AGREEMENT TO PURCHASE SHARES
Lincoln National Pension Insurance Company ("LNP"), on its behalf and on
behalf of Lincoln National Pension Variable Annuity Account C (the "Variable
Account"), and Lincoln National Government Securities 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 LNP
through the variable Account subject to the following provisions:
1. LNP 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"). LNP 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 LNP thereunder to separate divisions of the variable Account
designated as "sub-accounts" for investment in the shares of registered
investment companies selected by LNP ("underlying fund"). The Fund will be an
underlying fund for one of the sub-accounts.
2. Fund shares may be purchased and redeemed by LNP 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 LNP
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 LNP 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
LNP to reimburse promptly 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
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Maryland law.
3. LNP and its agents shall make no representation concerning the 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 LNP and shall not be the responsibility of the
Fund. The Fund will furnish LNP copies of its proxy material, reports to
stockholders and other communications to stockholders in such quantities as LNP
shall reasonably require for distribution to owners of or participants under the
Contracts and LNP will distribute these materials to such owners or participants
as required. LNP will vote Fund shares, to the extent required by law, in
accordance with instructions received from Contract owners. LNP 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. LNP
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
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offering of its shares and shall provide LNP with as many copies of its current
prospectus as LNP may reasonably request.
6. This Agreement may be terminated as to the issuance of Fund shares as
follows:
(a) at the option of LNP or the Fund upon 90 days, written notice to the
other party;
(b) at the option of LNP if Fund shares are not available for any reason
to meet the requirements of the Contracts as determined by LNP; or
(c) at the option of the Fund upon institution of any proceedings against
LNP 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) LNP 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 LNP) 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
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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 statement or omission was made in
reliance upon and in conformity with written information
furnished to LNP 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 LNP) of LNP 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 LNP to provide the services
and furnish the materials set forth in paragraph four hereof.
LNP 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 LNP 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 LNP, notify LNP of the
commencement thereof; but the omission so to notify LNP will not relieve LNP
from any liability which it may have to the Indemnified
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Parties otherwise than under this Agreement. In case any such action is brought
against the Indemnified Parties, and LNP is notified of the commencement
thereof, LNP 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 LNP to such party of LNP's election to assume the defense thereof,
LNP 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.
Executed and agreed to this l1th day of February, 1986.
LINCOLN NATIONAL PENSION INSURANCE
COMPANY
By _______________________________________
Xxxxxx X. Xxxx
Executive Vice President
LINCOLN NATIONAL GOVERNMENT
SECURITIES FUND, INC.
By _______________________________________
Xxxxxx X. Xxxxxx
President
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