SECOND AMENDMENT TO
RETAIL SALES AGREEMENT
▇▇▇▇▇▇ ▇▇▇▇▇ and MetLife
This is an amendment (the "Amendment") entered into as of the 28/th/ day
of January, 2009 (the "Effective Date") to that certain Retail Sales
Agreement (the "Agreement") dated on or about January 1, 2005, by and
between MetLife Investors Distribution Company (together with its Affiliates
hereinafter "MetLife") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P. (hereinafter "▇▇▇▇▇▇
▇▇▇▇▇"), that for the distribution of term life insurance, universal life
insurance, and variable universal life insurance products only, is or is
affiliated with one or more validly licensed insurance agencies, or for the
distribution of registered products, is registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") under the 1934 Act (as
defined in the Agreement) and is a member of the Financial Industry
Regulatory Authority ("FJNRA"). This Amendment shall be and is hereby made a
part of the Agreement.
WHEREAS, the parties wish to establish a process for the transmission of
documents by ▇▇▇▇▇▇ ▇▇▇▇▇ to MetLife electronically or by fax in lieu of
original paper documents, and;
WHEREAS, the parties now wish to amend the Agreement upon the terms and
conditions stated herein;
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and in the Agreement, the parties hereto agree as follows:
1. Fax or Electronic Transmission Process
(a) Documents to be Faxed or Transmitted. The fax or electronic
transmission process described in this Amendment currently only
applies to new life business documents including but not limited to
the completed application form, signed authorization, signed basic
illustration, and all other documents included in or pertaining to the
life application package ("New Life Business Documents"). If MetLife
adds other types of documents (e.g. brokerage or in force life
documents), to this process in the future, those additional documents
would be automatically added to this agreement. ▇▇▇▇▇▇ ▇▇▇▇▇
represents that the documents faxed or electronically submitted to
MetLife are exact copies of the New Life Business Documents.
(b) Methods of Fax and Transmission. ▇▇▇▇▇▇ ▇▇▇▇▇ shall fax their New Life
Business Documents to a specified fax server using a fax number
provided by MetLife or electronically transmit New Life Business
Documents via an electronic process approved by MetLife. ▇▇▇▇▇▇ ▇▇▇▇▇
represents that any systems that they use in the faxing or electronic
transmission process provide reasonable assurances against tampering
with the information contained in the original and degradation of any
reproduction of the original.
(c) Exception Originals of signed asset transfer authorizations involving
other companies, including but not limited to 1035 exchanges and
absolute assignments, require a wet signature and upon instruction by
MetLife must still be submitted by ▇▇▇▇▇▇ ▇▇▇▇▇ in hard copy
immediately after faxing or electronically transmitting.
(d) Imaging. All faxed or transmitted New Life Business Documents will be
captured as images or PDFs by MetLife and become MetLife's official
company record. A copy of these records will be made available to
▇▇▇▇▇▇ ▇▇▇▇▇ upon reasonable request.
(e) ▇▇▇▇▇▇ ▇▇▇▇▇ will not mail origina1 New Life Business Documents to
MetLife after those documents have been faxed to the fax server or
electronically transmitted to MetLife, unless specifically requested
to do so or as required by Section l.(c) above.
(f) Document Retention. ▇▇▇▇▇▇ ▇▇▇▇▇ will be required to retain all
original New Life Business Documents for at least 14 days after faxing
or transmitting them to MetLife, unless requested to submit the
original(s) to MetLife for audit or other review purposes before that
time.
(g) Document Destruction. Original hard copies of faxed or transmitted New
Life Business Documents will not be retained by ▇▇▇▇▇▇ ▇▇▇▇▇ beyond a
30 day period. Subject to the provisions of Subsection 1(c) of this
Amendment, ▇▇▇▇▇▇ ▇▇▇▇▇ must destroy all original New Life Business
Documents by shredding or similar method that renders the materials
unreadable. If required to retain copies of certain documents (e.g., a
copy of the application as part of a client file), or if desired as a
convenience for future reference (e.g., a pre-authorized checking
arrangement), ▇▇▇▇▇▇ ▇▇▇▇▇ will be permitted to retain photocopies of
the original documents.
"COMPANY" "BROKER"
METLIFE INVESTORS DISTRIBUTION
COMP. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P.
By, /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------ By, -----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇. Principal
Print Name and Title Print Name and Title
Date 2/2/08 1/28/2009
_______ Date __________
Address: Address:
----------------------------------- ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------
----------------------------------- ▇▇▇▇▇ ▇▇▇▇▇. ▇▇ ▇▇▇▇▇
-----------------------------
Fax # ▇▇▇-▇▇▇-▇▇▇▇ Fax # ▇▇▇-▇▇▇-▇▇▇▇
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Amendment to the Retail Sales Agreement
This Addendum Is made as of 3/17/06, (the "effective date") to the Retail Sales
Agreement, by and among MetLife Investors Distribution Company, a Missouri
corporation (the "Company") and ▇▇▇▇▇▇ ▇▇▇▇▇, (the "Broker"). Collectively the
Company and Broker are referenced herein as the Parties.
WHEREAS, the Parties desire to amend the Retail Sales Agreement to provide for
the submission of customer account changes through an electronic process; and
WHEREAS, the Parties named above have executed the filed and standard
agreements required for participation with the National Securities Clearing
Corporation (NSCC); or have contracted with a third party service bureau to
provide services through NSCC.
NOW THEREFORE, for good and valuable consideration. the receipt and sufficiency
of which Is hereby acknowledged, the Parties agree to participate In the
Automated Customer Account Transfer Service (ACATS) and/or Insurance Processing
Services (IPS) with the other under these agreements and in accordance with the
following terms: .
A. ELECTRONIC PROCESS FOR CUSTOMER ACCOUNT CHANGES
1. Broker may submit customer account changes, including custodial account
changes, to Company by electronic transmission ("Transmisslon") In
accordance with the ACA T/IPS procedures established from time to time
by NSCC in its rules and regulations. Parties acknowledge that
compliance with these Transmission procedures is a good order
requirement. Broker warrants that the information contained In the
Transmission is accurate and complete. The Parties acknowledge that
Company will rely upon the Information provided by Broker in making the
requested changes.
2. Broker will obtain all appropriate client authorizations on the Transfer
Initiation Form ("TIP). Such client authorizations include, but are not
limited to, those required from third parties, such as custodians and
trusts, among others. Broker will maintain such TIFs for a period of no
less than six (6) years from the date of the transfer initiation.
3. Company will, or will cause, prompt notice to Broker of any errors in
requests to transfer Customer Accounts. Notification will be made by
Transmission.
4. Company will, or will cause, prompt notice to Broker when good order
requirements have been met. Notification will be made by Transmission.
5. Each party to this Agreement shall promptly furnish to the other
Parties any reports and copies of forms which another party may
request for the purpose of meeting its reporting and record keeping
obligations under the insurance laws of any state, and under the
federal and state securities laws or the rules of the NASD or to
facilitate the handling of customer complaints. Broker shall provide
Company with a copy of the TIF. Such copy shall be provided to Company
no later than two (2) business days from the request date.
B. GENERAL
1. In accordance to Article IX of the Retail Sales Agreement. Broker
shall indemnify and hold harmless Company, Its subsidiaries and
affiliates and their respective officers, directors and employees
against any and all losses, claims, damages. liabilities or expenses
(including the reasonable costs of legal representation and
investigation) to which Company may become subject which arise out of
or are based on Company's reliance on incorrect information submitted
to Company or Its affiliates in the Transmission, or arising out of or
based on a breach or violation of the representations, warranties or
covenants contained herein.
2. Either party may terminate this Addendum upon 30 calendar days written
notice. Such notice of termination shall apply only to this Addendum
without affecting any other terms of the Retail Sales Agreement, as
amended.
▇▇▇▇▇▇ ▇▇▇▇▇ METUFE INVESTORS DISTRIBUTION COMP,
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------- ----------------------------------
Title: PRINCIPAL, INSURANCE Title: Executive Vice President
MARKETING
FIRST AMENDMENT TO
RETAIL SALES AGREEMENT
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO.
This Amendment is made as of January 1, 2005, to the Retail Sales Agreement
(the "Agreement") by and among MetLife Investors Distribution Company, a
Delaware corporation (the "Company") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. L P (the
"Broker") that, for the distribution of fixed insurance products only, Is or is
affiliated with one or more validly licensed insurance agencies, or for the
distribution of registered products, is registered as a broker-dealer with the
Securities and Exchange Commission ("SEC") under the 1934 Act (as hereafter
defined) and is a member of the National Association of Securities Dealers
("NASD") and is also either licensed as or affiliated with one or more validly
licensed insurance agencies.
The Agreement is amended as follows:
1. The first sentences of Article II, Section B (3) is deleted and the second
sentence in such section is amended to read as follows:
"Broker agrees that, if a formal or informal material investigation of Broker
or any of its Representatives is commenced by any insurance regulator, the NASD
or SEC, any other self regulatory organization or other governmental authority
in connection with the Contracts, including without limitation their offer or
sale, Broker shall notify Company of the existence and subject matter of such
investigation."
2. Article II, Section B (4) (d) is amended to read as follows:
"Broker shall take all reasonable and appropriate measures to assure that
applications, indications of interest or manifestations of interest submitted
under this Agreement are accurate, complete, and compliant with the conditions
herein and, in addition, for Variable Contracts are approved by a qualified
registered principal of Broker as required by Applicable Laws."
3. The first two sentences of Article II, Section B (5) are amended to read as
follows:
Except as otherwise agreed by the parties, to the extent permitted by
Applicable Laws only the initial purchase payments for the Contracts may be
collected by Representatives of Broker. All purchase payments or premiums shall
be remitted promptly in full (and in no event later than the time permitted
under Applicable Laws or the rules of the NASD), together with any related
application, forms and any other required documentation to Company or the
appropriate Affiliate."
4. The Article II, Section B (15)(d) is deleted.
5. Article TI, Section B (19) is amended by adding the following sentence
immediately after the first sentence in the Section:
"Notwithstanding the above, the Company or its Affiliates may permit (which
permission shall not be unreasonably withheld) the Broker, Agency or a
Representative to assist a customer to lapse, cancel, fail to renew or replace
a Contract, on a case by case basis, provided that the transaction is suitable
for and in the best interests of the customer and provided that such
transaction is not a part of any systematic or other effort by Broker, Agency
or the Representative to lapse, cancel, fail to renew or replace the Contracts
or any portion thereof."
6. Article VIII, Section D is amended by deleting existing paragraphs (1) and
(2) and substituting the following as Article VIII, Section D (1) and (2):
(1) "Confidential Information and Its Disclosure.
