Exhibit 3(b)
[Capital Brokerage Corporation Logo]
000 Xxxxxxx Xxxxxx
Post Office Box 5005
Norwalk, Connecticut 06856-5005
BROKER-DEALER SALES AGREEMENT
Name of Broker-Dealer: Address of Broker-Dealer:
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This Agreement is made this ____ day of __________, 2000 by and between Capital
Brokerage Corporation, a Washington corporation with its principal office as
listed above ("Capital Brokerage"), and ____________________,
a____________________ corporation with its principal office as listed above
("Broker-Dealer").
In consideration of the mutual benefits to be derived and intending to be
legally bound the parties hereby agree to the following terms and conditions:
SECTION I - DEFINITIONS
1.1 GE Life and Annuity Company ("GE Life & Annuity"), a Virginia
corporation, and GE Capital Life Assurance Company of New York ("GE
Capital Life") a New York corporation, which have developed certain
variable life insurance policies, variable annuity contracts and
registered modified guaranteed annuity contracts (listed in Schedule A,
which is attached hereto and made part of this Agreement) registered
with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933 (the "1933 Act").
1.2 Capital Brokerage is a Broker-Dealer registered as such under the
Securities Exchange Act of 1934 (the "1934 Act") and a member of the
National Association of Securities Dealers, Inc. ("NASD"). GE Life &
Annuity and GE Capital Life have appointed Capital Brokerage as
principal underwriter for the Policies and Annuities.
1.3 Broker-Dealer is registered as a Broker-Dealer under the 1934 Act, is a
member of the NASD and properly licensed and appointed to promote,
offer and sell the Policies and Annuities.
1.4 Registered Representatives are NASD registered individuals either
employed by or associated with the Broker-Dealer, or duly licensed
through an affiliated company of Broker-Dealer, and whom Broker-Dealer
wishes to have appointed by GE Life & Annuity and/or GE Capital Life to
sell Policies and Annuities ("Registered Representatives").
2. REPRESENTATIONS AND WARRANTIES OF CAPITAL BROKERAGE
2.1 Capital Brokerage represents and warrants that:
a. it has full power and authority to enter into this Agreement
and that it has all appropriate licenses to carry on its
business and to market the Policies and the Annuities;
b. the 1933 Act Registration Statements pertaining to the
Policies and the Annuities filed with the SEC have been
declared effective;
c. the 1933 Act Registration Statements pertaining to the
Policies and the Annuities comply or will comply in all
material respects with the provisions of the 1933 Act, the
1934 Act, the Investment Company Act of 1940 (the "1940 Act")
and the rules and regulations of the SEC; and
d. the 1933 Act Registration Statements do not contain an untrue
statement of a material fact or fail to state a material fact
required to be stated.
2.2 Section 2.1c. shall not apply to statements made in or omissions from
Registration Statements and any related materials, which statements or
omissions were made in reliance upon written statements furnished by
Broker-Dealer.
2.3 Capital Brokerage represents and warrants that it, or an affiliate of
Capital Brokerage, will use its best efforts to obtain insurance
licenses and appointments to allow Registered Representatives to sell
the Policies or the Annuities provided Broker-Dealer cooperates in
obtaining such licenses.
3. REPRESENTATIONS OF BROKER-DEALER
3.1 Broker-Dealer represents and warrants that it has full power and
authority to enter into this Agreement and that it has all appropriate
licenses and or registrations to carry on its business and to market
the Policies and the Annuities directly or through another subsidiary
or affiliate that is properly licensed to sell insurance products.
3.2 Broker-Dealer represents and warrants that it is registered as a
Broker-Dealer under the 1934 Act, is a member in good standing of the
NASD, is bonded as required by all applicable laws and regulations, and
that it, or a subsidiary or affiliate, has all insurance licenses
required by the states in which the Broker-Dealer intends to market the
Policies and the Annuities.
3.3 Broker-Dealer represents and warrants that all individuals recommended
for licensing and appointment to sell the Policies and Annuities will
be Registered Representatives who are appropriately registered with the
NASD and who possess or can obtain all required insurance licenses.
