FORM OF
DISTRIBUTION AGREEMENT
BETWEEN
FEDERAL XXXXXX LIFE ASSURANCE COMPANY
AND
INVESTORS BROKERAGE SERVICES, INC.
THIS AGREEMENT is made on this day of June, 2003 between FEDERAL XXXXXX
----
LIFE ASSURANCE COMPANY ("FKLA") on its own behalf and on behalf of the FKLA
Variable Annuity Separate Account (the "Account") and INVESTORS BROKERAGE
SERVICES, INC. ("IBS"). In consideration of the mutual covenants contained in
this Agreement, the parties agree as follows:
1. FKLA appoints IBS to promote the sale of variable annuity contracts
("Contracts") issued by FKLA and the Account. IBS will promote such Contracts in
those states in which FKLA has variable contract authority and in which the
Contracts are eligible for sale under applicable state law. FKLA agrees to
inform IBS of the status of such matters in each of these states from time to
time.
2. The solicitation of Contracts shall be made by persons who are registered
representatives of National Association of Securities Dealers, Inc. ("NASD")
member broker-dealers who have a Selling Group Agreement with IBS, which
agreement shall encompass the promotion of the sale of the Contracts; provided
that, no such registered representative shall be allowed to participate in the
solicitation of the Contracts unless such person has been appointed to solicit
variable Contracts by FKLA in any state in which such solicitation may occur.
3. All books and records maintained by FKLA in connection with the sale of
Contracts will be maintained and preserved by FKLA in conformity with the
requirements of Rule 17a-3 and 17a-4 under the Securities Exchange Act of 1934,
to the extent that such requirements are applicable to the Contracts.
4. FKLA assumes full responsibility for the activities of all persons engaged
directly or indirectly in the promotion of the solicitation of the Contracts,
including all sales representatives and associated persons as defined in the
Securities Exchange Act of 1934. IBS shall, in the course of contracting with
NASD member broker-dealers with which it has agreements, require that such
broker-dealers be responsible for the acts of their registered representatives
and associated persons.
5. Compensation to broker-dealers for the sale of Contracts shall be paid by
FKLA through IBS. Any obligation by IBS to pay such compensation will occur only
following receipt of such amounts by IBS from FKLA.
6. IBS, when requested by FKLA, shall suspend its efforts to effectuate sales of
the Contracts at any time FKLA shall request.
7. FKLA shall bear the expenses of printing and distributing registration
statements and prospectuses relating to the public sale of Contracts pursuant to
this Agreement. FKLA agrees to bear the expenses of qualification of the
Contracts for sale and of continuing the qualification in the various states.
FKLA shall bear the expenses of any sales literature used by IBS or furnished by
IBS to dealers in connection with offering the Contracts and the expenses of
advertising in connection with such offerings, except for customized pieces the
cost of which shall be mutually agreed to by FKLA and IBS.
1
8. IBS agrees that it will not use any sales material as defined under the rules
of the NASD or by the statutes or regulations of any state in which the
Contracts may be solicited, unless such material has received prior written
approval by FKLA.
9. IBS, FKLA and the Account shall each comply with all applicable provisions of
the Investment Company Act of 1940, Securities Act of 1933 and of all Federal
and state securities and insurance laws, rules and regulations governing the
issuance and sale of the Contracts.
10. FKLA agrees to indemnify IBS against any and all claims, liabilities and
expenses including but not limited to reasonable attorneys fees which IBS may
incur under the Investment Company Act of 1940, Securities Act of 1933 and all
Federal and state securities and insurance laws, rules and regulations governing
the issuance and sale of the Contracts, common law or otherwise, arising out of
or based upon any alleged untrue statements of material fact contained in any
registration statement or prospectus of the Account, or any alleged omission to
state a material fact therein, the omission of which makes any statement
contained therein misleading or of any alleged act or omission in connection
with the offering, sale or distribution of the Contracts by any registered
representatives or associated persons of a NASD member broker-dealer which has
an agreement with IBS. IBS agrees to indemnify FKLA and the Account against any
and all claims, demands, liabilities and expenses, including but not limited to
reasonable attorneys fees, which FKLA or the Account may incur, arising out of
or based upon any act of IBS or of any registered representative of an NASD
member investment dealer which has an agreement with IBS and is acting in
accordance with FKLA's instructions. FKLA acknowledges that IBS may similarly
attempt to hold such an NASD member broker-dealer responsible for the acts of
registered representatives and associated persons; and to the extent FKLA is
obligated to indemnify IBS under this Agreement, IBS agrees to assign its rights
against such broker-dealers to FKLA.
11. FKLA agrees to supply IBS with such information as may be reasonably
required by IBS including the "net accumulation unit value" computed as of the
time prescribed by and in compliance with all pertinent requirements of the NASD
and the Securities and Exchange Commission.
12. This Agreement shall be effective , 2003. This Agreement is subject to
------
termination by either party upon thirty (30) days' prior written notice to the
other party. This Agreement may not be assigned by either party without the
written consent of the other party. This Agreement shall be interpreted
according to the laws of the State of Illinois.
IN WITNESS WHEREOF, this Agreement has been signed by the parties on the date
first above written.
FEDERAL XXXXXX LIFE ASSURANCE COMPANY
BY: ________________________________________
Title: President and Chief Executive Officer
ATTEST:
_________________________________
Title: Corporate Secretary
2
INVESTORS BROKERAGE SERVICES, INC.
BY: ________________________________________
Title: President
ATTEST:
_________________________________
Title: Secretary
3
