EXHIBIT 1.(3)(b)
SELLING AGREEMENT
This is an Agreement, made this _____ day of ____________, ______, by
and between General American Life Insurance Company, ("General American"), a
Missouri Corporation, General American Distributors, Inc. ("GAD"), a
Missouri Corporation, a broker-dealer registered with the Securities and
Exchange Commission ("SEC") under the Securities and Exchange Act of 1934
(the "'34 Act") and a member of the National Association of Securities
Dealers, Inc. ("NASD") and ______________________________________ ("BD"), a
_________________________ Corporation, also a broker-dealer registered under
the `34 Act and a member of the NASD.
WITNESSETH:
WHEREAS, General American issues certain insurance and annuity
contracts listed in Schedule A (the "Contracts"), some of which are
registered ("Registered Contracts") under the Securities Act of 1933 (the
"'33 Act");
WHEREAS, General American has authorized GAD, as principal underwriter
of the Contracts, to enter into agreements, subject to the consent of
General American, with broker-dealers for the distribution of the Contracts;
WHEREAS, BD has been selected by General American and GAD to distribute
the Contracts and BD wishes to participate in the distribution of the
Contracts through BD's representatives ("Representatives") who are also duly
licensed insurance agents;
WHEREAS, GAD delegates to BD, to the extent legally permissible,
training and certain administrative responsibilities and duties in
connection with sales of the Contracts.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:
I. APPOINTMENT
General American and GAD hereby appoint BD to facilitate and supervise
solicitations of applications for the purchase of the Contracts.
II. REPRESENTATIONS
A. AUTHORITY TO ENTER INTO AGREEMENT. General American, GAD, and BD
each represents to the other that it and the undersigned officers
have the full power and authority to enter into this Agreement.
B. REGISTRATION OF GAD. GAD represents to BD that it is registered as
a broker-dealer under the '34 Act and under the Blue Sky Laws of
each jurisdiction in which such registration is required for the
sale of the Contracts and that GAD is a member of the NASD in good
standing.
C. REGISTRATION OF BD. BD represents to GAD that it is registered as
a broker-dealer under the '34 Act and under the Blue Sky Laws of
each jurisdiction in which such registration is required for the
sale of the Contracts and that BD is a member of the NASD in good
standing.
D. CONTRACTS IN COMPLIANCE WITH '33 ACT AND '40 ACT. General American
represents to BD that the Contracts, including related separate
accounts, shall comply with the registration and all other
applicable requirements of the '33 Act and the Investment Company
Act of 1940 (the "'40 Act"), and the rules and regulations
thereunder, including the terms of any order of the SEC with
respect thereto.
E. CONTRACTS FILED WITH INSURANCE DEPARTMENTS. General American
represents to BD that the Contracts it issues have been duly filed
and approved by the state insurance departments in such
jurisdictions where it is authorized to transact business.
F. PROSPECTUS DISCLOSURE. General American represents to BD that the
Contract prospectuses included in General American's registration
statement and in post-effective amendments thereto, and any
supplements thereto, as filed or to be filed with the SEC, as of
their respective effective dates, contain or will contain, all
statements and information which are required to be stated therein
by the '33 Act and in all respects conform or will conform, to the
requirements thereof.
III. DUTIES OF BD
A. LICENSING AND REGISTRATION. BD shall ensure that Representatives
conducting sales activities in connection with the Contracts are
duly appointed insurance agents with General American and properly
licensed and registered under applicable insurance and securities
laws. BD understands that General American reserves the right to
refuse to appoint any Representative or, once appointed, to
thereafter terminate the same. BD shall notify General American
and GAD if any Representative ceases to be a registered
representative of BD or is disciplined in any way so as to have a
material impact on Representative's ability to conduct sales
activities in connection with the Contracts.
B. TRAINING AND SUPERVISION. BD is responsible for the training and
supervision of the Representatives who are engaged directly or
indirectly in the offer or sale of the Contracts. The
Representatives shall be subject to the control of BD with respect
to their securities-regulated activities.
