AMENDMENT TO CGMI CONTRACT(S)
This Amendment is made by and among MetLife Investors Distribution Company,
MetLife Insurance Company of Connecticut, MetLife Investors Distribution
Company, MetLife Investors USA Insurance Company (collectively, "Company"),
Citigroup Global Markets Inc. ("CGMI"), SBHU Life Agency, Inc. ("SBHU"),
Citigroup Life Agency LLC ("CLA") and Xxxxxx Xxxxxxx Xxxxx Xxxxxx LLC ("MSSB"),
to the agreement(s) listed on Exhibit A, including all amendments thereto
(collectively, the "CGMI Contract(s)").
WHEREAS, Citigroup Inc. ("Citi") and Xxxxxx Xxxxxxx have established a new
broker-dealer, MSSB as part of a joint venture including the Xxxxx Xxxxxx
channel of CGMI;
WHEREAS, MSSB initially will serve as an introducing broker-dealer and will
utilize CGMI as a clearing broker-dealer for customers of the Xxxxx Xxxxxx
channel of MSSB;
WHEREAS, Citi shall contribute SBHU to MSSB to act as the licensed
insurance agency for the portion of the insurance and annuity business produced
by SBHU to be contributed to the Xxxxx Xxxxxx channel of MSSB (the "Contributed
Business") and Citi has formed CLA to act as the licensed insurance agency for
Citi's portion of the insurance and annuity business produced by SBHU until,
and to be retained by Citi after, the closing of the joint venture (the
"Retained Business").
WHEREAS, SBHU, CGMI, CLA and MSSB desire to amend the CGMI Contract(s) to
add as additional parties to the CGMI Contract(s): (i) MSSB, to service the
Xxxxx Xxxxxx channel of MSSB, including the Contributed Business, and (ii) CLA,
to service the Retained Business after the closing of the joint venture.
NOW, THEREFORE, the parties hereby agree to amend the CGMI Contract(s) as
follows:
1. Company, SBHU and CGMI agree to add as additional parties to the CGMI
Contract(s), effective as of the closing of the joint venture between Xxxxxx
Xxxxxxx and Citi: (i) MSSB and (ii) CLA. The provisions of the CGMI Contract(s)
relating to SBHU will apply with same effect to CLA with regard to the Retained
Business, as appropriate. The provisions of the CGMI Contract(s) relating to
CGMI will apply with same effect to the Xxxxx Xxxxxx channel of MSSB with regard
to the Contributed Business, as appropriate.
2. Company acknowledges and agrees that (i) MSSB may hereinafter serve as an
introducing broker-dealer or broker-dealer for customers of the Xxxxx Xxxxxx
channel of MSSB to, among other things, effect transactions under the CGMI
Contract(s) related to the Contributed Business, (ii) SBHU may hereinafter serve
as the licensed insurance agency for customers of the Xxxxx Xxxxxx channel of
MSSB to effect transactions for the Contributed Business under the CGMI
Contract(s); (iii) CLA may hereinafter serve as the licensed insurance agency
for customers of Citi to effect transactions for the Retained Business under the
CGMI Contract(s); and (iv) CGMI may continue to serve as a broker-dealer for its
customers, including effecting transactions under the CGMI Contract(s) related
to the Retained Business, and may hereinafter serve as a clearing broker-dealer
for customers of its introducing broker-dealer, the Xxxxx Xxxxxx channel of
MSSB, to, among other things, effect transactions under the CGMI Contract(s) for
the Contributed Business.
3. Company acknowledges that, through one or more agreements between SBHU, CGMI,
CLA and MSSB, as applicable, (i) SBHU or CGMI, as appropriate, may allocate all
or a portion of the compensation payable by Company under the CGMI Contract(s)
to CLA or MSSB, as appropriate, and (ii) CLA or MSSB,
as appropriate, may allocate all or a portion of the compensation payable by
Company under the CGMI Contract(s) to SBHU or CGMI, as appropriate.
4. For the avoidance of doubt, the parties hereto acknowledge that the CGMI
Contract(s) (which include this Amendment) shall inure to the benefit of, and
bind the respective successors of, the parties thereto and hereto. All other
provisions of the CGMI Contract(s) shall remain in full force and effect. This
Amendment does not alter or amend any similar agreement(s) entered into between
Xxxxxx Xxxxxxx or MSSB (for the Xxxxxx Xxxxxxx channel of MSSB) and Company.
5. This Amendment may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument. Transmission by telecopier or facsimile transmission of an executed
counterpart of this Amendment shall constitute due and sufficient delivery of
such counterpart.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed
by their duly authorized officer only with regard to the CGMI Contraet(s) to
which it is a party (as indicated on Exhibit A).
CITIGROUP GLOBAL MARKETS INC. XXXXXX XXXXXXX XXXXX XXXXXX LLC
BY: /s/ Xxxxxx X. Xxxxxxxx BY: /s/ Xxxxxx Xxxxxx
------------------------------- --------------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx Xxxxxx
Title: Managing Director Title: Authorized Signatory
Date: April 20, 2009 Date: April 20, 2009
SBHU LIFE AGENCY, INC. CITIGROUP LIFE AGENCY LLC
BY: /s/ Xxxxxxx Xxxxxxxxxx BY: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------- --------------------------------
Name: Xxxxxxx Xxxxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: President Title: President
Date: April 20, 2009 Date: April 20, 2009
METLIFE INVESTORS ("TIC")
DISTRIBUTION COMPANY ("MLIDC")
BY: /s/ Xxxxxxx X. Xxxxxxx BY:
------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxxx Name:
Title: Executive Vice President Title:
Date: 4/27/09 Date:
("TLAC)(TIC and TLAC are now Now MLIDC
MetLife Insurance Company of
Connecticut)
BY: BY:
------------------------------- --------------------------------
Name: Name:
Title: Title:
Date: Date:
METROPOLITAN LIFE METLIFE INVESTORS USA
INSURANCE COMPANY INSURANCE COMPANY
BY: /s/ Xxxxxxxxx Forget BY: /s/ Xxxxxxx X. Xxxxxxx
------------------------------- --------------------------------
Name: Xxxxxxxxx Forget Name: Xxxxxxx X. Xxxxxxx
Title: svp Title: Vice Precident
Date: 4/29/09 Date: 4/27/09
FIRST METLIFE INVESTORS INSURANCE
COMPANY
BY: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice Precident
Date: 4/27/09
CONSENT TO ASSIGNMENT
We hereby acknowledge that the sale and/or marketing of products, programs
and/or services under the CIAI Contract(s) is prohibited on and after the
Effective Date and consent to this Assignment and Assumption.
BROKER-DEALER:
METLIFE INVESTORS DISTRIBUTION METLIFE INSURANCE COMPANY OF
COMPANY CONNECTICUT
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxx
------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxx
Title: Executive Vice President Title: Senior Vice President &
Date: 5/14/07 Secretary
Date: May 10, 2007
CARRIERS/PROVIDERS:
METLIFE LIFE AND ANNUITY COMPANY OF FIRST METLIFE INVESTORS INSURANCE
CONNECTICUT COMPANY
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------- --------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President & Title: Vice President
Secretary
Date: May 10, 2007 Date: 5/14/07
METLIFE INVESTORS USA INSURANCE
COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Date: 5/14/07
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxx
-------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President &
Secretary
Date: May 10, 2007
SELLING AGREEMENT
This Agreement, including all schedules attached hereto and made a part
hereof ("Agreement"), is made as of February 22, 2006 ("Effective Date"), by and
among METLIFE INVESTORS DISTRIBUTION COMPANY ("Distributor"), a Delaware
corporation, CITIGROUP GLOBAL MARKETS INC. ("CGM") a New York corporation, its
affiliate, SBHU LIFE AGENCY, INC. and the affiliates listed on Schedule A
(collectively, "Agency") (CGM and Agency, collectively, "Xxxxx Xxxxxx").
A. Distributor and its affiliates listed on Schedule B ("MetLife
Affiliates" and collectively with Distributor, "MetLife") issue or provide
access to the life insurance, annuity contracts and other products identified on
Schedule C ("Contracts"), some of which are deemed to be securities under the
Securities Act of 1933, as amended, ("Variable Contracts") and some of which are
not so registered ("Fixed Contracts").
