CO-PRINCIPAL UNDERWRITERS' AGREEMENT
Between
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
and
XXXXX & XXXXXX, INC.
and
CONSECO EQUITY SALES, INC.
AGREEMENT dated as of ______________, 1998 by and between BUSINESS MEN'S
ASSURANCE COMPANY OF AMERICA ("BMA"), a Missouri corporation, on its own behalf
and on behalf of BMA Variable Life Account A (the "Separate Account"), Xxxxx &
Babson, Inc. ("J&B"), a Missouri corporation, and Conseco Equity Sales, Inc.
(ACES@), a Texas corporation.
WITNESSETH:
WHEREAS, the Separate Account is a segregated asset account established and
maintained by BMA pursuant to the laws of the State of Missouri for variable
life insurance policies to be issued by BMA and herein defined (the "Contracts")
under which income, gains and losses, whether or not realized, from assets
allocated to such accounts are, in accordance with the Contracts, credited to or
charged against the Separate Account without regard to other income, gains, or
losses of BMA or any other segregated asset accounts established by BMA;
WHEREAS, J&B and CES are each registered as broker-dealers under the
Securities Exchange Act of 1934, as amended, and are members in good standing of
the National Association of Securities Dealers, Inc., and are willing to serve
as co-principal underwriters of the Contracts; and
WHEREAS, BMA proposes to register interests in the Contracts by registering
the Separate Account under the Investment Company Act of 1940, as amended, and
interests in the Contracts under the Securities Act of 1933, as amended, and to
issue and sell the Contracts through the Separate Account to the public through
J&B and CES each acting as a co-principal underwriter for the Contracts; and to
that end has filed a registration statement with the Securities and Exchange
Commission.
NOW, THEREFORE, in consideration of their mutual promises, BMA, J&B and CES
hereby agree as follows:
1. Additional Definitions
(a) Contracts - The variable life insurance policies which BMA proposes to
issue and the premiums for which will be deposited in the Separate
Account and BMA's general account, including any riders to such
contracts.
(b) Registration Statement - At any time that this Agreement is in effect
the currently effective registration statement, or currently effective
post-effective amendment thereto, relating to the Separate Account,
including financial statements included in and all exhibits to such
registration statement or post-effective amendment.
(c) Prospectus - The prospectus included within the Registration
Statement, except that if the most recently filed prospectus filed
pursuant to Rule 497(c) or 497(e) under the 1933 Act subsequent to the
date on which the Registration Statement became effective differs from
the prospectus included within the Registration Statement at the time
it became effective, the term "Prospectus" shall refer to the most
recently filed prospectus filed under Rule 497(c) or 497(e) from and
after the date on which they each shall have been filed.
(d) Investment Company - The underlying open-end management investment
companies which the Separate Account invests in.
(e) 1933 Act - The Securities Act of 1933, as amended.
(f) 1934 Act - The Securities Exchange Act of 1934, as amended.
(g) 1940 Act - The Investment Company Act of 1940, as amended.
(h) SEC - The Securities and Exchange Commission.
(i) NASD - The National Association of Securities Dealers, Inc.
(j) Regulations - The rules and regulations promulgated by the SEC under
the 1933 Act, the 1934 Act and the 1940 Act as in effect at the time
this Agreement is executed or hereinafter promulgated.
(k) Territory - Each of the fifty states of the United States including
the District of Columbia and Puerto Rico except New York. It is
recognized that BMA is not qualified to transact a variable insurance
business in New York. In the event, however, that BMA becomes so
qualified and the Contracts are approved for sale in New York,
"Territory" shall then be deemed to include New York.
(l) Dealer - An entity registered as a broker-dealer and licensed as a
life insurance agent or affiliated with an entity so licensed, and
authorized to sell the Contracts and/or to recruit other Dealers to
sell the Contracts pursuant to a sales agreement as provided for in
this Agreement.
(m) Applications - Applications for the Contracts.
(n) Premium - A payment made under a Contract by an applicant or purchaser
to purchase benefits under the Contract.
(o) Service Center - BMA, ______________________________, or such other
location as may be designated in writing from time to time by BMA.
