EXHIBIT 99.3(b)
Form of Selling Agreement between Pacific Mutual Life, PMD and various
Broker-Dealers
EXHIBIT 99.3(b)
PACIFIC MUTUAL LIFE INSURANCE COMPANY
VARIABLE CONTRACT SELLING AGREEMENT
This Agreement ("Agreement") is made as of September, 1996 by and among
PACIFIC MUTUAL LIFE INSURANCE COMPANY ("Pacific Mutual"), PACIFIC MUTUAL
DISTRIBUTORS, INC. ("Distributor"), a broker/dealer registered with the
Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange
Act of 1934, as amended ("Exchange Act"), and a member of the National
Association of Securities Dealers, Inc. ("NASD"), ▇▇▇▇▇ ▇▇▇▇▇▇, INC., a
broker/dealer registered with the SEC pursuant to the Exchange Act and a member
of the NASD ("Broker/Dealer"), SBHU LIFE AGENCY, INC. and each listed
subsidiary and affiliated agency listed on Exhibit A which is attached hereto
and made a part hereof (jointly and severally referred to herein as "Agency");
Broker/Dealer and Agency jointly and severally hereinafter referred to
collectively as "Selling Entities".
This Agreement is for the purpose of providing for the distribution of
certain variable life insurance policies and/or annuity contracts set forth in
Schedule A hereto and of any successor additional SEC registered insurance
products (as discussed in Paragraph 3 of this Agreement) issued by Pacific
Mutual and approved for distribution by Distributor through representatives who
are both (a) state insurance licensed and appointed agents of Pacific Mutual (if
and as required by state insurance law), and associated with Agency and (b)
NASD Subagents of Broker/Dealer who are appropriately licensed with the NASD
and with the relevant states pursuant to state securities law (if and as
required by state law). The variable life insurance policies and/or variable
annuity contracts set forth in Schedule A which is attached hereto, and made a
part hereof, as such Schedule may be amended and/or restated from time to time
to include any successor or additional SEC registered insurance products, and
together with any riders or endorsements to such policies and contracts,
certificates relating to such policies and contracts, supplemental contracts and
forms are referred to collectively herein as the "Contracts".
1. APPOINTMENT
In consideration of the mutual promises and covenants contained in this
Agreement, Pacific Mutual and Distributor appoint Broker/Dealer and those
persons associated with Agency who are NASD Registered Representatives (or
Subagents as defined in paragraph 4 below) of Broker/Dealer, state insurance
licensed, and appointed by Pacific Mutual (if and as required by state law) to
procure applications for the Contracts.
These appointments are not deemed to be exclusive in any manner and extend
only to those jurisdictions set forth in Schedule B which is attached hereto and
made a part hereof, as such Schedule B may be amended from time to time by
Pacific Mutual in its sole discretion, and with written notice to Selling
Entities, where the Contracts specified in such Schedule B have been approved
for sale.
Pacific Mutual will provide Selling Entities with written advanced notice
regarding the jurisdictions in which Pacific Mutual is authorized to solicit
applications for the Contracts and any limitations on the availability of such
Contracts in any jurisdiction.
2. RESPONSIBILITIES
Broker/Dealer is authorized to collect the premium on the Contracts and
must remit such premiums to Pacific Mutual in the manner set forth in the
applicable Compensation Schedule set forth in the applicable Schedule D.
Contract applications shall be taken only on preprinted, state-appropriate
application forms supplied by Pacific Mutual or in an electronic format approved
by Pacific Mutual and by ▇▇▇▇▇ ▇▇▇▇▇▇. All completed applications, supporting
documents and payments are the sole property of Pacific Mutual and must be
promptly delivered to Pacific Mutual. All applications are subject to
acceptance by Pacific Mutual at its sole discretion; provided, however, that
Pacific Mutual will not discriminate based upon race, creed or color.
3. NEW PRODUCTS
Distributor may propose and Pacific Mutual may issue additional or
successor products, in which event Broker/Dealer will be informed in writing and
in advance of the new product and its related Compensation Schedule. Pacific
Mutual may not accept business for any new product until Broker/Dealer gives
written approval of such product to be sold through its Subagents. If and/or
when Broker/Dealer provides Pacific Mutual with
1
written approval of such new product(s) and agrees to its related Compensation
Schedule (which may be in the form of an executed Compensation Schedule for such
new product(s)), which shall be attached to and made a part of this Agreement as
an amendment or addendum to the applicable Schedule D, or as a new Schedule D
hereto, and receives the amendment(s) of Schedules A and B to this Agreement to
name such new product(s) and to identify where their offer and sale has been
approved, then Pacific Mutual and Distributor may distribute such new products
through the Selling Entities. If Broker/Dealer does not give written approval to
a new product and an order for same is accepted by Pacific Mutual, Distributor,
their agents or employees, then Distributor will be responsible for the
unapproved sale. Approval of new products by Broker/Dealer shall be deemed
approval by Agency.
