EXHIBIT 3 (d)
Distribution Agreement between, AIG Life Insurance Company, American
International Life Assurance Company of New York and Alliance Fund
Distributors, dated June 11, 1991
AGREEMENT
THIS AGREEMENT is between American International Fund Distributors, Inc.
("AIFD"), a New York corporation and Alliance Fund Distributors, Inc.
(hereinafter referred to as "DISTRIBUTOR"), A New York corporation, effective
June 11, 1991.
WITNESSETH:
WHEREAS, AIFD is the duly authorized distributor of certain variable
annuity contracts and variable life insurance policies (hereinafter collectively
referred to as "Variable Insurance Products") issued by AIG Life Insurance
Company and American International Life Assurance Company of New York
(hereinafter collectively referred to as "Companies"), such policies being
described on Exhibit A which is attached hereto and incorporated herein; and
WHEREAS, DISTRIBUTOR is licensed as an insurance agent or agency in the
jurisdictions requiring such licensing; and
WHEREAS, DISTRIBUTOR or an affiliated company is registered as a
broker-dealer with the Securities and Exchange Commission (the "SEC") under the
Securities and Exchange Act of 1934, as amended (the "1934 Act"), is a member of
the National Association of Securities Dealers Inc., (the "NASD"), and is
registered as a broker-dealer with any other governmental entity or jurisdiction
requiring such registration; and
WHEREAS, AIFD and DISTRIBUTOR desire to establish an arrangement whereby
DISTRIBUTOR will recommend to AIFD certain business firms to become general
agents of Companies for the sale of the Variable Insurance Products ("General
Agents");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and undertakings herein set forth, the parties hereby agree as follows:
A. APPOINTMENT
AIFD hereby appoints DISTRIBUTOR as its agent to represent AIFD in all
states in which the Companies are licensed. Nothing in this Agreement shall
prevent AIFD from contracting with other distributors, general agents or itself
for its Variable Insurance Products. Nothing in this Agreement shall prevent
DISTRIBUTOR from contracting with other insurers to sell variable insurance
products not covered by this Agreement.
B. AUTHORITY AND RESPONSIBILITY
1. DISTRIBUTOR is authorized to contact business firms to become General
Agents for the sale of the Variable Insurance Products. DISTRIBUTOR
shall only contact those business firms which possess the requisite
licenses and registrations in those jurisdictions in which AIFD has
notified DISTRIBUTOR in writing that such products are registered or
qualified for sale.
2. DISTRIBUTOR shall recommend that such business firms as described
above which desire to become General Agents be contracted with AIFD in
accordance with AIFD's procedures for such transactions. AIFD shall
have the right to reject any such recommendation, but shall not do so
arbitrarily or unreasonably. AIFD shall have the responsibility for
and bear the cost of (i) executing appropriate contracts with the
business firms recommended by DISTRIBUTOR and (ii) appointing such
business firms as insurance agents of Companies in those jurisdictions
where such business firms possess insurance licenses. AIFD shall have
no responsibility for, nor bear the cost of, any registration of
General Agents with the SEC or the NASD.
3. DISTRIBUTOR shall recruit, help in the appointment procedure of, and
familiarize representatives and agents of General Agents (hereinafter
collectively referred to as "Representative"), with respect to the
Variable Insurance Products as described on Exhibit A, as may be
reasonably acceptable to AIFD.
4. AIFD shall have the responsibility for and bear the cost of
appointment (including any special insurance appointments required to
sell the Variable Insurance Products) of Representatives as insurance
agents. AIFD shall have the right to reject any such appointment, but
shall not do so arbitrarily nor unreasonably. Neither party shall have
responsibility for, nor bear the cost of, any registration of
Representatives with the SEC or the NASD.
5. DISTRIBUTOR shall instruct all its associated persons (as that term is
defined in the 1934 Act), employees and assigns in the proper method
of solicitation, sale and delivery of Variable Insurance Products for
the purpose of complying on a continuous basis with the NASD Rules of
Fair Practice and with federal and state securities and insurance law
requirements applicable in connection with the offering and sale of
the Variable Insurance Products and for the purpose of complying with
AIFD's procedures which have been established for such solicitation,
sale and delivery. DISTRIBUTOR shall instruct all General Agents and
Representatives to have any purchase payments together with all
applications and related information in accordance with procedures
established by AIFD.
