GENERAL AMERICAN DISTRIBUTORS
SALES AGREEMENT
TABLE OF CONTENTS
I. DEFINITIONS IX. INDEMNIFICATION
II. COMPLIANCE WITH APPLICABLE LAWS X. GENERAL PROVISIONS
III. AGREEMENTS, REPRESENTATIONS, AND A. TERM AND TERMINATION
COVENANTS
B. ASSIGNABILITY
A. AGREEMENTS AND COVENANTS OF
GAD C. AMENDMENTS
B. REPRESENTATIONS AND COVENANTS D. NOTICES
OF BROKER
E. ARBITRATION
IV. PRINCIPLES OF ETHICAL MARKET
CONDUCT F. GOVERNING LAW
V. COMPENSATION G. ENTIRE UNDERSTANDING
VI. COMPLAINTS AND INVESTIGATIONS H. NO THIRD PARTY
BENEFICIARIES
VII. RECORDS AND ADMINISTRATION
I. NON-EXCLUSIVITY
VIII. PRIVACY INFORMATION
J. WAIVER
A. PROPRIETARY INFORMATION
K. COUNTERPARTS
B. RECEIPT OF CUSTOMER NONPUBLIC
PERSONAL INFORMATION FROM L. SEVERABILITY
BROKER BY GAD
C. TREATMENT OF NONPUBLIC
PERSONAL INFORMATION
DISCLOSED TO BROKER BY GAD
D. CONFIDENTIAL INFORMATION
E. PROTECTED HEALTH INFORMATION
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GENERAL AMERICAN FINANCIAL
SALES AGREEMENT
This Agreement, including the Exhibits attached hereto (collectively, the
"Agreement") dated July 29th, 2002, 2003, ("Effective Date") by and among
General American Distributors, a Missouri corporation, ("GAD") and United
Planners' Financial Services of America, an Arizona corporation that, for the
distribution of traditional fixed rate insurance products only, is a validly
licensed insurance agency, or for the distribution of registered products, is
registered as a broker dealer with the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended, (the "1934 Act")
and a member of the National Association of Securities Dealers ("NASD") and is
also either licensed as or is affiliated with a validly licensed insurance
agency (collectively "Broker").
WITNESSETH:
WHEREAS, GAD and its Affiliates issue or provide access to certain
insurance and financial products, including but not limited to, fixed rate
annuities, variable annuities, variable life insurance policies, fixed rate
life insurance policies, variable riders on such fixed rate products, and other
insurance products as identified on Exhibits A and B hereto (together, the
"Contracts"); and
WHEREAS, GAD, on behalf of itself and each Affiliate that issues or
provides access to the Contracts identified on Exhibits A and B hereto, is
authorized to enter into selling agreements with unaffiliated broker-dealers or
selling groups, as the case may be, to distribute the Contracts;
WHEREAS, GAD, subject to the terms and conditions of the Agreement, hereby
appoints Broker to solicit sales of and provide service with respect to the
Contracts which are set forth on the applicable Exhibits A and B on a
non-exclusive basis;
WHEREAS, Broker accepts such appointment and agrees to use its best
efforts to find purchasers for the Contracts; and
WHEREAS, GAD proposes to compensate Broker for the sale and servicing of
Contracts in accordance with the Compensation Schedules set forth in Exhibits A
and B.
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NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto agree as follows:
I. Definitions
1) Affiliate - Any entity that directly or indirectly controls, is
controlled by or is under common control with GAD, 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.
2) Agency - An associated insurance agency of Broker, identified on
Exhibit D hereto, which is properly licensed to participate in the
business of insurance.
3) Applicable Laws - Shall have the meaning given to such term as in
accordance with Section II of this Agreement.
4) Confidential Information - Shall have the meaning given to such
term as described in Section VIII(D) of this Agreement.
5) Fixed Contracts - Contracts that are not variable and include,
without limitation, fixed rate annuities, fixed rate life insurance
and other fixed insurance contracts, issued by GAD, or its
Affiliates, as more fully described in Exhibit B, which may be
amended by GAD in its sole discretion from time to time.
6) General Agent - Shall have the meaning given to such term as
described in Section III(A)(20) of this Agreement.
7) Nonpublic Personal Information - Nonpublic personal information
means 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 Xxxxx-Xxxxx-Xxxxxx Act and
regulations adopted pursuant to the Act.
8) Prospectus - The prospectuses and Statements of Additional
Information included within the Registration Statements referred to
herein or filed pursuant to the Securities Act of 1933 and the
Investment Company Act of 1940, as amended.
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9) 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.
10)Variable Contracts - Variable life insurance policies, variable
annuity contracts, variable insurance riders and other variable
insurance contracts, issued by GAD, or its Affiliates, as more
fully described in Exhibit A , which may be amended by GAD in its
sole discretion from time to time.
11)Representatives - those individuals, accepted by GAD to solicit and
sell Contracts under the terms of this Agreement, who are duly
licensed and appointed as a life insurance agent of GAD, and with
respect to registered products, are also duly registered,
individually, with the NASD in compliance with 1934 Act.
12)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 includes demographic information about
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
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 by GAD or an affiliate of GAD;
information related to the declination or issuance of, or claim
under, a long term care insurance policy issued by GAD or an
affiliate; or information derived therefrom.
