MARKETING COORDINATION AND ADMINISTRATIVE
SERVICE AGREEMENT
THIS AGREEMENT entered into by and between Sun Life Assurance Company of
Canada (U.S.) ("Sun Life (U.S.)"), a Delaware corporation and Sun Investment
Services Company, a Delaware corporation ("Sun Investment").
WITNESSETH
WHEREAS Sun Life (U.S.) proposes to issue and offer for sale certain life
insurance products (the "Plans") which are deemed to be securities under the
Securities Act of 1933 ("33 Act"); and
WHEREAS Sun Investment is registered as a broker-dealer with the Securities
and Exchange Commission ("SEC") under the Securities Exchange Act of 1934 ("34
Act") and is a member of the National Association of Securities Dealers, Inc.
("NASD"); and
WHEREAS Sun Investment proposes to coordinate the marketing of the Plans
and to perform certain administrative services in conjunction with the Plans.
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
I
THE PLANS
A. TYPE OF PLANS
The Plans issued by Sun Life (U.S.) to which this Agreement applies are
listed in Exhibit A. Exhibit A may be amended from time to time as agreed upon
by Sun Life (U.S.) and Sun Investment.
B. SUSPENSION/RESTRICTION
Sun Life (U.S.) may, at its option and at its sole discretion, suspend or
restrict in any manner the sale or method of distribution of all or any of the
Plans, including sales by all or any individuals licensed to sell Sun Life
(U.S.)'s products. If any suspension or restriction is required by any
regulatory authority having jurisdiction, written notice shall be given to Sun
Investment immediately upon receipt by Sun Life (U.S.) of notice of such
required suspension or restriction. In all other cases, Sun Life (U.S.) will
provide thirty (30) days' prior written notice to Sun Investment of any such
suspension or restriction.
C. PLAN CHANGES
Sun Life (U.S.) may, at its option and at its sole discretion, amend, add
or delete features of all or any of the Plans. In the event of any such
amendment, addition or deletion, Sun Life
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(U.S.) will provide written notice of such change to Sun Investment. If the
change is required by any regulatory authority having jurisdiction, written
notice shall be given to Sun Investment immediately upon receipt by Sun Life
(U.S.) of notice of such required change. In all other cases, Sun Life (U.S.)
will provide written notice at least thirty (30) days' prior to the effective
date of such change.
II
MARKETING COORDINATION AND SALES ADMINISTRATION
A. GENERAL DISTRIBUTOR
Sun Investment is hereby appointed by Sun Life (U.S.) as the General
Distributor of the Plans. Sun Investment shall, at all times, when performing
its functions under this Agreement, be registered as a securities broker-dealer
with the SEC and the NASD and shall be licensed or registered as a securities
broker-dealer in those jurisdictions where the performance of the duties
contemplated by this Agreement would require such licensing or registration.
B. DISTRIBUTION AGREEMENTS
Sun Investment will distribute the plans pursuant to a Corporate Markets
Variable Life Insurance Sales Agreement (the "Distribution Agreement"),
substantially in the form attached as Exhibit B. No Commission Schedule
attached to any Distribution Agreement may provide for commission payments in
excess of specified maximums established by Sun Life (U.S.) from time to time.
Sun Investment shall retain copies of all executed Distribution Agreements and
all correspondence, memoranda and other documents relating to the Distribution
Agreements.
C. SALES REPRESENTATIVES/REGISTERED REPRESENTATIVES
1. APPOINTMENT AND TERMINATION
(a) Sun Life (U.S.) hereby designates Sun Investment as its agent to
appoint and dismiss individuals as sales representatives of Sun Life (U.S.)
in those jurisdictions in which Sun Life (U.S.) transacts an insurance
business. Sun Life (U.S.) reserves the right to terminate any and all such
designations and will provide written notice of any such termination to Sun
Investment concurrently with notice to the particular regulatory authority.
(b) Appointments and/or dismissals of individuals as sales
representatives of Sun Life (U.S.) shall be made on forms supplied by
regulatory authorities having jurisdiction or by Sun Life (U.S.), as the
case may be. All such appointments and dismissals shall be subject to all
applicable laws, rules and regulations and to such written instructions and
rules as Sun Life (U.S.) may establish from time to time. Sun Investment
shall retain copies of all completed forms appointing and/or dismissing
agents and all related correspondence, memoranda and other documents.
(c) Sun Investment shall maintain current lists of sales
representatives of Sun Life (U.S.) which it has appointed.
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(d) Sun Life (U.S.) shall pay all necessary appointment fees (initial
and renewal) and other expenses of any type incurred by Sun Investment with
respect to licensing and appointment of individuals as sales
representatives of Sun Life (U.S.).
(e) Sun Life (U.S.) shall be responsible for determining that any
individual soliciting applications for Plans is: (i) properly licensed with
state insurance regulatory authorities; (ii) appointed as a sales
representative of Sun Life (U.S.); (iii) properly licensed under all
applicable securities laws; (iv) associated as a registered representative
with a broker/dealer registered under the 34 Act and a NASD member and
which has executed a Distribution Agreement; and (v) covered by a fidelity
bond which provides for claim payments to be made to Sun Life (U.S.) and
Sun Investment, as their interests may appear.
2. TRAINING OF SALES REPRESENTATIVES/REGISTERED REPRESENTATIVES
Sun Investment shall train sales representatives of Sun Life (U.S.)
which it has appointed to properly solicit applications for the Plans.