3.4 Broker-Dealer further represents and warrants that:
a. it made or will make a thorough and diligent inquiry and
investigation relative to each Registered Representative it
seeks to have appointed to sell the Policies and Annuities
including an investigation of the Registered Representative's
identity and business reputation;
b. all Registered Representatives are or will be personally
known to Broker-Dealer, are of good moral character, reliable,
financially responsible and worthy of an insurance license;
c. all examinations, training, and continuing educational
requirements have been or will be met for the NASD and the
specific state(s) in which Registered Representative is
requesting an insurance license;
d. if Registered Representative is required to submit to GE Life
& Annuity and/or GE Capital Life a picture or a signature in
conjunction with an application for an insurance license, that
any such items forwarded to GE Life & Annuity and/or GE
Capital Life will be those of Registered Representative and
any evidence of a securities registration forwarded to GE Life
& Annuity and/or GE Capital Life will be a true copy of the
original;
e. no Registered Representatives will apply for insurance
licenses with GE Life & Annuity and/or GE Capital Life in
order to place insurance on their life or property, the lives
or property of their relatives, or property or lives of their
associates;
f. each Registered Representative will receive close and adequate
supervision consistent with the requirements of the NASD, and
Broker-Dealer will review, when necessary, any Policies or
Annuities written by Registered Representative;
g. Broker-Dealer will be responsible for all acts and omissions
of its Registered Representatives within the scope of their
appointment with GE Life & Annuity and/or GE Capital Life or
as Registered Representatives;
h. Broker-Dealer will not permit its Registered Representatives
to act as insurance agents until properly trained (including
training in the Policies and Annuities), licensed and
appointed nor will Broker-Dealer pay compensation to any
Registered Representative not properly licensed and appointed
to sell the Policies and Annuities;
i. Broker-Dealer will immediately notify Capital Brokerage and GE
Life & Annuity and/or GE Capital Life of any change in the
NASD registration or insurance licensing status of any
Registered Representative and will maintain a list of all
Registered Representatives authorized to sell the Policies or
the Annuities;
j. Broker-Dealer agrees to indemnify, defend and hold GE Life &
Annuity, GE Capital Life, and Capital Brokerage harmless
against any losses, claims, damages, liabilities or expenses,
including reasonable attorneys fees, to which Capital
Brokerage, GE Life & Annuity, or GE Capital Life may be liable
to the extent that the losses, claims, damages, liabilities or
expenses, including reasonable attorneys fees, arise out of
allegations that Broker-Dealer did not have the right or
authority to make discretionary purchases or to make or change
a client's asset allocation; and
k. Broker-Dealer, in the conduct of its business selling Policies
and the Annuities, shall observe high standards of commercial
honor and just and equitable principles of trade consistent
with the Conduct Rules of the NASD.
4. SALE OF POLICIES AND ANNUITIES
4.1 Soliciting Applications.
a. Broker-Dealer is hereby authorized by Capital Brokerage to
solicit applications for the purchase of Policies and
Annuities through its Registered Representatives in states
where the Broker-Dealer and its Registered Representatives are
appropriately licensed and appointed. This authorization is
non-exclusive and is limited to the states in which Policies
and Annuities have been approved for sale.
b. Broker-Dealer shall have no authority on behalf of Capital
Brokerage, GE Life & Annuity, or GE Capital Life to:
(1) make, alter or discharge any contract;
(2) waive or modify any terms, conditions or limitations
of any Policy or Annuity;
(3) extend the time for payment of any premiums, bind GE
Life & Annuity or GE Capital Life to the
reinstatement of any terminated Policy, or accept
notes for payment of premiums;
(4) adjust or settle any claim or commit GE Life &
Annuity or GE Capital Life with respect thereto;
(5) incur any indebtedness or liability, or expend or
contract for the expenditure of funds; or
(6) enter into legal proceedings in connection with any
matter pertaining to Capital Brokerage's, GE Life &
Annuity's, or GE Capital Life's business without the
prior consent of Capital Brokerage, GE Life &
Annuity, or GE Capital Life, unless Broker-Dealer is
named as a party to the proceedings.
c. Broker-Dealer acknowledges that only applications bearing the
signature of a Registered Representative who is on the list of
properly licensed Registered Representatives provided by
Broker-Dealer, according to this Agreement, will be processed
by GE Life & Annuity or GE Capital Life.
4.2 Suitability.
a. Capital Brokerage wishes to ensure that the Policies and
Annuities solicited by Broker-Dealer through Registered
Representatives will be issued to persons for whom they will
be suitable.
b. Broker-Dealer shall take reasonable steps to ensure that none
of its Registered Representatives makes recommendations to any
applicant to purchase a Policy or Annuity in the absence of
reasonable grounds to believe that the purchase is suitable
for the applicant under the NASD Conduct Rules regarding
Recommendations to Customers.
c. A determination of suitability for the purchase of a Policy or
Annuity shall include, but not be limited to, a reasonable
inquiry of each applicant concerning the applicant's financial
status, tax status, and insurance and investment objectives
and needs.
