EXHIBIT 3
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made and entered into on this 4 day of February, 1983, by and
between XXXXXX XXXX LIFE INSURANCE COMPANY ("Xxxxxx Xxxx") a life insurance
company organized under the laws of the State of Illinois, XXXXXX XXXX LIFE
INSURANCE COMPANY SEPARATE ACCOUNT("Separate Account"), and a separate account
established by Xxxxxx Xxxx pursuant to the Illinois Insurance Code and XXXXXX
XXXX INVESTORS, INC. ("Investors"), a corporation organized under the laws of
the State of Maryland.
WITNESSETH:
WHEREAS, Xxxxxx Xxxx proposes to issue to the public certain variable annuity
contracts ("Contracts") and has by resolution of its Board of Directors on
November 13, 1982 authorized the creation of three new Series or Account
Divisions (for a total of four Account Division) within the Separate Account in
connection therewith; and
WHEREAS, Xxxxxx Xxxx previously established the Separate Account for the purpose
of funding Contracts; which Separate Account is registered with the Securities
and Exchange Commission ("Commission") as a unit investment trust under the
Investment Company Act of 1940; and
WHEREAS, the Contracts to be issued by Xxxxxx Xxxx are presently being
registered with the Commission for offer and sale to the public, and otherwise
are in compliance with all applicable laws; and
WHEREAS, Investors, a broker-dealer registered under the Securities Exchange Act
of 1934 and has served as the Distributor of variable annuity contracts
previously issued through the Separate Account, proposes to act as the
Distributor on an agency basis in the offering and sale of said Contracts; and
WHEREAS, Xxxxxx Xxxx desires to obtain the services of Investors as the
Distributors of such Contracts issued by Xxxxxx Xxxx through the Separate
Account and registered with the Commission;
NOW THEREFORE, in consideration of the foregoing, and of the mutual covenants
and conditions set forth herein, and for other good and valuable consideration,
Xxxxxx Xxxx, the Separate Account and Investors hereby agree as follows:
1. Investors will serve as the Distributor on an agency basis for the
Contracts which will be issued by Xxxxxx Xxxx through the Separate Account
and will be registered with the Commission for offer and sale to the
public.
2. Investors, as Distributor for the Contracts, will use its best efforts
to effect the offer and sale of the Contracts to the public on a continuing
basis. Investors shall be responsible for compliance with the requirements
of state broker-dealer regulations and
the Securities Exchange Act of 1934 as each applies to Investors in
connection with its duties as Distributor of said Contracts.
3. Subject to the written approval of Xxxxxx Xxxx, Investors may contract
with other broker-dealers registered under the Securities Exchange Act of
1934 and authorized by applicable law to sell variable annuity contracts
issued by the Separate Account. Any such contractual arrangement is
expressly made subject to this Agreement, and Investors will at all times
be responsible to Xxxxxx Xxxx for the distribution of all Contracts issued
by the Separate Account.
4. Warranties
(a) Xxxxxx Xxxx represents and warrants to Investors that:
(i) A Registration Statement on Form N-1 under the Securities Act
of 1933 (File No. 2- ), to be used in conjunction with the offer
and sale of the Contracts, and a Registration Statement on Form
N-8B-2 under the Investment Company Act of 1940 with respect to
the Separate Account have been filed with the Commission in the
form previously delivered to Investors and that copies of any and
all amendments thereto will be forwarded to Investors at or
before the time that they are filed with the Commission;
(ii) The Registration Statements and any further amendments or
supplements thereto will, when they become effective conform in
all material respects to the requirements of the Securities Act
of 1933 and the Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder, and will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity
with information furnished in writing to Xxxxxx Xxxx Investors
expressly for use therein;
(iii) Xxxxxx Xxxx is validly existing as a stock life insurance
company in good standing under the laws of the State of Illinois,
with power (corporate or other) to own its properties and conduct
its business as described in the Prospectus for the Separate
Account, and has been duly qualified for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification;
(iv) The Contracts to be issued through the Separate Account and
sold by Xxxxxx Xxxx through Investors hereunder have been duly
and validly authorized and, when issued and delivered against
payment therefor, will be duly and validly issued and will
conform to the description of such Contracts contained in the
Prospectuses relating thereto;
(v) Those persons who offer and sell the Contracts are
appropriately licensed in a manner as to comply with the state
insurance laws;
(vi) The performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach
or violation of any of the terms or provisions of, or constitute
a default under, any statute, any indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to which
Xxxxxx Xxxx is a part or by which Xxxxxx Xxxx is bound, Xxxxxx
Xxxx'x Certificate of Incorporation or By-laws, or any order,
rule or regulation of any court or governmental agency or body
having jurisdiction over Xxxxxx Xxxx or any of its properties;
and no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by
Xxxxxx Xxxx of the transactions contemplated by this Agreement,
except such as may be required under the Securities Exchange Act
of 1934 or state insurance or securities laws in connection with
the purchase and distribution of the Contracts by Investors; and
(vii) There are no material legal or governmental proceeding
pending to which Xxxxxx Xxxx or the Separate Account is a party
or of which any property of Xxxxxx Xxxx or the Separate Account
is the subject, other than as set forth in the Prospectus
relating to the Contracts, and other than litigation incident to
the kind of business conducted by Xxxxxx Xxxx which, if
determined adversely to Xxxxxx Xxxx, would individually or in the
aggregate have a material adverse effect on the financial
position, surplus or operations of Xxxxxx Xxxx.