_________________________________________________
a) "Confidential Information" shall mean business information of a
Disclosing Party, including, without limitation, the following:
(i) information relating to the Disclosing Party's planned or existing
computer systems and systems architecture, including computer
hardware, computer software, source code, object code, documentation,
methods of processing and operational methods;
(ii) information regarding the name, address, telephone number, e-mail
address, account, or policy information pertaining to an existing or
prospective customer of the Disclosing Party, and any list or grouping
of such customers, regardless of whether such list includes publicly
available information ("Customer Information");
(iii) information that identifies or can be used to identify individuals who
are employees of, or applicants for employment by, ▇▇▇▇▇▇ ▇▇▇▇▇, or
their dependants or beneficiaries ("Human Resources Information," and,
together with Customer Information, "Personal Information");
(iv) business information relating to the Disclosing Party including
information about sales, profits, organizational structure, new
business initiatives and other financial information;
(v) information that describes the Disclosing Party's products and
services, including insurance and financial products, product designs,
and how such products are administered and managed;
(vi) information that describes the Disclosing Party's product strategies,
tax interpretations, tax positions and treatment of any item;
(vii) confidential information of third parties with which the Disclosing
Party conducts business;
(viii) any information that a reasonable person familiar with the Disclosing
Party's business and industry would consider confidential or
proprietary, the maintenance of which would be important to the
Disclosing Party; and
(ix) any other information designated in writing as Confidential
Information by the Disclosing Party at the time the information is
disclosed or within a reasonable time thereafter.
"Confidential Information" shall not include information a Receiving Party
can clearly establish by written evidence was: (a) known to the Receiving Party
prior to this Agreement; (b) rightfully acquired by the Receiving Party from
third parties who are not under an obligation of confidence to the Disclosing
Party; (c) placed in the public domain without the Receiving Party's fault; or
(d) independently developed by the Receiving Party without reference to or
reliance on the Confidential Information. The foregoing exceptions do not apply
to any Personal Information (or any element or component of such Personal
Information) that is disclosed by a Disclosing Party to a Receiving Party,
including any list, description, or other grouping of individuals (and publicly
available information pertaining to them) that is derived using any Personal
Information provided to the Receiving Party by the Disclosing Party.
"Disclosing Party" and "Receiving Party." For purposes of this Agreement,
Broker is a "Disclosing Party" of its Confidential Information and a "Receiving
Party" of Company's Confidential Information, and Company is a "Disclosing
Party" of its Confidential Information and a "Receiving Party" of Broker's
Confidential Information.
Except as otherwise provided in Sections VIII A, B, and C, Receiving Party
acknowledges and agrees that Disclosing Party's Confidential Information is
confidential, proprietary, and constitutes a trade secret to Disclosing Party
and is disclosed to Receiving Party on a confidential basis under this
Agreement, to be used only as expressly permitted by the terms and conditions
of this Agreement. Receiving Party agrees that Disclosing Party's Confidential
Information is a proprietary development constituting a valuable Disclosing
Party asset, and provides Disclosing Party with a significant competitive
advantage in its business. Title to Disclosing Party's Confidential Information
shall remain at all times in Disclosing Party and no transfer of any interest
therein is either expressly granted or implied.
Receiving Party agrees that it and any person to whom Receiving Party grants
access to the Confidential Information shall at all times hold the Confidential
Information in trust and in the strictest confidence, with appropriate security
safeguards, and shall not, except as herein permitted, use, exploit, duplicate,
re-create, display, decompile or reverse assemble, modify, translate, or create
derivative works based upon the Confidential Information, nor shall Receiving
Party disclose or otherwise reveal the
Confidential Information to any other party or permit any other party to do so,
except as necessary to carry out the terms of the Agreement or to maintain or
administer the Contracts.
Company shall limit disclosure to independent contractors and to Company's
authorized employees who have a "need to know" for the purposes contemplated by
this Agreement.
If Receiving Party is requested to disc10seany Confidential Information in
any judicial or administrative proceeding, Receiving Party shall promptly
notify Disclosing Party of such request so that Disclosing Party may resist
such disclosure or seek an appropriate protective order. If Receiving Party is
nonetheless compelled to disclose Confidential Information in such judicial or
administrative proceeding, it may do so without liability hereunder.
(2)Security of Personal Information.
____________________________________
Broker and Company agree to implement and maintain a written, effective
information security programs that will include the protection of Disclosing
Party's Personal Information, which programs shall contain, at a minimum,
technical, administrative and physical elements as may be required:
(a) to ensure the security and confidentiality of Personal Information;
(b) to protect against any anticipated threats or hazards to the security or
integrity of such Personal Information; and
(c) to protect against unauthorized access to or use of Personal Information
that could result in substantial harm or inconvenience to Disclosing
Party or to employees or customers of Disclosing Party.
In the event that Receiving Party is in or reasonably believes itself to be
(or to have been) in material breach of any provisions of this Section vn D(2),
it shall immediately advise Disclosing Party and take reasonable steps, in
cooperation with Disclosing Party, to remedy such breach (if not already
remedied), including but not limited to protecting customers and Disclosing
Party against the consequences of any disclosure. or use of Confidential
Information in violation of this Agreement."
7. Section X J is amended to read as follows:
"For purposes of this Sub-section J only, the term "agent" shall include all
appointed agents and Representatives. The parties to this Agreement acknowledge
that each may have access to the names and identities of agents of each party
as a result of performing their respective obligations under this Agreement,
and that each may establish close working relationships with such persons.
Therefore, Broker for itself and for each
Agency on the one hand (for purposes of this Sub-section J, "Selling Group"),
and Company on the other hand, agree that while an agent maintains his/her
affiliation with each and for twelve (12) months after such agent's termination
of the affiliation for any reason:
1) Selling Group shall not, directly or indirectly, for its own behalf or on
behalf of any other person or entity, solicit, entice, or endeavor to employ or
associate with for business purposes any agent of Company. In addition Selling
Group acknowledges that Company's agents hold important contractual and
business relationships with Company and Selling Group shall not (a) interfere
in any way with the relationships, contractual or otherwise, between Company
and Company's agents, or (b) induce or encourage, or attempt to induce or
encourage, any agent of Company to terminate or change his/her relationship
with Company.
2) Company shall not, directly or indirectly, for its own behalf or on behalf
of any other person or entity, solicit, entice or endeavor to employ or
associate with for business purposes any agent of Selling Group. In addition
Company acknowledges that Selling Group's agents hold important contractual and
business relationships with Selling Group and Company shall not (a) interfere
in any way with the relationships, contractual or otherwise, between Selling
Group and Selling Group's agents, or (b) induce or encourage, or attempt to
induce or encourage, any agent of Selling Group to terminate or change his/her
relationship with Selling Group."
8. Except as amended herein, the Agreement, as amended, shall continue in full
force and effect.
In Witness Whereof, the parties to this Amendment have set their hands as of
the date first above written.
"COMPANY" "BROKER"
METLIFE INVESTORS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. L P
DISTRIBUTION COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------ -----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Executive Vice President Principal
------------------------ -----------------------------------
Print Name and Title Print Name and Title
Date 1/5/05 Date 1/4/05
Address: Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇. ▇▇ ▇▇▇▇▇.
Fax #: Fax#: ▇▇▇.▇▇▇.▇▇▇▇
METLIFE INVESTORS DISTRIBUTION COMPANY
RETAIL SALES AGREEMENT
TABLE OF CONTENTS
I. DEFINITIONS IX. INDEMNIFICATION
II. REPRESENTATIONS, WARRANTIES, X. GENERAL PROVISIONS
COVENANTS AND AGREEMENTS
A. TERM AND TERMINATION
A. REPRESENTATIONS, WARRANTIES, B. ASSIGNABILITY
COVENANTS AND AGREEMENTS OF
COMPANY C. AMENDMENTS
B. REPRESENTATIONS, D. NOTICES
WARRANTIES, COVENANTS
AND AGREEMENTS OF BROKER E. ARBITRATION
III. PRINCIPLES OF ETHICAL MARKET
CONDUCT F. GOVERNING LAW; VENUE; JURISDICTION
IV. COMPLIANCE WITH APPLICABLE LAWS G. ENTIRE UNDERSTANDING
V. COMPENSATION H. NO THIRD PARTY BENEFICIARIES
VI. COMPLAINTS AND INVESTIGATIONS I. NON-EXCLUSIVITY
VII. RECORDS AND ADMINISTRATION J. NO HIRE
VIII. PRIVACY INFORMATION K. WAIVER
A. PROPRIETARY INFORMATION L. COUNTERPARTS; FACSIMILE SIGNATURES
M. SEVERABILITY
B. RECEIPT OF CUSTOMER N. HEADINGS
NONPUBLIC PERSONAL INFORMATION
BY COMPANY FROM BROKER O. FURTHER ASSURANCES
C. TREATMENT OF NONPUBLIC
PERSONAL INFORMATION DISCLOSED P. CONSTRUCTION
BY COMPANY
D. CONFIDENTIAL INFORMATION Q. RECITALS
R. REPRESENTATION BY COUNSEL
E. PROTECTED HEALTH INFORMATION S. TRADEMARKS
MLIDC Retail Sales Agreement Page 1 of 36
METLIFE INVESTORS DISTRIBUTION COMPANY
RETAIL SALES AGREEMENT
This Agreement, including the Exhibits attached hereto (collectively, the
"Agreement") is made, entered into and effective as of January 1,2005
("Effective Date") by and among MetLife Investors Distribution Company, a
Delaware corporation and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P., (the "Broker") that, for
the distribution of fixed insurance products only, is or is affiliated with one
or more. validly licensed insurance agencies, or for the distribution of
registered products, is registered as a broker-dealer with the Securities and
Exchange Commission ("SEC") under the 1934 Act (as hereafter defined) and is a
member of the National Association of Securities Dealers ("NASD") and is also
either licensed as or affiliated with one or more validly licensed insurance
agencies.
RECITALS
A. Company and its Affiliates (as hereafter defined) issue or provide access
to certain Contracts (as hereafter defined).
B. Company, on behalf of itself and each Affiliate that issues or provides
access to the Contracts, is authorized to enter into this Agreement with Broker
and other unaffiliated broker-dealers or selling groups, as the case may be, to
distribute the Contracts.
C. Company proposes to compensate Broker for the sale and servicing of
Contracts in accordance with the Compensation Schedules set forth in Exhibits A
and B, which by this reference are hereby incorporated in, and made a part of
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and other good and valuable consideration, the parties hereto
agree as follows:
I. Definitions. All capitalized terms used in this Agreement shall have
the meanings defined below, or if not defined in this section, as set forth
elsewhere in this Agreement:
Affiliate - Any entity that directly or indirectly controls, is
controlled by or is under common control with Company or Broker, as
applicable, including, without limitation, any entity that owns 25% or
more of the voting securities of any of the foregoing and any entity
that is a subsidiary of any of the foregoing.
MLIDC Retail Sales Agreement Page 2 of 36
Agency- One or more associated insurance agencies of Broker, identified
on Exhibit D hereto, which are properly licensed to participate in the
business of insurance, for the distribution of the Contracts.
Applicable Laws - Shall have the meaning given to such term in Section
IV of this Agreement.
Confidential Information - Shall have the meaning given to such term in
Section VII(D) of this Agreement.
Contracts - Those Fixed Contracts, Variable Contracts and other products
that are identified on Exhibits A and B attached hereto.
Fixed Contracts - Contracts that are not Variable Contracts and include,
without limitation, fixed rate annuities, fixed life insurance and other
fixed insurance contracts, issued or offered by Company or its
Affiliates, as more fully described in Exhibit B.