4.3 Delivery of Prospectus(es) by Broker-Dealer.
a. The current Prospectus(es), the Statement(s) of Additional
Information where required by law, and all Supplements
relating to the Policies and the Annuities shall be delivered
by Broker-Dealer to every applicant seeking to purchase a
Policy or Annuity prior to the completion of an application.
b. Broker-Dealer shall not give any information or make any
representations concerning the Policies or the Annuities, GE
Life & Annuity, GE Capital Life, or Capital Brokerage unless
the information or representations are contained in the
current Prospectus(es) or are contained in sales literature or
advertisements approved in writing by the NASD, GE Life &
Annuity and/or GE Capital Life, and Capital Brokerage.
4.4 Issuance of Policies or Annuities.
a. GE Life & Annuity or GE Capital Life, at their sole
discretion, will determine whether to issue a Policy or an
Annuity.
b. Once a Policy or Annuity has been issued:
(1) GE Life & Annuity or GE Capital Life will mail it
promptly, accompanied by any required notice of
withdrawal rights and any additional required
documents to the individual or entity designated by
the Broker-Dealer;
(2) GE Life & Annuity or GE Capital Life will confirm to
the owner, with a copy to Broker-Dealer, the
allocation of the initial premium under the Policy or
the Annuity; and
(3) GE Life & Annuity or GE Capital Life will also notify
the owner of the name of the Broker-Dealer through
whom the Policy or the Annuity was solicited.
4.5 GE Life & Annuity or GE Capital Life will administer all Policies and
Annuities issued according to the terms and conditions set forth in the
Policy or Annuity.
4.6 GE Life & Annuity or GE Capital Life, at its own expense, will furnish
to Broker-Dealer, in reasonably sufficient quantities, the following
materials:
a. The current Prospectus(es) for the Policies and Annuities and
any underlying mutual funds;
b. Any Prospectus Supplement for the Policies and Annuities and
any underlying mutual funds, including any Statement(s) of
Additional Information if requested by client or required by
law;
c. Advertising materials and sales literature approved for use
by GE Life & Annuity and/or GE Capital Life; and
d. Applications for Policies and Annuities.
4.7 Money due GE Life & Annuity, GE Capital Life or Capital Brokerage.
a. All money payable in connection with the Policies or the
Annuities whether as premium or otherwise is the property of
the appropriate insurer, either GE Life & Annuity or GE
Capital Life.
b. Money due GE Life & Annuity or GE Capital Life and received by
the Broker-Dealer under this Agreement shall be held in a
fiduciary capacity and shall be transmitted immediately to
either GE Life & Annuity or GE Capital Life in accordance with
the administrative procedures of GE Life & Annuity or GE
Capital Life.
c. Unless express prior written consent to the contrary is given
to Broker-Dealer by either GE Life & Annuity or GE Capital
Life, money due GE Life & Annuity or GE Capital Life shall be
forwarded without any deduction or offset for any reason,
including by example, but not limitation, any deduction or
offset for compensation claimed by Broker-Dealer.
d. Unless express prior written consent to the contrary is given
to Broker-Dealer by GE Life & Annuity or GE Capital Life,
checks or money orders in payment for Policies or Annuities,
shall be drawn to the order of "GE Life and Annuity Assurance
Company" or "GE Capital Life Assurance Company of New York".
e. Checks drawn by or money orders purchased by the Registered
Representative will not be accepted by GE Life & Annuity, GE
Capital Life, or Capital Brokerage.
5. INDEMNIFICATION
5.1 Capital Brokerage agrees to indemnify and hold harmless Broker-Dealer
against any losses, claims, damages, liabilities or expenses, including
reasonable attorneys fees, to which Broker-Dealer and any affiliate,
parent, officer, director, employee or agent may be liable to the
extent that the losses, claims, damages, liabilities or expenses,
including reasonable attorneys fees, arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact or
omission or alleged omission of material fact contained in the 1933 Act
Registration Statement covering the Policies or the Annuities or in the
Prospectuses for the Policies or the Annuities or in any written
information or sales materials authorized and furnished to
Broker-Dealer by Capital Brokerage, GE Life & Annuity, or GE Capital
Life.
