FORM OF
SELLING GROUP AGREEMENT
FOR LINCOLN FINANCIAL ADVISORS
Effective ______________________ this Agreement is made between
Sagemark Consulting, Inc. [hereinafter called the "Broker"] and The Lincoln
National Life Insurance Company, located at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxx
Xxxxx, Xxxxxxx 00000, an Indiana corporation
[hereinafter called the "Company"].
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
A. Definitions
(1) Contract--variable annuity, and variable universal
life insurance contracts described in Schedule A
attached hereto and issued by the Company and for
which the Company acts as the principal underwriter.
From time to time Schedule A may be amended. Such
amendments will be effective upon written
notification to the Broker that a new or amended
Schedule A has been issued.
(2) Account--segregated investment accounts in which the
Company sets aside and invests the assets to fund the
benefits under the Contracts.
(3) Funds--Any of the mutual funds in which net purchase
payments are invested at net asset value pursuant to
the directions of the Contract owner.
(4) Registration Statement--the Registration Statements
and amendments thereto on file with the SEC relating
to the Contracts, the Account, and the Funds,
including financial statements and all exhibits, as
applicable.
(5) Prospectus--the prospectus included within the
Registration Statements referred to herein.
(6) 1933 Act--the Securities Act of 1933, as amended.
(7) 1934 Act--the Securities and Exchange Act of 1934, as
amended.
(8) 1940 Act--the Investment Company Act of 1940, as
amended.
(9) SEC--the Securities and Exchange Commission.
B. Agreements of Company
(1) Company hereby authorizes Broker during the term of
this Agreement to solicit applications for Contracts
from eligible persons, provided that there is an
effective Registration Statement relating to such
Contracts and provided further that Broker has been
notified by Company that the contracts are qualified
for sale under all applicable securities and
insurance laws of the state or jurisdiction in all
applicable jurisdictions. In connection with the
solicitation of applications for Contracts, Broker is
hereby authorized to offer riders that are available
with the Contracts in accordance with instructions
furnished by Company.
(2) Company, during the terms of this Agreement, will
notify Broker of the issuance by the SEC of any stop
order with respect to the Registration Statement or
any amendments thereto or the initiation of any
proceedings for that purpose or for any other purpose
relating to the Registration and/or offering of the
Contracts and of any other action or circumstance
that may prevent the lawful sale of the Contracts in
any state or jurisdiction.
(3) During the term of this Agreement, Company shall
advise Broker of any amendment to the Registration
Statement or any amendment or supplement to any
Prospectus.
C. Agreements of Broker
(1) Broker represents that it is a properly registered
and licensed broker or dealer under federal and state
securities laws and regulations and a member in good
standing of the National Association of Securities
Dealers, Inc. [hereinafter "NASD"] and agrees to
notify Company immediately if Broker ceases to be so
registered or licensed or a member in good standing
of the NASD. Further, Broker represents that each of
its agents licensed to sell contracts [each
respectively referred to hereinafter as "the Agent"]
will be soliciting applications for Contracts under
this Agreement. Broker represents that the Agent is a
fully-registered representative of the Broker and
moreover that the Agent is a registered
representative in good standing with the NASD, with
accreditation to sell the Contracts as required by
the NASD.
(2) Commencing at such time as Company and Broker shall
agree upon, Broker agrees to use its best efforts to
find purchasers for the Contracts acceptable to the
Company. In meeting its obligation to use its best
efforts to solicit applications for Contracts, Broker
shall, during the term of this Agreement, engage in
the following activities:
(a) Continuously utilize training, sales, and only such
promotional materials which have been approved by
Company for those Contracts defined in this
Agreement.
(b) Abide by all rules and regulations of the NASD,
including its Conduct Rules (which shall control and
override any provision to the contrary in this
Agreement), and company with all applicable federal
and state laws, rules and regulations. Broker is
responsible for supervision of Agent and other
associated persons which will enable Broker to assure
that Agent and associated persons are in compliance
with applicable securities laws, rules, regulations
and statements of policy promulgated thereunder.
(c) After reasonable inquiry of each applicant, Broker
shall take reasonable steps to ensure that the Agent
shall not make recommendations to an applicant to
purchase a Contract in the absence of reasonable
grounds to believe that the purchase of the Contract
is suitable for such applicant.
