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General Agent and Broker-Dealer
Servicing Agreement
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AG2006US (01/2005)
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COMPANY]
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AGREEMENT, dated as of the effective date as provided below, by and
among ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company (U.S.A.) ("▇▇▇▇ ▇▇▇▇▇▇▇ USA"), ▇▇▇▇
▇▇▇▇▇▇▇ Distributors LLC, the undersigned general agent ("General Agent") and
the undersigned broker-dealer ("Broker-Dealer").
WHEREAS, ▇▇▇▇ ▇▇▇▇▇▇▇ USA issues life insurance and annuity contracts,
some of which are exempted securities pursuant to Section 3 of the Securities
Act of 1933 (the "1933 Act") and therefore not subject to registration under the
1933 Act ("Insurance Contracts"), and some of which are not exempted securities
pursuant to Section 3 of the 1933 Act and therefore subject to registration
under the 1933 Act unless sold in exempt transactions ("Securities Contracts");
and
WHEREAS, ▇▇▇▇ ▇▇▇▇▇▇▇ USA has appointed ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC as
the principal underwriter for the Securities Contracts; and
WHEREAS, General Agent and Broker-Dealer desire to service certain
previously sold Securities Contracts and Insurance Contracts (collectively, the
"Contracts") in accordance with the provisions set forth in the Contracts,
Commissions and Fees Schedule (the "Contracts Schedule") which is Exhibit A to
this Agreement;
WHEREAS, General Agent desires to have its sub-agents who are not also
registered representatives of Broker-Dealer appointed as agents of ▇▇▇▇ ▇▇▇▇▇▇▇
USA for the purpose of servicing some or all of the Insurance Contracts
("Insurance Agents"), and General Agent and Broker-Dealer desire to have General
Agent's sub-agents who are also registered representatives of Broker-Dealer
appointed as agents of ▇▇▇▇ ▇▇▇▇▇▇▇ USA for the purpose of servicing some or all
of the Contracts ("Securities Agents")(lnsurance Agents and Securities Agents
are hereinafter collectively referred to as "Agents"); and
WHEREAS, if General Agent and Broker-Dealer are the same person, the
term "General Agent" in this Agreement shall refer to Broker-Dealer, which shall
undertake all the duties, responsibilities and privileges of General Agent under
this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. APPOINTMENT AND AUTHORIZATION
a. ▇▇▇▇ ▇▇▇▇▇▇▇ USA and ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC appoint and
authorize, on a non-exclusive basis, General Agent and Broker-Dealer to service
the Contracts in those jurisdictions in which ▇▇▇▇ ▇▇▇▇▇▇▇ USA is admitted to do
business, the Contracts have been approved for sale by the appropriate
regulatory authorities and General Agent and Broker-Dealer are properly licensed
to conduct business. General Agent and Broker-Dealer accept such appointment and
authorization, and each agrees to use its best efforts to provide ongoing
services to those purchasers with respect to the Contracts.
b. Each of General Agent and Broker-Dealer is performing the acts
covered by this Agreement in the capacity of an independent contractor and not
as an employee or partner of or a joint venturer with ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇
▇▇▇▇▇▇▇ Distributors LLC and is authorized to represent ▇▇▇▇ ▇▇▇▇▇▇▇ USA and
▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC only to the extent expressly authorized by this
Agreement. No further authority is granted or implied.
2. LICENSING AND APPOINTMENT OF AGENTS
a. General Agent is authorized to designate persons for appointment by
▇▇▇▇ ▇▇▇▇▇▇▇ USA as Agents to provide service to the Contracts and to collect
the premium (as used herein, the term "premium" shall refer to any premium
payment, deposit or contribution, as applicable, paid or payable in connection
with a Contract) thereon in conformance with applicable state laws and ▇▇▇▇
▇▇▇▇▇▇▇ USA's rules and procedures. General Agent shall not propose an Agent for
appointment unless such Agent is duly licensed as an insurance agent in the
state(s) in which it is proposed that such Agent solicit applications for the
Contracts and, if the Agent is to sell Securities Contracts, unless the Agent is
a registered representative of Broker-Dealer. General Agent shall be responsible
for such Agents' continuing compliance with applicable licensing requirements
under state insurance laws, and Broker-Dealer shall be responsible for such
Agents' continuing compliance with applicable registration requirements under
federal and state securities laws.
b. General Agent shall assist ▇▇▇▇ ▇▇▇▇▇▇▇ USA in the appointment of
Agents under applicable insurance laws and, in that connection, shall prepare
and transmit to ▇▇▇▇ ▇▇▇▇▇▇▇ USA appropriate licensing and appointment forms,
shall fulfill all requirements set forth in the General Letter of Recommendation
attached as Exhibit B to this Agreement and shall comply with such other related
policies and procedures as ▇▇▇▇ ▇▇▇▇▇▇▇ USA from time to time may establish or
amend in its sole discretion.