II. Compliance With Applicable Laws
1) GAD and Broker agree to comply with all applicable state and
federal statutes, laws, rules, and regulations including with out
limitation, state insurance laws, rules and regulations, and
federal and state securities laws, rules and regulations.
Applicable state and federal statutes, laws, rules and regulations
may also include, applicable rulings of federal and state
regulatory organizations, agencies and self regulatory agencies,
including without limitation state insurance departments, the SEC
and 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
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or may hereafter become applicable to the parties hereto and the
transactions that are the subject of this Agreement ("Applicable
Laws").
2) Notwithstanding the foregoing, GAD and Broker agree to comply with
all applicable anti-money laundering laws, regulations, rules and
government guidance, including the reporting, recordkeeping 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
Act"), its implementing regulations, and related SEC and SRO rules.
These requirements include requirements to identify and report
currency transactions and suspicious activity, to verify customer
identity, to conduct customer due diligence, and to implement
anti-money laundering compliance programs. As required by the 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.
3) Further, Broker agrees to comply with the economic sanctions
programs administered by the U.S. Treasury Department's Office of
Foreign Assets Control ("OFAC"). Broker certifies that it has an
OFAC compliance program in place which includes procedures for
checking customer names and persons with signature authority over
accounts against the OFAC lists of sanctioned governments and
specially-designated nationals, terrorists and traffickers; the
screening of wire transfers and other payments against the OFAC
lists; a designated compliance officer; an internal communication
network; training of appropriate personnel; and an independent
audit function.
4) GAD and Broker agree to promptly notify the other whenever
questionable activity or potential indications of suspicious
activity or OFAC matches are detected. GAD and Broker agree to
investigate any potentially suspicious activity and to take
appropriate action, including the blocking of accounts, the filing
of Suspicious Activity Reports and the reporting of matches to
OFAC, in connection with the Contracts.
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III. Authorizations, Representations, and Covenants
A. Authorizations, Representations, and Covenants of GAD
1) GAD represents that it is duly authorized, on behalf of itself and
each Affiliate that issues or provides access to the Contracts
identified on Exhibits A and B hereto, to enter into this Agreement
with Broker to distribute such Contracts.
2) GAD authorizes Broker through its Representatives to solicit
applications for the Fixed Contracts listed in Exhibit B, provided
that (a) Broker shall not solicit applications for Fixed Contracts
except 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
GAD or its Affiliates, and with the terms of this Agreement.
3) GAD authorizes Broker through its Representatives to offer and sell
the Variable Contracts listed in Exhibit A, provided that
(a) Broker shall not solicit applications for Variable Contracts
except in those states where it and its Representatives are
appropriately licensed; (b) there is an effective Registration
Statement relating to such Variable Contracts; (c) such Variable
Contracts are 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 GAD and its Affiliates, and with the
terms of the Agreement. GAD 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 action or circumstances that makes it no
longer lawful for GAD or its Affiliates to offer or issue Variable
Contracts listed in Exhibit A. GAD shall advise Broker of any
revision of or supplement to any prospectus related to the Variable
Contracts or underlying investments of such Variable Contracts.
4) The performance or receipt of services pursuant to this Agreement
shall in no way impair the absolute control of the business and
operations of each of the parties by its own Board of Directors.
Pursuant to the foregoing, GAD shall specifically retain ultimate
authority, including but not limited to:
a) to refuse for any reason to appoint a Representative and cancel
any existing appointment at any time;
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b) to direct the marketing of its insurance products and services;
c) to review and approve all advertising concerning, its insurance
products and services;
d) to underwrite all insurance policies issued by it;
e) to cancel risks;
f) to handle all matters involving claims adjusting and payment;
g) to prepare all policy forms and amendments; and
h) to maintain custody of, responsibility for and control of all
investments.
B. Representations and Covenants of Broker
1) Broker represents and warrants that it will only offer Fixed
Contracts in those states where it or its Agency is appropriately
licensed and that it has obtained any other appointments,
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
will be soliciting applications for Fixed Contracts will at all
times be appropriately licensed under Applicable Laws.
2) 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 is
licensed as an insurance broker 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
will be soliciting applications for Variable Contracts, whether
alone or jointly with representatives of GAD or its designee, will
at all times as required by Applicable Laws be appropriately
registered and/or licensed under such laws and shall comply with
all requirements of the NASD, the 1934 Act and all other federal
and/or state laws applicable to the solicitation and service of the
Variable Contracts including without limitation the NASD Rules of
Fair Practice, and all insurance replacement regulations and
regulations prohibiting the rebating of commission.
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3) Broker represents that neither it nor any of its Representatives
are 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 GAD in writing). Broker further agrees that, if a
formal or informal investigation of Broker or any of its agents 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
will notify GAD of the existence and subject matter of such
investigation. The Agency further agrees that no subagent shall be
appointed to solicit and procure Contracts of GAD if the subagent
has been convicted of any felony prohibited by the Federal Violent
Crime Control and Law Enforcement Act of 1994.
4) Commencing at such time as GAD and Broker shall agree upon, Broker
shall find suitable purchasers for the Contracts for which
Representatives are licensed and authorized under Applicable Laws.
