FORM OF
INVESTORS BROKERAGE SERVICES, INC.
SELLING GROUP AGREEMENT
THIS AGREEMENT ("Agreement") is made by and between Investors Brokerage
Services, Inc. ("IBS") and Broker-Dealer.
RECITALS:
A. IBS, pursuant to the provisions of Distribution Agreements
("Distribution Agreements") between it and Xxxxxx Investors Life Insurance
Company ("KILICO") and between it and Federal Xxxxxx Life Assurance Company
("FKLA"), acts as the principal underwriter of certain variable annuity
contracts and variable life insurance policies (the "variable products" or
"Contracts") issued by KILICO and FKLA. Such Contracts, and the investment
options available thereunder, are identified in Schedule 1 to this Agreement at
the time that this Agreement is executed, and such other Contracts that may be
added to Schedule 1 from time to time in accordance with Section 1.5 of this
Agreement. IBS desires that Broker-Dealer distribute such variable products in
those states or jurisdictions in which Broker-Dealer, IBS, KILICO, FKLA and the
Contracts are appropriately licensed, qualified or approved, and Broker-Dealer
desires to sell such Contracts, through its agents in such states or
jurisdictions, on the terms and conditions set forth hereinafter. KILICO and
FKLA have authorized IBS to enter into separate written agreements with
broker-dealers pursuant to which such broker-dealers would be authorized to
participate in the distribution of the Contracts and would agree to use their
best efforts to solicit applications for the Contracts to the general public.
B. KILICO and FKLA, pursuant to General Agent Agreements, have authorized
Broker-Dealer or an affiliate to act as a general agent ("General Agent") for
the solicitation of applications for the Contracts and to engage in the
distribution activities contemplated by this Agreement and such General Agent
Agreements.
C. The parties to this Agreement desire that Broker-Dealer be authorized
to solicit applications for the sale of the Contracts to the general public
subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
and covenants hereinafter set forth, the parties agree as follows:
Section 1: Representations and Warranties; Authorizations
1.1 Broker-Dealer agrees to use its best efforts on behalf of IBS while
performing the functions set forth herein. Broker-Dealer shall be free to
exercise its own judgment as to whom
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to solicit and the time, place, and manner of solicitation. Broker-Dealer shall
pay all expenses incurred by it hereunder and shall comply with all applicable
federal and state laws, ordinances and regulations relating thereto.
1.2 Broker-Dealer is authorized, except as hereinafter specifically
provided, to cause its representatives ("Registered Representatives") to sell
such Contracts in the states and jurisdictions in which Broker-Dealer and its
Registered Representatives are appropriately licensed, registered or otherwise
qualified and in which the Contracts are duly authorized. Broker-Dealer shall
not have the authority nor shall it grant such authority to any of its
Registered Representatives, on behalf of IBS, and KILICO and/or FKLA: to make,
alter or discharge any Contract or other contract entered into pursuant to a
Contract; to waive any Contract's forfeiture provisions; to extend the time of
paying any premiums; or to receive any monies or premiums from applicants for or
purchasers of the Contracts (except for the sole purpose of forwarding monies or
premiums to KILICO or FKLA). IBS, in its sole discretion, may reject any
application for a Contract submitted to it by the Broker-Dealer or any of its
Registered Representatives.
1.3 IBS, subject to the terms and conditions contained herein, hereby
authorizes Broker-Dealer as an independent contractor, on a non-exclusive basis,
to make sales of such Contracts for which IBS acts as distributor. Broker-Dealer
agrees to direct the sales activities of its Registered Representatives and to
enforce written supervisory procedures to assure strict compliance with
applicable rules and regulations under the Securities Exchange Act of 1934
("1934 Act"), the National Association of Securities Dealers, Inc. ("NASD")
rules, and other applicable federal and state statutes and regulations.
1.4 Nothing herein contained shall constitute Broker-Dealer or any of its
Registered Representatives as employees of IBS, KILICO or FKLA in connection
with the solicitation of applications for the Contracts.
1.5 Schedule 1 to this Agreement may be amended by IBS at its sole
discretion from time to time to include other Contracts (or investment options)
distributed by IBS pursuant to the Distribution Agreements or other distribution
agreements with KILICO and FKLA, or to delete Contracts (or investment options)
from the Schedule. The provisions of this Agreement shall be equally applicable
to each Contract listed on Schedule 1 unless the context otherwise requires.
