Exhibit (3)(e)
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
BETWEEN
FARMERS NEW WORLD LIFE INSURANCE COMPANY
AND
FARMERS FINANCIAL SOLUTIONS, LLC
THIS AMENDED AND RESTATED AGREEMENT ("Agreement"), entered into as of
this _____ day of _____ 2004, is between FARMERS NEW WORLD LIFE INSURANCE
COMPANY, a Washington corporation ("FNWL"), on its behalf and on behalf of each
separate account identified in Schedule 1 hereto, and FARMERS FINANCIAL
SOLUTIONS, LLC ("Distributor"), a Nevada Limited Liability Company.
WITNESSETH:
WHEREAS, Distributor is a broker-dealer that engages in the distribution
and sales of variable insurance products and may engage in the distribution of
other investment products;
WHEREAS, FNWL desires to issue certain variable insurance products
described more fully below to the public through Distributor acting as principal
underwriter and distributor; and
WHEREAS, FNWL and Distributor acknowledge that Distributor may
distribute variable insurance products and other investment products for other
companies.
NOW, THEREFORE, in consideration of their mutual promises, FNWL and
Distributor hereby agree as follows:
1. DEFINITIONS
a. Contracts -- The class or classes of variable insurance products set
forth on Schedule 2 to this Agreement as in effect at the time this
Agreement is executed, and such other classes of variable insurance
products that may be added to Schedule 2 from time to time in
accordance with Section 10.b of this Agreement, and including any
riders to such contracts and any other contracts offered in
connection therewith. For this purpose and under this Agreement
generally, a "class of Contracts" shall mean those Contracts issued
by FNWL on the same policy form or forms and covered by the same
Registration Statement.
b. Registration Statement -- At any time that this Agreement is in
effect, each currently effective registration statement filed with
the SEC under the 1933 Act on a prescribed form, or currently
effective post-effective amendment thereto, as the case may be,
relating to a class of Contracts, including financial statements
included in, and all exhibits to, such registration statement or
post-effective amendment. For purposes of Section 8 of this
Agreement, the term "Registration Statement" means any document
that is or at any time was a Registration Statement within the
meaning of this Section 1.b.
c. Prospectus -- The prospectus included within a Registration
Statement, except that, if the most recently filed version of the
prospectus (including any supplements thereto) filed pursuant to
Rule 497 under the 1933 Act subsequent to the date on which a
Registration Statement became effective differs from the prospectus
included within such Registration Statement at the time it became
effective, the term "Prospectus" shall refer to the prospectus and
supplements thereto most recently filed under Rule 497 under the
1933 Act, from and after the date on which it shall have been filed.
For purposes of Section 8 of this Agreement, the term "any
Prospectus" means any document that is or at any time was a
Prospectus within the meaning of this Section 1.c.
d. Fund -- An investment company in which the Variable Account invests.
e. Variable Account -- A separate account supporting a class or classes
of Contracts and specified on Schedule 1 as in effect at the time
this Agreement is executed, or as it may be amended from time to
time in accordance with Section 10.b of this Agreement.
f. 1933 Act -- The Securities Act of 1933, as amended.
g. 1934 Act -- The Securities Exchange Act of 1934, as amended.
h. 1940 Act -- The Investment Company Act of 1940, as amended.
i. SEC -- The Securities and Exchange Commission.
j. NASD -- NASD, Inc.
k. 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 thereafter promulgated.
l. Representative -- When used with reference to the Distributor, an
individual who is registered as a principal or representative of
such Distributor.
m. Application -- An application for a Contract.
n. Premium -- A payment made under a Contract by an applicant or
purchaser to purchase benefits under the Contract.
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2. AUTHORIZATIONS AND APPOINTMENT
a. Scope of Authority. FNWL hereby authorizes Distributor on a
non-exclusive agency basis, and Distributor accepts such authority,
subject to the registration requirements of the 1933 Act and the
1940 Act and the provisions of the 1934 Act and conditions herein,
to be the distributor and principal underwriter for the sale of the
Contracts to the public in each state and other jurisdiction in
which the Contracts may lawfully be sold during the term of this
Agreement. Distributor will actively engage in its duties under this
Agreement on a continuous basis while the Registration Statements
for the Contracts remain effective. Distributor shall use its best
efforts to market the Contracts actively subject to compliance with
applicable law, including the rules of the NASD. However,
Distributor shall not be obligated to sell any specific number or
amount of Contracts. Also, the parties acknowledge and agree that
Distributor may distribute variable insurance products and other
investment products for other companies.
b. Limits on Authority. Distributor shall act as an independent
contractor and nothing herein contained shall constitute Distributor
or its agents, officers or employees as agents, officers or
employees of FNWL solely by virtue of their activities in connection
with the sale of the Contracts hereunder. Distributor and its
Representatives shall not have authority, on behalf of FNWL: to
make, alter or discharge any Contract or other insurance policy or
annuity entered into pursuant to a 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 FNWL). Distributor shall not
expend, nor contract for the expenditure of, the funds of FNWL.