In meeting its obligation to solicit applications for the
Contracts, Broker shall engage in the following activities:
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 GAD 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 will, upon a reasonable written request
from GAD, provide a report to GAD 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 as required by Applicable Laws. Broker shall be solely
responsible for determining the suitability of recommendations
to purchase a Contract made by its agents or other
representatives; and notwithstanding the foregoing. Broker may
offer the Contracts in addition to offering other life insurance
and annuity products to customers of Broker. Furthermore, Broker
understands that no territory is exclusively assigned to Broker
hereunder. Broker acknowledges and agrees that GAD may
distribute the Contracts through its own employee's agent and
Representatives,
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including those of its Affiliates, or through any other
distribution method or system including (but not limited to)
agreements with other insurance agencies regarding the sale of
such Contracts in the territories, markets or distribution
channels covered by this Agreement.
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 to GAD are
accurate, complete, compliant with the conditions herein, and
approved by a qualified registered principal. With respect to
variable Contracts distributed jointly by Broker and
representatives of GAD or its designee, 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.
5) To the extent permitted by Applicable Laws, only the initial
purchase payments for the Contracts shall be collected by
Representatives of Broker. All such purchase payments shall be
remitted promptly in full, together with any related application,
forms and any other required documentation to GAD. The Broker shall
make such remittances in accordance with any and all policies and
procedures described in the contract, insurance policy, prospectus,
if appropriate, and any collateral documents associated with such
Contracts.
6) Broker acknowledges that GAD, on behalf of itself and its
Affiliates, shall have the unconditional right to reject, in whole
or in part, any application for a Contract. If GAD rejects an
application, GAD will immediately return any purchase payments
received directly to the Broker, and Broker will 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, will be
returned by GAD to the Broker, and the Broker will be will be
responsible for promptly returning such payments to the purchaser.
If a purchase payment is either refunded or returned to the
purchaser, no commission will be payable to Broker hereunder, and
any commission received by Broker will be returned promptly to GAD.
GAD may, at its option, offset any such amounts against any amounts
payable to Broker.
7) Broker is not a principal, underwriter or agent of GAD, or its
Affiliates, or any separate account of GAD or its Affiliates.
Broker shall act as an independent contractor, and nothing herein
contained
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shall constitute Broker, nor its agents or other representatives,
including Representatives as employees of GAD or its Affiliates in
connection with the solicitation of applications for Contracts or
other dealings with the public. Broker, its agents and its other
representatives, shall not hold themselves out to be employees of
GAD or its Affiliates in this connection or in any dealings with
the public.
8) Broker agrees that any material it 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 GAD, its Affiliates or the Contracts, will not be used
without the prior written consent of GAD.
9) Broker shall ensure that solicitation and other activities
undertaken by Broker or its Representatives shall be undertaken
only in accordance with Applicable Laws. Broker represents no
commissions, or portions thereof, or other compensation for the
sale of the Contracts will be paid to any person or entity that is
not duly licensed and appointed by GAD in the appropriate states 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. Broker
understands and acknowledges that neither it, nor any of its
Representatives, is authorized by GAD 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 GAD 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.
10)Neither Broker nor its agents, designees or other representatives
shall have authority on behalf of GAD or its Affiliates to alter or
amend any Contract or any form related to a Contract to adjust or
settle any claim or commit GAD or its Affiliates with respect
thereto, or bind GAD or its Affiliates in any way; or enter into
legal proceedings in connection with any matter pertaining to GAD's
business without its prior written consent. Broker shall not
expend, nor contract for the expenditure of, funds of GAD nor shall
Broker possess or exercise any authority on behalf of GAD other
than that expressly conferred on Broker by this Agreement.
11)Broker shall prepare any forms necessary to comply with Applicable
Laws or otherwise required in connection with the sale of the
Contracts, either as an initial transaction or as a replacement for
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other insurance or annuity products, and Broker shall send such
forms to GAD. In the alternative, if such forms are not required,
but information with respect to a transaction or replacement is
required, Broker will transmit such information in writing to GAD.
Broker further shall notify GAD when sales of the Contracts are
replacement contracts. Such notification shall not be later than
the time that Broker submits applications for such Contracts to GAD.
12)Broker shall furnish GAD 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 GAD or an appropriate regulatory authority in order to ascertain
whether the operations of GAD or Broker related to the Contracts
are being conducted in a manner consistent with Applicable Laws.
13)Broker will adhere to all Applicable laws, including but not
limited to, state insurance replacement regulations, before it
receives or solicits any applications for Contracts.
14)Broker represents that it has full authority to enter into this
Agreement and that by entering into this Agreement it will not
impair any other of its contractual obligations with respect to
sales of any Contract.
15)Insurance Coverage.
a) Fidelity Bond. Broker shall secure and maintain a fidelity bond
(including coverage for larceny and embezzlement), issued by a
reputable bonding company, covering all of its directors,
officers, agents, Representatives, associated persons and
employees who have access to funds of GAD 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
or future amendments thereto. Broker shall provide GAD with
satisfactory evidence of said bond upon GAD's reasonable
request. Broker hereby assigns any proceeds received from a
fidelity bonding company, or other liability coverage, to GAD,
for itself or on behalf of its Affiliates as their interest may
appear, to the extent of its loss due to activities covered by
the bond, policy or other liability coverage.
b) Plan of Insurance Agents. 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, its
Agency, representatives and agents,
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including Representatives. If such insurance plan terminates for
any reason during the term of the Agreement, Broker shall
immediately notify GAD of such termination. If requested by GAD,
Broker shall provide satisfactory evidence of coverage under
such insurance policy satisfactory to GAD 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 as referenced herein.
d) Broker represents that all of its directors, officers and
representatives are and shall be covered by blanket fidelity
bonds, including coverage for larceny and embezzlement, issued
by a reputable bonding company. These bonds shall be maintained
at Broker's expense and shall be at least, of the form type and
amount required under the NASD Rules of Fair Practice. Upon
request, Broker shall give evidence satisfactory to GAD that
such coverage is in force. Furthermore, Broker shall give prompt
written notice to GAD of any notice of cancellation or change of
such coverage. Broker hereby assigns any proceeds received from
a fidelity bonding company, or other liability coverage, to GAD,
for itself or its Affiliates, as their interest may appear, to
the extent of their loss due to activities covered by the bond,
policy or other liability coverage.
