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Exhibit B(3)
SELLING AGREEMENT
This SELLING AGREEMENT ("Agreement"), dated _________________, is by and among
the Northwestern Mutual Life Insurance Company ("NML"), Northwestern Mutual
Investment Services, LLC ("NMIS"), Xxxxxx X. Xxxxx & Co. Incorporated ("Baird")
and Xxxxx Insurance Services Inc., together with the duly licensed insurance
affiliates indicated on the attached Annex I, (the "Affiliates") (collectively,
Baird and the Affiliates are the "Broker/Dealer").
Where permitted by state law, Broker/Dealer is acting as general agent hereunder
and shall be responsible for the duties of broker/dealer and general agent
hereunder. If state law does not permit Broker/Dealer to hold a corporate
insurance license, the appropriate duly licensed insurance affiliate identified
on Annex I shall act as general agent hereunder.
1. Appointment. This Agreement is for the purpose of arranging for the
distribution of a certain no load variable annuity named Xxxxx Street
Variable Annuity (the "Contracts"), issued by NML and for which NMIS is
the distributor, through sales people who are licensed life insurance
agents for insurance purposes, and are associated with and registered
representatives of Broker/Dealer (each, a "Subagent"). In consideration
of the mutual promises and covenants contained in this Agreement, NML
and NMIS each appoint Broker/Dealer and, as provided in Section 3, its
Subagents, to solicit and procure applications for the Contracts, and
Broker/Dealer designates those NML agents approved by NML for
participation in the sale of the contracts through a fee-in-lieu
program administered by Broker/Dealer. These appointments and
designations are not deemed to be exclusive in any manner and only
extend to those jurisdictions where the Contracts have been approved
for sale and in which NML and Broker/Dealer are both licensed as
required by prevailing regulatory requirements.
2. Representations and Warranties.
A. Each party hereto represents and warrants to each other party,
as follows:
(i) It is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or
other corresponding applicable law and has all requisite
power, corporate or otherwise to carry on its business as now
being conducted and to perform its obligations as contemplated
by this Agreement.
(ii) It has all licenses, approvals, permits and
authorizations of, and registrations with, all authorities and
agencies, including non-governmental self-regulatory agencies,
required under all federal, state, and local laws and
regulations to enable it to perform its obligations as
contemplated by this Agreement.
(iii) The execution, delivery and performance of this
Agreement have been duly and validly authorized by all
necessary corporate action, if applicable, and this Agreement
constitutes the legal, valid and binding agreement of such
party, enforceable against it in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally
and general principles of equity.
B. Broker/Dealer additionally represents and warrants as follows:
(i) Xxxxx, Xxxxx Insurance Services and each additional
Affiliate is registered as a broker and dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
and
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is a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD").
(ii) Xxxxx, Xxxxx Insurance Services and each additional
Affiliate will comply with all applicable laws, rules and
regulations of, as well as any and all directives and
guidelines issued by any agency or other regulatory body with
authority over Broker/Dealer or over the premises on which
Broker/Dealer and its Subagents are soliciting the sale of
Contracts.
(iii) Baird Insurance Services is duly licensed as a corporate
insurance agent, or it has identified on Annex I hereto its
Affiliates which hold such licenses and are permitted to do so
under applicable laws.
3. Subagents. Broker/Dealer is authorized to recommend Subagents for
appointment by NML to solicit sales of the Contracts. Broker/Dealer is
responsible for investigating the character, work experience and
background of any proposed Subagent prior to recommending appointment
by NML. No Subagent shall act on behalf of NML until properly appointed
by NML. Broker/Dealer is responsible for ensuring that its Subagents,
unless otherwise agreed to with NML in writing, do not offer to sell
any other variable annuity contracts issued by NML, as such Subagents,
unless a selling agreement with respect thereto has been executed by
the parties. Broker/Dealer is responsible for supervising the
activities of its Subagents and for ensuring that Subagents are
properly licensed and in compliance with all applicable federal, state
and local laws and regulations and all rules and procedures of NML.