3. SUPERVISION OF SALES REPRESENTATIVES/REGISTERED REPRESENTATIVES
Sun Investment shall coordinate the supervision of the sales
representatives of Sun Life (U.S.) associated with other broker-dealers in
connection with the offering and sale of the Plans. Sun Investment will
establish such rules and procedures as may be necessary to insure proper
supervision of the sales representatives/registered representatives.
4. SALES ASSISTANCE TO SALES REPRESENTATIVES/REGISTERED REPRESENTATIVES
Sun Investment shall provide sales assistance to sales representatives
of Sun Life (U.S.) which it has appointed. This sales assistance shall
include, but not be limited to, assistance from home office personnel
through its telecommunications systems. In addition, Sun Investment shall
provide broker/dealers and sales representatives with sufficient quantities
of sales promotional materials, prospectuses, sample Plans, applications
and any necessary service forms.
5. PAYMENT OF COMMISSIONS
All commission payments required to be made pursuant to the
Distribution Agreements shall be made by Sun Investment as agent for Sun
Life (U.S.) or by Sun Life (U.S.) directly. Sun Life (U.S.) will fund a
commission account to make these payments. Sun Life (U.S.) acknowledges
that this function may be delegated by Sun Investment, subject to the prior
approval of Sun Life (U.S.).
D. SALES MATERIAL AND OTHER DOCUMENTS
1. SUN INVESTMENT RESPONSIBILITIES
Sun Investment shall be responsible for:
(a) the approval of promotional material by the Securities and
Exchange Commission and the National Association of Securities
Dealers, Inc., where required.
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2. SUN LIFE (U.S.)'S RESPONSIBILITIES
Sun Life (U.S.) shall be responsible for:
(a) providing Sun Investment with sufficient quantities of
prospectuses regarding Plans and separate accounts, Plans (including
endorsements), applications and sample Plans for sales training
purposes.
(b) the design and printing of all promotional material for the
Plans.
(c) the approval of promotional material by state and other insurance
regulatory authorities.
E. ADVERTISING
Sun Investment shall not print, publish or distribute any advertisement,
circular or any document relating to the Plans or relating to Sun Life (U.S.)
unless such advertisement, circular or document shall have been approved in
writing by Sun Life (U.S.). Neither Sun Life (U.S.) nor any of its agents or
affiliates shall print, publish or distribute any advertisement, circular or any
document relating to the Plans or relating to Sun Investment unless such
advertisement, circular or document shall have been approved in writing by Sun
Investment. However, nothing herein shall prohibit any person from advertising
annuities in general or on a generic basis.
F. SALES RECORDS - PRODUCTION REPORTS
Sun Investment shall provide Sun Life (U.S.) with such reports and
materials relative to the marketing and distribution of Plans as may reasonably
be required by Sun Life (U.S.), in the furtherance of its insurance business.
G. BOOKS, RECORDS AND SUPERVISION
1. BOOKS AND RECORDS
Sun Investment may request that all or some of the books and records
required to be maintained by it as a registered broker/dealer in connection
with the offer and sale of the Plans be prepared and maintained by Sun Life
(U.S.). Sun Life (U.S.) agrees to prepare and maintain such books and
records at its cost upon request, and agrees that such books and records
are the property of Sun Investment, that they will be made and preserved in
accordance with Rules 17a-3 and 17a-4 under the 34 Act and that they will
be subject to examination by the SEC in accordance with Section 17(a) of
the 34 Act.
2. SUPERVISION
Sun Investment has and assumes full responsibility for the securities
activities of all persons associated with Sun Life (U.S.) who maintain
books and records on its behalf. Sun Life (U.S.) acknowledges that Sun
Investment has full responsibility for all such persons in connection with
their training, supervision and control as contemplated by the 34 Act.
H. ASSIGNMENT OF DUTIES
Sun Life (U.S.) acknowledges that Sun Investment may assign all or any
part of its duties under this Agreement subject to the prior consent of Sun
Life (U.S.). No other assignment of Sun Investment's duties under this
Agreement is permitted.
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III
COMPENSATION
A. GENERAL
For performing administrative and marketing coordination services under
this Agreement, Sun Investment will not be compensated by Sun Life (U.S.).
B. CHANGES IN COMPENSATION
Compensation payable under this Agreement may be increased to reflect any
change in administrative or marketing coordination responsibilities.
C. INDEBTEDNESS
Nothing in this Agreement shall be construed as giving Sun Investment the
right to incur any indebtedness on behalf of Sun Life (U.S.). However, Sun Life
(U.S.) may offset amounts owed it under this Agreement against amounts payable
under this Agreement for any reason; and Sun Investment may offset amounts owed
by Sun Life (U.S.) under this Agreement against any amounts payable to Sun Life
(U.S.) under this Agreement for any reason, provided that no such offset is
permitted in connection with Plan premiums or purchase payments and Plan
payments.
IV
OTHER PROVISIONS
A. PRODUCT DEVELOPMENT
Sun Investment shall assist Sun Life (U.S.) in the design and development
of life insurance and annuity products for distribution pursuant to the
Distribution Agreements. This assistance shall include conducting market
research studies as reasonably requested by Sun Life (U.S.), providing
consulting services with respect to product design, and assisting in the
development of sales training, sales promotional and advertising material
relating to new insurance and annuity products. All such studies and materials
are the property of Sun Life (U.S.).