(3) All payments for Contracts collected by the Agent shall be
held at all times in a fiduciary capacity and shall be
remitted promptly, in full, together with such applications,
forms, and other required documentation to the designated
office of the Company. Checks or money orders in payment of
initial premiums shall be drawn to the order of The Lincoln
National Life Insurance Company. Broker acknowledges that the
Company retains the ultimate right to control the sale of the
Contracts and that the Company shall have the unconditional
right to reject, in whole or in part, any application for the
Contract. In the event Company rejects an application, Company
will immediately return all payments directly to the
purchaser, and the Broker will be notified of such action. In
the event that any purchaser of a Contract elects to return
such Contract, as allowed by the applicable state law, federal
law or NASD Conduct Rules, the purchaser will receive a refund
in accordance with the provisions of the applicable law or
rule.
(4) Broker shall return any related sales commission to the
Company, if a Contract is tendered for redemption within seven
business days after acceptance of the Contract application.
(5) Broker shall act as an independent contractor, and nothing
contained herein shall make Broker or any one of its
employees, or the Agent, an employee of Company in connection
with the solicitation of, or applications for, Contracts. The
Broker, the Agent, and the employees of either the Broker or
Agent shall not hold themselves out to be employees of Company
in this connection or in any dealings with the public.
(6) Broker agrees that any material it develops, approves or uses
for sales, training, explanatory or other purposes including
illustrations in connection with the solicitation of
applications for Contracts hereunder (other than generic
advertising materials which do not make specific reference to
the Contracts) will not be used without the prior written
consent of Company and, where appropriate, the endorsement of
Company.
(7) Solicitation and other activities by Broker shall be
undertaken only in accordance with applicable laws and
regulations. The Agent shall not solicit applications for the
Contracts until duly licensed and appointed by the Company as
a life insurance and variable contract broker or agent of
Company in the appropriate states or other jurisdictions.
Broker shall ensure that the Agent fulfills any training
requirements necessary to be licensed to sell such products.
Broker understands and acknowledges that neither it nor the
Agent is authorized by Company to give any information or make
any representation in connection with this Agreement or the
offering of the Contracts other than those contained in the
Prospectus or other solicitation material authorized in
writing by Company.
(8) Broker shall not have authority on behalf of Company to make,
alter, or discharge any Contract or other form; waive any
forfeiture; extend the time of paying any premium; or receive
any monies or premiums due, or to become due, to Company,
except as set forth in Section C(3) of this Agreement. Broker
shall not expend, nor contract for the expenditure of the
funds of Company, nor shall Broker possess or exercise any
authority on behalf of the Company under this Agreement.
(9) Broker shall have the responsibility for maintaining the
records of the Agent. Broker shall maintain such other records
as are required of it by applicable laws and regulations. The
books, accounts and records of Company, the Account and Broker
relating to the sale of the Contract shall be maintained so as
to clearly and accurately disclose the nature and details of
the transactions. All records maintained by the Broker in
connection with this Agreement shall be the property of the
Company and shall be returned to the Company upon termination
of this Agreement, free from any claims or retention of rights
by the Broker. Nothing in this Section C(9) shall be
interpreted to prevent the Broker from retaining copies of any
such records which the Broker, in its discretion, deems
necessary or desirable to keep. The Broker shall keep
confidential any information obtained pursuant to this
Agreement, and shall disclose such information, only if the
Company has authorized such disclosure, or if such disclosure
is expressed or required by an applicable federal or state
regulatory authority.
D. Compensation
(1) Company shall arrange for the payment of commissions
to the Agent as compensation for the sale of each
Contract sold by the Agent. Compensation shall be
paid according to the terms of Section B of the
Broker and Agent Contracts entered into between the
Company and the Broker, and the Company and the
Agent. No compensation is payable unless the Broker
and the Agent have first complied with all applicable
insurance laws, rules, and regulations. Company shall
identify to the Broker, with each such payment, the
name of the Agent as the one who solicited each
Contract covered by the payment.
(2) Neither Broker nor the Agent shall have any right to
withhold or deduct any part of any premium it shall
receive for the purposes of the payment of commission
or otherwise.