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c. John ▇▇▇▇▇▇▇ USA shall pay the initial appointment fees and renewal
fees required under state insurance laws to appoint each previously licensed
person as an agent of ▇▇▇▇ ▇▇▇▇▇▇▇ USA for the sale of Contracts. General Agent
shall be responsible for all other state insurance appointment and licensing
fees with respect to the Agents, including license issue, transfer and
termination fees. Broker-Dealer shall be responsible for all fees, including
registration and examination fees, necessary to maintain Securities Agents'
continuing compliance with applicable registration requirements under federal
and state securities laws and the rule of self-regulatory organizations.
d. John ▇▇▇▇▇▇▇ USA, in its discretion, may refuse to appoint any Agent
designated by General Agent or, after it has appointed an Agent, may terminate
or refuse to renew such Agent's appointment or may withdraw the Agent's right to
service some or all of the Contracts, in which case General Agent shall cause
such Agent to cease providing service under this Agreement.
e. With the frequency reasonably requested by ▇▇▇▇ ▇▇▇▇▇▇▇ USA, General
Agent shall provide ▇▇▇▇ ▇▇▇▇▇▇▇ USA with a list of all Agents, indicating which
of them are Securities Agents, and the jurisdictions where such Agents are
licensed to solicit sales of the Contracts. With the frequency reasonably
requested by General Agent, ▇▇▇▇ ▇▇▇▇▇▇▇ USA shall provide General Agent with a
list which shows the jurisdictions in which ▇▇▇▇ ▇▇▇▇▇▇▇ USA is admitted to do
business and the Contracts that have been approved for sale in each of those
jurisdictions.
3. SUPERVISION OF AGENTS
a. Except to the extent that Broker-Dealer is responsible therefor,
General Agent shall supervise all Agents and be responsible for their training
and compliance with applicable insurance laws and regulations, and if any act or
omission of an Agent or employee of General Agent is the proximate cause of any
loss, claim, damage, liability or expense (including reasonable attorneys' fees)
to ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC, General Agent shall be
liable therefor. Broker-Dealer shall supervise Securities Agents and be
responsible for their training and compliance with applicable federal and state
securities laws and regulations and the rules of the National Association of
Securities Dealers, Inc. ("NASD"), and if any act or omission of a Securities
Agent or employee of Broker-Dealer is the proximate cause of any loss, claim,
damage, liability or expense (including reasonable attorneys' fees) to ▇▇▇▇
▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC, Broker-Dealer shall be liable
therefor. General Agent and Broker-Dealer shall insure that only Securities
Agents service Securities Contracts. ▇▇▇▇ ▇▇▇▇▇▇▇ USA and ▇▇▇▇ ▇▇▇▇▇▇▇
Distributors LLC shall not have any responsibility for the supervision, training
or compliance with any law or regulation of any Agent or any employee of General
Agent or Broker-Dealer, and nothing in this Agreement shall be deemed to make
such an Agent or employee an agent or employee of ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇
▇▇▇▇▇▇▇ Distributors LLC.
b. General Agent shall (i) supervise Agents' compliance with all
applicable suitability requirements under state insurance laws and regulations
and (ii) provide adequate training to insure that Agents have thorough knowledge
of each Insurance Contract and the ability to make appropriate product
presentations and suitability determinations in compliance with applicable law.
Broker-Dealer shall (i) supervise Securities Agents' compliance with all
applicable suitability requirements under federal and state securities laws and
regulations and NASD rules and (ii) provide adequate training to insure that
Securities Agents have thorough knowledge of each Securities Contract and the
ability to make appropriate product presentations and suitability determinations
in compliance with applicable law. Each of General Agent and Broker-Dealer shall
not, and shall cause the Agents not to, recommend the purchase of a Contract to
a prospective purchaser unless it has reasonable grounds to believe that such
purchase is suitable for the prospective purchaser and is in accordance with
applicable rules and regulations of any regulatory authority, including, in the
case of Securities Contracts, the Securities and Exchange Commission ("SEC") and
the NASD. General Agent, in submitting an application for an Insurance Contract,
and Broker-Dealer, in submitting an application for a Securities Contract, will
be deemed to have warranted to ▇▇▇▇ ▇▇▇▇▇▇▇ USA, and to ▇▇▇▇ ▇▇▇▇▇▇▇
Distributors LLC in the case of a Securities Contract, that it has made a
determination of suitability based on information concerning the prospective
purchaser's insurance and investment objectives, risk tolerance, need for
liquidity, and financial and insurance situation and needs, or on such other
factors that General Agent or Broker-Dealer deems to be appropriate under the
circumstances and in compliance with applicable law.
c. If an Agent performs any unauthorized transaction with respect to a
Contract, fails to submit to the supervision of or otherwise meet the rules and
standards of General Agent or Broker-Dealer, or fails to hold any required
license, appointment, registration or association with Broker-Dealer, General
Agent and Broker-Dealer immediately shall notify ▇▇▇▇ ▇▇▇▇▇▇▇ USA in writing and
act to terminate the sales activities of such Agent relating to the Contracts.
d. Upon request by ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC,
General Agent and Broker-Dealer shall furnish appropriate records or other
documentation to evidence the diligent supervision of Agents by General Agent
and Broker-Dealer.
4. OBLIGATIONS OF GENERAL AGENT AND BROKER-DEALER
a. General Agent and Broker-Dealer shall permit Agents to provide
service for Contracts only if they (i) are duly licensed insurance Agents and
appointed by ▇▇▇▇ ▇▇▇▇▇▇▇ USA and (ii) in the case of Securities Contracts, are
also registered representatives of Broker-Dealer.
b. Checks or money orders for the payment of premiums shall be drawn to
the order of "▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company (U.S.A.)", or such other name
as ▇▇▇▇ ▇▇▇▇▇▇▇ USA shall authorize from time to time. General Agent and
Broker-Dealer do not have authority to deposit or endorse checks payable to ▇▇▇▇
▇▇▇▇▇▇▇ USA without the prior written approval of ▇▇▇▇ ▇▇▇▇▇▇▇ USA. ▇▇▇▇ ▇▇▇▇▇▇▇
USA has the right in its sole discretion to reject any application for a
Contract and return any premium payment made in connection with the sale of the
Contract.
