EXHIBIT 10.5
INTERIM SERVICES AGREEMENT
This Interim Services Agreement (this "Agreement") is executed this 19th day of
October, 1995, effective August 15, 1995, by and between ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co., a
California corporation ("JMC"), ▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., a Florida corporation
("▇▇▇▇▇▇▇"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company, N.A., as Trustee ("Trustee") under
that certain Trust Agreement ("Trust Agreement"), dated as of August 1, 1990, as
amended, by and between Trustee and JMC as Trustor of the Trust thereby
established.
R E C I T A L S:
----------------
On August 1, 1990, the parties hereto entered into that certain Services
Agreement (as amended and restated effective December 9, 1994, the "Services
Agreement"), pursuant to which JMC and its Subsidiaries agreed to provide
certain services to the Trust, Trustee and ▇▇▇▇▇▇▇. Capitalized terms used
herein without definition shall have the meanings ascribed to them in the
Services Agreement.
▇▇▇▇▇▇▇ and JMC have agreed to terminate the Services Agreement pursuant to the
Termination and Assignment Agreement, dated the date hereof, among the parties
hereto (the "Termination Agreement"). For a period of time following
termination of the Services Agreement, JMC has agreed to provide certain interim
services to the Trust, Trustee and ▇▇▇▇▇▇▇, subject to the terms and conditions
provided herein.
NOW THEREFORE, in consideration of the premises and mutual covenants and
undertakings hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. JMC SERVICES. JMC will provide administrative support services to
------------
▇▇▇▇▇▇▇ during an interim period commencing August 15, 1995 and ending October
27, 1995 (the "Transition Period"). Except as otherwise outlined herein, these
services will be provided in a manner consistent with the performance standards
set forth in Sections I.A. and I.B. of Schedule C to the Services Agreement.
The administrative support services shall consist of:
a. New Business Processing. Processing of annuity sales made by ▇▇▇▇▇▇▇
-----------------------
personnel according to written procedures agreed to by JMC and ▇▇▇▇▇▇▇. It is
understood and agreed that JMC will process annuity sales for only those
products previously sold by JMC pursuant to the Services Agreement as listed on
Schedule A attached hereto ("JMC Products").
1
b. Add-on Business Processing. JMC will process additional premiums added
--------------------------
to JMC Products by ▇▇▇▇▇▇▇'▇ customers who became participants in the Tax
Advantage Program prior to August 15, 1995 ("Tax Advantage Customers") in a
manner consistent with past practice and the performance standards set forth in
Sections I.A. and I.B. of Schedule C to the Services Agreement.
c. Customer Service. Handling routine customer service requests for Tax
----------------
Advantage Customers and customers who purchase JMC Products during the
Transition Period, including processing surrenders, change of address requests,
change of beneficiary forms, annuitizations, death claims and other
distributions, and providing other forms of customer assistance that do not
involve rendering investment advice.
d. Training. Assisting in the on-the-job training of any ▇▇▇▇▇▇▇
--------
employees who will provide customer service and perform business processing
functions after the Transition Period. All training shall be provided by the
▇▇▇▇▇▇▇ employees' nearest counterpart in the JMC organization. The business
processing training will consist of hands-on sessions with JMC's existing San
Diego-based administrative assistants concerning the details of processing
business with the providers of JMC Products. The customer service training will
consist of hands-on sessions with JMC's existing Tampa-based Divisional
Operations Manager and customer service representatives, as the case may be,
concerning the details of processing customer service requests with the
providers of JMC Products. JMC is under no obligation to provide proprietary
manuals, forms, or systems used in such service, processing or training, written
training materials or any formalized training program. ▇▇▇▇▇▇▇ will be
responsible for product and technical skills training. Customer service training
shall take place at JMC's Tampa Service Center and business processing training
will take place at JMC's corporate offices in San Diego. ▇▇▇▇▇▇▇ shall pay all
out-of-pocket expenses incurred for such training.
e. Reporting. During the Transition Period, JMC will continue to provide
---------
▇▇▇▇▇▇▇ with any production, performance, customer reporting and electronic data
files previously provided under the Services Agreement. Such reports and files
will be delivered through the reporting period ended October 31, 1995. JMC will
also deliver to ▇▇▇▇▇▇▇ on October 27, 1995 an electronic data file of all
information concerning Tax Advantage Customers in JMC's possession.