B. Distributor and CGM are both broker-dealers registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended ("1934 Act"), and members of NASD, Inc. ("NASD") in good standing.
C. Agency, an affiliate of CGM, whose employees are also employees of CGM,
is an insurance agency duly licensed to sell the Contracts in any state or other
jurisdiction in which Agency intends to perform hereunder.
D. Distributor, on behalf of itself and the MetLife Affiliates, is
authorized to enter into a written agreement with Xxxxx Xxxxxx appointing CGM
and Agency as agent of MetLife for the solicitation and sale of the Contracts.
The parties agree as follows:
1. APPOINTMENT AND AUTHORIZATION OF XXXXX XXXXXX; PERFORMANCE
----------------------------------------------------------
a) MetLife appoints Xxxxx Xxxxxx as agent and authorizes Xxxxx Xxxxxx to
solicit sales of the Contracts, through its Registered Representatives, in all
states where MetLife has separately notified Xxxxx Xxxxxx in writing that
MetLife is authorized to do business and that the Contracts are qualified for
sale or exempt from qualification under all applicable securities and insurance
laws. Xxxxx Xxxxxx accepts this appointment on the terms set forth in this
Agreement.
b) A "Registered Representative" is an individual who is (i) an associated
person of CGM within the meaning of section 3(a)(18) of the 1934 Act, (ii) a
general securities representative registered with the NASD with respect to whom
CGM has on file a Form U-4 and has completed a background investigation that has
been filed with the NASD, (iii) duly registered with all applicable state
securities regulatory authorities as a registered person of CGM, (iv) duly
licensed under the insurance laws of all states in which such individual is
required to be licensed in order to solicit and sell the Contracts and (v) duly
appointed by MetLife with state insurance departments to act as an agent to
solicit and sell the Contracts.
c) The parties, and their respective employees, agents and representatives,
will each perform their respective obligations hereunder in a manner reasonably
satisfactory to the others, in conformance with the customary practices of the
insurance and securities industries and in compliance with applicable law,
including any rule or regulation of any agency, governmental, regulatory or
self-regulatory authority ("Law").
d) The parties will make commercially reasonable good faith efforts to
comply with each other's policies and procedures with respect to the sales,
administration and servicing of the Contracts as may be issued in writing from
time to time.
2. NON-EXCLUSIVITY; INDEPENDENT CONTRACTOR STATUS
----------------------------------------------
a) This Agreement is not an exclusive agreement between the parties. Any
party (or their respective affiliates) may enter into any agreement or
arrangement that is identical to or different from this Agreement with any other
person or entity.
b) In the performance of this Agreement, the relationship of CGM to MetLife
is that of an independent contractor. Neither party shall be deemed to be an
employee, partner or joint venturer of or with the other party for any purpose.
3. REPRESENTATIONS AND WARRANTIES OF XXXXX XXXXXX
----------------------------------------------
a) CGM and Agency represent and warrant that each is, and will remain, duly
and validly organized, validly existing and in good standing under the laws of
the state in which it is organized, with full and proper power and authority to
enter into and perform the terms of this Agreement.
b) CGM represents and warrants that it is registered as a broker-dealer
under the 1934 Act and a member in good standing of NASD and under the
securities laws of each jurisdiction in which such registration is required for
the sale of the Contracts. CGM will promptly advise MetLife of any termination
or suspension of its broker-dealer registration or NASD membership.
c) Agency represents and warrants that it is duly licensed as an insurance
agent in each jurisdiction in which licensure is required for the sale of the
Contracts. Agency will promptly advise MetLife of any termination or suspension
of its insurance license in any such jurisdiction.
d) CGM and Agency each represents and warrants that the person signing on
its behalf is properly authorized to execute this Agreement and that this
Agreement constitutes a valid and binding contract between it and MetLife,
enforceable in accordance with its terms.
4. REPRESENTATIONS AND WARRANTIES OF DISTRIBUTOR AND METLIFE AFFILIATES
--------------------------------------------------------------------
a) Distributor and MetLife Affiliates represent and warrant that each is,
and will remain, duly and validly organized, validly existing and in good
standing under the laws of the state in which it is organized, with full and
proper power and authority to enter into and perform the terms of this
Agreement. MetLife Affiliates represents that it is licensed to do an insurance
business in all jurisdictions in which it conducts business. Distributor
represents that it is licensed to do business in all jurisdictions in which it
conducts business.
b) Distributor represents and warrants that it is registered as a
broker-dealer under the 1934 Act and a member in good standing of NASD and under
the securities laws of each jurisdiction in which such registration is required
for the sale of the Contracts. Distributor will promptly advise Xxxxx Xxxxxx of
any termination or suspension of its broker-dealer registration or NASD
membership.
c) Distributor represents and warrants that the person signing on its
behalf, and on behalf of the MetLife Affiliates, is properly authorized to
execute this Agreement and that this Agreement constitutes a valid and binding
contract between it and Xxxxx Xxxxxx, enforceable in accordance with its terms.
2
d) MetLife represents and warrants that the Variable Contracts issued by
MetLife Affiliates have been duly filed and approved by the state insurance
departments in each state where it is authorized to transact business, unless
otherwise stated in writing to Xxxxx Xxxxxx.
e) MetLife represents and warrants that the Contracts, including related
separate accounts, will comply with the registration and all other applicable
requirements of the 1933 Act and the Investment Company Act of 1940 ("1940
Act"), and the rules and regulations thereunder, including the terms of any
order of the SEC with respect thereto.
f) MetLife represents and warrants that the prospectuses, registration
statements and any post-effective amendments and any supplements thereto for the
Variable Contracts, as filed or to be filed with the SEC, as of their respective
dates (i) contain or will contain, all statements and information which are
required to be stated therein by the 1933 Act and the 1940 Act and in all
respects conform or will conform, to the requirements thereof, and (ii) contain
no untrue statements of material fact and do not omit to state material facts,
the omission of which makes any statement therein misleading.
g) MetLife represents and warrants that all sales, promotion, advertising,
marketing, education or training materials relating to the Contracts, MetLife,
or Xxxxx Xxxxxx, and approved by MetLife for use by Xxxxx Xxxxxx ("Sales
Material") comply with all applicable Law.
h) MetLife represents and warrants that all compensation payable to Xxxxx
Xxxxxx hereunder complies with Law.
i) MetLife will, during the term of this Agreement, provide Xxxxx Xxxxxx
with prompt written notice of the issuance by the SEC of any stop order with
respect to the registration statement or any amendments thereto or the
initiation of any proceedings for that purpose or for any other purpose relating
to the registration and offering of the Contracts and of any other action or
circumstance that may prevent the lawful sale of the Contracts in any state.
5. RIGHTS AND RESPONSIBILITIES OF XXXXX XXXXXX
-------------------------------------------
a) QUALIFIED AGENTS. Xxxxx Xxxxxx will ensure that each Registered
Representative recommended for appointment as agent of MetLife is licensed under
the applicable state insurance laws when proposed for appointment, has completed
any educational program required by applicable Law and is otherwise in good
standing with all agencies regulating the sale of the Contracts. Upon request,
Xxxxx Xxxxxx will furnish MetLife with proof reasonably acceptable to both
parties that the Registered Representative has satisfied licensing requirements.
Xxxxx Xxxxxx will not knowingly designate anyone for appointment to MetLife to
conduct insurance business who has been convicted of a felony involving
dishonesty or breach of trust intended to be covered under 18 USC (S) l033
(Federal Crime Xxxx) or who has not otherwise received consent and/or waiver of
an authorized insurance regulator to engage in the insurance business in spite
of such felony conviction.
b) BACKGROUND INVESTIGATIONS. Xxxxx Xxxxxx represents that it has conducted
a background investigation on each of its Registered Representatives as required
by applicable Law. To the extent permitted by applicable Law, Xxxxx Xxxxxx will
provide, or make reasonable effort to cause Registered Representatives to
provide, MetLife with appropriate authorization to allow MetLife to conduct such
background and credit investigations of Registered Representatives as may be
necessary or appropriate under applicable Law. Xxxxx Xxxxxx will promptly notify
MetLife if any Registered Representative is terminated with an electronic
notification through National Securities Clearing Corporation.