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c. Contracts issued on accepted applications shall be delivered to the
contract owners according to administrative procedures established by ▇▇▇▇
▇▇▇▇▇▇▇ USA.
d. General Agent and Broker-Dealer shall not, directly or indirectly,
expend or contract for the expenditure of any funds of ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇
▇▇▇▇▇▇▇ Distributors LLC. ▇▇▇▇ ▇▇▇▇▇▇▇ USA and ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC
shall not be obligated to pay any expense incurred by General Agent or
Broker-Dealer in the performance of this Agreement, unless otherwise
specifically provided for in this Agreement or agreed to in advance in writing
by ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC.
e. General Agent and Broker-Dealer are not authorized: to incur
indebtedness or make contracts on behalf of ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇
Distributors LLC; to alter or amend any of the provisions of the Contracts or
the forms prescribed by ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC; to
discharge, waive any forfeitures under or extend the time for making payments
under the Contracts; to pay any premium or other payment on behalf of a Contract
applicant; to enter into any court or regulatory proceeding in the name of or on
behalf of ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC; or to bind ▇▇▇▇
▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC in any way not specifically
authorized in writing by the party to be bound.
f. General Agent and Broker-Dealer shall not induce any employee or
agent of ▇▇▇▇ ▇▇▇▇▇▇▇ USA to terminate that relationship, persuade owners of
insurance or annuity contracts issued by ▇▇▇▇ ▇▇▇▇▇▇▇ USA to discontinue their
contracts or otherwise do anything prejudicial to the interests of ▇▇▇▇ ▇▇▇▇▇▇▇
USA or the owners of contracts issued by it.
g. General Agent and Broker-Dealer agree to comply with, and to cause
the Agents to comply with, the administrative procedures of ▇▇▇▇ ▇▇▇▇▇▇▇ USA
relating to the Contracts and the policies and procedures adopted by ▇▇▇▇
▇▇▇▇▇▇▇ USA relating to privacy, agent conduct and similar matters and
identified in the Policies and Procedures Schedule which is Exhibit C to this
Agreement, to the extent such policies and procedures are applicable to the
offer, sale and servicing of the Contracts, as those administrative procedures
and other policies and procedures are now in effect or may be amended or
established in the future by ▇▇▇▇ ▇▇▇▇▇▇▇ USA in its sole discretion and
communicated to General Agent and Broker-Dealer, as appropriate. General Agent
and Broker-Dealer acknowledge receipt of those policies of ▇▇▇▇ ▇▇▇▇▇▇▇ USA set
forth in the Policies and Procedures Schedule.
h. Each of General Agent and Broker-Dealer agrees to carry out its
activities and obligations under this Agreement, and to cause each Agent for
which it has primary supervisory responsibility to carry out the Agent's
activities and obligations in connection with the offer, sale and servicing of
the Contracts, in continuous compliance with applicable laws, rules and
regulations of applicable federal and state regulatory authorities (including
the rules of the NASD), including those governing securities and
insurance-related activities or transactions, and to notify ▇▇▇▇ ▇▇▇▇▇▇▇ USA and
▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC immediately in writing if it or any such Agent
fails to comply with any of those laws and regulations.
i. Broker-Dealer shall execute any electronic or telephone orders only
in accordance with the current prospectus applicable to the Securities Contracts
and agrees that, in consideration for electronic and telephone transfer
privileges, ▇▇▇▇ ▇▇▇▇▇▇▇ USA will not be liable for any loss incurred as a
result of acting upon electronic or telephone instructions containing
unauthorized, incorrect or incomplete information received from Broker-Dealer or
its representatives.
5. COMPENSATION
a. ▇▇▇▇ ▇▇▇▇▇▇▇ USA shall pay General Agent compensation for the
servicing of Insurance Contracts and, on behalf of ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors
LLC, shall pay Broker-Dealer for the servicing of Securities Contracts as set
forth in the Contracts Schedule. Unless otherwise provided in the Contracts
Schedule, ▇▇▇▇ ▇▇▇▇▇▇▇ USA will make these payments within 15 days after the end
of the calendar month in which it accepts the premiums and purchase payments on
which the payments are based. Notwithstanding any other provision of this
Agreement, Broker-Dealer shall return to ▇▇▇▇ ▇▇▇▇▇▇▇ USA all compensation paid
to it with respect to a Securities Contract if the Securities Contract is
tendered for redemption within seven business days after ▇▇▇▇ ▇▇▇▇▇▇▇ USA's
acceptance of the application for the Securities Contract.
b. Except as otherwise set forth in this Agreement including the
Contracts Schedule, General Agent shall be exclusively responsible for setting
the compensation of and promptly paying Agents for Insurance Contracts, and
Broker-Dealer shall be exclusively responsible for setting the compensation of
and promptly paying Agents for Securities Contracts.
