Dealer Sales Agreement
Capital Brokerage Corporation
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0000 Xxxx Xxxxx Xxxxxx
Post Office Xxx 00000
Xxxxxxxx, XX 00000
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GE Capital Life Assurance Company of New York
BROKER-DEALER SALES AGREEMENT
Name of Broker-Dealer: Address of Broker-Dealer:
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This Agreement is made this ___________ day of ___________________, 19___, by
and between Capital Brokerage Corporation, a Washington corporation with its
principal office as listed above ("Capital Brokerage"), and __________
___________________________________________________________________________, a
_________________ corporation with its principal office as listed above
("Broker-Dealer").
In consideration of the mutual benefits to be derived and intending to be
legally bound the parties hereby agree to the following terms and conditions:
SECTION I - DEFINITIONS
1.1 GE Capital Life Assurance Company of New York ("GE Capital Life") is a
New York corporation which has developed certain variable annuity
contracts (hereafter referred to as "Annuities", listed in Schedule B,
which is attached hereto and made part of this Agreement) registered
with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933 (the "1933 Act").
1.2 Capital Brokerage is a Broker-Dealer registered as such under the
Securities Exchange Act of 1934 (the "1934 Act") and a member of the
National Association of Securities Dealers, Inc. ("NASD"). GE Capital
Life has appointed Capital Brokerage as principal underwriter for the
Policies and Annuities.
1.3 Broker-Dealer is registered as a Broker-Dealer under the 1934 Act, is a
member of the NASD and is properly licensed and appointed to promote,
offer and sell the Policies and Annuities.
1.4 Registered Representatives are employees of the Broker-Dealer whom
Broker-Dealer wishes to have appointed by GE Capital Life to sell
Policies and Annuities.
2. REPRESENTATIONS AND WARRANTIES OF CAPITAL BROKERAGE
2.1 Capital Brokerage represents and warrants that:
a. it has full power and authority to enter into this Agreement
and that it has all appropriate licenses to carry on its
business and to market the Policies and the Annuities;
b. the 1933 Act Registration Statements pertaining to the
Policies and the Annuities filed with the SEC have been
declared effective;
c. the 1933 Act Registration Statements pertaining to the
Policies and the Annuities comply or will comply in all
material respects with the provisions of the 1933 Act, the
1934 Act, the Investment Company Act of 1940 (the "1940 Act")
and the rules and regulations of the SEC; and
d. the 1933 Act Registration Statements do not contain an untrue
statement of a material fact or fail to state a material fact
required to be stated.
2.2 Section 2.1c. shall not apply to statements made in or omissions from
Registration Statements and any related materials, which statements or
omissions were made in reliance upon written statements furnished by
Broker-Dealer.
2.3 Capital Brokerage represents and warrants that it, or an affiliate of
Capital Brokerage, will use its best efforts to obtain insurance
licenses and appointments to allow Registered Representatives to sell
the Policies or the Annuities provided Broker-Dealer cooperates in
obtaining such licenses.
3. REPRESENTATIONS OF BROKER-DEALER
3.1 Broker-Dealer represents and warrants that it has full power and
authority to enter into this Agreement and that it has all appropriate
licenses to carry on its business and to market the Policies and the
Annuities.
3.2 Broker-Dealer represents and warrants that it is registered as a
Broker-Dealer under the 1934 Act, is a member in good standing of the
NASD, is bonded as required by all applicable laws and regulations, and
that it, or a subsidiary or affiliate, has all insurance licenses
required by the states in which the Broker-Dealer intends to market the
Policies and the Annuities.
3.3 Broker-Dealer represents and warrants that all individuals recommended
for licensing and appointment to sell the Policies and Annuities will
be Registered Representatives who are appropriately registered with the
NASD and who possess or can obtain all required insurance licenses.