Broker/Dealer shall notify NML promptly, in writing, of any giving or
receiving of notice of termination of any Subagent. NML reserves the
right to refuse to appoint any proposed Subagent and to terminate any
relationship with any Subagent, with or without cause, at any time. By
submitting a Subagent for appointment, Broker/Dealer warrants that: (1)
such Subagent is recommended for appointment; (2) such Subagent is
fully licensed under applicable laws to transact business with NML and
is a duly registered representative of Broker/Dealer; and (3) all
background investigations required by state and federal laws have been
made with respect to such Subagent. NML will provide a list of its
agents who are eligible to participate in the sale of the Contracts
through Broker/Dealer's fee-in-lieu program, and such agents will be
designated by Broker/Dealer for participation in that program.
4. Sales Material.
A. Broker/Dealer shall not use any written, audio or visual sales
material (including prepared scripts for oral presentations)
in connection with the sales of the Contracts or solicitations
thereof, unless such material has been provided by, or
approved in writing in advance of such use by, NML and NMIS.
B. In accordance with the requirements of federal and certain
state laws, Broker/Dealer shall, to the extent required by
such laws, maintain complete records indicating the manner and
extent of distribution of any such sales material. This
material shall be made available to appropriate federal and
state regulatory agencies as required by law or regulation and
to NMIS and NML upon written request.
5. Prospectuses. For any Contract which is a registered security,
Broker/Dealer warrants that solicitation will be made by use of
currently effective prospectuses for the Contracts and the underlying
funds; and if required by state law, the Statement of Additional
Information for the Contracts; that the prospectuses will be delivered
concurrently with each sales presentation and that no statements shall
be made to a client superseding or controverting or otherwise
inconsistent with any statement made in the prospectus. NML and NMIS
shall furnish Broker/Dealer, at no cost to such party, reasonable
quantities of currently effective prospectuses.
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6. Conduct of Business.
A. Broker/Dealer will fully comply with the requirements of all
applicable laws, rules and regulations of regulatory
authorities (including self-regulatory organizations) having
jurisdiction over the activities of Broker/Dealer or over the
activities contemplated by this Agreement to be conducted by
Broker/Dealer.
B. Neither Broker/Dealer nor any Subagent shall solicit an
application from, or recommend the purchase of a Contract to,
an applicant without having reasonable grounds to believe, in
accordance with, among other things, applicable regulations of
any state insurance commission, the Securities and Exchange
Commission ("SEC") and the NASD, that such purchase is
suitable for the applicant. While not limited to the
following, a determination of suitability shall be based on
information supplied after a reasonable inquiry concerning the
applicant's insurance and investment objectives, and financial
situation and needs and other security holdings.
C Broker/Dealer has or will have established, prior to its
commencement of any solicitation of sales of Contracts
pursuant to the terms of this Agreement, such rules,
procedures, supervisory and inspection techniques as necessary
to diligently supervise the activities of its Subagents
pursuant to this Agreement and to ensure compliance with the
terms of this Agreement necessary to establish diligent
supervision. Broker/Dealer shall be responsible for securities
training, supervision and control of its Subagents in
connection with their solicitation activities with respect to
the Contracts and shall supervise compliance with applicable
federal and state securities laws and NASD requirements in
connection with such solicitation activities. Broker/Dealer
will observe, and will comply with, all requirements of any
bank on whose premises Broker/Dealer engages in sales
activities pursuant to this Agreement. Upon request by NML or
NMIS, Broker/Dealer will furnish appropriate records as are
necessary to establish diligent supervision.
D. Broker/Dealer will fully comply with the requirements of
applicable state insurance laws and regulations and will
maintain all books and records and file all reports required
thereunder to be maintained or filed by a licensed insurance
agent. Broker/Dealer shall comply with the terms and
conditions of any letter issued by the Staff of the SEC with
respect to the non-registration as a broker-dealer under the
1934 Act of a corporation licensed as an insurance agent and
associated with a registered broker-dealer. Broker/Dealer
shall notify NMIS immediately in writing if Broker/Dealer
fails to comply with any such terms and conditions and shall
take such measures as may be necessary to comply with any such
terms and conditions.
