Fund and the Underwriter agree to respond to any request for approval on a
prompt and timely basis.
4.3. The Fund or the Underwriter shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company or its separate account is
named, least fifteen business days prior to its use. No such material shall be
used if the Company reasonably objects in writing to such use within ten
business days after receipt of such material.
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4.4. The Fund and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company,
each Account, or the Contracts-other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to contractowners or participants,
or in sales literature or other promotional material approved by the Company,
except with the permission of the Company. The Company agrees to respond to any
request for approval on a prompt and timely basis.
4.5. The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares, within 20 days after
the filing of such document with the SEC or other regulatory authorities.
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, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Fund, within
20 days after the filing of such document with the SEC or other regulatory
authorities.
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
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tape recording, videotape display, signs or billboards, motion pictures, or
other public media), sales literature (ie., 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,
registration statements, prospectuses, statements of additional information,
shareholder reports, and proxy materials and any other material constituting
sales literature or advertising under NASD rules, the 1940 Act or the 1933 Act.
ARTICLE V. FEES AND EXPENSES
5.1. THE FUND AND UNDERWRITER shall pay no fee or other compensation to
the Company under this Agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then, subject to obtaining any required exemptive orders or other
regulatory approvals, the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing. Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund of this Agreement
shall be paid by the Fund to the extent permitted by law. All Fund shares will
be duly authorized for issuance and registered in accordance with applicable
federal law and to the extent deemed advisable by the Fund, in accordance with
applicable state law, prior to sale. The Fund shall bear the expenses for the
cost of registration and qualification of the Fund's shares, preparation and
filing of the Fund's prospectus and registration statement, Fund proxy materials
and reports, setting in- type, printing and distributing the prospectuses, the
proxy materials and reports to
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existing shareholders and contractowners, the preparation of all statements and
notices required by any federal or state law, all taxes on the issuance or
transfer of the Fund's shares, and any expenses permitted to be paid or assumed
by the Fund pursuant to a plan, if any, under Rule by 12b- I under the 1940 Act.
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, 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 fife insurance
contracts and any amendments or other modifications to such Section or
Regulations in accordance with guidelines provided by the Company prior to the
execution of this Agreement and as necessary thereafter. In the event of a
breach of this Article VI by the Fund, it will take all reasonable steps (a) to
notify the Company of such breach and (b) to adequately diversify the Fund so as
to achieve compliance with the grace period afforded by Treasury
Regulation 1.817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Board of Trustees of the Fund (the "Fund Board") will monitor
the Fund for the existence of any material irreconcilable conflict among the
interests of the contractowners 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
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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 fife insurance contractowners; or (f) a decision
by an insurer to disregard the voting instructions of contractowners. The Board
shall promptly inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof. A majority of the Fund
Board shall consist of persons who are not "interested" persons of the Fund.
7.2. The Company has reviewed a copy of the Mixed and Shared Funding
Exemptive Order, and in particular, has reviewed the conditions to the requested
relief set forth therein. As set forth in the Mixed and Shared Funding Exemptive
Order, the Company will report any potential or existing conflicts of which it
is aware to the Fund Board. The Company agrees to assist the Fund Board in
carrying out its responsibilities under the Mixed and Shared Funding Exemptive
Order, by providing the Fund Board upon its request with all information
reasonably necessary for the Fund Board to consider any issues raised. This
includes, but is not limited to, an obligation by the Company to inform the Fund
Board whenever contractowner voting instructions are disregarded. The Fund Board
shall record in its minutes or other appropriate records, all reports received
by it and all action with regard to a conflict.
7.3. If it is determined by a majority of the Fund Board, or a majority
of its disinterested Directors, that an irreconcilable material conflict exists,
the Company and other Participating Insurance Companies shall, at their expense
and to the extent reasonably practicable (as determined by a majority of the
disinterested Directors), take whatever steps are necessary to
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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 contractowners and, as appropriate, segregating the assets
of any appropriate group (ie., variable annuity contractowners or variable fife
insurance contractowners, of one or more Participating Insurance Companies) that
votes in favor of such segregation, or offering to the affected contractowners
the option of making such a change; and (2) establishing a new registered
management investment company or managed separate account.
7.4. If the Company's disregard of voting instructions could conflict
with the majority of contractowner voting instructions, and the Company's
judgment represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the Account's
investment in the Fund and terminate this Agreement with respect to such
Account. Any such withdrawal and termination must take place within 90 days
after the Fund gives written notice to the Company that this provision is being
implemented. Until the end of such 90 day period the Underwriter and Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.
7.5. If a particular state insurance regulator's decision applicable to
the Company conflicts with the majority of other state insurance regulators,
then the Company will withdraw the Account's investment in the Fund and
terminate this Agreement with respect to such Account. Any such withdrawal and
termination must take place within 90 days after the Fund gives written notice
to the Company that this provision is being implemented. Until the end of such
90 day
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period the Underwriter and Fund shall continue to accept and implement orders by
the Company for the purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 1.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Fund Board shall determine whether
any proposed action adequately remedies any irreconcilable material conflict,
but in no event will the Fund or the Underwriter 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 contractowners materially adversely
affected by the irreconcilable material conflict.