Distributor shall not possess or exercise any authority on behalf of
FNWL other than that expressly conferred on Distributor by this
Agreement. Distributor acknowledges and agrees that FNWL shall have
the right at any time to suspend or limit the public offering of the
Contracts.
3. SOLICITATION ACTIVITIES
a. Representations, Warranties and Covenants of Distributor.
Distributor represents and warrants to FNWL that Distributor is, and
covenants that it shall remain during the term of this Agreement:
(i) registered as a broker-dealer under the 1934 Act; (ii) a member
in good standing with the NASD; (iii) duly registered under
applicable state securities laws; (iv) in compliance with Section
9(a) of the 1940 Act; (v) licensed as an insurance agent with
authority to sell the Contracts or associated with an insurance
agent so licensed.
b. Representatives. No Representative shall solicit the sale of a
Contract unless at the time of such solicitation such individual is
duly registered with the NASD and duly
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licensed with all applicable state insurance and securities
regulatory authorities, and is duly appointed as an insurance agent
of FNWL.
(1) Appointment by FNWL. FNWL shall take all actions necessary to
effect the appointment of Representatives as may from time to
time be identified by Distributor as qualified to serve as
insurance agents of FNWL; provided, however, that FNWL
reserves the right, in its reasonable discretion, to refuse to
appoint any such person or renew any such appointment or to
terminate any appointment, consistent with its duties and
responsibilities under applicable law.
(2) Distributor Due Diligence. Distributor is [solely] responsible
for investigating the character, work experience, and
background of any Representative prior to recommending the
proposed Representative to FNWL for appointment. Distributor
will not employ, or permit to be associated with it, in any
material connection with the Contracts or the handling of
Contract assets, any person who, to the knowledge of
Distributor, is subject to statutory disqualification as set
forth in Section 3(a)(39) of the 0000 Xxx.
(3) Supervision by Distributor. Distributor is responsible for
supervising the activities of the Representatives and for
ensuring that the Representatives are properly licensed and in
compliance with all applicable federal or state laws, rules
and regulations and all rules and procedures of FNWL provided
in writing by FNWL. Distributor shall notify FNWL promptly, in
writing, of the termination of any Representative.
c. Sales and Solicitation Activities. All solicitation and sales
activities engaged in by Distributor and its Representatives with
respect to the Contracts shall be in compliance with all applicable
federal and state securities laws and regulations, with the rules of
the NASD, as well as with all applicable insurance laws and
regulations, including any laws and regulations related to
suitability, any other applicable federal or state law, rule, or
regulation, and any of the rules and procedures that FNWL may issue
from time to time. In particular, without limiting the generality of
the foregoing:
(1) Distributor [, along with appropriate FNWL NASD registered
principals,] shall train, supervise and be solely responsible
for the conduct of Representatives with regard to their
solicitation of Applications and Premiums and distribution of
the Contracts, and shall supervise their compliance with
applicable rules and regulations of any insurance or
securities regulatory agencies or self-regulatory
organizations that have jurisdiction over variable insurance
product activities.
(2) Neither Distributor nor any Representative shall offer,
attempt to offer, or solicit Applications for, the Contracts,
in any state or other jurisdiction unless FNWL has
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notified Distributor that such Contracts may lawfully be sold
or offered for sale in such state, and has not subsequently
revised such notice.
(3) Neither Distributor nor any Representative shall give any
information or make any representation in regard to a class of
Contracts in connection with the offer or sale of such class
of Contracts that is not in accordance with the Prospectus and
the statement of additional information for such class of
Contracts, or in the then-currently effective prospectus or
statement of additional information for a Fund, or in current
advertising materials for such class of Contracts authorized
by FNWL.
(4) Completed Applications for the Contracts solicited by
Distributor or Distributor's Representatives shall be
transmitted directly to FNWL (or as further designated by
FNWL) generally by noon of the next business day following
their receipt by Distributor, and in any event within such
period required by applicable law. All payments under the
Contracts shall be made by check [or money order] payable to
FNWL or by other method acceptable to FNWL as set forth in the
Prospectus. If any Premium is held at any time by Distributor,
Distributor shall hold such Premium in a fiduciary capacity
and such Premium shall be remitted promptly to FNWL in
accordance with applicable law. Distributor acknowledges that
all such Premiums, whether by check, money order or wire,
shall be the property of FNWL. Distributor acknowledges that
FNWL shall have the unconditional right to reject, in whole or
in part, any Application or Premium
d. Suitability. In view of both parties' desire to ensure that
Contracts will be sold to purchasers for whom the Contracts will be
suitable, the written agreement between Distributor and its
Representatives shall require that the Representatives not make
recommendations to an applicant to purchase a Contract in the
absence of reasonable grounds to believe that a recommendation to an
applicant to purchase a Contract is suitable for that applicant.