4. SUBAGENTS
Agency is authorized to appoint Subagents to solicit sales of the Contracts
("Subagents"); provided, however, that Pacific Mutual shall have the right in
its sole reasonable discretion to terminate the appointment of any Subagent upon
notice from Pacific Mutual to Agency. Agency covenants and agrees that no
Subagent shall commence solicitation nor aid, directly or indirectly, in the
solicitation of any application for any Contract unless, at the time of such
solicitation or aid, such Subagent is appropriately licensed for such product
under applicable insurance laws and is an NASD Registered Representative of
Broker/Dealer.
Selling Entities each represent that they have, for each Subagent,
fulfilled all requirements set forth in the form of general letter of
recommendation set forth in Schedule C which is attached hereto and made a part
hereof; and agree, upon reasonable advance written request by Pacific Mutual, to
furnish proof of such fulfillment as Pacific Mutual may require in connection
with any investigation or inquiry conducted by Pacific Mutual or any
governmental or regulatory body.
5. SALES MATERIAL
Neither Selling Entities nor Pacific Mutual nor any of their respective
Subagents, officers, directors, employees, affiliates, representatives or agents
shall utilize in their marketing efforts for the Contracts any written brochure,
descriptive literature, printed and published material, audio-visual material or
standard letters without notice to and approval by each other; provided,
however, that prospectuses, statements of additional information and supplements
or amendments thereto, and annual and semi-annual reports provided to Selling
Entities by Pacific Mutual or Distributor shall not require approval of Selling
Entities. Pacific Mutual and Broker/Dealer agree to submit to each other for
the other's review as to content, any advertising and/or marketing materials
prepared by the other which it wishes the other party to use. If either party
disapproves any materials, it will inform the other party of the basis for its
disapproval. If the disapproval cannot be resolved to the satisfaction of
Broker/Dealer, Broker/Dealer will have no obligation to use such materials in
its solicitation of the Contracts. If the disapproval cannot be resolved to the
satisfaction of Pacific Mutual, Broker/Dealer will not be able to use such
materials in its solicitation of the Contracts. In order for either party to
review and approve materials not produced by the other, the non-producing party
must provide the other party with evidence that any material proposed to be used
was filed with the NASD in accordance with applicable rules and copies of
correspondence with the NASD relating to the proposed material. All advertising
material and sales promotional material produced and published by Selling
Entities or their agents shall be and remain the sole and exclusive property of
Selling Entities and shall be used solely and exclusively by Selling Entities
and their agents. Such material shall not be used by Pacific Mutual nor its
agents without Broker/Dealer's prior consent. All advertising material and
sales promotional material produced or published by Pacific Mutual or
Distributor shall remain the sole and exclusive property of Pacific Mutual
and/or Distributor, respectively; and such material shall not be used by Selling
Entities or by its agents without Pacific Mutual's prior written consent.
6. RECORDS
In accordance with the requirements of federal and state laws and rules of
applicable self-regulatory organizations ("SROs"), as defined in the Exchange
Act, including but not limited to the Rules of Fair Practice of the NASD ("NASD
Rules"), all parties shall maintain complete records concerning the sale of the
Contracts, information regarding the customers relating to the sale and/or
servicing of the Contracts, including the manner and extent of distribution of
any sales, marketing or other solicitation material, shall make such records and
files available to staff of a party hereto at such times as the other party
hereto may reasonably request and shall make
2
such material available to personnel of state insurance departments, the NASD or
other regulatory agency, including the SEC, that have regulatory authority over
the parties to this Agreement.
