SCHEDULE 5
FORM OF SERVICE AGREEMENT
This schedule is an integral part of the Agreement to which it relates.
SERVICE SECURITY DISTRIBUTORS, INC.
AGREEMENT One Security Benefit Place
Topeka, Kansas 66636
This Service Agreement (this "Agreement"), effective as of [January 1, 2007]
(the "Effective Date"), by and between Security Distributors, Inc., a Kansas
corporation (herein "SDI"), whose Principal Office is located at One Security
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx 00000, Commonwealth Annuity and Life Insurance
Company, First Allmerica Financial Life Insurance Company and
________________________ (herein the "Broker-Dealer").
WITNESSETH:
WHEREAS, Broker-Dealer previously entered into a Sales or Service Agreements
with VeraVest Investments, Inc. (herein "VeraVest") (formerly known as Allmerica
Investments, Inc.) for the sales and service of Contracts (defined below) issued
by Commonwealth Annuity and Life Insurance Company (herein "Commonwealth")
(formerly known as Allmerica Financial Life Insurance and Annuity Company)
and/or First Allmerica Financial Life Insurance Company (herein "First
Allmerica") and VeraVest subsequently terminated the Sales or Service Agreement;
and
WHEREAS, certain Registered Representatives of the Broker-Dealer were formerly
affiliated with a broker-dealer which sold and serviced Contracts issued by
Commonwealth and/or First Allmerica and/or certain Registered Representatives of
the Broker-Dealer have acquired clients who own such Contracts; and
WHEREAS, such Registered Representatives are desirous of servicing those
Commonwealth and/or First Allmerica Contractholders who are their clients and,
if applicable, who were their clients while they were affiliated with their
prior broker-dealer; and
WHEREAS, the Insurance Companies are willing to consent to such Contractholders
being serviced by such Registered Representatives only if the Broker-Dealer
agrees to supervise the activities of such Registered Representatives related to
such Contractholders; and
WHEREAS, the Broker-Dealer agrees to provide appropriate supervision of its
Registered Representatives related to such Contractholders, subject to the terms
and conditions set forth in this Agreement;
NOW THEREFORE, the parties hereto agree as follows:
SDI, subject to the terms and conditions set forth in this Agreement, authorizes
and appoints the Broker-Dealer to service existing Contracts through its
Registered Representatives. The Broker-Dealer accepts this authorization and
appointment and agrees to the terms and conditions set forth below.
DEFINITIONS INSURANCE COMPANIES - All Contracts have been issued
by Commonwealth Annuity and Life Insurance Company
(herein "Commonwealth") (formerly known as Allmerica
Financial Life Insurance and Annuity Company) and/or
First Allmerica Financial Life Insurance Company
(herein "First Allmerica") (herein collectively
referred to as the "Insurance Companies").
The Home Office of Commonwealth is 000 Xxxxxxxx
Xxxx, Xxxxxxxxxxxx, XX 00000.
The Home Office of First Allmerica is 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000.
However, all Contracts issued by Commonwealth are
being administered on behalf of Commonwealth by se2,
a division of Security Benefit Life Insurance
Company (the "Administrator") and all Contracts
issued by First Allmerica and reinsured by
Commonwealth are being sub-administered by
Administrator. Accordingly, for the purposes of
these Contracts, all mail intended for Commonwealth
or First Allmerica should be directed to
Commonwealth in care of the Administrator at 0000 XX
0xx Xxxxxx, Xxxxxx, Xxxxxx 00000-0000.
CONTRACTS - The variable annuity and variable life
insurance contracts of the Insurance Companies to be
serviced by Registered Representatives of the
Broker-Dealer, for which SDI has been appointed the
principal underwriter.
REGISTERED REPRESENTATIVES - Individuals affiliated
with the Broker-Dealer who are licensed as life
insurance agents in those jurisdictions where
Contracts are to be serviced and who are also duly
registered with the National Association of
Securities Dealers, Inc. (herein the "NASD") in
compliance with the '34 Act.
