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EXHIBIT 3
DISTRIBUTION AGREEMENT
AGREEMENT dated as of _________________ by and between SAGE LIFE
ASSURANCE OF AMERICA, INC. ("Insurer"), a Delaware insurance company, on its
behalf and on behalf of each separate account identified in Schedule 1 hereto,
and SAGE DISTRIBUTORS, INC. ("Distributor"), a Delaware corporation.
WITNESSETH:
WHEREAS, Distributor is a broker-dealer that engages in the distribution
of variable insurance products and other investment products; and
WHEREAS, Insurer desires to issue certain variable insurance products
described more fully below to the public through Distributor acting as principal
underwriter;
NOW, THEREFORE, in consideration of their mutual promises, Insurer and
Distributor hereby agree as follows:
1. DEFINITIONS
a. CONTRACTS -- The class or classes of variable insurance products
set forth on Schedule 1 to this Agreement as in effect at the time
this Agreement is executed, and such other classes of variable
insurance products that may be added to Schedule 1 from time to
time in accordance with Section 11.b of this Agreement, and
including any riders to such contracts and any other contracts
offered in connection therewith. For this purpose and under this
Agreement generally, a "class of Contracts" shall mean those
Contracts issued by Insurer on the same policy form or forms and
covered by the same Registration Statement.
b. REGISTRATION STATEMENT -- At any time that this Agreement is in
effect, each currently effective registration statement filed with
the SEC under the 1933 Act on a prescribed form, or currently
effective post-effective amendment thereto, as the case may be,
relating to a class of Contracts, including financial statements
included in, and all exhibits to, such registration statement or
post-effective amendment. For purposes of Section 9 of this
Agreement, the term "Registration Statement" means any document
which is or at any time was a Registration Statement within the
meaning of this Section 1.b.
c. PROSPECTUS -- The prospectus included within a Registration
Statement, except that, if the most recently filed version of the
prospectus (including any supplements thereto) filed pursuant to
Rule 497 under the 1933 Act subsequent to the date on which a
Registration Statement became effective differs from the
prospectus included within such Registration Statement at the time
it became effective, the term "Prospectus" shall refer to the most
recently filed prospectus filed under Rule 497 under the 1933 Act,
from and after the date on which it shall
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have been filed. For purposes of Section 9 of this Agreement, the
term "any Prospectus" means any document which is or at any time
was a Prospectus within the meaning of this Section 1.c.
d. FUND -- An investment company in which a Separate Account invests.
e. SEPARATE ACCOUNT -- A separate account supporting a class or
classes of Contracts and specified on Schedule 1 as in effect at
the time this Agreement is executed, or as it may be amended from
time to time in accordance with Section 11.b of this Agreement.
f. 1933 ACT -- The Securities Act of 1933, as amended.
g. 1934 ACT -- The Securities Exchange Act of 1934, as amended.
h. 1940 ACT -- The Investment Company Act of 1940, as amended.
i. SEC -- The Securities and Exchange Commission.
j. NASD -- The National Association of Securities Dealers, Inc.
k. REGULATIONS -- The rules and regulations promulgated by the SEC
under the 1933 Act, the 1934 Act and the 1940 Act as in effect at
the time that this Agreement is executed or thereafter promulgated
or amended.
l. SELLING BROKER-DEALER -- A person registered as a broker-dealer
and licensed as a life insurance agent or affiliated with a person
so licensed, and authorized to dis tribute the Contracts pursuant
to a sales agreement as provided for in Section 4 of this
Agreement.
m. INTERMEDIARY DISTRIBUTOR -- A person authorized to recruit other
persons to become Selling Broker-Dealers pursuant to sales
agreements as provided for in Section 2 of this Agreement.
n. AGENTS MANUAL -- Written rules, regulations and procedures
provided by Insurer to insurance agents appointed to sell its
insurance contracts, which may be in the form of one or more
manuals, as revised from time to time.
o. REPRESENTATIVE -- When used with reference to Distributor, an
Intermediary Distributor or a Selling Broker-Dealer, an individual
who is an associated person, as that term is defined in the 1934
Act, thereof.
p. APPLICATION -- An application for a Contract.
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q. PURCHASE PAYMENT -- A payment made under a Contract by an
applicant or purchaser to purchase benefits under the Contract.
r. CUSTOMER SERVICE CENTER -- The service center identified in the
Prospectus for a class of Contracts as the location at which
Purchase Payments and Applications for such class of Contracts are
accepted.
s. TERRITORY -- All states and commonwealths of the United States
(other than New York), the District of Columbia and the
territories identified on Schedule 3 to this Agreement as amended
from time to time.
2. AUTHORIZATION AND APPOINTMENT
a. SCOPE OF AUTHORITY. Insurer hereby authorizes Distributor on an
exclusive basis, and Distributor accepts such authority, subject
to the registration requirements of the 1933 Act and the 1940 Act
and the provisions of the 1934 Act and conditions herein, to be
the distributor and principal underwriter for the sale of the
Contracts to the public in each state or other jurisdiction in the
Territory. As distributor and principal underwriter, Distributor
shall have authority to engage in the following activities in the
Territory, subject to the terms and conditions of this Agreement
and applicable laws and regulations, including rules of the NASD:
(1) the solicitation of Applications and Purchase Payments
directly from customers and prospective customers located
in the Territory;
(2) the selection of all persons who will be authorized to
engage in solicitation activities with respect to the
Contracts as Selling Broker-Dealers in each state and other
jurisdiction in the Territory in which the Contracts may
lawfully be sold, provided that each such person shall have
entered into a Selling Agreement substantially in the form
attached hereto as Exhibit A and complying with the terms
and conditions hereof; and
(3) the selection of all persons who will be authorized as
Intermediary Distributors to recruit persons in the
Territory to act as Selling Broker- Dealers, provided that
each such person shall have entered into a Marketing
Agreement satisfactory to Insurer and Distributor and
consistent with the terms and conditions of this Agreement;
Provided, however, that nothing herein shall be deemed to
require Distributor to engage in the retail sale of the
Contracts. The Contracts shall be offered for sale and
distribution at premium rates set from time to time by
Insurer. The Contracts shall not be offered in any state or
other jurisdiction as to which the Insurer has informed
Distributor in writing that the insurance departments and
securities
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departments, if applicable, have not approved the Contracts for
sale or that the Insurer has determined to cease offering the
Contracts therein.
b. LIMITS ON AUTHORITY. Distributor shall act as an independent
contractor vis-a-vis Insurer and nothing herein contained shall
constitute Distributor or its agents, officers or employees as
agents, officers or employees of Insurer solely by virtue of their
activities in connection with the distribution of the Contracts
hereunder. Distributor and its Representatives shall not have
authority, on behalf of Insurer: to make, alter or discharge any
Contract or other insurance policy or annuity entered into
pursuant to a Contract; to waive any Contract forfeiture
provision; to extend the time of paying any Purchase Payment; or
to receive any monies or Purchase Payments (except for the sole
purpose of forwarding monies or Purchase Payments to Insurer).
Distributor shall not expend, nor contract for the expenditure of,
the funds of Insurer. Distributor shall not possess or exercise
any authority on behalf of Insurer other than that expressly
conferred on Distributor by this Agreement.
c. TRADEMARKS. An affiliate of Insurer owns all right, title and
interest in and to the name, "Sage," and has authorized Insurer to
use and license other persons to use such name.
(1) Pursuant to such authority, Insurer hereby grants to
Distributor a non- exclusive license to use the name "Sage"
in connection with its performance of the services
contemplated under this Agreement, subject to (i) the
termination provisions in Section 10; (ii) Insurer's right
to terminate this license at any time for any reason
whatsoever; and (iii) any rights to terminate or otherwise
limit use of the name that may be reserved by such
affiliate of Sage. Upon any such termination, Distributor
shall promptly take steps to remove the name "Sage" from
all materials bearing its name, subject to compliance with
NASD rules.
(2) Distributor: (i) acknowledges and stipulates that Insurer's
name is a valid and enforceable trademark and/or service
xxxx; and that Distributor does not own Insurer's name and
claims no rights therein other than as a Distributor under
this Agreement; (ii) agrees never to contend otherwise in
legal proceedings or in other circumstances; and (iii)
acknowledges and agrees that the use of Insurer's name
pursuant to this grant of license shall inure to the
benefit of Insurer.
3. DISTRIBUTOR ACTIVITIES
a. DISTRIBUTOR REPRESENTATIVES. No Distributor Representative shall
solicit the sale of a Contract unless at the time of such
solicitation such individual is duly registered and in good
standing with the NASD and duly licensed with all
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applicable state insurance and securities regulatory authorities,
and is also duly appointed as an insurance agent of Insurer.
b. COMPLIANCE. All activities engaged in by Distributor and the
Distributor Representatives with respect to this Agreement shall
be in compliance with all applicable federal and state securities
laws and regulations and the Agents Manual. In particular, without
limiting the generality of the foregoing:
(1) Distributor shall train, supervise and be solely
responsible for the conduct of Distributor Representatives
in their activities in connection with the distribution of
the Contracts hereunder, and shall supervise their
compliance with applicable rules and regulations of any
securities regulatory agencies in the Territory that have
jurisdiction over variable insurance product activities.
(2) Neither Distributor nor any Distributor Representative
shall offer, attempt to offer, or solicit Applications for,
or deliver, the Contracts, in any state or other
jurisdiction in the Territory unless Insurer has notified
Distributor that such Contracts may lawfully be sold or
offered for sale in such state, and has not subsequently
revised such notice.
(3) Neither Distributor nor any Distributor Representative
shall give any information or make any representation to
any purchaser or prospective purchaser of a Contract in
connection with the offer or sale of such Contract that is
not in accordance with the Prospectus for such Contract, or
in the then-currently effective prospectus or statement of
additional information for a Fund underlying such Contract,
or in current advertising materials for such Contract or
Fund authorized by Insurer.
(4) All Purchase Payments paid by check or money order that are
collected by Distributor or any of Distributor
Representatives shall be remitted promptly, and in any
event not later than two business days, together with any
Applications, forms and any other required documentation,
to the Customer Service Center. Checks or money orders in
payment of Purchase Payments shall be drawn to the order of
"Sage Life Assurance of America, Inc." or "Sage Life".
Purchase Payments may be transmitted by wire order from
Distributor to the Customer Service Center in accordance
with the procedures set forth in the Agents Manual. If any
Purchase Payment is held at any time by Distributor,
Distributor shall hold such Purchase Payment in a fiduciary
capacity and such Purchase Payment shall be remitted
promptly, and in any event not later than two business
days, to Insurer. Distributor acknowledges that all such
Purchase Payments, whether by check, money order or wire,
shall be the property of Insurer. Distributor acknowledges
that Insurer shall have the
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unconditional right to reject, in whole or in part, any
Application or Purchase Payment.
c. REPRESENTATIONS AND WARRANTIES OF DISTRIBUTOR. Distributor
represents and warrants to Insurer that Distributor is and shall
remain registered during the term of this Agreement as a
broker-dealer under the 1934 Act, is a member with the NASD, and
is duly registered under applicable state securities laws, and
that Distributor is and shall remain during the term of this
Agreement in compliance with Section 9(a) of the 1940 Act.
4. SELLING BROKER-DEALERS
a. STANDARDS FOR SELLING BROKER-DEALERS. Distributor shall ensure
that Selling Broker-Dealers satisfy the standards set forth in
Schedule 4, as revised from time to time.
b. SALES AGREEMENT REQUIRED. Every Selling Broker-Dealer must enter
into a written sales agreement with Distributor which sales
agreement, among other things, will require such Selling
Broker-Dealer to use its best efforts to solicit applications for
Contracts and to comply with applicable laws and regulations,
including the Insurer's rules and regulations as reflected in the
Agents Manual or otherwise communicated to agents appointed by
Insurer, and will contain such other provisions as the Distributor
deems to be consistent herewith, including, without limitation,
the provisions of Section 3 of this Agreement governing activities
of Representatives of Distributor.
c. APPOINTMENT REQUIRED. Insurer shall appoint duly-qualified Selling
Broker- Dealers and their Representatives provided that Insurer
reserves the right to refuse to appoint any person proposed for
appointment, or once appointed, to terminate or refuse to renew
such appointment.
d. SUITABILITY STANDARDS. In view of Insurer's desire to ensure that
Contracts will be sold to purchasers for whom the Contracts will
be suitable, the sales agreement shall require that Selling
Broker-Dealers and their Representatives not make recommendations
to an applicant to purchase a Contract in the absence of
reasonable grounds to believe that the purchase of the Contract is
suitable for the applicant on the basis of information furnished
after a reasonable inquiry of the applicant's insurance and
investment objectives, financial situation and needs, and any
other information known to the person making the recommendation.