Distributor shall review all Applications for suitability in
accordance with suitability standards, including Rule 2310 of the
NASD Conduct Rules and interpretations and guidance relating
thereto, those established by law, rule or regulation (including
variable insurance regulations adopted by states where the Contracts
are sold), as well as any standards that may be established by
mutual agreement of FNWL and Distributor from time to time. While
not limited to the following, a determination of suitability shall
be based on information furnished to a Representative after
reasonable inquiry of the applicant concerning his or her financial
status, retirement needs, reasons for purchasing a Contract,
investment sophistication and experience, liquid net worth, other
securities holdings, other investments and savings, annual income,
financial situation and needs, insurance and investment objectives
(including occupation, marital status, age, number of dependents,
and risk tolerance), investment time horizon, tax status, and the
likelihood that the applicant will
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continue to make any premium payments contemplated by the Contract
applied for and will keep the Contract in force for a sufficient
period of time.
4. PROSPECTUSES, REGISTRATION STATEMENTS, CONTRACT FORMS AND MARKETING
MATERIALS
a. Preparation and Filing of Prospectuses, Registration Statements and
Contract Forms. FNWL shall be responsible for preparing the Contract
forms and filing them with applicable state insurance regulatory
authorities, and for preparing the Prospectuses and Registration
Statements and filing them with the SEC and state regulatory
authorities, to the extent required. FNWL agrees to forward to
Distributor copies of any and all amendments to the Registration
Statement.
b. Notification by FNWL. FNWL agrees to advise Distributor immediately
of:
(1) Any request by the SEC (i) for amendment of the Registration
Statement or (ii) for additional information that FNWL
determines is material to the Distributor;
(2) The issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose; and
(3) The occurrence of any material event, if known by FNWL, that
makes untrue any material statement made in the Registration
Statement or that requires the making of a change therein in
order to make any material statement made therein not
misleading.
c. Preparation and Filing of Sales Materials. FNWL and Distribution
shall together be responsible for the design, development and
preparation of all promotional, sales, and advertising material
relating to the Contracts, subject to review and approval by
Distributor of such material and documents in accordance with Rule
2210 of the NASD Conduct Rules. Distributor shall be responsible for
filing such material, as required, with the NASD and any state
securities regulatory authorities. FNWL shall be responsible for
filing all promotional, sales, or advertising material, as required,
with any state insurance regulatory authorities.
d. Resolution of Comments. The parties shall notify each other
expeditiously of any comments provided by the SEC, NASD or any
securities or insurance regulatory authority described in section
4(c), and will cooperate expeditiously in resolving and implementing
any comments, as applicable. In addition, Distributor shall promptly
furnish to FNWL copies of any letters from the NASD requesting
changes in any promotional, sales, and advertising material used or
to be used in connection with its distribution activities under this
Agreement, and shall not, after receipt of such a letter,
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use such material until FNWL shall have approved (or re-approved, as
applicable) their use in writing.
e. Use in Solicitation Activities. FNWL shall be responsible for
furnishing Distributor with such Applications, Prospectuses and
other materials for use by Distributor and Representatives in their
solicitation activities with respect to the Contracts. FNWL shall
notify Distributor of those states or jurisdictions that require
delivery of a statement of additional information with a Prospectus
to a prospective purchaser. Distributor shall not use and shall take
reasonable steps to ensure that its Representatives do not use any
promotional, sales or advertising materials that have not been
approved by FNWL. FNWL has the right to recall promotional, sales,
and advertising material from use at any time by notice to
Distributor. In the event that FNWL chooses to recall any such
materials, Distributor will promptly cease their use and destroy any
unused material.
f. Definitions. For purposes of this Agreement, the phrase
"promotional, sales, and advertising material" includes, but is not
limited to, advertisements (such as material published or designed
for use in, a newspaper, magazine, or other periodical, radio,
television, telephone or tape recording, videotape display, signs,
or billboards, motion pictures, telephone directories (other than
routine listings) electronic communications, the Internet or other
public media), sales literature (i.e.; any written communication
distributed or made generally available ---- to customers or the
public, including brochures, circulars, research reports, market
letters, form letters, seminar texts, reprints or excerpts of any
other advertisement, sales literature, or published article whether
in electronic or paper form), Registration Statements, Prospectuses,
statements of additional information, shareholder reports, and proxy
materials.
