METLIFE INVESTORS DISTRIBUTION COMPANY
RETAIL SALES AGREEMENT
TABLE OF CONTENTS
I. DEFINITIONS
II. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
A. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF COMPANY
B. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF BROKER
III. PRINCIPLES OF ETHICAL MARKET CONDUCT
IV. COMPLIANCE WITH APPLICABLE LAWS
V. COMPENSATION
VI. COMPLAINTS AND INVESTIGATIONS
VII. RECORDS AND ADMINISTRATION
VIII. PRIVACY INFORMATION
A. PROPRIETARY INFORMATION
B. RECEIPT OF CUSTOMER NONPUBLIC PERSONAL INFORMATION BY COMPANY FROM
BROKER
C. TREATMENT OF NONPUBLIC PERSONAL INFORMATION DISCLOSED BY COMPANY
D. CONFIDENTIAL INFORMATION
E. PROTECTED HEALTH INFORMATION
IX. INDEMNIFICATION
X. GENERAL PROVISIONS
A. TERM AND TERMINATION
B. ASSIGNABILITY
C. AMENDMENTS
D. NOTICES
E. ARBITRATION
F. GOVERNING LAW; VENUE; JURISDICTION
G. ENTIRE UNDERSTANDING
H. NO THIRD PARTY BENEFICIARIES
I. NON-EXCLUSIVITY
J. NO HIRE
K. WAIVER
L. COUNTERPARTS; FACSIMILE SIGNATURES
M. SEVERABILITY
N. HEADINGS
O. FURTHER ASSURANCES
P. CONSTRUCTION
Q. RECITALS
R. REPRESENTATION BY COUNSEL
S. TRADEMARKS
T. LONG TERM CARE CONTRACTS
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METLIFE INVESTORS DISTRIBUTION COMPANY
RETAIL SALES AGREEMENT
This Agreement, including the Exhibits attached hereto (collectively, the
"Agreement") is made, entered into and effective as of ______________________,
20___ ("Effective Date") by and among MetLife Investors Distribution Company, a
Missouri corporation (the "Company") and (BDNAME), (the "Broker") that, for the
distribution of fixed insurance products only, is or is affiliated with one or
more validly licensed insurance agencies, or for the distribution of registered
products, is registered as a broker-dealer with the Securities and Exchange
Commission ("SEC") under the 1934 Act (as hereafter defined) and is a member of
the National Association of Securities Dealers ("NASD") and is also either
licensed as or affiliated with one or more validly licensed insurance agencies.
RECITALS
A. Company and its Affiliates (as hereafter defined) issue or provide
access to certain Contracts (as hereafter defined).
B. Company, on behalf of itself and each Affiliate that issues or provides
access to the Contracts, is authorized to enter into this Agreement with Broker
and other unaffiliated broker-dealers or selling groups, as the case may be, to
distribute the Contracts.
C. Company proposes to compensate Broker for the sale and servicing of
Contracts in accordance with the Compensation Schedules set forth in Exhibits A
and B, which by this reference are hereby incorporated in, and made a part of
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and other good and valuable consideration, the parties hereto
agree as follows:
I. DEFINITIONS. All capitalized terms used in this Agreement shall have the
meanings defined below, or if not defined in this section, as set forth
elsewhere in this Agreement:
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Affiliate - Any entity that directly or indirectly controls, is controlled
by or is under common control with Company or Broker, as applicable,
including, without limitation, any entity that owns 25% or more of the
voting securities of any of the foregoing and any entity that is a
subsidiary of any of the foregoing.
Agency- One or more associated insurance agencies of Broker, identified on
Exhibit D hereto, which are properly licensed to participate in the
business of insurance, for the distribution of the Contracts.
Applicable Laws - Shall have the meaning given to such term in Section IV
of this Agreement.
Confidential Information - Shall have the meaning given to such term in
Section VIII(D) of this Agreement.
Contracts -Those Fixed Contracts, Variable Contracts and other products
that are identified on Exhibits A and B attached hereto.
Fixed Contracts - Contracts that are not Variable Contracts and include,
without limitation, fixed rate annuities, fixed life insurance and other
fixed insurance contracts, issued or offered by Company or its Affiliates,
as more fully described in Exhibit B.
HIPAA - The Health Insurance Portability and Accountability Act of 1996, as
now in force or hereafter amended, and all related regulations.
Nonpublic Personal Information - Financial or health related information by
which a financial institution's consumers and customers are individually
identifiable, including but not limited to nonpublic personal information
as defined by Title V of the Xxxxx-Xxxxx-Xxxxxx Act and regulations adopted
pursuant to that Act.
Prospectus - The prospectuses, supplements to prospectus(es), and
statements of additional information included within the Registration
Statements referred to herein or filed pursuant to the 1933 Act and the
Investment Company Act of 1940, as amended.
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Protected Health Information or PHI - Individually identifiable information
that is transmitted or maintained in any medium and relates to the past,
present or future physical or mental health or condition of an individual;
the provision of health care to an individual; or future payment for the
provision of health care to the individual. PHI also includes demographic
information about individuals, including names; addresses; dates directly
related to an individual, including but not limited to birth date;
telephone numbers; fax numbers; E-mail addresses; Social Security numbers;
policy numbers; medical record numbers; account numbers; and any other
unique identifying number, characteristic or code. PHI further includes,
but is not limited to, information provided by an individual on an
application for a long term care insurance policy or other health care plan
issued or offered by Company or an Affiliate of Company; information
related to the declination or issuance of, or claim under, a long term care
insurance policy issued or offered by Company or an Affiliate; or
information derived therefrom.
Registration Statements - Registration statements and amendments thereto
filed with the SEC relating to the Variable Contracts, including those for
any underlying investment vehicle or variable insurance rider.
Representatives - Those individuals, accepted by Company or its Affiliates
to solicit and sell Contracts under the terms of this Agreement, who are
duly contracted and appointed as life insurance agents of Company or its
Affiliates and, with respect to registered products, are also duly
registered, individually, with the NASD in compliance with the 1934 Act.
Variable Contracts - Contracts that are not Fixed Contracts and include,
without limitation, variable life insurance policies, variable annuity
contracts, variable insurance riders and other variable insurance
contracts, any of which may or may not have a fixed component, issued or
offered by Company or its Affiliates, as more fully described in Exhibit A.
1933 Act - The Securities Act of 1933, as amended.
1934 Act - The Securities Exchange Act of 1934, as amended.
II. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
A. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF COMPANY
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1) Authorization. Company represents that it is duly authorized, on
behalf of itself and each Affiliate that issues or provides access to
the Contracts, to enter into this Agreement with Broker to distribute
such Contracts.
2) Appointment. Company, subject to the terms and conditions of this
Agreement, hereby appoints Broker, on behalf of itself and its
Affiliates, to solicit, sell and provide services to the Contracts on
a non-exclusive basis.
3) Solicit Applications - Fixed Contracts. Company authorizes Broker,
through its Representatives, to solicit applications for the Fixed
Contracts listed in Exhibit B, provided that: (a) Broker shall solicit
applications for Fixed Contracts only in those states where it and its
Representatives are appropriately licensed, and in which the Fixed
Contracts are qualified for sale under Applicable Laws; and (b) Broker
complies in all other respects with the published policies and
procedures of Company and/or its Affiliates, as applicable, and with
the terms of this Agreement.
4) Solicit Applications - Variable Contracts. Company authorizes Broker,
through its Representatives, to offer and sell the Variable Contracts
listed in Exhibit A, provided that: (a) Broker shall solicit
applications for Variable Contracts only in those states where it and
its Representatives are appropriately licensed; (b) there is an
effective Registration Statement relating to each such Variable
Contract; (c) each such Variable Contract is qualified for sale under
Applicable Laws in such state in which the sale or solicitation is to
take place; and (d) Broker complies in all other respects with the
published policies and procedures of Company and/or its Affiliates, as
applicable, and with the terms of the Agreement. Company shall notify
Broker or its designee of the issuance by the SEC of any stop order
with respect to a Registration Statement or the initiation of any
proceeding by the SEC relating to the registration and/or offering of
Variable Contracts and of any other actions or circumstances that
makes it no longer lawful for Company or its Affiliates to offer or
issue one or more of the Variable Contracts listed in Exhibit A.
Company shall advise Broker of any revision of, or supplement to, any
Prospectus related to the Variable Contracts or underlying investments
of such Variable Contracts.
5) Rights of Company. Company and its Affiliates may, in their respective
discretion:
a) refuse for any reason to appoint a Representative and cancel any
existing appointment at any time;
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b) direct the marketing of its insurance products and services;
c) review and approve all advertising referring to its insurance
products and services;
d) underwrite all insurance policies issued by it;
e) cancel risks;
f) handle all matters involving claims and payment;
g) prepare all policy forms and amendments;
h) maintain custody of, responsibility for and control of all
investments; and
i) withdraw a form of Contract from sale or change or amend a form
of Contract for any reason.
