COMMONWEALTH ANNUITY AND LIFE INSURANCE COMPANY
("COMMONWEALTH ANNUITY" OR "THE COMPANY")
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Selling Agreement
THIS AGREEMENT ("Agreement") is made by and between [__] Principal
underwriter/distributor of variable products issued by the Company and
Broker-Dealer.
RECITALS:
A. [__], pursuant to the provisions of Distribution Agreements ("Distribution
Agreements") between it and the Company, acts as the principal underwriter of
certain variable annuity contracts and variable life insurance policies (the
"variable products" or "Contracts") issued by the Company. Such Contracts, and
the investment options available thereunder, are identified in Schedule 1 to
this Agreement at the time that this Agreement is executed, and such other
Contracts that may be added to Schedule 1 from time to time in accordance with
Section 1.5 of this Agreement. [__] desires that Broker-Dealer distribute such
variable products in those states or jurisdictions in which Broker-Dealer, [__],
the Company and the Contracts are appropriately licensed, qualified or approved,
and Broker-Dealer desires to sell such Contracts, through its agents in such
states or jurisdictions, on the terms and conditions set forth hereinafter. The
Company has authorized [__] to enter into separate written agreements with
broker-dealers pursuant to which such broker-dealers would be authorized to
participate in the distribution of the Contracts and would agree to use their
best efforts to solicit applications for the Contracts to the general public.
B. The parties to this Agreement desire that the Broker-Dealer be authorized to
solicit applications for the sale of the Contracts to the general public subject
to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual promises and
covenants hereinafter set forth, the parties agree as follows:
SECTION 1: REPRESENTATIONS AND WARRANTIES; AUTHORIZATIONS
1.1 Broker-Dealer agrees to use its best efforts on behalf of [__] while
performing the functions set forth herein. Broker-Dealer shall be free to
exercise its own judgment as to whom to solicit and the time, place, and manner
of solicitation. Broker-Dealer shall pay all expenses incurred by it hereunder
and shall comply with all applicable federal and state laws, ordinances and
regulations relating thereto.
1.2 Broker-Dealer is authorized, except as hereinafter specifically provided, to
cause its representatives ("Registered Representatives") to sell such Contracts
in the states and jurisdictions in which Broker-Dealer and its Registered
Representatives are appropriately licensed, registered or otherwise qualified
and in which the Contracts are duly authorized. Broker-Dealer shall not have the
authority nor shall it grant such authority to any of its Registered
Representatives, on behalf of [__] and/or the Company: to make, alter or
discharge any Contract or other contract entered into pursuant to a Contract; to
waive any Contract's forfeiture provisions; to extend the time of paying any
premiums; or to receive any monies or premiums from applicants for or purchasers
of the Contracts (except for the sole purpose of forwarding monies or premiums
to the Company). [__], in its sole discretion, may reject any application for a
Contract submitted to it by the Broker-Dealer or any of its Registered
Representatives.
1.3 [__], subject to the terms and conditions contained herein, hereby
authorizes Broker-Dealer as an independent contractor, on a non-exclusive basis,
to make sales of such Contracts for which [__] acts as distributor.
Broker-Dealer agrees to direct the sales activities of its Registered
Representatives and to enforce written supervisory procedures to assure strict
compliance with applicable rules and regulations under the Securities Exchange
Act of 1934 ("1934 Act"), the National Association of Securities Dealers, Inc.
("NASD") rules, and other applicable federal and state statutes and regulations.
1.4 Nothing herein contained shall constitute Broker-Dealer or any of its
Registered Representatives as employees of [__] or the Company in connection
with the solicitation of applications for the Contracts.
1.5 Schedule 1 to this Agreement may be amended by [__] at its sole discretion
from time to time to include other Contracts (or investment options) distributed
by [__] pursuant to the Distribution Agreements or other distribution agreements
with the Company, or to delete Contracts (or investment options) from the
Schedule. The provisions of this Agreement shall be equally applicable to each
Contract listed on Schedule 1 unless the context otherwise requires.