Section 2: Representations and Warranties:
Registration, Licensing and Compliance
2.1 Broker-Dealer represents, warrants and covenants that:
a. It is and will remain at all times during the terms of this
Agreement a member in good standing of the NASD and a
broker-dealer duly registered with the Securities and
Exchange Commission ("SEC") under the 1934 Act and licensed
as a broker-dealer in each state or other jurisdiction in
which Broker-Dealer intends to perform its functions and
fulfill its obligations under this Agreement.
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b. It is in compliance, and during the term of this Agreement,
will remain in compliance, with all applicable federal and
state security laws and regulations and the requirements of
the NASD and any applicable securities exchanges of which it
is a member.
c. It is a corporation organized, existing and in good standing
under applicable state law and is qualified to do business
as a corporation in those states or jurisdictions where it
is or will be doing business.
d. Only Registered Representatives of Broker-Dealer who are
agents of KILICO and FKLA, and who are licensed, registered,
or otherwise qualified to offer and sell the variable
products, may do so under this Agreement and as permitted
under the applicable insurance laws of such state or
jurisdiction under which the Registered Representatives are
authorized to perform their activities.
e. It is in compliance with all applicable insurance laws and
regulations, including without limitation state insurance
laws and regulations imposing insurance licensing
requirements.
f. It shall carry out its sales and administrative obligations
under this Agreement in continued compliance with federal
and state laws and regulations, including those governing
securities and/or insurance-related activities or
transactions, as applicable.
g. It has blanket bond insurance coverage. Broker-Dealer has
the affirmative duty to maintain its blanket bond insurance
coverage. Broker-Dealer will notify IBS immediately in the
event a determination is made to cancel, terminate or
substantially modify its blanket bond insurance coverage.
2.2 Broker-Dealer will be responsible for the training, supervision and control
of its Registered Representatives engaged in the offer and sale of the Contracts
and will supervise strict compliance with applicable federal and state
securities laws and NASD rules. IBS shall have no responsibility in connection
with such program of supervision and compliance.
2.3 If General Agent is an Affiliate of Broker-Dealer as reflected in Recital
B. to this Agreement, then by engaging in the distribution activities
contemplated by this Agreement, Broker-Dealer represents and warrants either
that:
a. Broker-Dealer
(i) Has obtained a letter from the Staff of the SEC
advising Broker-Dealer that the Staff will not
recommend enforcement action if General Agent is not
registered as a broker-dealer with the SEC; or
(ii) Is relying upon a no-action letter issued by the Staff
of the SEC at the request of a broker-dealer that,
also, was a licensed insurance agent engaged in
distribution activities similar to those
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contemplated by this Agreement, and where the Staff
did not recommend enforcement action if the insurance
agent was not registered as a broker-dealer with the
SEC; and
(iii) Is complying and will continue to comply with the
conditions set forth in such letters at all times
while this Agreement is in effect; or
b. that at the time that this Agreement becomes effective and
during the term of this Agreement
(i) General Agent is wholly-owned by Broker-Dealer or an
affiliated person of Broker-Dealer or is wholly-owned
by one or more associated persons of Broker-Dealer;
(ii) General Agent and its personnel will be "associated
persons" of Broker-Dealer within the meaning of
Section 3(a)(18) of the 1934 Act;
(iii) General Agent will engage in the offer or sale of the
Contracts only through persons who are also Registered
Representatives of Broker-Dealer;
(iv) General Agent will not receive or handle customer
funds or securities;
(v) Broker-Dealer will be responsible for the training,
supervision and control of its Registered
Representatives engaged in the offer or sale of the
Contracts on behalf of General Agent, as required
under the 1934 Act, the NASD rules and other
applicable federal and state statutes and regulations,
and will also be responsible for the supervision and
control of any of its associated persons who are
owners, directors, or executive officers of General
Agent;
(vi) Broker-Dealer will, in the offer and sale of the
Contracts by it or General Agent, comply with all
applicable requirements of the 1934 Act and the NASD,
including the requirement to maintain and preserve
books and records under Section 17(a) of the 1934 Act
and the rules thereunder; and
(vii) Commissions and fees relating to the Contracts will be
reflected in the quarterly FOCUS reports and the fee
assessment reports filed by Broker-Dealer with the
NASD.