VERAVEST - VeraVest Investments, Inc. (formerly
known as Allmerica Investments, Inc.) was the
exclusive distributor and principal underwriter for
the Contracts when they were initially sold and was
replaced by SDI, effective November 1, 2006.
'33 ACT - The Securities Act of 1933, as amended.
'34 ACT - The Securities Exchange Act of 1934, as
amended.
RELATIONSHIP SECTION 1. The Broker-Dealer agrees that it is and
OF PARTIES shall continue to act at all times as an independent
contractor while this Agreement remains in force.
Nothing in this Agreement will be construed to
create the relationship of employer and employee
between SDI or either Insurance Company and the
Broker-Dealer, or any of its employees, agents or
Registered Representatives. The Broker-Dealer and
each Registered Representative will be free to
exercise their independent judgment as to the time,
place and manner of servicing Contracts underwritten
by the Insurance Companies. However, the
Broker-Dealer and its Registered Representatives
shall have no authority to act on behalf of SDI or
the Insurance Companies in a manner which does not
conform to applicable statutes, ordinances, or
governmental regulations or to reasonable rules
adopted from time to time by SDI or the Insurance
Companies.
LIMITATIONS ON AUTHORITY SECTION 2. The Broker-Dealer understands and agrees
that this Agreement is being entered into solely for
the purpose of permitting Registered Representatives
of the Broker-Dealer to service existing Contracts
issued by the Insurance Companies and that neither
said Registered Representatives nor the
Broker-Dealer shall solicit or accept any new
variable annuity or variable life insurance Contract
applications on behalf of the Insurance Companies.
LICENSING AND SECTION 3. SDI hereby authorizes the Broker-Dealer
APPOINTMENT OF to recommend Registered Representatives for
REGISTERED REPRESENTATIVES appointment by the Insurance Companies as life
insurance agents and only individuals so recommended
shall be appointed. SDI shall arrange for the
Insurance Companies to apply for life insurance
agent appointments in the appropriate jurisdictions
for such recommended Registered Representatives.
PROVIDED, HOWEVER, that the Insurance Companies
shall only appoint a Registered Representative as
their life insurance agent if the Broker-Dealer
agrees (i) to reimburse the appointing Insurance
Company for any licensing and/or appointment fees
the Insurance Company may incur in conjunction with
the requested appointment; and (ii) to pay a
reasonable servicing fee, to be determined by the
appointing Insurance Company.
If a Registered Representative is no longer to be
treated as the agent of record on a Contract, the
Broker-Dealer shall promptly notify SDI and the
issuing Insurance Company in writing and, within
thirty (30) business days of such notice, identify a
Registered Representative who will act as the
successor agent of record.
Notwithstanding the foregoing, the Insurance
Companies, in their sole and absolute discretion,
reserve the right to refuse to appoint any proposed
Registered Representative and/or to terminate with
or without cause any Registered Representative who
has been appointed by the Insurance Companies.
AGREEMENTS BY SECTION 4. The Broker-Dealer agrees that at all
THE BROKER- times when performing its duties under this
DEALER Agreement that it shall be duly registered as a
securities broker-dealer under the '34 Act, be a
member in good standing of the NASD, and be duly
licensed or registered as a securities broker-dealer
in each jurisdiction where such licensing or
registration is required in connection with the
servicing of the Contracts or the supervision of
Registered Representatives who service the
Contracts.
The Broker-Dealer agrees that at all times when
performing its duties under this Agreement that it
shall be duly licensed and appointed as a life
insurance agent in each jurisdiction in which it
intends to perform hereunder.
The Broker-Dealer shall be responsible for carrying
out its obligations under this Agreement in
continued compliance with the NASD Conduct Rules,
federal and state securities laws and regulations,
and state insurance laws and regulations. The
Broker-Dealer and its Registered Representatives are
not authorized to make any representations
concerning a Contract other than those contained in
the Contract prospectus or in such sales literature
or advertising materials as may be authorized by
SDI.