2. Co-Principal Underwriters
(a) BMA grants to J&B and CES the right, and J&B and CES each accept such
grant, during the term of this Agreement, subject to the registration
requirements of the 1933 Act and the 1940 Act and the provisions of
the 1934 Act for each to be the co-distributor and co-principal
underwriter of the Contracts in the Territory. It is hereby understood
that J&B and CES will each develop distribution systems for the
distribution of the Contracts. J&B and CES each undertake to offer and
use its best efforts to market Contracts actively through Dealers and
will provide a dealer marketing staff to answer telephone inquiries
with respect to the Contracts from registered representatives of
Dealers that have executed a sales agreement with either J&B or CES.
(b) BMA authorizes J&B and CES to each enter into separate written sales
agreements with broker-dealers that thereby will become Dealers on
terms and conditions that are consistent with this Agreement. J&B and
CES each agree that each sales agreement shall require the Dealer and
its agents or representatives soliciting applications for the
Contracts or otherwise engaging in solicitation activities on behalf
of the Dealer to be duly and appropriately licensed, registered or
otherwise qualified for the sale and distribution of the Contracts
under the federal securities laws and the insurance laws and any
applicable securities or blue-sky laws of each state or other
jurisdiction in the Territory in which the Dealer offers the Contracts
for sale, and in which BMA informs J&B and CES that BMA is licensed to
sell the Contracts. Each sales agreement also shall require that the
Dealer be registered as both a broker-dealer under the 1934 Act and a
member of the NASD, or if not so registered or not such a member, then
the agents and representatives of such Dealer soliciting applications
for the Contracts shall be agents and registered persons of a
registered broker-dealer and NASD member which is an affiliate of such
Dealer and is also a party to such sales agreement and which maintains
full responsibility for the training, supervision, and control of the
securities activities of the agents and representatives distributing
the Contracts.
(c) BMA shall forward to J&B and CES Applications and other materials for
use by J&B and CES and the Dealers in their solicitation of the
Contracts. J&B and CES each agree that all Applications shall be made
only on application forms and other materials provided by BMA.
(d) All Premiums paid by check or money order that are collected by J&B
and/or CES or any Dealer shall be remitted promptly in full, together
with any Applications, forms and any other required documentation, to
the Service Center. Checks or money orders in payment of Premiums
shall be drawn to the order of "Business Men's Assurance Company of
America." Initial and additional Premiums may be transmitted by wire
order from J&B or CES or any Dealer to the Service Center in
accordance with the procedures set forth by BMA. Acceptance by BMA of
a wire order does not create a contractual obligation with BMA until
the receipt of a properly completed Application within 10 days of
transmittal of the wire order by J&B or CES or the Dealer. If any
Premium is held at any time by J&B or CES, J&B and CES agrees that
such Premium shall be held in a fiduciary capacity and shall be
remitted promptly to BMA. All such Premiums, whether by check, money
order or wire, shall be the property of BMA.
(e) J&B and CES each acknowledge that BMA shall have the unconditional
right to reject, in whole or in part, any Application. In the event an
Application is rejected, any Premium submitted will be returned by or
on behalf of BMA to the applicant. J&B or CES and, if applicable, the
Dealer that submitted the Premium, will be notified of such action. In
the event that a purchaser exercises his or her rescission privilege
provided by law, any amount to be refunded as provided in the Contract
will be so refunded to the purchaser by or on behalf of BMA. J&B and
CES and, if applicable, the Dealer who solicited the Contract, will be
notified of such action and will refund any commissions paid on such
rescinded Contract.
(f) J&B and CES shall each act as independent contractors in the
performance of their duties and obligations under this Agreement and
nothing herein contained shall make either J&B or CES or their
representatives or employees, or the Dealers or their respective
representatives or employees, employees of BMA in connection with the
distribution of the Contracts.
(g) J&B and CES each agrees to train, supervise and be solely responsible
for the conduct of their respective employees, if any, of J&B and CES
in their solicitation of applications and Premiums for the Contracts,
and to supervise their compliance with applicable rules and
regulations of any securities regulatory agencies that have
jurisdiction over variable contracts activities, including the
requirement that the Contracts be suitable for J&B's or CES's
customers.
