ALIAC BROKER-DEALER AGREEMENT
THIS AGREEMENT ("Agreement") is effective as of this _____________ day of
___________________, 1996, by and between Aetna Life Insurance and Annuity
Company ("Company"), Xxxxxxxx, Xxxxxxxxxxx 00000, incorporated under the laws of
the State of Connecticut, and ___________________________ ("Broker-Dealer"),
incorporated under the laws of the State of _________.
In consideration of the mutual promises contained herein, the parties hereto
agree as follows:
1. Agreements of the Company
A. The Company hereby authorizes the Broker-Dealer during the term of
this Agreement to solicit, offer and sell the contracts
("Contracts") described in the Schedules attached hereto and
issued and distributed by the Company to suitable customers,
provided that the Contracts are qualified for sale under all
applicable federal and state securities and insurance laws of the
jurisdiction in which the solicitations, offers or sales will be
made.
B. During the term of this Agreement, the Company will notify
Broker-Dealer of the issuance by the SEC or any state or
jurisdiction of any stop order with respect to the registration
statement or any amendments thereto or the initiation of any
proceedings for that purpose or for any other purpose relating to
the registration and/or offering of the Contracts and of any other
action or circumstance that may prevent the lawful sale of any
Contract in any state or jurisdiction.
C. During the term of this Agreement, the Company shall advise the
Broker-Dealer of any amendment to any registration statement
and/or any amendment, sticker or supplement to any Prospectus.
2. Agreements of Broker-Dealer
A. Registration and Licenses. The Broker-Dealer represents that it
is a registered Broker-Dealer with the Securities and Exchange
Commission ("SEC") and a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD"). The
Broker-Dealer represents that it is or will become registered,
licensed and appointed to sell the Contracts, as required under
the securities and insurance laws of those states and
jurisdictions where its agents or registered representatives will
solicit, offer
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and sell the Contracts. The Broker-Dealer represents that each
registered representative who solicits, offers and sells the
Contracts will be a duly registered representative of
Broker-Dealer. The Broker-Dealer represents that each registered
representative will hold all registrations and licenses required
by the NASD and any state or jurisdiction to sell the Contracts.
B. Sales Practices and Supervision. The Broker-Dealer agrees to use
its best efforts to lawfully solicit, offer and sell the Contracts
and further agrees to the following:
(i) The Broker-Dealer shall only use advertising material and
sales literature, including prospectuses, which have been
first approved by the Company and, if required, filed with
the NASD and any state or jurisdiction. The Broker-Dealer
agrees to discard immediately any out dated sales and
advertising material and prospectuses or any materials the
Company notifies the Broker-Dealer to discontinue using.
(ii) The Broker-Dealer shall establish and implement compliance
and supervisory procedures for the supervision of the sales
practices and conduct of its agents and representatives. The
Broker-Dealer shall submit to the Company, as reasonably
requested, periodic reports concerning the compliance by the
Broker-Dealer and its registered representatives with its
procedures and applicable laws and regulations, as they may
pertain to the Company's contracts. The Broker-Dealer agrees
to permit the Company to periodically audit its records with
respect to compliance upon reasonable notice.
(iii) The Broker-Dealer agrees that its registered representatives
will not make recommendations to a customer to invest in a
Contract in the absence of reasonable grounds to believe
that the Contract is suitable for the customer.
Determination of suitability shall be the sole
responsibility of the Broker-Dealer.
(iv) The Broker-Dealer agrees that neither it nor or any of
its affiliates will engage in any program or provide data to
any other person which will allow for the replacement of any
of the Company's business (or that of the Company's
affiliates).
(v) The Broker-Dealer and its employees, agents, or registered
representatives shall not, directly or indirectly, rebate or
offer to rebate all or part of its compensation on a
Contract issued or to be issued by the Company, nor offer
anything of value to a customer not specified in the
Contract, as an inducement to the customer to buy or retain
a Contract issued by the Company.
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C. Handling of Customer Payments. All payments for Contracts
collected by the Broker-Dealer shall be remitted promptly together
with such applications, forms and other required documentation to
the Company. Payments from customers shall be in accordance with
the procedures established by the Company from time to time. No
payment is deemed received by the Company until actually received
by the Company. The Broker-Dealer acknowledges that the Company
retains the unconditional right to reject, in whole or part, any
application for a Contract.
Upon the Company's acceptance of a Contract application
submitted by the Broker-Dealer, the Company shall mail the
appropriate documentation representing the Contract to the
Broker-Dealer, which shall make prompt delivery to the customer.