SECTION 2: REPRESENTATIONS AND WARRANTIES: REGISTRATION, LICENSING AND
COMPLIANCE
2.1 Broker-Dealer represents, warrants and covenants that:
a. It is and will remain at all times during the terms of this Agreement a
member in good standing of the NASD and a broker-dealer duly registered with the
Securities and Exchange Commission ("SEC") under the 1934 Act and licensed as a
broker-dealer in each state or other jurisdiction in which Broker-Dealer intends
to perform its functions and fulfill its obligations under this Agreement.
b. It is in compliance, and during the term of this Agreement, will remain in
compliance, with all applicable federal and state security laws and regulations
and the requirements of the NASD and any applicable securities exchanges of
which it is a member.
c. It is a corporation organized, existing and in good standing under applicable
state law and is qualified to do business as a corporation in those states or
jurisdictions where it is or will be doing business.
d. Only Registered Representatives of Broker-Dealer who are agents of the
Company, and who are licensed, registered, or otherwise qualified to offer and
sell the variable products, may do so under this Agreement and as permitted
under the applicable insurance laws of such state or jurisdiction under which
the Registered Representatives are authorized to perform their activities.
e. It is in compliance with all applicable insurance laws and regulations,
including without limitation state insurance laws and regulations imposing
insurance licensing requirements.
f. It shall carry out its sales and administrative obligations under this
Agreement in continued compliance with federal and state laws and regulations,
including those governing securities and/or insurance-related activities or
transactions, as applicable.
g. It has blanket bond insurance coverage. Broker-Dealer has the affirmative
duty to maintain its blanket bond insurance coverage. Broker-Dealer will notify
[__] immediately in the event a determination is made to cancel, terminate or
substantially modify its blanket bond insurance coverage.
h. It routinely performs a review of each application submitted to it for
appropriate suitability under NASD, SEC or State guidelines.
i. It agrees that its activities conducted under this Agreement, and any use or
disclosures of information, shall comply with all privacy and security
requirements of the federal Xxxxx-Xxxxx-Xxxxxx Act and other applicable federal,
state, and local privacy laws, regulations, and ordinances.
j. It understands and acknowledges that the Company and its employees are
committed to complying with the USA Patriot Act, including its anti-money
laundering rules and the regulations thereunder. It further acknowledges that it
has enacted similar policies (where applicable) and is in compliance with
applicable sections of the USA Patriot Act and the regulations thereunder.
2.2 Broker-Dealer will be responsible for the training, supervision and control
of its Registered Representatives engaged in the offer and sale of the Contracts
and will supervise strict compliance with applicable federal and state
securities laws and NASD rules. [__] shall have no responsibility in connection
with such program of supervision and compliance.
2.3 Broker-Dealer shall notify [__] immediately in writing if Broker-Dealer
fails to comply with any of the applicable provisions set forth above.
2.4 [__] represents and warrants that all Contracts are legally issued,
registered and filed as required by applicable federal securities and state
insurance laws.
SECTION 3: SALES MATERIALS
3.1 Broker-Dealer shall submit to [__], for written approval in advance of use,
all promotional sales, and advertising material and signs involving the use of
[__]'s and the Company's name and/or pertaining to the sale of any Contract.
3.2 [__] will file such materials or will cause such materials to be filed with
the SEC, the NASD, and with any state securities regulatory authorities, as
appropriate.
SECTION 4: COMPENSATION
4.1 Except as otherwise stated herein, Broker-Dealer shall be entitled to
commissions with respect to sales of such Contracts it shall make in accordance
with the Schedule of Commissions with the Company. Commissions are payable by
the Company through [__] or as otherwise permitted by law or regulations. Any
obligation of [__] to pay such commissions will occur only following receipt of
such amounts by [__] from the Company.
SECTION 5: TERM AND EXCLUSIVITY OF AGREEMENT
5.1 No relationship of principal and agent or partnership or joint venture
between the parties hereto is intended to be established and neither party shall
hold itself out as the agent, partner or joint venturer of or with the other
party in any respect whatsoever. Except for this Agreement, no other legal
relationship is intended between the parties.
5.2 This Agreement may be terminated at any time by either party upon thirty
(30) days written notice to the other, and may be terminated immediately by [__]
for cause. For purposes of this Section, "cause" shall mean failure to return
money to clients where appropriate, failure to account for any money received
from or on behalf of [__], any fraud, misrepresentation or dishonesty in any
relationship with [__], its affiliates, or any past, present or proposed client,
violation of any federal or state law or regulation, or violation of any of the
terms of this Agreement.
5.3 Notice of termination shall be deemed to be given on the day mailed or
delivered by hand to an officer of either party. If mailed to [__], such notice
shall be addressed to the principal office of [__], and if mailed to the
Broker-Dealer, shall be addressed to the last known address as shown on the
records of [__].
SECTION 6: COMPLAINTS AND INVESTIGATIONS
6.1 Broker-Dealer shall cooperate fully in any securities or insurance
regulatory investigation or proceeding or judicial proceeding with respect to
[__] and the Company, and/or Broker-Dealer and its Registered Representatives or
any Affiliate, to the extent that such investigation or proceeding is in
connection with the Contracts marketed under this Agreement.