SECTION 2. ▇▇▇▇▇▇▇'▇ RESPONSIBILITIES. During the Transition Period,
--------------------------
▇▇▇▇▇▇▇ will assume the following responsibilities relative to the processing of
annuity sales of JMC Products:
a. Documentation. ▇▇▇▇▇▇▇'▇ annuity sales personnel will be responsible
-------------
for providing JMC with complete and accurate documentation of sales sufficient
for processing. In the event any documentation provided to JMC is illegible,
JMC will contact ▇▇▇▇▇▇▇'▇ Jacksonville Investment Services Center ("ISC") for
clarification. The ISC will coordinate with the appropriate ▇▇▇▇▇▇▇ area
manager to obtain 48-hour resolution of the problem. Documentation which is
incomplete will be returned immediately to the ISC for completion. No sale will
be processed by JMC until legible and complete documentation has been provided
by ▇▇▇▇▇▇▇ to
2
JMC. In addition, the performance standards referenced in Section 1 hereof will
relate only to processable business.
b. Suitability. ▇▇▇▇▇▇▇ shall be responsible for reviewing the
-----------
suitability of each and every sales transaction delivered to JMC for processing.
JMC will not verify the suitability of any transaction.
c. Licensing. ▇▇▇▇▇▇▇ shall provide JMC with a list of the names of each
---------
▇▇▇▇▇▇▇ sales representative who will be selling JMC Products during the
Transition Period. This list shall be updated as necessary to ensure its
accuracy at all times. The list shall contain the following additional
information:
i) the states in which each representative is licensed to sell
annuity products;
ii) the representative's agent number with each of the Provider
Companies; and
iii) the representative's identification number with ▇▇▇▇▇▇▇.
JMC shall rely on this list when processing sales transactions and, other than
consulting the list to ensure that the list indicates that the representative is
appropriately licensed, JMC will not verify any representative's authority to
make any sale JMC processes. JMC will not process any sale unless the list
indicates that the selling representative is appropriately licensed.
d. Cash Control. ▇▇▇▇▇▇▇ will be responsible for all cashiering
------------
functions associated with sales of JMC Products during the Transition Period,
including, without limitation, cash balancing and transmitting funds to the
Provider Companies.
SECTION 3. TERMINATION.
-----------
a. Upon termination of the Transition Period, ▇▇▇▇▇▇▇ or its designee
will assume all of JMC's rights, duties and obligations as Trustor under the
Trust Agreement, and as recordkeeping agent and Agent for the Trust created
thereby pursuant to the Services Agreement and the Trust Agreement and JMC will
cease to have any responsibilities thereunder. At that time, JMC will make its
hard copy original customer files maintained in its Tampa Service Center
available to ▇▇▇▇▇▇▇ for delivery at JMC's Tampa Service Center.
b. Upon termination of the Transition Period, ▇▇▇▇▇▇▇ or its designee
will assume all of JMC's duties and responsibilities under this Agreement,
including without limitation, providing ongoing customer service to all Tax
Advantage Customers.
c. Upon termination of the Transition Period, ▇▇▇▇▇▇▇ will assume the
current customer service 800-number utilized in JMC's Tampa Service Center.
▇▇▇▇▇▇▇ will promptly pay or reimburse JMC for all costs associated with
transferring the number.
3
SECTION 4. TRANSITION PAYMENTS.
-------------------
On August 15, 1995, ▇▇▇▇▇▇▇ will pay JMC a lump sum transition fee of
$300,000 (the "Transition Fee"). In addition to the lump sum payment, ▇▇▇▇▇▇▇
will pay JMC a monthly service fee during the Transition Period. For the month
of August, the service fee will be $47,600. The service fee for September and
October will be $95,300 per month. All monthly payments shall be due and
payable in advance on the first business day of the month.
SECTION 5. COMPLIANCE WITH LAWS.
--------------------
a. JMC hereby agrees to comply with any and all applicable laws, rules
and regulations of any state or federal government, or any department, division,
office or agency of any of them, with respect to the performance of the services
described herein.
▇. ▇▇▇▇▇▇▇ hereby agrees to comply with any and all applicable laws,
rules and regulations of any state or federal government, or any department,
division, office or agency of any of them, or of any self-regulatory
organization with jurisdiction over ▇▇▇▇▇▇▇ or its affiliates in connection with
its sales of annuities during the Transition Period.