B. OWNERSHIP OF BUSINESS RECORDS
Sun Life (U.S.) shall own all business records, including but not limited
to Plan records, tax records, payment records, plan descriptions, appointment
records, agents lists, files, memoranda and other records maintained by Sun
Investment either on paper or in machine-readable form pertaining to the duties
and responsibilities under this Agreement. Such records shall be delivered to
Sun Life (U.S.) promptly upon reasonable request. Sun Investment will maintain
all records and accounts in accordance with Sun Life (U.S.)'s standards or
requirements, or otherwise, with generally accepted procedures as they apply to
the accounting and insurance industry. At Sun Life (U.S.)'s request Sun
Investment will make any such records available to Sun Life (U.S.)'s auditors or
to any governmental authority having jurisdiction over Sun Life (U.S.).
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C. APPROVAL OF PRACTICES AND PROCEDURES
Sun Life (U.S.) shall have the right to review and approve the standards,
practices and procedures utilized by Sun Investment in fulfilling its
obligations under the Agreement. Sun Life (U.S.) reserves the rights, from time
to time, to prescribe rules and regulations respecting the conduct of the
business covered hereby.
D. COMPLAINTS
1. Sun Investment shall immediately forward to Sun Life (U.S.) any
information received by Sun Investment relating to any complaint relating
to Sun Life (U.S.) or the Plans.
2. In the case of complaints or inquiries relating to the Plans
distributed pursuant to the Distribution Agreements, Sun Life (U.S.) may,
at its option, request Sun Investment to investigate and/or respond to such
complaints or inquiries. In such instances, Sun Investment shall promptly
forward to Sun Life (U.S.) copies of all documents relating to such
investigations and/or responses.
E. LIMITATIONS ON AUTHORITY
Sun Investment shall have authority only as expressly granted in this
Agreement. No party to this Agreement shall enter into any proceeding in a
court of law or before a regulatory agency in the name of any other party,
without the express written consent of that party. Further, if any legal or
administrative proceedings are commenced against any party arising out of the
obligations, duties or services performed under this Agreement by any third
party or any federal, state or other governmental or regulatory authority, that
party, as the case may be, shall immediately notify the other parties of this
fact.
V
GENERAL PROVISIONS
A. WAIVER
Failure of any party to insist upon strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of any of
the conditions, but the same shall remain in full force and effect. No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute a waiver of any other provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver.
X. XXXX
Sun Investment will maintain whatever fidelity bond may be required by
Sun Life (U.S.), and such bond shall be of a type and amount and issued by
a reputable company, all as approved by Sun Life (U.S.).
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C. BINDING EFFECT
This Agreement shall be binding on and shall inure to the benefit of
the parties to it and their respective successors and assigns.
D. INDEMNIFICATION
Each party hereby agrees to release, indemnify and hold harmless the
other party, its officers, directors, employees, agents, servants,
predecessors or successors from any claims or liability to third parties
arising out of the breach of this Agreement or arising out of the acts or
omissions of a party to this Agreement not authorized by this Agreement.
E. NOTICES
All notices, requests, demands and other communication under this
Agreement shall be in writing, and shall be deemed to have been given on
the date of service if served personally on the party to whom notice is to
be given, or on the date of mailing, if sent by First Class Mail,
Registered or Certified, postage prepaid and properly addressed as follows:
TO SUN LIFE (U.S.)
Sun Life Assurance Company of Canada (U.S.)
One Sun Life Executive Park
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attention: Secretary
TO SUN INVESTMENT
Sun Investment Services Co.
One Sun Life Executive Park
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attention: Secretary
F. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Massachusetts.
G. COMPLIANCE
All parties agree to observe and comply with the existing laws and
rules or regulations of applicable local, state or federal regulatory
authorities, and with those which may be enacted or adopted during the term
of this Agreement regulating the business contemplated hereby in any
jurisdiction in which business described herein is to be transacted.
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H. TERMINATION
This Agreement may be terminated by any of the parties upon two (2)
months' prior written notice to the other party.
Executed this day of January, 1997.
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
By ______________________________________________
Xxxxxxxx Xxxxx Xxxx, Secretary
SUN INVESTMENT SERVICES COMPANY
By ______________________________________________
Xxx X. Xxxxxxx, Secretary
EXHIBIT A
TYPES OF PLANS
- Sun Life Corporate VUL-SM-
(flexible premium variable universal life insurance policy)
EXHIBIT B
CORPORATE MARKETS VARIABLE LIFE INSURANCE
SALES AGREEMENT
AGREEMENT by and between SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
("the Company"), a Delaware corporation; Sun Investment Services Company
("Sun Investment"), a Delaware corporation, a broker-dealer registered with
the Securities and Exchange Commission under the Securities Exchange Act of
1934 (the "1934 Act") and a member of the National Association of Securities
Dealers, Inc. ("NASD");______________________________________________________
("Selling Broker-Dealer"), also a broker-dealer registered under the 1934 Act
and a member of the NASD; and________________________________________________
("Producer") an insurance agency affiliate of Selling Broker-Dealer.
