AMENDED AND RESTATED
PRINCIPAL UNDERWRITING AGREEMENT
THIS AGREEMENT is entered into on this 1st day of August, 1999 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 (each a "Separate Account" and collectively the
"Separate Accounts"), and LINCOLN FINANCIAL ADVISORS CORPORATION ("LFA"), a
corporation organized under the laws of the State of Indiana. Both LNY and LFA
are indirect 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, LFA 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, as well as to sell said
Contracts directly; and
WHEREAS, LNY desires to obtain the services of LFA 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 LFA hereby agree as follows:
DUTIES OF LFA
1. LFA 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 insurance
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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. LFA will enter into and maintain a selling group agreement on
behalf of itself and 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. LFA 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, it misstates any of the foregoing relating to
the duties, obligations or liabilities of LNY or LFA. LFA 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. LFA 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, except
insofar as LFA shall sell Contracts directly through its own associated
persons.
5. LFA will advise LNY immediately upon LFA'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.
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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 LFA 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. LFA 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
LFA.
8. LNY will furnish to LFA such information with respect to the
Separate Account and Contracts in such form and signed by such of its officers
as LFA may reasonably request, and will warrant that the statements therein
contained when so signed will be true or correct. LNY will advise LFA
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 LFA, as are from time to time set forth in selling
group agreements. LNY shall
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pay such commissions and any service fees in compliance with applicable state
insurance 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 LFA in performing its duties
hereunder. LNY will reimburse LFA for its services and for the services of its
salaried employees, and provide reimbursement for LFA's charges and expenses.
WARRANTIES
12. LNY represents and warrants to LFA 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 LFA, and copies
of any and all amendments thereto will be forwarded to LFA 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 LFA 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; (vi) 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; (vi) LNY will
only accept applications submitted by and pay commissions to persons who, 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
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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. LFA 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 LFA 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 LFA is a party or by which LFA is bound, the Certificate of
Incorporation or By-Laws of LFA, or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over LFA 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 LFA and shall conduct its affairs in accordance with the Rules of the NASD;
and (v) any information furnished in writing by LFA 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. LFA 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. The books, records and accounts of LNY, of
each Separate Account and LFA 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.
15. LFA 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. LFA
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does, however, represent that will actively engage in its duties under this
Agreement on a continuous basis while the Agreement is in effect.
16. LFA 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 LFA 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. LFA 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 LFA act or omission
relating to (i) rendering services under this Agreement 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 LFA (or any control person, shareholder,
director, officer or employee of LFA) 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 under this Agreement 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 LFA or
from the reckless disregard by LFA 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
LFA; or
b. at the option of LFA upon six months advance written notice to
LNY; or
c. at the option of LNY upon institution of formal proceedings
against LFA by regulatory body;
d. at the option of LFA 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.
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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 LFA 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.
25. Schedule A hereto may be amended unilaterally by LNY from time to
time by written notice to LFA.
26. Notwithstanding LFA's role as principal underwriter, nothing in
this Agreement shall prevent LFA from selling any Contract described herein to
its own customers, subject to the terms and conditions contained in the selling
group agreement entered into between LFA and other broker-dealers, as the terms
of such selling group agreement are amended from time to time.
This Agreement shall become effective on June , 1999
27. 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 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: Xxxx X. Xxxxxxx
2nd Vice President and Chief Financial Officer
Lincoln Life & Annuity Company of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Corporate Counsel
Lincoln Life & Annuity Company of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Any notice under this Agreement to LFA shall be given to:
ATTN: Xxxxxxx X. Xxxxxx
2nd Vice President and Controller
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
This Agreement shall become effective on August 1, 1999.
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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/ XXXXXXXX XXXXXX By: /s/ XXXXXX X. XXXXXXX
--------------------------- -----------------------------
LINCOLN FINANCIAL ADVISORS CORPORATION
Attest:
/s/ XXXXX XXXXX By: /s/ XXXXXX X. XXXXXX
--------------------------- -----------------------------
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SCHEDULE A
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
SEPARATE ACCOUNTS
Lincoln Life & Annuity Variable Annuity Account L
(Group Variable Annuity 1)
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
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