HIP AA - The Health Insurance Portability and Accountability Act of
1996, as now in force or hereafter amended, and all related regulations.
Nonpublic Personal Information - Financial or health related information
by which a financial institution's consumers and customers are
individually identifiable, including but not limited to nonpublic
personal information as defined by Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act
and regulations adopted pursuant to that Act.
Prospectus - The prospectuses, supplements to prospectus(es), and
statements of additional information included within the Registration
Statements referred to herein or filed pursuant to the 1933 Act and the
Investment Company Act of 1940, as amended.
Protected Health Information or PHI - Individually identifiable
information that is transmitted or maintained in any medium and relates
to the past, present or future physical or mental health or condition of
an individual; the provision of health care to an individual; or future
payment for the provision of health care to the individual. PHI also
includes demographic information about individuals! including names;
addresses; dates directly related to an individual, including but not
limited to birth date; telephone numbers; fax numbers; E-mail addresses;
Social Security numbers;
MLIDC Retail Sales Agreement Page 3 of 36
policy numbers; medical record numbers; account numbers; and any other
unique identifying number, characteristic or code. PHI further includes,
but is not limited to, information provided by an individual on an
application for a long term care insurance policy or other health care
plan issued or offered by Company or an Affiliate of Company;
information related to the declination or issuance of, or claim under, a
long term care insurance policy issued or offered by Company or an
Affiliate; or information derived therefrom.
Registration Statements - Registration statements and amendments thereto
filed with the SEC relating to the Variable Contracts, including those
for any underlying investment vehicle or variable insurance rider.
Representatives - Those individuals, accepted by Company or its
Affiliates to solicit and sell Contracts under the terms of this
Agreement, who are duly contracted and appointed as life insurance
agents of Company or its Affiliates and, with respect to registered
products, are also duly registered, individually, with the NASD in
compliance with the 1934 Act.
Variable Contracts - Contracts that are not Fixed Contracts and include,
without limitation, variable life insurance policies, variable annuity
contracts, variable insurance riders and other variable insurance
contracts, any of which mayor may not have a fixed component, issued or
offered by Company or its Affiliates, as more fully described in Exhibit
A.
1933 Act - The Securities Act of 1933, as amended.
1934 Act - The Securities Exchange Act of 1934, as amended.
II. Representations, Warranties, Covenants and Agreements
_____________________________________________________
A. Representations, Warranties, Covenants and Agreements of Company
________________________________________________________________
1) Authorization. Company represents that it is duly authorized, on
behalf of itself and each Affiliate that issues or provides access
to the Contracts, to enter into this Agreement with Broker to
distribute such Contracts.
2) Appointment. Company, subject to the terms and conditions of this
Agreement, hereby appoints Broker, on behalf of itself and its
Affiliates, to solicit, sell and provide services to the Contracts
on a non-exclusive basis.
MLIDC Retail Sales Agreement Page 4 of 36
3) Solicit Applications - Fixed Contracts. Company authorizes Broker,
through its Representatives, to solicit applications for the Fixed
Contracts listed in Exhibit B, provided that: (a) Broker shall
solicit applications for Fixed Contracts only in those states
where it and its Representatives are appropriately licensed, and
in which the Fixed Contracts are qualified for sale under
Applicable Laws; and (b) Broker complies in all other respects
with the published policies and procedures of Company and/or its
Affiliates, as applicable, and with the terms of this Agreement.
4) Solicit Applications - Variable Contracts. Company authorizes
Broker, through its Representatives, to offer and sell the
Variable Contracts listed in Exhibit A, provided that: (a) Broker
shall solicit applications for Variable Contracts only in those
states where it and its Representatives are appropriately
licensed; (b) there is an effective Registration Statement
relating to each such Variable Contract; (c) each such Variable
Contract is qualified for sale under Applicable Laws in such state
in which the sale or solicitation is to take place; and (d) Broker
complies in all other respects with the published policies and
procedures of Company and/or its Affiliates, as applicable, and
with the terms of the Agreement. Company shall notify Broker or
its designee of the issuance by the SEC of any stop order with
respect to a Registration Statement or the initiation of any
proceeding by the SEC relating to the registration and/or offering
of Variable Contracts and of any other actions or circumstances
that makes it no longer lawful for Company or its Affiliates to
offer or issue one or more of the Variable Contracts listed in
Exhibit A. Company shall advise Broker of any revision of, or
supplement to, any Prospectus related to the Variable Contracts or
underlying investments of such Variable Contracts.
5) Rights of Company. Company and its Affiliates may, in their
respective discretion:
a) refuse for any reason to appoint a Representative and cancel
any existing appointment at any time;
b) direct the marketing of its insurance products and services;
c) review and approve all advertising referring to its insurance
products and services;
d) underwrite all insurance policies issued by it;
e) cancel risks;
f) handle all matters involving claims and payment;
g) prepare all policy forms and amendments;
h) maintain custody of, responsibility for and control of all
investments; and
MLIDC Retail Sales Agreement Page 5 of 36
i) withdraw a form of Contract from sale or change or amend a
form of Contract for any reason.
6) Amendments to Exhibits. Exhibits A and B may be amended by Company
in its sole discretion from time to time, without prior notice, to
delete or add Contracts. The provisions of this Agreement shall
apply to such Exhibits, as they may from time to time be amended,
unless the context otherwise requires. In addition, the
Compensation Schedules that are part of Exhibits A and B may be
amended, modified and/or replaced by Company in its sole
discretion, from time to time, without prior notice.
7) Broker's Access to Copies of Documents. During the term of this
Agreement, Company shall provide Broker, as applicable and without
charge, with as many copies of the Contract Prospectus(es),
current underlying mutual fund prospectus(es), statements of
additional information and applications for the Contracts, as
Broker may reasonably request. Upon receipt from Company of
updated copies of the Contract Prospectus(es), current underlying
mutual fund prospectus(es), statements of additional information
and applications for the Contracts, Broker shall promptly discard
or destroy all copies of such documents previously provided to it,
except such copies as are needed for purposes of maintaining
proper records. Upon termination of this Agreement, Broker shall
promptly return to Company all Contract Prospectus(es), current
underlying mutual fund prospectus(es), statements of additional
information and applications for the Contracts and other materials
and supplies furnished by Company to Broker or to its
Representatives, except for copies required for maintenance of
records.
8) Advertising Material. Subject to the provisions of Section
VIII(D)(4), during the term of this Agreement, Company or its
Affiliates shall be responsible for approving all promotional,
sales and advertising material to be used by Broker. Company or
its Affiliates shall file such materials or shall cause such
materials to be filed with the SEC, NASD, and any applicable state
insurance and securities regulatory authorities, as required.
MLIDC Retail Sales Agreement Page 6 of 36
B. Representations, Warranties. Covenants and Agreements of Broker
_______________________________________________________________
1) Appointment of Broker. Broker, subject to the terms and conditions
of this Agreement, hereby accepts appointment to solicit, sell and
provide services to the Contracts and agrees to use its best
efforts to find suitable purchasers for the Contracts. Broker
represents and warrants that it shall offer Contracts only in
those states where it or an Agency is appropriately licensed and
that it has obtained any other appointments, approvals, licenses,
authorizations, orders or consents that are necessary to enter
into this Agreement and to perform its duties hereunder. Broker
further represents that its Representatives who shall be
soliciting applications for Contracts shall at all times be
appropriately licensed under Applicable Laws and such
solicitations shall be in accordance with Applicable Laws
including, without limitation, the NASD Conduct Rules and all
insurance replacement regulations and regulations prohibiting the
rebating of commissions.
2) Licenses and Approvals. For the sale of Variable Contracts, Broker
represents and warrants that it is a registered broker-dealer
under the 1934 Act, has all necessary broker-dealer licenses, is a
member in good standing with the NASD, and has obtained any other
approvals, licenses, authorizations, orders or consents which are
necessary to enter into this Agreement and to perform its duties
hereunder. Broker further represents that its Representatives who
shall be soliciting applications for Variable Contracts, whether
alone or jointly with representatives of Company or its designee,
shall at all times as required by Applicable Laws be appropriately
registered and/or licensed under such laws and shall comply with
Applicable Laws, including without limitation, the NASD Conduct
Rules and all insurance replacement regulations and regulations
prohibiting the rebating of commissions.
3) Investigations of Broker or Representative. Broker represents that
neither it nor any of its Representatives is currently under
investigation by any insurance regulator, the NASD or SEC, any
other self-regulatory organization or other governmental authority
(except for any investigations of which it has notified Company in
writing). Broker further agrees that, if a formal or informal
investigation of Broker or any of its Representatives is commenced
by any insurance regulator, the NASD or SEC, any other self
regulatory organization or other governmental authority, whether
or not in connection with the sale of the Contracts, Broker shall
notify Company of the existence and subject matter of such
investigation. Broker shall further take all steps necessary to
assure that no subagent of an Agency shall be appointed to solicit
and procure Contracts if that subagent is prohibited by 18 U.S.C.
(S) 1033(e) from engaging in the business of insurance. Broker
further
MLIDC Retail Sales Agreement Page 7 of 36
represents that it shall immediately notify Company in writing if
it or any of its Representatives have any of their respective
licenses, which are required under this Agreement for the
solicitation, sale or provision of services to the Contracts,
surrendered, removed, revoked, cancelled or suspended, whether
voluntarily or involuntarily.
4) Requirements to Solicit Applications. Commencing at such time as
Company and Broker shall agree, Broker shall find suitable
purchasers for the Contracts that Representatives are licensed and
authorized to solicit and sell under Applicable Laws. In meeting
its obligation to solicit applications for the Contracts:
a) Broker shall use only those training, sales, advertising and
promotional materials with respect to the Contracts that have
been pre-approved in writing by Company for use at that time;
b) Broker shall establish and implement reasonable procedures for
periodic inspection and supervision of sales practices of its
Representatives, and shall, upon a reasonable written request
from Company, provide a report to Company on the results of
such inspections and the compliance with such procedures;
provided, however, that Broker shall retain sole
responsibility for the supervision, inspection and control of
its Representatives;
c) Broker shall take reasonable steps to ensure that its
Representatives shall not make recommendations to an applicant
to purchase a Contract in the absence of reasonable grounds to
believe that the purchase of a Contract is suitable for such
applicant including those reasonable steps and reasonable
grounds required by Applicable Laws. Broker shall be solely
responsible for determining the suitability of recommendations
to purchase a Contract made by its Representatives.
d) Broker shall review diligently all Contract applications for
accuracy and completeness and for compliance with the
conditions herein, including the suitability and Prospectus
delivery requirements, and shall take all reasonable and
appropriate measures to assure that applications submitted
under this Agreement are accurate, complete, compliant with
the conditions herein and, in addition, for Variable Contracts
are approved by a qualified registered principal of Broker as
required by Applicable Laws. With respect to Variable
Contracts distributed jointly by Broker and representatives of
Company or its designee, Broker shall ensure that all
MLIDC Retail Sales Agreement Page 8 of 36
applications relating thereto have been provided to Broker for
its review and approval by a qualified registered principal of
Broker as required by Applicable Laws.
