FUND PARTICIPATION AGREEMENT



      THIS AGREEMENT made as of the 1st day of October 1998, by and among BT

Insurance Funds Trust ("TRUST"), a Massachusetts business trust, Bankers

Trust Company ("ADVISER"), a New York banking corporation, and Lincoln Life &

Annuity Company of New York ("LIFE COMPANY"), a life insurance company

organized under the laws of the State of New York.



      WHEREAS, TRUST is registered with the Securities and Exchange Commission

("SEC") under the Investment Company Act of 1940, as amended (the "40 Act"),

as an open-end, diversified management investment company; and



      WHEREAS, TRUST is comprised of several series funds (each a

"Portfolio"), with those Portfolios currently available being listed on

Appendix A hereto; and



      WHEREAS, TRUST was organized to act as the funding vehicle for certain

variable life insurance and/or variable annuity contracts ("Variable

Contracts") offered by life insurance companies through separate accounts

("Separate Accounts") of such life insurance companies ("Participating

Insurance Companies"); and



      WHEREAS, TRUST may also offer its shares to certain qualified pension and

retirement plans ("Qualified Plans"); and



      WHEREAS, TRUST has received an order from the SEC, granting Participating

Insurance Companies and their separate accounts exemptions from the provisions

of Sections 9(a), 13(a), 15(a) and 15(b) of the '40 Act, and Rules 6e-2(b)(15)

and 6e-3(T)(b)(1 5) thereunder, to the extent necessary to permit shares of the

Portfolios of the TRUST to be sold to and held by Variable Contract Separate

Accounts of both affiliated and unaffiliated Participating Insurance Companies

and Qualified Plans ("Exemptive Order"); and



      WHEREAS, LIFE COMPANY has established or will establish one or more

Separate Accounts to offer Variable Contracts and is desirous of having TRUST as

one of the underlying funding vehicles for such Variable Contracts; and



      WHEREAS, ADVISER is a "bank" as defined in the Investment Advisers Act

of 1940, as amended (the "Advisers Act") and as such is excluded from the

definition of "Investment Adviser" and is not required to register as an

investment adviser pursuant to the Advisers Act; and





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      WHEREAS, ADVISER serves as the TRUST's investment adviser; and



      WHEREAS, to the extent permitted by applicable insurance laws and

regulations, LIFE COMPANY intends to purchase shares of TRUST to fund the

aforementioned Variable Contracts and TRUST is authorized to sell such shares to

LIFE COMPANY at such shares' net asset value;



      NOW, THEREFORE, in consideration of their mutual promises, LIFE COMPANY,

TRUST, and ADVISER agree as follows:



                      Article 1. SALE OF TRUST SHARES



      1.1 TRUST agrees to make available to the Separate Accounts of LIFE

COMPANY shares of the selected Portfolios as listed on Appendix B for

investment of purchase payments of Variable Contracts allocated to the

designated Separate Accounts as provided in TRUST's Registration Statement.



      1.2 TRUST agrees to sell to LIFE COMPANY those shares of the selected

Portfolios of TRUST which LIFE COMPANY orders, executing such orders on a daily

basis at the net asset value next computed after receipt by TRUST or its

designee of the order for the shares of TRUST. For purposes of this Section

1.2, LIFE COMPANY shall be the designee of TRUST for receipt of such orders

from the designated Separate Account and receipt by such designee shall

constitute receipt by TRUST; provided that LIFE COMPANY receives the order by

4:00 p.m. New York time and TRUST receives notice from LIFE COMPANY by

telephone or facsimile (or by such other means as TRUST and LIFE COMPANY may

agree in writing) of such order by 9:00 a.m. New York time on the next Business

Day. "Business Day" shall mean any day on which the New York Stock Exchange

is open for trading and on which TRUST calculates its net asset value pursuant

to the rules of the SEC.



      1.3 TRUST agrees to redeem on LIFE COMPANY's request, any full or

fractional shares of TRUST held by LIFE COMPANY, executing such requests on a

daily basis at the net asset value next computed after receipt by TRUST or its

designee of the request for redemption, in accordance with the provisions of

this Agreement and TRUST's Registration Statement. (in the event of a conflict

between the provisions of this Agreement and the Trust's Registration Statement,

the provisions of the Registration Statement shall govern.) For purposes of this

Section 1.3, LIFE COMPANY shall be the designee of TRUST for receipt of requests

for redemption from the designated Separate Account and receipt by such designee

shall constitute receipt by TRUST; provided that LIFE COMPANY receives the

request for redemption by 4:00 p.m. New York time and TRUST receives notice from

LIFE COMPANY by telephone or facsimile (or by such other means as TRUST and LIFE

COMPANY may agree in





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writing) of such request for redemption by 9:00 a.m. New York time on the next

Business Day.



      1.4 TRUST shall furnish, on or before each ex-dividend date, notice to

LIFE COMPANY of any income dividends or capital gain distributions payable on

the shares of any Portfolio of TRUST. LIFE COMPANY hereby elects to receive all

such income dividends and capital gain distributions as are payable on a

Portfolio's shares in additional shares of the Portfolio. LIFE COMPANY reserves

the right to change such election. TRUST shall notify LIFE COMPANY or its

designee of the number of shares so issued as payment of such dividends and

distributions.



      1.5 TRUST shall make the net asset value per share for the selected

Portfolio(s) available to LIFE COMPANY on a daily basis as soon as reasonably

practicable after the net asset value per share is calculated but shall use its

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