6. AIFD shall be responsible for and bear the cost of administration of
the Variable Insurance Products following their purchase including all
policyholder service and communication activities, but DISTRIBUTOR
shall be responsible for answering inquiries from General Agents and
Representatives regarding the investment performance of the Variable
Insurance Products. Nothing herein, however, shall be deemed to
prohibit AIFD of the Companies from utilizing the administrative
services of an administrative service organization to perform any or
all of such administrative activities.
7. AIFD shall furnish DISTRIBUTOR with such administrative forms and
printed material deemed necessary by AIFD pursuant to the authority
granted by this Agreement. Copies of any sales literature developed by
DISTRIBUTOR in connection with this Agreement will be provided to AIFD
for its approval in light of applicable insurance laws and regulations
of the States governing such literature and for filing with the States
or the NASD as required. DISTRIBUTOR will use and authorize the use of
sales material in any State only if such material has been reviewed
and approved in writing by AIFD or Companies in accordance with
procedures established from time to time and such approval has not
been withdrawn. DISTRIBUTOR will not use or authorize the use of any
prospectuses which are not currently effective.
8. AIFD shall furnish DISTRIBUTOR with a list of the Variable Insurance
Products which may be sold in each jurisdiction. It is understood by
DISTRIBUTOR that the Companies each reserve the right in any
jurisdiction to withdraw for future issuance any of the Variable
Insurance Products, to suspend or discontinue writing this class of
business or to suspend or discontinue writing all business.
9. DISTRIBUTOR shall be responsible for the determination of the need for
and the maintenance of any applicable licenses, certifications or
permits for itself and/or its employees pursuant to any federal, state
or local law, rule or regulation.
C. REPRESENTATIONS AND WARRANTIES OF DISTRIBUTOR
DISTRIBUTOR hereby represents and warrants that:
1. It shall be duly registered, licensed, or otherwise qualified under
the insurance laws of any state or other jurisdiction to the extent
necessary to perform its responsibilities hereunder. Additionally,
DISTRIBUTOR or an affiliated company is a duly registered broker-dealer
under the 1934 Act and is a member in good standing of the NASD.
2. It has taken all actions necessary to authorize the execution,
delivery and performance of this Agreement and all transactions
contemplated hereunder.
D. COMPENSATION OF DISTRIBUTOR
1. DISTRIBUTOR shall receive compensation for its efforts as specified on
Exhibit B, which is attached hereto and incorporated herein.
2. In the event an application or purchase payment is rejected by AIFD or
Companies or if a purchase payment is refunded to a purchaser and
DISTRIBUTOR has received compensation on the amount so rejected or
refunded, DISTRIBUTOR shall promptly repay such compensation to AIFD.
3. (a) If within 1 year of the date of issue of a Variable Insurance
Product sold by a General Agent recommended by DISTRIBUTOR, such
Product is surrendered or terminated for any reason excluding
death or if any full withdrawal is made if DISTRIBUTOR has
received compensation with respect to such Variable Insurance
Product pursuant to this Agreement, DISTRIBUTOR shall promptly
repay all of such compensation to AIFD if the surrender,
termination or full withdrawal occurs within 6 months from the
date of issue, and one-half of such compensation if the
surrender, termination or full withdrawal occurs on or after 6
months from the date of issue but before the end of 1 year from
the date of issue.
(b) If, during the first 6 months after the date of issue, a partial
withdrawal is made from a Variable Insurance Product sold by a
General Agent recommended by DISTRIBUTOR and if DISTRIBUTOR has
received compensation with respect to such Variable Insurance
Product pursuant to this Agreement, DISTRIBUTOR shall promptly
repay the proportionate amount of such compensation. The
proportionate amount of the compensation due shall equal the
quotient of (a) divided by (b) where: (a) is the amount of the
partial withdrawal and (b) is the initial premium of the Variable
Insurance Product. If, however, such partial withdrawal should
occur on or after 6 months from the date of issue but before the
end of 1 year from the date of issue, DISTRIBUTOR shall repay
one-half of such quotient. DISTRIBUTOR, however, shall not repay
any amounts in excess of the compensation if received with
respect to such Variable Insurance Product.