W I T N E S S E T H:
WHEREAS, the Company issues certain life insurance contracts listed in
Schedule A (the "Contracts"), which are registered under the Securities Act
of 1933 (the "1933 Act"):
WHEREAS, the Company has authorized Sun Investment to act as the general
distributor and principal underwriter of the Contracts; and in that capacity
to enter into agreements, subject to the consent of the Company, with
Broker-Dealers and such Producers to act as Special COLI Producers for the
distribution of the Contracts:
WHEREAS, Sun Investment has agreed to assist in obtaining licenses,
registrations and appointments to enable the registered representatives and
sub-brokers of Producer to sell the Contracts, and participate at educational
meetings to familiarize them with the provisions and features of the
Contracts; and
WHEREAS, Selling Broker-Dealer and Producer have been selected by Sun
Investment to distribute the Contracts and Selling Broker-Dealer and
Producer, in an insurance brokerage capacity, wish to participate in the
distribution of the Contracts to their clients.
NOW THEREFORE, in consideration of the promises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
APPOINTMENT
Subject to the terms and conditions of this Agreement, the Company and
Sun Investment hereby appoint Selling Broker-Dealer and Producer to solicit
applications for the Contracts.
Selling Broker-Dealer and Producer jointly and severally accept such
appointment and each agrees to use its best efforts to find purchasers for
the Contracts acceptable to the Company.
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II.
AUTHORITY AND DUTIES OF PRODUCER
A. Licensing and Appointment of Sub-brokers
Producer is authorized to appoint sub-broker ("Sub-brokers") to solicit
sales of the Contracts. Producer agrees to fulfill all requirements set
forth in the General Letter of Recommendation attached as Schedule B hereto
in conjunction with its submission of licensing and appointment papers for
all Sub-brokers.
Producer warrants that it and all of its Sub-brokers appointed pursuant
to this Agreement shall not solicit nor aid, directly or indirectly, in the
solicitation of any application for any Contract until fully licensed by the
proper authorities under the applicable insurance laws within the applicable
jurisdictions where Producer proposes to offer the Contracts, where the
Company is authorized to conduct business and where the Contracts may be
lawfully sold.
Producer shall periodically provide the Company with a list of all
Sub-brokers appointed by Producer and the jurisdictions where such
Sub-brokers are licensed to solicit sales of the Contracts. The company
shall periodically provide Producer with a list which shows; (i) the
jurisdictions where the Company is authorized to do business; and (ii) any
limitations on the availability of the Contracts in any of such jurisdictions.
Producer shall prepare and transmit the appropriate appointment forms to
the Company. Producer shall pay all fees to state insurance regulatory
authorities in connection with obtaining necessary licenses and
authorizations for Sub-brokers to solicit and sell the Contracts. The
Company will pay appointment fees for Producer and resident appointment fees
for Sub-brokers. Non-resident appointment fees for Sub-brokers will be paid
by the Producer. The Company may refuse for any reason to apply for the
appointment of a Sub-broker and may cancel any existing appointment at any
time.
B. Rejection of Sub-broker
The Company or Sun Investment may refuse for any reason, by written
notice to Producer to permit any Sub-broker the right to solicit applications
for the sale of any of the Contracts. Upon receipt of such notice, Producer
immediately shall cause such Sub-broker to cease such solicitations of sales
and cancel the appointment of any Sub-broker under this agreement.
C. Supervision of Sub-broker
Producer, jointly with Selling Broker-Dealer, shall supervise all Sub-
brokers appointed pursuant to this Agreement to solicit sales of the Contracts
and bear responsibility for all acts and omissions of each Sub-broker. Producer
shall comply with and exercise all responsibilities required by applicable
federal and state law and regulations. Producer shall train and supervise
3
its Sub-brokers to ensure that purchase of a Contract is recommended only to
applicants where there are reasonable grounds to believe the purchase of the
Contract is suitable for that applicant. While not limited to the following,
a determination of suitability shall be based on information furnished to a
Sub-broker after reasonable inquiry of such applicant concerning the
applicant's insurance and investment objectives, financial situation and
needs, and the likelihood that the applicant will continue to make any
premium payments contemplated by the Contracts and will keep the Contract in
force for a sufficient period of time so that the Company's acquisition costs
are amortized over a reasonable period of time.
Nothing contained in this Agreement or otherwise shall be deemed to make
any Sub-broker appointed by Producer an employee or agent of the Company or
Sun Investment. Neither the Company nor Sun Investment shall have any
responsibility for the training and supervision of any Sub-broker or any
employee of Producer. If the act or omission of a Sub-broker or any employee
of Producer is the proximate cause of claim, damage or liability (including
reasonable attorneys' fees) to the Company or Sun Investment, Producer and
Selling Broker-Dealer shall be responsible and liable, jointly and severally,
therefor.
III.