7.7. The Company shall from time to time submit to the Fund Board such
reports, materials or data as the Fund Board may reasonably request so that the
Fund 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 Fund 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, (a) the Fund and/or the Participating Insurance
Companies, as appropriate, shall take such 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, 3.5, 7.1, 7.2, 7.3, 7.4,
and 7.5 of this Agreement shall
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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.
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY THE COMPANY
(a) The Company agrees to indemnify and hold harmless the Fund, the
Underwriter, and each of the Fund's or the Underwriter's directors, officers,
employees or agents and each person, if any, who controls or is associated with
the Fund or the Underwriter within the meaning of such terms under the federal
securities laws (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:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
registration statement, prospectus or statement of additional
information for the Contracts or contained in the Contracts or
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 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 Company by or on behalf of the Fund
for use in the registration statement, prospectus or statement of
additional information for the Contracts or in the Contracts or
sales literature or other promotional material for the Contracts
(or any amendment or supplement to any of the foregoing) or
otherwise for use in connection with the sale of the Contracts or
Fund shares; or
19
(ii) arise out of or as a result of untrue statements or
representations by or on behalf of the Company (other than
statements or representations contained in the Fund registration
statement, Fund prospectus, Fund statement of additional
information or sales literature or other promotional material of
the Fund not supplied by the Company or persons under its control)
or willful malfeasance, bad faith or gross negligence of the
Company or persons under its control, with respect to the sale or
distribution of the Contracts or Fund shares; 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 a
statement or omission was made in reliance upon and in conformity
with information furnished to the Fund by or on behalf of the
Company or persons under its control; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials or to make any payments under
the terms of this Agreement; or
(v) arise out of 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 by the Company of this
Agreement;
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) No party shall be entitled to indemnification if such loss, claim,
damage, liability or litigation is due to the willful misfeasance, bad faith,
gross negligence or reckless disregard of duty by the party seeking
indemnification.
20
(c) The indemnified parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of THE Fund shares or the Contracts or the . operation of
the Fund.
8.2. INDEMNIFICATION BY THE UNDERWRITER
(a) The Underwriter, on its own behalf and on behalf of the Fund,
agrees to indemnify and hold harmless the Company and each of its directors,
officers, employees or agents and each person, if any, who controls or is
associated with the Company within the meaning of such terms under the federal
securities laws (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 Underwriter) 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:
(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 Fund or sales literature or
other promotional material 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
Underwriter or Fund by or on behalf of the Company for use
in the registration statement, prospectus or statement of
additional information for the Fund or in sales literature
or other promotional material of the Fund (or any amendment
or supplement to any of the foregoing) 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 untrue statements or
representations (other than statements or representations
contained in the Contracts
21
or in the Contract or Fund registration statement, the
Contract or Fund prospectus, statement of additional
information, or sales literature or other promotional
material for the Contracts or of the Fund not supplied by
the Underwriter or the Fund or persons under the control of
the Underwriter or the Fund respectively) or willful
malfeasance, bad faith or gross negligence of the
Underwriter or the Fund or persons under the control of
the Underwriter or the Fund respectively, with respect to
the sale or distribution of the Contracts or Fund shares;
or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, statement of additional information
or sales literature or other promotional material 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 and in conformity with information furnished to the
Company by or on behalf of the Underwriter or the Fund or
persons under the control of the Underwriter or the Fund;
or
(iv) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement(including a failure, whether unintentional or in
good faith or otherwise, to comply with the diversification
requirements and procedures related thereto specified in
Article VI of this Agreement except if such failure is a
result of the Company's failure to comply with the
notification procedures specified in Article VI); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter or
the Fund in this Agreement or arise out of or result from
any other material breach of this Agreement by the
Underwriter or the Fund;
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 Underwriter may
otherwise have.
(b) No party shall be entitled to indemnification if such loss, claim,
damage, liability or litigation is due to the willful misfeasance, bad faith,
gross negligence or reckless disregard of duty by the party seeking
indemnification.
22
(c) The indemnified parties will promptly notify the Underwriter of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of THE Contracts or the operation of the Account.
8.3. INDEMNIFICATION PROCEDURE
Any person obligated to provide indemnification under this Article VIE
("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 provision 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 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
23
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 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 VHI shall survive any
termination of this Agreement.