5. COMPENSATION AND EXPENSES
a. Paymaster Activities. FNWL shall pay compensation for sales of the
Contracts in accordance with Schedule 4 attached hereto. FNWL may
apply commissions otherwise payable to Distributor to make payments
on behalf of Distributor to the Representatives. FNWL shall pay
commissions payable to designated Representatives as paying agent on
behalf of Distributor and will maintain the books and records
reflecting such payments in accordance with the requirements of the
1934 Act on behalf of Distributor. Such payments may include certain
amounts to Representatives as an advance on commissions payable by
Distributor. FNWL acknowledges and agrees that its services in this
regard are purely ministerial and clerical in nature and shall not
interfere with the control and supervision exercised by Distributor
over its Representatives with regard to the Contracts. FNWL shall
have no right to compensation for the performance of any activities
described in this Section 5. Representatives of Distributor shall
have no interest in this Agreement or right to any
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compensation to be paid by or on behalf of Distributor hereunder
prior to their receipt thereof.
b. FNWL's Responsibility for Expenses. FNWL shall pay all expenses in
connection with:
(1) the preparation and filing of each Registration Statement
(including each pre-effective and post-effective amendment
thereto) and the preparation and filing of each Prospectus
(including any preliminary and each definitive Prospectus);
(2) the preparation, underwriting, issuance and administration of
the Contracts;
(3) any registration, qualification or approval or other filing of
the Contracts or Contract forms required under the securities
or insurance laws of the states in which the Contracts will be
offered;
(4) all registration fees for the Contracts payable to the SEC;
(5) the printing and mailing of definitive Prospectuses for the
Contracts and any supplements thereto for distribution
directly to existing Contract owners; and
(6) the printing and mailing directly to Representatives of all
promotional materials relating to the Contracts, through
normal material ordering procedures;
(7) In the event Distributor is disqualified from continued
registration with the NASD, FNWL shall not be obligated to pay
commissions, fees, or additional compensation pursuant this
Agreement, the payment of which would represent a violation of
NASD rules.
c. Distributor's Responsibility for Expenses. Distributor shall pay the
following expenses related to its distribution and sale of the
Contracts:
(1) NASD filing fees and expenses of Representatives for which the
Distributor agrees to be responsible; and
(2) any other expenses incurred by Distributor or its employees
for the purpose of carrying out the obligations of Distributor
hereunder.
6. COMPLIANCE
a. FNWL and Distributor are in compliance in all material respects with
all applicable federal, state, and self-regulatory organization
laws, rules and regulations, including,
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without limitation, all laws, rules and regulations listed on
Schedule 3, as it may be amended from time to time by mutual consent
of FNWL and Distributor. The omission of a reference to a law, rule
or regulation in this Agreement shall not be deemed to be
acknowledgement by any party that such law, rule or regulation does
not apply to FNWL or Distributor.
b. Maintaining Registration and Approvals. FNWL shall be responsible
for maintaining the registration of the Contracts with the SEC and
any state securities regulatory authority with which such
registration is required, and for gaining and maintaining approval
of the Contract forms where required under the insurance laws and
regulations of each state or other jurisdiction in which the
Contracts are to be offered.
c. Confirmations and 1934 Act Compliance. FNWL, or its appointed
designee, as agent for Distributor, shall confirm to each applicant
for and purchaser of a Contract in accordance with Rule 10b-10 under
the 1934 Act the acceptance of Premiums and such other transactions
as are required by Rule 10b-10 or administrative interpretations
thereunder, or by any other SEC or NASD rule requiring the delivery
of such information. FNWL or its appointed designee, shall maintain
and preserve such books and records with respect to such
confirmations in conformity with the requirements of Rules 17a-3 and
17a-4 under the 1934 Act to the extent such requirements apply.
FNWL, and its appointed designee, shall maintain, as agent for
Distributor, such other books and records of Distributor pertaining
to the officer and sale of the Contracts and required by the 1934
Act as may be mutually agreed upon by FNWL and Distributor,
including but not limited to maintaining a record of Representatives
and of the payment of commissions and other payments or service fees
to Representatives. In addition, FNWL, or its appointed designee, as
agent for Distributor, shall maintain and preserve such additional
accounts, books and records as are required by FNWL, and Distributor
by the 1934 Act. FNWL, and its appointed designee, shall maintain
all such books and records and hold such books and records on behalf
of and as agent for Distributor whose property they are, and
acknowledges that such books and records are at all times subject to
inspection by the SEC in accordance with Section 17(a) of the 1934
Act, the NASD, and by all other regulatory bodies having
jurisdiction over the Contracts or Distributor.
d. Maintenance of Books and Records. To the extent FNWL employs
electronic storage media in connection with books and records
created, maintained and stored on behalf of Distributor, FNWL agrees
to comply with the requirements set forth in Rule 17a-4(f)(3)(vii)
and 17a-4(i) of the 1934 Act. With respect to any books and records
maintained and preserved on behalf of Distributor, FNWL hereby
undertakes to permit examination of books and records at any time or
from time to time during business hours by representatives or
designees of the SEC, and to promptly furnish to the SEC or its
designee a true, correct, complete and current hard copy of any or
all of any part of
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such books and records. Subject to Distributor's approval, FNWL
reserves the right to delegate the duties set forth in this Section
6.c to a third party administrator.