5.2 Capital Brokerage will not be liable to the extent that such loss,
claim, damage, liability or expense, including reasonable attorneys'
fees, arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon
information provided by Broker-Dealer and/or any affiliate, parent,
officer, director, employee or agent, including, without limitation,
negative responses to inquiries furnished to Capital Brokerage, GE Life
& Annuity, or GE Capital Life by or on behalf of Broker-Dealer,
specifically for use in the preparation of the 1933 Act Registration
Statement covering the Policies or the Annuities or in any related
Prospectuses.
5.3 Broker-Dealer agrees to indemnify and hold harmless Capital Brokerage,
GE Life & Annuity, and GE Capital Life, against any losses, claims,
damages, liabilities or expenses, including reasonable attorney's fees,
to which Capital Brokerage, GE Life & Annuity, GE Capital Life, and any
affiliate, parent, officer, director, employee or agent may be liable
to the extent that the losses, claims, damages, liabilities or
expenses, including reasonable attorneys fees, arise out of or are
based upon:
a. Any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission of a material contained
in the Registration Statement covering the Policies or the
Annuities or related Prospectuses but only to the extent, that
such untrue statement or alleged untrue statement or omission
or alleged omission is made in reliance upon information,
including, without limitation, negative responses to
inquiries, furnished to Capital Brokerage, GE Life & Annuity,
or GE Capital Life by or on behalf of Broker-Dealer
specifically for use in the preparation of the 1933 Act
Registration Statement covering the Policies or the Annuities
or in any related Prospectuses;
b. Any unauthorized use of advertising materials or sales
literature or any verbal or written misrepresentations or any
unlawful sales practices concerning the Policies or the
Annuities by Broker-Dealer, its Registered Representatives
or its affiliates; and
c. Claims by Registered Representatives or employees of
Broker-Dealer for commissions or other compensation or
remuneration of any type.
5.4 The party seeking indemnification agrees to notify the indemnifying
party within a reasonable time of receipt of a claim or demand. In the
case of a lawsuit, the party seeking indemnification must notify the
indemnifying party within ten (10) calendar days of receipt of written
notification that a lawsuit has been filed.
5.5 Broker-Dealer agrees that GE Life & Annuity, GE Capital Life or Capital
Brokerage may negotiate, settle and or pay any claim or demand against
them which arises from:
a. any wrongful act or transaction of Broker-Dealer or its
Registered Representatives. Wrongful act or transaction
includes, but is not limited to, fraud, misrepresentation,
deceptive practices, negligence, errors or omissions;
b. the breach of any provision of this Agreement; or
c. the violation or alleged violation of any insurance or
securities laws.
Upon sufficient proof that the claim or demand arose from the
occurrences listed above, Capital Brokerage, GE Life & Annuity, or GE
Capital Life may request reimbursement for any amount paid plus any
reasonable expenses incurred in investigating, defending against and/or
settling the claim or demand.
5.6 Broker-Dealer shall immediately notify Capital Brokerage, and the
appropriate insurer, either GE Life & Annuity or GE Capital Life, in
writing of any complaint or grievance relating to the Policies or the
Annuities, including, but not limited to any complaint or grievance
arising out of or based on advertising or sales literature approved by
GE Life & Annuity or GE Capital Life or the marketing or sale of the
Policies or Annuities.
5.7 Broker-Dealer shall promptly furnish all relative, non-privileged
written materials requested by Capital Brokerage, GE Life & Annuity or
GE Capital Life in connection with the investigation of any such
complaint and will provide reasonable cooperation in the investigation.
GE Life & Annuity, GE Capital Life or Capital Brokerage will notify in
a timely manner the Broker-Dealer of any complaint.
5.8 Broker-Dealer shall immediately notify Capital Brokerage and the
appropriate insurer, either GE Life & Annuity or GE Capital Life, in
writing of any state, federal, or self regulatory organization
investigation or examination regarding the marketing and sales
practices relating to the Policies or Annuities or any pending or
threatened litigation regarding the marketing and sales practices
relating to the Policies or Annuities.
6. TERMINATION
6.1 This Agreement may be terminated by either Capital Brokerage or
Broker-Dealer at any time, for any reason, upon thirty (30) calendar
days advance written notice delivered to the other party under the
terms of Section 10.10 of this Agreement. Unless terminated as provided
in Section 6.2(s) or (c) below, Capital Brokerage will continue to
provide contract information to the Broker-Dealer and/or its insurance
affiliate on all contracts issued under this agreement unless a change
of dealer has been requested by the owner.