8.4. CONTRIBUTION
In order to provide for just and equitable contribution in circumstances
in which the indemnification provided for in this Article VIII is due in
accordance with its terms but for any reason is held to be unenforceable with
respect to a party entitled to indemnification ("indemnified party" for purposes
of this Section 8.4) pursuant to the terms of this Article VIII, then each party
obligated to indemnify pursuant to the terms of this Article VIII shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and litigations in such proportion
as is appropriate to reflect the relative benefits received by the parties to
this Agreement in connection with the offering of Fund shares to the Account and
the acquisition, holding or sale of Fund shares by the Account, or if such
allocation is not permitted
24
by applicable law, in such proportions as is appropriate to reflect the relative
net benefits referred to above but also the relative fault of the parties to
this Agreement in connection with any actions that lead to such losses, claims,
damages, liabilities or litigations, as well as any other relevant equitable
considerations.
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 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 if shares of the Portfolios
delineated in Schedule 2 are not reasonably available to meet the requirements
of the Contracts as determined by the Company; or
(c) at the option of the Fund upon institution of formal
proceedings against the Company by the NASD, the SEC, the insurance commission
of any state or any other
25
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 the Account, or the purchase of the FUND shares, which the Fund
reasonably believes would 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 Underwriter by the NASD, the SEC, or any
state securities or insurance department or any other regulatory body, which the
Company reasonably believes would have a material adverse effect on the Fund's
or the Underwriter'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 and/or the vote of the contractowners 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 underlying investment media. The Company will give
30 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 Fund Board, or a majority of the
disinterested Fund Board members, that an irreconcilable material conflict
exists among the interests of (i) all contractowners of variable insurance
products of all separate accounts of (ii) the interests of the Participating
Insurance Companies investing in the Fund as delineated in Article VII of this
Agreement; 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
26
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
(i) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement; 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
Underwriter has suffered a material adverse change in its business, operations
or financial condition since the date of this Agreement; or
(k) at the option of the Fund or Underwriter, if the Fund or
Underwriter 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
(1) at the option of the Fund in the event any of the Contracts
are not issued or sold in accordance with applicable federal and/or state law.
Termination shall be effective immediately upon such occurrence without notice.
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
27
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 10.10) or 10.1(k), prior written notice of
the election to terminate this Agreement for cause shall be famished by the
party terminating this Agreement to the nonterminating 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 16. 1 (a) may be exercised for any reason or
for no reason.
10.4. EFFECT OF TERMINATION
(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 and the Underwriter to, -continue to make
available additional shares of the Fund for so long after the termination of
this Agreement as the Company desires 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.
28
(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 Underwriter, 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, if given by the Fund or Underwriter, need not be for more
than 90 days.
10.5. Except as necessary to implement contractowner 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 contractowners from allocating
payments to a Portfolio that was otherwise available under the Contracts, until
90 days after the Company shall have notified the Fund or Underwriter 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 such other address as
such party may from time to time specify in writing to the other party. All
notices shall be deemed given three business days after the date received or
rejected by the addressee. If to the Fund:
Xx. Xxxxxxx X. Xxxxx
President
OpCap Advisors
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to the Company:
29
Xxxxx X. Xxxxxxxxx
The Lincoln National Life Insurance Company
0000 X. Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000-0 506
If to the Underwriter:
Xx. Xxxxxx X. Xxxxxx
Secretary
OCC Distributors
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
ARTICLE XII. MISCELLANEOUS
12.1. All persons dealing with the Fund must look solely to the property
of the Fund for the enforcement of any claims against the Fund as neither the
Directors, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
12.2. Subject to law and regulatory authority, each party hereto shall
treat as confidential all information reasonably identified as such 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 prior
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
other-wise 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.
30
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 each other and 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.
12.9. The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating to the Contracts,
the Accounts or the Portfolios of the Fund.
31
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and behalf by its duly authorized representative as
of the date and year first WRITTEN above.
COMPANY:
THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY
SEAL By: /s/ Xxxxx X. Xxxxxxxxx
FUND:
OCC ACCUMULATION TRUST
SEAL By:
UNDERWRITER:
OCC DISTRIBUTORS
By: /s/ Xxxxxx X. Xxxxxx
32
SCHEDULE I
Participation Agreement
Among
OCC Accumulation Trust, The Lincoln National Life Insurance Company
and
OCC Distributors
The following separate accounts of The Lincoln National Life Insurance
Company are permitted in accordance with the provisions of this Agreement to
invest in Portfolios of the Fund shown in Schedule 2:
Lincoln Life Flexible Premium Variable Life Separate Account M
Lincoln Life Flexible Premium Variable Life Separate Account R
May 15, 1998
SCHEDULE 2
Participation Agreement
Among
OCC Accumulation Trust, The Lincoln National Life Insurance Company
and
OCC Distributors
The Separate Account(s) shown on Schedule I may invest in the following
Portfolios of the OCC Accumulation Trust:
Global Equity Portfolio
Managed Portfolio
May 15, 1998
AMENDMENT TO THE PARTICIPATION AGREEMENT
DATED MAY 15,1998
BY AND AMONG
OCC ACCUMULATION TRUST,
OCC DISTRIBUTORS AND
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
This is an amendment to the May 15, 1998 Participation Agreement
("Agreement") among OCC Accumulation Trust, OCC Distributors, and The Lincoln
National Life Insurance Company.