AUTHORITY AND DUTIES OF SELLING BROKER-DEALER
Selling Broker-Dealer agrees that it has the full legal responsibility
for the training and supervision of all persons, including Sub-brokers of
Producer, associated with Selling Broker-Dealer who are engaged directly or
indirectly in the offer or sale of Contracts. All such persons shall be
registered representatives of Selling Broker-Dealer and shall be subject to
the control and supervision of Selling Broker-Dealer with respect to their
securities regulated activities. Selling Broker-Dealer shall: (i) train and
supervise Sub-brokers, in their capacity as registered representatives, in
the sale of Contracts; (ii) use its best efforts to cause such Sub-brokers to
qualify under applicable federal and state laws to engage in the sale of
Contracts; (iii) provide the Company and Sun Investment to their satisfaction
with evidence of Sub-brokers' qualifications to sell Contracts; (iv) notify
the Company if any of such Sub-brokers ceases to be a registered
representative of Selling Broker-Dealer; and (v) train and supervise
Sub-brokers to ensure compliance with applicable federal and state securities
laws, rules, regulations, statements of policy thereunder and with NASD
rules. Selling Broker-Dealer, jointly with Producer, shall train and
supervise Sub-brokers to ensure that purchase of a Contract is recommended
only to applicants where there are reasonable grounds to believe the purchase
of the Contract is suitable for that applicant. While not limited to the
following, a determination of suitability shall be based on information
furnished to a Sub-broker after reasonable inquiry of such applicant
concerning the applicant's other security holdings, financial situation and
needs. Selling Broker-Dealer shall ensure that any offer of a Contract made
by a Sub-broker will be made by means of a currently effective prospectus.
The Company and Sun Investment shall not have any responsibility for the
supervision of any registered representative or any employee or affiliate of
Selling Broker-Dealer. If the act or
4
omission of a registered representative or any employee or affiliate of
Selling Broker-Dealer is the proximate cause of any claim, damage or
liability (including reasonable attorney's fees) to the Company or Sun
Investment, Selling Broker-Dealer and Producer shall be responsible and
liable, jointly and severally, therefor.
Selling Broker-Dealer at all times shall be duly registered as a
broker-dealer under the 1934 Act, a member in good standing of the NASD and
duly licensed in all states and jurisdictions where required to perform
pursuant to this agreement. Selling Broker-Dealer shall fully comply with
the requirements of the 1934 Act and all other applicable federal or state
laws and with the rules of the NASD. Selling Broker-Dealer shall establish
such rules and procedures as may be necessary to cause diligent supervision
of the securities activities of the Sub-brokers including ensuring compliance
with the prospectus delivery requirements of the 1933 Act.
IV.
AUTHORITY AND DUTIES OF
PRODUCER AND SELLING BROKER-DEALER
A. Contracts
The Contracts issued by the Company to which this Agreement applies are
listed in Schedule A. This Schedule A may be amended from time to time by
the Company. The Company, in its sole discretion, with prior or concurrent
written notice to Selling Broker-Dealer and Producer, may suspend
distribution of any Contract. The Company also has the right to amend any
Contract at any time.
B. Securing Applications
Each application for a Contract shall be made on an application form
provided by the Company and all payments collected by Selling Broker-Dealer,
Producer or any registered representative and Sub-broker shall be remitted
promptly in full, together with such application form and any other required
documentation, directly to the Company at the address indicated on such
application or to such other address as may be designated by the Company.
All such payments and documents shall be the property of the Company.
Selling Broker-Dealer and Producer shall review all such applications for
completeness and for compliance with the conditions herein, including the
suitability and prospectus delivery requirements set forth herein. Check or
money order in payment of such Contracts should be made payable to the order
of "Sun Life Assurance Company of Canada (U.S.)." All applications are
subject to acceptance or rejection by the Company in its sole discretion.
C. Receipt of Money
All money payable in connection with any of the Contracts, whether as
premium, purchase payment or otherwise and whether paid by or on behalf of any
contract owner or
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anyone else having an interest in the Contracts, is the property of the
Company and shall be transmitted immediately in accordance with the
administrative procedures of the Company without any deduction or offset for
any reason including, but not limited to, any deduction or offset for
compensation claimed by Selling Broker-Dealer or Producer, unless there has
been a prior written arrangement for net wire transmissions between the
Company and Selling Broker-Dealer or Producer.
D. Notice of Sub-broker's Noncompliance
Selling Broker-Dealer shall immediately notify Sun Investment and
Producer in the event a Sub-broker fails or refuses to submit to the
supervision of Selling Broker-Dealer or Producer in accordance with this
Agreement or any related agreement between Selling Broker-Dealer, Producer
and Sub-broker or otherwise fails to meet the rules and standards imposed by
Selling Broker-Dealer or its registered representatives or Producer or its
Sub-brokers. Selling Broker-Dealer or Producer shall also immediately notify
such Sub-broker that he or she is no longer authorized to sell the Contracts,
and both Selling Broker-Dealer and Producer shall take whatever additional
action may be necessary to terminate the sales activities of such Sub-broker
relating to the Contracts.
E. Sales Promotion, Advertising and Prospectuses
No sales promotion materials, circulars, documents or any advertising
relating to any of the Contracts shall be used by Selling Broker-Dealer,
Producer or any Sub-brokers unless the specific item has been approved in
writing by Sun Investment and the Company prior to use. Selling
Broker-Dealer shall be provided, without any expense to Selling
Broker-Dealer, with prospectuses relating to Contracts. Selling
Broker-Dealer and Producer shall be provided with such other material as Sun
Investment determines necessary or desirable for use in connection with sales
of the Contracts. Nothing in these provisions shall prohibit Selling
Broker-Dealer or Producer from advertising life insurance and annuities on a
generic basis.
Selling Broker-Dealer, Producer and Sub-brokers shall make no material
representations relating to the Contracts, other than those contained in the
relevant registration statement, as may be amended, or in sales promotion or
other materials approved by the Company and Sun Investment as provided herein.
F. Confidentiality
The Company, Sun Investment, Selling Broker-Dealer and Producer shall
keep confidential all information obtained pursuant to this Agreement,
including, without limitation, names of the purchasers of the Contracts, and
shall disclose such information, only if authorized to make such disclosure
in writing, or if such disclosure is expressly required by applicable federal
or state regulatory authorities.