7. DELIVERY OF PROSPECTUSES
Selling Entities covenant and agree that each solicitation, will be made by
use of a currently effective prospectus, that a prospectus will be delivered
concurrently with each sales presentation or upon confirmation of a sale, that
Selling Entities shall instruct and supervise Subagents that no statements shall
be made by Subagents to a client superseding or controverting any statement made
in the prospectus. Pacific Mutual and Distributor shall furnish Selling
Entities, at no cost to Selling Entities, reasonable quantities of currently
effective prospectuses and such other material as Pacific Mutual and Distributor
deem necessary to aid in the solicitation of Contracts. Such material shall be
delivered to Selling Entities prior to the effective date of this Agreement.
8. BROKER/DEALER REPRESENTATIONS
Broker/Dealer represents and covenants that:
(a) Broker/Dealer is affiliated with Agency which is an entity properly
licensed under the insurance laws of the jurisdiction(s) in which Broker/Dealer
will act under this Agreement;
(b) Broker/Dealer is registered with the SEC as a broker/dealer under the
Exchange Act, a member of the NASD and will, throughout the duration of this
Agreement, remain in compliance with the requirements of the NASD and of the
Exchange Act, including but not limited to laws requiring that the Broker/Dealer
and each of its Subagents be appropriately securities registered, insurance
licensed and appointed by Pacific Mutual (if and as required by law), and such
other applicable federal or state laws;
(c) Broker/Dealer has established rules, procedures, and supervisory review
techniques necessary to train and to supervise the activities of its NASD
Subagents who are state insurance licensed;
(d) Broker/Dealer, including any Subagent, shall only sell or recommend for
sale any Contract to any person with reasonable grounds for believing, after
appropriate inquiry, that the purchase of that Contract is suitable for that
person;
(e) Upon request by Pacific Mutual and Distributor, Broker/Dealer will
furnish such appropriate records as are necessary to document the training,
licensing and supervision required by subparagraph (c) above, and client
suitability determinations required by subparagraph (d) above; provided,
however, that nothing herein shall be deemed to require Selling Entities to
create or maintain separate procedures or create new processes so long as such
procedures in effect adequately address supervisory issues raised by this
Agreement.
9. AGENCY REPRESENTATIONS
Agency represents, warrants and covenants that each Subagent will comply
fully with the requirements of state insurance law and applicable federal laws,
including but not limited to assuring appropriate state insurance licensing and
appointment by Pacific Mutual, as necessary according to state law and will
establish rules and procedures necessary to supervise the activities of licensed
and appointed agents of Pacific Mutual associated with Agency. Upon request by
Pacific Mutual or Distributor, Agency will furnish such appropriate records as
are necessary to document such supervision.
10. SELLING ENTITIES REPRESENTATIONS
Selling Entities represent that they:
(a) shall take reasonable steps to prevent payment of commissions to
employees and/or agents of Selling Entities with respect to Contracts held by
persons who were solicited in states where such employees and/or agents are not
appointed with Pacific Mutual at the time of such payments;
3
(b) shall take reasonable steps to prevent solicitation of sales of
contracts to persons who reside in the states set forth in Exhibit B, which is
attached hereto and made a part hereof, by any employees and/or agents and
Subagents who are not appointed with Pacific Mutual in such states at the time
of such solicitations.
(c) shall take reasonable steps to prevent the payment of commissions to
any of its employees, agents and/or Subagents who are not appropriately
registered with the NASD and applicable states.
11. PACIFIC MUTUAL REPRESENTATIONS
(a) Pacific Mutual represents that the prospectus(es) and registration
statement(s) relating to the Contracts that are and shall be in effect from time
to time contain no untrue statements of material fact and do not omit to state
material facts, the omission of which makes any statement contained in such
prospectus(es) and registration statement(s) misleading. Further, Pacific
Mutual represents that it will file current updated information with the SEC as
required by applicable federal law and that current updated prospectuses shall
be delivered to Broker/Dealer in a timely manner.
(b) Pacific Mutual will not directly or indirectly (i) solicit applicants
provided to Pacific Mutual by Broker/Dealer or its agents for the purpose of
inducing them to purchase any products or (ii) sell, assign, transfer to,
disclose in any manner, with or without consideration any list of applicants
provided to Pacific Mutual by Broker/Dealer or its agents; provided, however,
this paragraph shall not apply to any applicant who was previously a
policyholder of Pacific Mutual nor to anything done or required to be done under
applicable law or this Agreement; and further provided that nothing herein is
intended to restrict or limit Pacific Mutual from accepting business from any
agent (not affiliated with Selling Entities) which involves or relates to a
client or applicant of ▇▇▇▇▇ ▇▇▇▇▇▇, nor to impose any liability or
responsibility on Pacific Mutual for the acts of any agent appointed by Pacific
Mutual who is not also an employee of Pacific Mutual and a Subagent of
Distributor.