Further, a good faith, reasonable inquiry shall be made as to the
facts and circumstances concerning a prospective Contract owner's
insurance and financial needs and no recommendation shall be made
that the prospective Contract owner purchase a Contract when such
a purchase is not reasonably consistent with the information that
is known or reasonably should be known to the Selling
Broker-Dealer or its
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Representatives. In making such recommendation, factors which may
be considered are: age, earnings, marital status, number and age
of dependents, the value of savings or other assets, and current
life insurance program.
e. ROLLOVERS AND REPLACEMENTS DISCOURAGED. Sales agreements entered
into with Selling Broker-Dealers shall require them to agree not
to encourage a prospective applicant to surrender or exchange an
insurance contract in order to purchase a Contract, nor to
encourage a Contract owner to lapse, terminate, surrender,
exchange or cancel his or her Contract or discontinue making
Purchase Payments thereunder, except to the extent consistent with
their suitability obligations under applicable law.
5. MARKETING MATERIALS
a. PREPARATION AND FILING. Distributor shall be primarily responsible
for the design and preparation of all promotional, sales and
advertising material relating to the Contracts. Distributor shall
be responsible for filing such material, as required, with the
NASD and any state securities regulatory authorities. Insurer
shall be responsible for filing all promotional, sales or
advertising material, as required, with any state insurance
regulatory authorities. Insurer shall be responsible for preparing
the Contract forms and filing them with applicable state insurance
regulatory authorities, and for preparing the Prospectuses and
Registration Statements and filing them with the SEC and state
regulatory authorities, to the extent required. The parties shall
notify each other expeditiously of any comments provided by the
SEC, NASD or any securities or insurance regulatory authority on
such material, and will cooperate expeditiously in resolving and
implementing any comments, as applicable.
b. USE IN SOLICITATION ACTIVITIES. Insurer shall be responsible for
furnishing Distributor with such Applications, Prospectuses and
other materials for use by Distributor, any Intermediary
Distributors and any Selling Broker-Dealers in their activities
with respect to the Contracts. Insurer shall notify Distributor of
those states or jurisdictions which require delivery of a
statement of additional information with a prospectus to a
prospective purchaser.
6. COMPENSATION AND EXPENSES
a. COMPENSATION. Insurer shall pay compensation for sales of the
Contracts in accordance with Schedule 2 hereto.
b. EXPENSES RELATING TO THE CONTRACTS. Subject to the provisions of
this Section 6, Insurer shall be responsible vis-a-vis Distributor
for the payment of any and all expenses in connection with the
Contracts including, but not limited to:
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(1) the preparation and filing of each Registration Statement
(including each pre-effective and post-effective amendment
thereto) and the preparation and filing of each Prospectus
(including any preliminary and each definitive Prospectus);
(2) the preparation, printing and delivery of all Prospectuses,
marketing materials, confirmations, reports and all other
materials prepared for or provided to Contract Owners or
prospective Contract Owners;
(3) the preparation, underwriting, issuance and administration
of the Contracts;
(4) any registration, qualification or approval or other filing
of the Contracts or Contract forms required under the
securities or insurance laws of the states in which the
Contracts will be offered; and
(5) all registration fees for the Contracts payable to the SEC.
c. EXPENSES OF DISTRIBUTOR. Insurer shall bear, as principal, all
expenses of Distributor, except for the responsibility and
obligation to pay compensation to Distributor Representatives,
Intermediary Distributors and Selling Broker- Dealers, without any
present or future expectation or obligation of Distributor to
incur such expenses as principal, to pay for such expenses or to
reimburse Insurer for such expenses. Such expenses to be paid by
Insurer (or that the insurer will cause to be paid) shall include,
but not be limited to:
(1) all expenses for the preparation and filing of all
contracts, reports and other communications with federal,
state and local agencies;
(2) all legal fees, auditing fees and consulting fees;
(3) all fees and expenses associated with the licensing,
training and supervision of Representatives and other
associated persons of Distributor;
(4) all administrative, clerical, stenographic, data processing
and other support services expenses;
(5) all office supplies and equipment expenses;
(6) all expenses related to office space;
(7) all NASD, SEC and other regulatory registration fees,
membership fees and assessments for Distributor and for
Distributor's registered personnel; and
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(8) all other corporate expenses of Distributor.
It is understood that, if Distributor enters into a distribution
agreement with another insurance company affiliated with Insurer,
Insurer's obligations pursuant to this Section 6.c shall be
allocated between Insurer and such other insurer based on existing
insurance regulations, agreements and procedures.
7. COMPLIANCE
a. MAINTAINING REGISTRATION AND APPROVALS. Insurer shall be
responsible for maintaining the registration of the Contracts with
the SEC and any state securities regulatory authority with which
such registration is required, and for gaining and maintaining
approval of the Contract forms where required under the insurance
laws and regulations of each state or other jurisdiction in the
Territory.
b. CONFIRMATIONS AND 1934 ACT COMPLIANCE. Insurer, as agent for
Distributor, shall confirm to each applicant for, and purchaser
of, a Contract in accordance with Rule 10b-10 under the 1934 Act
acceptance of Purchase Payments and such other transactions as are
required by Rule 10b-10 or administrative interpretations
thereunder. Insurer shall maintain and preserve books and records
with respect to such confirmations in conformity with the
requirements of Rules 17a-3 and 17a-4 under the 1934 Act to the
extent such requirements apply. The books, accounts and records of
Insurer, the Separate Account and Distributor as to all
transactions hereunder and with respect to the Contracts shall be
maintained so as to disclose clearly and accurately the nature and
details of the transactions. Insurer shall maintain, as agent for
Distributor, such books and records of Distributor pertaining to
the offer and sale of the Contracts as are required by the 1934
Act as may be mutually agreed upon by Insurer and Distributor,
including but not limited to maintaining a record of Distributor
Representatives and of the payment of commissions and other
payments or service fees to Distributor Representatives. In
addition, Insurer, as agent for Distributor, shall maintain and
preserve such additional accounts, books and other records as are
required of Distributor by the 1934 Act. Insurer shall maintain
all such books and records and hold such books and records on
behalf of and as agent for Distributor whose property they are and
shall remain, and acknowledges that such books and records are at
all times subject to inspection by the SEC in accordance with
Section 17(a) of the 1934 Act, NASD, and all other regulatory
bodies having jurisdiction.
c. REPORTS. Distributor shall cause Insurer to be furnished with such
reports as Insurer may reasonably request for the purpose of
meeting its reporting and recordkeeping requirements under the
1933 Act, the 1934 Act and the 1940 Act and regulations thereunder
as well as the insurance laws of the State of Delaware and any
other applicable states or jurisdictions.
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d. ISSUANCE AND ADMINISTRATION OF CONTRACTS. Insurer shall be fully
responsible vis-a-vis Distributor for issuing the Contracts and
administering the Contracts and the Separate Account in accordance
with applicable laws, rules and regulations, provided, however,
that Distributor shall have full responsibility for the securities
activities of all persons employed by the Insurer, engaged
directly or indirectly in Contract operations, and for the
training, supervision and control of such persons to the extent of
such activities.
8. COMPLAINTS, INVESTIGATIONS AND PROCEEDINGS
a. NOTICE OF CUSTOMER COMPLAINTS, REGULATORY INVESTIGATIONS AND
PROCEEDINGS. Distributor and Insurer shall notify each other
promptly of any customer complaint or notice of any regulatory
investigation or proceeding or judicial proceeding received by
either of them with respect to the Contracts or the activities
contemplated by this Agreement.
b. CUSTOMER COMPLAINTS. In the case of a customer complaint,
Distributor and Insurer shall cooperate in investigating such
complaint and any response by either party to such complaint will
be sent to the other party for approval not less than five
business days prior to its being sent to the customer or other
interested party, except that if a more prompt response is
required, the proposed response shall be communicated by facsimile
or in person. Distributor and Insurer shall each be responsible
for compliance with regulatory requirements applicable to each of
them with regard to the handling, processing, resolution and
reporting of customer complaints. Distributor and Insurer shall
cooperate with each other in order to assist the other in
complying with requirements under applicable law, rules or
regulations governing the handling, processing and resolution of
customer complaints.
c. INVESTIGATIONS AND PROCEEDINGS. Distributor and Insurer shall
cooperate fully in any securities or insurance regulatory
investigation or proceeding or judicial proceeding arising in
connection with the offering, sale or distribution of the
Contracts distributed under this Agreement, and shall make books
and records maintained by each of them available for inspection by
regulatory authorities to which the other is subject, to the
extent provided for in this Agreement or required by applicable
law, subject to the rights such party may have to the
attorney-client privilege or nondisclosure obligations such party
may have under applicable confidentiality requirements.
d. RIGHT TO INDEMNIFICATION. It is expressly acknowledged and agreed
that the parties may seek indemnification from the other for
liabilities arising as a result of customer complaints, regulatory
investigations or other proceedings, to the extent consistent with
the terms and conditions of Section 9 of this Agreement.
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9. INDEMNIFICATION
A. BY INSURER. Insurer shall indemnify and hold harmless Distributor
and each person who controls or is associated with Distributor
within the meaning of such terms under the federal securities
laws, and any officer, director, employee or agent of the
foregoing, against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal
and other expenses reasonably incurred in connection with, and any
amounts paid in settlement of, any action, suit or proceeding or
any claim asserted), to which Distributor and/or any such person
may become subject, under any statute or regulation, any NASD rule
or interpretation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities:
(1) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact or omission or
alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein
not misleading, in light of the circumstances in which they
were made, contained in any Registration Statement or in
any Prospectus; provided that Insurer shall not be liable
in any such case to the extent that such loss, claim,
damage or liability arises out of, or is based upon, an
untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon information
furnished in writing to Insurer by Distributor specifically
for use in the preparation of any such Registration
Statement or any amendment thereof or supplement thereto;
(2) result because any promotional, sales or advertising
material or sales practice authorized by Insurer violates
state insurance laws or regulations; or
(3) result from any material breach by Insurer of any provision
of this Agreement.
This indemnification agreement shall be in addition to any
liability that Insurer may otherwise have; provided, however, that
no person shall be entitled to indemnification pursuant to this
provision if such loss, claim, damage or liability is due to the
willful misfeasance, bad faith, gross negligence or reckless
disregard of duty by the person seeking indemnification.
b. BY DISTRIBUTOR. Distributor shall indemnify and hold harmless
Insurer and each person who controls or is associated with Insurer
within the meaning of such terms under the federal securities
laws, and any officer, director, employee or agent of the
foregoing, against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal
and other expenses reasonably
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incurred in connection with, and any amounts paid in settlement
of, any action, suit or proceeding or any claim asserted), to
which Insurer and/or any such person may become subject under any
statute or regulation, any NASD rule or interpretation, at common
law or otherwise, insofar as such losses, claims, damages or
liabilities:
(1) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact or omission or
alleged omission to state a material fact required to be
stated therein or necessary in order to make the statements
therein not misleading, in light of the circumstances in
which they were made, contained in any Registration
Statement or in any Prospectus, to the extent, but only to
the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in
reliance upon information furnished in writing by
Distributor to Insurer specifically for use in the
preparation of any such Registration Statement or any
amendment thereof or supplement thereto;
(2) result because of any use by Distributor or any Distributor
Representative of promotional, sales or advertising
material not authorized by Insurer or any verbal or written
misrepresentations by Distributor or any Distributor
Representative or any unlawful sales practices employed by
Distributor or any Distributor Representative in relation
to the Contracts under federal securities laws or NASD
regulations; or
(3) result from any material breach by Distributor of any
provision of this Agreement.