The following separate accounts of The Lincoln National Life Insurance
Company are permitted in accordance with the provisions of this Agreement to
invest in Portfolios of the Fund shown in Schedule 2:
Lincoln Life Flexible Premium Variable Life Separate' Account M
Lincoln Life Premium Variable Life Separate Account R
Lincoln Life Variable Annuity Account N
October 7, 1998
OCC ACCUMULATION TRUST
By: /s/ Xxxxxxx X. Xxxxx
Name Xxxxxxx X. Xxxxx
Title: Vice President
OCC DISTRIBUTORS
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Secretary
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
AMENDMENT TO THE PARTICIPATION AGREEMENT
DATED MAY 15, 1998
BY AND AMONG
OCC ACCUMULATION TRUST, OCC DISTRIBUTORS AND
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
This is an amendment to the May 15, 1998 Participation Agreement
("Agreement") among OCC Accumulation Trust, OCC Distributors, and The Lincoln
National Life Insurance Company.
Schedule 1 is amended to add the following separate account of The Lincoln
National Life Insurance Company as permitted in accordance with the provisions
of this Agreement to invest in Portfolios of the Fund shown in Schedule 2:
Lincoln Life Flexible Premium Variable Life Separate Account S
May 17, 1999
OCC ACCUMULATION TRUST
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
OCC DISTRIBUTORS
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Secretary
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
NOVATION
OF
PARTICIPATION AGREEMENT
This Novation Agreement dated as of September 1, 2005 is by and among THE
LINCOLN NATIONAL LIFE INSURANCE COMPANY (the "Company"), an Indiana corporation,
on its own behalf and on behalf of each separate account of the Company named in
Schedule 1 to Participation Agreement (as defined below), PREMIER VIT, an
open-end diversified management investment company organized under the laws of
the State of Massachusetts (the "Fund"), OCC DISTRIBUTORS LLC, a Delaware
limited liability company ("OCC Distributors"), and ALLIANZ GLOBAL INVESTORS
DISTRIBUTORS LLC, a Delaware limited liability company ("AGI Distributors").
WHEREAS, the Company, the Fund and OCC Distributors entered into a
Participation Agreement on May 15, 1998 ("Participation Agreement");
WHEREAS, the Fund was previously known as OCC ACCUMULATION TRUST;
WHEREAS, each of AGI Distributors and OCC Distributors is registered as a
broker-dealer with the SEC under the Securities Exchange Act of 1934, as
amended, and is a member in good standing of the National Association of
Securities Dealers, Inc.;
WHEREAS, the Company, the Fund and OCC Distributors desire that OCC
Distributors be replaced as the Fund's principal underwriter by AGI
Distributors; and
WHEREAS, the Company and the Fund desire to affect a novation of the
Participation Agreement so that AGI Distributors is substituted for OCC
Distributors as a party to such agreement and OCC Distributors is released from
its obligations under such agreement, AGI Distributors desires to accept the
novation thereof, and OCC Distributors desires to consent to such novation.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. NOVATION AND ACCEPTANCE. Subject to the terms and conditions contained
herein, the Company and the Fund hereby affect a novation of the Participation
Agreement to substitute AGI Distributors for OCC Distributors as party to such
agreement (the "Novation"), AGI Distributors hereby accepts such novation and
agrees to undertake all of OCC Distributors' duties and obligations under the
Participation Agreement. The Company and AGI Distributors hereby release OCC
Distributors from all of its duties and obligations under the Participation
Agreement and OCC Distributors hereby consents to such novation.
2. TERM. The novation shall become effective on the September 15, 2005
and shall extend for so long as the terms specified in Section 10 of the
Participation Agreement are satisfied or until terminated in accordance with
said Section 10.
3. NO TERMINATION. The parties agree that the novation shall not
constitute a termination of the Participation Agreement for purposes of Section
10 of the Participation Agreement, and that the Participation Agreement, as so
novated, shall remain in full force and effect after the novation.
4. NOTICES. All notices to the Company shall be sent to:
Rise X.X. Xxxxxx
Vice President
The Lincoln National Life Insurance Company
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
(260) 455 -1331
xxxxxxx@xxx.xxx
All notices to the Fund shall be sent to:
Attn: Xxxxx Xxxxxxxx
Fund President
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
000-000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Novation Agreement
to be executed by a duly authorized representative as of the day and year first
above written.
THE LINCOLN NATIONAL LIFE PREMIER VIT
INSURANCE COMPANY
By: /s/ Rise X.X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------- --------------------------------
Name: Rise X.X. Xxxxxx Name: Xxxxx X. Xxxxxxxx
Title: Vice President Title: President/CEO
OCC DISTRIBUTORS ALLIANZ GLOBAL INVESTORS DISTRIBUTORS LLC
By: /s/ Xxxxxxx X. Xxxx By: /s/ E. Xxxxx Xxxxx, Jr.