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G. Records
Selling Broker-Dealer and Producer shall have the responsibility for
maintaining the records of its Sub-brokers and representatives licensed,
registered and otherwise qualified to sell the Contracts. Selling
Broker-Dealer and Producer shall maintain such other records as are required
of them by applicable laws and regulations. The books, accounts and records
of Selling Broker-Dealer and Producer relating to the sale of the Contracts
shall be maintained so as to clearly and accurately disclose the nature and
details of the transactions. Selling Broker-Dealer and Producer each agree
to make the books and records relating to the sale of the Contracts available
to the Company or Sun Investment upon their written request.
H. Sub-Broker Agreements
Before a Sub-broker is permitted by Producer and Selling Broker-Dealer
to offer the Contracts, Sub-broker shall have entered into a written
agreement with Producer and Selling Broker-Dealer pursuant to which (i)
Sub-broker is appointed as a Sales representative of Producer and a
registered representative of Selling Broker-Dealer; (ii) Sub-broker agrees
that his or her selling activities relating to Contracts shall be under the
supervision and control of Selling Broker-Dealer and Producer, and (iii) that
Sub-brokers right to continue to sell such Contracts is subject to his or her
continued compliance with such agreement and any procedures, rules or
regulations implemented by Selling Broker-Dealer or Producer. At the request
of the Company, a copy of each such written agreement shall be mailed to the
Company.
V.
COMPENSATION
A. Commissions and Fees
Commissions and fees payable to Selling Broker-Dealer, Producer or any
Sub-broker in connection with the Contracts shall be paid by the Company
through Sun Investment, as paying agent for the Company to Producer, or
otherwise permitted by law or regulation. Producer shall pay Selling
Broker-Dealer and Sub-broker. Sun Investment will provide Selling
Broker-Dealer and Producer with a copy of its current Compensation
Schedule(s), attached hereto as Schedule C. Unless otherwise provided in
Schedule C. compensation will be paid as a percentage of premiums or purchase
payments (collectively, "Payments") received and accepted by the Company on
applications obtained by the various Sub-brokers appointed by Producer
hereunder. Upon termination of this Agreement, all compensation to Selling
Broker-Dealer and Producer hereunder shall cease. However, Producer shall be
entitled to receive compensation for all new and additional premium payments
which are in process at the time of termination, and shall continue to be
liable for any charge-backs pursuant to the provisions of said Schedule C, or
for any other amount advanced by or otherwise due the Company or Sun
Investment hereunder. The Company reserves the right not to pay compensation
on a Contract for which the premium is
7
paid in whole or in part by the loan or surrender value of any other life
insurance policy or annuity contract issued by the Company or any direct or
indirect affiliated company.
Sun Investment, at the direction of the Company, shall deduct any charge
backs from compensation otherwise due Producer or Selling Broker-Dealer. If
any amount to be deducted exceeds compensation otherwise due, Producer and/or
Selling Broker-Dealer shall promptly pay back the amount of the excess
following a written demand by Sun Investment or the Company. Producer and
Selling Broker-Dealer are jointly and severally liable for such charge backs.
The Company recognizes the Contract Owners' right on issued Contracts to
terminate its agent of record status with Producer and/or change a Selling
Broker-Dealer, provided that the Contract Owner notifies Sun Investment in
writing. When a Contract Owner terminates its agent of record, no further
service fees nor compensation on any payments due or received on any
increases in face amount in the existing policy after termination, shall be
payable to Producer or Selling Broker-Dealer in accordance with Schedule C
after the notice of termination is received and accepted by Sun Investment.
However, when a Contract Owner designates a new Selling Broker-Dealer other
than those of record, compensation on any payments due or received on any
increases in face amount in the existing Contract after the change, shall be
payable to the new Selling Broker-Dealer in accordance with Schedule C in
effect at the time of issuance of the Contract.
A change of Selling Broker-Dealer request by a Contract Owner shall be
honored by the Company only if there exists a valid similar Corporate Markets
Variable Life Insurance Sales Agreement between the Company, Sun Investment
and the new Selling Broker-Dealer and (1) the Contract Owner(s) requests in
writing that the Sub-broker remains as representative of record, or (2) both
the former and future Selling Broker-Dealers direct the Company and Sun
Investment in a joint writing to transfer all policies and future
compensation to the new Selling Broker-Dealer, or (3) the NASD approves and
effects a bulk transfer of all representatives to a new Selling Broker-Dealer.
B. Time of Payment
Sun Investment will pay any commissions due Producer in accordance with
Schedule C of this Agreement, as it may be amended from time to time.
C. Amendment of Schedules
Sun Investment may amend Schedule C upon at least ten (10) days' prior
written notice to Selling Broker-Dealer and Producer. The submission of an
application for the Contracts by Selling Broker-Dealer or Producer after the
effective date of any such amendment shall constitute agreement to such
amendment. Any such amendment shall apply to compensation due on
applications received by the Company after the effective date of such notice.