This indemnification shall be in addition to any liability that
Distributor may otherwise have; provided, however, that no person
shall be entitled to indemnification pursuant to this provision if
such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of
duty by the person seeking indemnification.
c. GENERAL. Promptly after receipt by a party entitled to
indemnification ("indemnified person") under this Section 9 of
notice of the commencement of any action as to which a claim will
be made against any person obligated to provide indemnification
under this Section 9 ("indemnifying party"), such indemnified
person shall notify the indemnifying party in writing of the
commencement thereof as soon as practicable thereafter, but
failure to so notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may have to the
indemnified person otherwise than on account of this Section 9.
The indemnifying party will be entitled to participate in the
defense of the indemnified person but such participation will not
relieve such indemnifying party of the obligation to reimburse the
indemnified person for reasonable legal
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and other expenses incurred by such indemnified person in
defending himself or itself.
The indemnification provisions contained in this Section 9
shall remain operative and in full force and effect,
regardless of any termination of this Agreement. A
successor by law of Distributor or Insurer, as the case may
be, shall be entitled to the benefits of the
indemnification provisions contained in this Section 9.
10. TERMINATION. This Agreement shall terminate automatically if it is
assigned by a party without the prior written consent of the other
party. This Agreement may be terminated at any time for any reason
by either party upon 60 days' written notice to the other party,
or sooner if agreed to by the parties, in either case without
payment of any penalty. (The term "assigned" shall not include any
transaction exempted from Section 15(b)(2) of the 1940 Act.) This
Agreement may be terminated at the option of either party to this
Agreement upon the other party's material breach of any provision
of this Agreement or of any representation or warranty made in
this Agreement, unless such breach has been cured within 10 days
after receipt of written notice of breach from the non-breaching
party. Upon termination of this Agreement all authorizations,
rights and obligations shall cease except: (a) the obligation to
settle accounts hereunder, including commissions on Purchase
Payments subsequently received for Contracts in effect at the time
of termination or issued pursuant to Applications received by
Insurer prior to termination; (b) the duty under Section 8 of this
Agreement to notify and cooperate with respect to customer
complaints, regulatory investigations and proceedings; and (c) the
indemnification provisions of Section 9 of this Agreement.
11. MISCELLANEOUS
a. BINDING EFFECT. This Agreement shall be binding on and shall inure
to the benefit of the respective successors and assigns of the
parties hereto provided that neither party shall assign this
Agreement or any rights or obligations hereunder without the prior
written consent of the other party.
b. SCHEDULES. The parties to this Agreement may amend the Schedules
to this Agreement from time to time to reflect additions of any
class of Contracts and Separate Accounts or changes in the
compensation for the sale of the Contracts. The provisions of this
Agreement shall be equally applicable to each such class of
Contracts and each Separate Account that may be added to the
Schedules, unless the context otherwise requires. Any other change
in the terms or provisions of this Agreement shall be by written
agreement between Insurer and Distributor.
c. RIGHTS, REMEDIES, ETC., ARE CUMULATIVE. The rights, remedies and
obligations contained in this Agreement are cumulative and are in
addition to any and all rights, remedies and obligations, at law
or in equity, which the parties hereto are entitled to under state
and federal laws. Failure of either party to insist upon strict
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compliance with any of the conditions of this Agreement shall not
be construed as a waiver of any of the conditions, but the same
shall remain in full force and effect. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute,
a waiver of any other provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver.
d. NOTICES. All notices hereunder are to be made in writing and shall
be given:
if to Insurer, to:
Xx. Xxxxx X. Xxxxxxx
President and Chief Executive Officer
Sage Life Assurance of America, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
if to Distributor, to:
Xx. Xxxxx X. Xxxxxxxx, Xx.
President and Chief Executive Officer
Sage Distributors, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
or such other address as such party may hereafter specify in
writing. Each such notice to a party shall be either hand
delivered or transmitted by registered or certified United States
mail with return receipt requested, or by overnight mail by a
nationally recognized courier, and shall be effective upon
delivery.
e. INTERPRETATION; JURISDICTION. This Agreement constitutes the whole
agreement between the parties hereto with respect to the subject
matter hereof, and supersedes all prior oral or written
understandings, agreements or negotiations between the parties
with respect to such subject matter. No prior writings by or
between the parties with respect to the subject matter hereof
shall be used by either party in connection with the
interpretation of any provision of this Agreement. This Agreement
shall be construed and its provisions interpreted under and in
accordance with the internal laws of the state of Delaware without
giving effect to principles of conflict of laws.
f. SEVERABILITY. This is a severable Agreement. In the event that any
provision of this Agreement would require a party to take action
prohibited by applicable federal or state law or prohibit a party
from taking action required by applicable federal or state law,
then it is the intention of the parties hereto that such provision
shall be enforced to the extent permitted under the law, and, in
any
- 14 -
15
event, that all other provisions of this Agreement shall remain
valid and duly enforceable as if the provision at issue had never
been a part hereof.
g. SECTION AND OTHER HEADINGS. The headings in this Agreement are
included for convenience of reference only and in no way define or
delineate any of the provisions hereof or otherwise affect their
construction or effect.
h. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one
and the same instrument.
i. REGULATION. This Agreement shall be subject to the provisions of
the 1933 Act, 1934 Act and 1940 Act and the Regulations and the
rules and regulations of the NASD, from time to time in effect,
including such exemptions from the 1940 Act as the SEC may grant,
and the terms hereof shall be interpreted and construed in
accordance therewith.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by such authorized officers on the date specified below.
SAGE LIFE ASSURANCE OF AMERICA, INC.
By:
--------------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------------------
Title: President and Chief Executive Officer
-----------------------------------------
SAGE DISTRIBUTORS, INC.
By:
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
Title: President and Chief Executive Officer
----------------------------------------
- 16 -
17
SCHEDULE 1
CLASSES OF CONTRACTS
SUPPORTED BY SEPARATE ACCOUNTS
Effective as of the date the Agreement was executed, the following classes of
Contracts are subject to the Agreement:
Contract Marketing SEC 1933 Act Name of Supporting
Name Registration Number Account Annuity or Life
========================== ========================== ======================= =======================
Asset I The Sage Variable Annuity
Annuity Account A
-----------------------------------------------------------------------------------------------------------
Asset II The Sage Variable Annuity
Annuity Account A
========================== ========================== ======================= =======================
Effective as of _______, the following classes of Contracts are hereby added to
this Schedule 1 and made subject to the Agreement:
Contract Marketing SEC 1933 Act Name of Supporting
Name Registration Number Account Annuity or Life
========================== ========================== ======================= =======================
========================== ========================== ======================= =======================
IN WITNESS WHEREOF, Distributor and Insurer hereby amend this Schedule 1 in
accordance with Section 11.b. of the Agreement.
------------------------------- ---------------------------------
Sage Distributors, Inc. Sage Life Assurance of America, Inc.
18
- 18 -
19
SCHEDULE 2
COMPENSATION SCHEDULE
[TO BE DETERMINED]
20
SCHEDULE 3
TERRITORY
AS OF __________, 0000
XXX XXXXXXXX XX XXXXXXXX AND
ALL STATES OTHER THAN NEW YORK
21
SCHEDULE 4
STANDARDS FOR SELLING BROKER-DEALERS
(1) Every Selling Broker-Dealer shall be registered as a
broker-dealer with the SEC, admitted as a member of the
NASD, and licensed as an insurance agent with authority to
sell variable products or associated with an insurance
agent so licensed in each state or other jurisdiction in
the Territory in which each such Selling Broker-Dealer
proposes to act, such association to be in compliance with
the terms and conditions of applicable SEC no-action
letters.
(2) Any individuals to be authorized to act on behalf of
Selling Broker-Dealer shall be duly registered with the
NASD as principals or representatives of Selling
Broker-Dealer with authority to sell variable products, and
shall be licensed as insurance agents and, where
applicable, with authority to sell variable products in
each state or other jurisdiction in the Territory in which
each such individual proposes to act.
(3) Intermediary Distributor shall have verified that Selling
Broker-Dealer and its Representatives are duly licensed
under applicable state insurance law to sell the Contracts
(or, if Broker-Dealer is not so licensed, that it is
associated with an entity so licensed).
(4) Every Selling Broker-Dealer (or, if applicable, its
associated insurance agency) and each of its
Representatives shall be qualified to be appointed by
Insurer in the relevant states if its proposed activities
in such state on behalf of Insurer require such
appointment.
(5) Every Selling Broker-Dealer must be willing to use
reasonable efforts to sell the Contracts.
(6) A Selling Broker-Dealer's compliance and complaint record
also shall be considered.
22
Specimen
Agreement
SELLING FIRM AGREEMENT
MARKETING AND SELLING AGREEMENT
FOR
SELLING BROKER DEALERS & SELLING AGENCIES
23
MARKETING AND SELLING AGREEMENT
INDEX
SECTION Page
------- ----
1. DEFINITIONS 3
2. APPOINTMENT 6
3. TERRITORY AND PRODUCTS 6
4. TERM AND TERMININATION 7
5. SALE OF THE PRODUCTS AND COMPENSATION 8
6. COMPENSATION VESTING RIGHTS 9
7. YOUR DUTIES AND OBLIGATIONS 9
8. LIMITATION OF AUTHORITY 13
9. SAGE'S ADMINISTRATIVE PROCEDURES 14
10. CLIENT SERVICE RESPONSIBILITIES 15
11. ADVERTISING AND SALES PROMOTIONAL MATERIAL 16
12. RECORDKEEPING 16
13. REPRESENTATIONS AND WARRANTIES 17
14. INDEMNIFICATIONS 17
15. ENTIRE AGREEMENT 18
16. CONDITIONS SURVIVING TERMINATION OF AGREEMENT 19
17. GENERAL PROVISIONS 19
18. SIGNATURE PAGE(S) AND EXECUTION 22
EXHIBITS
--------
AUTHORIZED TERRITORIES EXHIBIT A
AUTHORIZED PRODUCTS EXHIBIT B
COMPENSATION SCHEDULES EXHIBIT C
PRODUCER APPOINTMENT PROCEDURES EXHIBIT D
SELLING FIRM RECRUITING STANDARDS EXHIBIT E
AFFILIATE AGREEMENT EXHIBIT F
PRODUCER APPOINTMENT AGREEMENT EXHIBIT G
PRIOR AGREEMENTS EXHIBIT H
2
24
MARKETING AND SELLING AGREEMENT
AGREEMENT (THIS "AGREEMENT") MADE BY AND AMONG THE FOLLOWING ENTITIES, EACH
INDIVIDUALLY REFERRED TO AS A "PARTY" AND COLLECTIVELY REFERRED TO AS THE
"PARTIES":
SAGE LIFE ASSURANCE of AMERICA, INC. ("SAGE LIFE"), a life insurance company
incorporated in Delaware; and SAGE DISTRIBUTORS, INC. ("DISTRIBUTOR"), a
Broker-Dealer incorporated in Delaware (SAGE LIFE and DISTRIBUTOR are hereafter
collectively referred to as "SAGE"), or as We, or Us or Our;
AND
THE SELLING FIRM named on the signature page of this Agreement, together with
the other corporations and/or partnerships and/or entities and/or persons named
on the signature pages of this Agreement or any Affiliate Agreement, all of
which are hereafter collectively referred to as "Your Firm," or as "You", or
"Your."
RECITALS
WHEREAS, SAGE LIFE is a life insurance company conducting life insurance and
annuity business, including variable life insurance and variable annuity
business in the Territories; and,
WHEREAS, DISTRIBUTOR is a Broker-Dealer, and has been appointed by SAGE LIFE as
the principal underwriter and distributor for the Products (as defined herein);
and,
WHEREAS, You conduct the business of a financial products marketing company, are
experienced in the marketing of financial products, and wish to promote, market
and sell the Products of SAGE LIFE; and,
WHEREAS, The purpose of this Agreement is to establish the terms and conditions
under which You will arrange for the Products to be promoted, marketed and sold
by Your Producers and Your Selling Firms to the customers of Banks, or of such
other financial institutions, or of such other intermediaries operating in such
other markets as You and SAGE may agree upon from time to time in writing.
NOW THEREFORE, In consideration of the mutual benefits to be derived and
intending to be legally bound, the Parties hereby agree to the following terms
and conditions.
1. DEFINITIONS
The following additional definitions when used in this Agreement apply when used
in the singular or plural, and apply whether capitalized or not capitalized.