16)In such cases where Broker intends to distribute the Variable
Contracts through an Agency, Broker further represents that:
a) Broker will operate and be responsible for all
securities-related services provided by Agency arising from the
offer, sale and/or servicing by its registered Representatives
of the Variable Contracts;
b) Agency will engage in the offer or sale of Variable Contracts
only through persons who are registered Representatives of the
Broker. Unregistered employees will not engage in any securities
activities, nor receive any compensation based on transactions
in securities or the provision of securities advice;
c) Broker will be responsible for the training, supervision, and
control of its registered Representatives as required under the
1934 Act and other applicable laws, including, but not
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limited to, principal review and approval of all sales
literature and advertisements, periodic compliance audits, and
maintaining ability to appoint and terminate registered persons.
d) Registered Representatives will be licensed under the insurance
laws of the states in which they do business and will be
appointed agents by Agency for which the representatives may
solicit applications in connection with the offer and sale of
insurance securities;
e) Broker and Agency, as applicable, will 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 will 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 will
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
will be made payable to and sent directly to GAD or will be sent
by customers to the Broker for forwarding to GAD. Agency will
not receive, accumulate, or maintain custody of customer funds.
17)In such cases where Broker intends to distribute Fixed Contracts
through an Agency, Broker agrees that before an agent is permitted
to solicit Contracts, Broker or its Agency shall have entered into
a written agreement pursuant to which the subagent: (a) is
authorized to deliver policies only upon the payment to it of the
premiums due thereon and upon compliance with the terms, conditions
and provisions of such policies; (a) shall promptly remit to the
Agency all funds collected on GAD's or its Affiliates' behalf;
(c) shall otherwise act only pursuant to the limited authority
granted to the Agency hereunder and shall comply with all of the
duties and obligations of the Broker hereunder and the rules of GAD
or its Affiliates; and (d) agrees to GAD's right to offset from any
compensation due the subagent any indebtedness due from the
subagent to GAD or its Affiliates and to chargeback compensation
under GAD's or its Affiliates' rules. The Broker further agrees
that it shall promptly remit to GAD all funds collected on the
behalf of GAD or its Affiliates.
18)Broker agrees to comply with the policies and procedures of GAD and
its Affiliates with respect to the solicitation, sales and
administration of Contracts and services Broker and Representatives
are authorized to sell and service under the Agreement, including,
but not limited to, privacy policies
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and procedures, as those policies and procedures may be provided to
Broker by GAD from time to time.
19)For a period of 12 months after termination of the Agreement, the
Agency shall not, directly or indirectly, on a systematic basis,
contact the policyholders of GAD or its Affiliates or condone such
contact for the purpose of inducing any such policyholders to
lapse, cancel, and fail to renew or replace any Contract. If the
Agency, in the judgment of GAD is determined to have engaged in
such prohibited activity, then GAD shall have the right to declare
the Agency's claims for compensation or any other benefit under the
Agreement shall be forfeited and void. GAD, on behalf of itself and
its Affiliates, may also pursue all remedies, including injunction,
to assure compliance with the covenants in this section and shall,
if successful, be entitled to recover from the Agency all costs and
expenses incurred in pursuing such remedies, including reasonable
attorneys' fees.
20)In such cases where Broker shall distribute Contracts with the
assistance of the general agency distribution system of GAD
("General Agent"), the following additional terms shall apply:
a) Broker hereby acknowledges and consents to in advance the
participation of every General Agent, designated by GAD, as a
participating general agency under this Agreement.
b) Broker agrees that both it and its Representatives shall work
cooperatively with the General Agent(s) located in the
particular territory where a Contract is sold and through which
the sale is processed on behalf of GAD or its Affiliates. Broker
further agrees that with respect to each such Contract, it will
rely solely upon the General Agent(s) for Contract issuance,
servicing, the forwarding of commissions, and other related
matters. Notwithstanding the foregoing, the Broker agrees that
it shall look solely to GAD and not to General Agent(s) for
payment of any commissions or other compensation payable
pursuant to the terms of this Agreement.
IV. Principles of Ethical Market Conduct
As a member of the American Council of Life Insurance's Insurance
Marketplace Standards Association (IMSA), GAD expects that the
Agency and its subagents will abide by the six principles of
ethical market conduct set forth by IMSA in connection with all
Contracts sold pursuant to this Agreement. The six principles are
as follows: (a) to conduct business according to high standards of
honesty and fairness and to render that service to its customers
which in the same
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circumstances, it would apply to or demand for itself; (b) to
provide competent and customer focused sales and service; (c) to
engage in active and fair competition; (d) to provide advertising
and sales material that are clear as to purpose and honest and fair
as to content; (e) to provide fair and expeditious handling of
customer complaints and disputes; and (f) to maintain a system of
supervision and review that is reasonably designed to achieve
compliance with these principles of ethical market conduct.