Notwithstanding this obligation of the Broker-Dealer, the Company
reserves the right to transmit such documentation directly to the
customer.
D. Independent Contractor. The Broker-Dealer agrees it is and shall
act as an independent contractor. Nothing in this Agreement shall
make the Broker-Dealer, or its employees, agents or registered
representatives, an employee of the Company. Neither the
Broker-Dealer, nor its employees, agents, or registered
representatives shall hold themselves out to be employees, agents
or registered representatives of the Company in any dealings with
the public.
E. Authority. The Broker-Dealer warrants and represents that it has
the authority to act on behalf of any and all subsidiaries, and is
hereby exercising such authority on behalf of such subsidiaries
with respect to the obligations set forth in this Agreement as
well as the transfer of customer payments and forms, and the
acceptance of any compensation paid under this Agreement.
F. Training. The Broker-Dealer shall be responsible for training its
registered representatives with regard to the Contracts as well as
the Company procedures before they are permitted to sell any
Contract. The Company will, at the request of the Broker-Dealer,
provide training to Broker-Dealer personnel. The Broker-Dealer
shall be responsible to pay all costs of training for its
registered representatives.
G. Use of Sales and Training Materials. The Broker-Dealer agrees that
any material that it develops, approves or uses for sales,
advertising, training, explanatory or other purposes in connection
with the Contracts, and that references the Aetna, the Company or
Company name or the Company's Contract will not be used without
the prior written consent of the Company.
H. Compliance with Laws and Regulations. The solicitation, offer and
sale of the Contracts by the Broker-Dealer and its registered
representatives shall be undertaken only in accordance with
applicable laws and regulations. No
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registered representative of the Broker-Dealer shall solicit,
offer or sell the Contracts until duly registered, licensed, or
appointed, as required by the NASD and any state or jurisdiction.
The Broker-Dealer understands and acknowledges that neither the
Broker-Dealer nor its registered representatives are authorized by
the Company to give any information or make any representation in
connection with the solicitation, offer or sale of the Contracts
other than as contained in the prospectus or sales or advertising
material authorized in writing by the Company.
I. Maintaining Records. The Broker-Dealer shall have the
responsibility for maintaining the records of those registered
representatives of the Broker-Dealer registered, licensed and
appointed and otherwise qualified to sell the Contracts. The
Broker-Dealer shall maintain such records as required by
applicable laws and regulations. The books, accounts and records
maintained by the Broker-Dealer under the terms of this Agreement
that relate to the sale of the Contracts, the Company, and/or the
Broker-Dealer shall be maintained so as to clearly and accurately
disclose the nature and details of the transactions covered by the
Agreement.
J. Proprietary Information. Any and all account records developed by
the Company or provided to the Company by the Broker-Dealer,
including customers files, sales aides, computer software,
customer names, addresses, telephone numbers and related
paperwork, literature, authorizations, manuals and supplies of
every kind and nature relating to the Contracts and the servicing
of the Contracts are and shall remain the property of the Company.
Any and all materials developed and provided by the Company shall
be returned to the Company (including all copies made by the
Broker-Dealer) upon termination of this Agreement. Any materials
developed by the Broker-Dealer in support of the marketing, sales,
advertising or training related to the Company or its Contracts
shall be destroyed upon the termination of the Agreement. The
Broker-Dealer shall keep confidential any information that is
covered by this Agreement, and shall only disclose such
information if authorized in writing by the Company or expressly
required by the laws or regulations of any jurisdiction or the
NASD or court order.
K. Marketing Changes. With respect to the Contracts covered by this
Agreement, as amended from time to time, the Broker-Dealer shall
notify the Company of any material change or intention to
materially change its marketing operations. Such notice shall be
given in the manner specified in Section 13 of this Agreement. All
Broker-Dealer marketing plans and methods for offering Contracts
are subject to periodic review by the Company, but not less
frequently than annually.
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3. Compensation
A. Payment Schedule. The Company agrees to pay compensation to
Broker-Dealer for the sale of each Contract lawfully sold by a
registered representative of the Broker-Dealer. If required by the
law of any state or jurisdiction, such compensation will be paid
to a Designee and/or a Nominee, as provided in Addendum A and/or
Addendum B (attached hereto and made part of this Agreement). The
amount of compensation shall be in accordance with the Schedules
attached hereto. Notwithstanding the foregoing, no compensation
shall be payable for any transaction not in compliance with all
applicable insurance and securities laws, rules and regulations at
the time of the solicitation, offer and sale of a Contract and
thereafter. Notwithstanding any provision in the attached
Schedules concerning chargebacks, if any Contract is tendered for
redemption or not taken in accordance with applicable regulatory
requirements, no compensation shall be paid.