(e) Broker shall train, supervise and be solely responsible for
the conduct of its Representatives in their solicitation
activities in connection with the Contracts, and shill
supervise Representatives' strict compliance with applicable
laws, rules and regulations of any goveJ1lmental or other
insurance authorities that have jurisdiction over insurance
contract activities, as well as the rules and procedures of
Company pertaining to the solicitation, sale and submission of
applications for the Contracts and the provision of services
relating to the Contracts. Broker shall conduct and be solely
responsible for background investigations of its current and
proposed new Representatives to determine their
qualifications, good character and moral fitness to sell the
Contracts and will provide the Company with copies of such
investigations upon its request. Likewise, Broker hereby
acknowledges and agrees that it shall be solely liable for the
acts and omissions of its Representatives in the course of
conducting its business.
5) Collection of Payments. To the extent permitted by Applicable
Laws, only the initial purchase payments for the Contracts may be
collected by Representatives of Broker. All such initial" purchase
payments shall be remitted promptly in full (and in no event later
than the time permitted under Applicable Laws or the rules of the
NASD), together with any related application, forms and any other
required documentation to Company or the appropriate Affiliate.
The Broker shall make such remittances in accordance with any and
all policies and procedures described in the Contract, insurance
policy, Prospectus, if appropriate, any collateral documents
associated with such Contracts or as otherwise directed by Company
or its Affiliates.
6) Rejection and Return of Contracts. Company and/or its Affiliates
shall have the unconditional right to reject, in whole or in part,
any application for a Contract. If Company and/or its Affiliates
reject an application, Company or its Affiliate, as applicable,
shall promptly return any purchase payments received directly to
the purchaser or to the Broker, and, in the latter case, Broker
shall be responsible for promptly returning such payments to the
purchaser. If any purchaser of a Contract elects to return such
Contract pursuant to any law or contractual provision, any
purchase payment made or such other amount, as the Contract or
Applicable Laws shall specify, shall be returned by Company or its
Affiliate to the purchaser or to the Broker, and, in the latter
case, the Broker shall be responsible for promptly returning such
payments to the purchaser. Except as may otherwise be
MLIDC Retail Sales Agreement Page 9 of 36
provided in Exhibits A and/or B, if a purchase payment is either
refunded or returned to the purchaser, no commission shall be
payable to Broker hereunder, and any commission received by
Broker shall be returned promptly to Company or its Affiliates
where applicable. Company and its Affiliates, where applicable,
may, at their option, offset any such amounts against any other
amounts due to Broker as referenced in V(B).
7) Independent Contractor. With respect to the Contracts, neither
Broker nor its agents, designees or Representatives is a
principal, underwriter or agent of Company or its Affiliates, or
any separate account of Company or its Affiliates, provided that
Broker's designees, or agent's representatives may be appointed by
Company and its Affiliates for the sale of the Contracts. Nothing
contained in this Agreement shall be construed (a) to create any
relationship, partnership, employment or joint venture between or
among Company or any Affiliate of Company and Broker or its agents
or Representatives other than that of independent contractors, or
(b) to alter any relationship between or among Company or any
Affiliate of Company and Broker or its agents or Representatives
that may otherwise exist on and as of the Effective Date. Except
as expressly set forth herein, each party shall be solely
responsible for the respective fees, costs and expenses incurred
in connection with the operation of its business and the
fulfillment of its obligations hereunder. With respect to the
Contracts, neither Broker nor its agents, designees or
Representatives shall (a) hold themselves out to be employees of
Company in any dealings with the public, (b) alter or amend any
Contract or form related to a Contract, (c) adjust or settle any
claim or commit Company with respect thereto, (d) expend or
contract for the expenditure of funds on behalf of Company or its
Affiliates, or (e) assume or create any obligation or
responsibility, express or implied, on behalf of Company or bind
Company in any manner except as expressly permitted hereunder.
8) Promotional Materials. Any material Broker develops, approves or
uses for sales, training, explanatory or other purposes in
connection with the solicitation of applications for the Contracts
hereunder, other than generic advertising material which does not
make specific reference to Company, its Affiliates or the
Contracts, shall not be used without the prior written consent of
Company.
9) Payment of Commissions. Broker represents and covenants, that to
the extent required by Applicable Laws, that no commissions, or
portions thereof, or other compensation for the sale of the
Contracts, shall be paid to any person or entity that is not duly
licensed and appointed by Company or its Affiliates as required by
Applicable Laws. Broker shall ensure that Representatives
MLIDC Retail Sales Agreement Page 10 of 36
fulfill any training requirements necessary to be licensed or
otherwise qualified to sell the Contracts.
10) Contract Disclosures. Neither Broker nor any of its
Representatives, are authorized by Company or its Affiliates to
give any information or make any representation in connection with
this Agreement or the offering of the Contracts other than those
contained in the Contract, policy, Prospectus, or solicitation
material authorized for use in writing by Company or its
Affiliates. Broker shall not make any representations or give
information that is not contained in the contract, policy,
Prospectus or solicitation material of the Contracts.
11) Instructions by Representative. Broker and Agency shall be solely
responsible for the accuracy and propriety of any instruction
given or action taken by a Representative on behalf of an owner or
prospective owner of a Contract. Company shall have no
responsibility or liability for any action taken or omitted by it
in good faith in reliance on or by acceptance of such an
instruction or action.
12) Forms. Broker shall use Company forms or prepare any forms
necessary to comply with Applicable Laws or as otherwise required
in connection with the sale of the Contracts, either as an initial
transaction or as a replacement for other insurance or annuity
products, and Broker shall send prepared forms to Company or the
appropriate Affiliate. In the alternative, if such forms are not
required, but information with respect to a transaction or
replacement is required, Broker shall transmit or cause to be
transmitted such information in writing to Company or the
appropriate Affiliate. Broker shall further notify Company or the
appropriate Affiliates in writing when sales of the Contracts are
replacement contracts, as defined by the Company. Such
notification shall not be later than the time that Broker submits
applications for such Contracts to Company or the appropriate
Affiliate.
13) Furnishing of Information. To the extent permitted by Applicable
Laws, Broker shall furnish Company and any appropriate regulatory
authority with any information, documentation, or reports prepared
in connection with or related to this Agreement which may be
requested by Company or an appropriate regulatory authority in
order to ascertain whether the operations of Company or Broker
related to the Contracts are being conducted in a manner
consistent with Applicable Laws.
14) Authority. Broker represents that it has full authority to enter
into this Agreement and that by entering into this Agreement it
shall not impair any other of its contractual obligations.
MLIDC Retail Sales Agreement Page 11 of 36
15) Insurance Coverage.
___________________
a) Fidelity Bond. Broker shall secure and maintain a fidelity bond
(including coverage for larceny and embezzlement), issued by a
bonding company acceptable by Company, covering all of its
directors, officers, agents, Representatives, associated persons
and employees who have access to funds of Company or its
Affiliates. This bond shall be maintained at Broker's expense in
at least the amount prescribed under Rule 3020 of the NASD
Conduct Rules and future amendments thereto. Broker shall provide
Company with satisfactory evidence of said bond upon Company's
reasonable request. Broker hereby assigns any proceeds received
from a fidelity bonding company, or other liability coverage, to
Company, for itself or on behalf of its Affiliates, as their
interests may appear, to the extent of its loss due to activities
covered by the bond, policy or other liability coverage.
b) Plan of Insurance. Broker shall maintain in full force and effect
during the term of this Agreement a plan of insurance, which may
be a plan of self-insurance, which shall provide coverage for
errors and omissions of the Broker, an Agency, representatives
and agents, including Representatives, in such amounts and scope
of coverage as are acceptable to Company in its sole discretion.
If such insurance plan terminates for any reason during the term
of this Agreement, Broker shall immediately notify Company in
writing of such termination. If requested by Company, Broker
shall provide evidence of coverage under an insurance policy
satisfactory to Company, in its sole discretion, showing the
amount and scope of coverage provided.
c) Loss of coverage. The authority of any Representative to solicit
and procure Contracts hereunder shall terminate automatically
upon the termination of such Representative's coverage under the
Broker's fidelity bond or plan of insurance referred to in
subsections (a) and (b) above.
d) Company's Interest. All policies of liability insurance
maintained hereunder shall name Company as an additional insured.
All policies of insurance maintained hereunder shall contain a
clause providing that such policies may not be cancelled, reduced
in coverage or otherwise modified without at least thirty
(30) days prior written notice to Company, except for failure to
pay any premium, in which case said policy of insurance shall
provide for at least ten (10) days prior written notice prior to
said policy being cancelled or otherwise modified.
MLIDC Retail Sales Agreement Page 12 of 36
Broker shall upon the request of Company at any time furnish to
Company updated certificates or other evidence of insurance
acceptable to Company, in its reasonable discretion.
16) Agency Distribution of Variable Contracts. In such cases in which
Broker intends to distribute the Variable Contracts in association
with an Agency, Broker further makes the following representations
on its behalf and on behalf of that Agency:
a) Broker shall operate and be responsible for all
securities-related services arising from the offer, sale and/or
servicing by Representatives of the Variable Contracts;
b) Agency shall engage in the offer or sale of Variable Contracts
only through persons who are Representatives of the Broker.
Unregistered employees, agents or others shall not engage in any
securities activities or receive any compensation based on
transactions in securities or the provision of securities advice;
c) Broker shall be responsible for the education, training,
supervision and control of its Representatives, as required under
the 1934 Act and other Applicable Laws, including, but not
limited to, principal review, approval of all sales literature
and advertisements, periodic compliance audits and maintaining
the ability to appoint and terminate registered persons;
d) Representatives shall be licensed under the insurance laws of the
states in which they do business and shall be appointed agents by
Agency for which the Representatives may solicit applications in
connection with the offer and sale of Variable Contracts;
e) Broker and/or Agency, as applicable, shall maintain the books and
records relating to the sale of Variable Contracts and the
receipt and disbursement of insurance commissions and fees
thereon. Such books and records shall be maintained and preserved
in conformity with the requirements of Section 17(a) of the 1934
Act and the Rules thereunder, to the extent applicable, and shall
at all times be compiled and maintained in a manner that permits
inspection by supervisory personnel of the Broker, the SEC, the
NASD and other appropriate regulatory authorities; and
f) All premiums derived from the sale of the Variable Contracts
shall be made payable to and sent directly to Company or the
appropriate Affiliate, or shall be sent by purchasers to the
Broker for timely forwarding to Company or the appropriate
Affiliate. Agency shall not receive, accumulate or maintain
custody of premium payments.