e. Compliance Act. Upon request, Distributor shall promptly provide to
FNWL its written compliance policies and procedures as required by
Rule 38a-1 under the 1940 Act for review and approval by FNWL. Such
written compliance policies and procedures: (i) shall be designed to
prevent, detect and correct any material violations of the federal
securities laws, as such laws are defined in Rule 38a-1 under the
1940 Act and relate to the Distributor's duties under this Agreement
as principal underwriter for the Contracts and the Variable
Accounts; and (ii) shall include Distributor's policies and
procedures with regard to compliance with the SEC's pricing rules
for Variable Accounts, including but not limited to Rule 22c-1 under
the 1940 Act, and with regard to FNWL's Disruptive Trading policy as
that policy is disclosed in the Prospectuses for the Contracts.
Distributor further agrees to cooperate with FNWL in its annual
review of the adequacy of Distributor's written compliance policies
and procedures and the effectiveness of their implementation,
including, without limitation, furnishing such documentation,
certifications and sub-certifications as FNWL shall reasonably
request from time to time. In addition, Distributor agrees that it
shall promptly notify FNWL in the event that a "material compliance
matter" (as such term is defined by Rule 38a-1 under the 0000 Xxx)
arises with respect to its written compliance policies and
procedures provided to FNWL and any representations made under this
Agreement.
f. Privacy. FNWL and Distributor hereby acknowledge and agree that they
are subject to Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 and to
implementing regulations ("Privacy Regulations") promulgated
thereunder, and that any nonpublic personal information regarding
"customers" or "consumers" of the parties, as those terms are
defined in Privacy Regulations, shall be shared between the parties
and with others, only in accordance with the requirements of such
Privacy Regulations. These limitations shall include, but be not
limited to, restrictions on the use and re-use of such nonpublic
personal information. Further, as required by such Privacy
Regulations, FNWL and Distributor shall adopt written policies and
procedures that establish appropriate administrative, technical and
physical safeguards reasonably designed to protect the security,
confidentiality and integrity of any nonpublic personal information
from anticipated threats, hazards or unauthorized access. If other
applicable privacy laws, including any such laws or regulations
promulgated by a state or municipality having jurisdiction over the
parties, should afford customers or consumers greater protections or
rights than those provided by the Privacy Regulations or should
impose greater obligations or restrictions on the parties
("Additional Privacy Laws"), the parties shall comply with the terms
of such Additional Privacy Laws.
g. Reports. Each party shall furnish or cause to be furnished to the
other such reports as the party may reasonably request for the
purpose of meeting its reporting and record
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keeping requirements under the 1933 Act, the 1934 Act and the 1940
Act and regulations thereunder as well as the insurance laws of the
State of Washington and any other applicable states or
jurisdictions, as well as any other applicable law.
h. Issuance and Administration of Contracts. FNWL, or its appointed
designee, shall be responsible for issuing the Contracts and
administering the Contracts and the Variable Account, including all
Contract owner communications, provided, however, that Distributor,
and its designated Office(s) of Supervisory Jurisdiction and Branch
Office(s) (the "Office(s)") shall have full responsibility for the
securities activities of all persons employed by FNWL, engaged
directly or indirectly in the Contract operations, and for the
training, supervision and control of such persons to the extent of
such activities. Subject to Distributor's approval, FNWL reserves
the right to delegate its duties set forth in this Section 6.h to a
third party administrator.
i. Anti-Money Laundering Compliance. Distributor represents and
warrants that it has, and covenants that it shall continue to have,
an anti-money laundering compliance program as required by NASD Rule
3011. FNWL covenants that it shall implement such anti-money
laundering programs as it may be required to implement by applicable
laws, rules and regulations. .
7. INVESTIGATIONS AND PROCEEDINGS
a. Consultation and Cooperation. Distributor and FNWL shall cooperate
fully in any securities or insurance regulatory investigation or
proceeding or judicial proceeding arising in connection with the
offering, sale or distribution of the Contracts distributed under
this Agreement. Without limiting the foregoing, FNWL and Distributor
shall notify each other promptly of any customer complaint or notice
of any regulatory investigation or proceeding or judicial proceeding
received by either party with respect to the Contracts. In addition,
Distributor agrees to furnish regulatory authorities with any
information or reports in connection with the services it provides
under this Agreement that may be requested in order to ascertain
whether the operations of FNWL, Distributor or the Variable Accounts
are being conducted in a manner consistent with applicable laws and
regulations. Distributor further agrees to comply with the reporting
requirements imposed by NASD Conduct Rule 3070 with regard to sales
of the Contracts and the activities of Representatives.
b. Customer Complaints. Distributor and FNWL shall cooperate fully in
responding to any customer complaints. Distributor will promptly
provide to FNWL a copy of all customer complaints received by
Distributor concerning or related to the Contracts, FNWL,
Distributor, or its Representatives, in connection with any Contract
sold under this Agreement or regarding any activity of an
aforementioned entity relating to the exercise of its duties or
obligations hereunder. FNWL will promptly provide to
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Distributor a copy of all customer complaints received by FNWL
concerning or related to the Contracts, FNWL, Distributor, or its
Representatives, in connection with any Contract sold under this
Agreement or regarding any activity of an aforementioned entity
relating to the exercise of its duties or obligations hereunder.
