PRINCIPAL UNDERWRITERS' AGREEMENT
Between
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
and
XXXXX & XXXXXX, INC.
AGREEMENT dated as of September 21, 2000, by and between BUSINESS MEN'S
ASSURANCE COMPANY OF AMERICA ("BMA"), a Missouri corporation, on its own behalf
and on behalf of BMA Variable Life Account A (the "Separate Account") and Xxxxx
& Babson, Inc. ("J&B"), a Missouri corporation.
WITNESSETH:
WHEREAS, the Separate Account is a segregated asset account established
and maintained by BMA pursuant to the laws of the State of Missouri for variable
life insurance policies to be issued by BMA and herein defined (the "Contracts")
under which income, gains and losses, whether or not realized, from assets
allocated to such accounts are, in accordance with the Contracts, credited to or
charged against the Separate Account without regard to other income, gains, or
losses of BMA or any other segregated asset accounts established by BMA;
WHEREAS, J&B is registered as broker-dealers under the Securities
Exchange Act of 1934, as amended, and is a members in good standing of the
National Association of Securities Dealers, Inc., and is willing to serve as
principal underwriter of the Contracts; and
WHEREAS, BMA proposes to register interests in the Contracts by
registering the Separate Account under the Investment Company Act of 1940, as
amended, and interests in the Contracts under the Securities Act of 1933, as
amended, and to issue and sell the Contracts through the Separate Account to the
public through J&B as a principal underwriter for the Contracts; and to that end
has filed a registration statement with the Securities and Exchange Commission.
NOW, THEREFORE, in consideration of their mutual promises, BMA and J&B
hereby agree as follows:
1. Additional Definitions
(a) Contracts - The variable life insurance policies which BMA
proposes to issue and the premiums for which will be deposited
in the Separate Account and BMA's general account, including
any riders to such contracts.
(b) Registration Statement - At any time that this Agreement is in
effect the currently effective registration statement, or
currently effective post-effective amendment thereto, relating
to the Separate Account, including financial statements
included in and all exhibits to such registration statement or
post-effective amendment.
(c) Prospectus - The prospectus included within the Registration
Statement, except that if the most recently filed prospectus
filed pursuant to Rule 497(c) or 497(e) under the 1933 Act
subsequent to the date on which the Registration Statement
became effective differs from the prospectus included within
the Registration Statement at the time it became effective,
the term "Prospectus" shall refer to the most recently filed
prospectus filed under Rule 497(c) or 497(e) from and after
the date on which they each shall have been filed.
(d) Investment Company - The underlying open-end management
investment companies which the Separate Account invests in.
(e) 1933 Act - The Securities Act of 1933, as amended.
(f) 1934 Act - The Securities Exchange Act of 1934, as amended.
(g) 1940 Act - The Investment Company Act of 1940, as amended.
(h) SEC - The Securities and Exchange Commission.
(i) NASD - The National Association of Securities Dealers, Inc.
(j) Regulations - The rules and regulations promulgated by the
SEC under the 1933 Act, the 1934 Act and the 1940 Act as in
effect at the time
this Agreement is executed or hereinafter promulgated.
(k) Territory - Each of the fifty states of the United States
including the District of Columbia and Puerto Rico except New
York. It is recognized that BMA is not qualified to transact a
variable insurance business in New York. In the event,
however, that BMA becomes so qualified and the Contracts are
approved for sale in New York, "Territory" shall then be
deemed to include New York.
(l) Dealer - An entity registered as a broker-dealer and licensed
as a life insurance agent or affiliated with an entity so
licensed, and authorized to sell the Contracts and/or to
recruit other Dealers to sell the Contracts pursuant to a
sales agreement as provided for in this Agreement.
(m) Applications - Applications for the Contracts.
(n) Premium - A payment made under a Contract by an applicant or
purchaser to purchase benefits under the Contract.
(o) Service Center - BMA, 0000 Xxxxxxxx Xxxxxxx Xxxxx, Xx. Xxxxx,
Xxxxxxxx, or such other location as may be designated in
writing from time to time by BMA.