The Broker-Dealer hereby agrees not to use or
distribute, in writing or electronically, any sales
literature or advertising material relating to the
Contracts, unless the specific item has been
provided by SDI or has first been approved for use
in writing by SDI. SDI reserves the right to recall
any sales material provided by it at any time for
any reason, and the Broker-Dealer shall promptly
comply with any such request for the return of such
material and shall not use any such material
thereafter. Additionally, the Broker-Dealer shall
promptly return all sales material related to the
Contracts promptly upon termination of this
Agreement. On and after the Effective Date,
Broker-Dealer agrees to use no sales material
relating to the Contracts provided to it by Xxxx
Xxxx.
The Broker-Dealer agrees that it shall be fully
responsible for ensuring that no person shall
service Contracts on behalf of the Insurance
Companies until such person is appropriately
licensed, registered and otherwise qualified to
service Contracts under applicable state and federal
insurance and securities laws.
The Broker-Dealer agrees to train, supervise and be
solely responsible for the conduct of its Registered
Representatives in the servicing of the Contracts
and for the supervision as to their strict
compliance with SDI's rules and procedures, the NASD
Conduct Rules, and applicable rules and regulations
of any other governmental or other agency that has
jurisdiction over the servicing of the Contracts.
The Broker-Dealer shall take reasonable steps to
ensure that its Registered Representatives shall not
make investment or other recommendations to a
Contract owner in the absence of reasonable grounds
to believe that the recommendation is suitable for
such owner. Such determination will be based upon,
but will not be limited to, information furnished to
a Registered Representative after reasonable inquiry
of such owner concerning the owner's age, insurance
and investment objectives, other security holdings,
financial situation and needs. Upon request by SDI
or the Insurance Companies, the Broker-Dealer agrees
to promptly provide a copy of its current written
suitability procedures to SDI or the Insurance
Companies. The Broker-Dealer agrees that neither
SDI's nor the Insurance Companies' request for a
copy of the Broker-Dealer's suitability procedures
transfers the suitability responsibility to SDI or
the Insurance Companies.
The Broker-Dealer agrees on its own behalf, and on
behalf of the Registered Representatives, to comply
with any trading restrictions/requirements of the
mutual funds or other investment vehicles underlying
the Contracts. Further, in the event the Insurance
Companies or SDI is the subject of an information
request by an underlying fund in accordance with
Rule 22c-2 under the Investment Company Act of 1940,
Broker-Dealer agrees to cooperate fully and to
provide such information as Insurance Companies or
SDI reasonably requests in respect of such
information request. If requested by a fund,
Broker-Dealer agrees to execute instructions to
restrict or prohibit further purchases or exchanges
of fund shares by Registered Representatives and/or
customers of Registered Representatives.
The Broker-Dealer shall ensure that its Registered
Representatives conduct their business with respect
to the Contracts at all times as follows:
(a) A Registered Representative shall not service
Contracts in any jurisdiction until such
Registered Representative is properly trained
and, if required under applicable law, is
licensed and appointed as a life insurance
agent in such jurisdiction.
(b) A Registered Representative shall utilize only
that sales literature and advertising material
approved in writing by SDI; a Registered
Representative may use other sales material
only with the express written authorization of
SDI.
Broker/Dealer shall be solely responsible for any
payments to Registered Representatives of any
commissions for servicing of the Contracts and shall
indemnify, defend and hold SDI and Insurance
Companies harmless from any and all actions,
proceedings or claims by Registered Representatives
in respect of such commissions.
CERTAIN AGREEMENTS SECTION 5. SDI agrees that at all times while this
BY SDI Agreement remains in force that it shall be a
registered broker-dealer under the '34 Act and be a
member in good standing of the NASD.