Distributor will timely provide information as needed to enable FNWL
to respond to such complaints, and, at FNWL's option, will itself
respond to such complaints as directed by FNWL or as required by
federal or state securities laws or the rules of the NASD. Without
limiting the foregoing, FNWL agrees to notify the Distributor if
persons associated with FNWL are the subject of any written customer
complaint involving allegations of theft, forgery or
misappropriation of funds or securities, or is the subject of any
claim for damages by a customer, broker, or dealer that is settled
for an amount exceeding $15,000, or for such other amount as
Distributor may request from time to time.
8. INDEMNIFICATION
a. By FNWL. FNWL shall indemnify and hold harmless Distributor and each
person who controls or is associated with Distributor within the
meaning of such terms under the federal securities laws, and any
officer, director, employee or agent of the foregoing, against any
and all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of,
any action, suit or proceeding or any claim asserted), to which
Distributor and/or any such person may become subject, under any
statute or regulation, any NASD or SEC rule or interpretation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities:
(1) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission 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, contained in (i) any Registration Statement or in any
Prospectus required to be filed by FNWL; (ii) blue-sky
application or other document executed by FNWL specifically
for the purpose of qualifying any or all of the Contracts for
sale under the securities laws of any jurisdiction; provided
that FNWL shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or
is based upon, an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon
information furnished in writing to FNWL by Distributor
specifically for use in the preparation of any such
Registration Statement or any amendment thereof or supplement
thereto; or in any Prospectus required to be filed by FNWL; or
(2) result from any breach by FNWL of any provision of this
Agreement.
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This indemnification agreement shall be in addition to any
liability that FNWL may otherwise have; provided, however,
that no person shall be entitled to indemnification pursuant
to this provision if such loss, claim, damage or liability is
due to the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty by the person seeking
indemnification.
b. By Distributor. Distributor shall indemnify and hold harmless FNWL
and each person who controls or is associated with FNWL within the
meaning of such terms under the federal securities laws, and any
officer, director, employee of FNWL or agent of the foregoing,
against any and all losses, claims, damages or liabilities, joint or
several (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amounts paid in
settlement of, any action, suit or proceeding or any claim
asserted), to which FNWL and/or any such person may become subject
under any statute or regulation, any NASD rule or interpretation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities:
(1) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading, in light of the circumstances in which they
were made, contained in (i) any Registration Statement or in
any Prospectus required to be filed by FNWL; (ii) blue-sky
application or other document executed by FNWL specifically
for the purpose of qualifying any or all of the Contracts for
sale under the securities laws of any jurisdiction; in each
case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged
omission was made in reliance upon information furnished in
writing by Distributor to FNWL specifically for use in the
preparation of any such Registration Statement or any such
blue-sky application or any amendment thereof or supplement
thereto, or in any Prospectus required to be filed by FNWL;
(2) result because of any use by Distributor or its
Representatives of promotional, sales or advertising material
not authorized by FNWL or any verbal or written
misrepresentations by Distributor or its Representative or any
unlawful sales practices concerning the Contracts by
Distributor or its Representatives under federal securities
laws or NASD regulations;
(3) result from any breach by Distributor of any provision of this
Agreement; or
(4) result from Distributor's own misconduct or negligence.
This indemnification shall be in addition to any liability that
Distributor may otherwise have; provided, however, that no person
shall be entitled to indemnification pursuant to
13
this provision if such loss, claim, damage or liability is due to
the willful misfeasance, bad faith, gross negligence or reckless
disregard of duty by the person seeking indemnification.
c. General. Promptly after receipt by a party entitled to
indemnification ("indemnified person") under this Section 8 of
notice of the commencement of any action as to which a claim will be
made against any person obligated to provide indemnification under
this Section 8 ("indemnifying party"), such indemnified person shall
notify the indemnifying party in writing of the commencement thereof
as soon as practicable thereafter, but failure to so notify the
indemnifying party shall not relieve the indemnifying party from any
liability which it may have to the indemnified person otherwise than
on account of this Section 8. The indemnifying party will be
entitled to participate in the defense of the indemnified person but
such participation will not relieve such indemnifying party of the
obligation to reimburse the indemnified person for reasonable legal
and other expenses incurred by such indemnified person in defending
herself, himself or itself.
The indemnification provisions contained in this Section 8 shall
remain operative in full force and effect, regardless of any
termination of this Agreement. A successor by law of Distributor or
FNWL, as the case may be, shall be entitled to the benefits of the
indemnification provisions contained in this Section 8.
