SALES AGREEMENT
Agreement, made as of the ____ day of ____________, 199__, by and
between NYLIFE Distributors Inc. ("Distributor"), a Delaware corporation; New
York Life Insurance and Annuity Corporation ("NYLIAC"), a Delaware Corporation,
(collectively referred to herein as "NYL"); and _______________________, a
____________ corporation ("Dealer").
WITNESSETH
WHEREAS, Distributor is a broker-dealer registered with the Securities
and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended ("1934 Act") and a member of the National Association of Securities
Dealers, Inc. ("NASD"), and Dealer is also a broker-dealer registered with the
SEC under the 1934 Act, is a member of the NASD, and also possesses appropriate
insurance licenses;
WHEREAS, NYLIAC has appointed Distributor as principal underwriter for
the variable contracts issued by NYLIAC, which are described on Schedule A
hereto, as from time to time amended ("Variable Contracts") and it is intended
that Dealer shall be authorized to solicit applications for Variable Contracts
or to make applications for Variable Contracts available, subject to the terms
and conditions as set forth more fully herein;
WHEREAS, NYLIAC has authorized Distributor to enter into separate
written agreements with broker-dealers, which agree to solicit applications for
Variable Contracts or to make applications for Variable Contracts available,
and the parties desire that Dealer, through its registered representatives who
are not operating pursuant to a "Career Agent Contract" with New York Life
Insurance Company, as defined in Section B(5) of this Agreement, be authorized
to solicit applications for Variable Contracts or to make applications for
Variable Contracts available.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and promises herein contained, the parties agree as follows:
A. Agreements of NYL
(1) NYLIAC hereby appoints Dealer as an independent agent of NYLIAC to
solicit applications for Variable Contracts or to make applications
for Variable Contracts available during the term of this Agreement.
(2) During the term of this Agreement, Dealer is hereby authorized to
solicit applications for Variable Contracts or to make applications
for Variable Contracts available, provided there is an effective
registration statement under the Securities Act of 1933 ("1933 Act")
and Investment Company Act of 1940 ("Registration Statement") relating
to such Variable Contracts and, with respect to each state in which
applications are to be solicited or made available, it is further
provided that Dealer has been notified by NYL that the Variable
Contracts are qualified for sale under all applicable federal and
state securities laws and state insurance laws. NYL agrees that it
will use its best efforts to secure and maintain all necessary
qualifications of the Variable Contracts for sale under applicable
securities and insurance laws in all states and in any other
territories or jurisdictions in which the parties agree to sell the
Variable Contracts.
(3) NYL will be responsible for approving and filing all sales material
and promotional material respecting the Variable Contracts or any
underlying fund ("Fund") to be used by Dealer, with the NASD and with
the appropriate state insurance authorities. No sales material
respecting the Variable Contracts or any Fund will be used by Dealer,
without the prior written approval of NYL.
(4) NYL agrees to notify Dealer of the following:
(a) When the Registration Statement for the Variable Contracts or
the Registration Statement for any Fund has become effective
or when any post-effective amendment with respect to such
Variable Contract or Fund Registration Statement thereafter
becomes effective;
(b) Of the issuance by the SEC of any stop order with respect to
any Variable Contract or Fund Registration Statement or of
any amendments thereto or the initiation of any proceedings
for that purpose or for any other purpose relating to the
registration and/or offering of the Variable Contracts or
Fund shares;
(c) In which states or jurisdictions approval of the Variable
Contracts is required under the applicable insurance laws and
regulations, and when such approvals have been obtained; and
(d) In which states or jurisdictions Variable Contracts may not
be lawfully sold.
(5) NYL agrees to provide Dealer with as many copies of the Prospectus for
the Variable Contracts and the Fund (and any amendments or supplements
thereto) and application kits as may be reasonably requested by
Dealer. Upon termination of this Agreement, any prospectuses,
applications and other materials or supplies furnished by NYL to
Dealer or duly appointed agents of Dealer shall be promptly returned
to NYL.
B. Agreements of Dealer
(1) Dealer must at all times when performing its functions under this
Agreement, be registered as a broker-dealer under the 1934 Act and be
a member of the NASD.
(2) Dealer must at all times when performing its functions under this
Agreement, be registered as a broker-dealer with applicable state
authorities under the laws of any applicable states where necessary in
connection with its obligations under this agreement.