-------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxx Name: E. Xxxxx Xxxxx, Jr.
Title: CEO Title: Managing Director and CEO
2
AMENDMENT TO THE PARTICIPATION AGREEMENT
DATED MAY 15, 1998
BY AND AMONG
PREMIER VIT,
ALLIANZ GLOBAL INVESTORS DISTRIBUTORS LLC and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
This is an amendment to the May 15, 1998 Participation Agreement
("Agreement") among Premier VIT (the "Fund"), Allianz Global Investors
Distributors LLC, and The Lincoln National Life Insurance Company.
Schedule 1 is amended to add the following separate account of The
Lincoln National Life Insurance Company as permitted in accordance with the
provisions of the Agreement to invest in Portfolios of the Fund shown in
Schedule 2:
Lincoln Life Flexible Premium Variable Life Separate Account Z
Schedule 2 is amended to add the following Portfolio of the Fund as
permitted in accordance with the provisions of the Agreement for investment
by the separate accounts listed on Schedule 1:
Small Cap Portfolio
June 1, 2006
PREMIER VIT
By: /s/ Xxxxx X. Xxxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxxx
Title: PRESIDENT & CEO
ALLIANZ GLOBAL INVESTORS
DISTRIBUTORS LLC
By: /z/ E. Xxxxx Xxxxx, Jr.
------------------------
Name: E. Xxxxx Xxxxx, Jr.
Title: MANAGING DIRECTOR & CEO
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
AMENDMENT NO. 4 TO
PARTICIPATION AGREEMENT
AMONG
LINCOLN NATIONAL LIFE INSURANCE COMPANY, LINCOLN LIFE & ANNUITY COMPANY OF
NEW YORK,
PIMCO VARIABLE INSURANCE TRUST,
AND
ALLIANZ GLOBAL INVESTORS DISTRIBUTORS LLC
THE PARTICIPATION AGREEMENT, dated May 1, 2001 (the "Agreement"), by and
among the Lincoln National Life Insurance Company, and Lincoln Life & Annuity
Company of New York (collectively, the "Company"), PIMCO Variable Insurance
Trust (the "Fund") and Allianz Global Investors Distributors LLC (the
"Underwriter"), is hereby amended as follows:
1. Schedule A is revised to reflect Portfolios of the Fund
currently offered and additional separate accounts have been added
to the list of Segregated Asset Accounts under Schedule A
2. All other terms of the Agreement shall remain in full force and
effect.
Effective May 15, 2009, regardless of when executed.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
(Signatures located on following page)
LINCOLN NATIONAL LIFE INSURANCE COMPANY
By its authorized officer
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: 2nd Vice President
Date: 7/16/2009
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By its authorized officer
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: AVP
Date: 7/20/09
PIMCO VARIABLE INSURANCE TRUST:
By its authorized officer
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
Date: 7/8/09
ALLIANZ GLOBAL INVESTORS DISTRIBUTORS LLC:
By its authorized officer
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
Date: 7/1/09
SCHEDULE A
The term "Designated Portfolio" of the Fund will include any currently
offered class of any Portfolio of the Fund (as listed below) as well as any
Portfolio of the Fund or any share class of any Portfolio (now existing or
hereafter created) created subsequent to the date hereof.
DESIGNATED PORTFOLIOS/CLASSES:
ADMINISTRATIVE CLASS SHARES
All Asset Portfolio
All Asset All Authority
CommodityRealReturn(R) Strategy Portfolio
Diversified Income Portfolio
Emerging Markets Bond Portfolio
Foreign Bond Portfolio (Unhedged)
Foreign Bond Portfolio (U.S. Dollar-Hedged)
Global Bond Portfolio (Unhedged)
Global Multi-Asset Portfolio
High Yield Portfolio
Long-Term U.S. Government Portfolio
Low Duration Portfolio
Money Market Portfolio
Real Return Portfolio
SmallCap StocksPLUS(R) TR Portfolio
Short-Term Portfolio
StocksPLUS(R) Growth and Income Portfolio
Total Return Portfolio
INSTITUTIONAL CLASS SHARES
All Asset Portfolio
All Asset All Authority
CommodityRealReturn(R) Strategy Portfolio
Diversified Income Portfolio
Emerging Markets Bond Portfolio
Foreign Bond Portfolio (Unhedged)
Foreign Bond Portfolio (U.S. Dollar-Hedged)
Global Bond Portfolio (Unhedged)
High Yield Portfolio
Long-Term U.S. Government Portfolio
Low Duration Portfolio
Money Market Portfolio
Real Return Portfolio
Short-Term Portfolio
StocksPLUS(R) Growth and Income Portfolio
StocksPLUS(R) Total Return Portfolio
Total Return Portfolio
Total Return Portfolio II
ADVISOR CLASS SHARES
All Asset Portfolio
CommodityRealReturn(R) Strategy Portfolio
Emerging Markets Bond Portfolio
Foreign Bond Portfolio (Unhedged)
Global Bond Portfolio (Unhedged)
Global Multi-Asset Portfolio
High Yield Portfolio
Low Duration Portfolio
Real Return Portfolio
SmallCap StocksPLUS(R) TR Portfolio
StocksPLUS(R) Total Return Portfolio
Total Return Portfolio
M CLASS SHARES
All Asset Portfolio