1. BD shall train and supervise the Representatives to ensure
compliance with applicable federal and state securities laws,
rules, regulations, statements of policy thereunder, and with
NASD rules;
2. BD shall train the Representatives in the sale of the
Contracts;
3. BD shall supervise and review the use of sales literature and
advertising and all other communications with the public by
the Representatives in connection with the Contracts. No
sales solicitation, including the delivery of supplemental
sales materials, shall occur with a prospective purchaser
unless such material has been approved in writing by General
American and accompanied or preceded by appropriate
then-current prospectus(es) for the Contract(s);
4. BD shall ensure that all applications taken by the
Representatives for Contracts are made on application forms
supplied by General American. BD shall review all sales for
suitability and all applications for completeness and
correctness as to form. BD will promptly, but in no case
later than the next business day following receipt by BD,
forward to General American all complete and correct
applications for suitable transactions, together with any
payments received with the applications, without deduction
for compensation claimed by BD. General American reserves the
right to reject any Contract application and return any
payment made in connection with an application which is
rejected. Checks shall be made payable to the order of
"General American Life Insurance Company." Contracts issued
on accepted applications will be forwarded to BD or its
Representatives for delivery to the Contract owner.
5. BD shall train and supervise the Representatives to ensure
that purchase of a Contract is not recommended to an
applicant in the absence of reasonable grounds to believe
that the purchase of the Contract is suitable for that
applicant. While not limited to the following, a
determination of suitability shall be based on information
furnished to the Representative after reasonable inquiry of
such applicant concerning the applicant's other security
holdings, financial situation and needs. BD shall ensure that
any offer of a Contract made by a Representative will be made
by means of a currently effective prospectus and only in
jurisdictions where General American is licensed to sell the
Contracts.
6. Upon written request by General American, BD shall furnish
appropriate documentation evidencing BD's diligent
supervision of the Representatives.
C. BOOKS AND RECORDS. BD shall have the responsibility for
maintaining the records of the Representatives licensed,
registered, and otherwise qualified to sell the Contracts. BD
shall maintain such other records as are required of it by
applicable laws and regulations. The books, accounts, and
records of BD relating to the sale of the Contracts shall be
maintained so as to clearly and accurately disclose the details of
the transactions. BD agrees to make the books and records relating
to the sale of the Contracts available to General American or GAD
upon their written request. All records maintained by BD in
connection with this Agreement shall be the property of General
American and GAD and shall be returned to General American or GAD
upon termination of this Agreement. BD may retain copies of any
such records, which BD, in its discretion, deems necessary to
keep.
D. INSURANCE MARKETPLACE STANDARDS ASSOCIATION (IMSA). BD
acknowledges that it is in full support of General American's
membership in IMSA.
IV. COMMISSIONS
A. COMMISSIONS PAYABLE. Commissions payable in connection with the
sale by the Representatives of the Contracts shall be paid to BD
according to the Commission Schedule(s) relating to this Agreement
as may be modified from time to time in writing and in effect at
the time the Contract payments are received by General American.
General American reserves the right to revise the Commission
Schedule at any time upon ten (10) days written notice to BD.
Compensation to the BD's Representatives for Contracts solicited
by the Representatives and issued by General American will be
governed by agreement between BD and its Representatives and its
payment will be the BD's responsibility.
B. PROHIBITION AGAINST REBATES. General American or GAD may terminate
this Agreement if BD or its Representatives rebates, offers to
rebate or withholds any part of Commissions on the Contracts.
C. COMMISSIONS UPON TERMINATION. Upon termination of this Agreement,
all compensation to BD hereunder shall cease. Notwithstanding the
foregoing, BD shall be entitled to receive compensation for all
new and additional premium payments which are in process at the
time of termination, and shall continue to be liable for any
charge-backs pursuant to the provisions of the Commission
Schedule, or for any amount advanced by or otherwise due General
American or GAD hereunder. General American reserves the right not
to pay any commissions on the sale of a Contract for which the
premium is paid by the loan or surrender value of any other life
insurance policy or annuity contract issued by General American.