(c) Nothing in this Paragraph 11 shall be deemed to prohibit or limit
Pacific Mutual's rights or abilities to send confirmations, notices, statements,
annual and semi-annual reports and/or other communications generally sent to its
Contractholders.
(d) Pacific Mutual shall be fully liable to Broker/Dealer for any damage
caused to it by virtue of any unauthorized dissemination of Broker/Dealer's
customer lists and information regarding customers by Pacific Mutual.
(e) Pacific Mutual shall take reasonable steps to prevent payment of
commissions to Selling Entities with respect to Contracts sold to persons who
were solicited in states where Subagents are not appointed with Pacific Mutual
at the time of such payment.
(f) Pacific Mutual shall take reasonable steps to reject applications for
Contracts for persons who reside in the states set forth in Exhibit B, which are
submitted by any Subagents who are not appointed by Pacific Mutual in such
states.
(g) Pacific Mutual shall take reasonable steps to prevent the payment of
commissions to Selling Entities with respect to sales of Contracts by Subagents
who are not appropriately registered with the NASD.
(h) Pacific Mutual agrees that, with respect to Contracts as defined in
this Agreement, Pacific Mutual will notify Broker/Dealer in the event that
management of Pacific Mutual, in its ordinary course of business, becomes aware
that Subagents are attempting to circumvent this Agreement by submitting
Contracts through any broker/dealer other than ▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
12. DISTRIBUTOR REPRESENTATIONS
Distributor represents that it is a broker/dealer under the Exchange Act, a
member of the NASD and will, throughout the duration of this Agreement remain in
compliance with the requirements of the NASD and of the Exchange Act, including
but not limited to laws requiring that the Broker/Dealer and each of its
4
Subagents/Registered Representatives be appropriately securities registered,
insurance licensed, and in compliance with such other applicable federal or
state laws.
13. COMPENSATION
13.1 Pacific Mutual, through Distributor, will remit to Broker/Dealer or
Agency compensation as set forth in the applicable Schedules D which are
attached hereto and made a part hereof, which payments or termination thereof
shall be governed by the administrative rules established by Pacific Mutual in
its sole discretion and agreed to by Broker/Dealer prior to the effective date
of this Agreement, which agreement shall be evidenced by execution of this
Agreement. Selling Entities shall pay all Subagents. Pacific Mutual reserves
the right not to pay compensation on a Contract, the premium for which is paid
in whole or in part by the loan or surrender value of any other life insurance
policy or annuity contract issued by Pacific Mutual.
13.2 Pacific Mutual may offset, against any claim for commission and any
other compensation payable to Broker/Dealer or Agency under this Agreement, any
indebtedness of, respectively, Broker/Dealer or Agency, whether such
indebtedness arises under this Agreement or arises in connection with the sale
of "traditional" (non-variable/non-registered) life and/or annuities products
issued by Pacific Mutual. Such indebtedness shall constitute a first lien
against any such compensation. Neither Broker/Dealer nor Agency may offset,
against any such indebtedness, any compensation accruing under this Agreement.
14. COMPLAINTS AND INVESTIGATIONS
All parties agree to cooperate fully with each other in any insurance or
securities regulatory investigation or proceeding or judicial proceeding with
respect to the parties to this Agreement and their agents or representatives to
the extent that such investigation or proceeding is in connection with the
Contracts distributed under this Agreement. Without limiting the foregoing:
(a) All parties shall promptly notify each other of any complaint or
comment regarding the Contracts and/or any allegation that any party or its
agents or employees violated any law, regulation or rule in soliciting
applications for or servicing the Contracts. All parties shall promptly
investigate such complaint or allegation, take appropriate remedial measures and
notify the other parties of same. Each party shall provide the other parties
with full details of and correspondence relating to any of the foregoing,
including copies of all legal documents pertaining thereto.
(b) All parties shall cooperate fully with the other parties in any
regulatory proceeding, arbitration proceeding or judicial proceeding involving
the solicitation of applications for or the servicing of Contracts.