During the term of this Agreement, SDI will provide
to, or cause to be provided to, the Broker-Dealer,
without charge to the Broker/Dealer, as many copies
of the prospectus(es) for the Contracts (and any
amendments, or supplements thereto) and the current
prospectus(es) for any underlying fund(s) as the
Broker-Dealer may reasonably request. Upon
termination of the Agreement, any prospectuses and
other materials and supplies furnished by SDI to the
Broker-Dealer shall be promptly returned to SDI.
Commonwealth (or its designee) agree to promptly
notify the Broker-Dealer of newly declared effective
prospectus(es) for the Contracts and any amendments
or supplements thereto.
ILLUSTRATIONS SECTION 6. The Broker-Dealer and its Registered
Representatives will not furnish any Contract owner
with an illustration of the financial or other
aspects of a Contract unless the same has been
furnished by the Insurance Companies.
ACCOUNTING SECTION 7. In accordance with the rules of the
FOR FUNDS Insurance Companies, the Broker-Dealer will account
COLLECTED for and remit immediately to the Administrator all
funds received or collected for or on behalf of
either Insurance Company without deduction for any
commissions, or other claim the Broker-Dealer or any
Registered Representative may have against Insurance
Company, Xxxx Xxxx, SDI, the Administrator, or any
of their respective affiliates, and will make such
reports and file such substantiating documents and
records as the Insurance Companies may reasonably
require.
INDEMNIFICATION SECTION 8. The Broker-Dealer shall indemnify, defend
and hold the Insurance Companies, SDI, the
Administrator and their officers, directors,
employees and agents, and any of their respective
affiliates, harmless from any liability arising from
any act or omission of the Broker-Dealer, any
affiliate of the Broker-Dealer or any of their
officers, directors, life insurance agents,
employees or Registered Representatives, including
but not limited to, any fines, penalties, reasonable
attorney's fees, costs of settlement, damages or
financial loss. The Broker-Dealer expressly
authorizes the Insurance
Companies and SDI, without precluding them from
exercising any other remedy they may have, to charge
against all compensation due or to become due to the
Broker-Dealer under this Agreement, any monies paid
on any liability incurred by the Insurance Companies
or SDI by reason of any such act or omission of the
Broker-Dealer, any affiliate of the Broker-Dealer,
or any of their officers, directors, life insurance
agents, employees or Registered Representatives.
Commonwealth or First Allmerica, whichever Insurance
Company issued the affected Contract or Contracts,
shall indemnify, defend and hold the Broker-Dealer,
SDI and their officers, directors, insurance agents,
employees and Registered Representatives harmless
from any liability arising from any act or omission
of such Insurance Company, any affiliate of such
Insurance Company or any of its officers, directors
or employees, including but not limited to, any
fines, penalties, reasonable attorney's fees, costs
of settlement, damages or financial loss.
The indemnifications provided by this Section 8
shall survive termination of this Agreement.
COMMISSION SECTION 9. If a Contract owner rescinds a Contract
REFUNDS or exercises a right to surrender a Contract for
return of all payments made, the Broker-Dealer will
repay the issuing Insurance Company the amount of
any commissions received by the Broker-Dealer on the
Contract within 10 days of receipt of a written or
facsimile request for repayment or at the option of
SDI, to the extent permitted by law, SDI may deduct
any such amount to be repaid from any compensation
payable under this Agreement, whether such
compensation is now due or hereafter becomes due.
BASIS OF SECTION 10. While this Agreement remains in force,
COMPENSATION the Insurance Companies on behalf of SDI agree to
pay the Broker-Dealer commissions, if any, payable
on Contracts (a) serviced by Registered
Representatives affiliated with the Broker-Dealer
and (b) for which Broker-Dealer is the broker/dealer
of record as demonstrated by the Administrator's
records. Any commissions payable shall be calculated
and paid pursuant to the terms and conditions of the
sales agreement in force between VeraVest (formerly,
Allmerica Investments, Inc.) and the broker-dealer
with which the Registered Representative was
affiliated at the time the Contract was sold as such
sales agreement may have been amended from time to
time and as may be amended hereafter pursuant to
Section 16 of this Agreement. The Broker-Dealer
agrees to pay the servicing Registered
Representative in accordance with its compensation
arrangement with the Registered Representative.