Payment of compensation as described in the attached Schedules is
due when an application for a Contract is tendered to the Company.
The Broker-Dealer or, if applicable, the Designee and/or Nominee
may retain any compensation due it from amounts otherwise lawfully
due the Company. The Broker-Dealer, on its own behalf and on
behalf of any Designee and/or the Nominee, agrees to refund
immediately any compensation so retained with regard to a
particular Contract if the Company does not accept an application
for such Contract or the Contract is otherwise redeemed or not
taken as hereinbefore described. The Company reserves the right to
disallow or discontinue the practice of allowing the retain of
commissions. The Broker-Dealer shall be solely responsible for the
payment of any compensation of any kind to its registered
representatives.
B. Deductions by the Company. The Company reserves the right to
deduct any amount it determines is owed by the Broker-Dealer to
the Company or its affiliates, from any compensation due the
Broker-Dealer from the Company. This right shall apply, but is not
limited to the following: (i) advances to the Broker-Dealer; (ii)
compensation paid to the Broker-Dealer for payments by a customer
received by the Company and later returned or credited to such
customer for any reason; and (iii) any overpayment of compensation
to the Broker-Dealer. Any balance due the Company after such
deduction shall be a debt of the Broker-Dealer and will accrue
interest at eight percent (8%) per annum. The Company shall have
all rights of a creditor to collect amounts owed it by the
Broker-Dealer.
C. Payment Upon Termination. Upon the termination of this Agreement,
the Company will pay commissions to the Broker-Dealer in
accordance with the Company's established procedures on business
placed with the Company prior to the termination date of this
Agreement unless payment or receipt of renewal
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commissions would violate any laws, rules or regulations of any
jurisdiction or the NASD.
4. Complaints and Investigations
A. Cooperation. The Company and Broker-Dealer agree to cooperate
fully in any investigation or proceeding, the subject of which is
the Broker-Dealer, to the extent that such investigation or
proceeding concerns any matters related to this Agreement. Without
limiting the foregoing:
(i) The Company shall promptly notify the Broker-Dealer of
receipt of any customer complaint or notice of any inquiry,
investigation or proceeding concerning any matter related to
this Agreement.
(ii) The Broker-Dealer shall promptly notify the Company of
receipt of any customer complaint or notice of any inquiry,
investigation or proceeding concerning any matter relating
to this Agreement. The Broker-Dealer shall promptly notify
the Company of any NASD, federal or state inquiry,
investigation or proceeding, or litigation that has been
initiated against the Broker-Dealer.
B. Settlement by the Company. The Company reserves the right to
settle any claim or complaint made by a customer concerning any
conduct, act or omission by the Broker-Dealer or its registered
representatives. Provided there is agreement between the Company
and the Broker-Dealer regarding such settlement, the Broker-Dealer
shall reimburse the Company for the amount of any such settlement.
Any settlement payments agreed to by the Broker-Dealer shall be
reimbursed by the Broker-Dealer and will be a debt of the
Broker-Dealer as described in Section 3.B.
5. Indemnification
A. By the Company. The Company agrees to hold harmless and indemnify
the Broker-Dealer and its affiliates against any and all claims,
liabilities and expenses which any such party may incur from
liabilities (including reasonable attorney fees and related
expenses) arising from any acts or omissions of the Company and
its employees and other associated persons.
B. By the Broker-Dealer. The Broker-Dealer agrees to hold harmless
and indemnify Company and its affiliates against any and all
claims, liabilities and expenses which any such party may incur
from liabilities (including reasonable attorney fees and related
expense) arising from the acts or omissions of the Broker-Dealer,
its employees, registered representatives and other associated
persons (including any Designee or Nominee identified in any
Addendum to this Agreement).
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C. Notice of Action. After receipt by an indemnified party of notice
of the commencement of any action with respect to which a claim
will be made against an indemnifying party, such indemnified party
shall notify the indemnifying party promptly in writing of the
commencement of the action. The failure to so notify the
indemnifying party shall not relieve the indemnifying party from
any liability which it may otherwise have to any indemnified party
except and to the extent the indemnifying party is prejudiced
thereby. In any such action where the indemnified party has given
the notice described in this Section 5, the indemnifying party
shall be entitled to participate in and, to the extent that it
shall wish, jointly with any other indemnifying party similarly
notified, to assume defense of the action. After notice to such
indemnified party that the indemnifying party has elected to
assume defense of the action, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection with
the defense other than reasonable costs of investigation.