(b) Investors represents and warrants to Xxxxxx Xxxx that:
(i) It is a broker-dealer duly registered with the Commission
pursuant to the Securities and Exchange Act of 1934;
(ii) It shall permit the offer and sale of Contracts only by
and through persons who are appropriately licensed under both the
securities laws and state insurance laws;
(iii) The performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach
or violation of any of the terms or provisions of or constitute a
default under, any statute, any indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to which
Investors is a party or by which Investors is bound, the
Certificate of Incorporation or By-laws of Investors, or any
order, rule or regulation of any court or governmental agency or
body having jurisdiction over Investors or its property;
(iv) No offering, sale or other disposition of any Contracts will
be made until Investors is notified by Xxxxxx Xxxx that the
subject Registration Statement has been declared effective and
that the Contracts have been released for sale by Xxxxxx Xxxx;
and such offering, sale or other disposition shall be limited to
those jurisdictions that have approved or otherwise permit the
offer and sale of the Contracts by Xxxxxx Xxxx.
(v) To the extent that any statements or omissions made in the
Registration Statements, or any amendment or supplement thereto
are made in reliance upon and in conformity with written
information
furnished to Xxxxxx Xxxx by Investors expressly for use therein,
such Registration Statements and any amendments or supplements
thereto will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects
to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 and the rules and regulations of
the Commission thereunder and will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
5. Investors shall keep, in a manner and form prescribed or approved by Xxxxxx
Xxxx and in accordance with Rules 17a-3 and 17a-4 under the Securities Exchange
Act of 1934 correct records and books of account (as required to be maintained
by a registered broker-dealer acting as principal underwriter) of all
transactions entered into on behalf of Xxxxxx Xxxx and with respect to variable
annuity business it conducts for Xxxxxx Xxxx. Investors shall make such records
and books of account available for inspection by the Commission and Xxxxxx Xxxx,
and Xxxxxx Xxxx and the Commission shall have the right to inspect, make copies
of or take possession of such records and books of account at any time on
demand.
6. Subsequent to having been authorized to commence with the offering
contemplated herein, Investors will utilize the currently effective Prospectus
relating to the subject Contracts in connection with its selling efforts. As to
the other types of sales material, Investors agrees that it will use only sales
materials as have been authorized for use by Xxxxxx Xxxx and which conform to
the requirements of federal and state laws and regulations, and which have been
filed where necessary with the he appropriate regulatory authorities.
7. Investors will not use any Prospectus, sales literature, or any other
printed matter or material in the offer or sale of any Contact if, to the
knowledge of Investors, any of the foregoing misstates the duties, obligation or
liabilities of Xxxxxx Xxxx or Investors.
8. Investors, as Distributor, shall be entitled to such remuneration for its
services and for the services of its salaried employees and such reimbursement
for its charges and expenses as will be contained in such Schedules of
Remuneration as may be adopted from time to time. Said Schedules of Remuneration
may be amended from time to time at the mutual consent of the undersigned
parties.