6.2 This Agreement will terminate immediately:
a. If the Broker-Dealer is dissolved, liquidated, or otherwise
ceases business operations;
b. If the Broker-Dealer fails, in Capital Brokerage's sole
judgment, to comply with any of its material obligations
under this Agreement;
c. If the Broker-Dealer ceases to be registered under the 1934
Act or a member in good standing of the NASD; or
d. In the event one party assigns or transfers its rights or
liabilities under this Agreement to any third party without
the prior written consent of the other party.
6.3 The following provisions of the Agreement shall survive termination:
a. Section One - Definitions
b. Section Two - Representations
c. Section Five - Indemnification
d. Section Nine - Recordkeeping
e. Section Ten - General Provisions, Sub-Section 10 - Notices
7. COMPENSATION
7.1 Unless otherwise expressly agreed to in writing by the parties, no
compensation shall be payable to Broker-Dealer for its services under
this Agreement. All compensation payable with respect to sales of the
Policies and the Annuities by Broker-Dealer shall be paid in accordance
with the terms of the General Agent Agreement in effect between GE Life
& Annuity and/or GE Capital Life and Broker-Dealer, or a duly licensed
subsidiary or affiliate thereof.
8. ADVERTISEMENTS
8.1 Broker-Dealer shall not use any advertisements or sales literature for
the Policies or the Annuities or any advertisements or sales literature
referencing GE Life & Annuity, GE Capital Life or Capital Brokerage
without prior written approval of GE Life & Annuity, GE Capital Life or
Capital Brokerage. This includes brochures, letters, illustrations,
training materials, materials prepared for oral presentations and all
other similar materials.
9. RECORDKEEPING
9.1 Each party agrees to keep all records required by federal and state
laws, to maintain its books, accounts, and records so as to clearly and
accurately disclose the precise nature and details of transactions, and
to assist one another in the timely preparation of records.
9.2 Each party grants to the other and/or its representatives the right and
power at reasonable times to inspect, check, make extracts from, and
audit each of its books, accounts and records as they relate to this
Agreement, including, but not limited to advertisements and sales
materials, for the purpose of verifying adherence to each of the
provisions of this Agreement.
10. GENERAL PROVISIONS
10.1 Effective. This Agreement shall be effective upon execution by both
parties and will remain in effect unless terminated as provided in
Section Six.
10.2 Assignment. This Agreement may not be assigned or transferred to any
third party by either Capital Brokerage or Broker-Dealer without the
other party's prior written consent.
10.3 Governing Law. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Virginia.
10.4 Severability. If any provision of this Agreement shall be held or
rendered invalid by a court decision, state or federal statute,
administrative rule or otherwise, the remainder of this Agreement shall
not be rendered invalid.
10.5 Complete Agreement. The parties declare that, other than the General
Agent's Agreement between Broker-Dealer (or its affiliated insurance
agency) and GE Life & Annuity and/or GE Capital Life (or its affiliated
marketing company) there are no oral or other agreements or
understandings between them affecting this Agreement or relating to the
offer or sale of the Policies or the Annuities and that this
constitutes the entire Agreement between the parties.
10.6 Waiver. Forbearance by Capital Brokerage to enforce any of the terms
of this Agreement shall not constitute a waiver of such terms.
10.7 Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.8 Independent contractors. Broker-Dealer is an independent contractor.
Nothing contained in this Agreement shall create, or shall be construed
to create, the relationship of employer and employee between Capital
Brokerage and Broker-Dealer or Broker-Dealer's directors, officers,
employees, agents or Registered Representatives.
10.9 Cooperation. Each party to this Agreement shall cooperate with the
other and with all governmental authorities, including, without
limitation, the SEC, the NASD and any state insurance or securities
regulators, and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated under this
Agreement.
10.10 Notices. All notices, requests, demands and other communications which
must be provided under this Agreement shall be in writing and shall be
deemed to have been given on the date of service if served personally
on the party to whom notice is to be given or on the date of mailing if
sent by United States registered or certified mail, postage prepaid.
Notices should be sent to the parties at the addresses first listed in
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
representatives.
CAPITAL BROKERAGE CORPORATION
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(Signature) (Signature)
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(Name) (Name)
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(Title) (Title)
Date: ________________________ Date: ______________________________
SCHEDULE A
to
BROKER-DEALER SALES AGREEMENT
VARIABLE LIFE INSURANCE POLICIES, VARIABLE ANNUITY CONTRACTS and REGISTERED
MODIFIED GUARANTEED ANNUITY CONTRACTS: See Compensation Schedule(s) attached to
General Agent or Agency Sales Agreement.