(3) Dealer must at all times when performing its functions under this
Agreement, be duly licensed under applicable insurance laws in the
states or other jurisdictions where required to solicit applications
for the purchase of the Variable Contracts or to make applications for
Variable Contracts available.
(4) Dealer shall notify NYL if Dealer is no longer duly registered as a
broker-dealer under the 1934 Act or a member of the NASD, is no longer
fully licensed by the proper authorities under the applicable
insurance laws or registered under applicable state securities laws in
the jurisdictions in which Dealer is engaged to solicit applications
for the purchase of Variable Contracts or to make applications for
Variable Contracts available, is the subject of any investigation or
disciplinary action by any governmental, regulatory, or judicial
authority that has resulted, or for which it appears reasonably likely
may result, in loss or suspension of any registration, membership, or
license referred to above or undergoes a change in management,
control, or ownership other than a change in its internal management
personnel.
(5) Dealer will select and recommend to NYL individuals who are its
"associated persons," as defined in Section 3(a)(18) of the 1934 Act
and employees, representatives, or agents of Dealer for appointment as
agents by NYLIAC. It is understood that NYLIAC reserves the right to
refuse to appoint any proposed agent, or once appointed, to thereafter
terminate the same. It is further agreed and understood that NYL shall
refuse to allow any agent who is operating pursuant to a Career Agent
Contract with New York Life Insurance Company to solicit applications
for Variable Contracts or to make applications for Variable Contracts
available through Dealer. For purposes of this Agreement, agents
operating pursuant to a "Career Agent Contract" with New York Life
Insurance Company shall include, but shall not be limited to, all
agents operating pursuant to the N- 6, P-7 or N-8 Contracts, or any
additional or successor career agent contracts that New York Life
Insurance Company shall make available.
(6) All initial premium payments made by owners of the Variable Contracts
will be collected by Dealer who in turn will promptly transmit the
payment to NYL. Additional payments and loan repayments will be sent
by contract owners to NYL. In the event such additional payments and
loan repayments are sent to Dealer rather than NYL, such payments
received by Dealer shall be remitted promptly in full together with
such application, forms and any other required documentation to NYL.
Checks or money orders drawn for payments by policy owners, or
contract owners, as the case may be, shall be drawn to the order of
NYLIAC. Dealer acknowledges
that NYL shall have the unconditional right to reject, in whole or in
part, any application for a Variable Contract. It is further agreed
and understood that NYL shall reject any application for a Variable
Contract that is submitted by Dealer for any individual operating
pursuant to a Career Agent Contract with New York Life Insurance
Company, as defined above in Section B(5).
(7) Dealer shall be responsible for carrying out its sales and
administrative obligations under this Agreement in continued
compliance with applicable regulations relating to the offer and sale
of the Variable Contracts, including all applicable federal and state
securities laws and NASD regulations and all applicable insurance laws
and regulations. Dealer is not authorized to give any information or
make any representations concerning NYL, the Funds, any separate
account funding the Variable Contracts ("Separate Account"), and the
Variable Contracts, other than those contained in the prospectus or
Registration Statement for the Variable Contracts or Funds or in such
sales literature, advertisements or reports that are approved, in
writing, by NYL.
(8) Dealer agrees to (a) train, supervise and be solely responsible for
the conduct of its employees, representatives, and agents in
connection with their solicitation or acceptance of applications for
the Variable Contracts, (b) be solely responsible for the supervision
as to such persons' strict compliance with applicable rules and
regulations of any governmental or other agencies that have
jurisdiction over variable contract activities, and (c) train,
supervise and be solely responsible for the conduct of its employees,
representatives, and agents as to their strict compliance with NYL's
rules and procedures, as such rules and procedures are committed in
writing and furnished to Dealer.
(9) Dealer agrees to comply with applicable federal and state securities
laws requirements, NASD or other self-regulatory organization
requirements and state insurance law requirements in connection with
the marketing program by its personnel. Dealer will also be
responsible for having all of its employees, representatives, or
agents, who must be registered pursuant to federal or state securities
laws and/or licensed pursuant to state insurance laws in order to sell
the Variable Contracts, be duly registered and/or licensed. Dealer
agrees to maintain appropriate books and records concerning the
activities of duly appointed agents and registered representatives as
are required by the SEC, NASD, state insurance or securities
authorities, or any other governmental or regulatory authorities that
have jurisdiction. Dealer further agrees to submit to all
administrative and regulatory bodies that have jurisdiction any
information, reports or other materials required pursuant to
applicable laws or regulations. Such books and records are to be made
available to NYL during business hours upon reasonable written request
by NYL for the purpose of inspection, auditing, making extracts
therefrom or making copies thereof.