2.4 Broker-Dealer shall notify IBS and KILICO and FKLA immediately in writing
if Broker-Dealer fails to comply with any of the applicable provisions set forth
above.
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2.5 IBS represents and warrants that all Contracts are legally issued,
registered and filed as required by applicable federal securities and state
insurance laws.
Section 3: Sales Materials
3.1 Broker-Dealer shall submit to IBS, for written approval in advance of use,
all promotional sales, and advertising material and signs involving the use of
IBS's, KILICO's and FKLA's name and/or pertaining to the sale of any Contract.
3.2 IBS will file such materials or will cause such materials to be filed with
the SEC, the NASD, and with any state securities regulatory authorities, as
appropriate.
Section 4: Compensation
4.1 Except as otherwise stated herein, Broker-Dealer shall be entitled to
commissions with respect to sales of such Contracts it shall make in accordance
with the Schedule of Commissions under the General Agent Agreements with KILICO
and FKLA. Commissions are payable by KILICO and FKLA through IBS or as otherwise
permitted by law or regulations. Any obligation of IBS to pay such commissions
will occur only following receipt of such amounts by IBS from KILICO or FKLA.
Section 5: Term and Exclusivity of Agreement
5.1 No relationship of principal and agent or partnership or joint venture
between the parties hereto is intended to be established and neither party shall
hold itself out as the agent, partner or joint venturer of or with the other
party in any respect whatsoever. Except for this Agreement and the General Agent
Agreement, no other legal relationship is intended between the parties.
5.2 This Agreement may be terminated at any time by either party upon thirty
(30) days written notice to the other, and may be terminated immediately by IBS
for cause. For purposes of this Section, "cause" shall mean failure to return
money to clients where appropriate, failure to account for any money received
from or on behalf of IBS, any fraud, misrepresentation or dishonesty in any
relationship with IBS, its affiliates, or any past, present or proposed client,
violation of any federal or state law or regulation, or violation of any of the
terms of this Agreement.
5.3 Notice of termination shall be deemed to be given on the day mailed or
delivered by hand to an officer of either party. If mailed to IBS, such notice
shall be addressed to the principal office of IBS, and if mailed to the
Broker-Dealer, shall be addressed to the last known address as shown on the
records of IBS.
Section 6: Complaints and Investigations
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6.1 Broker-Dealer shall cooperate fully in any securities or insurance
regulatory investigation or proceeding or judicial proceeding with respect to
IBS, KILICO and FKLA, and/or Broker-Dealer and its Registered Representatives or
any Affiliate, to the extent that such investigation or proceeding is in
connection with the Contracts marketed under this Agreement.
Section 7: Assignment
7.1 Broker-Dealer may not assign this Agreement without the prior written
approval of IBS.
7.2 This Agreement is exclusively for and shall inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns and shall not be deemed to create any rights for the benefit of third
parities.
Section 8: Confidentiality
8.1 Each party will keep confidential information it may acquire as a result of
this Agreement regarding IBS, its affiliates' and subsidiaries' affairs,
including any customer list or other propriety information that it may acquire
in the performance of this Agreement, and shall not use such customer list or
information without the prior written consent of the other party which
requirement shall survive the termination of this Agreement.
Section 9: Modification of Agreement
9.1 This Agreement supersedes all prior agreements, either oral or written,
between the parties relating to the Contracts and, except for any amendment of
Schedule 1 pursuant to the terms of Section 1.5 hereof or of the Schedule of
Commissions pursuant to the terms of Section 4 hereof, may not be modified in
any way unless by written agreement signed by all of the parties.
Section 10: Indemnification
10.1 Broker-Dealer shall be responsible and liable for any damages arising out
of the acts or omissions of Broker-Dealer, its Registered Representatives,
and/or its employees and does hereby agree to indemnify and hold IBS harmless
against any loss or expense arising out of any of its Registered
Representatives, any Affiliate and/or employees failure to carry out fully and
without negligence the duties and responsibilities assigned to it herein.