(3) Upon termination of this Agreement, the Company will
pay commissions to the Agent only to the extent
provided in Section B of the Agent's Contract entered
into between the Company and the Agent. Furthermore,
in the event of termination, Company will pay
commissions to the Broker only to the extent provided
in Section B of the Broker's contract entered into
between the Company and the Agent.
(4) No commissions will be paid for the sale of Contracts
not listed in Schedule A.
(5) No commissions will be paid for the sale of Contracts
in jurisdictions in which the Broker and/or its
Agents are not duly licensed.
E. Complaints and Investigations
(1) Broker and Company jointly agree to cooperate fully
in any insurance regulatory investigation or
proceeding or judicial proceeding arising in
connection with the contracts marketed under this
Agreement. Broker and Company further agree to
cooperate fully in any securities regulatory
investigation or proceeding or judicial proceeding
with respect to Broker, Company, their affiliates and
the Agent to the extent that such investigation or
proceeding is in connection with Contracts marketed
under this Agreement. Broker and Company shall
furnish applicable federal and state regulatory
authorities with any information or reports in
connection with their services under this Agreement
which such authorities may request in order to
ascertain whether the Company's or Broker's
operations are being conducted in a manner consistent
with any applicable law or regulation.
(2) Broker warrants and represents that as of the date of
execution of this Agreement, it has no knowledge of
any pending or threatened complaint or investigation
instituted against any of its Agents relating to the
sale of any Contracts listed in Schedule A.
F. Termination of Agreement
(1) This Agreement shall continue in force unless
terminated by either party pursuant to Section A of
the Broker Contract entered into between the Company
and Broker.
(2) Upon termination of this Agreement, all
authorizations, rights and obligations themselves
shall cease except (a) the agreements contained in
Section E hereof; and (b) the indemnity agreement set
forth in Section G hereof.
G. Indemnity
(1) Broker shall be held to the exercise of reasonable
care in carrying out the provisions of this
Agreement.
(2) Company agrees to indemnify and hold harmless Broker
and each officer or director of Broker against any
losses, claims, damages or liabilities, joint or
several, to which Broker or such officer or director
becomes subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out
of, or are based upon, any untrue statement or
alleged untrue statement of a material fact, required
to be stated therein or necessary to make these
statements therein not misleading, contained in any
Registration Statement or any post-effective
amendment thereof or in the Prospectus, or any sales
literature provided by the Company.
(3) Broker agrees to indemnify and hold harmless Company
and each of its current and former directors and
officers and each person, if any, who controls or has
controlled the Company within the meaning of the 1933
Act of the 1934 Act, against any losses, claims,
damages or liabilities to which Company and any such
director or officer or controlling person may become
subject, under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or
actions in respect there) arise out of, or are based
upon:
(a) Any unauthorized use of sales materials or
any verbal or written misrepresentations or
any unlawful sales practices concerning the
Contracts by Broker, its agents and its
employees; or
(b) Claims by the Agent, Broker or their
employees for commissions, service fees,
development allowances or other compensation
or remuneration of any type; or
(c) The failure of Broker, its officers,
employees, or the Agent to comply with the
provisions of this Agreement; or
(d) The fraudulent, malicious, intentional,
reckless, knowing or negligent acts or
omissions of Broker's employees, officers,
agents or sales persons;
and Broker will reimburse Company and any director or
officer or controlling person of either for any legal
or other expenses reasonably incurred by Company, or
such director, officer of controlling person in
connection with investigating or defending any such
loss, claim, damage, liability, or action. This
indemnity agreement will be in addition to any
liability which Broker may otherwise have.
H. Assignability
(1) This Agreement shall not be assigned by either party
without the written consent of the other.
I. Governing Law
(1) This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed this _____ day of ______________, 19___.
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY SAGEMARK CONSULTING, INC.
[COMPANY] [BROKER]
By:_____________________________ By:______________________________
Its:____________________________ Its:_____________________________
Schedule A
to the
Selling Group Agreement
Between
The Company and The Broker
The following is a list of Contracts that Broker has been granted
authority by the Company to sell:
LINCOLN NATIONAL LIFE INSURANCE COMPANY
(eANNUITY) VARIABLE ANNUITY CONTRACTS