9. If any purchase payment premiums shall be returned by Xxxxxx Xxxx or should
Xxxxxx Xxxx become liable for the return thereof for any cause other than
surrenders or withdrawals by Contract Owners pursuant to the terms of the
Contract either before or after termination of this agreement, Investors agrees
to pay Xxxxxx Xxxx the amount of remuneration previously paid over to it by
Xxxxxx Xxxx with respect to such premiums.
10. Investors makes no representation or warranties regarding the number of
Contracts to be sold or the amount to be paid thereunder. Investors does,
however, represent that it will actively market such Contracts on a continuous
basis while there is an effective registration thereof with the Commission.
11. Investors may render similar services or act as Distributor or Dealer for
issuers other than the Separate Account or sponsors other than Xxxxxx Xxxx in
the offering of their securities.
12. The Contracts shall be offered for sale on the terms described in the
currently effective Prospectus describing such Contracts.
13. Xxxxxx Xxxx will use its best efforts to register for sale, from time to
time as necessary,
additional dollar amounts of the Contracts under the Securities Act of 1933 and,
should it ever be required, under State Blue Sky Laws and to file for approval
under state insurance laws when necessary.
14. Xxxxxx Xxxx reserves the right at any time to suspend or limit the public
offering of the subject Contracts upon one day's written notice to Investors.
15. Xxxxxx Xxxx agrees to advise Investors immediately:
(a) of any request by the Commission (i) for amendment of the Securities
Act Registration Statement relating to the contracts or (ii) for additional
information;
(b) of the issuance by the Commission of any stop order suspending the
effectiveness of its Registration Statement or the initiation of any
proceedings for that purpose; and
(c) of the happening of any material event, if known, which makes untrue
any statement made in its Registration Statement or which requires the
making of a change therein in order to make any statement made therein not
misleading.
16. Xxxxxx Xxxx will furnish to Investors such information with respect to the
Separate Account and the Contract in such form and signed by such of its
officers as Investors may reasonably request; and will warrant that the
statements therein contained when so signed will be true and correct.
17. Each of the undersigned parties agrees to notify the other in writing upon
being apprised of the institution of any proceeding, investigation or hearing
involving the offer or sale of the subject Contracts.
18. Absent the prior written consent of Xxxxxx Xxxx, this Agreement will
terminate automatically upon its assignment.
19. This Agreement shall terminate, without the payment of any penalty by
either party:
(a) at the option of Xxxxxx Xxxx or of Investors upon thirty days' advance
written notice to the other; or
(b) at the option of Xxxxxx Xxxx upon institution of formal proceedings
against Investors by the Commission or any state regulatory body; or
(c) at the option of Xxxxxx Xxxx, if Investors or any representative
thereof at any time (i) employs any device, scheme, or artifice to defraud;
makes any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; or engages in any
act, practice, or course of business which operates or would operate as a
fraud or deceit upon any person; (ii) fails promptly to account and pay
over to Xxxxxx Xxxx money due it according to its records; or (iii)
violates the conditions of this Agreement.
20. Each notice required by this Agreement may be given by wire and confirmed
in writing.
21. Xxxxxx Xxxx agrees to indemnify Investors for any liability that Investors
may incur to a Contact Owner or party-in-interest under a Contract (i) arising
out of any act of omission in the course of, or in connection with, rendering
services under this Agreement, or (ii) arising out of the purchase, retention or
surrender of a Contract; provided however that Xxxxxx xxxx will not indemnify
Investors for any such liability that results from the willful misfeasance, bad
faith or gross negligence of Investors, or from the reckless disregard, by
Investors, of its duties and obligations arising under this Agreement.
22. This Agreement shall be subject to the laws of the State of Illinois and
construed so as to interpret the Contracts as insurance products within the
business operations of Xxxxxx Xxxx.
23. This Agreement incorporates all agreements, verbal and written, between
Investors and Xxxxxx Xxxx with regard to the offer and sale of the Contracts,
and supersedes and annuls any and all agreements between the parties with
regards to the distribution of the Contracts; except that this Agreement shall
not affect the operation of previous agreements entered into between Investors
and Xxxxxx Xxxx that do not bear upon the sale of the Contracts.
This Agreement, along with any Schedules of Remuneration attached hereto and
incorporated herein by reference, may be amended from time to time by the mutual
agreement and consent of the undersigned parties; provided that such amendment
shall not affect the rights of existing Contract Owners, and that such amendment
be in writing and duly executed.
