EXHIBIT 3(b)
ALLMERICA FINANCIAL
PRINCIPAL OFFICE: XXXXXXXXX, XXXXXXXXXXXXX 00000
FORM OF
SALES AGREEMENT
First Allmerica Financial Life Insurance Company and Allmerica Financial Life
Insurance and Annuity Company (herein collectively referred to as "the Assurance
Companies" and individually as "First Allmerica Financial Life Insurance
Company" and "Allmerica Financial Life Insurance and Annuity Company",
respectively) and Allmerica Investments, Inc. (herein referred to as "the
Underwriter") do hereby appoint________________________________________________
_________________________________ and _________________________________________
the NASD Registered Broker-Dealer (herein "Broker") their Broker to solicit
application for life insurance and annuity policies, this appointment to be
effective on ___________________________, 199__.
Broker accepts this appointment, subject to the terms and provisions set
forth in this Agreement.
AUTHORITY TO SOLICIT BUSINESS
SECTION 1. Through appointed sub-agents, Broker may solicit life
insurance and annuity policy applications for the Assurance
Companies on a non-exclusive basis.
RELATIONSHIP OF PARTIES
SECTION 2. Nothing in this Agreement will be construed to create the
relationship of employer and employee between either Assurance
Company or the Underwriter and any sub-agent or employee of
Broker. Broker and any sub-agent of Broker will be
free to exercise their independent judgment as to the
time, place and manner of solicitation and servicing of
business underwritten by the Assurance Companies.
However, neither Broker nor any employee or sub-agent
of Broker shall have authority to act on behalf of the
Assurance Companies or the Underwriter in a manner
which does not conform to applicable statutes,
ordinances, or governmental regulations or to
reasonable rules adopted from time to time by the
Assurance Companies or the Underwriter.
Broker understands and agrees that it is responsible for its
continued compliance and the continued compliance of Broker's
sub-agents with the NASD Rules of Fair Practice and Federal and
state securities laws.
SUB-AGENTS
SECTION 3. Broker may only solicit life insurance and annuity policy
applications on behalf of the Assurance Companies through sub-
agents properly licensed with the Assurance Companies.
LIMITATIONS ON AUTHORITY
SECTION 4. Neither Broker nor any sub-agent of Broker will have authority to
accept risks of any kind; to make, alter or discharge contracts
of insurance or annuities; to waive forfeitures or exclusions; to
fix any premium for hazardous or substandard risks; to alter or
amend any papers received from either Assurance Company; to
deliver any policy of insurance or any document, agreement or
endorsement changing the amount of insurance coverage if Broker
knows or has reason to believe that the insured is uninsurable;
to collect any premium after the expiration of the policy grace
period except in connection with a policy reinstatement; or to
accept payment of any premium unless the premium meets the
minimum premium requirement for the policy established by the
Assurance Company.
APPLIED AUTHORITY
SECTION 5. Neither Broker nor any sub-agent of Broker will have any power or
authority other than as expressly provided in this Agreement and
no other power or authority shall be implied from the grant or
denial of power specifically mentioned in this Agreement.
__________ COMPLIANCE NEGATIVE OBLIGATIONS
SECTION 6. Broker agrees that neither Broker nor any sub-agent of Broker
will intentionally violate any applicable state or Federal law,
ruling or regulation pertaining to the business of the Assurance
Companies or any rule or regulation of either Assurance Company
or the Underwriter. Neither Broker nor any sub-agent of Broker
will knowingly engage in any activity which is detrimental to the
best interests of either Assurance Company or the Underwriter or
any of their affiliates.
Broker shall have the sole responsibility for the training and
supervision of all persons appointed as sub-agents hereunder.
Broker shall obtain and maintain for itself, its officers,
directors, employees and sales personnel, all licenses,
registrations and appointments required by any law, regulation or
other requirement of the SEC, the NASD or of any jurisdiction
where variable life insurance or variable annuity policies are
sold. Broker shall comply and shall have the responsibility to
ensure that all persons associated with it
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comply with all laws; rules and regulations applicable to
variable life insurance or variable annuity products, including
those requirements applicable to delivery of prospectuses and
determination of client suitability. Broker is responsible for
the education, supervision and instruction of all its associated
persons, including sub-agents of Broker, in the proper method of
solicitation, sale and delivery of variable life insurance or
variable annuity policies. Broker and all persons associated
with it shall use only those sales, advertising and promotional
materials which have been approved in writing by the affected
Assurance Company and the Underwriter.