All Asset All Authority Portfolio
SEGREGATED ASSET ACCOUNTS:
SEPARATE ACCOUNT ESTABLISHED DATE
---------------- ----------------
Lincoln National Variable Annuity Account C June 3, 1997
Lincoln Life Variable Annuity Account N November 3, 1997
Lincoln Life Flexible Premium Variable Life Account M December 17, 1997
Lincoln Life Flexible Premium Variable Life Account R December 23, 1997
Lincoln Life Flexible Premium Variable Life Account S December 24, 1999
Lincoln Life Flexible Premium Variable Life Account Z July 30, 2003
Lincoln Life Flexible Premium Variable Life Account M December 17, 1997
LLANY Separate Account R for Flexible Premium Variable Life Insurance February 11, 1998
LLANY Separate Account S for Flexible Premium Variable Life Insurance March 12, 1999
Lincoln Life & Annuity Flexible Premium Variable Life Account Z June 21, 2006
RULE 22C-2 AMENDMENT TO PARTICIPATION AGREEMENT
AMENDMENT entered into as of April 16, 2007, by and between Allianz
Global Investors Distributors LLC ("AGID"), the principal underwriter for
Premier VIT and PIMCO Variable Insurance Trust (each a "Trust" and,
collectively, the "Trusts") and The Lincoln National Life Insurance Company,
Lincoln Life & Annuity Company of
New York, Jefferson Pilot Financial
Insurance Company and Jefferson Pilot LifeAmerica Insurance Company
("Intermediary").
WHEREAS, Intermediary, pursuant to a Participation Agreement (as defined
below), purchases Shares of the Trusts to fund certain variable life
insurance or variable annuity contracts issued by Intermediary ("Contracts");
and
WHEREAS, AGID and Intermediary (each a "Party" and, together, the
"Parties") seek to enter into this Amendment in order for the Trusts, AGID
and Intermediary to comply with the requirements of Rule 22c-2 ("Rule 22c-2")
under the Investment Company Act of 1940, as amended (the "1940 Act"), and to
make other changes to the Participation Agreement.
A. CONTRACTHOLDER INFORMATION
A.1. Agreement to Provide Information. Intermediary agrees to provide Fund
Agent, upon written request, the taxpayer identification number ("TIN"),
the Individual/International Taxpayer Identification Number ("ITIN"), or
other government-issued identifier ("GII") and the Contract owner number or
participant account number, if known, of any or all Contractholder(s) of
the account, the name or other identifier of any investment professional(s)
associated with the Contractholder(s) or account (if known), and the
amount, date and transaction type (purchase, redemption, transfer, or
exchange) of every purchase, redemption, transfer, or exchange of Shares
held through an account maintained by Intermediary during the period
covered by the request. Unless otherwise specifically requested by the Fund
Agent, the Intermediary shall only be required to provide information
relating to Contractholder-Initiated Transfer Purchases or
Contractholder-Initiated Transfer Redemptions.
A.1.1 Period Covered by Request. Requests must set forth a specific
period, not to exceed 90 days from the date of the request, for which
transaction information is sought. Fund Agent may request transaction
information older than 90 days from the date of the request as it deems
necessary to investigate compliance with policies established or utilized
by a Trust or Fund Agent for the purpose of eliminating or reducing any
dilution of the value of the outstanding shares issued by a Fund.
If requested by Fund Agent, Intermediary will provide the information
specified in Section A.1 above for each trading day.
A.1.2 Form and Timing of Response. Intermediary agrees to provide,
promptly upon request of Fund Agent, the requested information specified in
Section A.1. Intermediary agrees to use its best efforts to determine
promptly whether any specific person about whom it has received the
identification and transaction information specified in Section A.1 is
itself a "financial intermediary," as that term is defined in Rule 22c-2
(an "Indirect Intermediary") and, upon request of Fund Agent, promptly
either (i) provide (or arrange to have provided) the information set forth
in Section A.1 for those Contractholders who hold an account with an
Indirect Intermediary or (ii) restrict or prohibit the Indirect
Intermediary from purchasing Shares in nominee name on behalf of other
persons. Intermediary
additionally agrees to inform Fund Agent whether it plans to perform (i) or
(ii) above. Responses required by this paragraph must be communicated in
writing and in a format mutually agreed upon by the Parties. To the extent
practicable, the format for any Contractholder and transaction information
provided to Fund Agent should be consistent with the NSCC Standardized Data
Reporting Format.