15. INDEMNIFICATION
15.1 Pacific Mutual and Distributor agree to, jointly and severally,
indemnify and hold harmless Selling Entities, their officers, directors, agents
and employees, against any and all losses, claims, damages, or liabilities
including, without limitation, reasonable attorney's fees and expenses to which
they may become subject under the Securities Act, the Exchange Act, the
Investment Company Act of 1940, or other federal or state statutory law or
regulation, at common law 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 or any
omission or alleged omission to state a material fact required to be stated or
necessary to make the statements made not misleading in the registration
statement for the Contracts or for the shares of Pacific Select Fund (the
"Fund") filed pursuant to the Securities Act, or any prospectus included as a
part thereof, as from time to time amended and supplemented, or in any
advertisement or sales literature produced by Pacific Mutual or Distributor,
including seminar materials or the form of illustration for Contracts provided
by Pacific Mutual and Distributor for use in solicitation relating to the
Contracts. This indemnification shall apply to the accuracy of the content of
any illustration provided by Pacific Mutual or Distributor to Selling Entities;
provided, however, that neither Pacific Mutual nor Distributor shall be
responsible for the assumptions given to Pacific Mutual by Subagents and used
(i.e., hypothetical expected returns) in illustrations produced for Selling
Entities nor for insuring that sufficient numbers of illustrations are produced
or delivered to the client. In addition, Pacific Mutual and Distributor agree
to include in the foregoing indemnification their failure to deliver updated
5
prospectuses to Broker/Dealer in a timely manner and any act or omission of a
director, officer or employee of Pacific Mutual or Distributor, proven to be in
violation of a state or federal statute by a court of competent jurisdiction or
a panel of arbitrators constituted to hear the controversy, including, without
limitation, any failure of Pacific Mutual or Distributor to be appropriately
registered or licensed.
15.2 Selling Entities agree to, jointly and severally, hold harmless and
indemnify Pacific Mutual and Distributor and any of their respective affiliates,
employees, officers, agents and directors (collectively, "Indemnified Persons")
against any and all losses, claims, damages, liabilities and expenses
(including, without limitation, losses occasioned by any rescission of any
Contract pursuant to a "free look" provision (as defined by the terms of any
Contract) or by any return of initial purchase payment in connection with an
incomplete application including, without limitation, reasonable attorneys' fees
and expenses and any loss attributable to the investment experience under a
Contract, that any Indemnified Person may incur from liabilities resulting or
arising out of or based upon (a) any untrue or alleged untrue statement other
than statements contained in the registration statement or prospectus relating
to any Contract, (b) any inaccurate or misleading, or allegedly inaccurate or
misleading sales material used in connection with any marketing or solicitation
relating to any Contract, other than current sales material which is provided
preprinted by Pacific Mutual or Distributor, (c) any use of any sales material
that either has not been specifically approved in writing by Pacific Mutual or
Distributor or that, although previously approved in writing by Pacific Mutual
or Distributor, has been disapproved, in writing by either of them, for further
use, or (d) any act or omission of a Subagent, director, officer or employee of
Selling Entities, proven to be in violation of a state or federal statute by a
court of competent jurisdiction or a panel of arbitrators constituted to hear
the controversy, including, without limitation, any failure of Selling Entities
or any Subagent to be registered as required as a broker/dealer under the 1934
Act, or licensed in accordance with the rules of any applicable self-regulatory
organization or insurance regulator, provided, however, that this
indemnification shall not apply to a "free look" caused by the act or omission
by Pacific Mutual or Distributor, including officers, directors or employees of
Pacific Mutual or Distributor.
16. FIDELITY BOND
Selling Entities each represent and covenant that all directors, officers,
employees and Subagents of Selling Entities licensed pursuant to this Agreement
or who have access to funds of Pacific Mutual are and will continue to be
covered by a comprehensive crime coverage policy (fidelity bond) including
coverage for larceny, embezzlement and other defalcation. This bond shall be
maintained at Broker/Dealer's and/or Agency's expense. Such bond shall be at
least equivalent to the minimal coverage required under the NASD Rules, and
which includes coverage of life insurance and annuity business. Selling
Entities acknowledge that Pacific Mutual may require evidence that such coverage
is in force, and Broker/Dealer or Agency shall promptly give notice to Pacific
Mutual of any notice of cancellation or change of coverage.
