Exhibit 3(a)
Form of
PRINCIPAL UNDERWRITING AGREEMENT
THIS AGREEMENT is entered into on this ___ day of ___________, ____
between LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK ("LNY"), a life insurance
company organized under the laws of the State of New York, on behalf of itself
and the separate accounts established by LNY pursuant to New York Insurance law
and set forth in Schedule A hereto, or provided electronically (each a "Separate
Account" and collectively the "Separate Accounts"), and LINCOLN FINANCIAL
DISTRIBUTORS, INC. ("LFD"), a corporation organized under the laws of the State
of Connecticut. Both LNY and LFD are subsidiaries of Lincoln National
Corporation.
WITNESSETH:
WHEREAS, LNY proposes to issue to the public certain variable annuity
contracts and variable life insurance policies ("Contracts") and has, by
resolution of its Board of Directors, authorized the creation of segregated
investment accounts in connection therewith; and
WHEREAS, LNY has established each Separate Account for the purpose of
issuing the Contracts and has registered (unless an exemption from registration
is available) each such Separate Account with the Securities and Exchange
Commission ("Commission") as a unit investment trust under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, interests in the Separate Account portion of the Contracts to
be issued by LNY are registered (unless an exemption from registration is
available) with the Commission under the Securities Act of 1933 as amended (the
"1933 Act") for offer and sale to the public, and otherwise are in compliance
with all applicable laws; and
WHEREAS, LFD is a broker-dealer registered under the Securities
Exchange Act of 1934, as amended (the "1934 Act") and a member of the National
Association of Securities Dealers, Inc., and proposes to enter into selling
agreements for the distribution of said Contracts; and
WHEREAS, LNY desires to obtain the services of LFD as principal
underwriter of the Contracts issued by LNY through the Separate Accounts;
NOW THEREFORE, in consideration of the foregoing, and of the mutual
covenants and conditions set forth herein, and for other good and valuable
consideration, LNY and LFD hereby agree as follows:
Duties of LFD
1. LFD will form a selling group by entering into selling group
agreements with broker-dealers which have as associated individuals persons who
are licensed to sell variable insurance pursuant to the laws of the state of New
York, or any other state in which LNY determines to issue Contracts ("Relevant
State"), and appointed by LNY to distribute the Contracts which are issued by
LNY through the Separate Accounts and interests in the Separate Account portion
of which are registered (unless an exemption from registration is available)
with the Commission under the 1933 Act for offer and sale to the public.
2. LFD will enter into and maintain a selling group agreement on behalf
of LNY with each broker-dealer (which has as associated persons individuals who
are licensed to sell insurance pursuant to the laws of the state of New York or
any Relevant State and appointed by LNY to distribute the Contracts) joining
such selling group ("member"). An executed copy of each such selling group
agreement will be provided to LNY. Any such selling group agreement will
expressly be made subject to this Agreement. Any such selling group agreement
will provide: (i) that each member will distribute the Contracts only in New
York or any Relevant State in which the Contracts may be legally sold and only
through duly licensed registered representatives of the members who are fully
licensed and appointed with LNY to sell the Contracts in New York or any
Relevant State; (ii) that all applications and initial and subsequent payments
under the Contracts collected by the member will be forwarded promptly by the
member to LNY or its designee at such address as it may from time to time
designate; and (iii) that each member will comply with all applicable federal
and state laws, rules and regulations in the sale of the Contracts.
3. LFD will not distribute any prospectus, sales literature,
advertising material or any other printed matter or material relating to the
Contracts or the mutual funds available as funding options under the Contracts
("Funds") if, to its knowledge, the materials misstate any of the foregoing
relating to the duties, obligations or liabilities of LNY or LFD. LFD will be
responsible for filing sales literature and advertising material, if necessary,
with appropriate federal regulatory authorities, including NASD Regulation, Inc.
and the National Association of Securities Dealers, Inc. (collectively "NASD").