MLIDC Retail Sales Agreement Page 13 of 36
17) Agency Distribution of Fixed Contracts. In cases in which Broker
intends to distribute Fixed Contracts through an Agency, before a
subagent is permitted to solicit Contracts, Broker or that Agency
shall have entered into a written agreement with the subagent
pursuant to which the subagent: (a) is authorized to deliver
policies only upon the payment to Company or the appropriate
Affiliate, or Broker of the premiums due thereon and upon
compliance with the terms, conditions and provisions of such
policies; (b) shall promptly remit to the Broker or the Agency all
funds collected on Company's or its Affiliates' behalf; (c) shall
otherwise act only pursuant to the limited authority granted to
that Agency hereunder and shall comply with all of the duties and
obligations of the Broker hereunder and the rules of Company or
its Affiliates; and (d) agrees to Company's right to offset from
any compensation due the subagent any indebtedness due from the
subagent to Company or its Affiliates and to chargeback
compensation under Company's or its Affiliates' rules. The Broker
shall promptly remit to Company all funds collected on behalf of
Company or its Affiliates.
18) Policies and Procedures. Broker shall comply with the policies and
procedures of Company and its Affiliates with respect to the
solicitation, sales and administration of the Contracts and
services that Broker and Representatives are authorized to sell
and service under this Agreement, including, but not limited to,
privacy policies and procedures, as set forth in this Agreement,
as they may be amended, modified and/or replaced, and as they may
be provided to Broker by Company or its Affiliates from time to
time.
19) Prohibited Solicitation With Policyholders. For a period of 12
months after termination of this Agreement, Broker shall not, and
Broker shall take all steps necessary to ensure that its
Representatives and any Agency shall not, directly or indirectly,
contact the policyholders of Company or its Affiliates for the
purpose of inducing any such policyholders to lapse, cancel, fail
to renew or replace any Contract. If Company, in its sole
discretion, determines that Broker, its Representatives or an
Agency has engaged in such prohibited activity, then Company shall
have the right to declare the Broker's or the Agency's claims for
compensation or any other benefit under this Agreement to be
forfeited and void. Company, on behalf of itself and its
Affiliates, may also pursue all remedies, whether at law or in
equity, including injunctive relief and/or damages, to assure
compliance with the covenants in this section and shall, if
successful, be entitled to recover from Broker or an Agency all
costs and expenses incurred in pursuing such remedies, including
reasonable attorneys' fees, court costs and expenses.
MLIDC Retail Sales Agreement Page 14 of 36
20) Market Timing. Broker shall not, and Broker shall take all steps
necessary to ensure that its Representatives and any Agency shall
not. (a) solicit, offer or sell Variable Contracts in connection
with or to facilitate any program, plan or arrangement involving
market timing transactions in underlying mutual funds within
Variable Contracts, or (b) take any other actions that would
promote, encourage or facilitate market timing transactions in the
underlying mutual funds within Variable Contracts. Notwithstanding
the foregoing, Broker and its Representatives may provide
incidental services in the form of-guidance to applicants and
owners of Variable Contracts regarding the allocation of premium
and Variable Contract value, provided that such services are
(a) solely incidental to Broker's activities in connection with
the sales of the Variable Contracts, (b) subject to the
supervision and control of Broker, (c) furnished in accordance
with any rules and procedures that may be prescribed by Company,
and (d) not promoting, encouraging or facilitating market timing
transactions in the underlying mutual funds within Variable
Contracts.
III. Principles of Ethical Market Conduct
____________________________________
As a member of the Insurance Marketplace Standards Association ("IMSA"),
Company expects that the Broker, Representatives, Agency and its
subagents shall abide by the principles of ethical market conduct set
forth by IMSA in connection with all Contracts sold pursuant to this
Agreement. Broker shall furnish information, documentation and reports
to Company as Company may reasonably request to permit Company to
ascertain whether Broker is conducting its operations in accordance with
the principles of ethical market conduct as set forth in this Section
III.
IV. Compliance With Applicable Laws
_______________________________
Company and Broker shall comply with all applicable state and federal
statutes, laws, rules and regulations, including without limitation,
state insurance laws, rules and regulations, and federal and state
securities laws, rules and regulations ("Applicable Laws"). Applicable
Laws include, without limitation, applicable rulings of federal and
state regulatory organizations, agencies and self regulatory agencies
(e.g. state insurance departments, the SEC, the NASD), consumer privacy
laws, HIPAA and any other state or federal laws, rules or regulations
and decisions, orders and rulings of state and federal regulatory
agencies that are now or may hereafter become applicable to the parties
hereto and the transactions that are the subject of this Agreement. The
compliance obligations, also includes, but are not limited to the
following:
MLIDC Retail Sales Agreement Page 15 of 36
A. Anti-Money Laundering. Company and Broker shall comply with all
applicable anti-money laundering laws, regulations, rules and government
guidance, including the reporting, record keeping and compliance
requirements of the Bank Secrecy Act ("BSA"), as amended by The
International Money Laundering Abatement and Financial Anti-Terrorism
Act of 2002, Title ill of the USA PATRIOT Act (the "Patriot Act"), its
implementing regulations, and related SEC and Self-Regulatory
Organization rules. These requirements include requirements to identify
and report currency transactions and .suspicious activity, to implement
a customer identification program to verify the identity of customers
and to implement an anti-money laundering compliance program. As
required by the Patriot Act, Broker certifies that it has a
comprehensive anti-money laundering compliance program that includes
policies, procedures and internal controls for complying with the BSA;
policies, procedures and internal controls for identifying, evaluating
and reporting suspicious activity; a designated compliance officer or
officers; training for appropriate employees; and an independent audit
function.
B. Customer Identification Program. Broker certifies, and shall certify
to Company or its Affiliates, where applicable, annually hereafter, that
it has established and implemented a customer. identification program,
in compliance with Applicable Laws, as part of its anti-money laundering
compliance program that, at a minimum, requires: (i) the verification of
the identity of any customer seeking to open an account; (ii) the
retention of a record of the information used to verify each customer's
identity; and (iii) the determination, within a reasonable time before
or after the account is opened, as to whether the customer appears on
any lists of known or suspected terrorists or terrorist organizations as
provided to it by any government agency. Broker shall verify the
identity of each customer that it introduces to Company, whether through
documentary or non-documentary means, and hereby acknowledges that
Company shall rely upon such verification, as prescribed by the
regulations promulgated under Section 326 of the Patriot Act in
accordance with the safe-harbor provided in Section 103.122(b)(6) of the
regulations under the Patriot Act.
C. Insurance Replacement Broker certifies on behalf of itself, its
Representatives and an Agency that it shall adhere to all applicable
SEC, NASD, federal and state statutes, laws, rules and regulations
regarding insurance replacement before it receives or solicits any
applications for Contracts.
MLIDC Retail Sales Agreement Page 16 of 36
V. Compensation
____________
A. Payment Under Compensation Schedules. Company shall pay Broker or an
Agency, as applicable, compensation for the sale of each Contract sold
by a Representative of Broker as set forth in the then applicable
Compensation Schedules that are part of Exhibits A and B, as such
Compensation Schedules may be from time to time amended, modified and/or
replaced in Company's sole discretion. Company shall use commercially
reasonable efforts to provide prior notice of changes to the
Compensation Schedules. Company shall identify to Broker or an Agency,
as applicable, with each such payment the name or names of the
Representative(s) of Broker who solicited each Contract covered by the
payment. Broker or an Agency, as applicable, shall be responsible for
issuing checks, statements or forms for tax purposes and other
administrative duties connected with compensation of such
Representatives. Unless otherwise agreed upon by the parties, Company
shall have no obligation to any of the employees, agents or
Representatives of Broker or an Agency for the payment of any
compensation. Any amendment to Exhibits A or B shall be applicable to
any Contract for which any application or premium is received by Company
on or after the effective date of such amendment. Company, however,
reserves the right to amend (i) Exhibits A and/or B with respect to
subsequent premiums and renewal commissions, and (ii) such Exhibits
pursuant to this subsection even after termination of this Agreement.
B. Offset. Company may at any time offset against any compensation
payable to (1) Broker, an Agency or their respective successors or
assigns, any indebtedness however or wherever incurred due from the
Broker or an Agency to Company or its Affiliates, and (2) the subagents
of any Agency or their successors or assigns any indebtedness however or
wherever incurred due from Broker, an Agency or a subagent to Company or
its Affiliates. Nothing contained herein shall be construed as giving
Broker, an Agency or Representative the right to incur any indebtedness
on behalf of Company or its Affiliates. Company shall have, and is
hereby granted, a f11"st lien on any and all compensation payable under
this Agreement as security for the payment of any and all remaining
indebtedness of Broker to Company or its Affiliates arising under this
Agreement and not offset as provided herein. The right of Broker, or any
person claiming through Broker, to receive any compensation provided by
this Agreement shall be subordinate to the right of Company to offset
such compensation against any such indebtedness of the Broker, an
Agency, a subagent or a Representative to Company or its Affiliates.
MLIDC Retail Sales Agreement Page 17 of 36
C. No Withholding of Premiums. Neither Broker nor any of its
Representatives shall withhold or deduct any part of any premium or
other purchase payment it shall receive with respect to the Contracts
covered by this Agreement for purposes of payment of compensation or
otherwise.
D. Compensation Not Payable. No compensation shall be payable, and any
compensation already paid shall be returned to Company immediately on
request, under each of the following conditions:
1) if Company or its Affiliates, in their sole discretion,
determine not to issue the Contract applied for;
2) if Company or its Affiliates refund the premium paid by the
applicant, upon the exercise of applicant's right of
withdrawal pursuant to any "free-look" privilege;
3) if Company or its Affiliates refund the premium paid by
applicant as a result of the resolution of a consumer
complaint, recognizing that Company and its Affiliates have
sole discretion to refund premiums paid by applicants; or
4) if Company or its Affiliates determine that any person signing
an application who is required to be registered and/or
licensed or any other person or entity receiving compensation
for soliciting purchases of the Contracts is not duly
registered and/or licensed to sell the Contracts in the
jurisdiction of such attempted sale.
E. Compensation and Termination of Agreement. Company shall pay the
compensation to Broker or an Agency, as applicable, for Contracts
credited prior to the termination date of this Agreement, as set forth
in the then applicable Compensation Schedules that are part of Exhibits
A and B. Such compensation shall be payable when the premium is due and
paid to Company, subject to the provisions of this Agreement and the
then applicable Compensation Schedule.
F. Company Payment of Compensation: Discharge of Obligation. Broker, on
its behalf and on behalf of each Agency, hereby agrees and acknowledges
that compensation attributable to the sale of any Contract issued by an
Affiliate of Company may be payable directly by Company, in its
discretion, to Broker or an Agency, where permitted, and not by the
Affiliate. Broker, on its behalf and on behalf of each Agency, further
agrees and acknowledges that such payment of compensation by Company
attributable to the sale of such Contracts shall constitute a complete
discharge of the obligation to pay
MLIDC Retail Sales Agreement Page 18 of 36
compensation by the Affiliate issuer under this Agreement. Such payment
of compensation shall not affect the right of offset or chargeback as
referred to in Sections V(B) and V(D) of this Agreement, or such other
compensation roles as may be set forth in this Agreement, the
Compensation Schedules or the rules of Company or its Affiliates.
G. Violation of Applicable Laws. Company shall not be obligated to pay
any compensation that would violate any Applicable Laws of any
jurisdiction, anything in this Agreement notwithstanding.
H. Expenses. Unless otherwise agreed to by Company, Broker, either
directly or by reimbursing Company on request, shall pay for expenses
incurred by such Broker in connection with the solicitation, offer and
sale of the Contracts.
