Exhibit 8(c)
AGREEMENT TO PURCHASE SHARES
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Effective June 30, 1994, The Lincoln National Life Insurance
Company ("LNL"), on its behalf and on behalf of Lincoln Life Flexible
Premium Variable Life Account K (the "Variable Account"), and Lincoln
National Xxxxxx Master Fund, Inc. (the "Fund") hereby agree that shares
of the Fund shall be made available to serve as an underlying investment
medium for variable life insurance 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 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 life insurance
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 Fund or Fund shares except those contained in the
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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 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 if such
statement or omission or such alleged
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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, and LNL is
notified of the commencement thereof, LNL will be entitled to
participate therein and to assume the defense thereof, with counsel
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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.
(b) If the dispute has not been resolved by negotiation as
provided herein, the parties shall endeavor to settle the
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dispute by mediation under the then current Center for Public Resources
("CPR") Model Procedure for Mediation of Business Disputes. The neutral
third party will be selected from the CPR Panels of Neutrals. If the
parties encounter difficulty in agreeing on a neutral, they will seek
the assistance of CPR in the selection process. All negotiations
pursuant to sub-paragraphs (a) and (b) of this paragraph 8 are
confidential and shall be treated as compromise and settlement
negotiations for purposes of the Federal Rules of Evidence and state
rules of evidence.
(c) Any dispute arising out of or relating to this contract
or the breach, termination or validity thereof, which has not been
resolved by non-binding procedures as provided in sub-paragraphs (a) or
(b) herein within 60 days of the initiation of those procedures shall be
finally settled by arbitration conducted expeditiously in accordance
with the CPR Rules for Non-Administered Arbitration of Business Disputes
by a sole arbitrator; provided, however, that if one party has requested
the other party to participate in a non-binding procedure and the other
has failed to participate, the requesting party may initiate arbitration
before expiration of the 60-day period set out just above. If within 45
days of the commencement of the process to select an arbitrator the
parties cannot agree upon the arbitrator, then he or she will be
selected from the CPR Panels of Neutrals. The arbitration shall be
governed by the United States Arbitration Act, 9 U.S.C. Sec. 1-16, and
judgment
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upon the award rendered by the Arbitrator may be entered by any court
having jurisdiction thereof. The place of arbitration shall be Fort
Xxxxx, Indiana. The Arbitrator is not empowered to award damages in
excess of compensatory damages.
9. LNL shall be deemed to own and control all pertinent records
pertaining to the variable life operations which are the subject of this
agreement. LNL, on its behalf and on behalf of the Variable Account,
shall have the right to inspect, audit and copy all records pertaining
to the performance of services under this agreement.
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
By /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
Assistant Vice President
LINCOLN NATIONAL XXXXXX
MASTER FUND, INC.
By /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Chairman of the Board,
President & Director
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