SUBMISSION OF APPLICATIONS; DELIVERY OF POLICIES; REJECTED BUSINESS
SECTION 7. Broker will submit directly to the Principal Office of the
Assurance Companies all Assurance Company life insurance and
annuity policy applications solicited by sub-agents of the
Broker. Broker will deliver, or cause to be delivered, within 10
days of the date of issue all policies issued on applications
submitted by sub-agents of Broker and will return to the
Assurance Companies any policy which is declined by the applicant
or which cannot be delivered within the time permitted by the
Assurance Company's rules.
ILLUSTRATIONS AND PROPOSALS
SECTION 8. Neither Broker nor any sub-agent of Broker will furnish any
prospective policyowner an illustration of the financial or other
aspects of a policy or a proposal for a policy of either
Assurance Company unless the same has been either furnished by
the Assurance Companies or prepared from computer software or
other material furnished or approved by the Assurance Companies.
Any illustration or proposal delivered by Broker or by any sub-
agent of Broker will conform to standards of completeness and
accuracy established by the Assurance Companies. If the proposal
or illustration was nor furnished by the Assurance Companies,
Broker will relate in its records for availability to the
Assurance Companies a copy thereof or the means to duplicate the
same. Any computer software or materials furnished by either
Assurance Company will be and remain its property.
ACCOUNTING FOR FUNDS COLLECTED
SECTION 9. In accordance with the rules of the Assurance Companies, Broker
will account for and remit immediately to the Principal Office of
the Assurance Companies all funds received or collected by Broker
or by a sub-agent of Broker for or on behalf of either Assurance
Company without deduction for any commissions, or other claim
Broker or the sub-agent may have against
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either Assurance Company and will make such reports and file such
substantiating documents and records as the Assurance Companies may
require.
INDEMNIFICATION
SECTION 10. If, due to the inaction or negligence of Broker or its sub-agents
or employees, a life insurance or annuity policy is not delivered
to the policy owner within 10 days of the date of issue of the
policy and if after delivery the owner returns the policy to the
Assurance Company and receives a full refund of all premiums
paid, the difference between the premium refunded and the cash
value of the policy on the date the policy is received by the
Assurance Company at its Principal Office shall be reimbursed to
the Assurance Company by the Broker in any case where the cash
value is less than the premium refunded. Any such reimbursement
shall be paid by the Broker to the affected Assurance Company
within 30 days of Broker's receipt of a written request for
payment.
Broker shall indemnify and hold the Assurance Companies and the
Underwriter and their officers, directors, and employees, harmless
from any liability arising from any act or omission of Broker or of
any officer, director, employee of Broker or of sub-agents or other
sales persons associated with Broker.
The Assurance Companies and the Underwriter shall, jointly or
severally, indemnify and hold the Broker and its sub-agents,
officers, directors and employees harmless from any liability
arising from any act or omission of either Assurance Company or
the Underwriter, or of any officer, director, employee or agent of
any such person.
The indemnifications provided by this Section 10 shall survive
termination of this Agreement and expressly include reimbursement of
reasonable attorneys' fees incurred by the indemnified party in
connection with the defense of any claim indemnified hereunder.
LIABILITY FOR REFUND OF COMMISSIONS AND FEES
SECTION 11. If a policyholder rescinds a policy or exercises a right to
surrender a policy for return of all premiums paid, Broker will
pay on demand the amount of any commissions received on the
premiums returned.
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_________ OF COMPENSATION
SECTION 12. Broker's compensation will consist of commissions payable on
premiums for life insurance and annuity policies placed with the
Assurance Companies. Annuity commissions shall be payable at the
rates set forth in Commission Schedule DG-1, attached, as in
effect from time to time. Life insurance commissions shall be
payable at the rate or rates set forth in a Commission Schedule
to be furnished to Broker at such time as Broker begins to
solicit life insurance applications on behalf of the Assurance
Companies.
All compensation due Broker under this Agreement will be paid by
Allmerica Financial as the common paymaster.
TIME OF PAYMENT OF COMMISSIONS
SECTION 13. A premium will not be considered paid until it has been received
by the Assurance Company at its Principal Office. On premiums
paid, commissions will be paid twice each month in accordance
with the rules of the Assurance Companies.
TERMINATION WITHOUT CAUSE
SECTION 14. Whether or not there is a breach of this Agreement, either party
may terminate this Agreement by giving ten (10) days' written
notice to the other party at any time during the first year
hereof, and by giving thirty (30) days' written notice after the
expiration of the first year hereof. If this Agreement
terminates without breach of its provisions by Broker, annuity
commissions provided for under Section 12 shall continue to be
paid the Broker in accordance with Schedule DG-1 as if this
Agreement had not terminated. Provided, that no annuity
commissions will be paid on premiums paid during the 11th or
subsequent policy year.
