SELLING GROUP AGREEMENT
FOR LINCOLN FINANCIAL ADVISORS
Effective July 1, 1997 this Agreement is made between Lincoln Financial
Advisors [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 26th day of June, 1997.
The Lincoln National Life Insurance Company Lincoln Financial Advisors, Inc.
[COMPANY] [BROKER]
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------- ----------------------------
Its: Vice President Its: Chief Financial Officer
---------------------------------- -----------------------------
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:
1. Lincoln National Life Insurance Company
Multi Fund-Registered Trademark- Variable Annuity Contracts
2. Lincoln National Life Insurance Company
Variable Universal Life III Contracts