Notwithstanding the foregoing, the Broker-Dealer
understands and agrees that
no commissions or other compensation shall be
payable on annuity payments received by SDI or the
Insurance Companies on or after May 1, 2003 on
Select variable annuity Contracts* serviced by
Registered Representatives affiliated with the
Broker-Dealer.
*The term "Select variable annuity Contracts" means
and includes the following variable annuity
Contracts issued by the Insurance Companies:
a. Allmerica Select Resource
b. Allmerica Select Resource II
c. Allmerica Select Acclaim
d. Allmerica Select Reward
e. Allmerica Select Charter
f. Allmerica Select Optim-L
Notwithstanding the foregoing, the Broker-Dealer
understands and agrees that no commissions or other
compensation shall be payable on annuity payments
received by SDI or the Insurance Companies on or
after May 1, 2004 on Partner variable annuity
Contracts** serviced by Registered Representatives
affiliated with the Broker-Dealer.
**The term "Partner variable annuity Contracts"
means and includes the following variable annuity
Contracts issued by the Insurance Companies:
a. Delaware Medallion I, II and III and
Golden Medallion Variable Annuity
Contracts;
b. Pioneer Vision, Vision 2, XtraVision and
C-Vision Variable Annuity Contracts;
x. Xxxxxxx Gateway Advisor, Gateway Custom,
Gateway Plus, Gateway Elite, Gateway
Incentive and Gateway Incentive EDB
Variable Annuity Contracts; and
d. Fulcrum FD Variable Annuity Contracts.
TIME OF PAYMENT SECTION 11. A payment will not be considered made
OF COMMISSIONS until it has been received by the Administrator at
the address noted in the Definitions section. On
payments made, commissions, if any, will be paid at
regular intervals in accordance with the rules of
the Insurance Companies and SDI.
TERMINATION SECTION 12. This Agreement shall automatically
terminate immediately and without notice upon the
Broker-Dealer ceasing to comply with any of the
terms and conditions of this Agreement or upon the
dissolution, bankruptcy or insolvency of the
Broker-Dealer.
Whether or not there is a breach of this Agreement,
the Broker-Dealer or SDI may terminate this
Agreement by giving ten (10) days' written notice to
the other party at any time during the first year
hereof, and by giving thirty (30) days' written
notice after the expiration of the first year
hereof.
Upon termination of this Agreement all
authorizations, rights and obligations shall cease,
except for (i) the indemnifications provided in
Section 8 (ii) the obligation to pay any
compensation due on the date of termination and
(iii) the provisions of Section 9 relative to
commission refunds. Except as provided in the
preceding sentence, no further compensation shall be
paid after termination of this Agreement.
RIGHT OF SET-OFF SECTION 13. SDI and the Insurance Companies will
have a lien on any compensation payable under this
Agreement, whether or not such compensation is now
due or hereafter becomes due, and may apply any such
monies to the satisfaction of indebtedness to SDI or
to either Insurance Company to the extent permitted
by law. The foregoing right of set-off on the part
of SDI and the Insurance Companies shall not prevent
all or any of them from pursuing any other means or
remedies available to them to recover any such
indebtedness.
NON-WAIVER OF BREACH SECTION 14. Waiver of any breach of any provision of
this Agreement will not be construed as a waiver of
the provision or of the right of SDI to enforce said
provision thereafter.
ASSIGNABILITY SECTION 15. This Agreement is not transferable.
Without the written consent of SDI and the Insurance
Companies, no rights or interest in or to any
compensation payable hereunder will be subject to
assignment, and any attempted assignment, sale or
transfer of any such compensation without such
written consents will immediately make this
Agreement void and be a release to SDI and to the
Insurance Companies in full of any and all of their
obligations hereunder.