3
c) LICENSING. Xxxxx Xxxxxx, at its sole expense, will ensure that its
Registered Representatives are properly licensed and/or registered with the
appropriate governmental agency or authority to solicit, sell and service the
Contracts.
d) CONTRACT SOLICITATION. Xxxxx Xxxxxx will ensure that Registered
Representatives solicit applications for Contracts in accordance with applicable
Law including, NASD Conduct Rules, insurance replacement regulations and
regulations prohibiting the rebating of commissions. Xxxxx Xxxxxx will train its
Registered Representatives in the solicitation of applications for the
Contracts. Xxxxx Xxxxxx will ensure that its Registered Representatives (i) do
not make any representations inconsistent with any applicable product
prospectus, Contract provision, or Sales Material that bas been approved by the
parties, and (ii) do not solicit applications for the Variable Contracts unless
accompanied or preceded by the applicable prospectus. Xxxxx Xxxxxx will be
solely responsible for its Registered Representatives in the solicitation and
sale of Contracts, except for acts or omissions taken in reliance upon
information provided by MetLife, unless the information is actually known by the
Registered Representative to be (i) in violation of applicable Law, or (ii)
materially inconsistent with the any applicable prospectus, supplemental or
marketing material that has been approved by the parties.
e) SUPERVISION. Xxxxx Xxxxxx will supervise the conduct of its Registered
Representatives in their solicitation activities in connection with the
Contracts, and will supervise Registered Representatives' compliance with
applicable Law.
f) SUITABILITY. Xxxxx Xxxxxx will be solely responsible for determining
suitability of sales transactions.
g) Xxxxx Xxxxxx will be solely responsible for the accuracy and propriety
of any instruction given or action taken by a Registered Representative on
behalf of a Contract owner or applicant for a Contract. MetLife will have no
responsibility or liability for any action taken or omitted by it in good faith
in reliance on or by acceptance of such an instruction or action.
h) INSURANCE COVERAGE.
(i) Fidelity Bond. Xxxxx Xxxxxx shall secure and maintain a fidelity
bond including coverage for employee fidelity, forgery, theft, and
similar offenses covering all of its directors, officers, agents,
Registered Representatives, associated persons and employees who have
access to funds of MetLife. This bond shall be maintained at CGM's
expense in at least the amount prescribed under Rule 3020 of the NASD
Conduct Rules and future amendments thereto.
(ii) Professional Liability. Xxxxx Xxxxxx will maintain coverage for
errors and omissions by CGM, Agency, representatives and agents,
including Registered Representatives, to claimants such as MetLife.
(iii) Loss of coverage. The authority of any Registered Representative
to solicit and procure Contracts will terminate automatically upon the
termination of such Registered Representative's coverage under Xxxxx
Barney's fidelity bond or plan of insurance referred to in subsections
(i) and (ii) above.
(iv) Right to Self-Insure. Xxxxx Xxxxxx shall have the option, either
alone or in conjunction with Citigroup Inc. ("Citigroup"), Xxxxx
Barney's ultimate parent corporation, or any subsidiaries or
affiliates of Citigroup, to maintain self insurance and/or provide or
maintain any insurance required by this Agreement under blanket
insurance policies maintained by Xxxxx Xxxxxx or Citigroup, or provide
or maintain insurance through such alternative risk management
programs as Citigroup may provide or participate in from time
4
to time (such types of insurance programs being herein collectively
and severally referred to as "self insurance"), provided the same does
not thereby decrease the insurance coverage or limits sets forth in
this Agreement. Any self insurance shall be deemed to contain all of
the terms and conditions applicable to such insurance as required in
this Agreement. If Xxxxx Xxxxxx elects to self-insure, then, with
respect to any claims which may result from incidents occurring during
the Term, such self insurance obligation shall survive the expiration
or earlier termination of this Agreement to the same extent as the
insurance required would survive.
(v) MetLife's Interest. Xxxxx Xxxxxx shall upon the request of MetLife
at any time furnish to MetLife updated certificates or other evidence
of insurance (unless Xxxxx Xxxxxx has already elected to self-insure
such exposures).
6. RIGHTS AND RESPONSIBILITIES OF DISTRIBUTOR AND METLIFE AFFILIATES
-----------------------------------------------------------------
a) APPOINTMENT/TRAINING. MetLife will appoint, at its own expense, all
Registered Representatives designated by Xxxxx Xxxxxx prior to, or concurrently
with, any solicitation of the Contracts as required by Law and agreed to by the
parties. MetLife may, with reasonable cause, decline to appoint any Registered
Representative or terminate any such appointment. MetLife will not terminate the
appointment of any Registered Representative without prior notice to Xxxxx
Xxxxxx, and will ensure that any such termination will not impair the Registered
Representative's ability to service outstanding Contracts, provided the
termination was not on account of malfeasance or misfeasance. MetLife will
provide training to Registered Representatives as to the features and costs of
the Contracts.
b) SALE OF CONTRACTS. MetLife has the right to modify any of the Contracts,
modify or alter the conditions or terms under which any Contract may be sold,
discontinue or withdraw any Contract from any geographic area or market segment
without prejudice to continuation of such form in any other area or market
segment, suspend the sale of any of the Contracts, or cease doing business in
any area in whole or in part, at any time with prior written notice to Xxxxx
Xxxxxx, unless the obligation to provide written notice will cause irreparable
harm to MetLife. MetLife may remove any Contract from Schedule C, thereby
terminating the solicitation and sale of such Contract under this Agreement,
with advance written notice to Xxxxx Xxxxxx, but may not add new Contracts to
Schedule C without the written consent of Xxxxx Xxxxxx.
c) SOURCE OF COMPENSATION. MetLife covenants, represents and warrants that
all sales compensation payable to Xxxxx Xxxxxx under this Agreement will be paid
from the general assets of MetLife, however derived, and not assessed as a
separately identifiable charge to Contract owners except to the extent disclosed
in the applicable prospectus.
d) FEE DISCLOSURE. To the extent required by applicable Law, MetLife will
disclose to purchasers, all fees, costs and expenses, whether direct or
indirect, associated with the purchase of any Contract.
e) ELECTRONIC DATA FEEDS AND REPORTS. MetLife will provide Xxxxx Xxxxxx
with all mutually agreed upon electronic data feeds and reports, including but
not limited to the following files: surrenders and cancellations, fund
(subaccount) transfers, account values, Commissions, Registered Representative
licensing and appointment, case-management, sales reporting and such other data
transmissions, in whatever format or medium, as Xxxxx Xxxxxx may reasonably
request, in a manner that Xxxxx Xxxxxx believes will enable Xxxxx Xxxxxx to (i)
comply with applicable Law and (ii) process and service business efficiently.
5
f) PROSPECTUSES. MetLife will provide Xxxxx Xxxxxx, without charge, with as
many copies of Contract prospectuses, current underlying subaccount
prospectuses, statements of additional information and applications for the
Contracts, as Xxxxx Xxxxxx may reasonably request. If any event occurs as a
result of which it is necessary to amend or supplement a prospectus for any
Variable Contract in order to make the statements therein, in light of the
circumstances under which they were or are made, true, complete or not
misleading, MetLife will promptly notify and furnish or make available to Xxxxx
Xxxxxx, without charge, any amendments or supplements to the prospectuses
sufficient to make the statements made in the prospectus as so amended or
supplemented true, complete and not misleading. MetLife will deliver to Variable
Contract owners updated prospectuses and supplements as they are issued as
required by Law.
g) MONITORING OF ACCOUNT ACTIVITY. MetLife will monitor account activity
and inform Xxxxx Xxxxxx if it observes unusual, questionable or inappropriate
patterns in transactions involving Registered Representatives or Xxxxx Xxxxxx
clients. Such transactions include exchanges, free looks, surrenders, lapses,
and significant transactions that will result in assets being transferred to or
from MetLife.
h) OWNER AUTHORIZATION. MetLife will ensure that a Registered
Representative does not execute on behalf of a Contract owner any subaccount
transfer within a Contract unless MetLife has on file a written authorization
from the Contract owner that the Registered Representative may execute such
transfers.
i) CERTIFICATION OF COMPLIANCE. On an annual basis beginning March 1,2006,
MetLife will provide to Xxxxx Xxxxxx a Certificate of Compliance ("Certificate")
the form of which is contained in Schedule D. Xxxxx Xxxxxx may require MetLife
to provide factual support for one or more certifications contained in the
Certificate. In the event that MetLife does not provide the Certificate on a
timely basis, is unable to certify performance with the matters stated in the
Certificate, or does not provide sufficient factual support (in the sole
discretion of Xxxxx Xxxxxx) for one or more of the certifications, Xxxxx Xxxxxx
shall notify MetLife in writing and provide MetLife an additional sixty (60)
calendar days to remedy the failure. If the failure has not been remedied within
the 60-day period, Xxxxx Xxxxxx will be entitled to terminate this Agreement.
j) CONTRACT SERVICE AND SUPPORT. MetLife will issue and deliver client
account statements with copies to the client's Registered Representative; will.
consistent with applicable Law and its Contract rights/obligations, promptly
process withdrawal requests, beneficiary designations, insurance claims; perform
required annual tax-reporting; and supply Xxxxx Xxxxxx (or its insurance service
centers, as appropriate) with current illustration software for the purpose of
illustrating life and long term care products to prospective clients.
k) LONG TERM CARE (LTC) PRODUCTS.