2. Principal Underwriter
(a) BMA grants to J&B the right, and J&B accepts such grant,
during the term of this Agreement, subject to the registration
requirements of the 1933 Act and the 1940 Act and the
provisions of the 1934 Act for it to be the distributor and
principal underwriter of the Contracts in the Territory. It is
hereby understood that J&B will develop distribution systems
for the distribution of the Contracts. J&B undertakes to offer
and use its best efforts to market Contracts actively through
Dealers and will provide a dealer marketing staff to answer
telephone inquiries with respect to the Contracts from
registered representatives of Dealers that have executed a
sales agreement with J&B.
(b) BMA authorizes J&B to enter into written sales agreements with
broker-dealers that thereby will become Dealers on terms and
conditions that are consistent with this Agreement. J&B agrees
that each sales agreement shall require the Dealer and its
agents or representatives soliciting applications for the
Contracts or otherwise engaging in solicitation activities on
behalf of the Dealer to be duly and appropriately licensed,
registered or otherwise qualified for the sale and
distribution of the Contracts under the federal securities
laws and the insurance laws and any applicable securities or
blue-sky laws of each state or other jurisdiction in the
Territory in which the Dealer offers the Contracts for sale,
and in which BMA informs J&B that BMA is licensed to sell the
Contracts. Each sales agreement also shall require that the
Dealer be registered as both a broker-dealer under the 1934
Act and a member of the NASD, or if not so registered or not
such a member, then the agents and representatives of such
Dealer soliciting applications for the Contracts shall be
agents and registered persons of a registered broker-dealer
and NASD member which is an affiliate of such Dealer and is
also a party to such sales agreement and which maintains full
responsibility for the training, supervision, and control of
the securities activities of the agents and representatives
distributing the Contracts.
(c) BMA shall forward to J&B Applications and other materials for
use by J&B and the Dealers in their solicitation of the
Contracts. J&B agrees that all Applications shall be made only
on application forms and other materials provided by BMA.
(d) All Premiums paid by check or money order that are collected
by J&B or any Dealer shall be remitted promptly in full,
together with any Applications, forms and any other required
documentation, to the Service Center. Checks or money orders
in payment of Premiums shall be drawn to the order of
"Business Men's Assurance Company of America." Initial and
additional Premiums may be transmitted by wire order from J&B
or any Dealer to the Service Center in accordance with the
procedures set forth by BMA. Acceptance by BMA of a wire order
does not create a contractual obligation with BMA until the
receipt of a properly completed Application within 10 days of
transmittal of the wire order by J&B or the Dealer. If any
Premium is held at any time by J&B, J&B agrees that such
Premium shall be held in a fiduciary capacity and shall be
remitted promptly to BMA. All such Premiums, whether by check,
money order or wire, shall be the property of BMA.
(e) J&B acknowledges that BMA shall have the unconditional right
to reject, in whole or in part, any Application. In the event
an Application is rejected, any Premium submitted will be
returned by or on behalf of BMA to the applicant. J&B and, if
applicable, the Dealer that submitted the Premium, will be
notified of such action. In the event that a purchaser
exercises his or her rescission privilege provided by law, any
amount to be refunded as provided in the Contract will be so
refunded to the purchaser by or on behalf of BMA. J&B and, if
applicable, the Dealer who solicited the Contract, will be
notified of such action and will refund any commissions paid
on such rescinded Contract.
(f) J&B shall act as an independent contractor in the performance
of their duties and obligations under this Agreement and
nothing herein contained shall make J&B or their
representatives or employees, or the Dealers or their
respective representatives or employees, employees of BMA in
connection with the distribution of the Contracts.
(g) J&B agrees to require the b/d to train, supervise and be
solely responsible for the conduct of their respective
employees, if any, of J&B in their solicitation of
applications and Premiums for the Contracts, and to supervise
their compliance with applicable rules and regulations of any
securities regulatory agencies that have jurisdiction over
variable contracts activities, including the requirement that
the Contracts be suitable for J&B's customers.