6. ASSOCIATED INSURANCE AGENCY
a. If they are not the same person, General Agent and Broker-Dealer
represent and warrant that they are in compliance with the terms and conditions
of no-action letters issued by the staff of the SEC with respect to
non-registration as a broker-dealer of an insurance agency associated with a
registered broker-dealer. If Broker-Dealer has entered into an agreement with
one or more insurance agencies other than General Agent (each, an "Associated
Agency") for purposes of selling Securities Contracts in those states in which
neither Broker-Dealer nor General Agent can obtain an insurance license
necessary to sell the Contracts, Broker-Dealer represents and warrants that it
and each such Associated Agency are in compliance with the terms and conditions
of no-action letters issued by the staff of the SEC with respect to
non-registration as a broker-dealer of an insurance agency associated with a
registered broker-dealer. The Broker-Dealer will supervise agents of an
Associated Agency in the same manner as it is required to supervise Agents under
this Agreement, as applicable. General Agent and Broker-Dealer shall notify ▇▇▇▇
▇▇▇▇▇▇▇ USA and ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC immediately in writing if General
Agent, Broker-Dealer or any Associated Agency fails to comply with any such
terms and conditions and shall take such measures as may be necessary to comply
with any such terms and conditions.
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b. In reliance on such representations and warranties, ▇▇▇▇ ▇▇▇▇▇▇▇ USA,
on behalf of ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC, agrees to pay any compensation
otherwise due to Broker-Dealer for sales of Securities Contracts to General
Agent or Associated Agencies as authorized in writing by Broker-Dealer.
c. Broker-Dealer shall have the same obligations under this Agreement
with respect to sales of Securities Contracts for which compensation is paid to
General Agent or an Associated Agency as it has for sales of Securities
Contracts for which it receives compensation directly from ▇▇▇▇ ▇▇▇▇▇▇▇
Distributors LLC or ▇▇▇▇ ▇▇▇▇▇▇▇ USA. In addition, Broker-Dealer shall insure
that compensation paid to General Agent or an Associated Agency is distributed
only to duly licensed Securities Agents.
7. REPRESENTATIONS AND WARRANTIES
a. Each of ▇▇▇▇ ▇▇▇▇▇▇▇ USA, ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC,
Broker-Dealer and General Agent represents to the others that it and its
officers signing below have full power and authority to enter into this
Agreement, that this Agreement has been duly and validly executed by it and that
this Agreement, assuming due and valid execution by the other parties,
constitutes a legal, valid and binding agreement.
b. General Agent represents and warrants to ▇▇▇▇ ▇▇▇▇▇▇▇ USA and ▇▇▇▇
▇▇▇▇▇▇▇ Distributors LLC that General Agent is, and at all times when performing
its functions and fulfilling its obligations under this Agreement will be, a
properly licensed insurance agency in each jurisdiction in which such licensing
is required for the sale of the Contracts.
c. Broker-Dealer represents and warrants to ▇▇▇▇ ▇▇▇▇▇▇▇ USA and ▇▇▇▇
▇▇▇▇▇▇▇ Distributors LLC that Broker-Dealer is, and at all times when performing
its functions and fulfilling its obligations under this Agreement will be,
registered as a broker-dealer with the SEC under the Securities Exchange Act of
1934 (the "1934 Act") and under the securities laws of each state in which such
registration is required for the sale of the Securities Contracts and a member
of the NASD. Broker-Dealer will notify ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC promptly in
writing if any such registration or membership is terminated or suspended.
d. John ▇▇▇▇▇▇▇ Distributors LLC represents and warrants to
Broker-Dealer that ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC is, and at all times when
performing its functions and fulfilling its obligations under this Agreement
will be, registered as a broker-dealer with the SEC under the 1934 Act and under
the securities laws of each state in which such registration is required for
underwriting the Securities Contracts and a member of the NASD.
e. John ▇▇▇▇▇▇▇ USA represents and warrants to General Agent and
Broker-Dealer that the Securities Contracts, including any variable account(s)
supporting the Securities Contracts, shall comply in all material respects with
applicable registration and other requirements of the 1933 Act and the
Investment Company Act of 1940 (the "1940 Act"), and the rules and regulations
thereunder, including the terms of any order of the SEC with respect thereto.
f. ▇▇▇▇ ▇▇▇▇▇▇▇ USA represents and warrants to General Agent and
Broker-Dealer that the prospectuses included in ▇▇▇▇ ▇▇▇▇▇▇▇ USA's registration
statements for the Contracts, and in post-effective amendments thereto, and any
supplements thereto, as filed or to be filed with the SEC, as of their
respective effective dates, contain or will contain in all material respects all
statements and information which are required to be contained therein by the
1933 Act.
8. SALES LITERATURE, ADVERTISEMENTS AND OTHER PROMOTION MATERIAL
a. General Agent and Broker-Dealer shall not use, and shall cause the
Agents not to use, any sales literature, advertisements or other promotional
material ("Sales Material") in connection with the offer and sale of the
Contracts unless the Sales Material has been approved in writing prior to use by
▇▇▇▇ ▇▇▇▇▇▇▇ USA, in the case of Insurance Contracts, or ▇▇▇▇ ▇▇▇▇▇▇▇
Distributors LLC, in the case of Securities Contracts. For purposes of this
Agreement, Sales Material shall include but not be limited to:
i. material published, or designed for use in, a newspaper,
magazine or other periodical, radio, television,
telephone or tape recording, video-tape display, signs
or billboards, motion pictures, telephone directories
(other than routine listings), electronic or other
public media, or direct mail;
ii. descriptive literature and sales aids of all kinds,
including, but not limited to, circulars, leaflets,
booklets, marketing guides, seminar material,
audiovisual material, computer print-outs, depictions,
illustrations and form letters;
iii. material used for training and education which is
designed to be used or is used to induce the public to
purchase or retain a Contract; and
iv. prepared sales talks and other presentations and
material prepared for use with prospective purchasers of
the Contracts or with the public generally.
b. ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC will provide
Broker-Dealer, without charge, with as many copies of the prospectuses and
statements of additional information for the Securities Contracts and the
underlying investment funds as may be reasonably requested ("Registration
Material"). Upon receipt of updated Registration Material, Broker-Dealer will
promptly discard or destroy all copies of Registration Material previously
provided to it, except as needed to maintain proper records.