RESERVATION OF SECTION 16. SDI reserves the right at any time, and
RIGHT TO CHANGE from time to time, to change prospectively the terms
and conditions of this Agreement, including but not
limited to, the rates of commissions. Any change
will become effective on the date specified in a
notice or, if later, 10 days after the notice is
given to the Broker-Dealer. However, the requirement
to give advance notice shall not apply if the change
becomes necessary or expedient by reason of
legislation or the requirements of any governmental
body and, in the opinion of SDI, it is not
reasonably possible to meet the 10 day requirement.
Changes will not be retroactive and changes in
commission rates will apply only to annuity payments
made on or after the effective date of the change.
COMPLAINTS AND SECTION 17. The Broker-Dealer, SDI and the Insurance
INVESTIGATIONS Companies agree to
cooperate fully in any customer complaint, insurance
or securities regulatory proceeding or judicial
proceeding with respect to the Broker-Dealer, SDI,
the Insurance Companies, their affiliates or their
Registered Representatives to the extent that any
such customer complaint or proceeding is in
connection with Contracts serviced under this
Agreement. Without limiting the foregoing:
(a) The Broker-Dealer will be notified promptly by
SDI or the Insurance Companies of any written
customer complaint or notice of any regulatory
inquiry, or audit or judicial proceeding of which
they become aware including the Broker-Dealer or any
Registered Representative which may be related to
any Contract covered by this Agreement. The
Broker-Dealer will promptly notify the Insurance
Companies and SDI of any written customer complaint
or notice of any regulatory inquiry, or audit or
judicial proceeding received by the Broker-Dealer
including the Broker-Dealer or any of its Registered
Representatives which may be related to any Contract
covered by this Agreement.
(b) Any response by the Broker-Dealer to a customer
complaint or regulatory inquiry or audit arising out
of the conduct of its registered representatives or
the activities of the Broker-Dealer associated with
the Contracts covered under this Agreement must be
sent to the applicable Insurance Company and to SDI
not less than five business days prior to the
response being sent to the customer or regulatory
authority, except that if a more prompt response is
required, the proposed response shall be
communicated by telephone or facsimile transmission.
CONFIDENTIALITY SECTION 18. SDI and the Insurance Companies each
agree that the names and addresses of all customers
of the Broker-Dealer and of any company or person
affiliated with the Broker-Dealer, and the names and
addresses of any Registered Representatives of the
Broker-Dealer which may come to the attention of SDI
exclusively as a result of the Broker-Dealer's
servicing of the Contracts covered by this Agreement
and not from any independent source, are
confidential and shall not be used by SDI, the
Insurance Companies, or any company or person
affiliated with SDI or the Insurance Companies, nor
divulged to any party for any purpose whatsoever,
except as may be necessary in connection with the
servicing of the Contracts covered by this
Agreement, and any agreement pursuant to which an
affiliate of SDI provides administration services
for or relating to the Contracts, including
responses to specified requests to the Insurance
Companies for service by Contract owners or efforts
to prevent the replacement of such Contracts or to
encourage the exercise of options under the terms of
the Contracts. Except as noted above, in no event
shall the names and addresses of such customers and
Registered Representatives be furnished by SDI to
any other company or person, including but not
limited to, any of their managers, registered
representatives,
or brokers who are not Registered Representatives of
the Broker-Dealer. The intent of this section is
that SDI, the Insurance Companies or companies or
persons affiliated with them shall not utilize, or
permit to be utilized, their knowledge of the
Broker-Dealer or of any affiliated companies which
is derived exclusively as a result of the
relationships created through the servicing of the
Contracts.
Confidential information will not include any
information or material, or any element thereof, to
the extent any such information or material, or any
element thereof:
(i) has been previously published or is
published hereafter, unless such
publication is a breach of this Agreement
or a similar confidentiality or
non-disclosure agreement;
(ii) was already known to the receiving party
prior to being disclosed by or obtained
from the other party;
(iii) has been or is hereafter rightfully
received by the receiving party from a
third person (other than the other party)
without restriction or disclosure and
without breach of this Agreement; or
(iv) has been independently developed by the
receiving party.