Affiliate:
Means, (i) any Broker/Dealer or Agency Associated With Your Broker/Dealer or
Your Agency for purposes of satisfying licensing, registration or qualification
requirements under applicable law, which becomes a party to this Agreement by
executing an Affiliate Agreement, and/or (ii) any corporation which controls, is
controlled by or under common control with any of the Parties.
Affiliate Agreement:
The Agreement by which an Affiliate agrees to be bound by the terms and
conditions of this Agreement.
Agency, Agencies :
A corporation, partnership or sole proprietorship licensed as an insurance agent
organization.
Agent(s):
An individual who is licensed as a life insurance agent by one or more states.
Application: Applicant:
Any application for a policy or contract relating to any of the Products. An
Applicant is a person who has signed a completed Application which has been
submitted to SAGE for approval.
Appointment Agreement: An agreement substantially in the form attached hereto as
Exhibit G that is entered into between SAGE LIFE and a Producer.
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25
1. DEFINITIONS (CONTINUED)
Associated; Associated With; Association:
Has the same meaning as contemplated by Section 3(a)(18) of the 1934 Act which
defines, as of the date of this Agreement, a "person associated with a broker or
dealer" and "associated person of a broker or dealer," to mean any partner,
officer, director or branch manager of such broker/dealer (or any person
occupying a similar status or performing similar functions), any person directly
or indirectly controlling, controlled by or under common control with such
broker/dealer, or any employee of such broker/dealer.
Bank(s):
Any insured depository institution, as that term is defined in Federal Deposit
Insurance Act, U.S.C. 1813(c)(2), including but not limited to a bank; savings
bank; savings and loan association; credit union; any uninsured branch or agency
of a foreign bank or a commercial lending company owned or controlled by a
foreign bank; or any other similar institution.
Broker-Dealer:
A person, corporation or entity registered as a broker-dealer under the 1934 Act
and who is also a member of the NASD.
Client:
Any individual, corporation, partnership or legal entity who has become a
Policyholder of SAGE LIFE directly as a result of a solicitation by Your Firm,
or by any Affiliate, or by any of Your Producers.
Compensation: Compensation Schedules:
The amounts payable or recoverable under this Agreement and specified in the
respective Exhibits and Compensation Schedules attached to this Agreement.
Contract and Contract Owner:
Means the same as Policy and Policyholder.
Code of Conduct:
A code of conduct governing business practices adopted by SAGE, and distributed
by SAGE from time to time.
Customer Service Center:
The service center identified in the Prospectus for a class of contracts as the
location at which Purchase Payments and Applications for such class of contracts
are accepted and underwritten.
Duly Licensed and Authorized:
With respect to a Producer, an individual who (i) is licensed and in good
standing as an Agent in the Territory(ies) where such Producer will solicit and
sell Products, (ii) is registered and in good standing with the NASD as a
Registered Representative of Your Broker-Dealer or a Selling Broker-Dealer;
(iii) is registered and in good standing with state securities regulatory
authorities as a securities agent of Your Broker-Dealer or a Selling
Broker-Dealer in state(s) in the Territory(ies) in which such registration is
required for such Producer to solicit and sell the Products; (iv) is appointed
as an Agent of SAGE LIFE; (v) is trained to sell and understand the Products,
product features and marketing methods and the role and purpose of the Products
in serving the financial needs of Clients; (vi) is trained in Your
administrative procedures and SAGE's administrative procedures relating to the
Products; and (vii) is trained in the procedures relating to all applicable
regulatory and product compliance requirements governing the sale of the
Products. With respect to a Broker-Dealer or Agency, an organization that, (i)
is licensed and in good standing as an Agency in the Territory(ies) where such
organization will solicit and sell Products; (ii) is registered with the SEC and
with state securities regulatory authorities, where required, as a Broker-Dealer
in the Territory(ies) and is a member in good standing with the NASD; (iii) is
appointed as an Agency of SAGE LIFE, it being understood that an organization
can rely on an insurance agency networking arrangement meeting the terms and
conditions of SEC no-action letters culminating in Xxxxxx & Xxxxxx (avail. Sept.
28, 1995), in order to satisfy all of the foregoing conditions; and (iv) offers
and sells the Products through Producers Associated With it who are Duly
Licensed and Authorized.
Effective Date:
The date shown on the signature page of this Agreement as the Effective Date.
Fund:
An investment company as defined in 1940 Act, or a portfolio thereof in which
premiums or cash value for the Products allocated to the Separate Account are
invested.
4
26
1. DEFINITIONS (CONTINUED)
NASD:
The National Association of Securities Dealers, Inc.
Policy and Policyholder:
The respective written contracts and contractual documents issued in respect of
a Product. The terms "contract" or "policy contract" or "certificate" or "group
certificate" or "group policy" all have the same meaning as Policy. A
Policyholder is the owner of a Policy and has the same meaning as contract
owner, or certificate owner.
Prior Agreements:
The agreement(s) (if any) described in Exhibit H and incorporated by reference
as forming an integral part of this Agreement.
Procedures Manual: Agent(cy) Procedures Manual:
The manual containing a description of the administrative rules, regulations or
special procedures applicable to You and all of Your Producers appointed by SAGE
to sell the Products.
Producer:
An individual who is a Registered Representative and/or Agent associated with
Your Firm or with one of Your Selling Firm and who has executed an Appointment
Agreement.
Products: Variable Products:
The insurance and annuity products, including the variable life insurance and
variable annuity products (the "Variable Products"), and the applicable policy
riders, described in Exhibit B as amended from time to time.
Purchase Payments:
A payment, including a payment of premiums, deposits or partial payments, made
by an Applicant in respect of an Application for a Product, or by a Policyholder
in respect of a Policy.
Prospectus:
With respect to each class of contracts, the prospectus for each class of
contracts included within the Registration Statement for such class of
contracts; provided, however, that, if the most recently filed prospectus filed
pursuant to Rule 497 under the 1933 Act subsequent to the date on which the
Registration Statement became effective differs from the prospectus on file at
the time the Registration Statement became effective, the term prospectus shall
refer to the most recently filed prospectus filed under Rule 497 from and after
the date on which it shall have been filed.
Registered Representative:
An individual person who is registered as a principal or representative with the
NASD and as a securities agent with the securities commissions of the
Territories in which such person conducts business activities.
Registration Statement:
With respect to each class of contracts, the most recent effective registration
statement(s) filed with the SEC or the most recent post-effective amendment(s)
thereto, including financial statements included therein and all exhibits
thereto.
Regulations, Regulators:
The federal and state securities laws; state insurance laws; the by-laws of the
NASD; and the laws, rules and regulations promulgated at any time under or
pursuant to such laws or by-laws or by the SEC, NASD and/or the state insurance
departments having jurisdiction over the respective activities.
Replacement Sale:
Is the sale of a Product which is funded by the Applicant with money obtained
from the liquidation of another life insurance or annuity contract issued by
SAGE or issued by any other insurance company.
SEC:
The Securities and Exchange Commission.
Selling Agency:
An Agency associated with a Selling Broker-Dealer.
Selling Agreement:
An agreement entered into by SAGE and a Selling Firm, including an Affiliate
Agreement.
Selling Broker-Dealer:
A Broker-Dealer that has entered into a Selling Agreement with SAGE for the sale
of the Products.
Selling Firm:
A Selling Broker-Dealer and / or a Selling Agency (including any Affiliated or
Associated Selling
5
27
1. DEFINITIONS (CONTINUED)
Broker Dealers or Selling Agency(ies) that have entered into a Selling Agreement
for the Products. The term includes Your Selling Firms, when applicable.
Selling Firm Producers:
A Duly Licensed and Authorized Producer Associated With a Selling Firm.
Separate Account:
A legal entity separate and distinct from the life insurance company under which
portfolios and cash values attributable to the Contracts are held.
Side; Other Side:
With reference to the Parties to this Agreement, those parties collectively
defined as either "SAGE" or "You" are a Side or Other Side, depending on the
context.
Territory(ies):
The region(s) and/or state(s) or other jurisdiction(s) shown in Exhibit A, or
any one, or any combination of them.
Written, in Writing:
Shall include communications delivered in conventional print as well as
electronic forms capable of being printed without the use of special equipment
or programs not maintained by the recipient of the communication.
Your Agency:
The Agency(ies) named on the signature pages to this Agreement or an Affiliate
Agreement.
Your Broker-Dealer:
The Broker-Dealer(s) named on the signature pages to this Agreement or an
Affiliate Agreement.
Your Firm, Firm:
The corporations and/or partnerships and/or entities and/or persons, other than
SAGE, named on the signature page(s) of this Agreement.
Your Selling Firm(s):
A Selling Firm(s) recruited by You that has entered into a Selling Agreement
with SAGE.
Your Producers or Producers with Your Firm:
A Duly Licensed and Authorized Producer Associated With Your Firm.
1933 Act:
The Securities Act of 1933, as amended.
1934 Act:
The Securities Exchange Act of 1934, as amended.
1940 Act:
The Investment Company Act of 1940, as amended.
2. APPOINTMENT
The DISTRIBUTOR, in its capacity as principal underwriter and distributor for
the Products, hereby appoints Your Broker-Dealer and, where so required by state
insurance law, SAGE LIFE, in its capacity as the issuer of the Products, hereby
appoints Your Agency, with authority to offer the Products and recruit Selling
Firms, subject to the terms and conditions of this Agreement. Your Firm hereby
accepts such appointments and agrees to undertake the duties and
responsibilities outlined herein in return for the payment by SAGE of the
Compensation specified in the Compensation Schedules. You understand that no
Territory is exclusively assigned hereunder to Your Firm and that We may enter
into agreements with other Selling Firms or Producers as SAGE in its sole
discretion may decide to appoint for the purpose of selling the Products in any
market or territory or geographic region, including any or all of the
Territories.
3. TERRITORY AND PRODUCTS
You are authorized to market the Products, in the Territories where (i) SAGE has
advised You in writing that the Products are approved for sale, and (ii) Your
Firm and Your Producers or Your Selling Firm and Selling Firm's Producers are
Duly Licensed and Authorized to conduct the selling of the Products. SAGE
reserves the right upon the giving of written notice to (i) add new Products, or
(ii) amend or withdraw any of the existing Products, or (iii) add new state(s)
or region(s), or (iv) withdraw from any state(s) or region(s), or (v) restrict
activities in any state(s) or region(s), and to amend Exhibit A and or Exhibit B
accordingly from time to time.
6
28
4. TERM AND TERMINATION
4.1 Automatic Renewal
This Agreement is for an initial period (the "Initial Period") commencing on the
Effective Date and ending on the final day of December in the year following the
anniversary of the Effective Date. Unless notice of termination has been given
as required herein, this Agreement will automatically renew for successive
calendar years (the "Renewal Period") commencing at the end of the Initial
Period or at the end of each succeeding Renewal Period.
4.2 Termination not for Cause
Subject to the over-riding provisions and continuing obligations and rights of
the Parties under any Prior Agreements, and except as may be provided in any
such Prior Agreements, this Agreement may be terminated by a Party upon the
giving of sixty (60) days written notice to all other Party(ies).
4.3 Termination for Cause
You or SAGE may terminate this Agreement at any time for cause, and such
termination will become effective upon the giving of written notice, in the
event of:
a) intentional misappropriation by a Party on the Other Side of the funds or
property of a Client or of one of the Parties;
b) cancellation or refusal by any regulatory authority to renew any material
license, certificate or other requirement for a Party on the Other Side
to perform its obligations and duties as a Duly Licensed and Authorized
entity;
c) a Party on the Other Side becoming a debtor in bankruptcy including
voluntary bankruptcy, or becoming the subject of an insolvency
proceeding;
d) any action by a regulatory authority with jurisdiction over the
activities of a Party on the Other Side that would have the effect of
preventing the Party on the Other Side from performing its obligations
hereunder, or would place the Party in receivership or conservatorship or
under similar legal status.