(c) If such repayment is not promptly made, AIFD may, at is option,
deduct such amount from any future payments due DISTRIBUTOR or
may otherwise institute proceedings to recover such amounts. The
provision of this Section D.3. shall survive the termination of
this Agreement.
4. All compensation payable hereunder is subject to AIFD's absolute
right to apply such compensation to all obligations of
DISTRIBUTOR to AIFD or Companies under the terms of this
Agreement, both during its term and following its termination.
5. AIFD reserves the right to revise compensation payable on
Variable Insurance Products issued, renewed, converted, or
exchanged in the future by giving written notice to DISTRIBUTOR
to such effect, effective 30 days after delivery of such notice
to DISTRIBUTOR. If, however, there are changes in any federal,
state or local law, rule or regulation or if any regulation or if
any regulatory agency having jurisdiction over AIFD or Companies
takes a position which affects the compensation payable on
Variable Insurance Products, then AIFD reserves the right to
revise such compensation, such revision to be effective
immediately upon delivery of such notice to DISTRIBUTOR.
E. ADDITIONAL PARTY TO THIS AGREEMENT
In the event DISTRIBUTOR is not itself a broker-dealer registered as such
with the SEC, but utilizes an affiliated entity to satisfy broker-dealer
requirements pursuant to permission granted by no-action letters issued by
the SEC, such affiliated broker-dealer shall countersign this Agreement and
shall be duly bound hereby.
F. INDEMNIFICATION
1. DISTRIBUTOR shall indemnify and hold harmless AIFD, its ultimate
parent corporation, the subsidiaries of such parent and the
directors, officers, and other employees and agents of each of
them from and against any and all claims, units, proceedings,
liabilities, losses, damages, costs, and expenses whatsoever,
including reasonable attorney's fees, arising from or in
connection with any claim, complaint, action, proceeding,
counterclaim or offset relating to (1) any act or omission or any
negligence or intentional misconduct by DISTRIBUTOR, any
affiliated broker-dealer, their directors, officers, employees or
assigns in connection with this Agreement or (2) the failure of
DISTRIBUTOR to comply with the terms of this Agreement.
2. AIFD shall indemnify and hold harmless DISTRIBUTOR, its ultimate
parent corporation, the subsidiaries of such parent and the
directors, officers, and other employees and agents of each them
from and against any and all claims, suits, proceedings,
liabilities, losses, costs, and expenses whatsoever, including
reasonable attorney's fees, arising from or in connection with
any claim, complaint, action, proceeding, counterclaim or offset
relating to (1) any act or omisssion or any negligence or
intentional misconduct by AIFD, its employees or assigns in
connection with this Agreement or (2) the failure of AIFD to
comply with the terms of this Agreement.
3. With respect to any demand or proceeding involving a matter
against which one party ("Indemnitee") is indemnified by the
other party ("Indemnitor") under this Section F, the Indemnitor
shall be solely responsible, at is sole expense, for litigating,
defending, or otherwise attempting to resolve such demand or
proceeding, and the Indemnitee shall fully cooperate with the
Indemnitor in its efforts to litigate, defend, or otherwise
attempt to resolve such demand or proceeding, and, at the
Indemnitee's own expense, the Indemnitee shall have the right to
participate therein through counsel of its own choice.
Within 15 days after the Indemnitee receives written documents
pertaining to the demand or proceeding underlying any indemnification
matter, or within such shorter period of time as may be necessary
under the circumstances to avoid prejudice to the Indemnitors rights,
the Indemnitee shall give proper notice to the Indemnitor of the
nature of such matter and shall deliver to the Indemnitor copies of
all such written documents.
4. Except as specifically provided in this Agreement, neither party
nor any affiliated company of either party will have the
responsibility to pay or reimburse the other party for any fines,
penalties, or legal or other expenses incurred in connection with
or as a result of their performance under this Agreement.
5. The provision of this Section F shall survive termination of this
Agreement.
G. TERM OF AGREEMENT
1. Effective Date
This Agreement shall be effective on the date first written
above.