This Agreement shall become effective upon the effective date of Post-Effective
Amendment No. ____ To the Form S-6 Registration Statement filed under the
Securities Act of 1933 with respect to the Contracts.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested on the date first stated above.
Xxxxxx Xxxx Life Insurance Company
Attest:
/s/ Xxxxxxxx XxXxxx By: /s/ Xxxx X. Xxxx
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Xxxxxx Xxxx Life Insurance Company
Separate Account
By Xxxxxx Xxxx Life Insurance Company
Attest:
/s/ Xxxxxxx Xxxxxxxxxx By: /s/ A. Xxxxxx Xxxxxxx
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Xxxxxx Xxxx Investors, Inc.
Attest:
/s/ Xxxxxxxx XxXxxx By: /s/ Xxxxxxx Xxxxxxxxxx
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MEMORANDUM OF UNDERSTANDING
AMONG XXXXXX XXXX LIFE INSURANCE COMPANY/
XXXXXX XXXX LIFE INSURANCE COMPANY SEPARATE ACCOUNT/
XXXXXX XXXX INVESTORS, INC.
DATED FEBRUARY 4, 1983
In accordance with an Agreement dated February 4, 1983 among Xxxxxx Xxxx
Investors, Inc. ("Investors"), Xxxxxx Xxxx Life Insurance Company("HMLIC"), and
Xxxxxx Xxxx Life Insurance Company Separate Account ("Separate Account"),
Investors is responsible for the supervision and recordkeeping required with
respect to sales of variable annuity contracts. The following outline,
consistent with the responsibility of Investors, clarifies the processing of
certain premium and commission transactions related to said variable annuity
sales and maintenance of book and records in accordance with SEC Rules 17a-3 and
17a-4.
1. The gross stipulated payment from annuity contractholders will be
received by HMLIC. Deductions, as detailed in the appropriate HMLIC
prospectus will be taken from the gross payment; the amount designated
by the contractholder to go to the fixed accumulation account will
then be deducted; the remainder then to be transferred to Xxxxxx Xxxx
Investors for purchase of Xxxxxx Xxxx Balanced Fund, Inc., Xxxxxx Xxxx
Income Fund, Inc., Xxxxxx Xxxx Short-Term Investment Fund, Inc. And
Xxxxxx Xxxx Growth Fund, Inc. ("Funds") shares as designated in the
name of the Separate Account.
2. HMLIC pays commissions directly to Educators Marketing Service
Corporation ("EMSC"). EMSC provides the sales personnel under the
general supervision of Investors for the marketing of variable
annuities. EMSC establishers and maintains records on behalf of
Investors relating to commission payments to sales personnel. HMLIC
establishes and maintains records relating to commission payments to
EMSC.
3. Commissions payable to EMSC are based upon the gross stipulated
payments received. Currently, fixed accumulation and variable
accumulations are subject to the same commission structure. Future
modification to the commission structure, if any will modify this
procedure accordingly.
Date: April 12, 1984
------------------
/s/ A. Xxxxxx Xxxxxxx /s/ Xxxx X. Xxxx
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Xxxxxx Xxxx Investors, Inc. Xxxxxx Xxxx Life Insurance Company
/s/ Xxxxxxxxx Xxxxx
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Educators Marketing Services Corp.
Schedule of Remuneration
for Distribution Agreement dated
February 4, 1983
Xxxxxx Xxxx Life Insurance Company
Xxxxxx Xxxx Life Insurance Company Separate Account
Xxxxxx Xxxx Investors, Inc.
Pursuant to paragraph 8 of the Distribution Agreement dated February 4, 1983, to
which this schedule is made a part, Xxxxxx Xxxx Investors, Inc. Shall be
compensated at the annual rate of $25,000, payable in twelve (12) equal
installments by Xxxxxx Xxxx Life Insurance Company to Xxxxxx Xxxx Investors,
Inc. for services rendered with respect to sales of variable annuity contract.
Xxxxxx Xxxx Life Insurance Company Xxxxxx Xxxx Investors, Inc.
By: /s/ Xxxx X. Xxxx By: /s/ A. Xxxxxx Xxxxxxx
-------------------------------- -------------------------
Xxxxxx Xxxx Life Insurance Company Separate Account
By: /s/ Xxxx X. Xxxx
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