AGREEMENT TO PURCHASE SHARES
The Lincoln National Life Insurance Company ("LNL"), on its behalf and on
behalf of Lincoln National Variable Annuity Account C (the "Variable Account"),
and Lincoln National Equity-Income Fund, Inc. (the "Fund") hereby agree that
shares of the Fund shall be made available to serve as an underlying investment
medium for variable annuity contracts to be offered by LNL through the Variable
Account subject to the following provisions:
1. LNL represents and warrants that it is an insurance company duly
organized and existing in good standing under Indiana law and that it has
legally and validly established the Variable Account as permitted under Indiana
law and has registered the Variable Account as permitted under Indiana law and
has registered the Variable Account as a unit investment trust in accordance
with the provisions of the Investment Company Act of 1940, as amended (the "1940
Act"), to serve as a segregated investment account for certain variable annuity
contracts (the "Contracts"). LNL further represents and warrants that the
Contracts will be registered under the Securities Act of 1933, as amended (the
"1933 Act"), and the Contracts will be issued and sold in compliance with all
applicable federal and state laws. The Contracts will provide for the
allocation of net amounts received by LNL thereunder to separate divisions of
the Variable Account designated as "sub-accounts" for investment in the shares
of registered
investment companies selected by LNL ("underlying funds"). The Fund will be an
underlying fund for one of the sub-accounts.
2. Fund shares may be purchased and redeemed by LNL in accordance with
the provisions of the then current prospectus of the Fund. The Fund anticipates
that it will make its shares available indefinitely for purchase by LNL
hereunder, but the Fund reserves the right to suspend or terminate sales of its
shares hereunder at any time or times when its Board of Directors makes a good
faith determination that further sales would be to the detriment of current
holders of Fund shares. Payment for Fund shares shall be made by LNL within
five days after placement of the order for Fund shares. The Fund reserves the
right to delay issuance or transfer of Fund shares and/or to delay the accrual
and/or declaration of dividends in accordance with any policy set forth in its
then current prospectus with respect to such shares until any payment check has
cleared. If payment is not received by the Fund or an agent of the Fund within
the five day period, the Fund may, without notice, cancel the order and require
LNL to promptly reimburse the Fund for any loss suffered by the Fund resulting
from such failure to make timely payment. The Fund represents and warrants that
Fund shares sold hereunder shall be registered under the 1933 Act and duly
authorized for issuance in accordance with Maryland law.
3. LNL and its agents shall make no representation concerning the
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Fund or Fund shares except those contained in the then current prospectus of the
Fund or in current printed sales literature of the Fund, or as otherwise
approved by the Fund in writing.
4. Administrative services to owners of and participants under Contracts
shall be the responsibility of LNL and shall not be the responsibility of the
Fund. The Fund will furnish LNL copies of its proxy material, reports to
stockholders and other communications to stockholders in such quantities as LNL
shall reasonably require for distribution to owners of or participants under the
Contracts and LNL will distribute these materials to such owners or participants
as required. LNL will vote Fund shares, to the extent required by law, in
accordance with instructions received from Contract owners. LNL will vote Fund
shares for which no instructions have been received in the same proportion as
Fund shares for which instructions have been received from Contract owners. LNL
and persons under its control will in no way recommend action in connection with
the solicitation of proxies for Fund shares held in the Variable Account.
5. 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 and shall provide LNL with as many copies
of its current prospectus as LNL may reasonably request.
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6. This Agreement may be terminated as to the issuance of Fund shares as
follows:
(a) at the option of LNL or the Fund upon 90 days' written notice to
the other party;
(b) at the option of LNL if Fund shares are not available for any
reason to meet the requirements of the Contracts as determined by
LNL; or
(c) at the option of the Fund upon institution of any proceedings
against LNL relating to the Variable Account or the issuance and
sale of the Contracts,, by the National Association of Securities
Dealers, Inc., the Securities and Exchange Commission, the
Indiana Insurance Commissioner or any other regulatory body.
7. (a) LNL agrees to indemnify and hold harmless the Fund and each of
its directors who is not an "interested person" of the Fund, as defined in the
1940 Act (collectively, the "Indemnified Parties") against any losses, claims,
damages, liabilities (including amounts paid in settlement thereof with the
written consent of LNL) or expenses or actions with respect thereto to which
such Indemnified Parties may become subject, under the federal securities laws
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 or prospectus of the Variable Account or
contained in the Contracts or sales literature (or any
amendment or supplement to any of the foregoing), or
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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, provided that this agreement to indemnify shall not
apply as to an Indemnified Party such statement or omission or
such alleged statement or omission was made in reliance upon
and in conformity with written information furnished to LNL by
such Indemnified Party expressly for use in the Registration
Statement or prospectus for the Variable Account or the
Contracts or sales literature (or any amendment or supplement);
(ii) arise out of or as a result of conduct, statements, or
representations (other than statements or representations
contained in the prospectus of the Fund and sales literature
not supplied by LNL) of LNL or persons under its control, with
respect to the sale and distribution of the Contracts, or
(iii) arise as a result of any failure by LNL to provide the services
and furnish the materials set forth in paragraph four hereof.
LNL will reimburse any legal or other expenses reasonably incurred by the
Indemnified Parties in connection with investigating or defending any such loss,
claim, damage, liability or action. This indemnity agreement is in addition to
any liability which LNL may otherwise have.
(b) Promptly after receipt by any of the Indemnified Parties of
notice of the commencement of any action, or the making of any claim for which
indemnity may apply under this paragraph, the Indemnified Parties will, if a
claim in respect thereof is to be made against LNL, notify LNL of the
commencement thereof; but the omission so to notify LNL will not relieve LNL
from any liability which it may have to the Indemnified Parties otherwise than
under this Agreement. In case any such action is brought against the
Indemnified Parties,
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and LNL is notified of the commencement thereof, LNL will be entitled to
participate therein and to assume the defense thereof, with counsel satisfactory
to the party named in the action, and after notice from LNL to such party of
LNL's election to assume the defense thereof, LNL will not be liable to such
party under this Agreement for any legal or other expenses subsequently incurred
by such party independently in connection with the defense thereof other than
reasonable costs of investigation.
8. (a) The parties shall in good faith attempt to resolve any dispute
arising out of or relating to this agreement promptly by negotiations between
executives who have authority to settle the controversy. Either party may give
the other party written notice of any dispute not resolved in the normal course
of business. Within 20 days after delivery of that notice, executives of both
parties shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to exchange relevant information and to
attempt to resolve the dispute. If the matter has not been resolved within 60
days of the disputing party's notice, or if the parties fail to meet within 20
days, either party may initiate mediation of the controversy or claim as
provided in sub-paragraph (b) above. If a negotiator intends to be accompanied
at a meeting by an attorney, the other negotiator shall be given at least three
working days' notice of that intention and may also be accompanied by an
attorney.
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ADDENDUM
(effective November 1, 1994)
to the
AGREEMENT to PURCHASE SHARES
(effective September 23, 1993)
between
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY and
LINCOLN NATIONAL EQUITY - INCOME FUND, INC.
The Agreement is hereby supplemented to include a new paragraph 9, which reads
as follows:
"9. a) LNL shall own and control all the pertinent records
pertaining to the operation of Variable Account C under this Agreement; and b)
LNL, during normal business hours, shall have the right to inspect, audit and
copy all records pertaining to performance by the Fund of services for LNL under
this Agreement."
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By: Xxxxxx X. Xxxxxx
LINCOLN NATIONAL EQUITY - INCOME FUND, INC.
By: Xxxxx X. Xxxxxxxxx
V10N1CRT.E
