DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of March, 2002, by and
between XXXXXX XXXX LIFE INSURANCE COMPANY ("Xxxxxx Xxxx"), a life insurance
company organized under the laws of the State of Illinois, XXXXXX XXXX LIFE
INSURANCE GROUP ANNUITY SEPARATE ACCOUNT ("Separate Account"), a separate
account established by Xxxxxx Xxxx pursuant to the Illinois Insurance Code, and
XXXXXX XXXX INVESTORS, INC. ("Investors"), a corporation organized under the
laws of the State of Maryland.
WITNESSETH:
WHEREAS, Xxxxxx Xxxx proposes to issue to the Chicago Public Schools ("CPS")and
participants in its 403(b) and 457(b) retirement plans (the "Plans") a group
variable annuity contract and certificates thereunder (the group contract and
the certificates are together referred to herein as the "Contracts"); and
WHEREAS, Xxxxxx Xxxx has, effective March 1, 2002, established the Separate
Account for the purpose of funding the Contracts; and
WHEREAS, Investors is a broker-dealer registered under the Securities Exchange
Act of 1934 and proposes to act as the principal underwriter in the offering and
sale of said Contracts; and
WHEREAS, Xxxxxx Xxxx desires to obtain the services of Investors as the
principal underwriter of such Contracts issued by Xxxxxx Xxxx through the
Separate Account ;
NOW THEREFORE, in consideration of the foregoing, and of the mutual covenants
and conditions set forth herein, and for other good and valuable consideration,
Xxxxxx Xxxx, the Separate Account and Investors hereby agree as follows:
1. Investors will serve as the distributor and principal underwriter
("Distributor") for the Contracts that will be issued by Xxxxxx Xxxx
through the Separate Account.
2. Investors will use its best efforts to effect the offer and sale of the
Contracts to participants in the Plans ("Participants") on a continuing
basis. Investors shall be responsible for compliance with the requirements
of state broker-dealer regulations and
the Securities Exchange Act of 1934 as each applies to Investors in
connection with its duties as Distributor of said Contracts.
3. Subject to the written approval of Xxxxxx Xxxx, Investors may contract
with other broker-dealers registered under the Securities Exchange Act of
1934 and authorized by applicable law to sell the Contracts. Any such
contractual arrangement is expressly made subject to this Agreement, and
Investors will at all times be responsible to Xxxxxx Xxxx for the
distribution of all Contracts issued by the Separate Account.
4. Warranties
(a) Xxxxxx Xxxx represents and warrants to Investors that:
(i) Xxxxxx Xxxx shall be responsible for the filing with the Securities
and Exchange Commission (the "Commission") of any required registration
statements under the Securities Act of 1933 and the Investment Company Act
of 1940, with respect to the Contracts and the Separate Account; and
copies of any and all such registration statements and amendments thereto
will be forwarded to Investors at or before the time that they are filed
with the Commission;
(ii) The registration statements and any further amendments or supplements
thereto will, when they become effective conform in all material respects
to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 and the rules and regulations of the Commission
thereunder, and will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to Xxxxxx Xxxx by Investors expressly for
use therein;
(iii) Xxxxxx Xxxx is validly existing as a stock life insurance company in
good standing under the laws of the State of Illinois, with power
(corporate or other) to own its properties and conduct its business, and
has been duly qualified for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification;
(iv) The Contracts to be issued through the Separate Account and sold by
Xxxxxx Xxxx through Investors hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor, will
be duly and validly issued;
(v) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
statute, any indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which Xxxxxx Xxxx is a part or by which Xxxxxx
Xxxx is bound, Xxxxxx Xxxx'x Certificate of Incorporation or By-laws, or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over Xxxxxx Xxxx or any of its properties; and no
consent, approval, authorization or order of any court or governmental
agency or body is required for the consummation by Xxxxxx Xxxx of the
transactions contemplated by this Agreement, except such as may be
required under the Securities Exchange Act of 1934 or state insurance or
securities laws in connection with the purchase and distribution of the
Contracts by Investors; and
(vi) There are no material legal or governmental proceedings pending to
which Xxxxxx Xxxx or the Separate Account is a party or of which any
property of Xxxxxx Xxxx or the Separate Account is the subject, other than
litigation incident to the kind of business conducted by Xxxxxx Xxxx
which, if determined adversely to Xxxxxx Xxxx, would not individually or
in the aggregate have a material adverse effect on the financial position,
surplus or operations of Xxxxxx Xxxx.