V. Compensation
1) GAD shall pay Broker compensation for the sale of each Contract
sold by Representative of Broker as set forth in the Compensation
Schedule(s) attached between GAD and either Broker or Agency, as
the case may be. GAD shall identify to Broker with each such
payment the name or names of the Representative(s) of Broker who
solicited each Contract covered by the payment. Broker will be
responsible for issuing checks, statements or forms for tax
purposes and other administrative duties connected with
compensation of such Representatives.
2) GAD may at any time offset against any compensation payable to
(a) the Agency or its successors or assigns, any indebtedness due
from the Agency to GAD or its Affiliates, and (b) the subagents or
their successors or assigns any indebtedness due from the subagent
to GAD or its Affiliates. Nothing contained herein shall be
construed as giving Agency or representative the right to incur any
indebtedness on behalf of GAD or its Affiliates. Any remaining
indebtedness of Broker to GAD or its Affiliates arising under this
Agreement shall be a first lien against any monies payable
hereunder. 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 GAD to offset such compensation
against any such indebtedness of the Broker to GAD or its
Affiliates.
3) Neither Broker nor any of its Representatives shall have any right
to withhold or deduct any part of any purchase payment it shall
receive with respect to the Contracts covered by this Agreement for
purposes of payment of commission or otherwise.
4) No compensation shall be payable, and any compensation already paid
shall be returned to GAD on request, under each of the following
conditions:
a) if GAD or its Affiliates, in their sole discretion, determine
not to issue the Contract applied for,
Enterprise Selling Agreement Page 15 of 43
b) if GAD 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,
c) if GAD or its Affiliates refund the premium paid by applicant as
a result of the resolution of a consumer complaint, recognizing
that GAD and its Affiliates have sole discretion to refund
premiums paid by applicants, or
d) if GAD 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.
5) GAD shall pay the compensation to Agency for Contracts credited
prior to the termination date of this Agreement, to the Agency
under the Agreement, as set forth in Compensation Schedule,
attached, while it is in effect. Such Compensation shall be payable
when the premium is due and paid to GAD subject to the provisions
of this Agreement and of the Compensation Schedule.
6) The compensation to be paid by GAD to Agency for the services
provided by Broker and Agency in connection with the joint
distribution of Contracts, if any, hereunder shall be set forth on
the credit line of the completed application form for the product
sold.
7) Agency and Broker hereby agree and acknowledge that compensation
attributable to the sale of any Contract issued by an Affiliate
shall be payable directly by GAD to Agency, and not by the
Affiliate. Agency and Broker further agree and acknowledge that
such payment of compensation by GAD attributable to the sale of
such Contracts shall constitute a complete discharge of the
obligation to pay compensation by the Affiliate issuer under this
Agreement. The foregoing manner of payment shall not affect the
right of offset or chargeback as referred to in Sections V (2) and
V (4) of this Agreement, or other compensation rules as may be set
forth in this Agreement, Compensation Schedules(s), or rules of GAD
or its Affiliates.
Enterprise Selling Agreement Page 16 of 43
8) GAD shall not be obligated to pay any compensation, which would
violate the applicable laws of any jurisdictions, anything in this
Agreement notwithstanding.
9) Broker, either directly or by reimbursing GAD on request, shall pay
for expenses incurred by such Broker in connection with the
solicitation, offer and sale of the Contracts.
10)In addition to the conditions and limitations elsewhere contained
in the Agreement and the Compensation Schedule(s), 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 either state regulation or GAD's
or its Affiliates' rules on replacement transactions; the
replacement or switching rules of each applicable Affiliate are
described on Exhibit C attached hereto.
11)With respect to compensation under this Agreement, in the event
that anything contained in this Section V conflicts with the terms
of the compensation described in the attached product schedules,
the terms contained in such schedules attached will prevail.
VI. Complaints and Investigations
1) Broker and GAD jointly agree to cooperate fully in any regulatory
investigation or proceeding or judicial proceeding arising in
connection with the offer, sale, and/or servicing of the Contracts.
2) Both the Broker and GAD jointly agree to 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 Contract covered by
this Agreement or his/her legal representative, or indirectly from
a regulatory agency to which he/she or his/her legal representative
has expressed a grievance.
3) Such cooperation referred to in Sections VI (1) and VI (2) of this
Agreement shall include, but is not limited to, each party promptly
notifying the other of the receipt of notice of any such
investigation or proceeding, forwarding to the other party 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,
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. A complaint is defined
as a
Enterprise Selling Agreement Page 17 of 43
written or documented verbal communication received by a company or
its distributors, which primarily expresses a grievance.
4) GAD 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 GAD and GAD, on behalf of itself,
settles the matter, Broker shall indemnify and hold harmless GAD
from any and all claims, complaints or grievances made by Broker or
any applicant, policyholder or other made in connection with such
matter.
VII. Records and Administration
1) Once a Contract has been issued, it will be delivered after review
by Broker to the applicant, accompanied by any applicable Notice of
Withdrawal Right and any additional appropriate documents. GAD will
confirm or cause to be confirmed to customers all Contract
transactions, as to the extent legally required, and will
administer the Contracts after they have been delivered, but may
from time to time require assistance from Broker. Broker hereby
undertakes to render such assistance to GAD.
