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METLIFE INVESTORS DISTRIBUTION COMPANY
RETAIL SALES AGREEMENT
TABLE OF CONTENTS
I. DEFINITIONS 2
II. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS 4
A. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF COMPANY 4
B. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF BROKER 7
III. PRINCIPLES OF ETHICAL MARKET CONDUCT 15
IV. COMPLIANCE WITH APPLICABLE LAWS 15
V. COMPENSATION 17
VI. COMPLAINTS AND INVESTIGATIONS 19
VII. RECORDS AND ADMINISTRATION 20
VIII.PRIVACY INFORMATION 21
A. PROPRIETARY INFORMATION 21
B. RECEIPT OF CUSTOMER NONPUBLIC PERSONAL INFORMATION BY COMPANY 22
FROM BROKER
C. TREATMENT OF NONPUBLIC PERSONAL INFORMATION DISCLOSED BY COMPANY 22
D. CONFIDENTIAL INFORMATION 23
E. PROTECTED HEALTH INFORMATION 24
IX. INDEMNIFICATION 25
X. GENERAL PROVISIONS 29
A. TERM AND TERMINATION 29
B. ASSIGNABILITY 29
C. AMENDMENTS 30
D. NOTICES 30
E. ARBITRATION 32
F. GOVERNING LAW; VENUE; JURISDICTION 32
G. ENTIRE UNDERSTANDING 32
H. NO THIRD PARTY BENEFICIARIES 32
I. NON-EXCLUSIVITY 32
J. NO HIRE 32
K. WAIVER 33
L. COUNTERPARTS; FACSIMILE SIGNATURES ▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇. ▇▇▇▇▇▇▇▇ 34
O. FURTHER ASSURANCES 34
P. CONSTRUCTION 34
Q. RECITALS 34
R. REPRESENTATION BY COUNSEL 34
S. TRADEMARKS 35
T. LONG TERM CARE CONTRACTS 35
MLIDC Retail Sales Agreement 7-1-05 (LTC)
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 _________, 20__
("EFFECTIVE DATE") BY AND AMONG METLIFE INVESTORS DISTRIBUTION COMPANY, A
MISSOURI CORPORATION (THE "COMPANY") AND (BDNAME), (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 7-1-05 (LTC)
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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 VIII(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.
HIPAA - 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
MLIDC Retail Sales Agreement 7-1-05 (LTC)
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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; 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 MAY OR 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.
MLIDC Retail Sales Agreement 7-1-05 (LTC)
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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.
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;
MLIDC Retail Sales Agreement 7-1-05 (LTC)
Page 5 Of 36
g) PREPARE ALL POLICY FORMS AND AMENDMENTS;
h) MAINTAIN CUSTODY OF, RESPONSIBILITY FOR AND CONTROL OF ALL
INVESTMENTS; AND
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 7-1-05 (LTC)
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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, 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 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.
MLIDC Retail Sales Agreement 7-1-05 (LTC)
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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. Broker shall ensure that all
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.
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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 shall supervise Representatives' strict
compliance with applicable laws, rules and regulations
of any governmental 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 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).
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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 fulfill any training requirements
necessary to be licensed or otherwise qualified to sell the
Contracts.
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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.
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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. 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.
MLIDC Retail Sales Agreement 7-1-05 (LTC)
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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 7-1-05 (LTC)
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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 7-1-05 (LTC)
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 7-1-05 (LTC)
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 III 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 7-1-05 (LTC)
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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 first 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.
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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 7-1-05 (LTC)
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 rules 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 rules 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 7-1-05 (LTC)
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 confirmed 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 7-1-05 (LTC)
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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 7-1-05 (LTC)
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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.