(i) MetLife will ensure that employees of Distributor or Distributor's
affiliates who work on the LTC sales desk ("LTC Associates" or "internal
wholesalers") or support the field ("LTC Specialists" or "external
wholesalers"), are well-informed with respect to (A) MetLife LTC products,
marketing material, underwriting and case management and B) Xxxxx Barney's
policies, procedures and business practices relating to LTC products, which will
be provided to MetLife in writing or in the periodic training classes described
in this paragraph. MetLife will require the LTC Associates and LTC Specialists
to attend periodic classes hosted by Xxxxx Xxxxxx personnel for training in how
to respond to LTC-related inquiries from Registered Representatives (including,
but not limited to product, marketing materials, licensing and continuing
education requirements).
(ii) MetLife LTC Specialists will be assigned to specified regions of
the country and provide sales support to Xxxxx Xxxxxx, including but not limited
to the following services: educate Registered Representatives as to MetLife LTC
products, conduct "on-site" training sessions for Registered Representatives as
requested by Xxxxx Xxxxxx branch personnel (at branch offices or other mutually
agreed upon locations) and conduct client seminars on LTC insurance and MetLife
LTC products.
6
l) DISABILITY INCOME (DI) CONTRACTS.
(i) MetLife will ensure that employees of Distributor or Distributor's
affiliates who are involved in the sale of DI Contracts ("DI Representatives" or
"DI Reps"), or support the field, are knowledgeable with respect to (A) MetLife
DI Contract foms, marketing material, underwriting and case management and B)
Xxxxx Barney's policies, procedures and business practices relating to DI
Contracts, which are provided to DI Reps in writing or in the training classes
described in this paragraph. MetLife will require the DI Reps to attend
periodic events hosted by Xxxxx Xxxxxx personnel, at a time and place that is
mutually agreed upon by Xxxxx Xxxxxx and MetLife, for training on how to respond
to DI-related inquiries from Registered Representatives (including, but not
limited to product, marketing materials, licensing and continuing education
requirements).
(ii) Metl.ife DI Reps will be assigned to specified regions of the
country and provide sales support to Xxxxx Xxxxxx as mutually agreed upon by
Xxxxx Xxxxxx and MetLife, including but not limited to the following services:
educate Registered Representatives as to MetLife DI Contracts, conduct "on-
site" training sessions for Registered Representatives as requested by Xxxxx
Xxxxxx branch personnel (at branch offices or other mutually agreed upon
locations) and conduct client seminars on DI insurance and MetLife DI Contracts.
Xxxxx Xxxxxx will ensure that Registered Representatives are knowledgeable with
respect to MetLife's policies, procedures and business practices relating to DI
Contracts, which are provided to Xxxxx Xxxxxx in writing.
7. LIMITATIONS OF AUTHORITY
------------------------
a) No party has the authority to incur any obligations or debts for or on
behalf of the other or to make, modify, or discharge any contract on behalf of
the other by any statement, promise, representation or transaction, without the
other party's express written consent.
b) Xxxxx Xxxxxx has no authority to (i) waive, alter, modify or change any
of the terms, rates, or conditions of the Contracts, (ii) approve evidence of
insurability, or (iii) collect or receive any premiums after the initial
premium, extend the time for any premium payment or reinstate any terminated
coverage..
c) No party may (i) provide or offer to provide to a Contract applicant or
owner any inducement not specified in the Contract, or any rebate of a premium,
consideration or purchase payment ("Purchase Payment") as an inducement to
purchase a Contract in violation of applicable Law, (ii) enter into any court or
regulatory proceeding in the name of, or on behalf of the other party, (iii)
adjust or settle any claim or enter into any legal proceedings on behalf of the
other party or (iv) bind the other party in any way not specifically authorized
in writing by the party to be bound.
d) No party may induce any employee or agent of the other party to
terminate that relationship without the prior written consent of the other
party.
e) Xxxxx Xxxxxx will not engage in a systematic program of contacting
Contract owners for the purpose of inducing them to cancel or replace their
Contracts unless it is determined in Xxxxx Barney's sole discretion to be in the
best interest of each Contract owner, based upon their individual facts and
circumstances.
f) MetLife win ensure that their wholesalers and/or Contract
representatives do not promote to CGM or distribute Sales Material for life
insurance or annuity products (other than the Contracts) to CGM's sales force
without the written consent of CGM. MetLife will ensure that its wholesalers
and/or Contract representatives (i) do not make any representations inconsistent
with any applicable product prospectus, Contract provision, or Sales Material
that has been approved by the parties.
7
g) MetLife may not contact by mail or any other method of communication any
person known by MetLife, as a result of this Agreement or other in-force
agreements between the parties or their predecessors, to be a Xxxxx Xxxxxx
customer, Registered Representative or other employee, agent, or other
individual acting in a similar capacity, except to the extent permitted by Law,
in the performance of this or any other in force Agreement or in connection with
the administration, servicing or maintenance of the Contracts. Any other contact
must be authorized by Xxxxx Xxxxxx in advance, in writing.
h) MetLife will ensure that any intranet site or Internet site that is not
publicly available or password protected will be pre-approved by Xxxxx Xxxxxx
before access is granted to Registered Representatives for the purpose of
accessing client data, preparing illustrations or otherwise.
8. APPLICATION/CONTRACT DELIVERY
-----------------------------
a) Xxxxx Xxxxxx will promptly forward, or cause to have forwarded, to
MetLife all Contract applications, including electronic data applications, found
acceptable and in good order, together with any payments received with the
applications in the form of checks made payable to the order of the applicable
insurer, or by such other means (e.g., wire or electronic transfer) as the
parties mutually agree in writing. MetLife will promptly process applications
for Contracts, reject any application and/or related paperwork that does not
meet MetLife's good order requirements or comply with Law (including New York
State Regulation 60 or any similar replacement statute) that is applicable to
MetLife and notify Xxxxx Xxxxxx of any such rejection.
b) MetLife has the right, based on its current underwriting guidelines, to
refuse to accept applications and purchase orders submitted by Xxxxx Xxxxxx. If
MetLife rejects an application, MetLife will return any Purchase Payment paid by
the applicant to such applicant, or Xxxxx Xxxxxx (which will promptly return the
Purchase Payment to the applicant), and will promptly notify Xxxxx Xxxxxx of
such action. If a purchaser exercises his or her free-look right for a Contract,
any amount to be refunded as provided in the Contract will be so refunded to the
purchaser by or on behalf of MetLife, and MetLife will promptly notify Xxxxx
Xxxxxx of such action.
c) MetLife will promptly deliver life insurance Contracts and applicable
subaccount prospectuses to Xxxxx Xxxxxx or, at the direction of Xxxxx Xxxxxx, to
the applicable insurance service center, which will review and promptly forward
the life insurance Contract and subaccount prospectuses to the Registered
Representative for prompt delivery to the Contract owner. Xxxxx Xxxxxx will
obtain and retain a written receipt for each Contract that it delivers. MetLife
will promptly deliver annuity Contracts issued to the Contract owner. MetLife
will confirm to Xxxxx Xxxxxx, in a manner acceptable to the parties, that the
annuity Contract, and applicable subaccount prospectuses, have been delivered.