2) Broker will maintain all books and records as required by Rules
17a-3 and 17a-4 under the 1934 Act, except to the extent that GAD
may agree to maintain any such records on Broker's behalf. Records
subject to any such agreement shall be maintained by GAD as agent
for Broker in compliance with said rules, and such 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 that Act.
Nothing contained herein shall be construed to affect GAD'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. GAD and Broker agree that
each shall retain all records related to this Agreement as required
by the 1934 Act, and the rules and regulations thereunder and by
any other applicable law or regulation, as Confidential Information
as described in Section VIII(B) 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. However,
nothing contained herein
Enterprise Selling Agreement Page 18 of 43
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 GAD or its Affiliates, or
provided to GAD or its Affiliates by Broker or Broker's affiliates,
including but not limited to customer files, sales aides, 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 GAD or its
Affiliates. Such proprietary information and materials shall be
treated as nonpublic personal information and/or confidential
information, as appropriate pursuant to Sections VIII(A), (B), (C),
and (D) of this Agreement.
Any and all proprietary information and material developed and
provided by GAD and its Affiliates shall be returned to GAD
(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 GAD or its Contracts shall be
destroyed upon the termination of the Agreement.
B. Receipt of Customer Nonpublic Personal Information From Broker by
GAD
1) GAD will treat Nonpublic Personal information regarding Broker's
customers provided to it by Broker under this Agreement as
Confidential Information under Section VIII(B) of this Agreement,
except that such provisions shall not apply to such information
regarding customers of Broker who were, are or become policyholders
or customers of GAD or its Affiliates other than by reason of the
services provided by Broker under this Agreement.
2) Notwithstanding the foregoing, GAD 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
GAD's 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
Enterprise Selling Agreement Page 19 of 43
Contracts under this Agreement; (d) as authorized by such customer;
and (e) to protect against or prevent fraud.
3) GAD 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 customers, and such
marketing, offering, selling or distributing by GAD 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 to Broker by
GAD
Broker will treat Nonpublic Personal Information regarding Broker's
customers provided to it by GAD 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 GAD to the extent permitted by
Applicable Laws and GAD's or its Affiliate's privacy policy, for
example, to comply with Applicable Laws or requests of regulators,
in connection with Broker's audit procedures, as authorized by such
customers, and to protect against or prevent fraud.
D. Confidential Information
1) GAD and Broker will maintain the confidentiality of Confidential
Information disclosed by either party to the other party under the
terms of this Agreement. Except as otherwise provided in Sections
VIII(A) and VIII(B), neither GAD nor Broker shall disclose any
Confidential Information that is covered by this Agreement, and
shall only disclose such information if 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 and regulations.
"Confidential Information" means: (a) any information that this
Agreement specifies will be treated as "Confidential Information"
under this Section VIII(D); (b) any information of Broker and its
affiliates disclosed by Broker to GAD through the course of
business during the term of this Agreement, or any information of
GAD and its Affiliates that is disclosed by GAD to Broker through
the course of business during the term of this Agreement, in each
such case if such information is clearly identified as and marked
"confidential" by the disclosing party, such
Enterprise Selling Agreement Page 20 of 43
information includes, but is 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; (c) Nonpublic Personal
Information; and (d) information required to be treated as
confidential under Applicable Laws.
2) "Confidential Information" does not include (i) 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; (ii) 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 (iii) information that the disclosing party
consents in writing that the receiving party may disclose.
3) 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
other 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 it used 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; and/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.
4) Any similarity between the Confidential Information and any other
information, regardless of medium, whether verbal 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
shall not constitute any violation of this Agreement and shall not
subject the receiving party to any liability whatsoever.
Enterprise Selling Agreement Page 21 of 43
5) The receiving party shall use the Confidential Information solely
for purposes contemplated by this Agreement and shall not disclose
the Confidential Information except as expressly provided herein.
6) The receiving party understands that neither the disclosing party
nor any of its representatives or designees have made or make any
representation or warranty as to the accuracy or completeness of
the Confidential Information.
E. Protected Health Information
To the extent that Broker and its Representatives receive, create,
has access to or uses PHI, as that term is defined in Section I of
the Agreement, regarding individuals who are applicants for, owners
of or eligible for benefits under certain health insurance products
and optional riders offered by or through GAD or any of its
Affiliates, in accordance with the requirements of the federal
Health Insurance Portability and Accountability Act of 1996 and
related regulations ("HIPAA"), as may be amended from time to time.
Broker agrees:
1) Not to use or disclose PHI except (i.) to perform functions,
activities, or services for, or on behalf of, GAD or its Affiliates
as specified in the Agreement and consistent with applicable laws,
or (ii.) to the extent that such use or disclosure is required by
law. Any such use or disclosure shall be limited to that required
to perform such services or to that required by relevant law.
2) To use appropriate safeguards to prevent use or disclosure of PHI
other than as permitted by this Agreement.
3) To promptly report to GAD any use or disclosure of PHI not
permitted by this Agreement of which Broker becomes aware and to
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) To ensure that any third party with whom Broker contracts or is
hired under that arrangement, receives or has access to PHI agrees
to the same restrictions and conditions that apply to Broker with
respect to PHI under this Agreement.