2. Termination
This Agreement may be terminated:
(a) at any time without cause upon sixty (60) days written
notice by either party to the other;
(b) immediately by either party
(i) upon the dissolution of the other party or in the event
that the other party shall become unable to pay its
debts as they mature or shall file a voluntary petition
in bankruptcy or seek reorganization or to effect a
plan or other arrangement with creditors, or shall file
an answer admitting the jurisdiction of the court and
the material allegations of any involuntary petition
filed pursuant to any Act of Congress relating to the
bankruptcy or shall make a general assignment for the
benefit of creditors, or shall apply for a consent to
the appointment of any receiver or trustee for all or a
substantial part of the property of the other party and
such receivers or trustee shall be appointed and shall
not be discharged within 60 days after the date of such
appointment;
(ii) if any federal, state or local governmental or
regulatory body institutes formal adverse proceedings
against the other party, provided that DISTRIBUTOR or
AIFD in its sole discretion determines that such
proceedings shall have a material adverse impact on the
other party's ability to perform under this Agreement;
or
(iii)upon the other party's breach of any material
obligations arising under the terms of this Agreement.
3. At the option of AIFD, in the event this Agreement between
DISTRIBUTOR and AIFD is terminated for any reason, AIFD may elect
to keep in full force and effect any General Agency Agreements
with AIFD previously executed in accordance with this Agreement.
Once this Agreement has terminated, no compensation shall be
payable to DISTRIBUTOR for Variable Insurance Products sold by
General Agent's recommended by DISTRIBUTOR and contracted as such
by AIFD, unless a policyholder's coverage under such Products has
become effective prior to the termination date.
2. In the event this Agreement is terminated, the parties will
undertake whatever actions may be necessary to protect AIFD's and
Companies' responsibility to policyholders as required by
applicable state or federal law or regulation. While this
Agreement is in effect and following its termination, DISTRIBUTOR
will not take any action, directly or indirectly, to cause such
policyholders to surrender, exchange or terminate any Variable
Insurance Product sold pursuant to the terms of this Agreement
unless otherwise agreed to by AIFD or Companies.
E. GENERAL
1. Modification or Amendment
This Agreement can only be modified by a written agreement duly
signed by the persons authorized to sign agreements on behalf of the
parties. Variance from the terms or conditions of this Agreement or
any order or other written notification will be of no effect.
2. Relationship
Each of the parties will act as an independent contractor under
the terms of this Agreement and other than where an agency
relationship has been established for insurance agency purposes,
neither is now, or in the future, an agent or a legal representative
of the other for any purpose. Neither party has any right or authority
to supervise or control the activities of the other party's employees
in connection with the performance of this Agreement or to assign or
create any application of any kind, express or implied, on behalf of
the other party or to bind it in any way, to accept any service of
process upon it or to receive any notice of any nature whatsoever on
its behalf.
3. Records and Written Material
AIFD and DISTRIBUTOR shall cause to be maintained and preserved
for the periods prescribed such accounts, books and other documents
relative to the Variable Insurance Products as are required of it by
any applicable laws and regulations. AIFD and DISTRIBUTOR shall cause
the other party or any affiliated company to be furnished with such
reports as the other may reasonably request.
DISTRIBUTOR and AIFD shall each maintain facilities and
procedures for the safekeeping of all books, accounts, records, filed
and other materials relative to this Agreement. Such books, accounts,
records, files and other materials shall remain confidential and shall
not be voluntarily disclosed to any other person or entity unless
DISTRIBUTOR, AIFD or the Companies respectively shall have agreed in
advance to such disclosures.
All records, applications, literature, and printed material
supplied by AIFD, will remain the exclusive property of AIFD subject
to the direction and control of AIFD. Upon termination of this
Agreement, all such property in DISTRIBUTOR'S or Representative's
possession will, at AIFD's request, be promptly either returned to
AIFD at AIFD's expense or be destroyed. The provisions of this section
H.3. shall survive termination of this Agreement.
4. Audit
(a) Upon reasonable notice to DISTRIBUTOR and at reasonable
times, DISTRIBUTOR hereby grants to AIFD and its
representatives the right and power to inspect, check, make
extracts from, or audit each of their books and records as
it relates to this Agreement for the purpose of verifying
adherence to each of the provisions of this Agreement,
provided that such inspection, check, examination or audit
will not unreasonably interfere with the normal course of
business of DISTRIBUTOR.