SECTION 6. MISCELLANEOUS.
-------------
a. During the Transition Period and for a period of three years
thereafter the termination thereof, JMC agrees that it will not, nor will any of
its Subsidiaries or affiliates, or any current officer, director, agent or
employee of any of them, knowingly solicit Tax Advantage Customers for the sale
of annuities or similar investment products.
b. This Agreement may not be changed orally, but only by agreement in
writing signed by the parties hereto. Any provision of this Agreement can be
waived, amended, supplemented or modified only by written agreement of the
parties hereto.
c. This Agreement has been negotiated fully and fairly between the
parties. If this Agreement becomes the subject of interpretation by a court of
law or equity or other third party, this Agreement shall not be construed either
against, or in favor of, JMC, ▇▇▇▇▇▇▇ or Trustee, by virtue of one of the
parties being deemed the draftsman of this Agreement.
d. This Agreement is governed by, and shall be construed and enforced in
accordance with, the laws of the State of Florida, except such laws that would
render this choice of laws ineffective.
e. All notices that are required or may be given pursuant to this
Agreement shall be in writing and shall be sufficient in all respects if
delivered or mailed by registered or certified mail postage prepaid, or if sent
by telex or telefax (in each as promptly confirmed by registered or certified
mail postage prepaid), or by overnight courier, addressed as follows:
4
If to ▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇ SECURITIES, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Trustee: ▇▇▇▇▇▇▇ ▇▇▇▇▇ TRUST COMPANY, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
If to JMC: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & CO.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇. ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman and
Chief Executive Officer
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
f. This Agreement, together with the Termination Agreement, evidence the
entire agreement of the parties hereto with respect to the subject matter
hereof. The terms and conditions of this Agreement and the Termination
Agreement shall supersede the terms and conditions of the letter of
understanding, dated August 15, 1995, and shall operate to terminate such letter
in accordance with Section 7.A. thereof.
5
This Agreement has been executed by the parties hereto as of the date first
above written.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & CO.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman and Chief Executive
Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇ TRUST COMPANY, N.A.
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Authorized Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Authorized Officer
6
SCHEDULE A
▇▇▇▇▇▇▇ BANK
TAX ADVANTAGE PROGRAM
PROVIDER COMPANY/PRODUCTS SOLD
10/1/90 - 8/31/95
PROVIDER JMC PROV. CO. POLICY
COMPANY PRODUCT NAME PRODUCT NAME FORM #
===============================================================================
ALLIANZ LIFE INSURANCE Tax Advantage Single Form #L40011
COMPANY OF NORTH AMERICA Income Plan Premium (8/92)
This product was originally (later Immediate Instant
sold on NALAC paper with "Annuity" Annuity Form #L30136
the same Policy Form instead of Standard
#L30136 Standard Issue only "Plan")
===============================================================================
FIRST PENN-PACIFIC LIFE Tax Advantage Single Form
INSURANCE COMPANY Single Premium Life #L-1541AA
Premium Life Policy (3/87)
===============================================================================
KEYPORT LIFE INSURANCE Tax Advantage Single Form #SPIA
COMPANY Immediate Premium
Annuity Immediate
Annuity
===============================================================================
Tax Advantage Single Form #SPDA (3)
Growth Annuity Premium Form #SPDA
Deferred (10)S
Annuity Form #SPDA
(10)I
===============================================================================
LIFE INSURANCE COMPANY OF Tax Advantage Flexible Form #P1098A
VIRGINIA Flexible Premium 8/87
Annuity Variable Form #P1140
Deferred 10/90
Annuity
===============================================================================
Tax Advantage Flexible Form #P1855
Growth Annuity Premium 6/90
Deferred Form #P1857
Annuity 8/92
Instant
Form # P18575S
Standard
===============================================================================
TRANSAMERICA LIFE INSURANCE Tax Advantage Flexible Form #4-597
ANNUITY COMPANY Growth Annuity Premium 11-192
Deferred
Annuity
===============================================================================
WESTERN-SOUTHERN LIFE Tax Advantage Flexible Form
ASSURANCE COMPANY Growth Annuity Premium #9202-5510 WSA
Deferred Form
Annuity #9301-5510 WSA
===============================================================================