4.4 Termination for Cause by SAGE
SAGE may terminate this Agreement for cause, and such termination will become
effective upon the giving of written notice, in the event of:
a) Your conviction or the conviction of any of Your Producers, or
conviction of any of Your officers or employees of any act of felony, or
act of fraud, or any crime involving dishonesty; or
b) Misconduct by You or any of Your Producers involving marketing
malpractice or misrepresentation of the Products; or
c) Failure by You or any of Your Producers to comply with any regulatory
requirements governing the activities undertaken by You or any of Your
Producers, or violation of any Regulations of any jurisdiction where You
or any of Your Producers or Your Selling Firms conducts, or has
conducted, any insurance business during the term of this Agreement; or
d) Your failure to exercise reasonable good faith efforts to recruit,
train and motivate Your Producers and Your Selling Firms and their
Producers to market and distribute the Products; or
e) Failure to deliver when due or on demand any Purchase Payments,
premiums, deposits, monies, records, files, or other property belonging
to SAGE in Your possession; or
f) Failure to comply with any substantial condition or provision of this
Agreement including those requiring You to cooperate with Us in
connection with any audit, examination or other inquiry by any regulatory
body having authority over You or Your activities, or over Us or Our
activities; or
g) Unbecoming conduct or conduct that serves to discredit SAGE, by You or
any of Your Producers; or
h) The assignment or transfer by You of Your rights, responsibilities,
duties and liabilities under this Agreement to any third party without
the prior written consent of SAGE; or
i) The failure to achieve the reasonable sales expectations and
performance goals agreed upon by the Parties from time to time.
4.4 Notice Requirements for Termination
Any written notice by a Party to terminate this Agreement for cause shall state
the cause with specificity. Prior to SAGE giving notice to terminate, SAGE may
at its sole discretion offer a reasonable time to cure any default.
7
29
4. TERM AND TERMINATION (CONTINUED)
4.5 Effect of Termination Notice
Subject to Section 16 hereof (Conditions Surviving Termination ), any notice of
termination by SAGE to any one of the Parties comprising Your Firm under this
Agreement, or any notice of termination given to SAGE by any of the Parties
comprising Your Firm, does not automatically terminate the rights, duties and
obligations of the other Parties comprising Your Firm under the Agreement, or
the rights, duties and obligations of any Selling Firm(s) appointed and
contracted with SAGE pursuant to this Agreement, unless separate written notices
of termination have been served to, or by, each of such other Parties or such
other Selling Firms.
5. SALE OF THE PRODUCTS AND COMPENSATION
5.1 Sale of Products
You undertake to exercise utmost good faith efforts to recruit, train and
motivate Your Producers and Your Selling Firms and their Producers to sell the
Products and in return SAGE undertakes to pay the Compensation due according to
the terms of this Agreement.
5.2 Compensation
The Compensation which becomes owing to Your Firm under the Compensation
Schedules in respect of a specific application submitted to SAGE, will be due
and payable to Your Firm only when: (i) the Application has been approved for
issue by SAGE; (ii) any insurable risk under the contract has been accepted by
an authorized officer of SAGE in accordance with SAGE's standard underwriting
procedures; and (iii) the Purchase Payment has been banked in a SAGE bank
account approved by SAGE.
5.3 Payment of Compensation to Your Selling Firms and Producers
If SAGE is required by this Agreement or an Affiliate Agreement to pay directly
to any of Your Selling Firms or to any of Your Producers, any portion of the
Compensation specified in the Compensation Schedules, any such amounts will be
deducted from the Compensation otherwise due to Your Firm. Any Selling Firm's or
Producer's right to receive any such direct Compensation payments is effective
only from the date that the respective Selling Agreement or Appointment
Agreement has been executed. SAGE will pay such Selling Firm or such Producer
only the Compensation due at the rates agreed between Your Firm and SAGE and
specified in the appropriate Compensation Schedules applicable to and made an
integral part of the respective Selling Agreement or Appointment Agreement.
5.4 Right to Change Compensation Schedules
SAGE has the right upon giving thirty (30) days written notice to change the
Compensation payable in respect of the Products, provided that such change will
be effective only for new Applications received by SAGE after the effective date
of the change.
5.5 Recovery of Compensation and Indebtedness
SAGE will have the right to deduct from any Compensation otherwise due and
payable to Your Firm, any indebtedness or obligation due to SAGE, (i) in terms
of the charge back practices specified in the Compensation Schedules, and/or
(ii) otherwise due to SAGE for any reason. Your responsibility to refund such
monies to SAGE shall include any Compensation not recoverable from Your
Producers.
5.6 Compensation Payment Practices and Procedures for terminated or
transferred Selling Firms
Except for Terminations by SAGE for cause, the continuing payment procedures
outlined in the Compensation Schedules will be applied in those situations where
any of Your Selling Firms have (i) voluntarily terminated their Selling
Agreement with SAGE or (ii) terminated their Association with Your Firm, and
have continued their Selling Agreement with SAGE or (iii) have transferred their
Association to another Selling Firm not Affiliated with You or (iv) have
terminated their Association with Your Firm and have entered into a new Selling
Agreement directly with SAGE.
8
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5. SALE OF THE PRODUCTS AND COMPENSATION (CONTINUED)
5.7 Right to Commute Compensation
If at any time before or after termination of this Agreement, the total
Compensation paid under this agreement over a twelve (12) month period has been
less than $1,000, SAGE may elect to commute future estimated Compensation
payments, by paying Your Firm a single sum equal to the present value of future
Compensation determined on a reasonable basis, less any indebtedness due by Your
Firm or Your Producers to SAGE.
6. COMPENSATION VESTING RIGHTS
Following any Termination of this Agreement, Your Firm's rights to receive
continuing Compensation from new Policies issued as a result of Applications
submitted by Your Firm and Your Producers, or by Your Selling Firms and their
Producers prior to the date of such Termination, shall continue in accordance
with the payment practices and procedures specified in the Compensation
Schedules. SAGE shall be obligated to continue to pay such amounts as become due
to Your Firm, subject to SAGE's right to deduct from any such Compensation
payments, (i) any portion of the Compensation payable to Your Selling Firms or
to Your Producers, and (ii) any Compensation charge-backs or other amounts owing
by Your Firm or Your Selling Firms or Your Producers to SAGE for any reason, and
(iii) any costs which SAGE is obliged to incur in effecting such payments.
7. YOUR DUTIES AND OBLIGATIONS
7.1 General Matters and Joint and Several Responsibility
Commencing on the Effective Date, You will faithfully perform Your duties within
the scope of the relationship created under this Agreement, to the best of Your
knowledge, skill and judgment. All parties comprising Your Firm, are jointly and
severally responsible and liable to SAGE LIFE and the DISTRIBUTOR for the
faithful performance of all obligations or duties, except those duties and
obligations which may be performed only by Your Broker-Dealer or Your Agency, as
applicable, as to which Your Broker-Dealer or Your Agency, as applicable, shall
be responsible and liable to SAGE LIFE and the DISTRIBUTOR.
7.2 Compliance Duties
You and Your Producers will use best efforts to comply with (i) all
instructions, rules, bulletins, manuals and underwriting guidelines issued in
writing by SAGE to You and Your Producers, including any Code of Conduct, and
(ii) all Regulations. If You are a Broker-Dealer owned by a Bank or other
financial institution, or operating within or adjacent to a bank's retail area,
You shall take all steps necessary to comply with NASD Rule 2350, the "bank
broker-dealer rule," and the Inter-Agency Statement on Retail Sales of
Non-deposit Investment Products, issued in 1994, including any supplements,
amendments or modifications thereto or successor Regulations.
7.3 Duties with Respect to Your Producers.
Your duties and obligations with respect to Your Producers include but are not
limited to the following:
a) Recommendation of Producers
You will make a thorough and diligent inquiry and investigation relative
to each Producer You recommend to be appointed to sell the Products,
including an investigation of the Producer's identity and business
reputation. SAGE shall retain sole authority to approve and make
appointments and reserves the right for reasonable cause, to not appoint
a Producer recommended by You, or to refuse to permit an appointed
Producer to continue to solicit from the public Applications for any of
the Products.
b) Licensing and Appointment Procedures for Your Producers
You are responsible for the preparation and submission of proper
insurance agent appointment and licensing forms, and the assurance that
all Producers recommended by You are Duly Licensed and Authorized in the
Territories where such Producers will solicit and sell the Products. Your
Broker-Dealer shall be responsible for the preparation and submission to
the NASD of all documentation and representative registration forms, and
the assurance that all Your Producers are properly registered with the
NASD as Registered Representatives of Your Broker-Dealer and as an Agent
of Your Agency before any such Producer is recommended to SAGE for
appointment with authority to solicit Applications for the Products. You
will maintain a list of all Your Producers and will notify SAGE of any
change in the NASD registration status or the insurance licensing status
of any of Your Producers.
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YOUR DUTIES AND OBLIGATIONS (CONTINUED)
c) Duly Licensed and Authorized Producers
You will not permit any of Your Producers to act as Agents until they are
properly trained, licensed and appointed, nor will You pay Compensation
to, or permit Compensation splitting with, any person who is not Duly
Licensed and Authorized by SAGE to sell the Products (unless otherwise
permitted by law and agreed to by SAGE).
d) Supervision of Producers
You are responsible for the supervision and administration of the
marketing, sales and customer service activities of Your Producers and
shall be responsible for all acts or omissions of each of Your Producers.
Each of Your Producers will receive close and adequate supervision by
You. Your supervisory and administrative duties and support services
shall include but are not limited to:
i) Ensuring that Your Producers comply with SAGE's written procedures
communicated to You from time to time, including communications
regarding changes in rates, details of regulatory notices or new
Product announcements; and in particular, but not by way of
limitation, ensuring that Your Producers:
A) Comply with and abide by all Regulations concerning the
sale and delivery of Products;
B) Have obtained and continuously maintain the required
state insurance licenses in the state where such Producers
will solicit and sell Products;
C) Have been appointed by SAGE in accordance with the law
of each respective state(s) in the Territories in which the
sale(s) occur and the prospective Applicant or Client
resides;
ii) Notifying SAGE if any of Your Producers fails to maintain their
good standing with the Regulators or to maintain the required
state insurance license or becomes inactive to the extent
that such information is or should reasonably be known to You;
iii) Informing SAGE promptly of any violation of law or of any
material procedures of SAGE.
iv) Providing Your Producers advice and assistance with regard to
the marketing and advertising of Products, and ensuring that no
sales literature or advertising is used unless SAGE has given
prior written approval;
g) Training of Your Producers
You are primarily responsible for training all of Your Producers
regarding Product features, marketing methods and the compliance
requirements of any applicable Regulations. Such training is (i) to be
conducted prior to any such Producer selling the Products and, (ii) is to
be ongoing thereafter and (iii) is to include direct training by
marketing representatives of SAGE given on a regular basis at such
facilities and during such reasonable business hours as the Parties agree
from time to time.
7.4 Duties with respect to Soliciting Applications for the Products
You are hereby authorized and required by SAGE to solicit Applications for the
Products through Duly Licensed and Authorized Producers with Your Firm from
Applicants who meet SAGE's underwriting and suitability standards. You may
solicit new business only in those Territories where Your Firm and Your
Producers are Duly Licensed and Authorized, and where SAGE has advised You in
writing that the Products are approved for sale. You acknowledge that SAGE will
be required to process only those Applications bearing the signature of a Duly
Licensed and Authorized Producer with Your Firm who is on Your list of approved
Producers as agreed between You and SAGE from time to time. You will review,
when necessary, any Applications or contracts issued for Products sold or
written by Your Producers.
a) Solicitation Process
You shall be responsible for:
i) Supplying to Your Producers necessary sales literature and
Application forms provided by and approved by SAGE;
ii) Ensuring that Your Producers:
A) Promptly submit to SAGE for underwriting any Applications
for the Products;
B) Submit premium payments directly and immediately to SAGE
in accordance with SAGE's procedures, but in no event more
than two (2) business days after receipt;
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YOUR DUTIES AND OBLIGATIONS (CONTINUED)
C) Deliver to Clients within five (5) days or on a timely
basis in compliance with applicable Regulations, all Policy
and other contractual documents relating to the Products;
and
D) Document transactions, including where so required by
Regulation, the fact of delivery, and maintain any other
documentation reasonably requested by SAGE.
b) Suitability Requirements
SAGE wishes to ensure that the Products solicited by Your Firm through
Your Producers will be issued to persons for whom they will be suitable.