(10) Dealer agrees that it shall be fully responsible for ensuring that no
person shall offer the Variable Contracts on its behalf or make
contracts for the Variable Contracts available until such person is
duly licensed and has been appointed by NYLIAC.
(11) Dealer understands that the public offering of the Variable Contracts
will commence as soon as practicable after the effective date of the
Registration Statement for the Variable Contracts and the Registration
Statement for any Fund. Beginning at that time and during the term of
this Agreement, Dealer agrees that it will use its best efforts to
solicit applications for the Variable Contracts or to make
applications for Variable Contracts available.
(12) Dealer shall not directly or by means of its employees offer, nor
attempt to offer, nor solicit applications for the Variable Contracts,
nor deliver Variable Contracts, nor make applications for Variable
Contracts available, in any state or jurisdiction in which the
Variable Contracts may not legally be sold or offered for sale. For
purposes of determining where the Variable Contracts may be offered
and applications solicited or made available, Dealer may rely on the
notification it receives from NYL pursuant to Section A(4) above
regarding the jurisdictions in which the Variable Contracts may be
sold or applications solicited.
(13) Dealer shall not have authority on behalf of NYL to: (a) make, alter
or discharge any Variable Contracts; and (b) receive any monies or
payments, except as set forth in Section B(6) of this Agreement.
Dealer shall not expend nor contract for the expenditure of the funds
of NYL nor shall Dealer possess or exercise any authority
on behalf of NYL other than that expressly conferred on Dealer by this
Agreement. Nothing herein contained shall constitute Dealer or any
employees, representatives, or agents thereof, as employees of NYL in
connection with the marketing program for the Variable Contracts.
(14) Dealer shall be obligated to pay all expenses related to its
solicitation of applications for the Variable Contracts or making
applications for Variable Contracts available, including, but not
limited to: (a) expenses associated with the training of Dealer's
agents, representatives, and employees, including any written training
material; and (b) any other expenses incurred by Dealer or its
employees, representatives, or agents for the purpose of carrying out
the obligations of Dealer hereunder.
(15) Dealer is authorized for the term of this Agreement to distribute the
prospectus for the Variable Contracts and the prospectus for any Fund
and, where required by law or upon request from an investor, the
statement of additional information for the Variable Contracts, if
any, or any Fund in connection with the solicitation of applications
for sales of the Variable Contracts or making applications for
Variable Contracts available.
(16) Dealer agrees that neither it nor any of its directors, partners,
officers, employees registered representatives, agents, or affiliated
persons as defined in the Investment Company Act of 1940 will give any
information or make any representations or statements, whether written
or oral, on behalf of the Separate Accounts or the Funds or concerning
the Variable Contracts, the Funds or Fund shares in connection with
the offer or sale of the Variable Contracts other than information or
representations contained in the prospectus, statement of additional
information, or Registration Statement for the Variable Contracts
and/or the Funds, as they may be supplemented or amended from time to
time, or in reports or proxy statements for the Separate Accounts or
the Funds, or in sales literature and promotional material or
information approved by NYL.
(17) Dealer shall train and supervise its employees, representatives, and
agents to ensure that purchase of a Variable Contract is not
recommended to an applicant in the absence of reasonable grounds to
believe the purchase of the Variable Contract is suitable for that
applicant. Dealer shall be solely responsible for determining the
suitability of recommendations to purchase the Variable Contracts that
are made by its registered representatives. While not limited to the
following, a determination of suitability shall be based on
information furnished to Dealer after reasonable inquiry of such
applicant concerning the applicant's investment objectives, financial
situation and needs. For each application for a Variable Contract
solicited or made available by Dealer, Dealer agrees to complete an
agent's report addressing the suitability of the Variable Contract for
the applicant. Dealer shall retain a copy of each such report, and
shall provide NYL with a copy of any such report upon reasonable
request from NYL.
C. REPRESENTATIONS AND WARRANTIES
(1) NYL and Dealer each represents and warrants to each other party that
it has full power and authority to enter into this Agreement.
(2) Dealer represents and warrants that it is (i) registered as a
broker-dealer under the 1934 Act and with applicable state authorities
under the laws of the states where necessary and is a member of the
NASD; and is (ii) fully licensed by the proper authorities under
applicable insurance and other laws to the extent necessary for it to
perform its duties under this Agreement and to receive compensation
for the sale of the Variable Contracts.
D. COMPENSATION
(1) NYLIAC, acting on behalf of Distributor, shall pay to Dealer, for each
Variable Contract issued through a Separate Account, compensation
based on the provisions set forth in Schedule B hereto, as such
Schedule B may be amended or modified from time to time. Duly
appointed agents of Dealer shall have no interest hereunder.
(2) Distributor shall have no obligation to pay Dealer hereunder, and
Dealer shall look solely to NYLIAC, acting on behalf of Distributor,
for payment of compensation pursuant to this Agreement.
E. INDEMNIFICATION
(1) INDEMNIFICATION BY NYL. Except as provided in Sections E(3) and E(4)
of this Agreement, NYL agrees to indemnify and hold harmless Dealer,
its directors, trustees, and officers, and each person, if any, who
controls the Dealer within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section
E(1)) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of NYL)
or litigation expenses (including legal and other expenses), to which
the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or litigation expenses are related to the
offer, sale or acquisition of the Variable Contracts or to the
acceptance of applications for the Variable Contracts or to the
solicitation of premiums, and, in any such case:
arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in
the Registration Statement or prospectus relating to the
Variable Contracts or any Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(2) INDEMNIFICATION BY DEALER. Except as provided in Section E(3) and E(4)
of this Agreement, Dealer agrees to indemnify and hold harmless NYL
and its directors, trustees, and officers, and each person, if any,
who controls NYL within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section
E(2)) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement) or litigation expenses
(including legal and other expenses), to which the Indemnified Parties
may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
litigation expenses are related to the offer, sale or acquisition of
the Variable Contracts, to the solicitation or acceptance of
applications for the Variable Contracts, or to the solicitation of
premiums, and in any such case:
arise out of or as a result of any statement or
representation (other than statements or representations
contained in the Registration Statement or prospectus or
other offering materials furnished or approved in writing by
NYL relating to the Variable Contracts or any Fund), any
unauthorized use of any sales materials relating to the
Variable Contracts, or wrongful conduct of the Dealer, any
use of unauthorized sales materials (including sales
materials that have not been approved, in writing, by NYL),
or the affiliates, employees, or agents of the Dealer with
respect to the sale or distribution of the Variable Contracts
or Fund shares or the acceptance of applications for the
Variable Contracts, including but not limited to any verbal
or written misrepresentations, unlawful sales practices, and
failure to deliver the prospectus relating to the Variable
Contracts or Funds.
(3) Indemnification Not Applicable.
No person required to provide indemnification under the terms of
Sections E(1) or E(2) of this Agreement shall be liable under any such
section with respect to any losses, claims, damages, liabilities or
litigation expenses to which an Indemnified Party under any such
section would otherwise be subject by reason of willful misfeasance,
bad faith, or negligence in the performance of such Indemnified
Party's duties, or by reason of such Indemnified Party's reckless
disregard of its obligations or duties under this Agreement.
(4) Notification.
Any person required to provide indemnification under the terms of
Sections E(1) or E(2) of this Agreement ("Indemnifying Party") shall
not be liable under the indemnification provisions of Section E(1) or
E(2) with respect to any claim made against an Indemnified Party under
any such section unless such Indemnified Party shall have notified the
Indemnifying Party in writing within 10 days after the summons or
other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after
such Party shall have received notice of such service on any
designated agent), but failure to notify the
Indemnifying Party of any such claim shall not relieve the
Indemnifying Party from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than
on account of the above- designated indemnification provisions. In
case any such action is brought against an Indemnified Party, the
Indemnifying Party shall be entitled to participate, at its own
expense, in the defense of such action, and counsel selected by any
Indemnifying Party must be satisfactory to the Indemnified Party.
F. TERM OF AGREEMENT
(1) This Agreement shall become effective upon execution by all parties as
of the date first written above. Any party to this agreement shall
have the right to terminate this agreement for any reason, or for no
reason at all, upon thirty days written notice to all other parties.
(2) If any party shall default in any material respect in the performance
of its respective obligations under this Agreement, the non-defaulting
party may, at its option, cancel and terminate this Agreement
immediately without notice.