In addition, notwithstanding the foregoing
provisions of this Section 18, nothing herein shall
prohibit SDI, the Insurance Companies or any company
or person affiliated with SDI or the Insurance
Companies from (i) seeking business relationships
and entering into separate sales agreements with
Registered Representatives of the Broker-Dealer if
the names of said Registered Representatives were
obtained from independent sources and not
exclusively as a result of SDI's relationship with
the Broker-Dealer created by this Agreement; (ii)
from entering into separate sales agreements with
Registered Representatives of the Broker-Dealer upon
the request and at the initiation of said Registered
Representatives; (iii) divulging the names and
addresses of any such customers, Registered
Representatives, or other companies or persons
described above in this section in connection with
any customer complaint or insurance, securities or
other regulatory proceeding, examination or
investigation or in connection with any other legal
process or (iv) providing information requested by
or on behalf of an underlying fund as contemplated
in Rule 22c-2 under the Investment Company Act of
1940.
PRIVACY SECTION 19. Each party hereto agrees to comply with
the privacy laws affecting it, including compliance
with the privacy requirements imposed under the
Xxxxx-Xxxxx-Xxxxxx Act (P.L. 102-106), and agrees
further not to
take any action to cause another party to violate
such privacy laws. If the applicable privacy laws
change, the parties shall take such action as is
necessary to comply with the law as it then exists.
SDI and the Insurance Companies agree to disclose or
use the non public personal financial information
(as such term is defined in Xxxxx-Xxxxx-Xxxxxx) of
the Contract owners only to carry out the terms and
conditions of this Agreement or as permitted by
applicable law. The Broker-Dealer agrees to disclose
or use any information it receives from SDI or the
Insurance Companies in connection with this
Agreement that is nonpublic personal information
only to carry out the terms and conditions of this
Agreement.
In addition, each party hereto shall maintain an
information security program designed to: (i) insure
the security and confidentiality of nonpublic
personal information; (ii) protect against any
anticipated threats or hazards to the security or
integrity of such information; and (iii) protect
against unauthorized access to or use of such
information. Each party shall notify the other party
promptly upon the discovery of any loss,
unauthorized access, disclosure or unauthorized use
of such nonpublic personal information.
ANTI-MONEY SECTION 20. Each party agrees to comply with the
LAUNDERING compliance and reporting provisions imposed under
the USA Patriot Act (2001) (the "Patriot Act"). The
Broker-Dealer hereby represents that it: has
established an Anti-Money Laundering Program that
complies in all material respects with the Patriot
Act and other applicable anti-money laundering laws
and regulations; knows and verifies the identity of
its customers; maintains records regarding the
identity of each customer for at least five years
following account termination; and screens all new
customers against the Office of Foreign Assets
Control ("OFAC") control list. The Broker-Dealer
understands that under the Patriot Act additional
anti-money laundering regulations may become
effective from time to time and agrees to take such
action as may be necessary to comply with any new or
additional anti-money laundering regulations.
BONDING SECTION 21. The Broker-Dealer agrees that at all
times while this Agreement remains in force that it
shall be covered by a blanket fidelity bond,
including coverage for larceny and embezzlement,
issued by a reputable bonding company. Such bond
shall be, at a minimum, of the form, type and amount
required under NASD rules, endorsed to extend
coverage to transactions relating to the Contracts.
SDI may require evidence, satisfactory to it, that
such coverage is in force and the Broker-Dealer
shall give prompt written notice to SDI of any
notice of cancellation of the bond or change of
coverage. Upon the failure or inability of the
Broker-Dealer to obtain or renew such bond, this
Agreement shall terminate at SDI's discretion upon
notice by SDI.
