EXHIBIT A3A
AGREEMENT
THIS AGREEMENT entered into this 3rd day of October, 1968, by and between
The Northwestern Mutual Life Insurance Company, a mutual life insurance company
organized under the laws of the State of Wisconsin, having its principal office
at 000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx (the "Company") and NML Equity
Services, Inc., a Wisconsin corporation, having its principal office at 000 X.
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx (the "Broker").
WHEREAS, the Company is engaged in the issuance of individual life
insurance policies and annuity contracts, pursuant to insurance laws in the
District of Columbia and in all states of the United States except Hawaii and
Alaska through its licensed life insurance agents (including General Agents,
District Agents, Field Directors, Special Agents, Soliciting Agents and Emeritus
Agents) and desires to issue and sell variable annuity contracts (the
"Contracts") through all or some of the same persons; and
WHEREAS, the Contracts may be deemed to be securities under the Securities
Act of 1933, and applicable state laws, and the sale of such securities may be
deemed to be through an instrumentality of interstate commerce within the
meaning of Section 15(a) of the Securities Exchange Act of 1934 (the "Act"); and
WHEREAS, the Broker is a wholly-owned subsidiary of the Company, is
registered as a broker-dealer under Section 15(b) of the Act and is a member of
the National Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, it is the desire of the parties hereto to enter into an agreement
pursuant to which the agents of the Company who are to be involved in the sale
of Contracts will be associated persons of the Broker, which will be responsible
for selecting, training, and supervising them for that purpose, all as more
particularly described herein.
THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:
1. The Company will supply to the Broker the names of agents who indicate
a willingness to sell the Contracts.
2. The Broker will, after careful investigation, select the agents who
are to be trained and qualified to make such sales, will train such agents in
the sale of variable annuity contracts and will use its best efforts to qualify
such agents under federal and state laws to engage in the sale of the Contracts.
Agents so trained and qualified ("Agents") will be "associated persons" of the
Broker under Section 15(b) of the Act and applicable requirements of NASD and,
in addition to all other requirements for such qualification, will be required
to comply with applicable examination requirements before being permitted to
engage in the sale of Contracts.
3. Upon qualification of an Agent under applicable federal and state
laws, this fact will be certified in writing to the Company by the Broker.
4. Prior to permitting any Agent to sell the Contracts, the Company, the
Broker and the Agent will enter into a mutually satisfactory agreement pursuant
to which the Agent will acknowledge that he will be an associated person of
Broker in connection with his selling
-2-
activities related to the Contracts, that such activities will be under the
supervision and control of the Broker and the supervisor designated by the
Broker, and that the Agent's right to continue to sell the Contracts is subject
to his continued compliance with such agreement and the rules and procedures
established by the Broker.
5. The Broker will fully comply with the requirements of NASD and of the
Act and will establish such rules and procedures as may be necessary to
supervise diligently the securities activities of the Agents. Upon request by
the Broker, the Company will furnish or require the Agents to furnish (at the
Company's or the Agent's expense) such appropriate records as may be necessary
to insure such diligent supervision.
6. In the event any Agent fails or refuses to submit to supervision of
the Broker in accordance with this Contract, or otherwise fails to meet the
rules and standards imposed by the Broker on its associated persons, the Broker
shall certify such fact to the Company and shall immediately notify such Agent
that he is no longer authorized to sell the Contracts, and the Broker and the
Company shall take whatever additional action may be necessary to terminate the
sales activities of such Agent relating to the Contracts.
7. It is contemplated that all or some of the General Agents of the
Company will become qualified as associated persons of the Broker and in that
capacity will supervise the selling activities of Agents under agreement with
them relating to the Contracts. In the event any such general Agent shall fail
or refuse to provide such supervision to the satisfaction of the Broker, the
Broker (with the cooperation of the Company) shall furnish a qualified person to
perform such supervision or, if the Broker is unable to furnish proper
supervision, the authority of the unsupervised Agents to sell the Contracts
shall be withdrawn.
8. Commissions payable to Agents in connection with sales of the
Contracts shall be paid by the Company to the Agents through the General Agents
or otherwise under the Company's usual agency contracts, and nothing contained
herein shall obligate the Broker to pay any commissions or other remuneration to
the Agents or to reimburse any such Agents for expenses incurred by them, nor
shall the Broker have any interest whatsoever in any commissions or other
remuneration payable to Agents by the Company. Commissions so paid by the
Company shall be appropriately reflected in the books and records maintained by
or on behalf of the Broker.
9. The Broker will assume full responsibility for the sales activities of
the Agents relating to the Contracts and for initial and continued compliance by
itself and Agents with applicable rules of NASD and federal and state securities
laws, and in connection therewith may demand and receive such assurances from
the Company as it deems appropriate demonstrating compliance with the Securities
Act of 1933 and the Investment Company Act of 1940.
10. The Broker may request that all or some of the books and records
required to be maintained by it, as a registered broker-dealer, in connection
with the sale of the Contracts, be prepared and maintained by the Company as
agent for the Broker. The Company agrees that such books and records are the
property of the Broker, will be made and preserved in accordance with Rules
17a-3 and 17a-4 under the Act, and will be subject to examination by the
Securities and Exchange Commission in accordance with Section 17(a) of the Act.
11. In payment of the services to be performed under this Agreement, the
Company shall pay the Broker an annual fee based upon the Broker's actual
expenses incurred in the performance of such services or reasonably and properly
allocated thereto, as certified to the
-3-
Company by the Broker or, at the option of the Company, by an independent public
accounting firm selected by the Company.
12. This Agreement may not be assigned by either party except by mutual
consent and shall continue for a period of one year and from year to year
thereafter subject to termination by either party at any time upon 60 days
written notice to the other party and to the Securities and Exchange Commission,
except that in the event the Broker shall cease to be a registered broker-dealer
under the Act, this Agreement shall immediately terminate.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE NORTHWESTERN MUTUAL LIFE
ATTEST: INSURANCE COMPANY
X.X. XXXXXXX By X.X. XXXXXXXX
----------------------------------- ----------------------------------
X.X. Xxxxxxx, Secretary X.X. Xxxxxxxx, President
ATTEST: NML EQUITY SERVICES, INC.
XXXXXXX X. XXXXX By XXXXXX X. XXXXXXXXXX
----------------------------------- ----------------------------------
Xxxxxxx X. Xxxxx, Secretary Xxxxxx X. Xxxxxxxxxx, President