D. CHARGE BACK OF COMMISSIONS. General American shall deduct from
compensation any amounts due General American or GAD. In the event
General American refunds premiums or returns contract values and
waives surrender charges on any
Contract for any reason, then no commission will be payable with
respect to said premiums and any commission previously paid for
said premiums must be refunded to GAD. GAD agrees to notify BD
within thirty (30) days after it receives notice from General
American of any premium refund or a commission charge-back.
V. GENERAL PROVISIONS
A. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties to it and their respective successors
and assigns provided that BD may not assign this Agreement or any
rights or obligations hereunder without the prior written consent
of General American.
B. CONFIDENTIALITY. The parties hereto shall keep confidential all
information obtained pursuant to this Agreement, including, but
not limited to, names of the purchasers of the Contracts, and
shall disclose such information only if authorized by the other
party in writing, or if such disclosure is expressly required by
applicable federal or state regulatory authorities.
C. TERMINATION. This Agreement shall continue indefinitely unless
terminated by either party. This Agreement may be terminated
without cause by either party upon thirty (30) days written notice
to the others. Notwithstanding the foregoing, this Agreement shall
be terminated immediately upon the occurrence of any of the
foregoing:
1. a breach of any material provisions of this Agreement;
2. BD or GAD shall cease to be a registered broker-dealer, or a
member in good standing of the NASD, or is otherwise
disciplined in such a manner as to make either party
incapable of performing of the provisions of this Agreement;
or
3. The dissolution, bankruptcy, or insolvency of BD;
The provisions of Sections IV, V.B. and V.D. shall survive the
termination of this Agreement.
Upon termination of this Agreement, BD shall use its best efforts
to have all property of General American and GAD in BD's possession
promptly returned to General American or GAD, as the case may be.
D. INDEMNIFICATION. BD shall indemnify General American, GAD and
their respective officers, directors, agents, employees, and
affiliates harmless from any and all losses claims, damages,
liabilities, or expenses, including reasonable attorneys fees,
arising out of or in connection with (i) a breach of BD's
obligations under this Agreement; (ii) any oral or written
misrepresentation by BD or their officers, directors, agents,
employees, or affiliates, including the Representatives, unless
such misrepresentation is contained in the registration statement
for the Contract, any prospectus included as a part thereof, as
from time to time may be amended and
supplemented, or any advertisement or sales literature approved in
writing by General American and GAD; (iii) claims by the
Representatives for payments of compensation or remuneration of
any type; or (iv) the acts or omissions of the Representatives in
connection with the offer or sale of the Contracts. General
American and GAD agree to indemnify and hold harmless BD, its
officers, directors, agents and employees, against any and all
losses, claims, damages, or liabilities to which it may become
subject under the '33 Act, the '34 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages, or liabilities are the direct
result any untrue statement of a material fact or omission to
state a material fact required to be stated or necessary to make
the statements made not misleading in the registration statement
for the Contracts or any prospectus included as a part thereof, as
from time to time amended and supplemented, or in any
advertisement or sales literature approved in writing by General
American and GAD.
E. NON-WAIVER. The failure of any party to insist upon strict
compliance with any of the provisions of this Agreement shall not
be construed as a waiver of any of the provisions of this
Agreement. No waiver of any of the provisions of this Agreement
shall constitute a waiver of any other provisions.
F. AMENDMENTS. The parties may amend this Agreement only in a writing
signed by the parties.
G. INDEPENDENT CONTRACTORS. BD and the Representatives are
independent contractors with respect to General American and GAD.