This confirmation shall also include, at a minimum, a "policy specification
page" detailing the features and particulars of the Contract, as issued.
d) MetLife will issue and Xxxxx Xxxxxx will deliver policies for Long term
care ("LTC") products and Disability Income Contracts ("DI Contracts") to
Contract owners in accordance with this paragraph and Law:
i) Xxxxx Xxxxxx agrees to deliver LTC policies to purchasers within
ten (10) days of receipt by Xxxxx Xxxxxx from the issuing MetLife
Affiliate.
ii) MetLife will be responsible for preparing a proposal for a DI
Contract and delivering it to the appropriate Registered
Representative who will deliver to the prospective client. A
"Proposal" for a DI Contract means (i) benefit summary pages that
describe the insurance coverage; and (ii) cost and benefit pages
that are consistent with the benefit summary pages. Xxxxx Xxxxxx
will transmit to MetLife all applications for DI Contracts and
the initial premiums, if any, received by it within five (5)
business days of receipt.
8
(iii) Xxxxx Xxxxxx will deliver newly-issued DI Contracts to the
Contract owner within five (5) business days of receipt from
MetLife. Xxxxx Xxxxxx will make reasonable effort to ensure that
the first modal premium is remitted to MetLife within sixty (60)
days of a policy's issue date. The Registered Representative
will deliver the DI Contract only if the insured, to the best of
the Registered Representative's knowledge, is in as good a
condition of health and insurability as is stated in the
original application for the policy. If the Registered
Representative becomes aware of any change in condition of
health and insurability, the policy must be returned to MetLife.
e) Xxxxx Xxxxxx agrees that it will not,nor will it permit Registered
Representatives to use or disclose information obtained about an individual in
connection with an application for or issuance of a Contract that is an LTC
product, including the fact that an individual is an insured under an LTC
product, in connection with the marketing or solicitation of other products.
9. COMPENSATION
------------
a) MetLife will pay Xxxxx Xxxxxx, as compensation for the sale and ongoing
service of the Contracts, the commissions, expense reimbursement allowances,
marketing allowances and overrides, if any ("Commissions") in accordance with
the Schedule C in effect at the time the Contract applications are received by
MetLife, in the case of life insurance, or at the time the Purchase Payments are
received, in the case of annuities. Xxxxx Xxxxxx will not pay any portion of
Commissions to any person or entity that is not duly licensed and appointed by
MetLife as required by applicable Law.
b) For each Commission payment, MetLife agrees to identify for Xxxxx
Xxxxxx, at a minimum, (i) the name of the Registered Representative who
solicited the Contract covered by the payment, (ii) the name of the Contract
owner and (iii) the Contract number.
c) Xxxxx Xxxxxx has the right to net Commissions due on the sale of annuity
Contracts against Purchase Payments collected.
d) Xxxxx Xxxxxx will pay MetLife in full for any indebtedness to MetLife
arising under this Agreement within thirty (30) days of demand. In calculating
the amount of Commissions payable, MetLife may at any time offset against any
compensation payable to CGM or Agency or their respective successors or assigns,
any compensation-related indebtedness due MetLife from CGM under this Agreement.
e) MetLife may, upon thirty days advance written notice to, and written
consent by Xxxxx Xxxxxx, revise any Commissions or chargebacks payable on
Contracts issued, renewed, converted, or exchanged after the effective date of
the revisions stated in the notice. MetLife will not revise Commissions payable
on additions to Contracts that have already been sold without thirty (30) days
prior written notice to, and written consent by, Xxxxx Xxxxxx. .
f) Xxxxx Xxxxxx is responsible for all amounts payable to its Registered
Representatives, employees or agents in connection with the sale of Contracts.
Xxxxx Xxxxxx will be responsible for issuing checks, statements and forms for
tax purposes and other administrative duties connected with compensation of such
Registered Representatives.
g) MetLife will pay Xxxxx Xxxxxx Commissions due and coming due on
Contracts that are in force for so long as Xxxxx Xxxxxx is designated as
broker-of-record at the time the Commissions become due.
h) In the event a chargeback of Commission is warranted, MetLife shall
claim the chargeback within 90 days of the event causing the chargeback. Failure
of MetLife to claim the chargeback during this 90-day period shall discharge
Xxxxx Xxxxxx from the obligation to honor the chargeback.
9
i) Xxxxx Xxxxxx agrees to repay MetLife any Commissions which may have been
paid to it, if MetLife returns Purchase Payments to a Contract owner because:
(i) a Contract owner exercises any applicable right of "free look," (ii) MetLife
rejects any Purchase Payment based upon its current underwriting guidelines,
(iii) by order of any regulatory body, (iv) MetLife determines not to pay a
claim during a Contract's contestability period due to a misrepresentation in
the Contract application, (v) the parties agree to return the Purchase Payment
(e.g. as a result of a complaint by applicant that the parties determine to be
well founded).
j) MetLife will pay Commissions on internal replacements in accordance with
MetLife's rules on replacement transactions. MetLife will not pay first year
Commission on a new sale that is in fact a replacement of a Contract with
another Contract, but undisclosed as required by Law or MetLife's rules on
replacement transactions.
l) Xxxxx Xxxxxx will disclose all Commissions it receives in connection
with the sales and service of Contracts to the extent required by Law. Subject
to Section 16 (Confidential Information), this provision shall not preclude a
party from disclosing to customers or potential customers additional information
regarding compensation payable under this Agreement.
10. SAME-DAY PRICING
----------------
Xxxxx Xxxxxx may electronically submit orders to MetLife for units of
variable annuity contracts ("Electronic Purchases"). For purposes of Electronic
Purchases, receipt by Xxxxx Xxxxxx of applications, related Purchase Payments
and other required documents (collectively, "Applications") for variable annuity
Contracts will be deemed to be receipt by MetLife, and receive unit pricing on
the same day that Xxxxx Xxxxxx receives Applications ("Same Day Pricing")
provided that: a) Xxxxx Xxxxxx receives Applications with complete and accurate
information according to Xxxxx Barney's standard good order guidelines ("Good
Order") prior to the close of the New York Stock Exchange ("Market Close"),
generally 4:00 PM New York time and b) MetLife receives the Electronic Purchases
in good order according to MetLife's standard good order guidelines by 6:00 PM
New York time on the same day. Xxxxx Xxxxxx will not submit any Electronic
Purchase to MetLife for Same Day Pricing if Xxxxx Xxxxxx receives the
Application after Market Close. Any Electronic Purchase received by MetLife from
Xxxxx Xxxxxx after 6:00 PM as described above, will not receive Same Day
Pricing. MetLife will be responsible for promptly notifying Xxxxx Xxxxxx of any
Electronic Purchase that does not receive Same Day Pricing due to failure of Met
Life's standard good order guidelines. Xxxxx Xxxxxx will accompany the
transmission of an Electronic Purchase with a financial reconciliation of each
Purchase Payment and on the next business day after transmission of an
Electronic Purchase, Xxxxx Xxxxxx will wire transfer to the account of MetLife
the amount of the Purchase Payment, net of Commissions due Xxxxx Xxxxxx
according to Schedule C.
11. MARKET TIMING AND LATE TRADING
------------------------------
The parties shall monitor for market-timing and late-trading activity in
the Variable Contracts. If MetLife, in its reasonable discretion, determines
that Xxxxx Xxxxxx or any of Xxxxx Barney's clients are engaging in market timing
activities (that is, programmed, large or frequent transfers) or late trading
(that is, submitting any order to purchase or redeem separate account units in
situations where the Xxxxx Xxxxxx receives the order after the close of trading)
with respect to any portfolios of the Variable Contracts, or that Xxxxx Xxxxxx
is providing advice or assistance to any persons to engage in such market-timing
activities or late trading, MetLife shall promptly notify Xxxxx Xxxxxx in
writing. At the request of Xxxxx Xxxxxx, MetLife shall remove Xxxxx Xxxxxx as
broker-of-record on any specified outstanding Contract. MetLife has the right to
reject any purchase order submitted by a party whom (or whose clients) MetLife
determines to be engaging in market-timing activity or late trading.