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D. Prohibition Against Rebates
The Company or Sun Investment may terminate this Agreement if Selling
Broker-Dealer, Producer or any Sub-broker rebates, offers to rebate or
withholds any part of any Payment on the Contracts. If Selling
Broker-Dealer, Producer or any Sub-broker shall at any time induce or
endeavor to induce any Owner of any Contract issued hereunder to discontinue
payments or to relinquish any such Contract, except under circumstances where
there is reasonable grounds for believing the Contract is not suitable for
such person, any and all compensation due Producer hereunder shall cease and
terminate.
E. Indebtedness and Right of Set Off
Nothing contained in this Agreement shall be construed as giving Selling
Broker-Dealer or Producer the right to incur any indebtedness on behalf of
the Company or Sun Investment. Selling Broker-Dealer and Producer hereby
authorize Sun Investment and the Company to set off liabilities of Selling
Broker-Dealer and Producer to the Company and Sun Investment against any and
all amounts otherwise payable to Selling Broker-Dealer or Producer.
VI.
GENERAL PROVISIONS
A. Waiver
Failure of any party to insist upon strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of any of the
conditions, but the same shall remain in full force and effect. No waiver of
any of the provisions of this Agreement shall be deemed to be, or shall
constitute, a waiver of any other provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver.
B. Limitations
The Selling Broker-Dealer and Producer are independent contractors with
respect to the Company and Sun Investment. No sub-broker is a party to this
Agreement nor is any sub-broker entitled to claim the status of a third party
beneficiary with respect to this Agreement. No party other than the Company
and or Sun Investment, as the case may be, shall have the authority to: (i)
make, alter or discharge any Contract issued by the Company; (ii) waive any
forfeiture or extend the time of making any payments; (iii) enter into any
proceeding in a court of law or before a regulatory agency in the name of or
on behalf of the Company or Sun Investment; (iv) contract for the expenditure
of funds of the Company or Sun Investment; (v) alter the forms which the
Company prescribes, or substitute other forms in place of those prescribed by
Sun Investment.
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C. Fidelity Bond and Other Liability Coverage
Selling Broker-Dealer and Producer each represent that all directors,
officers, agents, employees and brokers who are licensed pursuant to this
Agreement as brokers for the Company for state insurance law purposes or who
have access to funds of the Company, including but not limited to, funds
submitted with applications for the Contracts are and shall be covered by a
blanket fidelity bond, including coverage for larceny and embezzlement issued
by a reputable bonding company. This bond shall be maintained by Selling
Broker-Dealer or Producer at their expense and shall be, at a minimum, of the
form, type and amount required under NASD Rules endorsed to extend coverage
to transactions relating to the Contracts. The Company may require evidence
satisfactory to it, that such coverage is in force and Selling Broker-Dealer
or Producer, as the case may be, shall give prompt written notice to the
Company of any notice of cancellation of the bond or change of coverage.
Selling Broker-Dealer and Producer hereby assign any proceeds received
from a fidelity bonding company, error and omissions or other liability
coverage, to the Company or Sun Investment as their interest may appear, to
the extent of their loss due to activities covered by the bond, policy or
other liability coverage. If there is any deficiency amount, whether due to
a deductible or otherwise, Selling Broker-Dealer or Producer shall promptly
pay such amounts on demand. Selling Broker-Dealer and Producer hereby
indemnify and hold harmless the Company and Sun Investment from any such
deficiency and from the costs of collection thereof (including reasonable
attorneys' fees).
D. Binding Effect
This Agreement shall be binding on and shall inure to the benefit of the
parties to it and their respective successors and assigns provided that
neither Selling Broker-Dealer nor Producer may assign this Agreement or any
rights or obligations hereunder without the prior written consent of the
Company.
E. Regulations
All parties agree to observe and comply with the existing laws and rule
or regulations of applicable local, state, or federal regulatory authorities
and with those which may be enacted or adopted during the term of this
Agreement regulating the business contemplated hereby in any jurisdiction in
which the business described herein is to be transacted.
F. Indemnification
The Company and Sun Investment agree to indemnify and hold harmless Selling
Broker-Dealer and Producer, their officers, directors, agents and employees,
against any and all losses, claims, damages or liabilities to which they may
become subject under the 1933 Act, the 1934 Act, or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based
10
upon any untrue statement or alleged untrue statement of a material fact or
any omission or alleged omission to state a material fact required to be
stated or necessary to make the statements made not misleading in the
registration statement for the Contracts filed pursuant to the 1933 Act, or
any prospectus included as a part thereof, as from time to time amended and
supplemented, or in any advertisement or sales literature approved in writing
by the Company and Sun Investment pursuant to this Agreement.
Selling Broker-Dealer and Producer agree to indemnify and hold harmless
the Company and Sun Investment, their officers, directors, agents and
employees, against any and all losses, claims, damages or liabilities to
which they may become subject under the 1933 Act, the 1934 Act, or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (a) any oral or written
misrepresentation by Selling Broker-Dealer or Producer or their officers,
directors, employees or agents unless such misrepresentation is contained in
the registration statement for the Contracts, any prospectus included as a
part thereof, as from time to time amended and supplemented, or any
advertisement or sales literature approved in writing by the Company and Sun
Investment pursuant to this Agreement, (b) the failure of Selling
Broker-Dealer or Producer or their officers, directors, employees or agents
to comply with any applicable provisions of this Agreement or (c) claims by
brokers or employees of Producer or Selling Broker-Dealer for payments of
compensation or remuneration of any type. Selling Broker-Dealer and Producer
will reimburse the Company or Sun Investment or any director, officer, agent
or employee of either entity for any legal or other expenses reasonable
incurred by the Company, Sun Investment, or such office, director, agent or
employee in connection with investigating or defending any such loss, claims,
damages, liability or action. This indemnity agreement will be in addition
to any liability which Broker-Dealer may otherwise have.