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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 7-1-05 (LTC)
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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 7-1-05 (LTC)
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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 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 the control
of Company. Company shall further reimburse Broker for any
legal fees or other
MLIDC Retail Sales Agreement 7-1-05 (LTC)
Page 25 of 36
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
connection with investigating, defending, being witness in or
participating in (including an appeal)
MLIDC Retail Sales Agreement 7-1-05 (LTC)
Page 26 of 36
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
or 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 defense thereof, Indemnitor
shall not be liable to Indemnitee under this Agreement for any legal
or
MLIDC Retail Sales Agreement 7-1-05 (LTC)
Page 27 of 36
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 7-1-05 (LTC)
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 II(B)(19), 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 7-1-05 (LTC)
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 7-1-05 (LTC)
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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 7-1-05 (LTC)
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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 7-1-05 (LTC)
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 may be 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 each case, such
declaration shall serve to deprive any of the parties hereto of the
fundamental benefits of this Agreement.
MLIDC Retail Sales Agreement 7-1-05 (LTC)
Page 33 of 36
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 7-1-05 (LTC)
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(R) 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.
T. LONG TERM CARE
Notwithstanding anything contained in the Agreement to the
contrary, the following shall apply to Contracts that are long term
care insurance products (LTC products):
1) Broker agrees to deliver LTC products to purchasers no later
than 30 days after the policy is approved by the issuer.
2) Broker agrees that it will not, nor will it permit its
subagents to, solicit the sale of other products based solely
upon a customer's purchase of an LTC product.
3) LTC products shall not be deemed to be covered by the
provisions of Rewritten Business Rules described in Exhibit C
of the Agreement.
MLIDC Retail Sales Agreement 7-1-05 (LTC)
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 _____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - Executive Vice
President
Date _____________________________
Address:
▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
"BROKER"
(BDNAME)
__________________________________
By ____________________________
__________________________________
Print Name & Title
Date ____________________________
Address:
(Address1)
(Address2)
(City), (State) (PostalCode)
Fax #:(Fax)
MLIDC Retail Sales Agreement 7-1-05 (LTC)
Page 36 of 36
EXHIBIT A
SCHEDULE OF VARIABLE PRODUCT AND COMPENSATION
[TO BE INSERTED]
MLIDC Retail Sales
Ex. A - Page 1 of 1
EXHIBIT B
SCHEDULE OF FIXED PRODUCT AND COMPENSATION
[TO BE INSERTED]
MLIDC Retail Sales
Ex. B - Page 1 of 1
EXHIBIT D
ASSOCIATED INSURANCE AGENCY
The Broker/Dealer named below ("Broker"), having executed a Sales
Agreement (the "Agreement") by and between Broker, and MetLife Investors
Distribution Company and MetLife General Insurance Agency, Inc. (collectively
"Company") dated____that, among other things, provides for sales of Company's or
its Affiliates' Variable Contracts through a designated associated insurance
agency or agencies, hereby designates the associated insurance agency (the
"Associated Insurance Agency") named below as its Agency (as that term is
defined in the Agreement) pursuant to Section II(B) thereof. By signing this
Exhibit D, each of Broker and the Associated Insurance Agency hereby represents
and warrants that the Associated Insurance Agency is and will remain qualified
to serve as an Agency in accordance with the terms of the Agreement. The
Associated Insurance Agency hereby acknowledges that it has received a copy of
the Agreement, that it has reviewed the Agreement and understands all of its
terms, covenants and agreements, that it has had the opportunity to consult with
counsel of choice relative thereto and that it agrees to be bound by and subject
to the terms of the Agreement.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION THAT MAY BE
ENFORCED BY THE PARTIES
(BDNAME)
Broker/Dealer
By: __________________________
________________________________
Print Name & Title
________________________________
(Tax Identification Number)
(GANAME) (GANAMEII)
Associated Insurance Agency Name Associated Insurance Agency Name
By: _________________________ By: ____________________________
_______________________________ __________________________________
Print Name & Title Print Name & Title
_______________________________ __________________________________
(Tax Identification Number) (Tax Identification Number)
MLIDC Retail Sales
Ex. D - Page 1 of 1