(b) Investors represents and warrants to Xxxxxx Xxxx that:
(i) It is a broker-dealer duly registered with the Commission
pursuant to the Securities and Exchange Act of 1934;
(ii) It shall permit the offer and sale of Contracts only by and
through persons who are appropriately licensed under both the
securities laws and state insurance laws;
(iii) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms or provisions of or constitute a
default under, any statute, any indenture, mortgage, deed of trust,
note agreement or other agreement or instrument to which Investors
is a party
or by which Investors is bound, the Certificate of Incorporation or
By-laws of Investors, or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over Investors or
its property;
(iv) No offering, sale or other disposition of any Contracts will be
made until Investors is notified by Xxxxxx Xxxx that the Contracts
have been released for sale by Xxxxxx Xxxx; and such offering, sale
or other disposition shall be limited to those jurisdictions that
have approved or otherwise permit the offer and sale of the
Contracts by Xxxxxx Xxxx.
(v) To the extent that any statements or omissions made in any
registration statements, or any amendment or supplement thereto, are
made in reliance upon and in conformity with written information
furnished to Xxxxxx Xxxx by Investors expressly for use therein,
such registration statements and any amendments or supplements
thereto will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to
the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 and the rules and regulations of the Commission
thereunder, and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
5. Investors shall keep, in a manner and form prescribed or approved by Xxxxxx
Xxxx and in accordance with Rules 17a-3 and 17a-4 under the Securities Exchange
Act of 1934, correct records and books of account (as required to be maintained
by a registered broker-dealer acting as principal underwriter) of all
transactions entered into on behalf of Xxxxxx Xxxx and with respect to the
Contracts. Investors shall make such records and books of account available for
inspection by the Commission and Xxxxxx Xxxx, and Xxxxxx Xxxx and the Commission
shall have the right to inspect, make copies of or take possession of such
records and books of account at any time on demand.
6. Subsequent to having been authorized to commence with the offering
contemplated herein, Investors will utilize any currently effective offering
memorandum or prospectus relating to the subject Contracts in connection with
its selling efforts. As to the other types of sales material, Investors agrees
that it will use only sales materials as have been authorized for use by Xxxxxx
Xxxx and which conform to the requirements of federal and state laws and
regulations, and which have been filed where necessary with the appropriate
regulatory authorities.
7. Investors will not use any offering memorandum, prospectus, sales literature,
or any other printed matter or material in the offer or sale of any Contract if,
to the knowledge of Investors, any of the foregoing misstates the duties,
obligation or liabilities of Xxxxxx Xxxx or Investors.
8. Investors, as Distributor, shall be entitled to such remuneration for its
services and for the services of its salaried employees and such reimbursement
for its charges and expenses as will be contained in such Schedules of
Remuneration as may be adopted from time to time. Said Schedules of Remuneration
may be amended from time to time at the mutual consent of the undersigned
parties.
9. If any purchase payment premiums shall be returned by Xxxxxx Xxxx or should
Xxxxxx Xxxx become liable for the return thereof for any cause other than
surrenders or withdrawals by Participants pursuant to the terms of the
Contracts, either before or after termination of this Agreement, Investors
agrees to pay Xxxxxx Xxxx the amount of remuneration previously paid over to it
by Xxxxxx Xxxx with respect to such premiums.
10. Investors makes no representation or warranties regarding the number of
Contracts to be sold or the amount to be paid thereunder. Investors does,
however, represent that it will actively market such Contracts on a continuous
basis.
11. Investors may render similar services or act as Distributor or dealer for
issuers other than the Separate Account or sponsors other than Xxxxxx Xxxx in
the offering of their securities.
12. The Contracts shall be offered for sale on the terms described in any
currently effective offering memorandum or prospectus describing such Contracts.
13. Xxxxxx Xxxx will use its best efforts to register for sale, from time to
time as necessary, additional dollar amounts of the Contracts under the
Securities Act of 1933 and, should it ever be required, under State Blue Sky
Laws and to file for approval under state insurance laws when necessary.
14. Xxxxxx Xxxx reserves the right at any time to suspend or limit the offering
of the subject Contracts upon one day's written notice to Investors.
15. Xxxxxx Xxxx agrees to advise Investors immediately:
(a) of any request by the Commission (i) for amendment of any Securities
Act registration statement relating to the Contracts or (ii) for
additional information;
(b) of the issuance by the Commission of any stop order suspending the
effectiveness of any registration statement or the initiation of any
proceedings for that purpose; and
(c) of the happening of any material event, if known, which makes untrue
any statement made in any registration statement or which requires the
making of a change therein in order to make any statement made therein not
misleading.
16. Xxxxxx Xxxx will furnish to Investors such information with respect to the
Separate Account and the Contracts in such form and signed by such of its
officers as Investors may reasonably request; and will warrant that the
statements therein contained when so signed will be true and correct.
17. Each of the undersigned parties agrees to notify the other in writing upon
being apprised of the institution of any proceeding, investigation or hearing
involving the offer or sale of the subject Contracts.
18. Absent the prior written consent of Xxxxxx Xxxx, this Agreement will
terminate automatically upon its assignment.