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c. Upon notice to General Agent or Broker-Dealer, ▇▇▇▇ ▇▇▇▇▇▇▇ USA or
▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC may terminate at any time and for any reason the
use of any Sales Material previously approved by it or of any Registration
Material, and General Agent and Broker-Dealer shall promptly comply with any
such request and shall not use, or permit an Agent to use, such material
thereafter.
d. General Agent and Broker-Dealer are not authorized, and may not
authorize anyone else, to give any information or to make any representation
concerning ▇▇▇▇ ▇▇▇▇▇▇▇ USA, the Contracts, the separate accounts of ▇▇▇▇
▇▇▇▇▇▇▇ USA or the underlying investment funds for the Contracts other than
those contained in the current Registration Material and Sales Material
authorized for use by ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC.
Broker-Dealer, General Agent and Agents may not modify or represent that they
are authorized to modify any such material.
e. General Agent shall be responsible for all communications by Agents
with prospective purchasers of, and with the public generally in connection
with, Insurance Contracts. Broker-Dealer shall be responsible for all
communications by Securities Agents with prospective purchasers of, and with the
public generally in connection with, Securities Contracts.
9. GROUP ANNUITY CONTRACTS
For purposes of this Agreement, a group annuity contract which has not
been registered under the 1933 Act and which is to be issued in connection with
a stock bonus, pension, or profit-sharing plan which meets the requirements for
qualification under section 401 of the Internal Revenue Code (or in connection
with another kind of plan specified in Section 3(a)(2) of the 1933 Act) ("Exempt
Group Contract") shall be deemed to be an Insurance Contract, but a sale of an
Exempt Group Contract by a Securities Agent shall be subject to any applicable
NASD rules. Broker-Dealer shall supervise and maintain records with respect to
such transactions as may be required by any applicable NASD rules.
10. FIDELITY BOND AND OTHER LIABILITY COVERAGE
Each of General Agent and Broker-Dealer represents that it and its
directors, officers and employees and the Insurance Agents, in the case of
General Agent, and the Securities Agents, in the case of Broker-Dealer, are and
shall be covered by a blanket fidelity bond, issued by a reputable bonding
company, and other errors and omissions or liability insurance, acceptable to
▇▇▇▇ ▇▇▇▇▇▇▇ USA ("Liability Coverage"). Each of General Agent and Broker-Dealer
shall maintain its Liability Coverage at its expense. Liability Coverage shall
be in a form, type and amount and issued by a bonding company or other insurance
company satisfactory to ▇▇▇▇ ▇▇▇▇▇▇▇ USA. Any fidelity bond maintained by
Broker-Dealer which meets the requirements of the NASD Conduct Rules applicable
to fidelity bonds shall be deemed to be satisfactory. ▇▇▇▇ ▇▇▇▇▇▇▇ USA may
require evidence, satisfactory to it, that such coverage is in force, and
General Agent and Broker-Dealer shall give prompt written notice to ▇▇▇▇ ▇▇▇▇▇▇▇
USA of any cancellation or change of coverage. Each of General Agent and
Broker-Dealer assigns any proceeds received from the Liability Coverage to ▇▇▇▇
▇▇▇▇▇▇▇ USA to the extent of its loss, and to ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC to
the extent of its loss, due to activities covered by the Liability Coverage and
agrees to pay promptly any deficiency whether due to a deductible or otherwise.
11. COMPLAINTS, INVESTIGATIONS AND PROCEEDINGS
Each of General Agent and Broker-Dealer shall promptly notify ▇▇▇▇
▇▇▇▇▇▇▇ USA and ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC if it receives notice of any
customer complaint or of any threatened or pending regulatory investigation or
proceeding, civil action or arbitration (a "Proceeding") involving the
Contracts. ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC will promptly
notify General Agent or Broker-Dealer if it receives notice of any customer
complaint or of any Proceeding involving General Agent or Broker-Dealer and the
Contracts. Each party shall cooperate with the other parties in investigating
and responding to any such complaint or Proceeding, and in any settlement or
trial of any actions arising out of the conduct of business under this
Agreement. No response by General Agent or Broker-Dealer to an individual
customer complaint involving a Contract will be sent until it has been approved
by ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC or dealt with otherwise in
accordance with ▇▇▇▇ ▇▇▇▇▇▇▇ USA's administrative procedures.
12. INDEMNIFICATION
a. General Agent and Broker Dealer, jointly and severally, indemnify and
hold harmless ▇▇▇▇ ▇▇▇▇▇▇▇ USA, ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC, and their
respective affiliates, officers, directors, employees and agents against any and
all loss, claim, damage, liability or expense (including reasonable attorneys'
fees), joint or several, insofar as such loss, claim, damage, liability or
expense arises out of or is based upon any breach of this Agreement, any
applicable law or regulation, or any applicable rule of any self-regulatory
organization, by General Agent, Broker-Dealer or any of the Agents. This
indemnification will be in addition to any liability which the General Agent and
Broker-Dealer may otherwise have.
b. ▇▇▇▇ ▇▇▇▇▇▇▇ USA and ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC, jointly and
severally, indemnify and hold harmless General Agent, Broker-Dealer and their
respective affiliates, officers, directors, employees and Agents against any and
all loss, claim, damage, liability or expense (including reasonable attorneys'
fees), joint or several, insofar as such loss, claim, damage, liability or
expense arises out of or is based upon any breach of this Agreement, any
applicable law or regulation, or any applicable rule of any self-regulatory
organization, by ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC. This
indemnification will be in addition to any liability which ▇▇▇▇ ▇▇▇▇▇▇▇ USA and
▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC may otherwise have.