6) Amendments to Exhibits. Exhibits A and B may be amended by Company in
its sole discretion from time to time, without prior notice, to delete
or add Contracts. The provisions of this Agreement shall apply to such
Exhibits, as they may from time to time be amended, unless the context
otherwise requires. In addition, the Compensation Schedules that are
part of Exhibits A and B may be amended, modified and/or replaced by
Company in its sole discretion, from time to time, without prior
notice.
7) Broker's Access to Copies of Documents. During the term of this
Agreement, Company shall provide Broker, as applicable and without
charge, with as many copies of the Contract Prospectus(es), current
underlying mutual fund prospectus(es), statements of additional
information and applications for the Contracts, as Broker may
reasonably request. Upon receipt from Company of updated copies of the
Contract Prospectus(es), current underlying mutual fund
prospectus(es), statements of additional information and applications
for the Contracts, Broker shall promptly discard or destroy all copies
of such documents previously provided to it, except such copies as are
needed for purposes of maintaining proper records. Upon termination of
this Agreement, Broker shall promptly return to Company all Contract
Prospectus(es), current underlying mutual fund prospectus(es),
statements of additional information and applications for the
Contracts and other materials and supplies furnished by Company to
Broker or to its Representatives, except for copies required for
maintenance of records.
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8) Advertising Material. Subject to the provisions of Section VIII(D)(4),
during the term of this Agreement, Company or its Affiliates shall be
responsible for approving all promotional, sales and advertising
material to be used by Broker. Company or its Affiliates shall file
such materials or shall cause such materials to be filed with the SEC,
NASD, and any applicable state insurance and securities regulatory
authorities, as required.
B. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF BROKER
1) Appointment of Broker. Broker, subject to the terms and conditions of
this Agreement, hereby accepts appointment to solicit, sell and
provide services to the Contracts and agrees to use its best efforts
to find suitable purchasers for the Contracts. Broker represents and
warrants that it shall offer Contracts only in those states where it
or an Agency is appropriately licensed and that it has obtained any
other appointments, approvals, licenses, authorizations, orders or
consents that are necessary to enter into this Agreement and to
perform its duties hereunder. Broker further represents that its
Representatives who shall be soliciting applications for Contracts
shall at all times be appropriately licensed under Applicable Laws and
such solicitations shall be in accordance with Applicable Laws
including, without limitation, the NASD Conduct Rules and all
insurance replacement regulations and regulations prohibiting the
rebating of commissions.
2) Licenses and Approvals. For the sale of Variable Contracts, Broker
represents and warrants that it is a registered broker-dealer under
the 1934 Act, has all necessary broker-dealer licenses, is a member in
good standing with the NASD, and has obtained any other approvals,
licenses, authorizations, orders or consents which are necessary to
enter into this Agreement and to perform its duties hereunder. Broker
further represents that its Representatives who shall be soliciting
applications for Variable Contracts, shall at all times as required by
Applicable Laws be appropriately registered and/or licensed under such
laws and shall comply with Applicable Laws, including without
limitation, the NASD Conduct Rules and all insurance replacement
regulations and regulations prohibiting the rebating of commissions.
3) Investigations of Broker or Representative. Broker represents that
neither it nor any of its Representatives is currently under
investigation by any insurance regulator, the NASD or SEC, any other
self-regulatory organization or other governmental authority (except
for any investigations of which it has notified Company in writing).
Broker further agrees that, if a formal or informal
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investigation of Broker or any of its Representatives is commenced by
any insurance regulator, the NASD or SEC, any other self regulatory
organization or other governmental authority, whether or not in
connection with the sale of the Contracts, Broker shall notify Company
of the existence and subject matter of such investigation. Broker
shall further take all steps necessary to assure that no subagent of
an Agency shall be appointed to solicit and procure Contracts if that
subagent is prohibited by 18 U.S.C. Section 1033(e) from engaging in
the business of insurance. Broker further represents that it shall
immediately notify Company in writing if it or any of its
Representatives have any of their respective licenses, which are
required under this Agreement for the solicitation, sale or provision
of services to the Contracts, surrendered, removed, revoked, cancelled
or suspended, whether voluntarily or involuntarily.
4) Requirements to Solicit Applications. Commencing at such time as
Company and Broker shall agree, Broker shall find suitable purchasers
for the Contracts that Representatives are licensed and authorized to
solicit and sell under Applicable Laws. In meeting its obligation to
solicit applications for the Contracts:
a) Broker shall use only those training, sales, advertising and
promotional materials with respect to the Contracts that have
been pre-approved in writing by Company for use at that time;
b) Broker shall establish and implement reasonable procedures for
periodic inspection and supervision of sales practices of its
Representatives, and shall, upon a reasonable written request
from Company, provide a report to Company on the results of such
inspections and the compliance with such procedures; provided,
however, that Broker shall retain sole responsibility for the
supervision, inspection and control of its Representatives;
c) Broker shall take reasonable steps to ensure that its
Representatives shall not make recommendations to an applicant to
purchase a Contract in the absence of reasonable grounds to
believe that the purchase of a Contract is suitable for such
applicant including those reasonable steps and reasonable grounds
required by Applicable Laws. Broker shall be solely responsible
for determining the suitability of recommendations to purchase a
Contract made by its Representatives.
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d) Broker shall review diligently all Contract applications for
accuracy and completeness and for compliance with the conditions
herein, including the suitability and Prospectus delivery
requirements, and shall take all reasonable and appropriate
measures to assure that applications submitted under this
Agreement are accurate, complete, compliant with the conditions
herein and, in addition, for Variable Contracts are approved by a
qualified registered principal of Broker as required by
Applicable Laws. Broker shall ensure that all applications
relating thereto have been provided to Broker for its review and
approval by a qualified registered principal of Broker as
required by Applicable Laws.
(e) Broker shall train, supervise and be solely responsible for the
conduct of its Representatives in their solicitation activities
in connection with the Contracts, and shall supervise
Representatives' strict compliance with applicable laws, rules
and regulations of any governmental or other insurance
authorities that have jurisdiction over insurance contract
activities, as well as the rules and procedures of Company
pertaining to the solicitation, sale and submission of
applications for the Contracts and the provision of services
relating to the Contracts. Broker shall conduct and be solely
responsible for background investigations of its current and
proposed new Representatives to determine their qualifications,
good character and moral fitness to sell the Contracts and will
provide the Company with copies of such investigations upon its
request. Likewise, Broker hereby acknowledges and agrees that it
shall be solely liable for the acts and omissions of its
Representatives in the course of conducting its business.
5) Collection of Payments. To the extent permitted by Applicable Laws,
only the initial purchase payments for the Contracts may be collected
by Representatives of Broker. All such initial purchase payments shall
be remitted promptly in full (and in no event later than the time
permitted under Applicable Laws or the rules of the NASD), together
with any related application, forms and any other required
documentation to Company or the appropriate Affiliate. The Broker
shall make such remittances in accordance with any and all policies
and procedures described in the Contract, insurance policy,
Prospectus, if appropriate, any collateral documents associated with
such Contracts or as otherwise directed by Company or its Affiliates.
6) Rejection and Return of Contracts. Company and/or its Affiliates shall
have the unconditional right to reject, in whole or in part, any
application for a Contract. If Company and/or its Affiliates reject
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an application, Company or its Affiliate, as applicable, shall
promptly return any purchase payments received directly to the
purchaser or to the Broker, and, in the latter case, Broker shall be
responsible for promptly returning such payments to the purchaser. If
any purchaser of a Contract elects to return such Contract pursuant to
any law or contractual provision, any purchase payment made or such
other amount, as the Contract or Applicable Laws shall specify, shall
be returned by Company or its Affiliate to the purchaser or to the
Broker, and, in the latter case, the Broker shall be responsible for
promptly returning such payments to the purchaser. Except as may
otherwise be provided in Exhibits A and/or B, if a purchase payment is
either refunded or returned to the purchaser, no commission shall be
payable to Broker hereunder, and any commission received by Broker
shall be returned promptly to Company or its Affiliates where
applicable. Company and its Affiliates, where applicable, may, at
their option, offset any such amounts against any other amounts due to
Broker as referenced in V(B).
7) Independent Contractor. With respect to the Contracts, neither Broker
nor its agents, designees or Representatives is a principal,
underwriter or agent of Company or its Affiliates, or any separate
account of Company or its Affiliates, provided that Broker's
designees, or agent's representatives may be appointed by Company and
its Affiliates for the sale of the Contracts. Nothing contained in
this Agreement shall be construed (a) to create any relationship,
partnership, employment or joint venture between or among Company or
any Affiliate of Company and Broker or its agents or Representatives
other than that of independent contractors, or (b) to alter any
relationship between or among Company or any Affiliate of Company and
Broker or its agents or Representatives that may otherwise exist on
and as of the Effective Date. Except as expressly set forth herein,
each party shall be solely responsible for the respective fees, costs
and expenses incurred in connection with the operation of its business
and the fulfillment of its obligations hereunder. With respect to the
Contracts, neither Broker nor its agents, designees or Representatives
shall (a) hold themselves out to be employees of Company in any
dealings with the public, (b) alter or amend any Contract or form
related to a Contract, (c) adjust or settle any claim or commit
Company with respect thereto, (d) expend or contract for the
expenditure of funds on behalf of Company or its Affiliates, or (e)
assume or create any obligation or responsibility, express or implied,
on behalf of Company or bind Company in any manner except as expressly
permitted hereunder.