I. Replacements. In addition to the conditions and limitations elsewhere
contained in this Agreement and the Compensation Schedules, no first
year commission shall be payable on replacements or switches of any
Contract with another Contract, which are undisclosed, and which
otherwise requires disclosure by Applicable Laws or Company's or its
Affiliates' rules on replacement transactions. Specific replacement or
switching roles of each applicable Affiliate are described on Exhibit C
which is attached hereto and incorporated herein by reference, which
Exhibit may be from time to time amended, modified and/or replaced in
Company's sole discretion.
J. Conflict. In the event that anything contained in this Section V
conflicts with the terms of the compensation described in the
Compensation Schedules, the terms contained in the applicable
Compensation Schedules shall prevail.
VI. Complaints and Investigations
_____________________________
A. Customer Complaints. Both the Broker and Company shall investigate
any customer complaint in connection with the Contracts. The term
"customer complaint" shall mean an oral or written communication either
directly from the purchaser of or applicant for a Contract covered by
this Agreement or his legal representative, or indirectly from a
regulatory agency to which he or his legal representative has expressed
a grievance.
B. Cooperation. Broker and Company shall cooperate fully in any
regulatory investigation or proceeding or judicial proceeding arising in
connection with the offer, sale and/or servicing of the
MLIDC Retail Sales Agreement Page 19 of 36
Contracts. This cooperation shall include, but is not limited to, each
party promptly to the other of the receipt of notice of any such
investigation or proceeding, and forwarding to the other a copy of any
written materials in connection with the matter and such additional
information as may be necessary to furnish a complete understanding of
same. In the case of a customer complaint, Broker and Company shall
promptly refer such complaint to the other party for handling where
appropriate and provide the other party with customer complaint
information and documentation upon request.
C. Right to Settle. Company reserves the right to settle on behalf of
itself, and on behalf of itself and Broker collectively, if Broker
agrees, any claims, complaints or grievances made by applicants,
policyholders or others in connection with the Contracts, and concerning
any conduct, act or omission by the Broker or its agents or
Representatives with respect to the Contracts or any transactions
arising out of this Agreement. If Broker does not agree to a collective
settlement with Company and Company, on behalf of itself, settles the
matter, Broker shall indemnify, defend and hold harmless Company from
any and all claims, complaints or grievances made by Broker or any
applicant, policyholder or other person or entity made in connection
with such matter.
VII. Records and Administration
__________________________
A. Delivery of Contracts. Unless otherwise requested by Broker and
agreed to by Company, once a Contract has been issued, it shall be
delivered to Broker and, after being reviewed by Broker, shall be timely
delivered by Broker to the purchaser, accompanied by any documents
required to be delivered by Applicable Laws and any additional documents
deemed appropriate. Company shall confirm or cause to be conflicted to
customers all Contract transactions, to the extent required by
Applicable Laws, and shall administer the Contracts after they have been
delivered, but may from time to time require assistance from Broker.
Consistent with its administrative procedures, Company shall assume, and
shall rely on the assumption, that a Contract it, or its Affiliates,
issues shall be promptly delivered by Broker to the purchaser of such
Contract. As a result, if a purchaser exercises a "free look" right
under such Contract, Broker shall indemnify Company for any loss Company
incurs resulting from Broker's failure promptly to deliver such Contract
to its purchaser.
B. Books and Records. Broker shall maintain all books and records as
required by Rules 17a-3 and 17a-4 under the 1934 Act, as such rules may
be amended, succeeded or replaced, except to the extent that Company may
agree to maintain any such records on Broker's behalf. Records subject
to any such agreement shall be maintained by Company as agent for Broker
in compliance with said rules, and such
MLIDC Retail Sales Agreement Page 20 of 36
records shall be and remain the property of Broker and be at all times
subject to inspection by the SEC in accordance with Section 17(a) of the
1934 Act. Nothing contained herein shall be construed to affect
Company's or its Affiliates' right to ownership and control of all
pertinent records and documents pertaining to its business operations
including, without limitation, its operations relating to the Contracts,
which right is hereby recognized and affirmed. Company and Broker shall
each retain all records related to this Agreement as required by the
1934 Act, and the rules and regulations thereunder, and by any other
Applicable Laws, as Confidential Information as described in Section
VIII(D) of this Agreement, and neither party shall reveal or disclose
such Confidential Information to any third party unless such disclosure
is authorized by the party affected thereby or unless such disclosure is
expressly required by applicable federal or state regulatory
authorities. Nothing contained herein, however, shall be deemed to
interfere with any document, record or other information which. by law,
is a matter of public record.
VIII. Privacy Information
___________________
A. Proprietary Information
_______________________
Any and all account records developed by Company or its Affiliates,
or provided to Company or its Affiliates by Broker or Broker's
Affiliates, including but not limited to customer files, sales aids,
computer software, customer names, addresses, telephone numbers and
related paperwork, literature, authorizations, manuals and supplies of
every kind and nature relating to the Contracts and the servicing of the
Contracts are and shall remain the property of Company or its
Affiliates. Such proprietary information and materials shall be treated
as Nonpublic Personal Information and/or Confidential Information (as
hereafter defined in Section VIII(D)), as appropriate, pursuant to
Sections VIII(A), (B), (C) and (D) of this Agreement.
Except as otherwise required by Applicable Laws, any and all
proprietary information and material developed and provided by Company
and its Affiliates shall be returned to Company (including all copies
made by the Broker or its Affiliates) upon termination of this
Agreement. Any materials developed by the Broker or its Affiliates in
support of the marketing, sales, advertising or training related to
Company or its Contracts shall be destroyed upon the termination of this
Agreement.
MLIDC Retail Sales Agreement Page 21 of 36
B. Receipt of Customer Nonpublic Personal Information by Company from Broker
_________________________________________________________________________
1) Confidentiality. Company and its Affiliates shall treat all Nonpublic
Personal Information regarding Broker's customers provided to it by
Broker under this Agreement as Confidential Information, except that
such provisions shall not apply to such information regarding
customers of Broker who were, are or become policyholders or customers
of Company or any of its Affiliates other than by reason of the
services provided by Broker under this Agreement.
2) Right to Disclose. Notwithstanding the foregoing, Company and its
Affiliates shall have the right to use or disclose such Nonpublic
Personal Information: (a) to the full extent required to comply with
Applicable Laws or requests of regulators; (b) as necessary in
connection with any of Company's or its Affiliates' audit, legal,
compliance or accounting procedures; (c) as necessary or permitted by
Applicable Laws in the ordinary course of business (for example to
administer Contracts and provide customer service to purchasers of
Contracts under this Agreement); (d) as authorized by such customer;
or (e) to protect against or prevent fraud.
3) Offering: Products Outside Agreement. Company and its Affiliates may
market, offer, sell or distribute insurance products, including, but
not limited to, the Contracts, or any of their other products and
related services, outside of this Agreement to customers of Broker
provided they do not use Nonpublic Personal Information regarding
Broker's customers provided by Broker to specifically target those
customers, and such marketing, offering, selling or distributing by
Company and its Affiliates of insurance (including but not limited to
the Contracts) or any of their other products or services shall not be
subject to the terms of this Agreement.
C. Treatment of Nonpublic Personal Information Disclosed by Company to Broker
__________________________________________________________________________
Broker shall treat Nonpublic Personal Information regarding Broker's
customers provided to it by Company or its Affiliates under this Agreement
as Confidential Information and shall use such information only to solicit
sales of and to provide service with respect to Contracts sold pursuant to
this Agreement. Notwithstanding the foregoing, Broker shall have the right
to use or disclose Nonpublic Personal Information provided to it by Company
or its Affiliates to the extent permitted by Applicable Laws and Company's
or its Affiliates' privacy policy(ies) (for example, to comply with
Applicable Laws or requests of regulators) in connection with Broker's
audit procedures, as authorized by such customers or to protect against or
prevent fraud.
MLIDC Retail Sales Agreement Page 22 of 36
D. Confidential Information
________________________
1) Disclosure of Confidential Information. Company and Broker and their
respective Affiliates shall maintain the confidentiality of
Confidential Information disclosed by either party to the other party
under the terms of this Agreement and shall use such Confidential
Information solely for the purposes contemplated by this Agreement.
Except as otherwise provided in Sections VIII(A), VIII(B) and VIII(C),
neither Company, nor Broker and their respective Affiliates shall
disclose any Confidential Information that is covered by this
Agreement to any person or entity other than to their respective
employees, representatives or agents who need to know such
Confidential Information for the performance of their work, unless
authorized in writing by the affected party or if expressly required
under the terms of a valid subpoena or order issued by a court of
competent jurisdiction or regulatory body or Applicable Laws.
"Confidential Information" means: (a) any information that this
Agreement specifies shall be treated as "Confidential Information"
under this Section VIII; (b) Nonpublic Personal Information;
(c) information required to be treated as confidential under
Applicable Laws; and (d) any information of Broker and its Affiliates
that is disclosed by Broker or its Affiliates to Company or its
Affiliates through the course of business during the term of this
Agreement, or any information of Company and its Affiliates that is
disclosed by Company or its Affiliates to Broker or its Affiliates
through the course of business during the term of this Agreement,
including but not limited to, new products, marketing strategies and
materials, development plans, customer information, client lists,
pricing information, rates and values, financial information and
computer systems, in each such case if such information is clearly
identified as and marked "CONFIDENTIAL" by the disclosing party.
Notwithstanding the foregoing, "Confidential Information" does not
include (a) information which is now generally available in the public
domain or which in the future enters the public domain through no
fault of the receiving party; (b) information that is disclosed to the
receiving party by a third party without violation by such third party
of an independent obligation of confidentiality of which the receiving
party is aware; or (c) information that the disclosing party consents
in writing that the receiving party may disclose.
2) Right to Disclose: No Liability. The disclosing party warrants that it
has the right to provide access to, disclose and use the Confidential
Information to be provided hereunder. The receiving party shall not be
liable to the disclosing party for:
a) inadvertent use, publication, or dissemination of the Confidential
Information received hereunder provided that: (i) it uses the same
degree of care in safeguarding such information as
MLIDC Retail Sales Agreement Page 23 of 36
it uses for its own information of like importance; (ii) it has
complied with Applicable Laws; and (iii) upon discovery of such,
it shall take steps to prevent any further inadvertent use,
publication or dissemination; or
b) unauthorized use, publication or dissemination of the Confidential
Information received hereunder by persons who are or have been in
its employ unless it fails to safeguard such information with the
same degree of care as it uses for its own proprietary information
of like importance and provided that the receiving party uses such
Confidential Information in accordance with Applicable Laws.
3) Independent Development. Any similarity between the Confidential
Information and any other information, regardless of medium, whether
oral or written, as well as contracts and/or services acquired from
third parties or developed by the receiving party, or Affiliates
independently through its or their own efforts, thought, labor and
ingenuity, in each case without violating the provisions hereof, shall
not constitute any violation of this Agreement and shall not subject
the receiving party to any liability whatsoever.