4 LFD shall not be responsible for (i) taking or transmitting
applications for the Contracts; (ii) examining or inspecting risks or approving,
issuing or delivering Contracts; (iii) receiving, collecting or transmitting
payments; (iv) assisting in the completion of applications for Contracts; and
(v) otherwise offering and selling Contracts directly to the public.
However, nothing in this Agreement shall prevent LFD from
holding the securities registrations of Customer Service Representatives (CSRs)
who, on behalf of LNY and LFD, respond to inquiries regarding LNY's Contracts,
or who effect transactions in such Contracts at the direction of the owners of
the Contracts.
5. LFD will advise LNY immediately upon LFD's becoming aware of: (a)
any request by the Commission for amendment of the registration statement
relating to the Contracts or the Funds or for additional information; (b) the
issuance by the Commission of any stop order suspending the effectiveness of the
registration statement for the Contracts or for the Funds or the initiation of
any proceeding for that purpose; (c) the institution of any proceeding,
investigation or hearing involving the offer or sale of the Contracts or the
Funds of which it becomes aware; or (d) the happening of any material event, if
known, which makes untrue any statement made in the registration statement for
the Contracts or for the Funds or which requires the making of a change therein
in order to make any statement made therein not misleading.
Duties of LNY
6. LNY or its agent will receive and process applications and premium
payments in accordance with the terms of the Contracts. All applications for
Contracts are subject to acceptance or rejection by LNY in its sole discretion.
LNY will inform LFD of any such rejection and the reason therefor.
7. LNY will be responsible for filing the Contracts, applications,
forms, sales literature and advertising material, where necessary, with
appropriate insurance regulatory authorities. LNY will use reasonable efforts to
provide information and marketing assistance to the members, including preparing
and providing members with advertising materials and sales literature, and
providing members with current prospectuses for the Contracts and of the
underlying Funds. LNY will use reasonable efforts to ensure that members deliver
to customers and prospective customers only the currently effective prospectuses
for the Contracts and the Funds. LFD and LNY will cooperate in the development
of advertising and sales literature, as each may request the other. LNY will
deliver to members, and use reasonable efforts to ensure that members use, only
sales literature and advertising material which conforms to the requirements of
federal and state laws and regulations and which has been authorized by LNY and
LFD.
8. LNY will furnish to LFD such information with respect to the
Separate Account and Contracts in such form and signed by such of its officers
as LFD may reasonably request, and will warrant that the statements therein
contained when so signed will be true or correct. LNY will advise LFD
immediately of: (a) any request by the Commission for amendment of the
registration statement relating to the Contracts or any Fund or for additional
information; (b) the issuance by the Commission of any stop order suspending the
effectiveness of the registration statement for the Contracts or of any Fund or
the initiation of any proceeding for that purpose; (c) the institution of any
proceeding, investigation, hearing or other action involving the offer or sale
of the Contracts or the Funds of which it becomes aware; (d) the happening of
any material event, if known, which makes untrue any statement made in the
registration statement for the Contracts or any Fund or which requires the
making of a change therein in order to make any statement made therein not
misleading.
9. LNY will use reasonable efforts to register for sale an indefinite
amount of units of interest in the Contracts under the 1933 Act pursuant to Rule
24f-2 under the 1940 Act, and, should it ever be required, under state
securities laws and to file for approval under state insurance laws when
necessary. LNY will maintain the registration of each Separate Account under the
1940 Act and of its securities under the 1933 Act, unless exemptions from
registration is available.
10. LNY will pay to members of the selling group such commissions, on
behalf of and as agent of LFD, as are from time to time set forth in selling
group agreements. LNY shall pay such commissions and any service fees in
compliance with applicable state laws, applicable federal securities laws and
the rules and regulations of the NASD. Such selling group agreements shall
provide for the return of sales commissions by the members to LNY if Contracts
are tendered for redemption to LNY in accordance with the right to examine or
similarly worded provisions in the Contracts.