8) Promotional Materials. Any material Broker develops, approves or uses
for sales, training, explanatory or other purposes in connection with
the solicitation of applications for the Contracts
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hereunder, other than generic advertising material which does not make
specific reference to Company, its Affiliates or the Contracts, shall
not be used without the prior written consent of Company.
9) Payment of Commissions. Broker represents and covenants, that to the
extent required by Applicable Laws, that no commissions, or portions
thereof, or other compensation for the sale of the Contracts, shall be
paid to any person or entity that is not duly licensed and appointed
by Company or its Affiliates as required by Applicable Laws. Broker
shall ensure that Representatives fulfill any training requirements
necessary to be licensed or otherwise qualified to sell the Contracts.
10) Contract Disclosures. Neither Broker nor any of its Representatives,
are authorized by Company or its Affiliates 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 Contract,
policy, Prospectus, or solicitation material authorized for use in
writing by Company or its Affiliates. Broker shall not make any
representations or give information that is not contained in the
contract, policy, Prospectus or solicitation material of the
Contracts.
11) Instructions by Representative. Broker and Agency shall be solely
responsible for the accuracy and propriety of any instruction given or
action taken by a Representative on behalf of an owner or prospective
owner of a Contract. Company shall have no responsibility or liability
for any action taken or omitted by it in good faith in reliance on or
by acceptance of such an instruction or action.
12) Forms. Broker shall use Company forms or prepare any forms necessary
to comply with Applicable Laws or as otherwise required in connection
with the sale of the Contracts, either as an initial transaction or as
a replacement for other insurance or annuity products, and Broker
shall send prepared forms to Company or the appropriate Affiliate. In
the alternative, if such forms are not required, but information with
respect to a transaction or replacement is required, Broker shall
transmit or cause to be transmitted such information in writing to
Company or the appropriate Affiliate. Broker shall further notify
Company or the appropriate Affiliates in writing when sales of the
Contracts are replacement contracts, as defined by the Company. Such
notification shall not be later than the time that Broker submits
applications for such Contracts to Company or the appropriate
Affiliate.
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13) Furnishing of Information. To the extent permitted by Applicable Laws,
Broker shall furnish Company and any appropriate regulatory authority
with any information, documentation, or reports prepared in connection
with or related to this Agreement which may be requested by Company or
an appropriate regulatory authority in order to ascertain whether the
operations of Company or Broker related to the Contracts are being
conducted in a manner consistent with Applicable Laws.
14) Authority. Broker represents that it has full authority to enter into
this Agreement and that by entering into this Agreement it shall not
impair any other of its contractual obligations.
15) Insurance Coverage.
a) Fidelity Bond. Broker shall secure and maintain a fidelity bond
(including coverage for larceny and embezzlement), issued by a
bonding company acceptable by Company, covering all of its
directors, officers, agents, Representatives, associated persons
and employees who have access to funds of Company or its
Affiliates. This bond shall be maintained at Broker's expense in
at least the amount prescribed under Rule 3020 of the NASD
Conduct Rules and future amendments thereto. Broker shall provide
Company with satisfactory evidence of said bond upon Company's
reasonable request. Broker hereby assigns any proceeds received
from a fidelity bonding company, or other liability coverage, to
Company, for itself or on behalf of its Affiliates, as their
interests may appear, to the extent of its loss due to activities
covered by the bond, policy or other liability coverage.
b) Plan of Insurance. Broker shall maintain in full force and effect
during the term of this Agreement a plan of insurance, which may
be a plan of self-insurance, which shall provide coverage for
errors and omissions of the Broker, an Agency, representatives
and agents, including Representatives, in such amounts and scope
of coverage as are acceptable to Company in its sole discretion.
If such insurance plan terminates for any reason during the term
of this Agreement, Broker shall immediately notify Company in
writing of such termination. If requested by Company, Broker
shall provide evidence of coverage under an insurance policy
satisfactory to Company, in its sole discretion, showing the
amount and scope of coverage provided.
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c) Loss of coverage. The authority of any Representative to solicit
and procure Contracts hereunder shall terminate automatically
upon the termination of such Representative's coverage under the
Broker's fidelity bond or plan of insurance referred to in
subsections (a) and (b) above.
d) Company's Interest. All policies of liability insurance
maintained hereunder shall name Company as an additional insured.
All policies of insurance maintained hereunder shall contain a
clause providing that such policies may not be cancelled, reduced
in coverage or otherwise modified without at least thirty (30)
days prior written notice to Company, except for failure to pay
any premium, in which case said policy of insurance shall provide
for at least ten (10) days prior written notice prior to said
policy being cancelled or otherwise modified. Broker shall upon
the request of Company at any time furnish to Company updated
certificates or other evidence of insurance acceptable to
Company, in its reasonable discretion.
16) Agency Distribution of Variable Contracts. In such cases in which
Broker intends to distribute the Variable Contracts in association
with an Agency, Broker further makes the following representations on
its behalf and on behalf of that Agency:
a) Broker shall operate and be responsible for all
securities-related services arising from the offer, sale and/or
servicing by Representatives of the Variable Contracts;
b) Agency shall engage in the offer or sale of Variable Contracts
only through persons who are Representatives of the Broker.
Unregistered employees, agents or others shall not engage in any
securities activities or receive any compensation based on
transactions in securities or the provision of securities advice;
c) Broker shall be responsible for the education, training,
supervision and control of its Representatives, as required under
the 1934 Act and other Applicable Laws, including, but not
limited to, principal review, approval of all sales literature
and advertisements, periodic compliance audits and maintaining
the ability to appoint and terminate registered persons;
d) Representatives shall be licensed under the insurance laws of the
states in which they do business and shall be appointed agents by
Agency for which the Representatives may solicit applications in
connection with the offer and sale of Variable Contracts;
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e) Broker and/or Agency, as applicable, shall maintain the books and
records relating to the sale of Variable Contracts and the
receipt and disbursement of insurance commissions and fees
thereon. Such books and records shall be maintained and preserved
in conformity with the requirements of Section 17(a) of the 1934
Act and the Rules thereunder, to the extent applicable, and shall
at all times be compiled and maintained in a manner that permits
inspection by supervisory personnel of the Broker, the SEC, the
NASD and other appropriate regulatory authorities; and
f) All premiums derived from the sale of the Variable Contracts
shall be made payable to and sent directly to Company or the
appropriate Affiliate, or shall be sent by purchasers to the
Broker for timely forwarding to Company or the appropriate
Affiliate. Agency shall not receive, accumulate or maintain
custody of premium payments.
17) Agency Distribution of Fixed Contracts. In cases in which Broker
intends to distribute Fixed Contracts through an Agency, before a
subagent is permitted to solicit Contracts, Broker or that Agency
shall have entered into a written agreement with the subagent pursuant
to which the subagent: (a) is authorized to deliver policies only upon
the payment to Company or the appropriate Affiliate, or Broker of the
premiums due thereon and upon compliance with the terms, conditions
and provisions of such policies; (b) shall promptly remit to the
Broker or the Agency all funds collected on Company's or its
Affiliates' behalf; (c) shall otherwise act only pursuant to the
limited authority granted to that Agency hereunder and shall comply
with all of the duties and obligations of the Broker hereunder and the
rules of Company or its Affiliates; and (d) agrees to Company's right
to offset from any compensation due the subagent any indebtedness due
from the subagent to Company or its Affiliates and to chargeback
compensation under Company's or its Affiliates' rules. The Broker
shall promptly remit to Company all funds collected on behalf of
Company or its Affiliates.
18) Policies and Procedures. Broker shall comply with the policies and
procedures of Company and its Affiliates with respect to the
solicitation, sales and administration of the Contracts and services
that Broker and Representatives are authorized to sell and service
under this Agreement, including, but not limited to, privacy policies
and procedures, as set forth in this Agreement, as they may be
amended, modified and/or replaced, and as they may be provided to
Broker by Company or its Affiliates from time to time.
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19) Prohibited Solicitation With Policyholders. For a period of 12 months
after termination of this Agreement, Broker shall not, and Broker
shall take all steps necessary to ensure that its Representatives and
any Agency shall not, directly or indirectly, contact the
policyholders of Company or its Affiliates for the purpose of inducing
any such policyholders to lapse, cancel, fail to renew or replace any
Contract. If Company, in its sole discretion, determines that Broker,
its Representatives or an Agency has engaged in such prohibited
activity, then Company shall have the right to declare the Broker's or
the Agency's claims for compensation or any other benefit under this
Agreement to be forfeited and void. Company, on behalf of itself and
its Affiliates, may also pursue all remedies, whether at law or in
equity, including injunctive relief and/or damages, to assure
compliance with the covenants in this section and shall, if
successful, be entitled to recover from Broker or an Agency all costs
and expenses incurred in pursuing such remedies, including reasonable
attorneys' fees, court costs and expenses.