3.4 Broker-Dealer further represents and warrants that:
a. it made or will make a thorough and diligent inquiry and
investigation relative to each Registered Representative it
seeks to have appointed to sell the Policies and Annuities
including an investigation of the Registered Representative's
identity and business reputation;
b. all Registered Representatives are or will be personally known
to Broker-Dealer, are of good moral character, reliable,
financially responsible and worthy of an insurance license;
c. all examinations, training, and continuing educational
requirements have been or will be met for the NASD and the
specific state(s) in which Registered Representative is
requesting an insurance license;
d. if Registered Representative is required to submit to GE
Capital Life a picture or a signature in conjunction with an
application for an insurance license, that any such items
forwarded to GE Capital Life will be those of Registered
Representative and any evidence of a securities registration
forwarded to GE Capital Life will be a true copy of the
original;
e. no Registered Representatives will apply for insurance
licenses with GE Capital Life in order to place insurance on
their life or property, the lives or property of their
relatives, or property or lives of their associates;
f. each Registered Representative will receive close and adequate
supervision consistent with the requirements of the NASD, and
Broker-Dealer will review, when necessary, any Policies or
Annuities written by Registered Representative;
g. Broker-Dealer will be responsible for all acts and omissions
of its Registered Representatives within the scope of their
appointment with GE Capital Life or as Registered
Representatives;
h. Broker-Dealer will not permit its Registered Representatives
to act as insurance agents until properly trained (including
training in the Policies and Annuities), licensed and
appointed nor will Broker-Dealer pay compensation to any
Registered Representative not properly licensed and appointed
to sell the Policies and Annuities;
i. Broker-Dealer will immediately notify Capital Brokerage and GE
Capital Life of any change in the NASD registration or
insurance licensing status of any Registered Representative
and will maintain a list of all Registered Representatives
authorized to sell the Policies or the Annuities;
j. Broker-Dealer agrees to indemnify, defend and hold GE Capital
Life and Capital Brokerage harmless against any losses,
claims, damages, liabilities or expenses, including reasonable
attorneys fees, to which Capital Brokerage or GE Capital Life
may be liable to the extent that the losses, claims, damages,
liabilities or expenses, including reasonable attorneys fees,
arise out of allegations that Broker-Dealer or any of its
Registered Representatives did not have the right or authority
to make discretionary purchases or to make or change a
client's asset allocation; and
k. Broker-Dealer, in the conduct of its business selling Policies
and the Annuities, shall observe high standards of commercial
honor and just and equitable principles of trade consistent
with the Conduct Rules of the NASD.
4. SALE OF POLICIES AND ANNUITIES
4.1 Soliciting Applications.
a. Broker-Dealer is hereby authorized by Capital Brokerage to
solicit applications for the purchase of Policies and
Annuities through its Registered Representatives in states
where the Broker-Dealer and its Registered Representatives are
appropriately licensed and appointed. This authorization is
non-exclusive and is limited to the states in which Policies
and Annuities have been approved for sale.
b. Broker-Dealer shall have no authority on behalf of Capital Brokerage
or GE Capital Life to:
(1) make, alter or discharge any contract;
(2) waive or modify any terms, conditions or limitations
of any Policy or Annuity;
(3) extend the time for payment of any premiums, bind GE
Capital Life to the reinstatement of any terminated
Policy, or accept notes for payment of premiums;
(4) adjust or settle any claim or commit GE Capital Life
with respect thereto;
(5) incur any indebtedness or liability, or expend or
contract for the expenditure of funds; or
(6) enter into legal proceedings in connection with any
matter pertaining to Capital Brokerage 's or GE
Capital Life's business without the prior consent of
Capital Brokerage or GE Capital Life, unless
Broker-Dealer is named as a party to the proceedings.
c. Broker-Dealer acknowledges that only applications bearing the
signature of a Registered Representative who is on the list of
properly licensed Registered Representatives provided by
Broker-Dealer, according to this Agreement, will be processed
by GE Capital Life.
4.2 Suitability.
a. Capital Brokerage wishes to ensure that the Policies and
Annuities solicited by Broker-Dealer through Registered
Representatives will be issued to persons for whom they will
be suitable.
b. Broker-Dealer shall take reasonable steps to ensure that none
of its Registered Representatives makes recommendations to any
applicant to purchase a Policy or Annuity in the absence of
reasonable grounds to believe that the purchase is suitable
for the applicant under the NASD Conduct Rules regarding
Recommendations to Customers.
c. A determination of suitability for the purchase of a Policy or
Annuity shall include, but not be limited to, a reasonable
inquiry of each applicant concerning the applicant's financial
status, tax status, and insurance and investment objectives
and needs.