17. LIMITATIONS OF AUTHORITY
The Contract forms are the sole property of Pacific Mutual. No person or
party other than Pacific Mutual has the right or authority to: (i) make, alter,
modify, discharge or rescind any Contract; (ii) waive any provision with respect
to any Contract; (iii) incur indebtedness or liability, or expend or contract
for expenditure of any funds on behalf of Pacific Mutual or the Contracts; (iv)
extend the time for payment of any premiums, bind Pacific Mutual to reinstate
any terminated Contracts, or accept notes for payment of premiums; (v) enter
into any proceeding in a court of law or before a regulatory agency in the name
of or on behalf of Pacific Mutual; or (vi) institute or file any response to any
legal proceeding in connection with any matter pertaining to the Contracts on
behalf of Pacific Mutual without the prior written consent of Pacific Mutual
(except that if Selling Entities themselves are named as a party or parties in
such proceedings each named party may enter into legal proceedings on its own
behalf without the written consent of Pacific Mutual).
18. GENERAL PROVISIONS
18.1 WAIVER
Failure of any of the parties to insist promptly upon strict compliance
with any of the obligations of any other party under this Agreement will not be
deemed to constitute a waiver of the right to enforce strict compliance.
6
18.2 INDEPENDENT CONTRACTORS
Selling Entities are each an independent contractor and not an employee or
subsidiary of Pacific Mutual or Distributor. Nothing contained in this
Agreement or otherwise shall be deemed to make any Subagent of Broker/Dealer or
any Subagent appointed by Agency an employee or agent of Pacific Mutual or
Distributor for tax or any other purposes. Neither Pacific Mutual nor
Distributor shall have any responsibility for training or supervision of any
such Subagent or registered representative or of any other employee or affiliate
of any Selling Entities.
18.3 ASSIGNMENT
This Agreement shall not be assigned, nor the duties delegated, by either
party without the prior written consent of the other party, which consent shall
not be unreasonably withheld or delayed. Notwithstanding the foregoing, the
right to receive commissions under this Agreement shall be freely assignable,
subject to applicable law, in the event either party is merged with or purchased
by another entity. Each party agrees to notify the other party within 20
(twenty) days of any change in their corporate ownership. Thereafter, each
party shall have the right to immediately terminate this Agreement by providing
written notice to the other party. Any purported assignment in violation of
this Paragraph 18.3 is void.
18.4 NOTICE
Any notice required or otherwise given pursuant to this Agreement may be
given electronically by facsimile or electronic mail (but not orally by
telephone) or by mail, postage paid, (including any express mail service),
transmitted to the last address communicated by the receiving party to the other
parties to this Agreement. The current address for mailing purposes of this
Agreement shall be set forth on the signature page.
18.5 SEVERABILITY
To the extent this Agreement may be in conflict with any applicable law or
regulation, this Agreement shall be construed in a manner consistent with such
law or regulation. The invalidity or illegality of any provisions of this
Agreement shall not be deemed to affect the validity or legality of any other
provision of this Agreement.
18.6 AMENDMENT
Except as expressly provided herein, this Agreement may be amended only by
a writing signed by all parties. The Schedules hereto may be amended by Pacific
Mutual or Distributor upon 30 days' written notice to Broker/Dealer and Agency
which shall be deemed received the earlier of actual receipt or 30 days after
mailing or transmission. The submission of an application for the Contracts by
Selling Entities or Agency after the date of any such amendment shall constitute
such party's agreement to such amendment. No amendment will impair the right to
receive commissions as accrued with respect to Contracts issued and applications
procured prior to the amendment. This Agreement does not apply to any variable
life or annuity contract which was initially issued by First Capital Corporation
("FCC Contracts") which is currently carried by Pacific Corinthian Life
Insurance Company and which may, in the future, be deemed by operation of law to
become a Pacific Mutual contract. FCC Contracts may only be covered by this
Agreement if an amendment to that effect is signed by all parties.
18.7 TERMINATION
This Agreement may be terminated by any party for any reason upon 30 days'
prior written notice. It may be terminated, for cause, by any party
immediately. Termination of this Agreement shall not impair the right to
receive commissions accrued with respect to applications procured prior to the
termination except as otherwise specifically provided in the applicable Schedule
D hereto. Selling Entities agree that, following the termination of this
Agreement for any reason, they will not enter into any plan, program scheme or
course of action which would systematically attempt to attract Contract owners
away from Pacific Mutual, except that Selling Entities may always recommend a
move to another company's product if such move would be more suitable than
Pacific Mutual's products for a particular client or clients or in the event of
a detrimental change in the financial stability of Pacific Mutual which Selling
Entities believe would jeopardize their clients (as determined by Selling
Entities). Termination of this Agreement shall not terminate Selling Entities'
rights to commissions on policies sold by Selling Entities prior to such
termination, except as provided in any Schedule D to this
7
Agreement. This paragraph shall not be in derogation of any right of set-off of
other remedies Pacific Mutual may have on monies owed.