20) Market Timing. Broker shall not, and Broker shall take all steps
necessary to ensure that its Representatives and any Agency shall not,
(a) solicit, offer or sell Variable Contracts in connection with or to
facilitate any program, plan or arrangement involving market timing
transactions in underlying mutual funds within Variable Contracts, or
(b) take any other actions that would promote, encourage or facilitate
market timing transactions in the underlying mutual funds within
Variable Contracts. Notwithstanding the foregoing, Broker and its
Representatives may provide incidental services in the form of
guidance to applicants and owners of Variable Contracts regarding the
allocation of premium and Variable Contract value, provided that such
services are (a) solely incidental to Broker's activities in
connection with the sales of the Variable Contracts, (b) subject to
the supervision and control of Broker, (c) furnished in accordance
with any rules and procedures that may be prescribed by Company, and
(d) not promoting, encouraging or facilitating market timing
transactions in the underlying mutual funds within Variable Contracts.
III. PRINCIPLES OF ETHICAL MARKET CONDUCT
As a member of the Insurance Marketplace Standards Association ("IMSA"),
Company expects that the Broker, Representatives, Agency and its subagents
shall abide by the principles of ethical market conduct set forth by IMSA
in connection with all Contracts sold pursuant to this Agreement. Broker
shall furnish information, documentation and reports to Company as Company
may reasonably request
Page 15 of 36
to permit Company to ascertain whether Broker is conducting its operations
in accordance with the principles of ethical market conduct as set forth in
this Section III.
IV. COMPLIANCE WITH APPLICABLE LAWS
Company and Broker shall comply with all applicable state and federal
statutes, laws, rules and regulations, including without limitation, state
insurance laws, rules and regulations, and federal and state securities
laws, rules and regulations ("Applicable Laws"). Applicable Laws include,
without limitation, applicable rulings of federal and state regulatory
organizations, agencies and self regulatory agencies (e.g. state insurance
departments, the SEC, the NASD), consumer privacy laws, HIPAA and any other
state or federal laws, rules or regulations and decisions, orders and
rulings of state and federal regulatory agencies that are now or may
hereafter become applicable to the parties hereto and the transactions that
are the subject of this Agreement. The compliance obligations, also
includes, but are not limited to the following:
A. ANTI-MONEY LAUNDERING. Company and Broker shall comply with all
applicable anti-money laundering laws, regulations, rules and government
guidance, including the reporting, record keeping and compliance
requirements of the Bank Secrecy Act ("BSA"), as amended by The
International Money Laundering Abatement and Financial Anti-Terrorism Act
of 2002, Title III of the USA PATRIOT Act (the "Patriot Act"), its
implementing regulations, and related SEC and Self-Regulatory Organization
rules. These requirements include requirements to identify and report
currency transactions and suspicious activity, to implement a customer
identification program to verify the identity of customers and to implement
an anti-money laundering compliance program. As required by the Patriot
Act, Broker certifies that it has a comprehensive anti-money laundering
compliance program that includes policies, procedures and internal controls
for complying with the BSA; policies, procedures and internal controls for
identifying, evaluating and reporting suspicious activity; a designated
compliance officer or officers; training for appropriate employees; and an
independent audit function.
B. CUSTOMER IDENTIFICATION PROGRAM. Broker certifies, and shall certify to
Company or its Affiliates, where applicable, annually hereafter, that it
has established and implemented a customer identification program, in
compliance with Applicable Laws, as part of its anti-money laundering
compliance program that, at a minimum, requires: (i) the verification of
the identity of any customer seeking to open an account; (ii) the retention
of a record of the information used to verify each
Page 16 of 36
customer's identity; and (iii) the determination, within a reasonable time
before or after the account is opened, as to whether the customer appears
on any lists of known or suspected terrorists or terrorist organizations as
provided to it by any government agency. Broker shall verify the identity
of each customer that it introduces to Company, whether through documentary
or non-documentary means, and hereby acknowledges that Company shall rely
upon such verification, as prescribed by the regulations promulgated under
Section 326 of the Patriot Act in accordance with the safe-harbor provided
in Section 103.122(b)(6) of the regulations under the Patriot Act.
C. INSURANCE REPLACEMENT. Broker certifies on behalf of itself, its
Representatives and an Agency that it shall adhere to all applicable SEC,
NASD, federal and state statutes, laws, rules and regulations regarding
insurance replacement before it receives or solicits any applications for
Contracts.
V. COMPENSATION
A. PAYMENT UNDER COMPENSATION SCHEDULES. Company shall pay Broker or an
Agency, as applicable, compensation for the sale of each Contract sold by a
Representative of Broker as set forth in the then applicable Compensation
Schedules that are part of Exhibits A and B, as such Compensation Schedules
may be from time to time amended, modified and/or replaced in Company's
sole discretion. Company shall use commercially reasonable efforts to
provide prior notice of changes to the Compensation Schedules. Company
shall identify to Broker or an Agency, as applicable, with each such
payment the name or names of the Representative(s) of Broker who solicited
each Contract covered by the payment. Broker or an Agency, as applicable,
shall be responsible for issuing checks, statements or forms for tax
purposes and other administrative duties connected with compensation of
such Representatives. Unless otherwise agreed upon by the parties, Company
shall have no obligation to any of the employees, agents or Representatives
of Broker or an Agency for the payment of any compensation. Any amendment
to Exhibits A or B shall be applicable to any Contract for which any
application or premium is received by Company on or after the effective
date of such amendment. Company, however, reserves the right to amend (i)
Exhibits A and/or B with respect to subsequent premiums and renewal
commissions, and (ii) such Exhibits pursuant to this subsection even after
termination of this Agreement.
B. OFFSET. Company may at any time offset against any compensation payable
to (1) Broker, an Agency or their respective successors or assigns, any
indebtedness however or wherever incurred due
Page 17 of 36
from the Broker or an Agency to Company or its Affiliates, and (2) the
subagents of any Agency or their successors or assigns any indebtedness
however or wherever incurred due from Broker, an Agency or a subagent to
Company or its Affiliates. Nothing contained herein shall be construed as
giving Broker, an Agency or Representative the right to incur any
indebtedness on behalf of Company or its Affiliates. Company shall have,
and is hereby granted, a first lien on any and all compensation payable
under this Agreement as security for the payment of any and all remaining
indebtedness of Broker to Company or its Affiliates arising under this
Agreement and not offset as provided herein. The right of Broker, or any
person claiming through Broker, to receive any compensation provided by
this Agreement shall be subordinate to the right of Company to offset such
compensation against any such indebtedness of the Broker, an Agency, a
subagent or a Representative to Company or its Affiliates.
C. NO WITHHOLDING OF PREMIUMS. Neither Broker nor any of its
Representatives shall withhold or deduct any part of any premium or other
purchase payment it shall receive with respect to the Contracts covered by
this Agreement for purposes of payment of compensation or otherwise.
D. COMPENSATION NOT PAYABLE. No compensation shall be payable, and any
compensation already paid shall be returned to Company immediately on
request, under each of the following conditions:
1) if Company or its Affiliates, in their sole discretion, determine
not to issue the Contract applied for;
2) if Company or its Affiliates refund the premium paid by the
applicant, upon the exercise of applicant's right of withdrawal
pursuant to any "free-look" privilege;
3) if Company or its Affiliates refund the premium paid by applicant
as a result of the resolution of a consumer complaint,
recognizing that Company and its Affiliates have sole discretion
to refund premiums paid by applicants; or
4) if Company or its Affiliates determine that any person signing an
application who is required to be registered and/or licensed or
any other person or entity receiving compensation for soliciting
purchases of the Contracts is not duly registered and/or licensed
to sell the Contracts in the jurisdiction of such attempted sale.
Page 18 of 36
E. COMPENSATION AND TERMINATION OF AGREEMENT. Company shall pay the
compensation to Broker or an Agency, as applicable, for Contracts credited
prior to the termination date of this Agreement, as set forth in the then
applicable Compensation Schedules that are part of Exhibits A and B. Such
compensation shall be payable when the premium is due and paid to Company,
subject to the provisions of this Agreement and the then applicable
Compensation Schedule.
F. COMPANY PAYMENT OF COMPENSATION; DISCHARGE OF OBLIGATION. Broker, on its
behalf and on behalf of each Agency, hereby agrees and acknowledges that
compensation attributable to the sale of any Contract issued by an
Affiliate of Company may be payable directly by Company, in its discretion,
to Broker or an Agency, where permitted, and not by the Affiliate. Broker,
on its behalf and on behalf of each Agency, further agrees and acknowledges
that such payment of compensation by Company attributable to the sale of
such Contracts shall constitute a complete discharge of the obligation to
pay compensation by the Affiliate issuer under this Agreement. Such payment
of compensation shall not affect the right of offset or chargeback as
referred to in Sections V(B) and V(D) of this Agreement, or such other
compensation rules as may be set forth in this Agreement, the Compensation
Schedules or the rules of Company or its Affiliates.