4.3 Delivery of Prospectus(es) by Broker-Dealer.
a. The current Prospectus(es), the Statement(s) of Additional
Information where required by law, and all Supplements
relating to the Policies and the Annuities shall be delivered
by Broker-Dealer to every applicant seeking to purchase a
Policy or Annuity prior to the completion of an application.
b. Broker-Dealer shall not give any information or make any
representations concerning the Policies or the Annuities, GE
Capital Life or Capital Brokerage unless the information or
representations are contained in the current Prospectus(es) or
are contained in sales literature or advertisements furnished
or approved in writing by GE Capital Life and Capital
Brokerage.
4.4 Issuance of Policies or Annuities.
a. GE Capital Life, at its sole discretion, will determine
whether to issue a Policy or an Annuity.
b. Once a Policy or Annuity has been issued:
(1) GE Capital Life will mail it promptly, accompanied by
any required notice of withdrawal rights and any
additional required documents to the individual or
entity designated by the Broker-Dealer;
(2) GE Capital Life will confirm to the owner, with a
copy to Broker-Dealer, the allocation of the initial
premium under the Policy or the Annuity; and
(3) GE Capital Life will also notify the owner of the
name of the Broker-Dealer through whom the Policy or
the Annuity was solicited.
4.5 GE Capital Life will administer all Policies and Annuities issued
according to the terms and conditions set forth in the Policy or
Annuity.
4.6 Capital Brokerage or GE Capital Life, at their own expense, will
furnish to Broker-Dealer, in reasonably sufficient quantities, the
following materials:
a. The current Prospectus(es) for the Policies and Annuities and
any underlying mutual funds;
b. Any Prospectus Supplement for the Policies and Annuities and
any underlying mutual funds, including any Statement(s) of
Additional Information if requested by client or required by
law;
c. Advertising materials and sales literature approved for use by
Capital Brokerage and GE Capital Life; and
d. Applications for Policies and Annuities.
4.7 Money due GE Capital Life or Capital Brokerage.
a. All money payable in connection with the Policies or the
Annuities whether as premium or otherwise is the property of
GE Capital Life.
b. Money due GE Capital Life and received by the Broker-Dealer
under this Agreement shall be held in a fiduciary capacity and
shall be transmitted immediately to GE Capital Life in
accordance with the administrative procedures of GE Capital
Life.
c. Unless express prior written consent to the contrary is given
to Broker-Dealer by GE Capital Life, money due GE Capital Life
shall be forwarded without any deduction or offset for any
reason, including by example, but not limitation, any
deduction or offset for compensation claimed by Broker-Dealer.
d. Unless express prior written consent to the contrary is given
to Broker-Dealer by GE Capital Life, checks or money orders in
payment for Policies or Annuities, shall be drawn to the order
of "The Life Insurance Company of Virginia" or "GE Capital
Life."
e. Checks drawn by or money orders purchased by the Registered
Representative will not be accepted by GE Capital Life or
Capital Brokerage.
5. INDEMNIFICATION
5.1 Capital Brokerage agrees to indemnify and hold harmless Broker-Dealer
against any losses, claims, damages, liabilities or expenses, including
reasonable attorneys fees, to which Broker-Dealer may be liable to the
extent that the losses, claims, damages, liabilities or expenses,
including reasonable attorneys fees, arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact or
omission or alleged omission of material fact contained in the 1933 Act
Registration Statement covering the Policies or the Annuities or in the
Prospectuses for the Policies or the Annuities or in any written
information or sales materials authorized and furnished to
Broker-Dealer by Capital Brokerage or GE Capital Life.