5) To, within 15 days of GAD's request, provide GAD with any PHI or
information relating to PHI as deemed necessary by GAD to provide
individuals with access to, amendment of, and an accounting of
disclosures of their PHI.
6) To 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/her request to determine GAD's, or
one of its Affiliate's, compliance with HIPAA.
7) To, upon termination of this Agreement, in accordance with GAD's
wishes either return or destroy all PHI Broker maintains in any
form and retain no copies. If GAD agrees that such return or
Enterprise Selling Agreement Page 22 of 43
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 will be
solely for the purposes that make return or destruction
infeasible. Destruction without retention of copies is deemed
"infeasible" if prohibited by the terms of the Agreement or by
applicable law, including record retention requirements of
various state insurance laws.
IX. Indemnification
1) Except with respect to matters relating to the joint distribution
of Contracts, the following indemnification provisions shall apply:
a) GAD will indemnify and hold harmless Broker and Agency from any
and all losses, claims, damages or liabilities (or actions in
respect thereof), to which Broker may become subject, insofar as
such losses, claims, damages or liabilities (or actions in
respect thereof) 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 GAD for any of the Contracts or any relevant funding
vehicle or any amendments or supplements thereto, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
will reimburse Broker for any legal or other expenses reasonably
incurred by it in connection with investigating or defending
against such loss, claim, damage, liability or action in respect
thereof; provided, however, that GAD shall not be liable in any
such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made by Broker when referring to or explaining such
Prospectus, amendment. Registration Statement or any other sales
or offering materials. GAD shall not indemnify Broker for any
action 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 GAD. The forgoing indemnities shall, upon the same
terms and conditions, extend to and inure to the benefit of each
director, trustee and officer of Broker and any person
controlling it.
b) Broker will indemnify and hold harmless GAD and its Affiliates
against any losses, claims, damages or liabilities (or actions
in respect thereof), to which GAD or its Affiliates may become
subject, insofar as such losses, claims, damages, or liabilities
(or actions in respect
Enterprise Selling Agreement Page 23 of 43
thereof) arise out of or are based upon any negligent, improper,
fraudulent or unauthorized acts or omissions by Broker, its
employees, agents, representatives, officers or directors,
including but not limited to improper or unlawful sales
practices, any 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; and will reimburse GAD or
its Affiliates for any legal or other expenses reasonably
incurred by them in connection with investigating or defending
against any such loss, claim, damage, liability or action. The
foregoing indemnities shall, upon the same terms and conditions,
extend to and inure to the benefit of each director, trustee and
officer of GAD and its Affiliates, and any person controlling
either GAD or its Affiliates.
c) Broker shall indemnify and hold harmless GAD and its Affiliates
from any and all losses, claims, damages or liabilities (or
actions in respect thereof) to which GAD or its Affiliates may
be subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
result from any breach of any representation or warranty,
covenant, agreement, obligation or undertaking in this Agreement
by Broker or its directors, officers, employees or other
representatives or by any other person or entity acting on
behalf of or under control of Broker; and will reimburse GAD or
its Affiliates for any legal or other expenses reasonably
incurred by them in connection with investigating or defending
against any such loss, claim, damage, liability or action. The
foregoing indemnities shall, upon the same terms and conditions,
extend to and inure to the benefit of each director, trustee and
officer of GAD and its Affiliates, and any person controlling
either GAD or its Affiliates.
d) Broker shall indemnify and hold GAD and its Affiliates harmless
for any penalties, losses or liabilities resulting from GAD
improperly paying any compensation under this Agreement, unless
such improper payment was caused by GAD's or its Affiliates'
negligence or willful misconduct; and will reimburse GAD or its
Affiliates for any legal or other expenses reasonably incurred
by them in connection with investigating or defending against
any such loss, claim, damage, liability or action. The foregoing
indemnities shall, upon the same terms and conditions, extend to
and inure to the benefit of each director, trustee and officer
of GAD, its Affiliates, and any person controlling either GAD or
its Affiliates.
2) With respect to matters relating to the joint distribution of
Contracts, the following indemnification provision shall apply:
Enterprise Selling Agreement Page 24 of 43
a) GAD, and General Agent, where applicable, jointly and severally,
agree to indemnify Broker and Agency against and hold them
harmless from any and all claims, damages, lawsuits,
administrative proceedings, liabilities and expenses (including
reasonable attorneys' fees) against Broker or Agency arising or
resulting directly or indirectly from acts or omissions of GAD
or General Agent(s), including, but not limited to, breach of
any representation, warranty, covenant or obligation of GAD or
General Agent(s) under the Agreement, or of any of their
officers or employees in connection with performance under the
Agreement. For purposes of this Section only, Broker shall be
deemed to include its "controlling persons" as defined in
Section 15 of the 1933 Act and Section 20(a) of the 1934 Act.
b) Broker and Agency, where applicable, jointly and severally,
agree to indemnify GAD, its Affiliates and General Agent(s)
against and hold them harmless from any and all claims, damages,
lawsuits, administrative proceedings, liabilities and expenses
(including reasonable attorneys' fees) against GAD, its
Affiliates or General Agent(s) arising or resulting directly or
indirectly from acts or omissions of Broker or Agency,
including, but not limited to, breach of any representation,
warranty, covenant or obligation of Broker or Agency under the
Agreement, or of any of their officers or employees in
connection with performance under the Agreement. For purposes of
this Section only, GAD shall be deemed to include its
"controlling persons" as defined in Section 15 of the 1933 Act
and Section 20(a) of the 0000 Xxx.