G. VIOLATION OF APPLICABLE LAWS. Company shall not be obligated to pay any
compensation that would violate any Applicable Laws of any jurisdiction,
anything in this Agreement notwithstanding.
H. EXPENSES. Unless otherwise agreed to by Company, Broker, either directly
or by reimbursing Company on request, shall pay for expenses incurred by
such Broker in connection with the solicitation, offer and sale of the
Contracts.
I. REPLACEMENTS. In addition to the conditions and limitations elsewhere
contained in this Agreement and the Compensation Schedules, no first year
commission shall be payable on replacements or switches of any Contract
with another Contract, which are undisclosed, and which otherwise requires
disclosure by Applicable Laws or Company's or its Affiliates' rules on
replacement transactions. Specific replacement or switching rules of each
applicable Affiliate are described on Exhibit C which is attached hereto
and incorporated herein by reference, which Exhibit may be from time to
time amended, modified and/or replaced in Company's sole discretion.
Page 19 of 36
J. CONFLICT. In the event that anything contained in this Section V
conflicts with the terms of the compensation described in the Compensation
Schedules, the terms contained in the applicable Compensation Schedules
shall prevail.
VI. COMPLAINTS AND INVESTIGATIONS
A. CUSTOMER COMPLAINTS. Both the Broker and Company shall investigate any
customer complaint in connection with the Contracts. The term "customer
complaint" shall mean an oral or written communication either directly from
the purchaser of or applicant for a Contract covered by this Agreement or
his legal representative, or indirectly from a regulatory agency to which
he or his legal representative has expressed a grievance.
B. COOPERATION. Broker and Company shall cooperate fully in any regulatory
investigation or proceeding or judicial proceeding arising in connection
with the offer, sale and/or servicing of the Contracts. This cooperation
shall include, but is not limited to, each party promptly to the other of
the receipt of notice of any such investigation or proceeding, and
forwarding to the other a copy of any written materials in connection with
the matter and such additional information as may be necessary to furnish a
complete understanding of same. In the case of a customer complaint, Broker
and Company shall promptly refer such complaint to the other party for
handling where appropriate and provide the other party with customer
complaint information and documentation upon request.
C. RIGHT TO SETTLE. Company reserves the right to settle on behalf of
itself, and on behalf of itself and Broker collectively, if Broker agrees,
any claims, complaints or grievances made by applicants, policyholders or
others in connection with the Contracts, and concerning any conduct, act or
omission by the Broker or its agents or Representatives with respect to the
Contracts or any transactions arising out of this Agreement. If Broker does
not agree to a collective settlement with Company and Company, on behalf of
itself, settles the matter, Broker shall indemnify, defend and hold
harmless Company from any and all claims, complaints or grievances made by
Broker or any applicant, policyholder or other person or entity made in
connection with such matter.
VII. RECORDS AND ADMINISTRATION
Page 20 of 36
A. DELIVERY OF CONTRACTS. Unless otherwise requested by Broker and agreed
to by Company, once a Contract has been issued, it shall be delivered to
Broker and, after being reviewed by Broker, shall be timely delivered by
Broker to the purchaser, accompanied by any documents required to be
delivered by Applicable Laws and any additional documents deemed
appropriate. Company shall confirm or cause to be confirmed to customers
all Contract transactions, to the extent required by Applicable Laws, and
shall administer the Contracts after they have been delivered, but may from
time to time require assistance from Broker. Consistent with its
administrative procedures, Company shall assume, and shall rely on the
assumption, that a Contract it, or its Affiliates, issues shall be promptly
delivered by Broker to the purchaser of such Contract. As a result, if a
purchaser exercises a "free look" right under such Contract, Broker shall
indemnify Company for any loss Company incurs resulting from Broker's
failure promptly to deliver such Contract to its purchaser.
B. BOOKS AND RECORDS. Broker shall maintain all books and records as
required by Rules 17a-3 and 17a-4 under the 1934 Act, as such rules may be
amended, succeeded or replaced, except to the extent that Company may agree
to maintain any such records on Broker's behalf. Records subject to any
such agreement shall be maintained by Company as agent for Broker in
compliance with said rules, and such records shall be and remain the
property of Broker and be at all times subject to inspection by the SEC in
accordance with Section 17(a) of the 1934 Act. Nothing contained herein
shall be construed to affect Company's or its Affiliates' right to
ownership and control of all pertinent records and documents pertaining to
its business operations including, without limitation, its operations
relating to the Contracts, which right is hereby recognized and affirmed.
Company and Broker shall each retain all records related to this Agreement
as required by the 1934 Act, and the rules and regulations thereunder, and
by any other Applicable Laws, as Confidential Information as described in
Section VIII(D) of this Agreement, and neither party shall reveal or
disclose such Confidential Information to any third party unless such
disclosure is authorized by the party affected thereby or unless such
disclosure is expressly required by applicable federal or state regulatory
authorities. Nothing contained herein, however, shall be deemed to
interfere with any document, record or other information which, by law, is
a matter of public record.
Page 21 of 36
VIII. PRIVACY INFORMATION
A. PROPRIETARY INFORMATION
Any and all account records developed by Company or its Affiliates, or
provided to Company or its Affiliates by Broker or Broker's Affiliates,
including but not limited to customer files, sales aids, 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 Company or its Affiliates. Such proprietary
information and materials shall be treated as Nonpublic Personal
Information and/or Confidential Information (as hereafter defined in
Section VIII(D)), as appropriate, pursuant to Sections VIII(A), (B), (C)
and (D) of this Agreement.
Except as otherwise required by Applicable Laws, any and all
proprietary information and material developed and provided by Company and
its Affiliates shall be returned to Company (including all copies made by
the Broker or its Affiliates) upon termination of this Agreement. Any
materials developed by the Broker or its Affiliates in support of the
marketing, sales, advertising or training related to Company or its
Contracts shall be destroyed upon the termination of this Agreement.
B. RECEIPT OF CUSTOMER NONPUBLIC PERSONAL INFORMATION BY COMPANY FROM
BROKER
1) Confidentiality. Company and its Affiliates shall treat all Nonpublic
Personal Information regarding Broker's customers provided to it by
Broker under this Agreement as Confidential Information, except that
such provisions shall not apply to such information regarding
customers of Broker who were, are or become policyholders or customers
of Company or any of its Affiliates other than by reason of the
services provided by Broker under this Agreement.
2) Right to Disclose. Notwithstanding the foregoing, Company and its
Affiliates shall have the right to use or disclose such Nonpublic
Personal Information: (a) to the full extent required to comply with
Applicable Laws or requests of regulators; (b) as necessary in
connection with any of Company's or its Affiliates' audit, legal,
compliance or accounting procedures; (c) as necessary or permitted by
Applicable Laws in the ordinary course of business (for example to
administer Contracts and provide customer service to purchasers of
Contracts under this Agreement); (d) as authorized by such customer;
or (e) to protect against or prevent fraud.
Page 22 of 36
3) Offering Products Outside Agreement. Company and its Affiliates may
market, offer, sell or distribute insurance products, including, but
not limited to, the Contracts, or any of their other products and
related services, outside of this Agreement to customers of Broker
provided they do not use Nonpublic Personal Information regarding
Broker's customers provided by Broker to specifically target those
customers, and such marketing, offering, selling or distributing by
Company and its Affiliates of insurance (including but not limited to
the Contracts) or any of their other products or services shall not be
subject to the terms of this Agreement.
C. TREATMENT OF NONPUBLIC PERSONAL INFORMATION DISCLOSED BY COMPANY TO
BROKER
Broker shall treat Nonpublic Personal Information regarding Broker's
customers provided to it by Company or its Affiliates under this Agreement
as Confidential Information and shall use such information only to solicit
sales of and to provide service with respect to Contracts sold pursuant to
this Agreement. Notwithstanding the foregoing, Broker shall have the right
to use or disclose Nonpublic Personal Information provided to it by Company
or its Affiliates to the extent permitted by Applicable Laws and Company's
or its Affiliates' privacy policy(ies) (for example, to comply with
Applicable Laws or requests of regulators) in connection with Broker's
audit procedures, as authorized by such customers or to protect against or
prevent fraud.
D. CONFIDENTIAL INFORMATION
1) Disclosure of Confidential Information. Company and Broker and their
respective Affiliates shall maintain the confidentiality of
Confidential Information disclosed by either party to the other party
under the terms of this Agreement and shall use such Confidential
Information solely for the purposes contemplated by this Agreement.
Except as otherwise provided in Sections VIII(A), VIII(B) and VIII(C),
neither Company, nor Broker and their respective Affiliates shall
disclose any Confidential Information that is covered by this
Agreement to any person or entity other than to their respective
employees, representatives or agents who need to know such
Confidential Information for the performance of their work, unless
authorized in writing by the affected party or if expressly required
under the terms of a valid subpoena or order issued by a court of
competent jurisdiction or regulatory body or Applicable Laws.