18.8 SURVIVAL
The representations, warranties and covenants of each of the parties as set
forth in this Agreement are continuous during the term of this Agreement and
each party agrees to notify each other party to this Agreement immediately, in
writing, if, at any time during the course of this Agreement, any of the
representations, warranties or covenants set forth herein become inaccurate or
untrue, including the facts related thereto. All representations and warranties
made in or pursuant to this Agreement and the provisions of Paragraphs 6.
Records, 14.Complaints, 15.Indemnification, 17.Limitations on Authority,
18.5.Severability, 18.7.Termination, 18.10.Arbitration, and 18.11.Proprietary
Information, of this Agreement shall survive the termination of this Agreement.
18.9 ARBITRATION AND GOVERNING LAW
All parties to this is Agreement agree to submit any dispute hereunder to
the Arbitration Department of the New York Stock Exchange or the NASD to be
heard in accordance with the rules then in effect. This Agreement shall be
construed in accordance with the laws of the State of California, without giving
effect to the conflict of law provisions thereof. To the extent that
jurisdiction of a court is required in order to (i) enforce the judgment of an
arbitration panel, (ii) appeal an arbitration panel's ruling in accordance with
the rules of the NYSE or NASD, as applicable, or (iii) obtain a ruling on a
point of law related to any arbitration, then the parties consent to the
jurisdiction of the courts of the State of California and to the jurisdiction of
federal courts located within California.
18.10 CONFIDENTIAL/PROPRIETARY INFORMATION
(a) The parties expressly acknowledge that they may reveal certain
Confidential Information (as defined in paragraph (b) below) to the other in
performance of this Agreement and agree not to, nor allow its officers,
affiliates, employees or agents to, convey any confidential information to any
third party, except as may be required under the terms of this Agreement.
Pacific Mutual agrees that names, addresses, and other information as to
customers or policyholders given to it by ▇▇▇▇▇ ▇▇▇▇▇▇ is Confidential
Information owned by ▇▇▇▇▇ ▇▇▇▇▇▇ and shall not be disclosed to any person not a
party to this Agreement without ▇▇▇▇▇ Barney's prior written approval. Selling
Entities acknowledge that information pertaining to any Distributor program or
service is proprietary in nature and belongs exclusively to Distributor.
(b) Each party acknowledges and agrees that any and all information
emanating from the other's business in any form is "Confidential Information",
and each party agrees that it will not, during or after the term of this
Agreement, permit the duplication, use, or disclosure of any such Confidential
Information to any person (other than an employee, agent or representative of
the other party, or any service provider retained by any party which has been
instructed with respect to the confidential nature of the confidential
information, who must have such information for the performance of its
obligation hereunder), unless such duplication, use or disclosure is
specifically authorized by the other party in writing prior to any disclosure.
Each party shall instruct any service provider retained by it when information
is "Confidential Information" as defined herein and advise them to maintain its
confidentiality. Each party shall use reasonable diligence, and in no event
less than that degree of care which such party uses in respect to its own
confidential information of like nature, to prevent the unauthorized disclosure
or reproduction of such information to any third party. Without limiting the
generality of the foregoing, to the extent that this Agreement permits the
copying of Confidential Information, all such copies shall bear the same
confidentiality notices, legends, and intellectual property rights designations
that appear in the original versions.
(c) For the purposes of this Paragraph 18.10, the term "Confidential
Information" shall not include: information which is in the public domain;
information known to the recipient party as of the date of this Agreement as
shown by the recipient party's written records, unless the recipient party
agreed to keep such information in confidence at the time of its receipt; and
information properly obtained hereafter from a source who is not under an
obligation of confidentiality with respect to such information.
8
19. ENTIRE AGREEMENT
This Agreement shall constitute the entire agreement among the parties and
supersedes all prior agreements and understandings, whether written or verbal.
This Agreement cannot be altered except in a writing signed by the parties
below.
By signing below, each of the undersigned agrees to have read and be bound
by the terms and conditions of this Agreement. Each of the undersigned
acknowledges receipt of a copy of this fully executed Agreement.