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13. TERMINATION
a. Any party may terminate this Agreement in its discretion without
cause upon thirty (30) days written notice to the other parties.
b. ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC may terminate this
Agreement effective with the mailing of a notice of termination to General Agent
or Broker-Dealer if the reasons for the termination include (i) conversion,
fraud, embezzlement or similar activity, (ii) failure to maintain Liability
Coverage as required by Section 10 or (iii) a rebate of, offer to rebate or
withholding of any payment due on a Contract by General Agent or Broker-Dealer.
c. This Agreement will terminate automatically without notice, effective
as of the immediately preceding date, if: General Agent or Broker-Dealer ceases
to have the requisite registrations and regulatory licenses (but only as to the
jurisdictions and Contracts affected by the absence of such registrations and
licenses); applicable laws or regulations otherwise prohibit General Agent or
Broker-Dealer from continuing to market the Contracts; or General Agent or
Broker-Dealer files for bankruptcy or financial or corporate reorganization
under federal or state insolvency law.
d. No provision of this Agreement shall continue in force after any
termination, other than Sections 11, 12, 14, 15, 18, 19, 20 and 21, and the
Contracts Schedule.
14. CONFIDENTIALITY
Each party to this Agreement shall maintain the confidentiality of any
customer list and any material designated as confidential and/or proprietary by
another party ("Confidential Information"), and shall not use or disclose such
information without the prior written consent of the party designating such
material as confidential and/or proprietary. Each party to this Agreement shall
take reasonable steps to protect such Confidential Information, applying at
least the same security measures and level of care as it employs to protect its
own Confidential Information. If any party to this Agreement is compelled by
applicable law to disclose any Confidential Information, it shall promptly
notify the party designating such material as confidential and/or proprietary in
writing. The General Agent and Broker-Dealer shall cause Agents to comply with
this provision.
15. AMENDMENTS
This Agreement may be amended in a writing signed by all the parties. If
▇▇▇▇ ▇▇▇▇▇▇▇ USA and ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC send written notice of a
proposed amendment to this Agreement to General Agent and Broker-Dealer, General
Agent and Broker-Dealer shall be deemed to have agreed to the amendment if
either submits an application for a Contract on or after the fifth business day
after the date on which the notice was sent. ▇▇▇▇ ▇▇▇▇▇▇▇ USA may also
unilaterally suspend distribution of any of the Contracts and amend the
Schedules to this Agreement in any and all respects, from time to time in its
sole discretion, with prior or concurrent written notice to General Agent and
Broker-Dealer. Any change in compensation shall apply to compensation due on
applications received by ▇▇▇▇ ▇▇▇▇▇▇▇ USA after the effective date of the
notice. ▇▇▇▇ ▇▇▇▇▇▇▇ USA may also amend the Contracts from time to time, in its
sole discretion, and nothing in this Agreement shall be deemed to affect its
right to so amend the Contracts.
16. BOOKS AND RECORDS
a. General Agent and Broker-Dealer shall maintain such books and records
concerning the activities of the Agents as may be required under applicable
insurance and securities laws and regulations and the rules of the NASD, and as
may be reasonably required by ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC
to reflect adequately the Contracts business processed through General Agent or
Broker-Dealer. General Agent and Broker-Dealer shall maintain such books and
records at their respective principal places of business in good and legible
condition for a period of six calendar years following the year in which this
Agreement is terminated (the "Post-Termination Period") and shall make them
available during normal business hours to ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇
Distributors LLC from time to time while this Agreement is in effect and during
the Post-Termination Period upon 10 days' written request.
b. The parties shall promptly furnish each other any reports and
information that another party may reasonably request for the purpose of meeting
its reporting and recordkeeping requirements under the insurance laws of any
state or under any applicable federal or state securities laws or regulations or
NASD rules.
17. NOTICES
a. All notices under this Agreement shall be given in writing and sent
to the address of a party shown on the signature page or to such other address
as the party may designate in writing.
b. Each of General Agent and Broker-Dealer shall provide written notice
to ▇▇▇▇ ▇▇▇▇▇▇▇ USA no less than thirty days prior to the closing date of its
proposed merger into or consolidation with another entity, a sale of
substantially all its assets or a sale, transfer or assignment of a controlling
interest in it.
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18. EFFECTIVE DATE
This Agreement supersedes in its entirety any other effective agreement
between the General Agent or Broker-Dealer and ▇▇▇▇ ▇▇▇▇▇▇▇ USA or ▇▇▇▇ ▇▇▇▇▇▇▇
Distributors LLC. If this Agreement is executed by General Agent and
Broker-Dealer and returned to ▇▇▇▇ ▇▇▇▇▇▇▇ USA, it shall be effective as of the
date of its execution by ▇▇▇▇ ▇▇▇▇▇▇▇ USA.