9. TERMINATION
This Agreement shall terminate automatically if it is assigned by the
Distributor or FNWL without the prior written consent of the other party. This
Agreement may be terminated at any time for any reason or for no reason by
either party upon 60 days' written notice to the other party, without payment of
any penalty. (The term "assigned" as used in this Section 9 shall not include
any transaction exempted from Section 15(b)(2) of the 1940 Act.) This Agreement
may be terminated at the option of either party to this Agreement upon the other
party's material breach of any provision of this Agreement or of any
representation or warranty made in this Agreement, unless such breach has been
cured within 10 days after receipt of notice of breach from the non-breaching
party. Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except the following: (1) 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 FNWL prior to termination; and (2) the agreements
contained in Sections 3.c.( 4), 5, 6, 7, 8, 10.g and 10.h of this Agreement.
In the event of any termination for any reason, all books and records and sales
or marketing materials held by Distributor being the property of FNWL, shall
promptly be returned to FNWL free from any claim or retention of rights by
Distributor.
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10. MISCELLANEOUS
a. Binding Effect. This Agreement shall be binding on and shall inure
to the benefit of the respective successors and assigns of the
parties hereto provided that neither party shall assign this
Agreement or any rights or obligations hereunder without the prior
written consent of the other party.
b. Schedules. The parties to this Agreement may amend Schedules 1 and 2
to this Agreement from time to time to reflect additions of any
class of Contracts and Variable Accounts. The provisions of this
Agreement shall be equally applicable to each such class of
Contracts and each Variable Account that may be added to the
Schedule, unless the context otherwise requires. FNWL and
Distributor may modify Schedules 3 and 4 as mutually agreed in
writing from time to time. Any other change in the terms or
provisions of this Agreement shall be by written agreement between
FNWL and Distributor.
c. 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 either 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.
d. Notices. All notices hereunder are to be made in writing and shall
be given:
if to FNWL, to:
C. Xxxx Xxxxxx, President
Farmers New World Life Insurance Company
0000 00xx Xxxxxx X.X.
Xxxxxx Xxxxxx, XX 00000
with a copy to:
X. Xxxxxxx Close
Vice President & General Counsel
Farmers New World Life Insurance Company
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
15
if to Distributor, to:
Xxxxx Xxxxx, President
Farmers Financial Solutions, LLC
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
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, or by overnight mail by a nationally
recognized courier, and shall be effective upon delivery. Failure to
provide written notice shall not constitute a defense to any action
unless the party who did not receive written notice was materially
prejudiced thereby.
e. Interpretation; Jurisdiction. This Agreement constitutes the whole
agreement between the parties hereto with respect to the subject
matter hereof, and supersedes all prior oral or written
understandings, agreements or negotiations between the parties with
respect to such subject matter. No prior writings by or between the
parties with respect to the subject matter hereof shall be used by
either party in connection with the interpretation of any provision
of this Agreement. This Agreement is made in the State of
Washington, and all questions concerning its validity, construction
or otherwise shall be determined under the laws of Washington
without giving effect to principles of conflict of laws.
f. Severability. This is a severable Agreement. In the event that any
provision of this Agreement would require a party to take action
prohibited by applicable federal or state law or prohibit a party
from taking action required by applicable federal or state law, then
it is the intention of the parties hereto that such provision shall
be enforced to the extent permitted under the law, and, in any
event, that all other provisions of this Agreement shall remain
valid and duly enforceable as if the provision at issue had never
been a part hereof.
g. Confidentiality. The parties covenant and agree that they will not
at any time during or after the termination of this Agreement,
reveal, divulge or make known to any person (other than their
respective directors, officers, employees, agents, professional
advisors or affiliates who need to know such information for the
performance of obligations hereunder), or use for their own account
or purposes or for any other account or purpose other than the
performance of obligations under this Agreement, any confidential or
proprietary information, including but not limited to information
about applicants for or purchasers of the Contracts, business plans,
product designs, marketing strategies, action plans, pricing,
methods, processes, records, financial information or other data,
16
trade secrets, customer lists, nonpublic personal information
concerning "consumers" or "customers" as described in Section 6.h
herein, or any other information obtained as a result of this
Agreement, whether any such information is in oral or printed form
or on any computer tapes, computer disks or other forms of
electronic or magnetic media (collectively the "confidential
information") used or owned by a party or any of its affiliates and
made known (whether or not with the knowledge and permission of such
party or any of its affiliates, and whether or not developed,
devised or otherwise created in whole or in part by the efforts of
the parties) to the other party at any time by reason of their
association under this Agreement; provided, however, that
confidential information shall not include any information: (i) that
was previously known by a party from a source, other than the other
party (or any affiliate thereof), without an obligation of
confidence; (ii) that was previously disclosed in a lawful manner to
a party without breach of this Agreement or of any other applicable
agreement, and without any requirement of confidentiality; (iii)
that was or is rightfully received from a third party without an
obligation of confidence or from publicly available sources without
obligations of confidence; (iv) that is in the public domain; (v)
that was or is developed by means independent of information
provided by a party or its affiliates. The parties further covenant
and agree that they shall retain all such knowledge and information
that they acquire or develop respecting such confidential
information in trust for the sole benefit of the parties, and their
respective successors and assigns provided, further, that this
Agreement shall not restrict any disclosure required to be made by
order of a court or governmental agency of competent jurisdiction or
by a self-regulatory organization of which a party is a member,
except that no such disclosure shall be made sooner (unless
otherwise compelled) than five business days after a party's written
receipt of such an order. The party receiving such an order shall
promptly notify the other parties of the order.