(h) BMA, as agent for J&B and CES, will confirm the purchase of the
Contract to each purchaser of a Contract in accordance with the 1934
Act and the rules thereunder. BMA will maintain and preserve such
books and records with respect to such confirmations in conformity
with the requirements of the 1934 Act and the rules thereunder. BMA
agrees that all such books and records will be maintained and held on
behalf of and as agent for J&B and CES whose property they are and
shall remain, and that such books and records are at all times subject
to inspection by the SEC.
3. Representations and Warranties of BMA BMA makes the following
representations and warranties:
(a) BMA will notify J&B and CES when the Registration Statement has been
declared effective by the SEC or has become effective in accordance
with the Regulations.
(b) The Registration Statement and the Prospectus comply in all material
respects with the provisions of the 1933 Act and the 1940 Act and the
Regulations, and neither of the Registration Statement nor the
Prospectus contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, in light of the
circumstances in which they were made; provided, however that none of
the representations and warranties in Section 3(b) shall apply to
statements or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with the information furnished
to BMA in writing by J&B and CES expressly for use in the Registration
Statement.
(c) BMA has not received any notice from the SEC with respect to the
Registration Statements pursuant to Section 8(e) of the 1940 Act and
no stop order under the 1933 Act has been issued and no proceeding
therefor has been instituted or threatened by the SEC.
(d) BMA will notify J&B and CES promptly upon learning the Registration
Statement have ceased to be effective.
(e) The accountants who certified the financial statements included in the
Registration Statement and Prospectus are independent public
accountants as required by the 1993 Act and the Regulations.
(f) The financial statements included in the Registration Statement
present fairly the financial condition of BMA at the dates indicated.
Such financial statements have been prepared in conformity with
generally accepted accounting principles.
(g) Subsequent to the respective dates as of which information is given in
the Registration Statement or the Prospectus through the date of this
Agreement, there has not been any material adverse change in the
condition, financial or otherwise, of BMA which would cause
information to be misleading.
(h) BMA has been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Missouri with full
power and authority to own, lease and operate its properties and
conduct its business in the manner described in the Prospectus and is
duly qualified to transact the business of a life, health and accident
insurance company, and is in good standing in each state or other
jurisdiction in the Territory.
(i) The Contracts have been approved to the extent required by the
Missouri Insurance Commissioner and by the governmental agency
responsible for regulating insurance companies in each other state or
jurisdiction in which BMA has indicated to J&B and CES that the
Contracts may be offered for sale.
(j) The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein have been duly authorized by all
necessary corporate action by BMA and when so executed and delivered
this Agreement will be the valid and binding obligation of BMA
enforceable in accordance with its terms.
(k) The consummation of the transactions contemplated by this Agreement,
and the fulfillment of the terms of this Agreement, will not conflict
with, result in any breach of any of the terms and provisions of or
constitute (with our without notice or lapse of time) a default under
the charter or by-laws of BMA, or any indenture, agreement, mortgage,
deed of trust, or other instrument to which BMA is party or by which
it is bound, or violate any law, or, to the bet of BMA's knowledge,
any order, rule or regulation applicable to BMA of any court or any
federal or state regulatory body, administrative agency or any other
governmental instrumentality having jurisdiction over BMA or any of
its properties.
(l) No consent, approval, authorization or order of any court or
governmental authority or agency is required for the issuance or sale
of the Contracts or for the consummation of the transactions
contemplated by this Agreement, that has not been obtained, except
with respect to the states or jurisdictions in which BMA has informed
J&B and CES that such consent is still being sought, or with respect
to which the parties have agreed that such consent is not being
sought.
(m) BMA has filed with the SEC all statements and other documents required
for registration of the Separate Account under the provisions of the
1940 Act and the Regulations thereunder and such registration is
expected to be or has been effective.
(n) The Contracts conform to the descriptions thereof in the Registration
Statement and the Prospectus and, when issued as contemplated by the
Registration Statement, will constitute legal, validly issued and
binding obligations of BMA in accordance with their terms.