19. REGULATIONS
All parties agree to observe and comply with all existing laws, rules
and regulations of all applicable local, state or federal regulatory authorities
(including the rules of the NASD), and with all existing rules and regulations
of any self-regulatory organization, and to observe and comply with those laws,
rules and regulations which may be enacted, adopted or promulgated during the
term of this Agreement, which relate to the business contemplated hereby in any
jurisdiction in which the business described herein is to be transacted.
20. OTHER
This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof, supersedes all prior agreements and
understandings among the parties regarding the subject matter, may be executed
in two or more counterparts which together shall constitute a single agreement,
may not be assigned by any party without the written consent of the other
parties (except that it may be assigned by ▇▇▇▇ ▇▇▇▇▇▇▇ USA to a successor in
connection with a merger, consolidation or sale of all or substantially all of
the assets of ▇▇▇▇ ▇▇▇▇▇▇▇ USA, and may be assigned by ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors
LLC to an affiliate or successor) and shall inure to the benefit of and to be
binding upon the parties and their respective successors and assigns.
Forbearance by a party to require performance of any provision hereof shall not
constitute or be deemed a waiver by that party of such provision or of the right
thereafter to enforce the same, and no waiver by a party of any breach or
default hereunder shall constitute or be deemed a waiver of any subsequent
breach or default, whether of the same or similar nature or of any other nature,
or a waiver of the provision or provisions with respect to which such breach or
default occurred. This Agreement shall be governed and construed in all respects
by the laws of the State of Michigan without reference to the principles of
conflict or choice of law thereof.
21. ARBITRATION
Any and all disputes under this Agreement shall be settled by
arbitration in Massachusetts under the then existing rules of the American
Arbitration Association and judgment may be entered upon the award in any court
of competent jurisdiction. The determination of the arbitrators shall be final
and binding on all parties. The costs of arbitration shall be borne equally by
the parties to the arbitration, provided however, that the arbitrators may
assess one party more heavily than the other for these costs upon a finding that
such party did not make a good faith effort to settle the dispute informally
when it first arose.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date set forth below.
GENERAL AGENT BROKER-DEALER
______________________________________ ______________________________________
Name Name
______________________________________ ______________________________________
Street Address Street Address
______________________________________ ______________________________________
City, State & Zip City, State & Zip
By:___________________________________ By:___________________________________
Title:________________________________ Title:________________________________
Date:_________________________________ Date:_________________________________
▇▇▇▇ ▇▇▇▇▇▇▇ LIFE INSURANCE ▇▇▇▇ ▇▇▇▇▇▇▇ DISTRIBUTORS LLC
COMPANY (U.S.A.) P.O. Box 4700
P.O. Box 600 Buffalo, NY
Buffalo, NY 14240-4700
14201-0600
Attn: Agency Department Attn: Operations Department
By:___________________________________ By:___________________________________
Title:________________________________ Title:________________________________
Date:_________________________________ Date:_________________________________
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Exhibit A
Contracts, Commissions and Fees Schedule
General Provisions
Compensation. Unless otherwise provided in this Contracts Schedule,
commissions will be paid as a percentage of premiums or purchase payments
(collectively, "Payments") received in cash or other legal tender and accepted
by ▇▇▇▇ ▇▇▇▇▇▇▇ USA on applications obtained by Agents. Such Payments will be
payable in respect of the sale of such Contracts, in such amounts, and upon such
terms as are set forth in the applicable commission schedules together with any
accompanying schedules relating to the Payments, (the "Commission Schedules"),
established by ▇▇▇▇ ▇▇▇▇▇▇▇ USA and ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC and covering
each Contract, as are in effect from time to time, to which such Payments
relate. ▇▇▇▇ ▇▇▇▇▇▇▇ USA and ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC expressly reserve the
right to transfer future compensation on a Contract to another General Agent or
Broker-Dealer if the owner of the Contract so requests. Upon termination of the
Agreement, General Agent and Broker-Dealer shall receive no further
compensation, except for compensation for all Payments which are in process at
the time of termination of the Agreement or are received subsequently on
Contracts in force at the time of termination of the Agreement, unless otherwise
provided in an applicable Commission Schedule. Notwithstanding the foregoing, no
Payments will be made with respect to an increase in the face amount of a
Contract when the Agreement is terminated prior to such increase, and when the
Agreement is terminated, no Payments with respect to any Securities Contracts
shall be made after the Broker-Dealer ceases to be properly licensed to sell
Securities Contracts. General Agent and Broker-Dealer shall continue to be
liable for any chargebacks pursuant to the provisions of this Contracts
Schedule, and for any other amounts advanced by or otherwise due ▇▇▇▇ ▇▇▇▇▇▇▇
USA or ▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC under the Agreement.
Joint Business. Any Contract sold by General Agent or Broker-Dealer in
conjunction with any other person authorized to sell the Contracts shall be
considered as joint business and, unless otherwise agreed to by ▇▇▇▇ ▇▇▇▇▇▇▇
USA, the amount of the compensation due on the Payments accepted under that
Contract shall be apportioned equally among each participant in the sale.
General Agent or Broker-Dealer shall provide ▇▇▇▇ ▇▇▇▇▇▇▇ USA with written
notice of any such joint business and of the existence of any agreement among
participants for unequal apportionment of compensation.