6. Assignability
This Agreement shall not be assigned by either party without the written
consent of the other party.
7. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Connecticut.
8. Revocation of Prior Agreements
This Agreement and any subsequent written amendments constitute the
entire agreement between the Company and the Broker-Dealer. This
Agreement terminates and supersedes all previous contracts, agreements or
arrangements made between the parties in connection with the Contracts
described in this Agreement.
9. Severability
The provisions of this Agreement are severable, and if any provision of
this Agreement or any amendment to it is found to be invalid, such
provision shall not affect any other provision of the Agreement that can
be given effect without the invalid provision.
10. Amendments
A. The Company reserves the right to amend this Agreement or any
Schedule attached hereto at any time. An amendment to the
Agreement shall be
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effective thirty (30) days from the date notice is given the
Broker-Dealer. Amendments to Schedules shall be effective without
approval of the Broker-Dealer from the date notice is given to the
Broker-Dealer that a new or amended Schedule has been issued by
the Company.
B. No amendment made by the Broker-Dealer shall be effective unless
it is agreed to in writing by the Company.
11. Waiver
Failure of either party to require performance of any provision of this
Agreement shall not constitute a waiver of that party's right to enforce
such provision at a later time. Waiver of any breach of any provision
shall not constitute a waiver of any succeeding breach.
12. Termination
A. This Agreement shall terminate:
(i) If the Broker-Dealer is dissolved, liquidated, or otherwise
ceases business operations;
(ii) If the Broker-Dealer fails, in the Company's sole judgment,
to comply with any of its obligations under this Agreement;
(iii) If the Company fails, in the Broker-Dealer's sole judgment,
to comply with any of its obligations under this Agreement;
(iv) If any state or jurisdiction revokes, suspends or otherwise
terminates the insurance license or appointment to represent
the Company of the Broker-Dealer or, where applicable, the
Broker-Dealer's Designee and/or Nominee (provided that no
substitute Designee and/or Nominee satisfactory to the
Company is named by the Broker-Dealer);
(v) If the Broker-Dealer's SEC, state or NASD registration or
membership is suspended, terminated or otherwise restricted
so as to render the Broker-Dealer, in the Company's opinion,
unable to perform its obligations pursuant to this
Agreement; or
(vi) If the Broker-Dealer refuses to accept an amendment made in
accordance with Section 10.
B. The termination date of this Agreement for any of the
circumstances set forth in Section 12.A shall be the date of
occurrence.
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C. Notwithstanding the provisions of Section 12.A., the Company and
the Broker-Dealer shall have the right to terminate this Agreement
for any reason. Termination in accordance with this Section 12.C.
shall be effective sixty (60) days from the date notice is given
by the terminating party.
D. Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except the provisions set forth in
Sections 3.B, 3.C, 4, and 5.
13. Arbitration
Any claim or controversy arising out of or relating to this Agreement
shall be subject to arbitration according to the commercial arbitration
rules of the American Arbitration Association then in effect. There shall
be three arbitrators. Each party shall select one arbitrator and the two
arbitrators selected shall mutually agree upon a third arbitrator. Cost
of the arbitration may be awarded in the discretion of the arbitrator(s).
The award of the arbitrator or arbitrators shall be final and binding,
and judgment on the award may be entered by any court having
jurisdiction.
14. Notice
Any notice required by the terms of this Agreement or any attachment
hereto, shall be valid if in writing and hand delivered, or sent by
United States mail postage prepaid, overnight delivery service or
facsimile transmission to the other party at the address provided below
such party's signature hereto.
15. Force Majeure
No party to this Agreement shall be responsible to the other for delays
or errors in its performance or other breach under this Agreement
occurring solely by reason of circumstances beyond its control, including
acts of civil or military authority, national emergencies, fire, major
mechanical breakdown, labor disputes, flood or catastrophe, acts of God,
insurrection, war, riots, delays of supplier, or failure of
transportation, communication or power supply.
16. Headings
The headings in this Agreement are for reference purposes only and shall
not be deemed part of this Agreement or affect its meaning or
interpretation.
17. Counterparts
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By:_____________________________ Date:__________________
Name:___________________________
Title:__________________________
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
(000) 000-0000 (Facsimile)
_________________________________________ [BROKER-DEALER]
By:______________________________ Date:__________________
Name:____________________________
Title:___________________________
Address:
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