E. Broker/Dealer shall promptly notify NML and NMIS of any
written customer complaint or notice of any regulatory
investigation or proceeding received by Broker/Dealer or any
Subagent relating to a Contract or any activities undertaken
in connection with this Agreement. NML, NMIS and Broker/Dealer
shall each cooperate fully in any investigation or proceeding
including but not limited to any securities or insurance
regulatory investigation or proceeding or judicial proceeding
arising in connection with the Contracts.
F. Broker/Dealer shall pay all expenses incurred by it in the
performance of this Agreement unless otherwise specifically
provided for in this Agreement or in a writing signed by NML
and/or NMIS and Broker/Dealer.
G. Applications shall be taken only on preprinted application
forms supplied by NML. The Contract forms and applications are
the sole property of NML. No person other than NML has the
authority to make, alter or discharge any policy, Contract
application, Contract certificate, supplemental contract or
form issued by NML. No person other than NML has the right to
waive any provision with respect to any Contract or policy. No
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person other than NML has the authority to enter into any
proceeding in a court of law or before a regulatory agency in
the name of or on behalf of NML.
H. Broker/Dealer and Subagent shall accept premiums in the form
of a check or money order made payable to NML. Broker/Dealer
shall ensure that all checks and money orders and applications
for the Contracts received by it or any Subagent are remitted
promptly to NML. In the event that any other premiums are sent
to a Subagent or Broker/Dealer rather than to NML, they shall
promptly remit such premiums to NML, Broker/Dealer
acknowledges that if any premium is held at any time by it,
such premium shall be held on behalf of NML, and Broker/Dealer
shall segregate such premium from its own funds and promptly
remit such premium to NML. All such premiums, whether by
check, money order or wire, shall at all times be the property
of NML.
I. Upon issuance of a Contract by NML and delivery of such
Contract to Broker/Dealer, Broker/Dealer shall promptly
deliver such Contract to its purchaser. For purposes of this
provision, "promptly" shall be deemed to mean not later than
five calendar days, or such shorter period as is reasonable
under the circumstances. Broker/Dealer shall return promptly
to NML all receipts for delivered Contracts, all undelivered
Contracts and all receipts for cancellation, in accordance
with the instructions from NML.
J. Unless required by a determination of suitability, during the
term of this Agreement and after termination hereof,
Broker/Dealer covenants on behalf of itself and any Subagent
appointed hereunder, that they shall not solicit, induce or
attempt to solicit or induce Contract owners to terminate,
surrender, cancel, replace or exchange such Contract.
Broker/Dealer acknowledges and agrees that the provisions
contained in this Section 6 may be enforced by an action for
an injunction, as well as or in addition to any action for
damages.
7. Indemnification
A. Broker/Dealer shall indemnify, defend and hold harmless NML
and NMIS and each person who controls or is associated with
NML or NMIS within the meaning of the federal securities laws
and all directors, officers, corporate agents, employees,
attorneys and representatives thereof, from and against all
losses, expenses, claims, damages and liabilities (including
any costs of investigation and legal expenses and any amounts
paid in settlement of any action, suit or proceeding of any
claim asserted) which result from, arise out of or are based
upon:
(i) any breach by Broker/Dealer or any Affiliate of any
representation, warranty or other provision of this Agreement;
or
(ii) any violation by Broker/Dealer, any Affiliate or any Subagent
of any federal or state securities law or regulation,
insurance law or regulation or any rule or requirement of the
NASD;
(iii) the use by Broker/Dealer, any Affiliate or any Subagent of any
sales or promotional material which has not received specific
written approval of NML and NMIS as provided in Section 4 of
this Agreement, any oral or written misrepresentations or any
unlawful sales practices concerning the Contracts by
Broker/Dealer, any Affiliate or any Subagent; or
(iv) Claims by Subagents or other agents or representatives of
Broker/Dealer for commissions or other compensation or
remuneration of any type.