10
12. ANTI-MONEY LAUNDERING
---------------------
a) Each party represents that it complies with all applicable anti-money
laundering laws, regulations, rules and government guidance, including the
reporting, recordkeeping and compliance requirements of, to the extent
applicable, the Bank Secrecy Act ("BSA "), as amended by The International Money
Laundering Abatement and Financial Anti-Terrorism Act of 2002, Title III of the
USA PATRIOT Act ("Patriot Act"), its implementing regulations, and related SEC
and SRO rules. To the extent required by applicable Law, each party represents
that it has a comprehensive anti-money laundering compliance program that
includes, policies, procedures and internal controls for complying with the BSA;
policies, procedures and internal controls for identifying, evaluating and
reporting suspicious activity; a designated compliance officer or officers;
training for appropriate employees; and an independent audit function.
b) Xxxxx Xxxxxx certifies, and will certify to Distributor annually, that
it has established and implemented a Customer Identification Program, in
compliance with applicable regulations, as part of its anti-money laundering
compliance program that, at a minimum, currently requires: (i) the verification
of the identity of any customer seeking to open an account after October 1,2003;
(ii) the retention of a record of the information used to verify each such
customer's identity; and (iii) the determination, within a reasonable time
before or after the account is opened, as to whether the customer appears on any
lists of known or suspected terrorists or terrorist organizations as provided to
it by any government agency. Xxxxx Xxxxx agrees that, to the extent required by
applicable Law, it will verify the identity of each customer that it introduces
to MetLife, provided the customer has opened an account with Distributor after
October 1, 2003, whether through documentary or non-documentary means.
Distributor will rely upon such verification, as provided in Section 103.122(b)
of the regulations promulgated under Section 326 of the Patriot Act.
c) Each party represents that it will cooperate and share information with
the others pursuant to Sections 312 and 313 of the Patriot Act so as to enable
each party to conduct enhanced due diligence monitoring of customer activity
involving any customer identified as a senior foreign political figure or
maintaining a residence in a jurisdiction deemed non-cooperative in the fight
against international money laundering by the Financial Action Task Force.
13. SALES MATERIAL
--------------
a) The parties will not use Sales Material unless approved in writing by
MetLife and Xxxxx Xxxxxx prior to such use.
b) MetLife shall ensure that all Sales Material provided by MetLife to
Xxxxx Xxxxxx, its branch offices, employees or customers, will a) have first
been filed with the appropriate governmental and regulatory bodies, if required.
b) be compliant with their respective requirements and have received all
necessary regulatory approvals, and c) have first been approved by Xxxxx Xxxxxx
and assigned an approval code. Unless otherwise agreed by the parties it shall
be Xxxxx Barney's responsibility to file and obtain NASD approval of any Sales
Materials prepared by Xxxxx Xxxxxx.
c) A party's giving of such approval shall apply to each specific request
and shall not be construed to have applied to any subsequent materials or
programs. All materials shall be subject to periodic review after initial
approval to ensure compliance with applicable Law and policies of the parties.
At least one hard copy of each piece of Sales Material in the form used shall be
supplied to the other party at least five business days prior to first use.
Additional copies or longer time period may be required for Sales Materials that
must be filed for approval with any regulatory authorities prior to use.
d) MetLife will use reasonable efforts to provide Xxxxx Xxxxxx with
information and marketing assistance, including providing reasonable quantities
of Sales Material, without charge. MetLife is responsible for the content of
Sales Material it provides to Xxxxx Xxxxxx, except to the extent it bas relied
on information supplied by Xxxxx Xxxxxx.
11
e) No party may use another party's tradenames, trademarks, service marks
or logos, except to the extent explicitly allowed in writing by the providing
party and necessary to carry out the purposes of this Agreement. Nothing in this
provision, however, shall be deemed as requiring such authorization in
connection with the use of a party's name in connection with any valid
regulatory request or court order.
f) Nothing contained in this Agreement shall be construed as conferring upon
Xxxxx Xxxxxx or its Registered Representatives any right to use or refer to in
advertising, publicity, promotion, marketing or other activities, any Marks, or
any other designation or likeness of any of the Peanuts[illegible] characters or
any other character licensed by United Feature Syndicate (including any
contraction, abbreviation or simulation of any kind of the foregoing) without
prior express permission from United Feature Syndicate, which Xxxxx Xxxxxx and
its Registered Representatives must obtain through MetLife.
14. COMPLAINTS AND INVESTIGATIONS
-----------------------------
The parties agree to cooperate fully in any regulatory investigation,
inquiry, inspection or proceeding or in any judicial proceeding arising in
connection with the Contracts. The parties shall permit federal, state, and
self-regulatory authorities to audit their records and shall furnish them with
any information that they may request in order to ascertain whether the parties
are complying with applicable Law with respect to the sale of the Contracts. The
parties agree to cooperate with each other in resolving all customer complaints
and internal investigations with respect to the Contracts sold under this
Agreement
15. BOOKS AND RECORDS
-----------------
The parties shall maintain and retain all books and records required by
applicable Law in connection with the solicitation and sale of the Contracts.
The books and records shall be maintained so as to clearly and accurately
disclose the nature and details of all transactions. Each party will make
available to the other, upon reasonable advance request, copies of books and
records, or such information as a party may reasonably request to enable it to
comply, and to demonstrate its compliance, with its obligations under applicable
Law and internal control policies as they relate to the solicitation and sale of
the Contracts.
16. CONFIDENTIAL INFORMATION
------------------------
a) Confidential Information. All information communicated, in any form, by
MetLife to Xxxxx Xxxxxx or by Xxxxx Xxxxxx to MetLife under this Agreement
regarding MetLife or Xxxxx Xxxxxx, or their respective affiliates, including,
but not limited to, proprietary information, such as financial, business,
technical, marketing or economic information, administrative procedures,
computer systems and software, sales data, financial plans, investment
strategies, the terms of this Agreement and any other agreements between the
parties, and confidential customer information (collectively "Confidential
Information") shall be treated confidentially by the receiving party in
accordance with applicable Law and the terms of this Agreement. "Confidential
Customer Information" refers to information about individuals who are consumers
or customers of either party, and may include, but is not limited to,
information such as customer lists, names, addresses, telephone numbers, account
balances, account numbers, account activity, social security numbers, taxpayer
identification numbers, financial, medical and health information, credit
history, and protected health information (PHI) as that term is defined by
federal regulations implementing the privacy provisions of the Health Insurance
Portability and Accountability Act of 1996 (HIPAA).
b) Confidential Information excludes information that (1) is independently
developed by a party without violating the disclosing party's proprietary
rights, (2) is or becomes publicly known (other than through unauthorized
disclosure), (3) is intentionally disclosed by the owner of such information to
a third party free of any obligation of confidentiality, (4) is already known by
a party, as evidenced by the written records of that party, free of an
obligation of confidentiality other than pursuant to this Agreement, or (5) is
rightfully received by a party free of any obligation of confidentiality.
12
c) Applicable Law for the purposes of this Section 16 refers to federal,
state, and local laws or regulations related to consumer privacy including,
without limitation, Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (Public Law
106-102) and its implementing regulations (e.g., Regulation S-P of the
Securities and Exchange Commission and regulations adopted by the various state
insurance departments), HIPAA and its implementing privacy regulations adopted
by Health and Human Services, and the federal Fair Credit Reporting Act and its
implementing regulations, as they may be amended from time to time.
d) USE. The parties may use Confidential Information received from the
other party only in connection with the performance of their obligations under
this Agreement and in accordance with applicable Law. The parties may not
disclose Confidential Information to any other party, provided, however, that
MetLife may use and disclose Confidential Customer Information as necessary to
underwrite Contracts, administer claims, and otherwise fulfill its obligations
as an insurer or as otherwise required or permitted by applicable Law. The
parties may disclose Confidential Information only to their respective employees
and agents on a need-to-know basis provided such employees and agents are
required or have otherwise agreed to treat such information confidentially. In
the event that a party shares Confidential Information, or requests that the
other party share Confidential Information, with a third party assisting that
party in performing services under this Contract, the party must have a written
agreement with such entity which includes a confidentiality provision
prohibiting disclosure or use of Confidential Information other than to carry on
the purposes for which the information was provided. Each party will take
reasonable steps to protect the Confidential Information received from the other
party, applying at least the same security measures and level of care as they
employ to protect its own Confidential Information. A party shall promptly
report to the other any unauthorized disclosure or use of Confidential
Information received from the other party of which it becomes aware. If a party
is compelled by applicable Law to disclose any Confidential Information received
from the other party, the party so compelled must promptly notify, in writing,
the party whose Confidential Information is being disclosed, and provide that
party with an opportunity to limit the production. Each party will have the
right to audit the others for the limited purpose of ensuring compliance with
this provision under reasonable terms and conditions, including, e.g. advance
notice and duration.
d) SECURITY. Each party agrees to implement reasonable safeguards to ensure
the confidentiality, integrity and security of Confidential Information as
required by applicable Law. The parties shall use their best efforts to conform
and coordinate their actions under, and interpretations of, their respective
policies and procedures in the performance of the actions contemplated by this
Agreement so as to ensure compliance with applicable Law and avoid conflicts
between themselves. Each party represents and warrants that it has implemented
and currently maintains an effective information security program to protect the
Confidential Information, which program includes administrative, technical, and
physical safeguards:
(i) to insure the security and confidentiality of Confidential Information;
(ii) to protect against any anticipated threats or hazards to the security
or integrity of such Confidential Information; and
(iii) to protect against unauthorized access to or use of Confidential
Information which could result in substantial harm or inconvenience to
either party or their affiliates, or to customers of any of them.