SECTION 7: ASSIGNMENT
7.1 Broker-Dealer may not assign this Agreement without the prior written
approval of [__].
7.2 This Agreement is exclusively for and shall inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns and shall not be deemed to create any rights for the benefit of third
parities.
SECTION 8: CONFIDENTIALITY
8.1 Each party will keep confidential information it may acquire as a result of
this Agreement regarding [__], its affiliates' and subsidiaries' affairs,
including any customer list or other propriety information that it may acquire
in the performance of this Agreement, and shall not use such customer list or
information without the prior written consent of the other party which
requirement shall survive the termination of this Agreement.
SECTION 9: MODIFICATION OF AGREEMENT
9.1 This Agreement supersedes all prior agreements, either oral or written,
between the parties relating to the Contracts and, except for any amendment of
Schedule 1 pursuant to the terms of Section 1.5 hereof or of the Schedule of
Commissions pursuant to the terms of Section 4 hereof, may not be modified in
any way unless by written agreement signed by all of the parties.
SECTION 10: INDEMNIFICATION
10.1 Broker-Dealer shall be responsible and liable for any damages arising out
of the acts or omissions of Broker-Dealer, its Registered Representatives,
and/or its employees and does hereby agree to indemnify and hold [__] harmless
against any loss or expense arising out of any of its Registered
Representatives, any Affiliate and/or employees failure to carry out fully and
without negligence the duties and responsibilities assigned to it herein.
10.2 If any action or proceeding shall be brought against Broker-Dealer relating
to a Contract sold pursuant to this Agreement, Broker-Dealer shall give prompt
written notice to [__].
10.3 In the event of any dispute with a Contract owner, [__] shall have the
right to take such action as [__] may in its sole discretion deem necessary to
promptly effect a mitigation of damages or limitation of losses without
obtaining the prior consent of Broker-Dealer and without waiving or electing to
relinquish any rights or remedies [__] may have against Broker-Dealer.
10.4 [__] shall have the right to settle with any Contract owner engaged in a
dispute with [__] or Broker-Dealer without the prior consent of Broker-Dealer
and without waiving or electing to relinquish any rights or remedies [__] may
have against Broker-Dealer.
10.5 The indemnification provisions of this Agreement shall remain operative and
in full force and effect, regardless of the termination of this Agreement and
shall survive any such termination.
10.6 Without limiting the foregoing indemnities, [__] and Broker-Dealer each
agree to indemnify and hold harmless the other against any breach of
representation, warranty or covenant herein by the indemnifying party.
SECTION 11: RIGHT, REMEDIES, ETC. ARE CUMULATIVE
11.1 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws. Failure of either party to insist upon strict compliance with any
of the conditions of this Agreement shall not be construed as a waiver of any of
the conditions, but the same shall remain in full force and effect. No waiver of
any of the provisions of this Agreement shall be deemed, or shall constitute a
waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver.
SECTION 12: NOTICES
12.1 All notices hereunder are to be made in writing and shall be either hand
delivered or transmitted by registered or certified United States mail with
return receipt requested to the principal office of the party and shall be
effective upon delivery, except as otherwise provided in Section 5.2 of this
Agreement.
SECTION 13: INTERPRETATION, JURISDICTION, ETC.
13.1 This Agreement constitutes the whole agreement between the parties hereto
with respect to the subject matter hereof, and supersedes all prior oral or
written understandings, agreements or negotiations between the parties with
respect to the subject matter hereof. No prior writings by or between the
parties hereto with respect to the subject matter hereof shall be used by either
party in connection with the interpretation of any provisions of this Agreement.
13.2 This Agreement is made in the State of Massachusetts, and all questions
concerning its validity, construction or otherwise shall be determined under the
laws of Massachusetts without giving effect to principles of conflict of laws.
SECTION 14: HEADINGS
14.1 The headings in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
SECTION 15: COUNTERPARTS
15.1 This Agreement may be executed in two or more counterparts, each of which
taken together shall constitute one and the same instrument.
SECTION 16: SEVERABILITY
16.1 This is a severable Agreement. In the event that any provisions of this
Agreement would require a party to take action prohibited by applicable federal
or state law or prohibit a party from taking action required by applicable
federal or state law, then it is the intention of the parties hereto that such
provisions shall be enforced to the extent permitted under the law, and, in any
event, that all other provisions of this Agreement shall remain valid and duly
enforceable as if the provision at issue had never been a part hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year indicated below.
[Principal Underwriter] [Broker Dealer]
By By
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