11. LNY will bear its expenses of providing services under this
Agreement, including but not limited to, the cost of preparing (including
typesetting costs), printing and mailing of prospectuses for the Contracts to
Contract owners, expenses and fees of registering or qualifying the Contracts or
interests therein and the Separate Account under federal or state laws, and any
expenses incurred by its employees in assisting LFD in performing its duties
hereunder. LNY will reimburse LFD at cost for its services and for the services
of its salaried employees, and provide reimbursement for LFD's charges and
expenses. Such reimbursement shall include all direct and indirect allocable
expenses. The methods for allocating expenses to LNY shall be determined in
accordance with the requirements prescribed in New York Insurance Department
Regulation No. 33. Such methods shall be modified and adjusted by mutual
agreement where necessary or appropriate to reflect fairly and equitably the
actual incidence of cost incurred by LFD on behalf of LNY. Within 30 days of
each calendar quarter, or more frequently as LFD and LNY may agree, LFD shall
determine the expenses to be allocated to LNY pursuant to this Agreement. Within
30 days thereafter, LNY shall pay LFD the amount of those expenses.
Warranties
12. LNY represents and warrants to LFD that (i) registration statements
(including amendments thereto) under the 1933 Act and under the 1940 Act with
respect to the Contracts and the Separate Accounts have been filed with the
Commission in the form previously delivered to LFD, and copies of any and all
amendments thereto will be forwarded to LFD within 20 days from the time that
they are filed with the Commission; (ii) the registration statements and any
amendments or supplements thereto which have become effective, conform in all
material respects to the requirements of the 1933 Act and the 1940 Act, and the
rules and regulations of the Commission thereunder, and do not and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statement or omission made in reliance upon and in conformity with
information furnished in writing to LNY by LFD expressly for use therein; (iii)
LNY is validly existing as a stock life insurance company in good standing under
the laws of the State of New York, with power (corporate or other) to own its
properties and conduct its business as described in the prospectus, and has been
duly qualified for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification; (iv) the Contracts
to be funded through the Separate Accounts have been duly and validly authorized
and, when interests therein are issued and delivered against payment therefor as
provided in the prospectus and in the Contracts, will be duly and validly issued
and conform to the description of such Contracts contained in the prospectus
relating thereto; (v) LNY will only accept applications submitted by, and pay
commissions on behalf of LFD to, members which, to the best of LNY's knowledge,
are appropriately licensed or appointed to offer and sell the Contracts under
applicable state insurance laws; (vi) the performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a breach
or violation of any of the terms or provisions of, or constitute a default under
any statute, any indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which LNY is a party or by which LNY is bound, LNY's
Charter as a stock life insurance company or By-Laws, or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
LNY or any of its properties; and no consent, approval, authorization or order
of any court or governmental agency or body which has not been obtained by the
effective date of this Agreement is required for the consummation by LNY of the
transactions contemplated by this Agreement; and (vii) there are no material
legal or governmental proceedings pending to which LNY or any Separate Account
is a party or to which any property of LNY or any Separate Account is subject,
other than litigation incidental to the kind of business conducted by LNY which,
if determined adversely to LNY, would not individually or in the aggregate have
a material adverse effect on the financial position, surplus or operations of
LNY.