G. Notices
All notices or communications shall be sent to the following address for
the Company or Sun Investment, or to such other address as the Company or Sun
Investment may request by giving written notice to the other parties:
Sun Life Assurance Co. Of Canada (U.S.) Sun Investment Services Co.
One Sun Life Xxxxxxxxx Xxxx, XX0000 One Sun Life Xxxxxxxxx Xxxx, XX0000
Xxxxxxxxx Xxxxx, XX 00000 Xxxxxxxxx Xxxxx, XX 00000
All notices or communications to the Selling Broker-Dealer or Producer
shall be sent to the last address known to the Company for that party, or to
such other address as Selling Broker-Dealer or Producer may request by giving
written notice to the other parties.
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H. Governing Law
This Agreement shall be construed in accordance with and governed by the
laws of the Commonwealth of Massachusetts.
I. Amendment of Agreement
Sun Investment may amend this Agreement upon at least ten (10) days'
prior written notice to Selling Broker-Dealer and Producer. The submission
of an application for the Contracts by Selling Broker-Dealer or Producer
after the effective date of any such amendment shall constitute agreement to
such amendment.
J. Producer as Broker-Dealer
Selling Broker-Dealer and Producer shall not have the other entity's
authority and shall not be responsible for the other entity's duties
hereunder unless Selling Broker-Dealer and Producer are the same entity,
subject to their acceptance of joint and several responsibility under this
Agreement. If Selling Broker-Dealer and Producer are the same person or
legal entity, such person or legal entity shall have the rights and
obligations hereunder of both Selling Broker-Dealer and Producer and this
Agreement shall be binding and enforceable by and against such person or
legal entity in both capacities.
K. Complaints and Investigations
The Company, Sun Investment, Selling Broker-Dealer and Producer agree to
cooperate fully in any insurance regulatory investigation or proceeding or
judicial proceeding arising in connection with the Contracts distributed
under this Agreement. The Company, Sun Investment, Selling Broker-Dealer and
Producer further agree to cooperate fully in any securities regulatory
investigation or proceeding with respect to the Company, Sun Investment,
Selling Broker-Dealer and Producer, their affiliates and their agents or
representatives to the extent that such investigation or proceeding is in
connection with the Contracts distributed under this Agreement. Without
limiting the foregoing:
(a) Selling Broker-Dealer or Producer will be notified promptly of any
customer complaint or notice of any regulatory investigation or proceeding
or judicial proceeding received by the Company or Sun Investment with
respect to Selling Broker-Dealer or Producer or any Sub-broker or which may
affect the Company's issuance of any contracts sold under this Agreement;
and
(b) Selling Broker-Dealer and Producer will promptly notify the Company
and Sun Investment of any customer complaint or notice of any regulatory
investigation or proceeding received by Selling Broker-Dealer, Producer or
their affiliates with respect to Selling Broker-Dealer, Producer or any
Sub-broker in connection with any Contracts distributed under this
Agreement or any activity in connection with any such policies.
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In the case of a substantive customer complaint, the Company, Sun
Investment, Selling Broker-Dealer and Producer will cooperate in
investigating such complaint and any response will be sent to the other party
to this Agreement for approval not less than five business days prior to its
being sent to the customer or regulatory authority, except that if a more
prompt response is required, the proposed response shall be communicated by
telephone or telegraph.
L. Termination
This Agreement may be terminated, without cause, by any party upon
thirty (30) days' prior written notice. This Agreement also may be
terminated immediately if Sun Investment or Selling Broker-Dealer shall cease
to be a registered Broker-Dealer under the 1934 Act or a member in good
standing of the NASD, or if there occurs the dissolution, bankruptcy or
insolvency of Selling Broker-Dealer or Producer. Sections V I, F and K shall
survive termination of this Agreement.
Upon termination of this Agreement, Selling Broker-Dealer and Producer
shall each use their best efforts to have all property of the Company and Sun
Investment in Selling Broker-Dealer, Producer or Sub-brokers' possession
promptly returned to the Company or Sun Investment, as the case may be. Such
property includes illustration software, prospectuses, applications and other
literature supplied by the Company or Sun Investment.
M. Exclusivity
Selling Broker-Dealer and Producer each agree that no territory is
assigned exclusively hereunder and that the Company and Sun Investment
reserve the right in their discretion to establish one or more agencies in
any jurisdiction in which Selling Broker-Dealer and Producer transact
business hereunder.
This Agreement shall be effective as of __________________________________.
Sun Life Assurance Company of Canada (U.S.) __________________________________
(Selling Broker-Dealer)
By:___________________________________ By:________________________________
(Signature) (Signature)
Title: _______________________________ Title:_____________________________
Date:_________________________________ Date:______________________________
13
Sun Investment Services Co. ________________________________
(Producer)
By:___________________________________ By:________________________________
(Signature) (Signature)
Title:________________________________ Title:_____________________________
Date:_________________________________ Date: _____________________________
______________________________________ ___________________________________
(Producer) (Producer)
By:___________________________________ By:________________________________
(Signature) (Signature)
Title:________________________________ Title:_____________________________
Date:_________________________________ Date: _____________________________