"Confidential Information" means: (a) any information that this
Agreement specifies shall be treated as "Confidential Information"
under this Section VIII; (b) Nonpublic Personal Information; (c)
information required to be treated as confidential under Applicable
Laws; and (d) any information of Broker and its Affiliates that is
Page 23 of 36
disclosed by Broker or its Affiliates to Company or its Affiliates
through the course of business during the term of this Agreement, or
any information of Company and its Affiliates that is disclosed by
Company or its Affiliates to Broker or its Affiliates through the
course of business during the term of this Agreement, including but
not limited to, new products, marketing strategies and materials,
development plans, customer information, client lists, pricing
information, rates and values, financial information and computer
systems, in each such case if such information is clearly identified
as and marked "CONFIDENTIAL" by the disclosing party. Notwithstanding
the foregoing, "Confidential Information" does not include (a)
information which is now generally available in the public domain or
which in the future enters the public domain through no fault of the
receiving party; (b) information that is disclosed to the receiving
party by a third party without violation by such third party of an
independent obligation of confidentiality of which the receiving party
is aware; or (c) information that the disclosing party consents in
writing that the receiving party may disclose.
2) Right to Disclose; No Liability. The disclosing party warrants that it
has the right to provide access to, disclose and use the Confidential
Information to be provided hereunder. The receiving party shall not be
liable to the disclosing party for:
a) inadvertent use, publication, or dissemination of the
Confidential Information received hereunder provided that: (i) it
uses the same degree of care in safeguarding such information as
it uses for its own information of like importance; (ii) it has
complied with Applicable Laws; and (iii) upon discovery of such,
it shall take steps to prevent any further inadvertent use,
publication or dissemination; or
b) unauthorized use, publication or dissemination of the
Confidential Information received hereunder by persons who are or
have been in its employ unless it fails to safeguard such
information with the same degree of care as it uses for its own
proprietary information of like importance and provided that the
receiving party uses such Confidential Information in accordance
with Applicable Laws.
3) Independent Development. Any similarity between the Confidential
Information and any other information, regardless of medium, whether
oral or written, as well as contracts and/or services acquired from
third parties or developed by the receiving party, or Affiliates
independently through
Page 24 of 36
its or their own efforts, thought, labor and ingenuity, in each case
without violating the provisions hereof, shall not constitute any
violation of this Agreement and shall not subject the receiving party
to any liability whatsoever.
4) No Representation. Neither the disclosing party nor any of its
employees, representatives or designees has made or makes any
representation or warranty as to the accuracy or completeness of the
Confidential Information, including but not limited to, any
promotional, sales or advertising material provided or approved by
Company or its Affiliates to be used by Broker.
E. PROTECTED HEALTH INFORMATION OR PHI
To the extent that Broker or its Affiliates or their respective
Representatives receive, create, have access to or use PHI, regarding
individuals who are applicants for, owners of or eligible for benefits
under certain health insurance products and optional riders offered by or
through Company or any of its Affiliates, in accordance with the
requirements of HIPAA, Broker shall:
1) Not use or disclose PHI except (a) to perform functions, activities or
services for, or on behalf of, Company or its Affiliates as specified
in this Agreement and consistent with Applicable Laws, or (b) to the
extent that such use or disclosure is required by Applicable Laws. Any
such use or disclosure shall be limited to that required to perform
such services or to that required by relevant law;
2) Use appropriate safeguards to prevent use or disclosure of PHI other
than as permitted by this Agreement;
3) Promptly report to Company any use or disclosure of PHI not permitted
by this Agreement of which Broker becomes aware and mitigate any
harmful effect of any use or disclosure that is made by Broker or its
Representatives in violation of the requirements of this Agreement;
4) Ensure that any third party with whom Broker contracts or who is hired
by Broker and who may, under that arrangement, receive or have access
to PHI agrees to the same restrictions and conditions that apply to
Broker with respect to PHI under this Agreement;
5) Within 15 days of Company's request, provide Company with any PHI or
information relating to PHI as deemed necessary by Company to provide
individuals with access to, amendment of and an accounting of
disclosures of their PHI;
Page 25 of 36
6) Make Broker's records relating to use or disclosure of PHI available
to the Secretary of the United States Department of Health and Human
Services at his request to determine Company's, or one of its
Affiliate's, compliance with HIPAA; and
7) Upon termination of this Agreement and in accordance with Company's
instructions, either return or destroy all PHI Broker maintains in any
form, and retain no copies. If Company agrees that such return or
destruction is not feasible, Broker shall extend these protections to
the PHI beyond the termination of the Agreement, in which case any
further use or disclosure of the PHI shall be solely for the purposes
that make return or destruction infeasible. Destruction without
retention of copies is deemed not feasible if prohibited by the terms
of the Agreement or by Applicable Laws, including record retention
requirements of the various applicable state insurance laws.
IX. INDEMNIFICATION
A. INDEMNIFICATION PROVISIONS The following indemnification provisions
shall apply:
1) Company Indemnification. Company shall indemnify, defend and hold
harmless Broker from any and all losses, claims, judgments, fines,
penalties, damages, liabilities or amounts paid in a settlement consented
to by the Company (or any actions or threatened actions in respect of any
of the foregoing) (collectively, the "Claims"), to which Broker may become
subject, insofar as such Claims: (a) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in the Prospectus, Registration Statements or any other sales or offering
materials furnished or approved in writing by Company for any of the
Contracts; or (b) arise out of or result from any breach of any
representation or warranty, covenant, agreement obligation or undertaking
in this Agreement by Company or by any person or entity acting on behalf of
or under the control of Company. Company shall further reimburse Broker for
any legal fees or other expenses actually and reasonably incurred by it in
connection with investigating, defending, being a witness in or
participating in (including an appeal) any Claim for which indemnification
is provided hereunder. Notwithstanding anything contained herein to the
contrary, Company shall not indemnify, defend or hold harmless Broker
against any Claim: (a) to the extent that any such Claim arises out of or
is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made by Broker or any of its Affiliates or any of their
respective agents, Representatives, officers, directors or employees when
referring to or explaining a Prospectus, Registration Statement or any
other sales or offering materials; (b) where an applicant for any of the
Contracts was not furnished or sent or given, at or prior to written
confirmation of the sale of a Contract, a copy of the appropriate
Prospectus(es), any statement of additional information, if
Page 26 of 36
required or requested, and any supplements or amendments to either
furnished to Broker by Company or its Affiliates; or (c) if a judgment or
other final adjudication adverse to the Broker establishes that Broker's
acts were committed in bad faith, were the result of active and deliberate
dishonesty, were the result of willful misconduct or gross negligence, or
the Broker gained, in fact, a financial profit or other advantage to which
Broker was not legally entitled. The foregoing indemnities shall, upon the
same terms and conditions, extend to and inure to the benefit of each
director, trustee, officer, agent and employee of Broker and any of its
Affiliates, and the foregoing exclusions from indemnification shall, upon
the same terms and conditions, extend to and inure to the benefit of each
director, trustee, officer, agent and employee of Company and any of its
Affiliates.
2) Broker Indemnification. Broker shall indemnify, defend and hold harmless
Company and its Affiliates against any Claims to which Company or its
Affiliates may become subject, insofar as such Claims: (a) result from
Company improperly paying any compensation under this Agreement; (b) arise
out of or are based upon any negligent, improper, fraudulent or
unauthorized acts or omissions by Broker, its employees, agents, trustees,
Representatives, officers or directors, including but not limited to
improper or unlawful sales practices, any untrue statement or alleged
untrue statement of any material fact, any omission or alleged omission,
any unauthorized use of sales materials or advertisements and any oral or
written misrepresentations; or (c) arise out of or result from any breach
of any representation or warranty, covenant, agreement, obligation or
undertaking in this Agreement by Broker, its Representatives, or by any
other person or entity acting on behalf of or under the control of Broker.
Broker shall further reimburse Company and its Affiliates for any legal
fees or other expenses actually and reasonably incurred by them in
connection with investigating, defending, being witness in or participating
in (including an appeal) any Claim for which indemnification is provided
hereunder. Notwithstanding anything contained herein to the contrary,
Broker shall not indemnify, defend or hold harmless Company and its
Affiliates if an improper payment of any compensation under this Agreement
or a judgment or other final adjudication adverse to Company or its
Affiliates establishes that Company 's or its Affiliates' acts were
committed in bad faith, were the result of active and deliberate
dishonesty, were the result of willful misconduct or gross negligence, or
Company or its Affiliates gained, in fact, a financial profit or other
advantage to which Company or its Affiliates were not legally entitled. The
foregoing indemnities shall, upon the same terms and conditions, extend to
and inure to the benefit of each director, trustee, officer, agent and
employee of Company and its Affiliates,
Page 27 of 36
and the foregoing exclusions from indemnification shall, upon the same
terms and conditions, extend to and inure to the benefit of each director,
trustee, officer, agent and employee of Broker and its Affiliates.