13. LFD represents and warrants to LNY that: (i) it is a broker - dealer
duly registered with the Commission pursuant to the 1934 Act and a member in
good standing of the National Association of Securities Dealers, Inc. and is in
substantial compliance with the securities laws in those states in which it
conducts business as a broker-dealer; (ii) the performance of its duties under
this Agreement by LFD will not result in a breach or violation of any of the
terms or provisions of or constitute a default under any statute, any indenture,
mortgage, deed of trust, note agreement or other agreement or instrument to
which LFD is a party or by which LFD is bound, the Certificate of Incorporation
or By-Laws of LFD, or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over LFD or its property; and (iii) it will
use reasonable efforts to ensure that no offering, sale or other disposition of
the Contracts will be made until it has been notified by LNY that the applicable
registration statements (including any amendments thereto) have been declared
effective and the particular Contracts have been released for sale by LNY, and
that such offering, sale or other disposition shall be limited to those
jurisdictions that have approved or otherwise permit the offer and sale of the
Contracts by LNY; (iv) it will comply in all material respects with the
requirements of state broker-dealer regulations and the 1934 Act as each applies
to LFD and shall conduct its affairs in accordance with the Rules of the NASD;
and (v) any information furnished in writing by LFD to LNY for use in the
registration statement for the Contracts will not result in the registration
statement's failing to conform in all material respects to the requirements of
the 1933 Act and the rules and regulations thereunder or containing any untrue
statement of a material fact or omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Miscellaneous
14. LFD shall maintain and preserve for the periods prescribed by law
or other agreement such accounts, books and other documents as are required of
it by applicable law and regulation, including, but not limited to, New York
Insurance Department Regulation No.152. The books, records and accounts of LNY,
of each Separate Account and LFD as to all transactions hereunder shall be
maintained such that they clearly and accurately disclose the nature and details
of such transaction, including such accounting information as is necessary to
support the reasonableness of the amounts to be paid by LNY. All records, books
and files established and maintained by LFD by reason of it performance of
services under this Agreement shall be available for inspection by LNY and by
any government agency that has regulatory authority over LNY's business
activities. All such records, books and files shall be promptly delivered to LNY
upon termination of this Agreement.
15. LFD makes no representation or warranty regarding the number of
Contracts to be sold by licensed broker-dealers and insurance agents or the
amount to be paid thereunder. LFD does, however, represent that it will actively
engage in its duties under this Agreement on a continuous basis while the
Agreement is in effect.
16. LFD may act as principal underwriter, sponsor, distributor or
dealer for issuers other than LNY or its affiliates in connection with mutual
funds or insurance products and otherwise.
17. Nothing in this Agreement shall obligate LNY to appoint any member
or representative of a member its agent for purposes of the distribution of the
Contracts. Nothing in this Agreement shall be construed as requiring LFD to
effect sales of the Contracts directly to the public or act as an insurance
agent or insurance broker on behalf of LNY for purposes of state insurance laws.
18. LFD agrees to indemnify LNY (or any control person, shareholder,
director, officer or employee of LNY) for any liability incurred (including
costs relating to defense of any action) arising out of any LFD act or omission
relating to (i) rendering services to LNY by LFD as principal underwriter or
(ii) the purchase, retention or surrender of a Contract by any person or entity;
provided, however that indemnification will not be provided hereunder for any
such liability that results from the willful misfeasance, bad faith or gross
negligence of LNY or from the reckless disregard by LNY of its duties and
obligations arising under this Agreement.
19. LNY agrees to indemnify LFD (or any control person, shareholder,
director, officer or employee of LFD) for any liability incurred (including
costs relating to defense of any action) arising out of any LNY act or omission
relating to (i) rendering services to LNY by LFD as principal underwriter or
(ii) the purchase, retention or surrender of a Contract by any person or entity;
provided, however, that indemnification will not be provided hereunder for any
such liability that results from the willful misfeasance, bad faith and gross
negligence of LFD or from the reckless disregard by LFD of its duties and
obligations arising from this Agreement.
20. This Agreement will terminate automatically upon its assignment, as
that term is defined in the 1940 Act. The parties understand that there is no
intention to create a joint venture in the subject matter of this Agreement.
Accordingly, the right to terminate this Agreement and to engage in any activity
not inconsistent with this Agreement is absolute. This Agreement will terminate,
without the payment of any penalty by either party:
a. at the option of LNY upon six months advance written notice to LFD; or
b. at the option of LFD upon six months advance written notice to LNY; or
c. at the option of LNY upon institution of formal proceedings against LFD by
any regulatory body;
d. at the option of LFD upon the institution of formal proceedings against LNY
by the Department of Insurance of a state or any other federal or state
regulatory body;
e. as otherwise required by the 1940 Act.