10.2 If any action or proceeding shall be brought against Broker-Dealer relating
to a Contract sold pursuant to this Agreement, Broker-Dealer shall give prompt
written notice to IBS.
10.3 In the event of any dispute with a Contract owner, IBS shall have the right
to take such action as IBS may in its sole discretion deem necessary to promptly
effect a mitigation of damages or limitation of losses without obtaining the
prior consent of Broker-Dealer and without waiving or electing to relinquish any
rights or remedies IBS may have against Broker-Dealer.
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10.4 IBS shall have the right to settle with any Contract owner engaged in a
dispute with IBS or Broker-Dealer without the prior consent of Broker-Dealer and
without waiving or electing to relinquish any rights or remedies IBS may have
against Broker-Dealer.
10.5 The indemnification provisions of this Agreement shall remain operative and
in full force and effect, regardless of the termination of this Agreement and
shall survive any such termination.
10.6 Without limiting the foregoing indemnities, IBS and Broker-Dealer each
agree to indemnify and hold harmless the other against any breach of
representation, warranty or covenant herein by the indemnifying party.
Section 11: Right, Remedies, etc. are Cumulative
11.1 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 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.
Section 12: Notices
12.1 All notices hereunder are to be made in writing and shall be either hand
delivered or transmitted by registered or certified United States mail with
return receipt requested to the principal office of the party and shall be
effective upon delivery, except as otherwise provided in Section 5.2 of this
Agreement.
Section 13: Interpretation, Jurisdiction, etc.
13.1 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 the subject matter hereof. No prior writings by or between the
parties hereto with respect to the subject matter hereof shall be used by either
party in connection with the interpretation of any provisions of this Agreement.
13.2 This Agreement is made in the State of Illinois, and all questions
concerning its validity, construction or otherwise shall be determined under the
laws of Illinois without giving effect to principles of conflict of laws.
Section 14: Headings
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14.1 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.
Section 15: Counterparts
15.1 This Agreement may be executed in two or more counterparts, each of which
taken together shall constitute one and the same instrument.
Section 16: Severability
16.1 This is a severable Agreement. In the event that any provisions 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
provisions shall be enforced to the extent permitted under the law, and, in any
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year indicated below.
INVESTORS BROKERAGE _____________________________________
SERVICES, INC. ("Broker-Dealer")
BY___________________________________ BY___________________________________
Print Name___________________________ Print Name___________________________
Title________________________________ Title________________________________
Date_________________________________ Date_________________________________
April 9, 1996
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Schedule 1
to
INVESTORS BROKERAGE SERVICES, INC.
SELLING GROUP AGREEMENT
Effective May 1, 1996
XXXXXX INVESTORS LIFE INSURANCE COMPANY
CONTRACTS PRODUCT TYPE
Xxxxxx ADVANTAGE III Flexible Premium, Fixed and
Variable Deferred Annuity
Xxxxxx PASSPORT Variable and Market Value -
Adjusted Deferred Annuity
Xxxxxx SELECT Variable Life
SCHED 1 8/96
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Schedule 1
to
INVESTORS BROKERAGE SERVICES, INC.
SELLING GROUP AGREEMENT
Effective May 1, 1996
XXXXXX INVESTORS LIFE INSURANCE COMPANY
CONTRACTS PRODUCT TYPE
Xxxxxx ADVANTAGE III Flexible Premium, Fixed and
Variable Annuity
SCHED 1 8/96 B
10
Schedule 1
to
INVESTORS BROKERAGE SERVICES, INC.
SELLING GROUP AGREEMENT
EFFECTIVE SEPTEMBER 15, 1995
CONTRACTS INVESTMENT OPTIONS
Xxxxxx PASSPORT Xxxxxx Investors Fund
All Portfolios
Xxxxxx SELECT Xxxxxx Investors Fund
Money Market Portfolio
Total Return Portfolio
High Yield Portfolio
Equity Portfolio
Government Securities Portfolio
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Schedule 1
to:
INVESTORS BROKERAGE SERVICES, INC.
SELLING GROUP AGREEMENT
Effective March 1, 1997
CONTRACT
Xxxxxx Quick VUL, Policy Form S-4050-A
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