H. REGULATIONS AND NOTIFICATION OF PROCEEDINGS. The parties hereto
agree to observe and comply with the laws, rules and regulations
of all applicable state, federal, and self-regulatory authorities
with respect to the subject matter contained herein. BD agrees to
promptly notify GAD of any disciplinary proceedings against BD or
any of the Representatives soliciting sales of the Contracts or
any customer complaint, arbitration action, or civil litigation
arising out of BD's solicitation of the Contracts.
I. NOTICE. All notices or communications shall be sent to the
following address shown, or to such other address as the party may
request by giving written notice to the other parties:
General American Life Insurance Company
000 Xxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Attn: Law Department
General American Distributors, Inc.
000 Xxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Attn: Law Department
For BD:
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J. SEVERABILITY. If any provision of this Agreement shall be held or
made non-enforceable by a statute, rule, regulation, decision of a
tribunal or otherwise, such provision shall be automatically
reformed and construed so as to be valid, operative and
enforceable to the maximum extent permitted by law or equity while
most nearly preserving the original intent. The invalidity of any
part of this Agreement shall not render invalid the remainder of
this Agreement and, to that extent, the provision of this
Agreement shall be deemed to be severable.
K. ENTIRE AGREEMENT. This Agreement represents the entire Agreement
between the parties with respect to the matters referred to herein
and supersedes any and all previous Agreements.
L. ARBITRATION. Any dispute relating to this Agreement that cannot be
settled shall be taken to arbitration as set forth in the
paragraph below:
1. Arbitration Disclosure
* Arbitration is final and binding on the parties.
* The parties waive their right to seek remedies in court,
including the right to jury trial.
* Pre-arbitration discovery is generally more limited than and
different from court proceedings.
* The arbitrators' award is not required to include factual
findings or legal reasoning and any party's right to appeal
or to seek modification of rulings by the arbitrators is
strictly limited.
* The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities
industry.
2. Arbitration Agreement. Any controversy between us arising out
of our business or this agreement shall be submitted to
arbitration conducted before the National Association of
Securities Dealers, Inc., in accordance with their rules.
Arbitration must be commenced by service upon the other party
of a written demand for arbitration
or a written notice of intention to arbitrate, therein
electing the arbitration tribunal.
NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO
ARBITRATION, NOR SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION
AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE
CLASS ACTION: OR WHO IS A MEMBER OF A PUTATIVE CLASS AND WHO HAS
NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED
BY THE PUTATIVE CLASS ACTION UNTIL: (i) THE CLASS CERTIFICATION IS
DENIED; (ii) THE CLASS IS DECERTIFIED; OR (iii) THE CUSTOMER IS
EXCLUDED FROM THE CLASS BY THE COURT. SUCH FORBEARANCE TO ENFORCE
AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY
RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.
M. CAPTIONS. Paragraph headings are for convenience only and are not
of substantive effect.
N. GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the laws of the state of Missouri without
giving effect to conflict of law provisions.
GENERAL AMERICAN LIFE BROKER/DEALER:
INSURANCE COMPANY
BY: _____________________________ BY: ____________________________
ITS: ____________________________ ITS: ___________________________
GENERAL AMERICAN DISTRIBUTORS, INC.
BY: _____________________________
ITS: ____________________________
COMMISSION SCHEDULE
1. BD shall be paid a commission for products listed in Schedule A
accepted by General American under an issued Contract for which BD
solicited the business, in accordance with the schedule listed below.
2. In the event a Contract for which a commission has been paid lapses or
is surrendered by the Contract owner during the first policy year, or
is returned to General American or GAD for refund of premium within the
later of ten (10) days after the purchaser receives it or forty-five
(45) days after the application for the policy is completed, or a
premium for which commission has been paid is refunded by General
American, GAD will require reimbursement from BD, as follows:
a. 100% if the triggering event occurs within six months of the
policy issue date;
b. 50% if the triggering event occurs during the seventh through
twelfth month of the policy issue date.
If the amount to be deducted exceeds compensation due, BD shall
promptly pay back the amount of excess following a written demand by
General American or GAD.