B. NOTICE Promptly after receipt by an indemnified party (the "Indemnitee")
of notice of the commencement of any action, such Indemnitee shall, if a
Claim in respect thereof is to be made against the indemnifying party (the
"Indemnitor"), notify the Indemnitor in writing of the commencement
thereof; but the omission to notify the Indemnitor shall not relieve the
Indemnitor from any liability which the Indemnitor may otherwise have to
any Indemnitee.
C. PARTIAL INDEMNIFICATION In the event a party is entitled to
indemnification under this Agreement for some or a portion of Claims, but
not, however, for all of the total amount thereof (as finally determined in
an action for which indemnification is permitted hereunder), then the
Indemnitor shall indemnify the Indemnitee for the portion thereof to which
the Indemnitee is entitled.
D. CONDUCT OF DEFENSE With respect to any Claim as to which an Indemnitee
notifies an Indemnitor of the commencement thereof:
1) Participation. Indemnitee shall be entitled to participate therein
at the Indemnitee's own expense; and
2) Assumption of Defense. Except as otherwise provided below, to the
extent that the Indemnitor may wish, Indemnitor shall be entitled to assume
the defense thereof, with counsel selected by Indemnitor. After notice from
Indemnitor to Indemnitee of the Indemnitor's election to assume the defense
thereof, Indemnitor shall not be liable to Indemnitee under this Agreement
for any legal or other expenses subsequently incurred by Indemnitee in
connection with the defense thereof except as otherwise provided below.
Indemnitee shall have the right to employ Indemnitee's own counsel in
matters giving rise to such Claim, but the fees and expenses of such
counsel incurred after notice from Indemnitee of its assumption of the
defense thereof shall be at the expense of Indemnitee unless (a) the
employment of counsel by Indemnitee has been authorized by Indemnitor in
writing, (b) Indemnitee's counsel shall have reasonably concluded that
there may likely be a conflict of interest between Indemnitor and
Indemnitee in the conduct of the defense of matters giving rise to such
Claim, or (c) Indemnitor shall not in fact have employed counsel to assume
the defense of such Claim, in each of
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which cases the fees and expenses of counsel shall be at the expense of
Indemnitor. Indemnitor shall not be entitled to assume the defense of any
Claim brought by or on behalf of Indemnitor; and
3) Settlement. Indemnitor shall not be liable to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any Claim
effected without Indemnitor's written consent. Indemnitor shall not settle
any Claim in any manner which would impose any penalty or limitation on
Indemnitee without Indemnitee's written consent. Indemnitee shall not
unreasonably delay or withhold its consent to any proposed settlement.
E. SUBROGATION In the event of any indemnification payment under this
Agreement, Indemnitor shall be subrogated to the extent of such payment to
all the rights of recovery of Indemnitee, who shall execute all papers
required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable
Indemnitor to effectively bring suit to enforce such rights.
F. RECEIPT OF PAYMENT Anything to the contrary notwithstanding, Indemnitor
shall not be liable under this Agreement to make any payment in connection
with any Claim made against Indemnitee to the extent Indemnitee has
otherwise actually received payment of the amounts otherwise indemnifiable
hereunder.
G. PROVISIONS NOT TO CONTROL Notwithstanding anything in this Section IX to
the contrary, the terms and provisions of Section VI(C) shall control in
the event of any conflict or alleged conflict with this Section IX.
X. GENERAL PROVISIONS
A. TERM AND TERMINATION
1) Term. This Agreement shall continue in force for a term of one year
from the Effective Date and thereafter shall automatically be renewed
each year for a further one-year period, unless otherwise terminated
pursuant to Section X(A)(2) of this Agreement.
Page 29 of 36
2) Termination. This Agreement shall terminate immediately upon (a)
Company or Broker ceasing to be a registered broker-dealer or a member
of the NASD or, (b) the termination of the legal existence of Broker
or an Agency, or the merger, consolidation, reorganization,
dissolution, receivership or bankruptcy of either, or whenever the
Broker or an Agency is no longer licensed under Applicable Laws to
solicit and procure applications for Contracts, unless that Broker or
Agency notifies the Company in writing at least thirty (30) days'
prior to the occurrence of any of the above events and obtains written
permission to continue on a basis approved by the Company or, (c)
Company or Broker unilaterally terminating this Agreement with or
without cause upon thirty (30) days' prior notice of termination to
the other party.
3) Continuing Obligations. Upon termination of this Agreement, all
agreements, authorizations, rights and obligations shall cease except
(a) those contained in Sections II(B)(19), V(A), VI, VIII, IX, X(D),
X(E), X(F), X(J), X(K), and X(S) hereof; and (b) the obligation to
settle accounts hereunder. Except with respect to records required to
be maintained by Broker pursuant to Rules 17a-3 and 17a-4 under the
1934 Act or other Applicable Laws, Broker shall return to Company,
within 30 days after the effective date of termination, any and all
records in its possession which have been specifically maintained in
connection with Company's operations related to the Contracts.
B. ASSIGNABILITY
This Agreement shall not be assigned by either party without the
written consent of the other; provided, however, that Company may assign
this Agreement to any of its Affiliates at any time without notice or
consent. Any purported assignment in violation of this Section shall be
void.
C. AMENDMENTS
No oral promises or representations shall be binding nor shall this
Agreement be modified except by an agreement in writing that expressly
refers to this Agreement and that has been executed on behalf of the
parties by a duly authorized officer of each of them. Notwithstanding the
foregoing, Company has the right to amend, modify and /or replace Exhibits
A and/or B at any time, to be effective as Company may direct, in its sole
discretion and without prior notice.
Page 30 of 36
D. NOTICES
Any notice or consent required by this Agreement shall be in writing
and either (i) mailed by certified or registered mail, postage-prepaid,
return receipt requested, or (ii) sent by telefacsimile transmission and
followed by delivery via First Class U.S. mail, to such party at its
address and facsimile number set forth on the signature page below or to
such other address and/or facsimile number as such party may designate by
notice given in accordance herewith. Such notices or consents shall be
deemed duly delivered upon the date earlier of (i) two (2) Business Days
after having been deposited in the United States mail as hereinbefore set
forth, or (ii) upon sender's production of electronic confirmation of
transmission by telefacsimile. As used herein, the term "Business Day"
means each day of the week other than Saturdays, Sundays or federal legal
holidays.
E. ARBITRATION
1) When Arbitration Required. All disputes and differences between the
parties, other than those seeking injunctive relief or a restraining
order under this Agreement must be decided by arbitration, in
accordance with the rules of arbitration of the NASD, regardless of
the insolvency of either party, unless the conservator, receiver,
liquidator or statutory successor is specifically exempted from an
arbitration proceeding by Applicable Laws.
2) Initiation of Arbitration. Either party may initiate arbitration by
providing written notification to the other party ("Arbitration
Demand"). Such Arbitration Demand shall set forth (a) a brief
statement of the issue(s), and (b) the failure of the parties to reach
agreement.
3) Arbitration Panel. The arbitration panel shall consist of three (3)
arbitrators. The arbitrators must be impartial and must be or must
have been officers of life insurance and/or securities companies other
than the parties or their affiliates.
4) Selection of Arbitrators. Each party shall select an arbitrator within
thirty (30) days from the date of the Arbitration Demand. If either
party shall refuse or fail to appoint an arbitrator within the time
allowed, the party that has timely appointed an arbitrator may notify
the other party that, if it has not appointed its arbitrator within
the following ten (10) days, an arbitrator shall be appointed on its
behalf. The two (2) arbitrators shall select the third arbitrator
within thirty (30) days of the appointment of the second arbitrator.
If the two (2) arbitrators fail to agree on the selection of the third
arbitrator within the time allowed, each arbitrator shall submit to
the other a list of three (3)
Page 31 of 36
candidates. Each arbitrator shall select one name from the list
submitted by the other and the third arbitrator shall be selected from
the two (2) names chosen by drawing lots.
5) Procedure. The arbitrators shall interpret this Agreement as an
honorable engagement rather than merely as a legal obligation and
shall consider practical business and equitable principles as well as
industry custom and practice regarding the applicable insurance and
securities business. The arbitrators are released from judicial
formalities and shall not be bound by strict rules of procedure and
evidence.
6) Rules; Place for Meetings; Majority Vote. To the extent permitted
under the NASD rules of arbitration, the arbitrators shall determine
all arbitration schedules and procedural rules. Organizational and
other meetings will be held in Newport Beach, California, unless the
arbitrators select another location. The arbitrators shall decide all
matters by majority vote.
7) Decision Final. The decisions of the arbitrators shall be final and
binding on both parties. The arbitrators may, at their discretion,
award costs and expenses, as they deem appropriate, including but not
limited to legal fees and interest. The arbitrators may not award
exemplary or punitive damages. Judgment may be entered upon the final
decision of the arbitrators in any court of competent jurisdiction.
8) Fees and Expenses. Unless the arbitrators shall provide otherwise,
each party shall be responsible for (a) all fees and expenses of its
respective counsel, accountants, actuaries and any other
representatives in connection with the arbitration and (b) one-half
(1/2) of the expenses of the arbitration, including the fees and
expenses of the arbitrators.
F. GOVERNING LAW; VENUE; JURISDICTION
This Agreement shall be governed by and construed in accordance with
the laws of the State of California without regard to California choice of
law provisions.
G. ENTIRE UNDERSTANDING
This Agreement and the Exhibits and Schedules referenced and
incorporated herein constitute the complete understanding of the parties
and supersede in their entirety any and all prior agreements
Page 32 of 36
among the parties with respect to the subject matter discussed herein. No
oral agreements or representations shall be binding.
H. NO THIRD PARTY BENEFICIARIES
Company's and Broker's respective Affiliates shall each be third party
beneficiaries of this Agreement, entitled to enforce the provisions hereof
as if they were parties to this Agreement. Except as otherwise provided in
the preceding sentence, nothing in the Agreement shall convey any rights
upon any person or entity who or which is not a party to this Agreement.
I. NON-EXCLUSIVITY
Broker, on its behalf and on behalf of each Agency, agrees that no
territory or product is assigned exclusively hereunder and that Company and
its Affiliates reserve the right in their discretion to enter into selling
agreements with other broker-dealers, and to contract with or establish one
or more insurance agencies in any jurisdiction in which Broker transacts
business hereunder. Broker's relationship with Company is non-exclusive,
and Broker is free to sell or solicit insurance and other products issued
or sold by other companies.
J. NO HIRE
For purposes of this Sub-section J only, the term "agent" shall
include all appointed agents and Representatives. The parties to this
Agreement acknowledge that each may have access to the names and identities
of agents of each party as a result of performing their respective
obligations under this Agreement, and that each may establish close working
relationships with such persons. Therefore, Broker for itself and for each
Agency on the one hand (for purposes of this Sub-section J, "Selling
Group"), and Company on the other hand, agree that while an agent maintains
his/her affiliation with each and for twelve (12) months after such agent's
termination of the affiliation for any reason:
1) Selling Group shall not in any way, directly or indirectly, for its
own behalf or on behalf of any other person or entity, solicit,
entice, hire, employ or endeavor to employ or associate with for
business purposes any agent of Company. In addition Selling Group
acknowledges that Company's agents hold important contractual and
business relationships with Company and Selling Group shall not (a)
interfere in any way with the relationships, contractual or otherwise,
between Company and Company's agents, or (b) induce or encourage, or
attempt to induce or encourage, any agent of Company to terminate or
change his/her relationship with Company.
Page 33 of 36
2) Company shall not in any way, directly or indirectly, for its own
behalf or on behalf of any other person or entity, solicit, entice,
hire, employ or endeavor to employ or associate with for business
purposes any agent of Selling Group. In addition Company acknowledges
that Selling Group's agents hold important contractual and business
relationships with Selling Group and Company shall not (a) interfere
in any way with the relationships, contractual or otherwise, between
Selling Group and Selling Group's agents, or (b) induce or encourage,
or attempt to induce or encourage, any agent of Selling Group to
terminate or change his/her relationship with Selling Group.
K. WAIVER
The failure of either party to strictly enforce any provision of this
Agreement shall not operate as a waiver of such provision or release either
party from its obligation to perform strictly in accordance with such
provision or any other provision of this Agreement.
L. COUNTERPARTS; FACSIMILE SIGNATURES
This Agreement may be executed in counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute one and the same instrument. A
signature transmitted by facsimile machine or telecopier shall be deemed to
be an original signature hereunder.
M. SEVERABILITY
If any provision of this Agreement is declared null, void or
unenforceable in whole or in part by any court, arbitrator or governmental
agency, said provision shall survive to the extent it is not so declared
and all the other provisions of the Agreement shall remain in full force
and effect unless, in each case, such declaration shall serve to deprive
any of the parties hereto of the fundamental benefits of this Agreement.
Page 34 of 36
N. HEADINGS
The various section headings used in this Agreement are for
convenience of reference only and are in no way intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement or
any of its provisions.
O. FURTHER ASSURANCES
Each of the parties shall from time to time at the reasonable request
of the other party and without further cost or expense to such other party,
execute and deliver or cause to be executed and delivered such other
instruments and take such other related action, as may be necessary, to
more effectively consummate the terms and provisions of this Agreement.
P. CONSTRUCTION
Whenever the singular number is used in this Agreement and when
required by the context, the same shall include plural and vice versa, and
the masculine gender shall include the feminine and neuter genders and vice
versa.
Q. RECITALS
The Recitals set forth in this Agreement are hereby deemed to be
material provisions of this Agreement and are hereby incorporated into and
made a part of this Agreement.
R. REPRESENTATION BY COUNSEL
All parties hereto have been represented or have had the opportunity
to be represented by counsel in connection with the negotiation and
preparation of this Agreement. Therefore, this Agreement shall be construed
without regard to any presumption against the party drafting the same.
Page 35 of 36
S. TRADEMARKS
Neither party may use the other party's trademarks, service marks,
trade names, logos, or other commercial or product designations
(collectively, "Marks") for any purpose whatsoever without the prior
written consent of the other party.
1) Permission not Implied. Nothing in this Agreement shall be construed
as prior written consent to permit (i) any party to use the Marks of
the other party, or (ii) any other individual or entity to use the
Marks of any party.
2) UFS. Nothing contained in this Agreement shall be construed as
conferring upon Broker or Representatives any right to use or refer to
in advertising, publicity, promotion, marketing or other activities,
any Marks, or any other designation or likeness of any of the
Peanuts(R) characters or any other character licensed by United
Feature Syndicate (including any contraction, abbreviation or
simulation of any kind of the foregoing) without prior express
permission from United Feature Syndicate, which Broker and
Representatives must obtain through Company.
T. LONG TERM CARE
Notwithstanding anything contained in the Agreement to the contrary,
the following shall apply to Contracts that are long term care insurance
products (LTC products):
1) Broker agrees to deliver LTC products to purchasers no later than 30
days after the policy is approved by the issuer.
2) Broker agrees that it will not, nor will it permit its subagents to,
solicit the sale of other products based solely upon a customer's
purchase of an LTC product.
3) LTC products shall not be deemed to be covered by the provisions of
Rewritten Business Rules described in Exhibit C of the Agreement.
Page 36 of 36
In reliance on the representations set forth and in consideration of the
undertakings described, the parties represented below do hereby contract and
agree.
"COMPANY"
METLIFE INVESTORS DISTRIBUTION
COMPANY
By
----------------------------------
Xxxxxxx X. Xxxxxxx - Executive Vice
President
Date
------------------------
Address:
0 Xxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Fax #: 000-000-0000
"BROKER"
(BDNAME)
-------------------------------------
By
----------------------------------
-------------------------------------
Print Name & Title
Date
------------------------
Address:
(Address 1)
(Address 2)
(City), (State) (Postal Code)
Fax #: (Fax)
Page 37 of 36
EXHIBIT A
SCHEDULE OF VARIABLE PRODUCT AND COMPENSATION
[TO BE INSERTED]
MLIDC Retail Sales
Ex. A - Page 1 of 1
EXHIBIT B
SCHEDULE OF FIXED PRODUCT AND COMPENSATION
[TO BE INSERTED]
MLIDC Retail Sales
Ex. B - Page 1 of 1
EXHIBIT D
ASSOCIATED INSURANCE AGENCY
The Broker/Dealer named below ("Broker"), having executed a Sales Agreement
(the "Agreement") by and between Broker, and MetLife Investors Distribution
Company and MetLife General Insurance Agency, Inc. (collectively "Company")
dated _____________ that, among other things, provides for sales of Company's or
its Affiliates' Variable Contracts through a designated associated insurance
agency or agencies, hereby designates the associated insurance agency (the
"Associated Insurance Agency") named below as its Agency (as that term is
defined in the Agreement) pursuant to Section II(B) thereof. By signing this
Exhibit D, each of Broker and the Associated Insurance Agency hereby represents
and warrants that the Associated Insurance Agency is and will remain qualified
to serve as an Agency in accordance with the terms of the Agreement. The
Associated Insurance Agency hereby acknowledges that it has received a copy of
the Agreement, that it has reviewed the Agreement and understands all of its
terms, covenants and agreements, that it has had the opportunity to consult with
counsel of choice relative thereto and that it agrees to be bound by and subject
to the terms of the Agreement.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION THAT MAY BE
ENFORCED BY THE PARTIES
(BDNAME)
Broker/Dealer
By:
---------------------------------
-------------------------------------
Print Name & Title
-------------------------------------
(Tax Identification Number)
(GANAME) (GANAMEII)
Associated Insurance Agency Name Associated Insurance Agency Name
By: By:
--------------------------------- ------------------------------------
------------------------------------- ----------------------------------------
Print Name & Title Print Name & Title
------------------------------------- ---------------------------------------
(Tax Identification Number) (Tax Identification Number)
MLIDC Retail Sales
Ex. D - Page 1 of 1