19. This Agreement shall terminate, without the payment of any penalty by either
party:
(a) at the option of Xxxxxx Xxxx or of Investors upon thirty days' advance
written notice to the other; or
(b) at the option of Xxxxxx Xxxx upon institution of formal proceedings
against Investors by the Commission or any state regulatory body; or
(c) at the option of Xxxxxx Xxxx, if Investors or any representative
thereof at any time (i) employs any device, scheme, or artifice to
defraud; makes any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading; or engages
in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person; (ii) fails promptly to
account for and pay over to Xxxxxx
Xxxx money due it according to its records; or (iii) violates the
conditions of this Agreement.
20. Each notice required by this Agreement may be given by wire and confirmed in
writing.
21. Xxxxxx Xxxx agrees to indemnify Investors for any liability that Investors
may incur to a Participant or party-in-interest under a Contract (i) arising out
of any act or omission in the course of, or in connection with, rendering
services under this Agreement, or (ii) arising out of the purchase, retention or
surrender of a Contract; provided however that Xxxxxx Xxxx will not indemnify
Investors for any such liability that results from the willful misfeasance, bad
faith or gross negligence of Investors, or from the reckless disregard, by
Investors, of its duties and obligations arising under this Agreement.
22. This Agreement shall be subject to the laws of the State of Illinois and
construed so as to interpret the Contracts as insurance products within the
business operations of Xxxxxx Xxxx.
23. This Agreement incorporates all agreements, verbal and written, between
Investors and Xxxxxx Xxxx with regard to the offer and sale of the Contracts,
and supersedes and annuls any and all agreements between the parties with
regards to the distribution of the Contracts; except that this Agreement shall
not affect the operation of previous agreements entered into between Investors
and Xxxxxx Xxxx that do not bear upon the sale of the Contracts.
This Agreement, along with any Schedules of Remuneration attached hereto and
incorporated herein by reference, may be amended from time to time by the mutual
agreement and consent of the undersigned parties; provided that such amendment
shall not affect the rights of existing Participants, and that such amendment be
in writing and duly executed.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be
duly executed as of the date first stated above.
Xxxxxx Xxxx Life Insurance Company
By:
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Xxxxxx Xxxx Life Insurance Company
Separate Account
By Xxxxxx Xxxx Life Insurance Company
By:
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Xxxxxx Xxxx Investors, Inc.
By:
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MEMORANDUM OF UNDERSTANDING
AMONG XXXXXX XXXX LIFE INSURANCE COMPANY/
XXXXXX XXXX LIFE INSURANCE GROUP ANNUITY SEPARATE ACCOUNT/
XXXXXX XXXX INVESTORS, INC./
XXXXXX XXXX SERVICE CORPORATION
DATED AS OF MARCH 1, 2002
In accordance with an Agreement dated March 1, 2002 (the "Agreement") among
Xxxxxx Xxxx Investors, Inc. ("Investors"), Xxxxxx Xxxx Life Insurance Company
("HMLIC"), and Xxxxxx Xxxx Life Insurance Group Annuity Separate Account
("Separate Account"), Investors is responsible for the supervision and
recordkeeping required with respect to sales of the Contracts. The following
outline, consistent with the responsibility of Investors, clarifies the
processing of certain premium and commission transactions related to said sales
and maintenance of book and records in accordance with SEC Rules 17a-3 and
17a-4. Terms used and not defined herein will have the meanings given to them in
the Agreement.
1. The gross stipulated payment from Participants will be received by
HMLIC. Deductions, as detailed in the appropriate HMLIC prospectus or
offering memorandum will be taken from the gross payment. The amount
designated by the Participant to go to the fixed account will then be
deducted, and the remainder is allocated to the appropriate subaccounts of
the Separate Account as designated by the Participant. HMLIC maintains
records on behalf of HMII as to all premium amounts allocated to the
Separate Account.
2. HMLIC will pay commissions to Xxxxxx Xxxx Service Corporation ("HMSC"),
which will pay said commissions to Linsco/Private Ledger Corp. ("LPL). LPL
provides the sales personnel under the general supervision of LPL for the
marketing of the Contracts, pursuant to a Broker Dealer Selling Agreement
with HMLIC, Investors, and HMSC. HMSC establishes and maintains records on
behalf of Investors relating to commission payments to sales personnel.
HMLIC establishes and maintains records relating to commission payments to
HMSC.
3. Commissions payable to LPL are based upon the gross stipulated payments
received, rolling 12 month persistency, and annual account values.
Currently, fixed accumulation and variable accumulations are subject to
the same commission structure.
Future modification to the commission structure, if any will modify this
procedure accordingly.
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Xxxxxx Xxxx Investors, Inc. Xxxxxx Xxxx Life Insurance Company
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Xxxxxx Xxxx Service Corporation