3) Promptly after receipt by an indemnified party of notice of the
commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying
party, notify the indemnifying party in writing of the commencement
thereof; but the omission to notify the indemnifying party shall
not relieve it from any liability which it may otherwise have to
any indemnified party. In case any such action shall be brought
against any indemnified party, it shall notify the indemnifying
party of the commencement thereof. The indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party, similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
Enterprise Selling Agreement Page 25 of 43
X. General Provisions
A. Term and Termination
1) This Agreement shall continue in force for one year from its
Effective Date and thereafter shall automatically be renewed every
year for a further one year period; provided that either party may
unilaterally terminate this Agreement with or without cause upon
sixty (60) days' written notice to the other party of its intention
to do so.
2) Change in Status.
a) Broker-Dealer Status. The Agreement shall terminate immediately
upon GAD or Broker ceasing to be a registered broker-dealer or a
member of the NASD.
b) Legal Status. The Agreement shall terminate immediately upon the
termination of the legal existence of Broker or the Agency, or
the merger, consolidation, reorganization, dissolution,
receivership or bankruptcy of either, or whenever the Broker or
Agency is no longer licensed under law to solicit and procure
applications for Contracts, unless the Agency notifies the other
parties 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 other parties.
3) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except (a) the agreements contained in
Sections, VI, VIII, K, X(E), X(F), and X(J) 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, Broker shall return to GAD, within
30 days after the Effective Date of termination, any and all
records in its possession which have been specifically maintained
in connection with GAD'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 GAD may
assign this Agreement to its Affiliates at any time. Any purported
assignment in violation of this Section shall be void.
Enterprise Selling Agreement Page 26 of 43
C. Amendments
No oral promises or representations shall be binding nor shall this
Agreement be modified except by agreement in writing, executed on
behalf of the Parties by a duly authorized officer of each of them.
D. Notices
Notices to be given hereunder shall be addressed to:
General American Distributors, Inc. United Planners' Financial
000 Xxxxxx Xxxxxx Services of America
Xx. Xxxxx, XX 00000 0000 X Xxxxxxxxxx Xxxxx
Xxxx: Xxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
E. Arbitration
1) All disputes and differences between the parties, other than those
arising with respect to the use of nonpublic personal information
under Section VIII must be decided by arbitration, regardless of
the insolvency of either party, unless the conservator, receiver,
liquidator or statutory successor is specifically exempted from an
arbitration proceeding by applicable state law.
2) Either party may initiate arbitration by providing written
notification to the other party. Such written notice shall set
forth (i) a brief statement of the issue(s); (ii) the failure of
the parties to reach agreement; and (iii) the date of the demand
for arbitration.
3) The arbitration panel shall consist of three 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.
4) Each party shall select an arbitrator within thirty-days (30) from
the date of the demand. If either party shall refuse or fail to
appoint an arbitrator within the time allowed, the party that has
appointed an arbitrator may notify the other party that, if it has
not appointed its arbitrator within the following ten (10) days, an
arbitrator will 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 arbitrators fail
to agree on the selection of the third arbitrator within the time
allowed,
Enterprise Selling Agreement Page 27 of 43
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 names chosen by drawing lots.
5) 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) The arbitrators shall determine all arbitration schedules and
procedural rules. Organizational and other meetings will be held in
Missouri, unless the arbitrators select another location. The
arbitrators shall decide all matters by majority vote.
7) 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) Unless the arbitrators shall provide otherwise, each party will 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
F. Governing Law
This Agreement shall be governed by and construed in accordance
with the laws of the State of Missouri without regard to Missouri
choice of law provisions.
G. Entire Understanding
This Agreement and any reference incorporated herein constitute the
complete understanding of the parties and supersedes in its
entirety any and all prior and contemporaneous agreements among the
parties with respect to the subject matter discussed herein. No
oral agreements or representatives shall be binding.
Enterprise Selling Agreement Page 28 of 43
H. No Third Party Beneficiaries
GAD's Affiliates shall be third party beneficiaries of this
Agreement, entitled to enforce the provision hereof as if they were
a party to this Agreement. Except as otherwise provided in the
preceding sentence, nothing in the Agreement shall convey any
rights upon any person or entity, which is not a party to the
Agreement.
I. Non-exclusivity
Broker and Agency agree that no territory or product is assigned
exclusively hereunder and that GAD reserves the right in its
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.
J. 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.
K. Counterparts
This Agreement may be executed in counterparts, with the same force
and effect as if executed in one complete document.
L. Severablity
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.
Enterprise Selling Agreement Page 29 of 43
In reliance on the representations set forth and in consideration of the
undertakings described, the parties represented below do hereby contract and
agree.
GENERAL AMERICAN DISTRIBUTORS
(BROKER-DEALER)
By /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx PRESIDENT
--------------------------------
Print Name & Title
Date 3-27-03
---------------------------
UNITED PLANNERS' FINANCIAL
SERVICES OF AMERICA
(SELLING BROKER-DEALER)
By /s/ Xxxxxxxxx X. Xxxxxx
---------------------------
XXXXXXXXX X. XXXXXX XX. V.P.
--------------------------------
Print Name & Title
Date March 19, 2003
---------------------------
Enterprise Selling Agreement Page 30 of 43