4) No Representation. Neither the disclosing party nor any of its
employees, representatives or designees has made or makes any
representation or warranty as to the accuracy or completeness of the
Confidential Information, including but not limited to, any
promotional, sales or advertising material provided or approved by
Company or its Affiliates to be used by Broker.
E. Protected Health Information or PHI
___________________________________
To the extent that Broker or its Affiliates or their respective
Representatives receive, create, have access to or use PHI, regarding
individuals who are applicants for, owners of or eligible for benefits under
certain health insurance products and optional riders offered .by or through
Company or any of its Affiliates, in accordance with the requirements of
HIPAA, Broker shall:
1) Not use or disclose PHI except (a) to perform functions, activities or
services for, or on behalf of, Company or its Affiliates as specified
in this Agreement and consistent with Applicable Laws, or (b) to the
extent that such use or disclosure is required by Applicable Laws. Any
such use or disclosure shall be limited to that required to perform
such services or to that required by relevant law;
MLIDC Retail Sales Agreement Page 24 of 36
2) Use appropriate safeguards to prevent use or disclosure of PHI other
than as permitted by this Agreement;
3) Promptly report to Company any use or disclosure of PHI not permitted
by this Agreement of which Broker becomes aware and mitigate any
harmful effect of any use or disclosure that is made by Broker or its
Representatives in violation of the requirements of this Agreement;
4) Ensure that any third party with whom Broker contracts or who is hired
by Broker and who may, under that arrangement, receive or have access
to PHI agrees to the same restrictions and conditions that apply to
Broker with respect to PHI under this Agreement;
5) Within 15 days of Company's request, provide Company with any PHI or
information relating to PHI as deemed necessary by Company to provide
individuals with access to, amendment of and an accounting of
disclosures of their PHI;
6) Make Broker's records relating to use or disclosure of PHI available
to the Secretary of the United States Department of Health and Human
Services at his request to determine Company's, or one of its
Affiliate's, compliance with HIPAA; and
7) Upon termination of this Agreement and in accordance with Company's
instructions, either return or destroy all PHI Broker maintains in any
form and retain no copies. If Company agrees that such return or
destruction is not feasible, Broker shall extend these protections to
the PHI beyond the termination of the Agreement, in which case any
further use or disclosure of the PHI shall be solely for the purposes
that make return or destruction infeasible. Destruction without
retention of copies is deemed not feasible if prohibited by the terms
of the Agreement or by Applicable Laws, including record retention
requirements of the various applicable state insurance laws.
IX. Indemnification
_______________
A. Indemnification Provisions Except with respect to matters relating to
the joint distribution of Contracts, the following indemnification
provisions shall apply:
1) Company Indemnification. Company shall indemnify, defend and hold
harmless Broker from any and all losses, claims, judgments, fines,
penalties, damages, liabilities or amounts paid in a settlement
consented to by the Company (or any actions or threatened actions
in respect of any of the foregoing) (collectively, the "Claims"),
to which Broker may become subject, insofar as such Claims:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Prospectus,
Registration Statements or any other sales or offering materials
furnished or approved in writing by Company for any of the
Contracts; or (b) arise out of or result from any breach of any
representation or warranty, covenant, agreement obligation or
undertaking in this Agreement by Company or by any person or
entity acting on behalf of or under
MLIDC Retail Sales Agreement Page 25 of 36
the control of Company. Company shall further reimburse Broker for
any legal fees or other expenses actually and reasonably incurred
by it in connection with investigating, defending, being a witness
in or participating in (including an appeal) any Claim for which
indemnification is provided hereunder. Notwithstanding anything
contained herein to the contrary, Company shall not indemnify,
defend or hold harmless Broker against any Claim: (a) to the
extent that any such Claim arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made by Broker or any of its Affiliates or any of
their respective agents, Representatives, officers, directors or
employees when referring to or explaining a Prospectus,
Registration Statement or any other sales or offering materials;
(b) where an applicant for any of the Contracts was not furnished
or sent or given, at or prior to written confirmation of the sale
of a Contract, a copy of the appropriate Prospectus(es), any
statement of additional information, if required or requested, and
any supplements or amendments to either furnished to Broker by
Company or its Affiliates; or (c) if a judgment or other final
adjudication adverse to the Broker establishes that Broker's acts
were committed in bad faith, were the result of active and
deliberate dishonesty, were the result of willful misconduct or
gross negligence, or the Broker gained, in fact, a financial
profit or other advantage to which Broker was not legally
entitled. The foregoing indemnities shall, upon the same terms and
conditions, extend to and inure to the benefit of each director,
trustee, officer, agent and employee of Broker and any of its
Affiliates, and the foregoing exclusions from indemnification
shall, upon the same terms and conditions, extend to and inure to
the benefit of each director, trustee, officer, agent and employee
of Company and any of its Affiliates.
2) Broker Indemnification. Broker shall indemnify, defend and hold
harmless Company and its Affiliates against any Claims to which
Company or its Affiliates may become subject, insofar as such
Claims: (a) result from Company improperly paying any compensation
under this Agreement; (b) arise out of or are based upon any
negligent, improper, fraudulent or unauthorized acts or omissions
by Broker, its employees, agents, trustees, Representatives,
officers or directors, including but not limited to improper or
unlawful sales practices, any untrue statement or alleged untrue
statement of any material fact, any omission or alleged omission,
any unauthorized use of sales materials or advertisements and any
oral or written misrepresentations; or (c) arise out of or result
from any breach of any representation or warranty, covenant,
agreement, obligation or undertaking in this Agreement by Broker,
its Representatives, or by any other person or entity acting on
behalf of or under the control of Broker. Broker shall further
reimburse Company and its Affiliates for any legal fees or other
expenses actually and reasonably incurred by them in
MLIDC Retail Sales Agreement Page 26 of 36
connection with investigating, defending, being witness in or
participating in (including an appeal) any Claim for which
indemnification is provided hereunder. Notwithstanding anything
contained herein to the contrary, Broker shall not indemnify,
defend or hold harmless Company and its Affiliates if an improper
payment of any compensation under this Agreement or a judgment or
other final adjudication adverse to Company or its Affiliates
establishes that Company's or its Affiliates' acts were committed
in bad faith, were the result of active and deliberate dishonesty,
were the result of willful misconduct or gross negligence, or
Company 0t: its Affiliates gained, in fact, a financial profit or
other advantage to which Company or its Affiliates were not
legally entitled. The foregoing indemnities shall, upon the same
terms and conditions, extend to and inure to the benefit of each
director, trustee, officer, agent and employee of Company and its
Affiliates, and the foregoing exclusions from indemnification
shall, upon the same terms and conditions, extend to and inure to
the benefit of each director, trustee, officer, agent and employee
of Broker and its Affiliates.
B. Notice Promptly after receipt by an indemnified party (the
"Indemnitee") of notice of the commencement of any action, such
Indemnitee shall, if a Claim in respect thereof is to be made against
the indemnifying party (the "Indemnitor"), notify the Indemnitor in
writing of the commencement thereof; but the omission to notify the
Indemnitor shall not relieve the Indemnitor from any liability which the
Indemnitor may otherwise have to any Indemnitee.
C. Partial Indemnification In the event a party is entitled to
indemnification under this Agreement for some or a portion of Claims,
but not, however, for all of the total amount thereof (as finally
determined in an action for which indemnification is permitted
hereunder), then the Indemnitor shall indemnify the Indemnitee for the
portion thereof to which the Indemnitee is entitled.
D. Conduct of Defense With respect to any Claim as to which an
Indemnitee notifies an Indemnitor of the commencement thereof:
1) Participation. Indemnitee shall be entitled to participate therein
at the Indemnitee's own expense; and
2) Assumption of Defense. Except as otherwise provided below, to the
extent that the Indemnitor may wish, Indemnitor shall be entitled
to assume the defense thereof, with counsel selected by
Indemnitor. After notice from Indemnitor to Indemnitee of the
Indemnitor's election to assume the
MLIDC Retail Sales Agreement Page 27 of 36
defense thereof, Indemnitor shall not be liable to Indemnitee
under this Agreement for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof
except as otherwise provided below. Indemnitee shall have the
right to employ Indemnitee's own counsel in matters giving rise to
such Claim, but the fees and expenses of such counsel incurred
after notice from Indemnitee of its assumption of the defense
thereof shall be at the expense of Indemnitee unless (a) the
employment of counsel by Indemnitee has been authorized by
Indemnitor in writing, (b) Indemnitee's counsel shall have
reasonably concluded that there may likely be a conflict of
interest between Indemnitor and Indemnitee in the conduct of the
defense of matters giving rise to such Claim, or (c) Indemnitor
shall not in fact have employed counsel to assume the defense of
such Claim, in each of which cases the fees and expenses of
counsel shall be at the expense of Indemnitor. Indemnitor shall
not be entitled to assume the defense of any Claim brought by or
on behalf of Indemnitor; and
3) Settlement. Indemnitor shall not be liable to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any
Claim effected without Indemnitor's written consent. Indemnitor
shall not settle any Claim in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee's written
consent. Indemnitee shall not unreasonably delay or withhold its
consent to any proposed settlement.
E. Subrogation. In the event of any indemnification payment under this
Agreement, Indemnitor shall be subrogated to the extent of such payment
to all the rights of recovery of Indemnitee, who shall execute all
papers required and shall do everything that may be necessary to secure
such rights, including the execution of such documents necessary to
enable Indemnitor to effectively bring suit to enforce such rights.
F. Receipt of Payment. Anything to the contrary notwithstanding,
Indemnitor shall not be liable under this Agreement to make any payment
in connection with any Claim made against Indemnitee to the extent
Indemnitee has otherwise actually received payment of the amounts
otherwise indemnifiable hereunder .
G. Provisions Not to Control Notwithstanding anything in this Section IX
to the contrary, the terms and provisions of Section VI(C) shall control
in the event of any conflict or alleged conflict with this Section IX.
MLIDC Retail Sales Agreement Page 28 of 36
X. General Provisions
___________________
A. Term and Termination
____________________
1) Term. This Agreement shall continue in force for a term of one
year from the Effective Date and thereafter shall automatically be
renewed each year for a further one-year period, unless otherwise
terminated pursuant to Section X(A)(2) of this Agreement.
2) Termination. This Agreement shall terminate immediately upon
(a) Company or Broker ceasing to be a registered broker-dealer or
a member of the NASD or, (b) the termination of the legal
existence of Broker or an Agency, or the merger, consolidation,
reorganization, dissolution, receivership or bankruptcy of either,
or whenever the Broker or an Agency is no longer licensed under
Applicable Laws to solicit and procure applications for Contracts,
unless that Broker or Agency notifies the Company in writing at
least thirty (30) days' prior to the occurrence of any of the
above events and obtains written permission to continue on a basis
approved by the Company or, (c) Company or Broker unilaterally
terminating this Agreement with or without cause upon thirty
(30) days' prior notice of termination to the other party.