5.2 Capital Brokerage will not be liable to the extent that such loss,
claim, damage, liability or expense, including reasonable attorneys'
fees, arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon
information provided by Broker-Dealer, including, without limitation,
negative responses to inquiries furnished to Capital Brokerage or GE
Capital Life by or on behalf of Broker-Dealer, specifically for use in
the preparation of the 1933 Act Registration Statement covering the
Policies or the Annuities or in any related Prospectuses.
5.3 Broker-Dealer agrees to indemnify and hold harmless Capital Brokerage
and GE Capital Life, against any losses, claims, damages, liabilities
or expenses, including reasonable attorney's fees, to which Capital
Brokerage, GE Capital Life and any affiliate, parent, officer,
director, employee or agent may be liable to the extent that the
losses, claims, damages, liabilities or expenses, including reasonable
attorneys fees, arise out of or are based upon:
a. Any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission of a material fact
contained in the Registration Statement covering the Policies
or the Annuities or related Prospectuses but only to the
extent, that such untrue statement or alleged untrue statement
or omission or alleged omission is made in reliance upon
information, including, without limitation, negative responses
to inquiries, furnished to Capital Brokerage or GE Capital
Life by or on behalf of Broker-Dealer specifically for use in
the preparation of the 1933 Act Registration Statement
covering the Policies or the Annuities or in any related
Prospectuses;
b. Any unauthorized use of advertising materials or sales
literature or any verbal or written misrepresentations or any
unlawful sales practices concerning the Policies or the
Annuities by Broker-Dealer, its Registered Representatives or
its affiliates; and
c. Claims by Registered Representatives or employees of
Broker-Dealer for commissions or other compensation or
remuneration of any type.
5.4 The party seeking indemnification agrees to notify the indemnifying
party within a reasonable time of receipt of a claim or demand. In the
case of a lawsuit, the party seeking indemnification must notify the
indemnifying party within ten (10) calendar days of receipt of written
notification that a lawsuit has been filed.
5.5 Broker-Dealer agrees that GE Capital Life or Capital Brokerage may
negotiate, settle and or pay any claim or demand against them which
arises from:
a. any wrongful act or transaction of Broker-Dealer or its
Registered Representatives. Wrongful act or transaction
includes, but is not limited to, fraud, misrepresentation,
deceptive practices, negligence, errors or omissions;
b. the breach of any provision of this Agreement; or
c. the violation or alleged violation of any insurance or
securities laws.
Upon sufficient proof that the claim or demand arose from the
occurrences listed above, Capital Brokerage or GE Capital Life may
request reimbursement for any amount paid plus any reasonable expenses
incurred in investigating, defending against and/or settling the claim
or demand. Broker-Dealer agrees to reimburse Capital Brokerage or GE
Capital Life for these expenses.
5.6 Broker-Dealer shall immediately notify Capital Brokerage and GE Capital
Life, in writing of any complaint or grievance relating to the Policies
or the Annuities, including, but not limited to any complaint or
grievance arising out of or based on advertising or sales literature
approved by GE Capital Life or the marketing or sale of the Policies or
Annuities.
5.7 Broker-Dealer shall promptly furnish all written materials requested by
Capital Brokerage or GE Capital Life in connection with the
investigation of any such complaint and will cooperate in the
investigation. GE Capital Life or Capital Brokerage will notify in a
timely manner the Broker-Dealer of any complaint.
5.8 Broker-Dealer shall immediately notify Capital Brokerage and GE Capital
Life, in writing of any state, federal, or self regulatory organization
investigation or examination regarding the marketing and sales
practices relating to the Policies or Annuities or any pending or
threatened litigation regarding the marketing and sales practices
relating to the Policies or Annuities.
6. TERMINATION
6.1 This Agreement may be terminated by either Capital Brokerage or
Broker-Dealer at any time, for any reason, upon thirty (30) calendar
days advance written notice delivered to the other party under the
terms of Section 10.10 of this Agreement.
6.2 This Agreement will terminate immediately:
a. If the Broker-Dealer is dissolved, liquidated, or otherwise
ceases business operations;
b. If the Broker-Dealer fails, in Capital Brokerage's sole
judgment, to comply with any of its obligations under this
Agreement;
c. If the Broker-Dealer ceases to be registered under the 1934
Act or a member in good standing of the NASD; or
d. In the event one party assigns or transfers its rights or
liabilities under this Agreement to any third party without
the prior written consent of the other party.