(3) Upon termination of this Agreement, all authorizations, rights and
obligations hereunder shall cease except (1) the recordkeeping
provisions set forth in Section B(9); (2) the compensation provisions
set forth in D(1) and (2); (3) the indemnification provisions set
forth in Section E; (4) the complaints and investigations provisions
set forth in Section G; (5) the exchange of contract provisions set
forth in Section H; (6) the product name provisions set forth in
Section I; and (7) the confidentiality provisions set forth in Section
X.
X. COMPLAINTS AND INVESTIGATIONS
(1) Dealer and NYL jointly agree to cooperate fully in any insurance
regulatory investigation or proceeding or judicial proceeding arising
in connection with the Variable Contracts. Dealer and NYL further
agree to cooperate fully in any securities regulatory investigation or
proceeding or judicial proceeding arising in connection with the
Variable Contracts. Without limiting the foregoing:
(a) NYL will promptly notify Dealer of any customer complaint or
notice of any regulatory investigation or proceeding or
judicial proceeding received by NYL with respect to Dealer or
any of its agents, representatives or employees or which may
affect NYLIAC's issuance of any Variable Contract.
(b) Dealer will promptly notify NYL of any written customer
complaint or notice of any regulatory investigation or
proceeding or judicial proceeding received by Dealer with
respect to NYL or any of its agents, representatives or
employees in connection with any Variable Contract or any
activity in connection with any such Variable Contract.
H. EXCHANGE OF CONTRACTS
In the absence of NYL's consent, neither Dealer nor any of its
affiliates, agents, employees or registered representatives will at any time
before or after termination of this Agreement solicit or seek to cause the
exchange by any owner of a Variable Contract into another insurance policy,
insurance contract or investment product, unless such exchange is based upon a
determination by Dealer that the Variable Contract is unsuitable given the
Contract Owner's financial situation, needs and other securities holdings.
I. PRODUCT NAME
Dealer agrees that Distributor, New York Life Insurance Company ("New
York Life"), and NYLIAC, and their affiliates have the exclusive right to the
use of the names of the Variable Contracts to be offered, as set forth in
Schedule A hereto, as may be amended from time to time; the names "New York
Life and Annuity," "New York Life," "NYLIAC," and "NYLIFE;" and any words or
phrases including the names of the Variable Contracts described on Schedule A
hereto or the names "New York Life and Annuity," "New York Life," "NYLIAC,"
and/or "NYLIFE." Dealer further agrees not to use any of these names in any
promotional materials or sales literature without the prior
written consent of NYL.
J. CONFIDENTIALITY
The parties hereto agree that the terms of this Agreement, any
marketing or business plans regarding the Variable Contracts, and the methods
of operations of the parties hereto are confidential and shall not be disclosed
to any other person without the consent of the other parties hereto, except as
required under applicable law. Notwithstanding the foregoing, nothing in this
Agreement shall prohibit any party hereto from advising any other person of the
existence of this Agreement.
K. MODIFICATION OF AGREEMENT
This Agreement supersedes all prior agreements, either oral or
written, between the parties relating to the Variable Contracts. All amendments
to this Agreement shall be in writing. Notwithstanding the foregoing, NYL
reserves the right to amend this Agreement at any time, and Dealer agrees that
its submission of an application to purchase Variable Contracts after written
notice of any such amendment has been sent to Dealer shall constitute Dealer's
agreement to any such amendment.
L. ASSIGNABILITY
No assignment of this Agreement by any party shall be valid without
the prior written consent of the other parties. The change in control or
ownership of a party, other than a change in the internal management personnel
of such party, shall be deemed to be an assignment of this Agreement for
purposes of this Section. Each party to this Agreement agrees to notify the
other parties within 10 business days of such change in control or ownership.
M. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
N. 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.
O. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
P. NOTICE
Notice given pursuant to any of the provisions of this Agreement
unless otherwise specified, shall be sufficiently given when sent by registered
or certified mail to the other parties at the addresses of such parties as set
forth below (or to such other addresses as such parties may from time to time
specify in writing to the other parties):
To: NYLIFE Distributors Inc.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn..: Xxxxxxxxx X. Xxxxx, President
To: New York Life Insurance and Annuity Corp.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxx Xxxxx, Senior Vice President
To: [Dealer]
Attn.:
Q. FAILURE TO ACT NO WAIVER.
If any party fails to require performance by another party of any
provision of this Agreement, that party does not waive its rights to require
such performance at a later time. If any party waives the breach of any
provision of this Agreement by another party, the waiving party still has the
right to require performance of that provision and its conduct shall not be
construed to waive succeeding breaches of that provision or any breaches of any
other provision.