4. Additional Obligations of BMA
(a) BMA shall use its best efforts: (1) to maintain the registration of
the Contracts with the SEC and any state securities commissions of any
state or other jurisdiction in the Territory where the securities or
blue-sky laws of such state or other jurisdiction require registration
of the Contracts, including without limitation using its best efforts
to prevent a stop order from being issued or if a stop order has been
issued to cause such a stop order to be withdrawn: (2) to gain
approval of the Contract or forms where required under the insurance
laws and regulations of each state or other jurisdiction in the
Territory; and (3) to keep such registration and approval in effect
thereafter so long as they are required and the Contracts are
outstanding.
(b) BMA agrees to provide J&B and CES, at any time upon J&B's and/or CES's
request, with a list of all states and jurisdiction in which the
Contracts lawfully may be sold. To the extent that BMA is not
authorized to issue the Contracts in any state or other jurisdiction
in the Territory, BMA shall make all reasonable efforts to obtain such
authorization in such state or jurisdiction. BMA agrees to notify J&B
and CES promptly of any change in the status of its application for
Contract approval in any jurisdiction where such approval has not been
obtained.
(c) During the term of this Agreement, BMA agrees that it will take all
action which is required to cause the Contracts to comply, and to
continue to comply, as annuity contracts and as registered securities
under applicable laws and regulations, and to cause the Registration
Statement and the Prospectus to comply, and to continue to comply,
with:
i. all applicable federal laws and regulations; and
ii. all applicable laws and regulations of each state and other
jurisdiction in the Territory.
(d) During the term of this Agreement, BMA will notify each J&B and CES as
soon as possible under the circumstances: i. When the Registration
Statement has become effective or any post-effective amendments with
respect to the Registration Statement thereafter becomes effective or
ceases to be effective;
ii. Of any request by the SEC for any amendments to the Registration
Statement or supplements to the Prospectus or for additional
information;
iii. Of any event which makes any material statement made in the
Registration Statement or the Prospectus untrue in any material
respect or results in material omission in the Registration
Statement or the Prospectus;
iv. Of the issuance by the SEC of any stop order with respect to the
Registration Statement or any amendment 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.
(e) BMA will furnish to J&B and CES without charge promptly after filing a
copy of the Registration Statement as originally filed and any
pre-effective or post-effective amendments thereto, including
financial statements and all exhibits not incorporated therein by
reference, Contractholder reports, and proxy statements and materials
in the form mailed to Contractholders.
(f) During the term of this Agreement, no amendment or rider will be made
or added to the Contracts, no amendment will be made to the
Registration Statement and no amendment or supplement will be made to
the Prospectus, without J&B and CES each having been previously so
advised and having not objected to any such amendment, rider or
supplement. J&B and CES shall not object unreasonably to any such
amendment or rider, and BMA may effect an amendment or rider despite
any objection of J&B and/or CES if required by law or regulation.
(g) BMA will be obligated to pay all expenses in connection with: (i) the
preparation and filing of the Registration Statement, each preliminary
Prospectus and final Prospectus; (ii) the preparation and issuance of
the Contracts; (iii) any registration, qualification or approval of
the Contracts for offer and sale required under the securities,
blue-sky laws or insurance laws of the states and other jurisdictions
in the Territory; (iv) registration fees for the Contracts payable to
the SEC and the NASD; (v) the costs of designing, typesetting of the
different versions of the prospectuses to be distributed by J&B and
CES for the Separate Account and any supplements thereto; (vi) the
costs of any advertisements and sales material which J&B and CES
develop for their use in connection with the sale of the Contracts;
(vii) the cost of printing the different versions of the prospectuses
of the Separate Accounts and the Funds for distribution to potential
Contractholders and broker-dealers; (viii) designing and printing
periodic reports for the Separate Account and printing periodic
reports for the Funds to be provided to existing Contractholders; (ix)
taxes (if any) payable by the Separate Account and the cost of
preparing tax returns for the Separate Account; (x) the cost of
printing and mailing one set of proxy materials a year for existing
Contractholders; (xi) the cost of conducting meetings of
Contractholders for the purpose of conducting insurance company or
Separate Account business; (xii) all costs of necessary licensing,
registration, and qualification of BMA or its personnel in states in
which the Contracts are sold; (xiii) all legal, accounting and other
professional fees incurred by BMA in connection with the foregoing;
and (xiv) any other expenses related to the distribution of the
Contracts except those set forth in Section 6(g) below, or as mutually
agreed by the parties from time-to-time.
(h) BMA agrees that the names and addresses of all customers and
prospective customers of J&B and CES and their affiliates, or of any
Dealer which may come to the attention of BMA or any company or person
affiliated with BMA as a result of its relationship with J&B or CES or
their affiliates or any Dealer and not from any independent source,
are confidential and shall not be used by BMA or any company or person
affiliated with BMA for any purpose whatsoever except as may be
necessary in connection with the administration of the Contracts sold
by or through J&B or CES, including responses to specific requests to
BMA for service by Contractholders or efforts to prevent the
replacement of such Contracts or to encourage the exercise of options
under the terms of the Contracts. In no event shall the names and
addresses of such customers and prospective customers be furnished by
BMA to any other company or person. The intent of this paragraph is
that neither BMA nor companies or persons affiliated with BMA shall
utilize, or permit to be utilized, their knowledge of J&B or CES,
their affiliates or any Dealer, including the identity and all other
information concerning their customers, which is derived as a result
of the relationship created under this Agreement.
(i) BMA agrees to file in a timely manner all reports, statements and
amendments required to be filed by or for the Separate Account under
the 1933 Act and/or the 1940 Act or the Regulations.
(j) BMA agrees to deliver to J&B and CES as soon as practicable after it
becomes available, the Annual Statement for BMA and for the Separate
Account in the form filed with the State of Missouri and to supply
copies of all other financial reports at such time any such reports
are filed with the regulators or sent to Contractholders.
(k) BMA agrees to provide J&B and CES access to such records, officers and
employees of BMA at reasonable times as necessary to enable J&B and
CES to fulfill their obligations as co-principal underwriters under
the 1933 Act for the Contracts.
(l) BMA shall have the responsibility for maintaining the appointment
records of all agents appointed by BMA to distribute the Contracts.
(m) BMA shall have the responsibility for the ongoing operation and
administration of the Contracts and the Separate Account in accordance
with the terms of the Contracts and the Prospectus and all applicable
laws and regulations.
5. Representation and Warranties of J&B and CES
J&B and CES each make the following representations and warranties:
(a) J&B and CES have each taken all action including, without limitation,
those necessary under its articles of incorporation, by-laws and
applicable state corporate law, necessary to authorize the execution,
delivery and performance of this Agreement and all transactions
contemplated hereunder.
(b) J&B and CES are each and shall remain registered during the term of
this Agreement as broker-dealers under the 1934 Act, are members in
good standing with the NASD, and are duly registered, if required, as
broker-dealers under applicable state securities laws.
(c) J&B and CES shall solicit, and shall instruct Dealers to solicit,
sales of the Contracts only in those states or jurisdictions in which
BMA has indicated that the Contracts may be offered for sale.
(d) J&B and CES will each require each Dealer to be duly registered as a
broker-dealer under the 1934 Act and to be a member in good standing
with the NASD (or, if not so registered or such a member, to be
affiliated with a person so registered and such a member), and to
represent that it is duly in compliance with applicable state
securities and insurance laws. J&B and CES shall each require each
Dealer to sell the Contracts only through those associated persons (as
that term is defined in the 0000 Xxx) who are duly and appropriately
licensed, registered and otherwise qualified to sell the Contracts
under the 1934 Act, applicable rules of the NASD and applicable state
securities and insurance law, and who are appointed by BMA agents for
the sale of the Contracts.
(e) No statement or representation concerning the Contracts shall be made
by either J&B or CES or any associated person thereof in connection
with the Contracts other than those contained in the Registration
Statement or Prospectus or any other promotional, sales or advertising
material utilized in accordance with this Agreement.
6. Additional Obligations of J&B and CES
(a) It is understood that J&B and CES will each be responsible for the
design and preparation of all promotional, sales and advertising
material in connection with their own marketing and sales activities
in connection with the Contracts. It is further understood that BMA
may perform this function on behalf of J&B relating to its
distribution efforts in connection with the Contracts. J&B and CES
shall each initiate and design forms of promotional, sales and
advertising material for the Contracts. J&B and CES shall each provide
to BMA and each other copies of all promotional sales and advertising
material developed by them for BMA's and each others review and
approval. Upon receipt of such material from the other party, the
receiving party(ies) shall be given a reasonable amount of time to
complete its review. The parties hereby agree to respond on a prompt
and timely basis in reviewing any such material. Each party shall be
responsible for filing the material it develops, as required, with the
NASD and any state securities regulatory authorities. BMA shall be
responsible for filing all such material, as required with any state
insurance regulatory authorities. BMA/J&B and CES will approve
promotional, sales or advertising material for use in any state or
other jurisdiction in the Territory only upon notifying the other
party(ies) that such material has been submitted to all appropriate
state and regulatory authorities and reviewed and approved by such
authorities to the extent required by applicable law. J&B and CES
shall each require in each sales agreement with a Dealer that the
individuals associated with such Dealer and appointed as agents of BMA
to solicit the sale of the Contracts shall not use, develop or
distribute any promotional, sales or advertising material which has
not been approved in writing by BMA/J&B and/or CES and filed with the
appropriate regulatory agencies.
(b) Solicitation and other applicable activities of J&B and CES relating
to the Contracts shall be undertaken only in accordance with
applicable laws, and regulations and rules of the NASD, including the
rules on suitability of investments. J&B and CES each understands and
acknowledges that neither it nor its agents or representatives is
authorized by BMA to give any information or make any representation
in connection with this Agreement or the offering of the Contracts
other than those contained in the Registration Statement or Prospectus
or other promotional, sales or advertising material utilized in
accordance with this Agreement.
(c) J&B and CES shall each require that no agent or representative of J&B
or CES shall solicit applications for the Contracts until duly
licensed and appointed by BMA as a life insurance agent of BMA in the
appropriate states or other jurisdictions in the Territory. It is
understood that BMA reserves the right, which right shall not be
exercised unreasonably, to refuse to appoint any proposed agent, or
once an appointment is made, to terminate such appointment. J&B and
CES shall each require that agents or representatives of J&B or CES
distributing the Contracts have variable insurance contract licenses
where required.
(d) J&B and CES shall not directly or by means of their agents or
representatives offer, nor attempt to offer, nor solicit Applications
or deliver Contracts in any state or jurisdiction in the Territory in
which BMA has advised them prior to such solicitation or offer that
the Contracts may not legally be sold or offered for sale.
(e) J&B and CES shall not have authority, and shall not grant authority to
Dealers, on behalf of BMA: to make, alter or discharge any Contract;
to waive any Contract forfeiture provision; to extend the time of
paying any Premium; or to receive any monies or Premiums (except for
the sole purpose of forwarding monies or Premiums to BMA). J&B and CES
shall not expend nor contract for the expenditure of the funds of BMA
nor shall J&B or CES possess or exercise any authority on behalf of
BMA other than that expressly conferred on each by this Agreement.
(f) J&B and CES shall each require that its agents and representatives
appointed by BMA as agents not make recommendations to an applicant to
purchase a Contract in the absence of reasonable grounds to believe
that the purchase of the Contract is suitable for the applicant. In
any sales agreement with a Dealer, J&B and CES shall each require that
any agent or representative of the Dealer appointed by BMA as an
insurance agent not make any recommendation to an applicant to
purchase a Contract in the absence of reasonable grounds to believe
that the purchase of the Contract is suitable for the applicant. While
not limited to the following, a determination of suitability shall be
based on information supplied to an agent or representative after a
reasonable inquiry concerning the applicant's insurance and investment
objectives and financial situation and needs.
(g) J&B and CES will each be obligated to pay the following expenses
related to each of their distribution activities of the Contracts: (i)
the compensation of J&B's and CES's own registered representatives, if
any; (ii) expenses associated with the initial licensing and training
of their registered representatives and other employees involved in
the distribution of the Contracts; (iii) all legal and other
professional fees incurred by J&B and/or CES in connection with the
foregoing; and (iv) any other expenses incurred by J&B and/or CES or
their agents, representatives or employees for the purpose of carrying
out the obligations of J&B and CES hereunder.
7. Records
BMA, J&B and CES each shall maintain such accounts, books and other
documents as are required to be maintained by each of them by applicable
laws and regulations and shall preserve such accounts, books and other
documents for the periods prescribed by such laws and regulations. The
accounts, books and records of BMA, the Separate Account, the Investment
Companies, J&B and CES as to all transactions hereunder shall be maintained
to clearly and accurately disclose the nature and details of the
transactions, including such accounting information as necessary to
demonstrate the reasonableness of the amounts paid by either party
hereunder. Each party shall have the right to inspect and audit such
accounts, books and records of the other party during normal business hours
upon reasonable written notice to the other party(ies). Each party shall
keep confidential all information obtained pursuant to such an inspection
or audit, and shall disclose such information to third parties only upon
receipt of written authorization from the other parties, except as required
by law. J&B and CES shall each include in the sales agreement with each
Dealer a requirement that the Dealer promptly furnish to BMA or its
authorized agent any reports and information which BMA reasonably may
request for the purpose of meeting BMA's reporting and recordkeeping
requirements under the insurance laws of any state, and under any
applicable federal and state securities laws, rules and regulations and
under the rules of the NASD.
8. Compensation
BMA shall pay commissions on Premiums paid under Contracts sold pursuant to
this Agreement as follows:___________________________________ . J&B and CES
shall each be responsible for all tax reporting information which J&B and
CES are required to provide under applicable tax law to their agents,
representatives or employees with respect to the Contracts, and each sales
agreement with a Dealer shall require the Dealer to be responsible for all
tax reporting information which such Dealer is required to provide under
applicable tax law to its agents, representatives and employees with
respect to the Contracts. Nothing contained in this Agreement or any sales
agreement is to be construed to require BMA to provide any tax reporting
information directly or indirectly to any Dealer or its agents,
representatives or employees.
9. Investigation and Proceedings
(a) BMA, J&B and CES each agree to cooperate fully in any insurance
regulatory investigation or proceeding or judicial proceeding arising
in connection with the offering, sale or distribution of the Contracts
distributed under this Agreement. The parties further agree to
cooperate fully in any securities regulatory investigation or
proceeding or judicial proceeding with respect to BMA, J&B and/or CES,
their affiliates and their agents or representatives to the extent
that such investigation or proceeding is in connection with the
offering, sale or distribution of the Contracts distributed under this
Agreement. Without limiting the foregoing, each party agrees to notify
the other parties promptly of any written customer complaint or notice
of any regulatory investigation or proceeding or judicial proceeding
received by any party with respect to the Contracts, Investment
Companies, BMA, J&B and CES, or any agent or representative which may
affect the sale of the Contracts under this Agreement.
(b) In the case of a substantive customer complaint, all parties will
cooperate in investigating such complaint and any response by a party
to such complaint will be sent to the other parties for approval not
less than five business days prior to its being sent to the customer
or any regulatory authority, except that if a more prompt response is
required, the proposed response shall be communicated by telephone,
facsimile or electronic mail. No party will release any such response
without the other parties' prior written approval.
10. Indemnification
(a) Each party hereto (the "indemnifier") shall defend, indemnify and hold
harmless the other parties and their affiliated companies, and each
person who controls or is associated with them within the meaning of
such terms under the federal securities laws and any officers,
directors, employees and agents, with respect to any and all losses,
damages, claims or expenses (including any investigative, legal or
other expenses reasonably incurred in connection with, and any amounts
paid in settlement of, any action, suit or proceeding or any claim
asserted) which may be incurred as a result of any acts or omissions
of the indemnifier, its officers, directors, employees and agents.
This section 10 shall survive termination of this Agreement. This
indemnification shall be in addition to any liability which the
parties hereto may otherwise have.