21. Each notice required by this Agreement shall be given in writing
and delivered by certified mail-return receipt requested.
22. This agreement shall be subject to the laws of the State of New
York and construed so as to interpret the Contracts as insurance products
written within the business operation of LNY.
23. This Agreement covers and includes all agreements, oral and written
(expressed or implied) between LNY and LFD with regard to the marketing and
distribution of the Contracts, and supersedes any and all Agreements between the
parties with respect to the subject matter of this Agreement.
24. This Agreement may be amended from time to time by mutual agreement
and
consent of the undersigned parties, provided such amendment is in writing and
duly executed and provided further that no such amendment shall become effective
until it has been filed with, and approved by, the New York Insurance
Department.
25. Schedule A hereto may be amended unilaterally by LNY from time to
time by
written notice to LFD, but will not be effective until such time as it has been
filed with, and approved by, the New York Insurance Department. Such written
notice will include an electronic transmission, including e-mail and facsimile
to the contact persons indicated in 27. below, or their successors.
26. Notwithstanding LFD's role as principal underwriter and subject to
the terms and conditions contained in the selling group agreement entered into
between LFD and other broker-dealers, as the terms of such selling group
agreement are amended from time to time, nothing in this Agreement shall prevent
registered representatives of LFD from effecting a securities transaction while
providing customer service to the owner of any Contract described herein.
27. LNY and persons authorized by it or any government agency having
jurisdiction over LNY shall have the right, at LNY's expense, to conduct an
audit of the relevant books, records, and accounts of LFD pertaining to this
Agreement by giving reasonable notice of its intent to conduct such an audit. In
the event of such audit, LFD shall give the person conducting the audit
reasonable cooperation and access to its books, records, and accounts during
business hours.
28. All notices given or submitted pursuant to this Agreement shall be
made in writing and shall be deemed given when (a) deposited with the United
States Postal Service, postage prepaid, registered or certified mail, return
receipt requested; (b) deposited with a nationally recognized overnight mail
delivery services; (c) sent by facsimile with electronic confirmation of
delivery e-mail, with confirmation of delivery or with a copy sent by mail as
described in (a) or (b) above; or (d) delivered in person; all to the last
address of record of each party being notified.
Any notice under this Agreement to LNY shall be given to:
ATTN:
Phone:
Facsimile:
With a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Corporate Counsel
Lincoln Life & Annuity Company of New York
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Any notice under this Agreement to LFD shall be given to:
ATTN:
Phone:
Facsimile:
This Agreement shall become effective on _________________ , 2006.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be
duly executed and attested on the date first stated above.
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
Attest:
/s/ By: /s/
------------------- ---------------------------------------
LINCOLN FINANCIAL DISTRIBUTORS, INC.
Attest:
/s/ By: /s/
------------------ -----------------------------------------
Schedule A
Lincoln Life & Annuity Company of New York
Separate Accounts
Lincoln Life & Annuity Variable Annuity Account L
(Group Variable Annuity I)
Established 7/24/96
Lincoln Life & Annuity Variable Annuity Account L
(Group Variable Annuity II)
Established 7/24/96
Lincoln Life & Annuity Variable Annuity Account L
(Group Variable Annuity III)
Established 7/24/96
Lincoln Life & Annuity Flexible Premium Variable Life Account M
Established 11/24/97
LLANY Separate Account N for Variable Annuities
Established 3/11/99
LLANY Account Q for Variable Annuities
Established 1/29/98
LLANY Separate Account R for Flexible Premium Variable Life Insurance
Established 1/29/98
LLANY Separate Account S for Flexible Premium Variable Life Insurance
Established 3/11/99