h. Unauthorized Access to Confidential Information. In the event either
party knows or suspects that confidential information has been
subject to unauthorized access, that party shall notify the other
party and shall undertake reasonable steps to prevent further
unauthorized access, to limit and mitigate any reasonably
foreseeable harm resulting from the unauthorized disclosure, and to
make such notifications and take other actions as are required under
applicable law.
i. Section and Other 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.
j. Counterparts. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one and
the same instrument.
17
k. Regulation. This Agreement shall be subject to the provisions of the
1933 Act, 1934 Act, the 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, the parties hereto have caused this Agreement to be duly
executed by such authorized officers on the date specified above.
FARMERS NEW WORLD LIFE INSURANCE COMPANY
By:
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Assistant Vice President & Secretary
FARMERS FINANCIAL SOLUTIONS, LLC
Distributor
By:
--------------------------------------
Name: Xxxxx Xxxxx
Title: President
18
SCHEDULE 1
VARIABLE ACCOUNTS
For the purposes of this Amended and Restated Agreement entered into as of this
___ day of April, 2004, between FNWL and Distributor, the Variable Accounts are
as follows:
1. Farmers Annuity Separate Account A
2. Farmers Variable Life Separate Account A
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SCHEDULE 2
VARIABLE INSURANCE PRODUCTS
For the purposes of this Amended and Restated Agreement entered into as of this
___ day of April, 2004, between FNWL and Distributor, the variable products are
as follows:
1. Farmers Variable Annuity (an individual flexible premium variable annuity)
2. Farmers Variable Universal Life (a flexible premium variable life insurance
policy)
3. Farmers Accumulator VUL (a flexible premium variable life insurance policy)
SCHEDULE 3
APPLICABLE LAWS AND REGULATIONS
1. Securities Act of 1933, as amended
2. Securities Exchange Act of 1934, as amended
3. Investment Company Act of 1940, as amended
4. Federal Violent Crime Control and Law Enforcement Act of 1994
5. Xxxxx-Xxxxx Xxxxxx Act of 1999
6. USA PATRIOT Act of 2001
7. Economic sanctions programs administered by the U.S. Treasury Department's
Office of Foreign Asset Control
8. Xxxxxxxx-Xxxxx Act of 2002
SCHEDULE 4
SALES COMPENSATION
The Distributor shall receive compensation based on such percentages of Premiums
from sales of Contracts as may be selected by its Representatives from the grid
appearing below. All compensation payable to the Distributor shall be subject to
FNWL's vesting rules and also to indebtedness, charge-backs and other offsets
and limitations asserted by FNWL against its agents who are also representatives
of the Distributor.
FARMERS VARIABLE ANNUITY
% OF
DESCRIPTION OF GDC PAID BY FNWL TO FFS PREMIUM
GDC paid on issue ages 0 to 80 (limited to $1,000,000) 7.00%
GDC paid on issue ages 81 to 85 (limited to $1,000,000) 4.00%
GDC paid on issue ages 86 to 90 (limited to $1,000,000) 1.00%
FARMERS VARIABLE UNIVERSAL LIFE
% OF
DESCRIPTION OF GDC PAID BY FNWL TO FFS PREMIUM
1st-year GDC paid "up to target" 69.00%
1st-year GDC paid "on excess of target" 4.74%
2-10 year GDC paid "up to target" 6.60%
2-10 year GDC paid "on excess of target" 4.74%
11 year + paid on all 0.00%
11 year +, FNWL to pay a GDC = 0.185% of Assets under management to be paid
monthly (1/12 of 0.185).
FARMERS ACCUMULATOR VUL
% OF
DESCRIPTION OF GDC PAID BY FNWL TO FFS PREMIUM
1st-year GDC paid "up to target" 69.00%
1st-year GDC paid "on excess of target" 4.74%
2-10 year GDC paid "up to target" 6.60%
2-10 year GDC paid "on excess of target" 4.74%
11 year + paid on all 2.00%
NOTE: NO GDC WILL BE PAID ON TRANSFERRED BALANCES BETWEEN FNWL ACCOUNTS (FNWL TO
FNWL REPLACEMENTS).