NOTICE SECTION 22. Whenever this Agreement requires a
notice to be given, the requirement shall be
considered to have been met, (a) in the case of
notice to
the Insurance Companies, if delivered or mailed
postage prepaid to the applicable Insurance
Company's Home Office as specified in the
"Definitions" section, or such other address as may
be specified in writing to Broker-Dealer, (b) in the
case of notice to SDI, if delivered or mailed
postage prepaid to the address specified in the
opening paragraph of this Agreement (to the
attention of SDI's General Counsel), or such other
address as may be specified in writing to
Broker-Dealer, and (c) in the case of Broker-Dealer,
if delivered or mailed postage prepaid at the
address specified on the signature page of this
Agreement.
GOVERNING LAW SECTION 23. This Agreement shall be governed by and
construed in accordance with the laws of the United
States, the State of New York (without regard to its
choice of law provisions), and the rules of the
NASD, as applicable.
SEVERABILITY SECTION 24. The provisions of this Agreement are
severable, and if any provision of this Agreement is
found to be invalid, such provision shall not affect
any other provision of this Agreement that can be
given effect without the invalid provision.
ARBITRATION SECTION 25. All claims and controversies arising out
of or related to this Agreement, except actions for
equitable relief pending an arbitration award, shall
be submitted to binding arbitration in Topeka,
Kansas (or such other location as may be agreeable
to all the parties to the arbitration) in accordance
with the Code of Arbitration procedure of the NASD,
if the NASD accepts jurisdiction, and, if not, by a
panel of three neutral arbitrators under the
Commercial Arbitration Rules of the American
Arbitration Association. Judgement upon an award of
the arbitrators may be entered and enforced in any
court having jurisdiction. The parties to such
dispute will equally share the fees and expenses of
the arbitrators. The parties agree that the
prevailing party in any such arbitration, as
determined by the arbitrators, shall be entitled to
reasonable attorneys' fees.
LIMITATION ON LIABILITY SECTION 26. In no event shall (a) SDI's aggregate
liability to Broker-Dealer under this Agreement
exceed the amount of commissions paid to such
Broker-Dealer in the twelve months preceding the
claim giving rise to such liability (b) SDI be
liable to Broker-Dealer for any indirect, punitive,
special, exemplary, incidental or consequential
damages, even if advised of the possibility of such
damages. The limitations of this Section 26 shall
apply, regardless of whether the claim giving rise
to such liability sounds in breach of contract, tort
or otherwise. If more than one claim is made by
Broker-Dealer under this Agreement in any twelve
month period, any amounts paid in respect of the
first claim shall reduce the amount available for
subsequent
claims in such twelve month period.
CAPTIONS SECTION 27. Captions are used for informational
purposes only and no caption shall be construed to
affect the substance of any provision of this
Agreement.
COUNTERPARTS SECTION 28. This Agreement may be executed in any
number of counterparts, all of which, taken
together, shall constitute one agreement, and any
party hereto may execute this Agreement by signing
any such counterpart.
EFFECTIVENESS; SECTION 29. This Agreement contains the entire
ENTIRE CONTRACT; contract between the parties. Upon execution it will
PRIOR AGREEMENTS replace all previous agreements between the
Broker-Dealer, SDI, VeraVest and the Insurance
Companies, or any of them, relating to the servicing
of the Contracts. It is hereby understood and agreed
that any other agreement or representation,
commitment, promise or statement of any nature,
whether oral or written, relating to or purporting
to relate to the relationship of the parties is
hereby rendered null and void.
IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate to
take effect on the Effective Date.
[SIGNATURE PAGE FOLLOWS]
For: Commonwealth Annuity and Life For: First Allmerica Financial Life
Insurance Company Insurance Company
By: By:
--------------------------------- ------------------------------------
Name: Name:
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Title: Title:
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Date: Date:
------------------------------- ----------------------------------
For: For: Security Distributors, Inc.
________________________________
Name of Broker-Dealer
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Title: Title:
------------------------------ ---------------------------------
Date: Date:
------------------------------- ----------------------------------
Address for notice:
________________________
________________________
________________________
Last revised: November 21, 2006