Prohibition Against Rebates. General Agent and Broker-Dealer shall not,
and shall cause the Agents not to, rebate, offer to rebate or withhold any part
of any payments due on the Contracts. If General Agent, Broker-Dealer or any
Agent shall at any time induce or endeavor to induce any owner of any Contract
to discontinue payments or to relinquish any such Contract, except under
circumstances where there is reasonable grounds for believing the Contract is
not suitable for such person, ▇▇▇▇ ▇▇▇▇▇▇▇ USA shall forthwith cease paying any
and all compensation that would otherwise be due General Agent or Broker-Dealer
under this Agreement.
Right of Set Off. Each of General Agent and Broker-Dealer hereby
authorizes ▇▇▇▇ ▇▇▇▇▇▇▇ USA to set off its liabilities to ▇▇▇▇ ▇▇▇▇▇▇▇ USA and
▇▇▇▇ ▇▇▇▇▇▇▇ Distributors LLC against any and all amounts otherwise payable to
General Agent or Broker-Dealer, including amounts payable under the Agreement or
under any other agreement pursuant to which General Agent or Broker-Dealer
receive compensation directly or indirectly from ▇▇▇▇ ▇▇▇▇▇▇▇ USA.
Each of General Agent and Broker-Dealer shall be liable for the portion
of any debit balance equal to advances on unearned compensation which appears in
their respective Advance Accounts. Such portion of the debit balance shall be
payable by General Agent or Broker-Dealer, as applicable, upon demand by ▇▇▇▇
▇▇▇▇▇▇▇ USA. At the option of ▇▇▇▇ ▇▇▇▇▇▇▇ USA, interest at the maximum rate
permissible by state law will accrue on such portion of the debit balance from
the time a debit balance occurs in such account.
Paying Agent for Insurance Contracts. At the request of General Agent,
▇▇▇▇ ▇▇▇▇▇▇▇ USA, at its discretion, may agree to act as General Agent's paying
agent and make payments of compensation directly to such Insurance Agents and
such other appropriate parties who are not employees of General Agent but are
appointed with ▇▇▇▇ ▇▇▇▇▇▇▇ USA and are entitled to compensation from General
Agent in connection with the sale of those Insurance Contracts that are not
variable annuity contracts or variable life insurance policies, as General Agent
may designate from time to time.
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Exhibit B
General Letter of Recommendation
General Agent hereby certifies to ▇▇▇▇ ▇▇▇▇▇▇▇ USA that all of the
following requirements will be fulfilled in conjunction with the submission by
General Agent of licensing/appointment papers for all applicants to become
Agents ("Applicants"). General Agent will, upon request, forward proof of
compliance with same to ▇▇▇▇ ▇▇▇▇▇▇▇ USA in a timely manner.
1. We have made a thorough and diligent inquiry and investigation
relative to each Applicant's identity, residence, business reputation and
experience and declare that each Applicant is personally known to us, has been
examined by us, is known to have a good business reputation, is reliable, is
financially responsible and is worthy of a license and appointment as an Agent.
Each individual is trustworthy, competent and qualified to act as an agent for
▇▇▇▇ ▇▇▇▇▇▇▇ USA and hold himself out in good faith to the general public. We
vouch for each Applicant.
2. We have on file a Form B-300, B-301 or U-4 which was completed by
each Applicant. With respect to each Applicant to become a Securities Agent, we
have fulfilled all the necessary investigative requirements for the registration
of each such Applicant as a registered representative through our NASD member
firm, and each such Applicant is presently registered as an NASD registered
representative. The above information in our files indicates no fact or
condition which would disqualify the Applicant from receiving a license, and all
the findings of all investigative information is favorable.
3. We certify that all educational requirements have been met for the
specific state in which each Applicant is requesting a license and that all such
persons have fulfilled the appropriate examination, education and training
requirements.
4. If the Applicant is required to submit his or her picture, signature
and securities registration in the state in which he or she is applying for a
license, we certify that those items forwarded to ▇▇▇▇ ▇▇▇▇▇▇▇ USA are those of
the Applicant and the securities registration is a true copy of the original.
5. We hereby warrant that the Applicant is not applying for a license
with ▇▇▇▇ ▇▇▇▇▇▇▇ USA in order to place insurance chiefly or solely on his or
her life or property or on the lives, property or liability of his or her
relatives or associates.
6. We certify that each Applicant will receive close and adequate
supervision, and that we will make inspection when needed of any or all risks
written by these Applicants, to the end that the insurance interest of the
public will be properly protected.
7. We will not permit any Applicant to transact insurance as an agent
until duly licensed therefor. No Applicants have been given a contract or
furnished supplies, nor have any Applicants been permitted to write, solicit
business or act as an agent in any capacity, and they will not be so permitted
until the certificate of authority or license applied for is received.
8. We certify that General Agent, Broker-Dealer and Applicant shall have
entered into a written agreement pursuant to which: (a) Applicant is appointed a
Sub-agent of General Agent and a registered representative of Broker-Dealer; (b)
Applicant agrees that his or her activities relating to the Securities Contracts
shall be under the supervision and control of Broker-Dealer and his or her
activities relating to the Insurance Contracts shall be under the supervision
and control of General Agent; and (c) that Applicant's right to continue to
service such Contracts is subject to his or her continued compliance with such
agreement and any procedures, rules or regulations implemented by Broker-Dealer
or General Agent.
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Exhibit C
Policies and Procedures Schedule
In addition to its administrative procedures, ▇▇▇▇ ▇▇▇▇▇▇▇ USA has
adopted the following Codes which contain policies and procedures applicable to
the offer, sale and servicing of the Contracts:
Privacy Code
Agent's Code of Conduct
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