If a party discovers a breach of its information security program, it shall
promptly notify the other parties.
13
d) INJUNCTIVE RELIEF. The parties acknowledge that the unauthorized
disclosure of Confidential Information is likely to cause irreparable injury to
the disclosing party and that, in the event of a violation or threatened
violation of a party's obligations hereunder, the disclosing party shall have no
adequate remedy at law and shall therefore be entitled to enforce each such
obligation by seeking a temporary or permanent injunctive or mandatory relief
obtained in any court of competent jurisdiction without the necessity of proving
damages, posting any bond or other security, and without prejudice to any other
rights and remedies which may be available at law or in equity.
e) USE UPON TERMINATION. At the termination of this Agreement, or in the
event a party makes a request for the return of their Confidential Information,
the other parties will promptly return the original and all copies of same, or
certify in writing to the requesting party that the Confidential Information has
been destroyed, provided however, that each party shall retain Confidential
Information in its possession necessary to service its customers or as may be
required by Law.
f) This Confidentiality section shall survive the termination of this
Agreement.
17. INDEMNIFICATION; LIMITATION OF LIABILITY
----------------------------------------
a) DEFINITIONS.
(i) "Claim" means any civil, administrative and/or civil criminal
action, claim, suit and/or legal proceeding of any kind that is brought against
an Indemnitee by a third party ("Claimant") unaffiliated with such Indemnitee.
(ii) "Costs" means any damages, judgments, settlements, losses,
expenses, interest, penalties, reasonable legal fees and disbursements
(including without limitation fees and costs for investigators, expert witnesses
and other litigation advisors) and other costs incurred by an Indemnitee to
investigate, defend or settle a Claim, except that no settlement payments shall
be included in Costs unless the applicable Indemnitor has given its prior
express written consent to the settlement, which consent shall not be
unreasonably withheld. Costs shall not include any expenses for any
investigation or defense of a Claim incurred by Indemnitee after the date on
which Indemnitor gives notice of its election to assume the defense of such
Claim.
b) BY XXXXX XXXXXX. Xxxxx Xxxxxx will indemnify and hold harmless
Distributor and MetLife Affiliates, including each of their respective current
and former officers, directors, employees or agents (each a Distributor and/or
MetLife Affiliate Indemnitee"), from any Costs sustained by a Distributor or
MetLife Affiliate Indemnitee, on account of any Claim arising out of or based
upon any negligent, fraudulent, illegal or wrongful act or omission with respect
to its obligations under this Agreement, or any breach of this Agreement by
Xxxxx Xxxxxx In any of the foregoing cases Xxxxx Xxxxxx and/or Agency will be an
"Indemnitor" as the term is used in this Agreement.
c) BY METLIFE. MetLife will indemnify and hold harmless CGM and Agency,
including each of their respective current and former officers, directors,
employees or agents (each a CGM and/or Agency Indemnitee"), from any Costs
sustained by a CGM and/or Agency Indemnitee, on account of any Claim arising out
of or based upon negligent, fraudulent, illegal or wrongful act or omission with
respect to its obligations under this Agreement, or any breach of this Agreement
by MetLife. In any of the foregoing cases Distributor and/or MetLife Affiliates
will be an "Indemnitor" as the term is used in this Agreement.
d) INDEMNIFICATION CLAIM NOTICE AND CASE MANAGEMENT. Indemnitor will not be
liable under this indemnification provision for any Claim made against an
Indemnitee unless that Indemnitee has notified the Indemnitor in writing within
a reasonable time after the summons or other first legal process giving
information of the nature of the Claim has been served upon that Indemnitee (or
after the Indemnitee has
14
received notice of such service on any designated agent). At any time after such
notice, any Indemnitor may deliver to the Indemnitee its written acknowledgment
that Indemnitee is entitled to indemnification under this indemnification
provision for all Costs associated with the Claim. The Indemnitor will
thereafter be entitled to assume the defense of the Claim and will bear all
associated expenses, including without limitation, payment on a current basis of
all previous Costs incurred by the Indemnitee in relation to the Claim from the
date the Claim was brought, unless in dispute pursuant to sub paragraph 17(g).
After notice from any Indemnitor to the Indemnitee of an election to assume the
defense of any Claim, the Indemnitee will not be liable to the Indemnitors for
any Costs related to the Claim. Until an Indemnitee receives notice of an
Indemnitor's election to assume the defense of any Claim, Indemnitee may defend
itself against the Claim and may hire counsel and other experts of its choice
and Indemnitors, jointly and severally, will be liable for payment of counsel
and other expert fees on a current basis as the same are billed.
e) COOPERATION AND UPDATES. If an Indemnitee makes a claim for
indemnification against an Indemnitor, Indemnitee and Indemnitor will each give
the other copies of its books and records (or reasonable access to its
employees) in connection with the Claim for which indemnification is sought
hereunder and will otherwise cooperate with one another in the defense of any
such Claim. Regardless of which party defends a particular Claim, the defending
party will give the other parties written notice of any significant development
in the case as soon as practicable, but in any event within five (5) business
days after such development. In no event will either Indemnitor or Indemnitee be
required to divulge any privileged information.
f) SETTLEMENT. If an Indemnitee is defending a Claim and: (1) a settlement
proposal is made by the Claimant, or (2) the Indemnitee desires to present a
settlement proposal to the Claimant, then the Indemnitee must promptly notify
the Indemnitors of such settlement proposal together with its counsel's
recommendation and request the consent of Indemnitor(s). Indemnitee, in making
such request, will make available complete access, during normal business hours,
to any and all discovery up to the date of such request. If the Indemnitee
desires to enter into the settlement and less than all of the Indemnitors
consent within thirty (30) business days (unless such period is extended, in
writing, by mutual agreement of the parties hereto), then Indemnitors, from the
time they fail to consent forward, will defend the Claim and will further
indemnify the Indemnitees for all Costs associated with the Claim which are in
excess of the proposed settlement amount even if the same were not originally
covered under this indemnification provision. If an Indemnitor is defending a
Claim and a settlement requires an admission of liability by Indemnitee or would
require Indemnitee to either take action (other than purely ministerial action)
or refrain from taking action (due to an injunction or otherwise), Indemnitor
may agree to such settlement only after obtaining the express, written consent
of Indemnitee.
g) INDEMNIFICATION DISPUTES. In the event that there is a dispute between
an Indemnitee and an Indemnitor over whether the Indemnitor is liable for a
Claim, then Indemnitor must advise Indemnitee of such a dispute and the reasons
therefor, in writing, within thirty (30) days after the Claim is first tendered
to Indemnitor, unless the Indemnitee and Indemnitor mutually agree, in writing,
to extend the time, and the parties shall refer the Claim to Arbitration as
provided below.
h) SUBROGATION. In the event of any indemnification payment under this
Agreement, Indemnitor shall be subrogated to the extent of such payment to all
the rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable Indemnitor to effectively bring
suit to enforce such rights.
18. FORCE MAJEURE
-------------
No party shall be responsible to the other Parties for delays or errors in
its performance or any breach of this Agreement occurring solely by reason of
circumstances beyond its control, including, without limitation, acts of civil
or military authority, national emergencies, fire, major mechanical breakdown,
labor disputes, flood, landslide, hurricane, tsunami or other catastrophe, acts
of God, insurrection, war, riots, delays of supplier, or failure of
transportation, communication or power supply (a "Disaster").