A.1.3. Limitations on Use of Information. Fund Agent agrees not to use
the information received hereunder for marketing or any other similar
purpose without the prior written consent of Intermediary; provided,
however, that this provision shall not limit the use of publicly available
information, information already in the possession of Fund Agent, a Trust
or their affiliates at the time the information is received pursuant to
this Amendment or information which comes into the possession of Fund
Agent, a Trust or their affiliates from a third party.
B. Execution of Trading Restriction Instructions
B.1. Agreement to Restrict Trading. Intermediary agrees to execute
written instructions from Fund Agent to restrict or prohibit further
purchases or exchanges of Shares by a Contractholder that has been
identified by Fund Agent as having engaged in transactions in Shares
(directly or indirectly through Intermediary's account) that violate
policies established or utilized by a Trust or Fund Agent for the purpose
of eliminating or reducing any dilution of the value of the outstanding
Shares issued by a Fund. Unless otherwise directed by Fund Agent, any such
restrictions or prohibitions shall only apply to Contractholder-Initiated
Transfer Purchases or Contractholder-Initiated Transfer Redemptions that
are effected directly or indirectly through Intermediary.
B.1.1 Form of Instructions. Instructions must include the TIN, ITIN or
GII and the specific individual Contract owner number or participant
account number associated with the Contractholder, if known, and the
specific restriction(s) to be executed. If the TIN, ITIN, GII or the
specific individual Contract owner number or participant account number
associated with the Contractholder is not known, the instructions must
include an equivalent identifying number of the Contractholder(s) or
account(s) or other agreed upon information to which the instruction
relates.
B.1.2. Timing of Response. Intermediary agrees to execute instructions
from Fund Agent as soon as reasonably practicable, but not later than ten
(10) business days after receipt of the instructions by Intermediary.
B.1.3. Confirmation by Intermediary. Intermediary must provide written
confirmation to Fund Agent that Fund Agent's instructions to restrict or
prohibit trading have been executed. Intermediary agrees to provide
confirmation as soon as reasonably practicable, but not later than ten (10)
business days after the instructions have been executed.
C. Definitions
For purposes of this Amendment, certain terms are used as defined in the
preamble or body of this Amendment. The following terms shall have the
following meaning, unless a different meaning is clearly required by the
context:
C.1 The term "Contractholder" means the holder of interests in a Contract or
a participant in an employee benefit plan with a beneficial interest in a
Contract.
C.2 The term "Contractholder-Initiated Transfer Purchase" means a
transaction that is initiated or directed by a Contractholder that results
in a transfer of assets within a Contract to a Fund, but does not include
transactions that are executed: (i) automatically pursuant to a contractual
or systematic program or enrollment such as a transfer of assets within a
Contract to a Fund as a result of "dollar cost averaging" programs,
insurance company approved asset allocation programs, or automatic
rebalancing programs; (ii) pursuant to a Contract death benefit; (iii) as a
result of a one-time step-up in Contract value pursuant to a Contract death
benefit; (iv) as a result of an allocation of assets to a Fund through a
Contract as a result of payments such as loan repayments, scheduled
contributions, retirement plan salary reduction contributions, or planned
premium payments to the contract; or (v) pre-arranged transfers at the
conclusion of a required "free look" period.
The term "Contractholder-Initiated Transfer Redemption" means a
transaction that is initiated or directed by a Contractholder that results
in a transfer of assets within a Contract out of a Fund, but does not
include transactions that are executed: (i) automatically pursuant to a
contractual or systematic program or enrollments such as transfers of
assets within a Contract out of a Fund as a result of annuity payouts,
loans, systematic withdrawal programs, insurance company approved asset
allocation programs and automatic rebalancing programs; (ii) as a result of
any deduction of charges or fees under a Contract; (iii) within a Contract
out of a Fund as a result of scheduled withdrawals or surrenders from a
Contract; or (iv) as a result of payment of a death benefit from a
Contract.
C.3. The term "Funds" shall mean the constituent series of the Trust, but for
purposes of Section A of this Amendment shall not include Funds excepted
from the requirements of paragraph (a) of Rule 22c-2 by paragraph (b) of
Rule 22c-2.
C.4 The term "Fund Agent" shall mean AGID or such other persons or entities
as may be designated as such by the Trusts for purposes of this Amendment
from time to time.
C.5 The term "Participation Agreement" shall mean the Participation
Agreement and/or other similar agreement(s) relating to transactions in
Shares to which Intermediary or any of Intermediary's predecessors,
successors or affiliates is a party.
C.6. The term "promptly" shall mean as soon as practicable but in no event
later than five (5) business days from Intermediary's predecessors,
successors or affiliates is a party.
C.7. The term "Shares" means the interests of Contractholders corresponding
to the redeemable securities of record issued by a Fund.
C.8. The term "written" includes electronic writings and facsimile
transmissions.
In addition, for purposes of this Amendment, the term "purchase" does
not include the automatic reinvestment of dividends or distributions.
D. ADDITIONAL AMENDMENTS TO PARTICIPATION AGREEMENT
The Participation Agreement is hereby further amended to incorporate the
provisions set forth in Exhibit A hereto.