(h) BMA, as agent for J&B, will confirm the purchase of the
Contract to each purchaser of a Contract in accordance with
the 1934 Act and the rules thereunder. BMA will maintain and
preserve such books and records with respect to such
confirmations in conformity with the requirements of the 1934
Act and the rules thereunder. BMA agrees that all such books
and records will be maintained and held on behalf of and as
agent for J&B, and that such books and records are at all
times subject to inspection by the SEC.
3. Representations and Warranties of BMA BMA makes the following
representations and warranties:
(a) BMA will notify J&B when the Registration Statement has been
declared effective by the SEC or has become effective in
accordance with the Regulations.
(b) The Registration Statement and the Prospectus comply in all
material respects with the provisions of the 1933 Act and the
1940 Act and the Regulations, and neither of the Registration
Statement nor the Prospectus contains an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in light of the circumstances in which they were
made; provided, however that none of the representations and
warranties in Section 3(b) shall apply to statements or
omissions from the Registration Statement or Prospectus made
in reliance upon and in conformity with the information
furnished to BMA in writing by J&B expressly for use in the
Registration Statement.
(c) BMA has not received any notice from the SEC with respect to
the Registration Statements pursuant to Section 8(e) of the
1940 Act and no stop order under the 1933 Act has been issued
and no proceeding therefor has been instituted or threatened
by the SEC.
(d) BMA will notify J&B promptly upon learning the Registration
Statement has ceased to be effective.
(e) The accountants who certified the financial statements
included in the Registration Statement and Prospectus are
independent public accountants as required by the 1993 Act and
the Regulations.
(f) The financial statements included in the Registration
Statement present fairly the financial condition of BMA at the
dates indicated. Such financial statements have been prepared
in conformity with generally accepted accounting principles.
(g) Subsequent to the respective dates as of which information is
given in the Registration Statement or the Prospectus through
the date of this Agreement, there has not been any material
adverse change in the condition, financial or otherwise, of
BMA which would cause information to be misleading.
(h) BMA has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of
Missouri with full power and authority to own, lease and
operate its properties and conduct its business in the manner
described in the Prospectus and is duly qualified to transact
the business of a life, health and accident insurance company,
and is in good standing in each state or other jurisdiction in
the Territory.
(i) The Contracts have been approved to the extent required by the
Missouri Insurance Commissioner and by the governmental agency
responsible for regulating insurance companies in each other
state or jurisdiction in which BMA has indicated to J&B that
the Contracts may be offered for sale.
(j) The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate action by BMA and
when so executed and delivered this Agreement will be the
valid and binding obligation of BMA enforceable in accordance
with its terms.
(k) The consummation of the transactions contemplated by this
Agreement, and the fulfillment of the terms of this Agreement,
will not conflict with, result in any breach of any of the
terms and provisions of or constitute (with our without notice
or lapse of time) a default under the charter or by-laws of
BMA, or any indenture, agreement, mortgage, deed of trust, or
other instrument to which BMA is party or by which it is
bound, or violate any law, or, to the bet of BMA's knowledge,
any order, rule or regulation applicable to BMA of any court
or any federal or state regulatory body, administrative agency
or any other governmental instrumentality having jurisdiction
over BMA or any of its properties.
(l) No consent, approval, authorization or order of any court or
governmental authority or agency is required for the issuance
or sale of the Contracts or for the consummation of the
transactions contemplated by this Agreement, that has not been
obtained, except with respect to the states or jurisdictions
in which BMA has informed J&B that such consent is still being
sought, or with respect to which the parties have agreed that
such consent is not being sought.
(m) BMA has filed with the SEC all statements and other documents
required for registration of the Separate Account under the
provisions of the 1940 Act and the Regulations thereunder and
such registration is expected to be declared or has been
declared effective.
(n) The Contracts conform to the descriptions thereof in the
Registration Statement and the Prospectus and, when issued as
contemplated by the Registration Statement, will constitute
legal, validly issued and binding obligations of BMA in
accordance with their terms.
4. Additional Obligations of BMA
(a) BMA shall use its best efforts: (1) to maintain the
registration of the Contracts with the SEC and any state
securities commissions of any state or other jurisdiction in
the Territory where the securities or blue-sky laws of such
state or other jurisdiction require registration of the
Contracts, including without limitation using its best efforts
to prevent a stop order from being issued or if a stop order
has been issued to cause such a stop order to be withdrawn:
(2) to gain approval of the Contract or forms where required
under the insurance laws and regulations of each state or
other jurisdiction in the Territory; and (3) to keep such
registration and approval in effect thereafter so long as they
are required and the Contracts are outstanding.
(b) BMA agrees to provide J&B, at any time upon J&B's request,
with a list of all states and jurisdiction in which the
Contracts lawfully may be sold. To the extent that BMA is not
authorized to issue the Contracts in any state or other
jurisdiction in the Territory, BMA shall make reasonable
efforts to obtain such authorization in such state or
jurisdiction. BMA agrees to notify J&B promptly of any change
in the status of its application for Contract approval in any
jurisdiction where such approval has not been obtained.
(c) During the term of this Agreement, BMA agrees that it will
take all action which is required to cause the Contracts to
comply, and to continue to comply, as annuity contracts and as
registered securities under applicable laws and regulations,
and to cause the Registration Statement and the Prospectus to
comply, and to continue to comply, with: i. all applicable
federal laws and regulations; and ii. all applicable laws and
regulations of each state and other jurisdiction in the
Territory.
(d) During the term of this Agreement, BMA will notify J&B as soon
as possible under the circumstances:
i. When the Registration Statement has become effective
or any post-effective amendments with respect to the
Registration Statement thereafter becomes effective
or ceases to be effective;
ii. Of any request by the SEC for any amendments to the
Registration Statement or supplements to the
Prospectus or for additional information;
iii. Of any event which makes any material statement made
in the Registration Statement or the Prospectus
untrue in any material respect or results in material
omission in the Registration Statement or the
Prospectus;
iv. Of the issuance by the SEC of any stop order with
respect to the Registration Statement or any
amendment thereto or the initiation of any
proceedings for that purpose or for any other purpose
relating to the registration and/or offering of the
Contracts.
(e) BMA will furnish to J&B without charge promptly after filing a
copy of the Registration Statement as originally filed and any
pre-effective or post-effective amendments thereto, including
financial statements and all exhibits not incorporated therein
by reference, Contractholder reports, and proxy statements and
materials in the form mailed to Contractholders.
(f) During the term of this Agreement, no amendment or rider will
be made or added to the Contracts, no amendment will be made
to the Registration Statement and no amendment or supplement
will be made to the Prospectus, without J&B having been
previously so advised of any such amendment, rider or
supplement. J&B shall not object unreasonably to any such
amendment or rider, and BMA may effect an amendment or rider
despite any objection of J&B if required by law or regulation.
(g) BMA will be obligated to pay all expenses in connection with:
(i) the preparation and filing of the Registration Statement,
each preliminary Prospectus and final Prospectus; (ii) the
preparation and issuance of the Contracts; (iii) any
registration, qualification or approval of the Contracts for
offer and sale required under the securities, blue-sky laws or
insurance laws of the states and other jurisdictions in the
Territory; (iv) registration fees for the Contracts payable to
the SEC and the NASD; (v) the costs of designing, typesetting
the prospectuses to be distributed by J&B for the Separate
Account and any supplements thereto; (vi) the costs of any
advertisements and sales material which J&B develops for its
use in connection with the sale of the Contracts; (vii) the
cost of printing the prospectuses of the Separate Accounts and
the Funds for distribution to potential Contractholders and
broker-dealers; (viii) designing and printing periodic reports
for the Separate Account and printing periodic reports for the
Funds to be provided to existing Contractholders; (ix) taxes
(if any) payable by the Separate Account and the cost of
preparing tax returns for the Separate Account; (x) the cost
of printing and mailing one set of proxy materials a year for
existing Contractholders; (xi) the cost of conducting meetings
of Contractholders for the purpose of conducting insurance
company or Separate Account business; (xii) all costs of
necessary licensing, registration, and qualification of BMA or
its personnel in states in which the Contracts are sold;
(xiii) all legal, accounting and other professional fees
incurred by BMA in connection with the foregoing; and (xiv)
any other expenses related to the distribution of the
Contracts except those set forth in Section 6(g) below, or as
mutually agreed by the parties from time-to-time.
(h) BMA agrees to file in a timely manner all reports, statements
and amendments required to be filed by or for the Separate
Account under the 1933 Act and/or the 1940 Act or the
Regulations.
(i) BMA agrees to deliver to J&B as soon as practicable after it
becomes available, the Annual Statement for BMA and for the
Separate Account in the form filed with the State of Missouri
and to supply copies of all other financial reports at such
time any such reports are filed with the regulators or sent to
Contractholders.
(j) BMA agrees to provide J&B access to such records, officers and
employees of BMA at reasonable times as necessary to enable
J&B to fulfill its obligations as principal underwriter under
the 1933 Act for the Contracts.
(l) BMA shall have the responsibility for maintaining the
appointment records of all agents appointed by BMA to
distribute the Contracts.
(m) BMA shall have the responsibility for the ongoing operation
and administration of the Contracts and the Separate Account
in accordance with the terms of the Contracts and the
Prospectus and all applicable laws and regulations.
5. Representation and Warranties of J&B J&B makes the following
representations and warranties:
(a) J&B has taken all actions including, without limitation, those
necessary under its articles of incorporation, by-laws and
applicable state corporate law, necessary to authorize the
execution, delivery and performance of this Agreement and all
transactions contemplated hereunder.
(b) J&B is and shall remain registered during the term of this
Agreement as broker-dealer under the 1934 Act, are member in
good standing with the NASD, and is duly registered, if
required, as broker-dealers under applicable state securities
laws.
(c) J&B shall solicit, and shall instruct Dealers to solicit,
sales of the Contracts only in those states or jurisdictions
in which BMA has indicated that the Contracts may be offered
for sale.
(d) J&B will require each Dealer to be duly registered as a
broker-dealer under the 1934 Act and to be a member in good
standing with the NASD (or, if not so registered or such a
member, to be affiliated with a person so registered and such
a member), and to represent that it is duly in compliance with
applicable state securities and insurance laws. J&B shall
require each Dealer to sell the Contracts only through those
associated persons (as that term is defined in the 0000 Xxx)
who are duly and appropriately licensed, registered and
otherwise qualified to sell the Contracts under the 1934 Act,
applicable rules of the NASD and applicable state securities
and insurance law, and who are appointed by BMA agents for the
sale of the Contracts.
(e) No statement or representation concerning the Contracts shall
be made by either J&B or any associated person thereof in
connection with the Contracts other than those contained in
the Registration Statement or Prospectus or any other
promotional, sales or advertising material utilized in
accordance with this Agreement.
6. Additional Obligations of J&B
(a) It is understood that J&B will be responsible for the design
and preparation of all promotional, sales and advertising
material in connection for its own marketing and sales
activities in connection with the Contracts. It is further
understood that BMA may perform this function on behalf of J&B
relating to its distribution efforts in connection with the
Contracts. J&B shall initiate and design forms of promotional,
sales and advertising material for the Contracts. J&B shall
provide to BMA copies of all promotional sales and advertising
material developed by it for BMA's review and approval. Upon
receipt of such material from the other party, the receiving
party shall be given a reasonable amount of time to complete
its review. The parties hereby agree to respond on a prompt
and timely basis in reviewing any such material. Each party
shall be responsible for filing the material it develops, as
required, with the NASD and any state securities regulatory
authorities. BMA shall be responsible for filing all such
material, as required with any state insurance regulatory
authorities. BMA and J&B will approve promotional, sales or
advertising material for use in any state or other
jurisdiction in the Territory only upon notifying the other
party(ies) that such material has been submitted to all
appropriate state and regulatory authorities and reviewed and
approved by such authorities to the extent required by
applicable law. J&B shall require in each sales agreement with
a Dealer that the individuals associated with such Dealer and
appointed as agents of BMA to solicit the sale of the
Contracts shall not use, develop or distribute any
promotional, sales or advertising material which has not been
approved in writing by BMA and J&B and filed with the
appropriate regulatory agencies.
(b) Solicitation and other applicable activities of J&B relating
to the Contracts shall be undertaken only in accordance with
applicable laws, and regulations and rules of the NASD,
including the rules on suitability of investments. J&B
understands and acknowledges that neither it nor its agents or
representatives is authorized by BMA to give any information
or make any representation in connection with this Agreement
or the offering of the Contracts other than those contained in
the Registration Statement or Prospectus or other promotional,
sales or advertising material utilized in accordance with this
Agreement.
(c) J&B shall require that no agent or representative of J&B shall
solicit applications for the Contracts until duly licensed and
appointed by BMA as a life insurance agent of BMA in the
appropriate states or other jurisdictions in the Territory. It
is understood that BMA reserves the right, which right shall
not be exercised unreasonably, to refuse to appoint any
proposed agent, or once an appointment is made, to terminate
such appointment. J&B shall require that agents or
representatives of J&B distributing the Contracts have
variable insurance contract licenses where required.
(d) J&B shall not directly or by means of their agents or
representatives offer, nor attempt to offer, nor solicit
Applications or deliver Contracts in any state or jurisdiction
in the Territory in which BMA has advised it prior to such
solicitation or offer that the Contracts may not legally be
sold or offered for sale.
(e) J&B shall not have authority, and shall not grant authority to
Dealers, on behalf of BMA: to make, alter or discharge any
Contract; to waive any Contract forfeiture provision; to
extend the time of paying any Premium; or to receive any
monies or Premiums (except for the sole purpose of forwarding
monies or Premiums to BMA). J&B shall not expend nor contract
for the expenditure of the funds of BMA nor shall J&B possess
or exercise any authority on behalf of BMA other than that
expressly conferred on each by this Agreement.
(f) J&B shall require that its agents and representatives
appointed by BMA as agents not make recommendations to an
applicant to purchase a Contract in the absence of reasonable
grounds to believe that the purchase of the Contract is
suitable for the applicant. In any sales agreement with a
Dealer, J&B shall require that any agent or representative of
the Dealer appointed by BMA as an insurance agent not make any
recommendation to an applicant to purchase a Contract in the
absence of reasonable grounds to believe that the purchase of
the Contract is suitable for the applicant. While not limited
to the following, a determination of suitability shall be
based on information supplied to an agent or representative
after a reasonable inquiry concerning the applicant's
insurance and investment objectives and financial situation
and needs.
(g) J&B will be obligated to pay the following expenses related to
its of their distribution activities of the Contracts: (i) the
compensation of J&B's own registered representatives, if any;
(ii) expenses associated with the initial licensing and
training of its registered representatives and other employees
involved in the distribution of the Contracts; (iii) all legal
and other professional fees incurred by J&B in connection with
the foregoing; and (iv) any other expenses incurred by J&B or
its agents, representatives or employees for the purpose of
carrying out the obligations of J&B hereunder.
7. Records
BMA and J&B shall maintain such accounts, books and other documents as
are required to be maintained by each of them by applicable laws and
regulations and shall preserve such accounts, books and other documents
for the periods prescribed by such laws and regulations. The accounts,
books and records of BMA, the Separate Account, the Investment
Companies, J&B as to all transactions hereunder shall be maintained to
clearly and accurately disclose the nature and details of the
transactions, including such accounting information as necessary to
demonstrate the reasonableness of the amounts paid by either party
hereunder. Each party shall have the right to inspect and audit such
accounts, books and records of the other party during normal business
hours upon reasonable written notice to the other party(ies). Each
party shall keep confidential all information obtained pursuant to such
an inspection or audit, and shall disclose such information to third
parties only upon receipt of written authorization from the other
parties, except as required by law. J&B shall include in the sales
agreement with each Dealer a requirement that the Dealer promptly
furnish to BMA or its authorized agent any reports and information
which BMA reasonably may request for the purpose of meeting BMA's
reporting and recordkeeping requirements under the insurance laws of
any state, and under any applicable federal and state securities laws,
rules and regulations and under the rules of the NASD.
8. Compensation
BMA shall pay commissions on Premiums paid under Contracts sold
pursuant to this Agreement as is specified in Exhibit A. J&B shall be
responsible for all tax reporting information which J&B is required to
provide under applicable tax law to their agents, representatives or
employees with respect to the Contracts, and each sales agreement with
a Dealer shall require the Dealer to be responsible for all tax
reporting information which such Dealer is required to provide under
applicable tax law to its agents, representatives and employees with
respect to the Contracts. Nothing contained in this Agreement or any
sales agreement is to be construed to require BMA to provide any tax
reporting information directly or indirectly to any Dealer or its
agents, representatives or employees.
9. Investigation and Proceedings
(a) BMA and J&B each agree to cooperate fully in any insurance
regulatory investigation or proceeding or judicial proceeding
arising in connection with the offering, sale or distribution
of the Contracts distributed under this Agreement. The parties
further agree to cooperate fully in any securities regulatory
investigation or proceeding or judicial proceeding with
respect to BMA or J&B, their affiliates and their agents or
representatives to the extent that such investigation or
proceeding is in connection with the offering, sale or
distribution of the Contracts distributed under this
Agreement. Without limiting the foregoing, each party agrees
to notify the other parties promptly of any written customer
complaint or notice of any regulatory investigation or
proceeding or judicial proceeding received by any party with
respect to the Contracts, Investment Companies, BMA, J&B, or
any agent or representative which may affect the sale of the
Contracts under this Agreement.
(b) In the case of a substantive customer complaint, all parties
will cooperate in investigating such complaint and any
response by a party to such complaint will be sent to the
other parties for approval not less than five business days
prior to its being sent to the customer or any regulatory
authority, except that if a more prompt response is required,
the proposed response shall be communicated by telephone,
facsimile or electronic mail. No party will release any such
response without the other parties' prior written approval.
10. Indemnification
(a) Each party hereto (the "indemnifier") shall defend, indemnify
and hold harmless the other parties and their affiliated
companies, and each person who controls or is associated with
them within the meaning of such terms under the federal
securities laws and any officers, directors, employees and
agents, with respect to any and all losses, damages, claims or
expenses (including any investigative, legal or other expenses
reasonably incurred in connection with, and any amounts paid
in settlement of, any action, suit or proceeding or any claim
asserted) which may be incurred as a result of any acts or
omissions of the indemnifier, its officers, directors,
employees and agents. This section 10 shall survive
termination of this Agreement. This indemnification shall be
in addition to any liability which the parties hereto may
otherwise have.
(b) The terms and provisions of this Agreement are intended solely
for the benefit of the parties to this Agreement, and the
respective successors and assigns, and it is not the intention
of the parties to confer third-party beneficiary rights on any
person or entity.
11. Term
(a) Unless otherwise terminated pursuant to this Section 11, this
Agreement shall remain in effect for two (2) years following its
execution. This Agreement shall remain in effect thereafter unless
(i) terminated, after the expiration of the initial period, at the
option of any party, upon sixty days written notice to the other
party or (ii) terminated pursuant to subparagraph (b) of this
Paragraph 11.
(b) This Agreement shall terminate automatically if it is assigned.
Without limiting the generality of the foregoing, the term
"assigned" shall not include any transaction exempted from Section
15(b)(2) of the 1940 Act. This Agreement may be terminated upon
ten days written notice to the other party(ies), without payment
of any penalty. This Agreement may be terminated at the option of
any party upon the other party's material breach of any provision
of this Agreement or immediately upon written notice in the event
any party: files a petition for reorganization or liquidation
under the U.S. Bankruptcy Code; becomes subject to the
jurisdiction of the U.S. Bankruptcy Court; has a liquidator or
trustee appointed to oversee its affairs; or is adjudged
insolvent.
(c) Upon termination of this Agreement all authorizations, rights and
obligations shall cease except: (i) the obligation to settle
accounts hereunder, including commissions on Premiums subsequently
received for Contracts in effect at the time of termination or
issued pursuant to applications received by BMA prior to
termination; (ii) the provisions contained in Sections 4(h), 8 and
9 hereof; (iii) the indemnification provisions set forth in
Section 10 hereof; and (iv) a mutual obligation to refrain from
replacing, directly or indirectly, existing Contracts with new
variable annuity contracts resulting from new affiliations of any
party, except as otherwise agreed in writing.
12. Rights, Remedies, etc., are Cumulative
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws. Failure of any party to insist upon strict
compliance with any of the conditions of this Agreement shall not be
construed as a waiver of any of the conditions, but the same shall remain
in full force and effect. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver.
13. Notices
All notices hereunder are to be made in writing and shall be given:
if to BMA, to:
Business Men's Assurance
Company of America
000 Xxxxxx Xxxx.
Xxxxxx Xxxx XX 00000-0000
if to J&B, to:
Xxxxx & Babson
000 Xxxxxx Xxxx.
Xxxxxx Xxxx XX 00000-0000
or such other address as such party may hereafter specify in
writing. Each such notice to a party shall be either hand
delivered or transmitted by registered or certified United States
mail with return receipt requested, and shall be effective upon
delivery.
14. Interpretation, Jurisdiction, Etc.
This Agreement constitutes the whole agreement between the parties hereto
and supersedes all prior oral or written negotiations between the parties
with respect to the subject matter hereof. This Agreement shall be
construed and its provisions interpreted under and in accordance with the
internal laws of the State of Missouri without giving effect to principles
of conflict of laws.
15. 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.
16. Counterparts
This Agreement may be executed in counterparts, each of which taken
together shall constitute one and the same instrument.
17. Severability
This is a severable agreement and in the event that any part or parts of
this Agreement shall be held to be unenforceable to its or their full
extent, then it is the intention of the parties hereto that such part or
parts shall be enforced to the extent permitted under the law, and, in any
event, that all other parts of this Agreement shall remain valid and duly
enforceable as if the unenforceable part or parts had never been a part
hereof.
18. Regulation
This Agreement shall be subject to the provisions of the 1933 Act, 1934 Act
and 1940 Act and the Regulations and the rules and regulations of the NASD,
from time to time in effect, including such exemptions from the 1940 Act as
the SEC may grant, and the terms hereof shall be interpreted and construed
in accordance therewith.
IN WITNESS WHEREOF, each party hereto represents that the officer signing
this Agreement on the party's behalf is duly authorized to execute this
Agreement; and the parties hereto have caused this Agreement to be duly executed
by such authorized officers on the date specified below.
BUSINESS MEN'S ASSURANCE
COMPANY OF AMERICA
Date:_______________ By:____________________________
XXXXX & XXXXXX, INC.
Date:_______________ By:____________________________
EXHIBIT A
COMPENSATION
1. Compensation for Variable Life Insurance
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Year 1 105% of Target Premium
3% of Excess Premium
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Years 2-10 5% of Target Premium
3% of Excess Premium
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Year 11+ .25% annual rate of Accumulation Value, paid quarterly
on average balance.
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Commission Chargeback Rules: During the 1st 12 months, seventy-five percent (75%)
of the compensation paid will be charged back for full
surrenders if compensation was annualized.
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