15
19. CONTINUITY OF BUSINESS PLAN
---------------------------
Notwithstanding the "Force Majeure" provision, each party shall adopt a
Continuity of Business Plan (a "COB Plan") to ensure the least disruption to the
availability of Contracts to any Contract owner, which COB Plan may be reviewed
from time to time upon reasonable notice by the other party and during normal
business hours. Each party must immediately advise the other parties upon the
occurrence of any event or circumstance that will, or would reasonably be
expected to, disrupt their operations and in such event, upon request of the
other Party and, to the extent practicable, deliver all Confidential Information
pertaining to Contract owners. Each party shall implement its COB Plan to permit
it to perform its obligations hereunder, within a commercially reasonable period
of time, in the event of a Disaster.
20. NOTICE
------
Any notice required to be given by one party to another shall be (i)
personally delivered, (ii) mailed by registered or certified mail, postage
prepaid, or (iii) delivered to a third-party company or governmental entity,
delivery charges prepaid, providing delivery services in the ordinary course of
business which guarantees delivery to the other party on the next business day,
to the addresses below, with a copy at the same address to the General Counsel;
or such different addresses as a party designates in writing in compliance with
this subsection. All such notices shall be deemed delivered when so mailed or
hand-delivered. Alternatively, such notices shall be deemed delivered by timely
transmission of the writing, delivery charges prepaid, to a third-party company
or governmental entity providing delivery services in the ordinary course of
business which guarantees delivery to the other party on the next business day.
CITIGROUP GLOBAL MARKETS INC. or METLIFE INVESTORS DISTRIBUTION COMPANY
SBHU LIFE AGENCY, INC. 0 Xxxx Xxxxx, Xxxxx 0000
000 Xxxxxxxxx Xxxxxx Xxxxxx, XX 00000
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx With a copy to:
Xxxxx X. Xxxxx, Assistant General Counsel
MetLife
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
21. ARBITRATION
-----------
a) Any dispute arising out of this Agreement will be settled by arbitration
under the rules then in effect at the NYSE or the NASD respective department of
arbitration, or the American Arbitration Association. Neither party will seek
consequential or punitive damages from the other, and, if punitive damages are
so awarded by the arbitration panel, neither party will seek to collect that
part of the panel's award from the other. Arbitration will be held in the State
of New York. Judgment on any award rendered by the arbitration panel may be
entered in any court having jurisdiction thereof except to the extent
consequential or punitive damages are part of the award.
b) The arbitration will be determined by one neutral arbitrator as agreed
upon by each party. If the parties fail to appoint an arbitrator on a timely
basis or are unable to agree on the choice of an arbitrator on a timely basis,
any one of the parties may apply to the American Arbitration Association to
appoint the arbitrator to sit and hear the arbitration. Each arbitrator
appointed shall be a retired judge or a practicing attorney, admitted to
practice in the State of New York, who is, if practicable, an experienced
arbitrator of large, complex securities and insurance cases. The arbitrator's
decision will be binding on the parties and the decision will be final with no
right of appeal. Each party will bear its own costs of arbitration. Each party
waives the right to a trial by either a jury or a court, including but not
limited to a trial of any issue concerning the validity of this section and the
right of appeal from the arbitrator's award.
16
c) By agreeing to arbitration, the parties do not intend to deprive a court
of competent jurisdiction of its authority to issue a pre-arbitral injunction,
pre-arbitral attachment, or other order in aid of arbitration, or for a
preliminary injunction or other equitable relief to maintain the status quo or
prevent irreparable harm prior to the appointment of the arbitral tribunal.
Without prejudice to such provisional remedies as may be available under the
jurisdiction of such court, the arbitral tribunal shall have full authority to
grant provisional remedies and to direct the parties to request that any court
modify or vacate any temporary or preliminary relief or other order issued by
such court, and to award damages for the failure of any party to respect the
arbitral tribunal's orders to that effect.
22. TERMINATION
-----------
a) This Agreement may be terminated by any party providing thirty (30) days
written notice to the others.
(b) A party may terminate this Agreement immediately and without notice if
the other party (i) as to CGM or Distributor, ceases to be registered under the
1934 Act or to be a member in good standing of the NASD, (ii) fails to comply
with any licensing laws or other applicable Law, (iii) becomes insolvent or
bankrupt or suffers other financial impairment that may affect its performance
of this Agreement, or (iv) is prohibited from offering the Contracts as a result
of any order by a regulatory authority or applicable Law.
c) A party may terminate this Agreement for cause at any time upon ten (10)
days' written notice to the other parties. "Cause" is defined as a breach of a
material provision of this Agreement. In the event of notification of a
termination for cause, and upon request, the other party shall have thirty (30)
days to cure the breach ("cure period"). If the party is able to cure the breach
to the good faith satisfaction of the other party within the cure period, this
Agreement will continue in effect as though it were never terminated.
d) Termination of this Agreement will have no effect on Commissions due and
coming due Xxxxx Xxxxxx on Contracts issued, additions thereto, and applications
received by MetLife prior to the termination date, unless (i) payment of
Commissions would violate Law or (ii) Xxxxx Xxxxxx is no longer broker-of-record
on a Contract at the direction of the Contract owner.
e) The following sections will survive termination of this Agreement to the
maximum extent permitted by Law: Sections 9(Compensation), 11 (Market Timing),
14 (Complaints and Investigations), 15 (Books and Records), 16
(Confidentiality), 17 (Indemnification), 21 (Arbitration) and 22 (Termination).
f) Notwithstanding termination, the obligations of the parties related to
client services (including but not limited to electronic client account values,
Contract owner service capabilities, copies of client statements) for
outstanding Contracts issued prior to termination will remain in effect so long
as Xxxxx Xxxxxx is the broker of record.
23. MODIFICATION; WAIVER
--------------------
This Agreement may not be amended or supplemented except by a written
agreement signed by all parties. Any failure of a party to comply with any
obligation, covenant, agreement or condition in this Agreement may be waived by
the party entitled to the benefits thereof only by a writing signed and
delivered by the party granting the waiver. A waiver, or failure to insist upon
strict compliance with such obligation, covenant, agreement or condition, will
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure of compliance.
17
24. ASSIGNMENT
----------
No party may assign its rights or obligations under this Agreement without
the prior written consent of the other parties (which consent may not be
unreasonably withheld) and any purported assignment without such consent shall
be void. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
25. GOVERNING LAW
-------------
This Agreement shall be governed as to its validity, interpretation, and
effect by the laws of the state of New York without giving effect to principles
of conflicts of laws.
26. ENTIRE AGREEMENT
----------------
This Agreement contains the entire understanding and agreement among the
parties with respect to its subject matter, and supersedes all prior and
contemporaneous discussions, agreements, and understandings including selling
agreements between Xxxxx Xxxxxx, MetLife Investors Distribution Company and
MetLife Investors USA Insurance Company, respectively, dated August 1,2004
(although the rights and obligations of the parties, including, without
limitation, ongoing compensation, in respect of any Contracts currently
outstanding under various single case agreements, shall remain in effect and are
not modified in any respect hereby). However, the rights and obligations of the
parties and their affiliates under the selling agreement between Xxxxx Xxxxxx,
The Travelers Insurance Company and The Travelers Life and Annuity Company dated
July 1, 2005 shall remain in effect and are not modified in any respect by this
Agreement.
27. CONSTRUCTION; SEVERABILITY
--------------------------
Section headings contained in this Agreement are inserted for convenience
of reference only and shall not affect the meaning or interpretation of this
Agreement. In the event any term, phrase, clause, paragraph, restriction,
covenant, or agreement contained in this Agreement shall be held to be invalid
or unenforceable by a court of competent jurisdiction, the same shall be
severable and shall not defeat or impair the remaining provisions thereof.
CITIGROUP GLOBAL MARKETS INC. SBHU LIFE AGENCY, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx X Xxxxxxxxxx
------------------------------ ---------------------------------
Name: Xxxxxx Xxxxx Name: Xxxxxxx X Xxxxxxxxxx
Title: Managing Director Title: President/EVP as appropriate
Date: 9/27/06 Date: 9/27/06
METLIFE INVESTORS DISTRIBUTION COMPANY
By: /s/ [illegible]
--------------------------------
Name: [illegible]
Title: EVP, National Sales Manager-Life
Date: 10-2-06
18