Your Firm will undertake best efforts to ensure that none of Your
Producers makes recommendations to any Applicant to purchase a SAGE
Product unless Your Firm and Your Producers have reasonable grounds to
believe that the purchase is suitable for the Applicant. Any
determination of suitability for the purchase of a Product should
include, but not be limited to, in respect of each Application submitted
to SAGE, a reasonable inquiry concerning the Applicant's investment
sophistication, insurance and investment objectives, financial situation
and needs, other securities holdings, tax status, tolerance for risk, and
any other pertinent information known to Your Producer or required, so as
to be in compliance with NASD Rule 2310 governing suitability
determinations and interpretations.
c) Delivery of Prospectus(es)
You and Your Producers will ensure that the current Prospectus(es), the
Statement(s) of Additional Information where required by law and all
Supplements, relating to the Products where applicable, are delivered to
every prospective Applicant including an existing Client seeking to
purchase a Product, prior to the completion of an Application. No
information shall be given, or any representations made concerning the
Products, unless the information or representations are contained in the
current Prospectus(es) or are contained in sales literature or
advertisements confirmed to You in writing by SAGE as available for
distribution and use and as having been approved by the NASD and where
applicable by the appropriate Regulators. For purposes of this section
the terms Prospectus(es) shall include the Prospectus(es) or where
approved by the SEC as an alternative valid form of delivery, the
applicable Prospectus Profile(s) for the Products or each respective
investment fund choice available under the Product.
d) Sales Illustrations and Asset Allocation Models
Any illustration of projected values and benefits under any of the
Products provided to any Applicant, must be in a format approved by SAGE
and be in full compliance with all Regulations.
e) Market Timing
You and Your Producers will not solicit Applications, Policies or
Purchase Payments in connection with any so-called "market timing" or
"asset allocation" program that has not been approved or otherwise agreed
to in advance by SAGE and You.
f) Replacement Sales
You are required to ensure that on all Replacement Sales by Your
Producers, all Producers comply with all applicable requirements under
the Regulations and in particular, without limiting or modifying the
foregoing, provide sufficient information to prospective and existing
customers, Applicants and Clients as to the suitability of the
Replacement Sale. Such information is in addition to the suitability
requirements referred to in Section 7.4(b) above, and includes but may
not be limited to:
i) The amount of the surrender charge to be incurred on the
investment to be liquidated;
ii) All fees and possible charges, such as surrender charges, on
the new Product;
iii) Any change in the investment risk to the Applicant or prospective
Client;
iv) Any change in the nature of, or the provider of, any guarantees
under the respective contracts or Products to be surrendered or
canceled;
v) Any changes in the expenses associated with the Product and the
surrendered contract or policy;
vi) For life insurance-to-annuity Replacement Sales, the difference
in the amount and tax treatment and status of the death benefit,
and the implications of surrendering the insurance, including any
requirements for new or additional underwriting evaluation;
vii) Recommending to the Applicant or Client that they obtain
independent advice from tax counsel as to the transaction
qualifying under Internal Revenue Code section 1035 for deferral
of gain;
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YOUR DUTIES AND OBLIGATIONS (CONTINUED)
viii) Any material change in premiums payable, cost of insurance,
contractual benefits and types of coverage, or important terms and
conditions, or restrictions or limitations including any new
contestable and suicide periods, or any change in disability
coverages or important rider benefits.
7.5 Duties with respect to Recruiting and Supporting Selling Firms
You shall recommend only Selling Firms and Selling Firm Producers who are
qualified to be Duly Licensed and Authorized to sell the Products and meet the
recruiting standards and conditions set forth in Exhibit E.
a) Recommendation of Selling Firm
If a Selling Firm recommended by You is deemed acceptable to Us, We shall
enter into a Selling Agreement with such firm, and such firm shall be
deemed one of Your Selling Firms for purposes of Your duties hereunder to
Your Selling Firms and Your entitlement to Compensation relating to
Products sold by Your Selling Firms. Your Firm shall assist Us in
entering into Selling Agreements with Your Selling Firms and Appointment
Agreements with Your Selling Firm's Producers in conformity with the
applicable Regulations. We shall have sole discretion to appoint, refuse
to appoint, discontinue, or terminate the appointment of any Your Selling
Firms or any of Your Selling Firm's Producers. Upon termination of
appointment of a Selling Firm, Your Firm shall take all action necessary
to terminate the sales activities of such Selling Firm.
b) Support and Servicing of Selling Firms
Your Firm shall use its best efforts to provide services and support to
Your Selling Firms to facilitate the offering and sale of the Products.
Such efforts shall include but not be limited to: (i) Your Firm's
assistance and participation in the marketing, product training, and
administrative activities of Your Selling Firms, and (ii) Your Firm
ensuring that reasonable access to Your Selling Firm's Producers is
afforded to SAGE's marketing representatives for the purpose of providing
Product training and marketing assistance. The specific services to be
provided by Your Firm to Your Selling Firms will be negotiated and agreed
upon by Your Firm and Your Selling Firms, separate and apart from this
Agreement.
c) Related Supervisory Practices
In meeting its obligations pursuant to this section, Your Firm shall,
during the term of this Agreement, engage in the following activities:
i) Continuously utilize only those training, sales, advertising,
and promotional materials which have been approved by SAGE;
ii) Establish and implement reasonable procedures for periodic
inspection and supervision of sales practices of Your Selling Firm
Producers and submit periodic reports to SAGE, as may be
requested, on the results of such inspections and the compliance
with such procedures; provided however that Your Firm shall retain
sole responsibility for the supervision, inspection and control of
Your Producers;
iii) Take reasonable steps to ensure that Your Selling Firms and
their Producers shall not make recommendations to an Applicant to
purchase a Product in the absence of reasonable grounds to believe
that the purchase of a Product is suitable for such Applicant
consistent with applicable suitability requirements and any
suitability guidelines provided by Us from time to time.
7.6 General Duties and Responsibilities
a) Expenses
Except as otherwise provided in this Agreement, or as otherwise agreed in
writing from time to time, You and Your Producers will be responsible for all
costs and expenses of any kind and nature incurred in the performance of Your
duties under this Agreement. SAGE will be responsible for the payment of initial
and ongoing state insurance agent appointment fees relating to the appointment
of Producers who actively solicit Applications and submit new business under
this Agreement. SAGE will also pay for SAGE authorized promotional and marketing
materials provided to You in the normal course of business, and such other
reasonable costs incurred in the promotion of the Products as SAGE in its sole
discretion may agree from time to time, including reimbursement of the actual
cost of any promotional material SAGE has authorized You to prepare.
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YOUR DUTIES AND OBLIGATIONS (CONTINUED)
b) Bonding
Your directors, officers and employees, and any Producers who have access to
funds of SAGE, including but not limited to funds submitted with Applications
for Products, or funds being returned to Applicants or Clients, are and shall be
covered by an appropriate blanket fidelity bond, including coverage for larceny
and embezzlement, issued by a reputable bonding company acceptable to SAGE. SAGE
will have the right to receive evidence, satisfactory to SAGE that such coverage
is in force. You are required to give written notice to SAGE not less than
thirty (30) days before any proposed cancellation or any change of coverage.
c) Independent Contractor
You and Your Producers are independent contractors in relation to SAGE. Nothing
contained in this Agreement shall create, or shall be construed to create, the
relationship of employer and employee (i) between SAGE and You, or (ii) between
SAGE and any of Your Producers, or (iii) between SAGE and Your respective
directors, officers, employees, or agents. SAGE shall not be liable for any
expenses incurred by You or any of Your Producers except those specifically
authorized in writing by SAGE.
d) Compensation Reporting
You are responsible for ensuring that any Compensation, whether in form of
commissions and or/fees relating to the Products, will be reflected in the
quarterly FOCUS reports and the fee assessment reports filed with the NASD by
Your Broker-Dealer.
e) Approval of Marketing Materials
Your Firm agrees that any material it develops, approves or uses for sales,
training, explanatory or other purposes in connection with the solicitation of
Applicants for Products hereunder other than generic advertising material which
does not make specific reference to Us or the Products will not be used without
Our prior written consent.
f) Other Duties
You shall undertake any other duties necessary or appropriate to the performance
of Your obligations under this Agreement.
8. LIMITATION OF AUTHORITY
This Agreement does not entitle You or any of Your Producers or any Selling Firm
or any Selling Firm's Producers to perform on behalf of SAGE or its Affiliates
any of the following actions, which can only be undertaken by an authorized
officer of SAGE:
a) Make, alter or discharge any Policy;
b) Waive or modify any terms, conditions or limitations of any Application
or any Policy;
c) Extend the time for payment of any premiums, or bind SAGE to the
reinstatement of any terminated Policy, or accept notes for payment of
premiums;
d) Accept payments on behalf of SAGE which are not in the form of a check
or a wire transfer payable to "Sage Life Assurance of America, Inc.," or
payable to "SAGE LIFE";
e) Adjust or settle any claim or commit SAGE with respect thereto;
f) Incur any indebtedness or liability, or expend or contract for the
expenditure of funds;
g) Enter into legal proceedings in connection with any matter pertaining
to SAGE's business without the prior written consent of SAGE, provided
that You have the right to enter into any such legal proceeding where You
or any of the Parties comprising You are named as a party to the
proceedings, provided You have given SAGE adequate notice of such
intended proceedings;
h) Make, accept or endorse notes, or endorse checks payable to SAGE or
otherwise incur any expense or liability on behalf of SAGE;
i) Offer to pay or pay, directly or indirectly, any rebate of premium or
any other inducement not specified in the Products or in this Agreement
to any person seeking to complete an Application or to any Client;
j) Misrepresent the Products for the purpose of inducing a Client or
owner of a Policy of this or any other insurance company to lapse,
forfeit or surrender their insurance with that company;
k) Give or offer to give any advice or opinion regarding the taxation of
any Applicant's or Client's income or estate in connection with the
purchase of any Product;
l) Enter into an agreement with any person or entity to market or sell
the Products without the written consent of SAGE;
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8. LIMITATION OF AUTHORITY (CONTINUED)
m) Agree to the payment of Compensation to any Producer other than in terms
of a scale of Compensation agreed to in writing by SAGE.
9. SAGE'S ADMINISTRATIVE PROCEDURES
SAGE will administer all Products issued by SAGE LIFE in accordance with the
terms and conditions set forth in the respective Policy and SAGE's standard
administrative procedures as advised to you from time to time in writing. These
procedures will include but not be limited to the following:
9.1 Procedures for Issuance of a Policy for the Products
SAGE, at its sole discretion, will determine whether to issue a Policy for any
of the Products for which an Application has been submitted by Your Firm or by a
Producer with Your Firm. Except where required by Regulation, SAGE will not be
bound by the terms of any Policy relating to a Product, until You or the
Applicant has been advised in writing of the approval by SAGE of the
Application, and SAGE's acceptance of the risk under the Policy. Once a Policy
has been issued, SAGE undertakes to:
a) Mail the Policy together with any required notice of withdrawal rights,
and any additional required documents, to You or where so required by
You directly to the Client, or to such other person designated by You and
acceptable to SAGE as having the authority to receive the Policy on
behalf of the Client. SAGE reserves the right where so mandated by
Regulation, to require You to provide proof of delivery of any Policies
and other documents delivered by You to the Client.
b) Confirm in writing to the Client, with a copy to Your Selling Firm(s)
or to Your Selling Firm(s) designee, the allocation of the initial
Purchase Payment or any premium or any other payments under the Policy.
Such confirmation shall comply with Rule 10b-10 under the 1934 Act.
c) Provide confirmation notices to the Client showing the name of the
Selling Broker-Dealer.
9.2 Procedures for use of Marketing Materials Provided by SAGE
SAGE will provide You and Your Producers with reasonable quantities of the
following materials:
a) Marketing brochures and other advertising materials approved by SAGE
for the Products, including the current Prospectus(es) for the Products
and for any underlying mutual funds, or separate accounts;
b) Any Prospectus Supplement for the Products and for any underlying mutual
funds or separate accounts, including any Statement(s) of Additional
Information if requested by Client or required by law;
c) Applications and all other standard forms required for the selling of
the Products.
9.3 Procedures for Collection and Remittance of Purchase Payments and Other
Considerations Due to SAGE
SAGE will determine in consultation with You which of the following
administrative procedures are acceptable to SAGE for the collection and
remittance to SAGE of the Purchase Payments due in respect of Policies issued by
SAGE or Applications submitted by Your Producers or by the Producers of Your
Selling Firms:
a) "Standard Procedure - Check with Application"
Where the Application and the corresponding check for the Purchase
Payment will be sent to a national processing center designated by SAGE.
b) "Direct Gross Deposit Procedure"
Where gross funds due to SAGE are deposited or wired to a designated SAGE
bank account established for this purpose, and where the corresponding
Applications together with evidence of payment will be sent to a national
processing center designated by SAGE.
c) "Net Wire Procedure"
Where the Selling Firm is a financial institution approved by SAGE,
Compensation may be deducted from gross amounts remitted to SAGE under
written procedures acceptable to SAGE which are in compliance with
Regulations.
Except as provided by the special Net Wire Procedures referred to in this
section, all money due to SAGE shall be forwarded without any deduction or
offset for any reason, including by example, and not by limitation, any
deduction or offset for Compensation claimed by You or any Producer with Your
Firm.
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9. SAGE'S ADMINISTRATIVE PROCEDURES (CONTINUED)
A payment due to SAGE under a Product is valid only if it is in the form of a
check or money order payable to the order of "Sage Life Assurance of America,
Inc." or "SAGE LIFE," or a wire transfer to a SAGE LIFE bank account. Wire
transfers for the account of SAGE shall be in accordance with the administrative
procedures communicated by SAGE. You are not permitted to accept third party
checks or cash for any Purchase Payment or premium or any other consideration
due to SAGE.
All Purchase Payments collected by You or by any of Your Producers in connection
with the Products are the property of SAGE. Such payments must be deposited in
SAGE's bank account, or otherwise remitted to SAGE, immediately upon receipt by
You or Your Producers in accordance with the administrative procedures of SAGE.
Until You or Your Producers have remitted such monies to SAGE, any sums received
or collected by You or Your Producers under this Agreement are regarded as being
held by You or Your Producers in a fiduciary capacity on behalf of SAGE, and may
not be banked in any account that is not a SAGE bank account.
9.4 Procedures regarding Declined and Cancelled Applications
a) Declined Applications
The depositing of any payment relating to an Application into a SAGE bank
account does not imply that SAGE is obligated to accept the risk under the
Application. SAGE shall have the unconditional right to reject, in whole or in
part, any Application. In the event SAGE rejects an Application involving risks
not accepted by SAGE's underwriters or SAGE's reinsurers, We will return to the
Applicant any payments (together with appropriate interest or investment
earnings adjustments where applicable in accordance with the requirements of the
Prospectus and SAGE's administrative procedures and We will notify the Selling
Firm of such action.
b) Cancelled Applications
In the event that any Applicant elects to cancel the Application and the sale
pursuant to any law or contractual free look period, We will refund to the
Applicant the amounts required by law or otherwise determined according to the
terms of the Prospectus and We will notify the Selling Firm or its designee of
such action.
9.4 Procedures for Complaints and Grievances
You and Your Producers shall immediately notify in writing addressed to the
Senior Compliance Officer of SAGE LIFE at the Home Office address of SAGE LIFE,
details of any complaint or grievance made by or on behalf of a Client or
Applicant or of which You or any of Your Producers become aware. This includes,
but is not limited to, complaints or grievances arising out of or based on
advertising approved by SAGE, or arising from any other complaint or grievance
relating to the sale or presentation of the Products, or the service provided to
an Applicant or a Client concerning any of the Products, or the performance of
any Product. You and Your Producers shall promptly furnish all written materials
requested by SAGE in connection with the investigation of any such complaint or
grievance of which You or Your Producers or SAGE may become aware, and will
cooperate in the investigation and resolution of such complaint or grievance.
10. CLIENT SERVICE RESPONSIBILITIES
The Parties acknowledge that it is their joint responsibility to provide post
sales service, and continuing customer service to Your Clients and to the
Clients of Your Selling Firms.
10.1 Standards of Service
SAGE will provide to Your Clients its customary and usual standard of customer
service. Such service will include a toll-free access to a Customer Service
Center, and such other appropriate administrative, accounting and policyholder
services as SAGE provides to all its Policyholders.
10.2 Client Service
You and Your Producers undertake to act in the best interests of Your Clients in
rendering reasonable and satisfactory standards of pre-sale and post-sale
service, and reasonable and satisfactory ongoing customer service to the Client,
including but not limited to assistance with the following:
a) Explanation of and completion of any forms and procedures that may be
required under the insurance contract, including the completion of
Applications, underwriting questionnaires, claim forms; and
b) Delivery of and explanation of the Prospectus and Policy contract
documents
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11. ADVERTISING AND SALES PROMOTIONAL MATERIAL
Except for materials supplied to You by SAGE, You may not, nor may any of Your
Producers or Your Selling Firms or their Producers without the prior written
consent of SAGE, advertise any of the Products, or use SAGE's name, logo or
trademarks or service marks in any advertisement, nor use any sales literature
or advertisements or other materials for the Products without the prior written
approval of SAGE. This includes Product specific brochures, letters,
illustrations, training materials, materials prepared for oral presentations and
all other similar materials. SAGE's consent in one instance does not imply
consent in another, and SAGE's consent must be obtained on each and every
separate advertising occasion, or whenever any modification is proposed to any
of the materials referred to herein. SAGE reserves the right to recall any
materials or to place time limits for the approved use of any materials provided
to You or Your Producers or Your Selling Firms and their Producers.
12. RECORDKEEPING
12.1 Maintenance of Records
Each Party agrees to keep all records required by the Regulations, to maintain
such books, accounts, and records so as to clearly and accurately disclose the
precise nature and details of transactions, and to assist one another in the
timely preparation of records. You also agree to maintain such other records as
SAGE may reasonably require. Such records will include but are not limited to
records of:
a) All marketing and advertising materials, brochures, illustrations,
asset allocation models and work sheets, application and contract forms,
sales and internal training materials, and Client correspondence
concerning SAGE or the Products, and persons to whom such materials have
been distributed.
b) Payments, premiums and other amounts collected from a Client or an
Applicant.
c) All complaints or, grievances against SAGE or You or any of Your
Producers reported by a Client or a Producer concerning the Products, or
concerning any actions by SAGE or You or any such Producer.
12.2 Safekeeping of Property
You and Your Producers will safeguard, maintain and account for all policies,
forms, manuals, equipment, supplies, electronic software including sales
illustration software and supporting materials, advertising and sales literature
furnished by SAGE, and will destroy or return the same to SAGE promptly upon
request.
12.3 Records Retention
All information and records required to be maintained under this Agreement will
be retained by You and Your Producers for the time periods required by the
Regulations, but in no event shall they be retained for a period less than seven
(7) years, (or where required by state law for the duration of the Policy or
otherwise as required by state law), whether or not the Product was ever sold,
and will be made available to SAGE for audit and inspection under section 12.4
below. Micro-fiche and electronic forms of data maintenance are acceptable
records under this Agreement only to the extent they satisfy applicable
securities laws requirements with respect to such storage mediums.
12.4 Right of Inspection and Audit
All books, records and files established and maintained by You or Your Producers
for SAGE under this Agreement, including, without limitation, marketing
materials and agent licensing information, shall be the property of SAGE and
shall be subject to examination at all times during the term of this Agreement,
and for a period of twelve (12) months after the date of termination of this
Agreement. Unless we are required to provide immediate access to a regulatory
authority, SAGE will normally give You five (5) business days prior notice of
intention to examine the records during Your regular business hours, provided
that such right of access by SAGE shall not unreasonably interfere with Your
normal course of business.
12.5 Right to Receive Copies of Records
SAGE shall have the right, at its expense, to the prompt delivery of originals
of any such records retained by You within five (5) business days after any
reasonable request by SAGE. SAGE shall be responsible for payment of all
documented costs of copying and mailing or otherwise transporting any
documentation as required under this Agreement.
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13. REPRESENTATIONS AND WARRANTIES
13.1 Representations by SAGE
SAGE hereby undertakes and represents that as of the time the Products are
available for sale to the public:
a) the Products listed on Exhibit B as being available for sale have been
approved for sale by the respective Regulators as advised to You in
writing by SAGE from time to time, and where so required have been duly
registered with the SEC under the 1933 Act;
b) The DISTRIBUTOR is a Broker-Dealer that is Duly Licensed and Authorized
to promote, offer and sell the Products as the principal underwriter and
the distributor for the Products;
c) SAGE has full power and authority to enter into this Agreement and has
all the appropriate licenses to carry on its business to market the
Products;
d) the 1933 Act Registration Statements pertaining to the Products filed
with the SEC have been declared effective;
e) the 1933 Act Registration Statements pertaining to the Products comply
in all material respects with the provisions of the 1933 Act, the 1934
Act, the 1940 Act and the rules and regulations of the SEC;
f) the 1933 Act Registration Statements do not contain any untrue statement
of a material fact or fail to state a material fact required to be
stated and of which SAGE should reasonably be aware.
The above undertakings by SAGE shall not apply to statements made in or
omissions from Registration Statements, and any related material in which
statements or omissions were made in reliance upon written statements furnished
by You.
13.2 Representations by Your Firm
Each of the parties comprising Your Firm jointly and severally represent and
warrant that:
a) They have full power and authority to enter into this Agreement and
that they are Duly Licensed and Authorized to carry on Your business and
to market the Products;
b) Together, You are a Duly Licensed and Authorized Broker-Dealer and
Agency in the states where they intend to market the Products;
c) You are in compliance with the terms and conditions of Xxxxxx & Xxxxxx
(sub.nom. First of America Brokerage Service, Inc) (avail. Sept.28,1995)
issued by the Staff of the SEC with respect to the non-registration as a
broker-dealer of an insurance agency associated with a registered
broker-dealer. You will notify SAGE immediately in writing if You fail to
comply with any such terms and conditions and shall take such measures as
necessary and as promptly as practicable under the circumstances to cure
any such non-compliance;
d) All individuals recommended for licensing and appointment as a Producer
of Your Firm to sell the Products possess or can obtain all required
insurance licenses under state insurance regulations, and are also
Registered Representatives of Your Broker-Dealer who are appropriately
registered with the NASD;
e) All examinations, educational and training requirements have been or
will be met for the specific state(s) or territories in which any
Producer of Your Firm proposes to act;
f) If any items of identification are required by the regulatory
authorities in conjunction with an application for an insurance license
for a Producer, any such items forwarded to SAGE will be those for such
Producer and any evidence of a securities registration or state insurance
license forwarded to SAGE will be a true copy of the original.
14. INDEMNIFICATION
14.1 Indemnification by SAGE
SAGE LIFE agrees to indemnify and hold You harmless against any losses, claims,
damages, liabilities or expenses, including reasonable attorney fees, to which
You may be liable to the extent that the losses, claims, damages, liabilities or
expenses, including reasonable attorney fees, arise out of or are based upon:
a) Any untrue statement or alleged untrue statement of a material fact,
contained in the 1933 Act Registration Statement covering the Products or
in the Prospectuses for the Products or in any written information or
sales materials authorized and furnished by SAGE to You or to any of Your
Producers;
b) Any material breach by SAGE of any covenant under this Agreement;
c) A material inaccuracy or breach of any representation by SAGE under this
Agreement.
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14. INDEMNIFICATION (CONTINUED)
SAGE will not be liable to the extent that such loss, claim, damage, liability
or expense, including reasonable attorney fees, arises out of or is based upon
any untrue statement or alleged untrue statement made in reliance upon
information, including, without limitation, negative responses to inquiries
furnished to SAGE by or on behalf of You specifically for use in the preparation
of the 1933 Act Registration Statement covering the Products or in any related
Prospectuses.
14.2 Indemnification by You
Each of the parties comprising Your Firm, jointly and severally, agree to
indemnify and hold SAGE, its directors, officers and employees, harmless against
any losses, claims, damages, liabilities or expenses, including reasonable
attorney fees, to which SAGE may be liable to the extent that the losses,
claims, damages, liabilities or expenses, including reasonable attorney fees,
arise out of or are based upon:
a) Any untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact contained in the
Registration Statement covering the Products or related Prospectuses but
only to the extent that such untrue statement or alleged untrue statement
or omission or alleged omission is made in reliance upon information,
including, without omission, negative responses to inquiries, furnished
to SAGE by or on behalf of You or any of the parties comprising You
specifically for use in the preparation of the 1933 Act Registration
Statement covering the Products or in any related Prospectuses;
b) Any acts or omissions including but not limited to failure to remit
Purchase Payments or remit the correct Purchase Payments or to submit
Applications or to deliver Policies, by You or an employee or any of Your
Producers while acting, whether under actual or apparent authority, on
Your behalf or on SAGE's behalf in connection with this Agreement;
c) Any unauthorized use of advertising materials or any verbal or written
misrepresentations, or unauthorized actions concerning the right to make
discretionary purchases or changes to a Client's asset allocation
instructions, or any unlawful sales practices concerning the Products, by
You or any of Your Producers or employees;
d) Claims by Your Producers or employees or Your Selling Firms, for
commissions or other Compensation or remuneration of any type other than
payments which are contractually due by SAGE to such persons;
e) The inaccuracy or breach by You of any representation or provision, or
breach of any covenant made by You under this Agreement.
14.3 Notice of Demand for Indemnification
The Party seeking indemnification agrees to notify the indemnifying Party within
a reasonable time of any claim or demand. In the case of a lawsuit, the Party
seeking indemnification must notify the indemnifying Party within five (5)
calendar days (i) of receipt of written notification that a lawsuit has been
filed, or (ii) becoming aware of a pending lawsuit for which indemnification
will be sought.
14.4 Right to Settle Disputes
SAGE may negotiate, settle and/or pay any claim or demand against SAGE which
arises from:
a) Any wrongful act or transaction by You or Your Producers. For this
purpose wrongful act or transaction includes, but is not limited to,
fraud, misrepresentation, deceptive marketing or business practices,
negligence, error or omission; or,
b) The breach of any provision of this Agreement; or,
c) The violation or alleged violation of any insurance or securities laws.
Upon sufficient proof that the claim or demand arose from the occurrences listed
above, SAGE may request reimbursement for any amount paid plus any reasonable
expenses incurred in investigating, defending against and/or settling the claim
or demand, and You agree upon receiving written notice to reimburse SAGE for all
reasonable costs incurred including the costs of outside counsel.
15. ENTIRE AGREEMENT
This Agreement together with the Exhibits attached hereto, and including but not
by way of limitation the continuing terms of any Prior Agreements specified in
Exhibit H, all of which are hereby incorporated by reference and made an
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16. ENTIRE AGREEMENT(CONTINUED)
integral part of this Agreement, represents the entire agreement of the Parties.
Except for the continuing and overriding obligations and understandings arising
from the Prior Agreements and rules of construction or interpretations set forth
in Exhibit H, this Agreement supersedes and replaces any prior or other
understandings and agreements, including oral agreements and understandings
between the Parties.
16. CONDITIONS SURVIVING TERMINATION OF AGREEMENT
All of the conditions of any Prior Agreements referred to in Exhibit H, and the
following provisions of this Agreement, shall survive any Termination of this
Agreement.
Section 1. Definitions
Section 6. Compensation Vesting Rights
Section 9. SAGE'S Administrative Procedures
Section 10. Client Service Responsibilities
Section 12. Recordkeeping
Section 13. Representations and Warranties
Section 14. Indemnifications
Section 15. Entire Agreement
Section 17. General Provisions
17. GENERAL PROVISIONS
17.1 Effective Date
This Agreement shall be effective upon execution by all of the Parties from the
date shown on the signature page as the Effective Date, and will remain in
effect unless terminated as provided in Section 4 of this Agreement.
17.2 Assignment
This Agreement may not be assigned or transferred to any third party (whether or
not affiliated with a Party) by either SAGE or You without prior written consent
of all Parties to this Agreement.
17.3 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
the State of Connecticut, except for its conflicts of law provisions.
17.4 Severability
If any provision of this Agreement shall be held or rendered invalid by a court
decision, state, or federal statute, administrative rule or otherwise, the
remainder of this Agreement shall not be rendered invalid.
17.5 Rights, Remedies, etc. are Cumulative; No Waivers
The rights, remedies and obligations contained in this Agreement are cumulative
and are in addition to any and all rights, remedies and obligations, at law or
in equity, which the Parties hereto are entitled to under state and federal
laws. Failure of any Party to insist upon strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of any of the
conditions, but the same shall remain in full force and effect. No waiver of any
of the terms of this Agreement shall be deemed, or shall constitute, a waiver of
any of the other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver. Any waiver, including a waiver of this section,
must be in writing and signed by the parties hereto.
17.6 Counterparts
This Agreement may be executed in two or more counterparts, of which each copy
shall be deemed an original, and all such signed copies together shall
constitute one and the same instrument.
17.7 Co-operation
Each Party to this Agreement agrees to cooperate with the other and with all
governmental authorities, including, without limitation, the SEC, the NASD and
any state insurance or securities regulators, and will permit such
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17. GENERAL PROVISIONS (CONTINUED)
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated under this Agreement.
17.8 Confidential Information
The Parties covenant and agree that they will not at any time during or after
the termination of this Agreement, reveal, divulge or make known to any person
(other than their respective directors, officers, employees, agents,
professional advisors or affiliates of the Parties who need to know such
information for the performance of obligations hereunder), or use for their own
account or purposes or for the account or purposes of any other person, any
confidential or proprietary business plans, product designs, marketing
strategies, action plans, pricing, methods, processes, records, financial or
other data, trade secrets, customer lists or any other confidential or
proprietary information whatever, whether any of such information is in oral or
printed form or on any computer tapes, computer disks or other forms of
electronic or magnetic media (the "Confidential Information") used or owned by a
Party or any of its Affiliates and made known (whether or not with the knowledge
and permission of such Party or any of its Affiliates, and whether or not
developed, devised or otherwise created in whole or in part by the efforts of
the Parties) to the other Party at any time by reason of their association;
provided, however, that Confidential Information shall not include any
information: (i) that was previously known by a Party from a source other than
the other Party or any Affiliate without obligation of confidence; or (ii) that
was previously disclosed in a lawful manner to a Party without breach of this
Agreement or of any other applicable agreement, and without any requirement of
confidentiality; or (iii) that was or is rightfully received from a third party
without obligations of confidence or from publicly available sources without
obligations of confidence; (iv) that is in the public domain; or (v) that was or
is developed by means independent of information provided by a Party or its
Affiliates. The Parties further covenant and agree that they shall retain all
such knowledge and information that they acquire or develop respecting such
Confidential Information in trust for the sole benefit of the Parties, and their
respective successors and assigns; provided, further, that this Agreement shall
not restrict any disclosure required to be made by order of a court or
governmental agency of competent jurisdiction, except that no such disclosure
shall be made sooner (unless otherwise compelled) than five (5) business days
after a Party's receipt of written notice from the other Party of such order,
and such notice will include a copy of such order.
17.9 Interpretation
It is the intention of the Parties hereto that customs and usage of the business
of life insurance and annuities and variable insurance contracts shall be given
full effect in the interpretation of this Agreement other than to the extent the
unique aspects of the transaction render such customs and usage inapplicable.
The Parties hereto shall act in all things with the utmost good faith. Unless
otherwise agreed to by the Parties at the time of any dispute, any dispute
arising out of or relating to this Agreement shall be resolved in accordance
with the arbitration procedures described herein.
17.10 Arbitration Procedures
The Parties agree to attempt to settle any misunderstandings or disputes arising
out of this Agreement through consultation and negotiation in good faith and a
spirit of mutual cooperation. However, if those attempts fail, the Parties agree
that any misunderstandings or disputes arising from this Agreement will be
decided by arbitration which will be conducted, upon request of either Party,
before three arbitrators (unless both Parties agree on one arbitrator)
designated by the American Arbitration Association located in the city of SAGE's
principal place of business. The Parties further agree that the arbitrator(s)
will decide which Party must bear the expenses of the arbitration. This
Agreement to arbitrate shall not preclude either Party from obtaining
provisional remedies such as injunctive relief or the appointment of a receiver
from a court having jurisdiction, before, during or after the pendency of the
arbitration. The institution and maintenance of such provisional remedies shall
not constitute a waiver of the right of a Party to submit a dispute to
arbitration.
17.11 Amendment of Agreement
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SAGE and You reserve the right to amend this Agreement at any time, but no
amendment shall be effective until approved in writing by all the Parties.
Provided however that the aforementioned amendment procedure does not affect
SAGE's right to (i) amend any of the Exhibits except Exhibit H ("Prior
Agreements'), as SAGE may decide
17. GENERAL PROVISIONS (CONTINUED)
from time to time, or (ii) remove any Affiliate who is a Party to this Agreement
or an Affiliate Agreement upon the receipt by SAGE of a written request from You
for termination of that Affiliate's status under this Agreement, or (iii) cancel
the Selling Agreement of any of Your Selling Firms, or cancel the Appointment
Agreement of any Producer for cause.
17.12 Binding Effect
This Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective successors and assigns subject to the provisions of
this Agreement limiting assignment.
17.13 Headings
The headings in this Agreement are for convenience only and are not intended to
have any legal effect.
17.14 Defined Terms
The terms defined in this Agreement are to be interpreted in accordance with
this Agreement. Such defined terms are not intended to conform to specific
statutory definitions of any state.
17.15 Notices
All notices, requests, demands and other communications which must be provided
under this Agreement shall be in writing and shall be deemed to have been given
(i) on the date of service, if served personally on the Party to whom notice is
to be given, or (ii) on a date which is three (3) days after the date of mailing
if sent by United States registered or certified mail, postage prepaid, or (iii)
on the next day, if sent for "next day delivery" via a national courier service
with the capacity to track its shipments, or (iv) in the case of notices
provided pursuant to any provision of the Agreement other than Sections 2 and
14, to the email address or other electronic delivery sites with receipt
acknowledgement, in every such case addressed to the last known address of
record described below:
a) If to You. All notices shall be sent to You or the respective Affiliate,
c/o The President, at the primary business address reflected in our
records for You. It is Your responsibility to advise SAGE of any change
in the address of record and any other information pertaining to You or
any of Your Affiliates shown on the signature pages of this Agreement,
or any other Affiliates who have completed an Affiliate Agreement.
b) If to SAGE. All notices to SAGE shall be sent to each respective
company for the attention of the President, at the home office address
shown below. SAGE will advise You of any change in the following home
office addresses.
Sage Life Assurance of America, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Sage Distributors, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxx, XX 00000
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18. SIGNATURE PAGE(S) AND EXECUTION
By signing these pages, the Parties hereby approve this Agreement and approve
the attached Exhibits which form an integral part of this Agreement, to become
effective on________________________________(the Effective Date).
In witness whereof, the Parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
and representatives.
THUS DONE AND EXECUTED BY THE RESPECTIVE PARTIES.
BY SAGE LIFE ASSURANCE BY SAGE DISTRIBUTORS, INC.
---------------------- --------------------------
OF AMERICA, INC.
----------------
Signature Signature
-------------------------- --------------------------
Name Name
------------------------------- -------------------------------
Title Title
------------------------------ ------------------------------
BY THE SELLING FIRM
Corporate Name of the Selling Firm
Signature Date
-------------------------------------- ----------------------
Name and Title:
----------------------------------------------------------
Address of Record:
-------------------------------------------------------
City, State and Zip Code:
------------------------------------------------
BY YOUR BROKER-DEALER
NAME OF THE BROKER DEALER IF DIFFERENT THAN ABOVE
Signature Date
-------------------------------------- ----------------------
Name and Title:
----------------------------------------------------------
Address of Record:
-------------------------------------------------------
City, State and Zip Code:
------------------------------------------------
BY YOUR BROKER-DEALER
NAME OF SECOND BROKER DEALER IF APPLICABLE
Signature Date
-------------------------------------- ----------------------
Name and Title:
----------------------------------------------------------
Address of Record:
-------------------------------------------------------
City, State and Zip Code:
------------------------------------------------
BY YOUR AGENCY
NAME OF THE SELLING GENERAL AGENCY
Signature Date
-------------------------------------- ----------------------
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Name and Title:
----------------------------------------------------------
Address of Record:
-------------------------------------------------------
City, State and Zip Code:
------------------------------------------------
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