(b) Upon reasonable notice to AIFD and at reasonable times, AIFD
hereby grants to DISTRIBUTOR and its representatives the
right and power to inspect, check, make extracts from, and
audit each of their books and records as it related to this
Agreement for the purpose of verifying adherence to each of
the provisions of this Agreement, provided that such
inspection, check, examination, or audit will not
unreasonably interfere with the normal course of business of
AIFD.
5. Separablity
If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
6. Assignment
This Agreement and the rights, duties and obligations of the
parties hereto shall not be assignable by either party hereto without
the prior consent of the other, and any purported assignment shall be
void, except that AIFD may assign any of its rights or obligations
under this Agreement to its parent corporation or to an affiliated
company without being released thereby.
7. Waiver
No waiver by either party of any default by the other in the
performance of any promise, term or condition of this Agreement shall
be construed to be a waiver by such party of any other or subsequent
default in performance of the same or any other or subsequent default
in performance of the same or any other covenant, promise, term or
condition hereof. No prior transactions or dealings between the
parties shall be deemed to establish any custom or usage waiving or
modifying any provision hereof.
8. Acts Beyond The Control Of the Parties
No liability shall result to either party, nor shall either party
be deemed to be in default hereunder, as a result of delay in its
performance or from its nonperformance hereunder caused by
circumstances beyond its control, including but not limited to: act of
God, act of war, riot, epidemic, fire, flood or other disaster, or act
of government. Nevertheless, the party shall be required to be
diligent in attempting to remove such cause or causes.
9. Governing Law
This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New York.
10. Captions
Captions contained in this Agreement are for reference purposes
only and do not constitute part of this Agreement.
11. Notice
All notices which are required to be given or submitted pursuant
to this Agreement shall be in writing and shall be deemed given when
deposited with the United States Postal Service, postage prepaid,
registered or certified mail, return receipt requested, to the last
address of record of each party being notified which is maintained by
the other party in the ordinary course of business.
12. Notification of Claims
Each party hereto shall promptly notify the other in writing of
any claims, demands or actions having any bearing on this Agreement.
In the event such claim, demand or action is time sensitive and
affects a party to this Agreement, notice shall be given to the
affected party by either a nationally recognized overnight courier or
by facsimile transmission.
13. Name, Logo, Trademark, Service Xxxx or Symbol
Neither AIFD nor DISTRIBUTOR will use the other's name nor any
other name, logo, trademark, service xxxx or symbol that is now or may
hereafter be owned by the other party, a parent or an affiliate or
subsidiary thereof, except in the manner and to the extent that the
other party may specifically authorize in writing. Upon termination of
this Agreement, each party will immediately discontinue the use of
such name, logo, trademark, service xxxx, or symbol belonging to the
other party, parent, affiliate or subsidiary thereof.
14. Performance in Accordance With Law
Each party agrees to perform its obligations hereunder in
accordance with all applicable laws, rules and regulations now or
hereafter in effect.
15. Binding Agreement
This Agreement shall be binding upon and insure to the benefit of
the parties hereto, their successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement at New
York on June 11, 1991.
AMERICAN INTERNATIONAL FUND DISTRIBUTORS, INC.
By:/s/Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx, Vice President
Name and Title
ALLIANCE FUND DISTRIBUTORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, President
Name and Title
Countersigned by:
AIG LIFE INSURANCE COMPANY
AMERICAN INTERNATIONAL LIFE ASSURANCE
COMPANY OF NEW YORK
By: /s/Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx, Vice President
Name and Title
Exhibit A
Variable Insurance Products
AIG Life Insurance Company Variable Annuity Contract Form No.
45648-4/87 and its state variations funded by Alliance Variable
Products Series Fund, Inc.
American International Life Assurance Company of New York Variable
Annuity Contract Form No. 45649-4/87 and its state variations funded
by Alliance Variable Products Series Fund, Inc.
AIG Life Insurance Company Variable Life Insurance Policy Form No.
45652-4/87 and its state variations funded by Alliance Variable
Products Series Fund, Inc.
American International Life Assurance Company of New York Variable
Life Insurance Policy Form No. 45653-4/87 and its state variations
funded by Alliance Variable Product Series Fund, Inc.
Exhibit B
Compensation
Amount of Compensation: 1.5% of premium accepted by Companies on
Variable Insurance Products sold on a single premium basis by General
Agents recommended by DISTRIBUTOR and contracted as such by AIFD.
