SALES SUPPORT AGREEMENT
AGREEMENT made as of the 1st day of April, 1999, by and between THE
PENN MUTUAL LIFE INSURANCE COMPANY ("Penn Mutual"), a Pennsylvania Company, and
XXXXXX, XXXXXXXX & XXXX, INC. ("HTK"), a Pennsylvania Corporation.
W I T N E S S E D:
WHEREAS, Penn Mutual is engaged in the business of issuing variable
life insurance policies to the public;
WHEREAS, HTK is licensed as a life insurance agent of Penn Mutual under
state insurance laws, is registered as a broker-dealer under the Securities
Exchange Act of 1934 and is a member of the National Association of Security
Dealers, Inc.; and
WHEREAS, Penn Mutual desires that HTK provide sales support services in
connection with the sale of variable life insurance policies by designated life
insurance agents of Penn Mutual, and HTK desires to provide such services;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
I. Training and Education
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A. HTK will provide training and educational services to designated life
insurance agents of Penn Mutual in connection with the sale of variable life
insurance policies identified in Schedule I attached hereto (hereinafter
rereferred to as "Policies"). Designated life insurance agents of Penn Mutual
are those life insurance agents who are designated by Penn Mutual and are
associated persons of HTK.
I. Compliance
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X. Xxxx Mutual will furnish HTK with the names of its life insurance agents who
indicate a desire to sell Policies.
A. HTK, after investigation, will select the life insurance agents of Penn
Mutual who are to become qualified under federal and state securities laws and
rules of the NASD to engage in the sale of Policies and will use its best
efforts to cause such life insurance agents to be qualified. Life insurance
agents so qualified will be "persons associated with" HTK under the Securities
Exchange Act of 1934 and the
applicable rules of the NASD. Upon such qualification of a life insurance agent,
the fact will be certified in writing to Penn Mutual by HTK.
B. Prior to permitting a life insurance agent to sell Policies, Penn Mutual,
HTK, the life insurance agent and the supervisor of the life insurance agent
designated by HTK will enter into a mutually satisfactory agreement pursuant to
which the life insurance agent will acknowledge that he will be an associated
person of HTK in connection with his selling activities relating to Policies,
that such activities will be under the supervision and control of HTK and the
supervisor designated by HTK, and that the life insurance agent's right to
continue to sell Policies is subject to his or her continued compliance with
such agreement and the rules and procedures established by HTK.
A. It is contemplated that other personnel of Penn Mutual will become qualified
as associated persons of HTK in order to carry out securities activities with
respect to the sale of Policies. HTK will train such personnel as requested by
Penn Mutual, and will use its best efforts to cause such personnel to become
qualified as associated persons. Upon such qualification, the fact will be
certified in writing to Penn Mutual by HTK.
A. HTK will fully comply with the requirements of NASD and of the Securities
Exchange Act of 1934 and will supervise diligently the securities activities of
life insurance agents of Penn Mutual who are associated persons of HTK. Upon
request by HTK, Penn Mutual will furnish or request any life insurance agent who
is an associated person to furnish (at Penn Mutual's or the life insurance
agent's expense) such appropriate records that may be necessary to insure
diligent supervision.
A. In the event any associated person falls or refuses to submit to supervision
by HTK in accordance with this Agreement, or otherwise fails to meet the rules
and standards imposed by HTK on the associated person, HTK shall certify such
fact to Penn Mutual and shall immediately notify the associated person that he
or she is no longer authorized to engage in securities activities with respect
to the sale of Policies, and HTK and Penn Mutual shall take whatever additional
action may be necessary to terminate such securities activities of the
associated person.
A. HTK will assume full responsibility for the securities activities of its
associated persons with respect to the sale of Policies and for initial and
continued compliance by itself and its associated persons with applicable
federal and state security laws and rules of the NASD, and in connection
therewith may demand and shall be entitled to receive such assurances from Penn
Mutual as HTK deems appropriate to demonstrate compliance with the Securities
Act of 1933 and the Investment Company Act of 1940.
A. Compensation and reimbursement of expenses payable to life insurance agents
in connection with sales of Policies shall be paid by Penn Mutual under Penn
Mutual's agency contracts and will not be an expense of HTK. All premiums paid
under Policies by policy owners shall be paid to Penn Mutual and will not be
income to HTK. HTK shall have no interest in any commissions or other
remuneration payable to life insurance agents by Penn Mutual or in any premiums
paid under Policies to Penn Mutual. For regulatory purposes of the NASD and the
Securities Exchange Act of 1934, commissions paid by Penn Mutual shall be
appropriately reflected in the books and records maintained by or on behalf of
HTK.
A. At the request of HTK, some or all of the books and records required to be
maintained by a registered broker-dealer under the Securities Exchange Act of
1934 in connection with the sale of Policies will be maintained by Penn Mutual
as agent for HTK. Penn Mutual agrees that such records are and shall remain the
property of HTK, will be maintained and preserved in conformity with the
requirements of Rules 17a-3 and 17a-4 under the Securities Exchange Act of 1934,
to the extent that such requirements are applicable to the Policies, and will be
subject to examination by the Securities Exchange Commission in accordance with
Section 17(a) of the Securities Exchange Act of 1934.
A. A confirmation with respect to each premium payment made under a Policy will
be sent to the holder of such Policy in accordance with Rule 15cl-4 under the
Securities Exchange Act of 1934.
I. Compensation
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A. In payment for the services performed under this Agreement, Penn Mutual shall
compensate HTK as provided in Schedule I attached hereto.
A. The compensation for services provided under this Agreement shall be paid
within 15 days after the end of the calendar month in which premium payments are
accepted by Penn Mutual. Should Penn Mutual for any reason return a premium
payment, HTK shall repay Penn Mutual the total amount of any compensation which
Penn Mutual may have paid to HTK with respect to such purchase payments.
I. General
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A. Schedule I attached to this Agreement shall be signed by the parties to this
Agreement and may be revised from time to time by agreement and signature of the
parties.
A. This Agreement shall continue in effect until terminated. Either party may
terminate the Agreement by giving the other party thirty days prior written
notice.
A. This Agreement supersedes and replaces any and all prior sales support or
similar assignments between Penn Mutual and HTK relating to the same subject
matter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year written
above.
Attest THE PENN MUTUAL LIFE
INSURANCE COMPANY
------------------------------ By
Secretary Xxxxxxx X. Plush
Vice President, Products & Programs
Attest XXXXXX, XXXXXXXX & XXXX, INC.
------------------------------ By
Secretary Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
SCHEDULE I
SALES SUPPORT AGREEMENT DATED APRIL 1, 1999
Compensation Payable by The Penn Mutual Life Insurance Company to
Xxxxxx, Xxxxxxxx & Xxxx, Inc.
Pursuant to Section 3 of the Sales Support Agreement
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Products Compensation
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Cornerstone VUL I, II and III Flexible 3.75% of total commission paid
Premium Adjustable Variable Life Insurance (first year and renewal)
Policy and Variable EstateMax Last
Survivor Flexible Premium Adjustable
Variable Life Insurance Policies