B. The indemnification provided for herein shall survive
termination of this Agreement.
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8. Fidelity Bond. Broker/Dealer represents that all directors, officers,
employees, representatives and Subagents who are appointed pursuant to
this Agreement or who have access to funds of NML are and will continue
to be covered by a blanket fidelity bond including coverage for
larceny, embezzlement or any other defalcation, issued by a reputable
bonding company. This bond shall be maintained at Broker/Dealer's or
Subagent's expense. Such bond shall be at least equivalent to the
minimal coverage required under the NASD Rules of Fair Practice,
endorsed to extend coverage to life insurance and annuity transactions.
Broker/Dealer acknowledges that NML may require evidence that such
coverage is in force and Broker/Dealer shall promptly give notice to
NML of any notice of cancellation or change of coverage. Broker/Dealer
assigns any proceeds received from the fidelity bond company to NML to
the extent of NML's loss due to activities covered by the bond. If
there is any deficiency, Broker/Dealer will promptly pay NML that
amount on demand, and Broker/Dealer shall indemnify and hold harmless
NML from any deficiency and from the cost of collection.
9. Termination.
A. Normal Termination. This Agreement shall continue for an
indefinite term, subject to the termination by NML, NMIS or
Broker/Dealer party upon written notice to the other parties
hereto, which shall be effective upon receipt thereof.
B. Automatic Termination for Cause. This Agreement shall
automatically terminate upon: (1) a material breach of this
Agreement, including without limitation the failure to comply
with the laws or regulations of any state or other
governmental agency or body having jurisdiction over the sale
of insurance; and (2) the suspension, revocation or
non-renewal of any then required insurance or securities
license of Broker/Dealer or any of its Affiliates, or the
deregistration of the Broker/Dealer or its termination of
membership with the NASD.
C. Rights and Obligations. Upon termination of this Agreement,
except as otherwise provided herein, all authorizations,
rights and obligations shall cease. If this Agreement is
terminated for cause as described above, Broker/Dealer's right
to receive compensation shall immediately terminate.
10. General Provisions.
A. Waiver. Failure by any of the parties to promptly insist upon
strict compliance with any of the obligations of any other
party under this Agreement will not be deemed to constitute a
waiver of the right to enforce strict compliance.
B. Independent Contractor. Broker/Dealer is an independent
contractor and its Subagents who are appointed as insurance
agents of NML are agents of Broker/Dealer and not employees,
agents or representatives of NML or NMIS for purposes of this
Agreement.
C. Notice. Any notice pursuant to this Agreement shall be mailed,
postage paid, to the last address communicated by the
receiving party to the other parties to this Agreement.
D. Severability. To the extent this Agreement may be in conflict
with any applicable law or regulation, this Agreement shall be
construed in a manner not inconsistent with such law or
regulation. The invalidity or illegality of any provision of
this Agreement shall not be deemed to affect the validity or
legality of any other provision of this Agreement.
E. Amendment. No Amendment to this Agreement shall be effective
unless in writing and signed by all the parties hereto.
F. Wisconsin Law. This Agreement shall be construed in accordance
with the laws of the State of Wisconsin.
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G. Effectiveness. This Agreement shall be effective as of the
date set forth above.
[Signatures Contained on Next Page]
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IN WITNESS WHEREOF, this Agreement has been executed by duly authorized
representatives of the parties to this Agreement as of the date set forth above.
THE NORTHWESTERN MUTUAL
LIFE INSURANCE COMPANY
By:
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Name:
Title:
NORTHWESTERN MUTUAL
INVESTMENT SERVICES LLC
By:
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Name:
Title:
XXXXXX X. XXXXX & CO. INCORPORATED
By:
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Name:
Title:
XXXXX INSURANCE SERVICES INC.
By:
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Name:
Title:
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ANNEX I
(If Needed)
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