3) Continuing Obligations. Upon termination of this Agreement, all
agreements, authorizations, rights and obligations shall cease
except (a) those contained in Sections IT(B)(l9), V(A), VI, VIII,
IX, X(D), X(E), X(F), X(J), X(K), and X(S) hereof; and (b) the
obligation to settle accounts hereunder. Except with respect to
records required to be maintained by Broker pursuant to Rules
17a-3 and 17a-4 under the 1934 Act or other Applicable Laws,
Broker shall return to Company, within 30 days after the effective
date of termination, any and all records in its possession which
have been specifically maintained in connection with Company's
operations related to the Contracts.
B. Assignability
_____________
This Agreement shall not be assigned by either party without the
written consent of the other; provided, however, that Company may assign
this Agreement to any of its Affiliates at any time without notice or
consent. Any purported assignment in violation of this Section shall be
void.
MLIDC Retail Sales Agreement Page 29 of 36
C. Amendments
__________
No oral promises or representations shall be binding nor shall this
Agreement be modified except by an agreement in writing that expressly
refers to this Agreement and that has been executed on behalf of the
parties by a duly authorized officer of each of them. Notwithstanding
the foregoing, Company has the right to amend, modify and/or replace
Exhibits A and/or B at any time, to be effective as Company may direct,
in its sole discretion and without prior notice.
D. Notices
_______
Any notice or consent required by this Agreement shall be in writing
and either (i) mailed by certified or registered mail, postage-prepaid,
return receipt requested, or (ii) sent by telefacsimile transmission and
followed by delivery via First Class U.S. mail, to such party at its
address and facsimile number set forth on the signature page below or to
such other address and/or facsimile number as such party may designate
by notice given in accordance herewith. Such notices or consents shall
be deemed duly delivered upon the date earlier of (i) two (2) Business
Days after having been deposited in the United States mail as
hereinbefore set forth, or (ii) upon sender's production of electronic
confirmation of transmission by telefacsimile. As used herein, the term
"Business Day" means each day of the week other than Saturdays, Sundays
or federal legal holidays.
E. Arbitration
___________
1) When Arbitration Required. All disputes and differences between
the parties, other than those seeking injunctive relief or a
restraining order under this Agreement must be decided by
arbitration, in accordance with the rules of arbitration of the
NASD, regardless of the insolvency of either party, unless the
conservator, receiver, liquidator or statutory successor is
specifically exempted from an arbitration proceeding by Applicable
Laws.
2) Initiation of Arbitration. Either party may initiate arbitration
by providing written notification to the other party ("Arbitration
Demand"). Such Arbitration Demand shall set forth (a) a brief
statement of the issue(s), and (b) the failure of the parties to
reach agreement.
3) Arbitration Panel. The arbitration panel shall consist of three
(3) arbitrators. The arbitrators must be impartial and must be or
must have been officers of life insurance and/or securities
companies other than the parties or their affiliates.
MLIDC Retail Sales Agreement Page 30 of 36
4) Selection of Arbitrators. Each party shall select an arbitrator
within thirty (30) days from the date of the Arbitration Demand.
If either party shall refuse or fail to appoint an arbitrator
within the time allowed, the party that has timely appointed an
arbitrator may notify the other party that, if it has not
appointed its arbitrator within the following ten (10) days, an
arbitrator shall be appointed on its behalf. The two
(2) arbitrators shall select the third arbitrator within thirty
(30) days of the appointment of the second arbitrator. If the two
(2) arbitrators fail to agree on the selection of the third
arbitrator within the time allowed, each arbitrator shall submit
to the other a list of three (3) candidates. Each arbitrator shall
select one name from the list submitted by the other and the third
arbitrator shall be selected from the two (2) names chosen by
drawing lots.
5) Procedure. The arbitrators shall interpret this Agreement as an
honorable engagement rather than merely as a legal obligation and
shall consider practical business and equitable principles as well
as industry custom and practice regarding the applicable insurance
and securities business. The arbitrators are released from
judicial formalities and shall not be bound by strict rules of
procedure and evidence.
6) Rules: Place for Meetings: Majority Vote. To the extent permitted
under the NASD rules of arbitration, the arbitrators shall
determine all arbitration schedules and procedural rules.
Organizational and other meetings will be held in Newport Beach,
California, unless the arbitrators select another location. The
arbitrators shall decide all matters by majority vote.
7) Decision Final. The decisions of the arbitrators shall be final
and binding on both parties. The arbitrators may, at their
discretion, award costs and expenses, as they deem appropriate,
including but not limited to legal fees and interest. The
arbitrators may not award exemplary or punitive damages. Judgment
may be entered upon the final decision of the arbitrators in any
court of competent jurisdiction.
8) Fees and Expenses. Unless the arbitrators shall provide otherwise,
each party shall be responsible for (a) all fees and expenses of
its respective counsel, accountants, actuaries and any other
representatives in connection with the arbitration and
(b) one-half (1/2) of the expenses of the arbitration, including
the fees and expenses of the arbitrators.
MLIDC Retail Sales Agreement Page 31 of 36
F. Governing Law: Venue: Jurisdiction
__________________________________
This Agreement shall be governed by and construed in accordance with
the laws of the State of California without regard to California choice
of law provisions.
G. Entire Understanding
____________________
This Agreement and the Exhibits and Schedules referenced and
incorporated herein constitute the complete understanding of the parties
and supersede in their entirety any and all prior agreements among the
parties with respect to the subject matter discussed herein. No oral
agreements or representations shall be binding.
H. No Third party Beneficiaries
____________________________
Company's and Broker's respective Affiliates shall each be third
party beneficiaries of this Agreement, entitled to enforce the
provisions hereof as if they were parties to this Agreement. Except as
otherwise provided in the preceding sentence, nothing in the Agreement
shall convey any rights upon any person or entity who or which is not a
party to this Agreement.
I. Non-exclusivity
_______________
Broker, on its behalf and on behalf of each Agency, agrees that no
territory or product is assigned exclusively hereunder and that Company
and its Affiliates reserve the right in their discretion to enter into
selling agreements with other broker-dealers, and to contract with or
establish one or more insurance agencies in any jurisdiction in which
Broker transacts business hereunder. Broker's relationship with Company
is non-exclusive, and Broker is free to sell or solicit insurance and
other products issued or sold by other companies.
J. No Hire
_______
For purposes of this Sub-section J only, the term "agent" shall
include all appointed agents and Representatives. The parties to this
Agreement acknowledge that each may have access to the names and
identities of agents of each party as a result of performing their
respective obligations under this Agreement, and that each may establish
close working relationships with such persons. Therefore, Broker for
itself and for each Agency on the one hand (for purposes of this
Sub-section J, "Selling Group"), and Company on the other hand, agree
that while an agent maintains his/her affiliation with each and for
twelve (12) months after such agent's termination of the affiliation for
any reason:
MLIDC Retail Sales Agreement Page 32 of 36
1) Selling Group shall not in any way, directly or indirectly,
for its own behalf or on behalf of any other person or entity,
solicit, entice, hire, employ or endeavor to employ or
associate with for business purposes any agent of Company. In
addition Selling Group acknowledges that Company's agents hold
important contractual and business relationships with Company
and Selling Group shall not (a) interfere in any way with the
relationships, contractual or otherwise, between Company and
Company's agents, or (b) induce or encourage, or attempt to
induce or encourage, any agent of Company to terminate or
change his/her relationship with Company.
2) Company shall not in any way, directly or indirectly, for its
own behalf or on behalf of any other person or entity,
solicit, entice, hire, employ or endeavor to employ or
associate with for business purposes any agent of Selling
Group. In addition Company acknowledges that Selling Group's
agents hold important contractual and business relationships
with Selling Group and Company shall not (a) interfere in any
way with the relationships, contractual or otherwise, between
Selling Group and Selling Group's agents, or (b) induce or
encourage, or attempt to induce or encourage, any agent of
Selling Group to terminate or change his/her relationship with
Selling Group.
K. Waiver
______
The failure of either party to strictly enforce any provision of this
Agreement shall not operate as a waiver of such provision or release
either party from its obligation to perform strictly in accordance with
such provision or any other provision of this Agreement.
L. Counterparts: Facsimile Signatures
__________________________________
This Agreement maybe executed in counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute one and the same
instrument. A signature transmitted by facsimile machine or telecopier
shall be deemed to be an original signature hereunder.
M. Severability
____________
If any provision of this Agreement is declared null, void or
unenforceable in whole or in part by any court, arbitrator or
governmental agency, said provision shall survive to the extent it is
not so declared and all the other provisions of the Agreement shall
remain in full force and effect unless, in
MLIDC Retail Sales Agreement Page 33 of 36
each case, such declaration shall serve to deprive any of the parties
hereto of the fundamental benefits of this Agreement.
N. Headings
________
The various section headings used in this Agreement are for
convenience of reference only and are in no way intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement
or any of its provisions.
O. Further Assurances
__________________
Each of the parties shall from time to time at the reasonable request
of the other party and without further cost or expense to such other
party, execute and deliver or cause to be executed and delivered such
other instruments and take such other related action, as may be
necessary, to more effectively consummate the terms and provisions of
this Agreement.
P. Construction
____________
Whenever the singular number is used in this Agreement and when
required by the context, the same shall include plural and vice versa,
and the masculine gender shall include the feminine and neuter genders
and vice versa.
Q. Recitals
________
The Recitals set forth in this Agreement are hereby deemed to be
material provisions of this Agreement and are hereby incorporated into
and made a part of this Agreement.
R. Representation by Counsel
_________________________
All parties hereto have been represented or have had the opportunity
to be represented by counsel in connection with the negotiation and
preparation of this Agreement. Therefore, this Agreement shall be
construed without regard to any presumption against the party drafting
the same.
MLIDC Retail Sales Agreement Page 34 of 36
S. Trademarks
__________
Neither party may use the other party's trademarks, service marks,
trade names, logos, or other commercial or product designations
(collectively, "Marks") for any purpose whatsoever without the prior
written consent of the other party.
1) Permission not Implied. Nothing in this Agreement shall be
construed as prior written consent to permit (i) any party to
use the Marks of the other party, or (ii) any other individual
or entity to use the Marks of any party.
2) UFS. Nothing contained in this Agreement shall be construed as
conferring upon Broker or Representatives any right to use or
refer to in advertising, publicity, promotion, marketing or
other activities, any Marks, or any other designation or
likeness of any of the Peanuts@ characters or any other
character licensed by United Feature Syndicate (including any
contraction, abbreviation or simulation of any kind of the
foregoing) without prior express permission from United
Feature Syndicate, which Broker and Representatives must
obtain through Company.
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MLIDC Retail Sales Agreement Page 35 of 36
In reliance on the representations set forth and in consideration of the
undertakings described, the parties represented below do hereby contract and
agree.
"COMPANY"
METLIFE INVESTORS DISTRIBUTION
COMPANY
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Date 1/5/05
Address:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
____________________
Newport Beach.
_____________
▇▇ ▇▇▇▇▇
________
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
"BROKER"
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. L.P.
__________________________
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇. Principal
_____________________________
Print Name & Title
Date
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
___________________
3rd Floor
_________
▇▇. ▇▇▇▇▇. ▇▇ ▇▇▇▇▇
___________________
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
MLIDC Retail Sales Agreement Page 36 of 36