E. SCOPE OF AMENDMENT
Intermediary acknowledges and agrees that this Amendment shall apply to
the handling of all transactions in Shares, whether authorized under the
Participation Agreement or any other agreement between or among Intermediary
and a Trust, any transfer agent of a Trust, AGID, and other Fund Agent or any
of their affiliates, and further acknowledges and agrees that the
Participation Agreement and nay other such agreement is hereby modified to
the extent necessary to reflect the agreements herein.
F. EFFECTIVE DATE
This Amendment shall be effective upon its execution hereof or, if
later, upon the effectiveness of the provisions of Rule 22c-2 relating to
agreements with "financial intermediaries" (as such term is defined in Rule
22c-2). Prior to the effective date of this Amendment, AGID and Intermediary
agree that any request made to Intermediary by AGID for Contractholder
transaction information, and Intermediary's response to such request, shall
be governed by whatever practices AGID and Intermediary had utilized in the
absence of a formal agreement, if any, to govern such requests.
G. ADDITIONAL OBLIGATIONS
It shall be Intermediary's obligation to make any required
notification(s) to is Contractholders of the provisions of this Amendment and
Intermediary agrees to do so. Intermediary also agrees to provide point of
sale disclosure documents to its Contractholders consistent with applicable
legal requirements as in effect from time to time.
H. AMENDMENTS TO COMPLY WITH RULE 22c-2
Without limiting any other provisions of this Amendment, including those
provisions set forth in Exhibit A hereto, the Parties agree that AGID may,
upon 30 days' written notice to Intermediary, further amend or modify the
Participation Agreement without the affirmative consent of Intermediary in
order to comply with Rule 22c-2, as such rule may be revised or interpreted
by the Securities and Exchange Commission or its staff. Notice for these
purposes shall be deemed to be given when mailed or electronically
transmitted to Intermediary. Intermediary's submission and a Trust's or it
designee's acceptance of an order to purchase, redeem or exchange Shares
after the transmission of such notice shall represent Intermediary's
acknowledgement and acceptance of the terms and conditions of any such
amendment.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be
executed as of the date first above written.
ALLIANZ GLOBAL INVESTORS DISTRIBUTORS LLC
/s/ illegible
-----------------------------------------
By:
Title:
The Lincoln National Life Insurance Company
/s/ Xxxxx X. Xxxxxxxxx
By: Xxxxx X. Xxxxxxxxx
Title: Vice President
Lincoln Life & Annuity Company of
New York
/s/ Xxxxx X. Xxxxxxxxx
By: Xxxxx X. Xxxxxxxxx
Title: Second Vice President
Jefferson Pilot Financial Insurance Company
Jefferson-Pilot LifeAmerica Insurance Company
/s/ Xxxx X. Xxxxxx
By: Xxxx X. Xxxxxx
Title: Vice President
EXHIBIT A
ADDITIONAL AMENDMENTS TO PARTICIPATION AGREEMENT
Capitalized terms used in the provisions set forth below are used as
defined in the Participation Agreement.
COMPLIANCE MATTERS. As required by the Participation Agreement,
Intermediary shall comply with provisions of the Prospectuses and Statement
of Additional Information of each Trust, and with applicable federal and
state securities laws. Among other things, Intermediary shall be responsible
for reasonably assuring that: (a) only orders to purchase, redeem or exchange
Shares received by Intermediary or any Indirect Intermediary prior to the
Valuation Time shall be submitted directly or indirectly by Intermediary to
the Fund or its transfer agent or other applicable agent for receipt of a
price based on the net asset value per share calculated for that day in
accordance with Rule 22c-1 under the 1940 Act(1); and (b) Intermediary shall
cause to be imposed and/or waived applicable redemption fees, if any, only in
accordance with the relevant Fund's then current Prospectuses or Statement of
Additional Information and/or as instructed by Fund Agent. Intermediary
further agrees to make reasonable efforts to assist the Funds and their
service providers (including but not limited to Fund Agent) to detect,
prevent and report market timing or excessive short-term trading of Shares.
To the extent Intermediary has actual knowledge of violations of Fund
policies (as set forth in the applicable Fund's then current Prospectuses or
Statement of Additional Information) regarding (i) the timing of purchase,
redemption or exchange orders and pricing of Shares, (ii) market timing or
excessive short-term trading, or (iii) the imposition of redemption fees, if
any, Intermediary agrees to report such known violations to Fund Agent. For
purposes of this provision, the term "Valuation Time" refers to the time as
of which the Shares are valued on each business day, currently the close of
regular trading on the
New York Stock Exchange (normally, 4:00 p.m., Eastern
Time) on each day that the
New York Stock Exchange is open for business.
---------------------
(1) Orders to purchase, redeem or exchange Fund shares received by
Intermediary subsequent to the Valuation Time on any given day shall receive
a price based on the next determined net asset value per share in accordance
with Rule 22c-1 under the 1940 Act.