R. ARBITRATION
The parties hereto agree to submit all disputes arising out of, or
relating to, this Agreement to arbitration before the NASD in accordance with
the NASD Code of Arbitration Procedure, and agree that judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. No party to this Agreement shall be entitled to special or punitive
damages.
S. NO PARTY REQUIRED TO VIOLATE LAWS OR REGULATIONS.
Nothing contained in this Agreement shall require any party hereto to
do anything which, in the judgment of the affected party, would be in violation
of any federal or state securities or banking law, state insurance law or NASD
regulation.
T. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
NYLIFE DISTRIBUTORS INC.
By:
---------------------------
Title:
------------------------
NEW YORK LIFE INSURANCE and
ANNUITY CORPORATION
By:
---------------------------
Title:
------------------------
[DEALER]
By:
---------------------------
Title:
------------------------
SCHEDULE A
Variable Contracts
The following Variable Contracts shall be offered pursuant to this Sales
Agreement:
SCHEDULE B
Compensation
Dealer shall be entitled to receive compensation on Variable Contracts sold
pursuant to this Agreement as follows:
1. GROSS SELLING CONCESSIONS. Except as provided in Paragraph 2
below, for each Variable Contract that is issued as the
result of an application submitted by Dealer, NYLIAC, on
behalf of Distributor, shall pay Gross Selling Concessions in
accordance with its then current compensation schedule, which
is set forth on Exhibit 1 to this Schedule B and as may be
amended from time to time.
2. INTERNAL REPLACEMENTS. NYL shall not be obligated to pay any
Gross Selling Concession on any Variable Contract that NYL,
in its sole discretion, deems to be an "Internal
Replacement." As used herein "Internal Replacement" shall
include any premium payment made into any Variable Contract
within 90 days of the termination of another insurance or
annuity contract issued by New York Life Insurance Company or
NYLIAC.
3. "FREE LOOK" POLICIES. In the event that a Variable Contract
is returned to NYLIAC within the applicable "free look"
period, then Dealer agrees to promptly refund to NYLIAC, or
shall forfeit the right to receive, the full amount of the
applicable Gross Selling Concession for such Variable
Contract.
4. UNDUE DELAY IN DELIVERY. Notwithstanding the provisions of
Paragraph 3 of this Schedule B, in the event that Dealer or
any of its directors, partners, officers, employees,
registered representatives, agents or affiliated persons
shall fail to deliver a Variable Contract within thirty days
of its issuance, and, upon delivery, the owner of such
Variable Contract shall return it to NYLIAC within any
applicable "free look" period, then Dealer shall indemnify
NYLIAC as follows:
(a) for variable life insurance policies, the Dealer
shall indemnify NYLIAC for the difference between the
premiums paid by the Variable Contract owner and the
Cash Value, as defined in the then current prospectus
for such product, that are next calculated after
NYLIAC's receipt of the surrendered Variable
Contract.
(b) for variable annuity contracts, the Dealer shall
indemnify NYLIAC for the difference between the
premiums paid by the Variable Contract owner and the
Accumulation Value, as defined in the then current
prospectus for such product, that are next calculated
after NYLIAC's receipt of the surrendered Variable
Contract.
5. CHARGEBACKS. Dealer shall refund to NYLIAC all or, if
applicable, a pro rata portion of, the Gross Selling
Concession attributable to premiums received by NYLIAC under
Variable Contracts surrendered or from which partial
withdrawals are made as follows:
During the first contract year, the rate of chargeback shall
be:
(a) 100% of the attributable Gross Selling Concession for
Variable Contracts that are surrendered during the
first six months of the contract;
(b) 50% of the attributable Gross Selling Concession for
Variable Contracts that are surrendered during the
seventh through twelfth months of the contract; or,
(c) a pro rata portion of the attributable Gross Selling
Concession for Variable Contracts from which partial
withdrawals are made during the first twelve months
of the contract, in an
amount equal to the percentage obtained by dividing
the amount of the partial withdrawal by the premiums
paid, which percentage shall in no event exceed 100%
6. AMENDMENTS TO COMPENSATION SCHEDULE. NYL reserves the right
to amend this Compensation Schedule and any exhibits thereto
as set forth in Paragraph K of the Sales Agreement.