TERMINATION FOR CAUSE
SECTION 15. This Agreement may be terminated for cause and without notice if
Broker or any sub-agent of Broker:
(a) misappropriates any funds belonging to or received on behalf
of either Assurance Company or any of its affiliates; or
(b) withholds any funds or other property belonging to either
Assurance Company after the same should have been reported and
transmitted to said Assurance Company or after a demand has
been made for the same; or
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(c) commits any willful or dishonest act which injuries either
Assurance Company; or
(d) willfully violates any of the provisions of this Agreement.
No commissions will be paid following termination of this Agreement,
if it is terminated for cause, nor will commissions continue to be
paid after termination of this Agreement if thereafter Broker or any
sub-agent of Broker breaches any of its terms or conditions by the
commission of an act prohibited by its terms.
TOP SET-OFF
SECTION 16. The Assurance Companies will have a lieu on any commissions
payable under this Agreement, whether or not such payments are
now due or hereafter become due, and may apply any such monies to
be satisfaction of indebtedness to either Assurance Company to
the extent permitted by law.
__________ WAIVER OF __________________________
SECTION 17. Waiver of any breach of any provision of this Agreement will not
be construed as a waiver of the provision or of the right of the
Assurance Companies to enforce said provision thereafter.
SIGNABILITY
SECTION 18. This Agreement is not transferable. Without the consent of the
Assurance Companies, no rights or interest in or to commissions
will be subject to assignment, and any attempted absolute
assignment, sale or transfer of this Agreement or of any
commissions without the written consent of the Assurance
Companies will immediately make this Agreement void and be a
release to the Assurance Companies in full of any and all of
their obligations hereunder.
RESERVATION OF RIGHT TO CHANGE
SECTION 19. The Assurance Companies reserve the right at any time, and from
time to time, to change the terms and conditions or this
Agreement, including but not limited to, the rates of commissions
or to discontinue the payment of any commissions. The Assurance
Companies may act through Allmerica Financial and a notice of
change given in the name of Allmerica Financial will bind or
benefit (as the case may be) Allmerica Financial Life Insurance
and Annuity Company, even though not named, unless the notice
specifies otherwise.
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ELECTIVE DATE OF CHANGE
SECTION 20. Any change will become effective on the date specified in a
notice or, if later, 30 days after the notice is given to Broker.
However, the requirement to give advance notice shall not apply
if the change becomes necessary or expedient by reason of
legislation or the requirements of any governmental body and, in
the opinion of the Assurance Companies, it is not reasonably
possible to meet the 30 day requirement. Changes will not be
retroactive and will apply only to life insurance coverage
solicited or annuity premiums paid on or after the effective date
of the change. Notice of any change may be given by a Allmerica
Financial or Allmerica Financial Life Insurance and Annuity
Company bulletin or announcement and distribution of the bulletin
or announcement in the usual manner will constitute notice to
Broker.
NOTICE
SECTION 21. Whenever this Agreement requires a notice to be given, the
requirement will be considered to have been met, in the case of
notice to the Assurance Companies or to the Underwriter, if
delivered or mailed postage prepaid to the Vice President,
Individual Marketing, or to such other officer as may be
specified and, in the case of notice to Broker, if delivered or
mailed postage prepaid to Broker's principal place of business
(as specified above).
CAPTIONS
SECTION 22. Captions are used for informational purposes only and no caption
shall be construed to effect the substance of any provision of
this Agreement.
__________
SECTION 23. This Agreement contains the entire contract between the parties.
Upon execution it will replace all previous agreements between
Broker and the Assurance Companies, or either of them or the
Underwriter, relating to the solicitation or life insurance or
annuity policies. It is hereby understood and agreed that any
other agreement or representation, commitment, promise or
statement of any nature, whether oral or written, relating to or
purporting to relate to the relationship of the parties is hereby
rendered null and void.
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UNDERSTOOD THAT THIS IS AN "AT WILL" RELATIONSHIP WHICH MAY BE TERMINATED BY
EITHER PARTY WITHOUT CAUSE OR REASON AS PROVIDED FOR IN SECTION 14.
WITNESS WHEREOF, the parties have executed this Agreement in duplicate to
take effect on effective date.
First Allmerica Financial Life Insurance Company
and
Allmerica Financial Life Insurance and Annuity Company
/s/
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(Name of Broker)
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By: /s/
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Vice President
Allmerica Investments, Inc.
By: /s/
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Title:
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