11. Term
(a) Unless otherwise terminated pursuant to this Section 11, this
Agreement shall remain in effect for a period of one year following
its execution. This Agreement shall remain in effect thereafter unless
(i) terminated at the option of any party, upon sixty days written
notice to the other party(ies), or (ii) terminated pursuant to
subparagraph (b) of this Paragraph 11. Termination of this Agreement
with respect to any one co-principal underwriter shall not affect its
continued effectiveness with respect to the other co-principal
underwriter.
(b) This Agreement shall terminate automatically if it is assigned.
Without limiting the generality of the foregoing, the term "assigned"
shall not include any transaction exempted from Section 15(b)(2) of
the 1940 Act. This Agreement may be terminated upon ten days written
notice to the other party(ies), without payment of any penalty. This
Agreement may be terminated at the option of any party upon the other
parties' material breach of any provision of this Agreement or
immediately upon written notice in the event any party: files a
petition for reorganization or liquidation under the U.S. Bankruptcy
Code; becomes subject to the jurisdiction of the U.S. Bankruptcy
Court; has a liquidator or trustee appointed to oversee its affairs;
or is adjudged insolvent.
(c) Upon termination of this Agreement all authorizations, rights and
obligations shall cease except: (i) the obligation to settle accounts
hereunder, including commissions on Premiums subsequently received for
Contracts in effect at the time of termination or issued pursuant to
applications received by BMA prior to termination; (ii) the provisions
contained in Sections 4(h), 8 and 9 hereof; (iii) the indemnification
provisions set forth in Section 10 hereof; and (iv) a mutual
obligation to refrain from replacing, directly or indirectly, existing
Contracts with new variable annuity contracts resulting from new
affiliations of any party, except as otherwise agreed in writing.
12. Rights, Remedies, etc., are Cumulative
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws. Failure of any party to insist upon strict
compliance with any of the conditions of this Agreement shall not be
construed as a waiver of any of the conditions, but the same shall remain
in full force and effect. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver.
13. Notices
All notices hereunder are to be made in writing and shall be given:
if to BMA, to:
--------------------
--------------------
--------------------
if to J&B, to:
--------------------
--------------------
--------------------
if to CES, to:
--------------------
--------------------
--------------------
or such other address as such party may hereafter specify in writing. Each
such notice to a party shall be either hand delivered or transmitted by
registered or certified United States mail with return receipt requested,
and shall be effective upon delivery.
14. Interpretation, Jurisdiction, Etc.
This Agreement constitutes the whole agreement between the parties hereto
and supersedes all prior oral or written negotiations between the parties
with respect to the subject matter hereof. This Agreement shall be
construed and its provisions interpreted under and in accordance with the
internal laws of the State of _________________ without giving effect to
principles of conflict of laws.
15. Headings
The headings in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
16. Counterparts
This Agreement may be executed in counterparts, each of which taken
together shall constitute one and the same instrument.
17. Severability
This is a severable agreement and in the event that any part or parts of
this Agreement shall be held to be unenforceable to its or their full
extent, then it is the intention of the parties hereto that such part or
parts shall be enforced to the extent permitted under the law, and, in any
event, that all other parts of this Agreement shall remain valid and duly
enforceable as if the unenforceable part or parts had never been a part
hereof.
18. Regulation
This Agreement shall be subject to the provisions of the 1933 Act, 1934 Act
and 1940 Act and the Regulations and the rules and regulations of the NASD,
from time to time in effect, including such exemptions from the 1940 Act as
the SEC may grant, and the terms hereof shall be interpreted and construed
in accordance therewith. IN WITNESS WHEREOF, each party hereto represents
that the officer signing this Agreement on the party's behalf is duly
authorized to execute this Agreement; and the parties hereto have caused
this Agreement to be duly executed by such authorized officers on the date
specified below.
BUSINESS MEN'S ASSURANCE
COMPANY OF AMERICA
Date:_______________ By:____________________________
XXXXX & XXXXXX, INC.
Date:_______________ By:____________________________
CONSECO EQUITY SALES, INC.
Date:_______________ By:____________________________