PACIFIC MUTUAL LIFE INSURANCE COMPANY
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: President
-----------------------------
PACIFIC MUTUAL DISTRIBUTORS, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Title: President and CEO
-----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: Executive Vice President
-----------------------------
SBHU LIFE AGENCY, INC.
ON ITS OWN BEHALF AND ON BEHALF OF EACH OF THE SUBSIDIARIES
AND AFFILIATED AGENCIES SET FORTH IN EXHIBIT A HERETO
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Title: Vice President/EVP
-----------------------------
9
EXHIBIT A
List of Subsidiaries and Affiliated Agencies of SBHU Life Agency, Inc.
Tax I.D. Number
---------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Insurance Services of Alabama, Inc. ▇▇-▇▇▇▇▇▇▇
SBHU Life Agency, Inc. ▇▇-▇▇▇▇▇▇▇
SBHU Life Agency of Arizona, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Brokerage Agency of Arkansas, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Agency of Hawaii, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Agency of Idaho, Inc. 82-0353604
SBHU Life Agency of Indiana, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Brokers of Kentucky, Inc. ▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Life Agency, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Agency of Maine, Inc. ▇▇-▇▇▇▇▇▇▇
SBHU Life Agency of Massachusetts, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Agency of Montana, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Agency of Nevada, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Brokers of New Hampshire, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Brokers of North Dakota, Inc. ▇▇-▇▇▇▇▇▇▇
SBHU Life Agency of Ohio, Inc. ▇▇-▇▇▇▇▇▇▇
SBHU Life Agency of Oklahoma, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Agency of South Dakota, Inc. ▇▇-▇▇▇▇▇▇▇
SBHU Life Agency of Texas, Inc. ▇▇-▇▇▇▇▇▇▇
SBHU Life Agency of Utah, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Insurance Agency of Wyoming, Inc. ▇▇-▇▇▇▇▇▇▇
SBS Life Insurance Agency of Puerto Rico, Inc. ▇▇-▇▇▇▇▇▇▇
10
EXHIBIT B
States in which Subagents must be appointed by Pacific Mutual
PRIOR to making solicitations in the State
Alabama Mississippi
Arkansas New Hampshire
Delaware New Mexico
District of Columbia North Carolina
Georgia Ohio (non-resident)
Kentucky Oklahoma
Maine Pennsylvania
Maryland (non-resident) West Virginia
Massachusetts
11
AMENDMENT #1
TO
PACIFIC MUTUAL LIFE INSURANCE COMPANY
VARIABLE CONTRACT SELLING AGREEMENT
This Amendment Number 1 is made this _____ day of _______, 1997 amending
the Agreement dated September, 1996 (the "Agreement"), made by and among PACIFIC
MUTUAL LIFE INSURANCE COMPANY ("Pacific Mutual"), PACIFIC MUTUAL DISTRIBUTORS,
INC. ("Distributor"), ▇▇▇▇▇ ▇▇▇▇▇▇, INC. ("Broker/Dealer"), SBHU LIFE AGENCY,
INC. and each listed subsidiary and affiliated agency listed on Exhibit A which
is attached hereto and made a part hereof (jointly and severally referred to
herein as "Agency"), Broker/Dealer and Agency jointly and severally hereinafter
referred to collectively as "Selling Entities".
Pacific Mutual, Distributor and Selling Entities hereby agree that
effective with this Amendment, the Agreement shall apply to all variable annuity
contracts which were initially issued by First Capital Corporation (FCC
Contracts) which are currently carried by Pacific Corinthian Life Insurance
Company and which, on or about October 30, 1997, will be deemed by operation of
law to become Pacific Mutual Contracts.
All other terms and conditions of the Agreement shall remain in full force
and effect.
The FCC Contracts are not available for new sales. Updated Exhibits A, B
and D (commission schedule) to the Agreement are attached hereto.
PACIFIC MUTUAL LIFE INSURANCE COMPANY PACIFIC MUTUAL DISTRIBUTORS, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: By:
------------------------------------- -----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------- --------------------------
Title: President Title: President and CEO
---------------------------------- --------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ INC. SBHU LIFE AGENCY, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ITS OWN BEHALF AND ON ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ EACH OF THE SUBSIDIARIES AND
AFFILIATED AGENCIES SET FORTH IN
By: EXHIBIT A ATTACHED HERETO
------------------------------------- ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
---------------------------------
Title: Executive Vice President By:
-------------------------------- -----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President/EVP
--------------------------
1
[Schedules A, B and D to be attached at a later date.]