6.3 The following provisions of the Agreement shall survive termination:
a. Section One - Definitions
b. Section Two - Representations
c. Section Five - Indemnification
d. Section Nine - Recordkeeping
e. Section Ten - General Provisions, Sub-Section 10 - Notices
7. COMPENSATION
7.1 Unless otherwise expressly agreed to in writing by the parties, no
compensation shall be payable to Broker-Dealer for its services under
this Agreement. All compensation payable with respect to sales of the
Policies and the Annuities by Broker-Dealer shall be paid in accordance
with the terms of the General Agent Agreement in effect between GE
Capital Life and Broker-Dealer, or a duly licensed subsidiary or
affiliate thereof.
8. ADVERTISEMENTS
8.1 Broker-Dealer shall not use any advertisements or sales literature for
the Policies or the Annuities or any advertisements or sales literature
referencing GE Capital Life or Capital Brokerage without prior written
approval of GE Capital Life or Capital Brokerage. This includes
brochures, letters, illustrations, training materials, materials
prepared for oral presentations and all other similar materials.
9. RECORDKEEPING
9.1 Each party agrees to keep all records required by federal and state
laws, to maintain its books, accounts, and records so as to clearly and
accurately disclose the precise nature and details of transactions, and
to assist one another in the timely preparation of records.
9.2 Each party grants to the other and/or its representatives the right and
power at reasonable times to inspect, check, make extracts from, and
audit each of its books, accounts and records as they relate to this
Agreement, including, but not limited to advertisements and sales
materials, for the purpose of verifying adherence to each of the
provisions of this Agreement.
10. GENERAL PROVISIONS
10.1 Effective. This Agreement shall be effective upon execution by both
parties and will remain in effect unless terminated as provided in
Section Six.
10.2 Assignment. This Agreement may not be assigned or transferred to any
third party by either Capital Brokerage or Broker-Dealer without the
other party's prior written consent.
10.3 Governing Law. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Virginia.
10.4 Severability. If any provision of this Agreement shall be held or
rendered invalid by a court decision, state or federal statute,
administrative rule or otherwise, the remainder of this Agreement shall
not be rendered invalid.
10.5 Complete Agreement. The parties declare that, other than the General
Agent's Agreement between Broker-Dealer (or its affiliated insurance
agency) and GE Capital Life (or its affiliated marketing company) there
are no oral or other agreements or understandings between them
affecting this Agreement or relating to the offer or sale of the
Policies or the Annuities and that this constitutes the entire
Agreement between the parties.
10.6 Waiver. Forbearance by Capital Brokerage to enforce any of the terms of
this Agreement shall not constitute a waiver of such terms.
10.7 Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.8 Independent contractors. Broker-Dealer is an independent contractor.
Nothing contained in this Agreement shall create, or shall be construed
to create, the relationship of employer and employee between Capital
Brokerage and Broker-Dealer or Broker-Dealer's directors, officers,
employees, agents or Registered Representatives.
10.9 Cooperation. Each party to this Agreement shall cooperate with the
other and with all governmental authorities, including, without
limitation, the SEC, the NASD and any state insurance or securities
regulators, and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated under this
Agreement.
10.10 Notices. All notices, requests, demands and other communications which
must be provided under this Agreement shall be in writing and shall be
deemed to have been given on the date of service if served personally
on the party to whom notice is to be given or on the date of mailing if
sent by United States registered or certified mail, postage prepaid.
Notices should be sent to the parties at the addresses first listed in
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
representatives.
CAPITAL BROKERAGE CORPORATION _______________________________
(Name of Broker-Dealer)
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(Signature) (Signature)
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(Name) (Name)
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(Title) (Title)
Date: ________________________________ Date: _________________________
SCHEDULE A
to
BROKER-DEALER SALES AGREEMENT
VARIABLE ANNUITY CONTRACTS:
