PRINCIPAL UNDERWRITING AGREEMENT
AGREEMENT dated September 1, 1988, by and between Charter National
Life Insurance Company ("Charter National"), a Missouri corporation, on its
own behalf and on behalf of Charter National Variable Annuity Account
("Variable Accounts"), and CNL, Inc. ("CNL"), a Missouri corporation.
WITNESSETH:
WHEREAS, the Variable Account is a segregated asset account
established and maintained by Charter National pursuant to the laws of the
State of Missouri for flexible premium variable deferred annuities bearing
a form number of P1258 to be issued by Charter National (the "Contracts"),
under which income, gains, and losses, whether or not realized, from assets
allocated to such account, will be, in accordance with the Contracts,
credited to or charged against such account without regard to other income,
gains, or losses of Charter National; and
WHEREAS, Charter National has registered the Variable Account as a
unit investment trust under the Investment Company Act of 1940 (the
"Investment Company Act"); and
WHEREAS, CNL has registered as a broker-dealer under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") and is a member firm
of the National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, Charter National has registered the Contracts under the
Securities Act of 1933 and proposes to issue and sell the Contracts through
CNL acting as its principal underwriter.
NOW, THEREFORE, Charter National and CNL hereby mutually agree as
follows:
1. Underwriter.
(a) Charter National grants to CNL the exclusive right, during
the term of this Agreement, subject to the registration requirements of the
Securities Act of 1933 and the Investment Company Act and the provisions of
the Securities Exchange Act, to be the principal underwriter of the
Contracts. CNL agrees to use its best efforts to distribute the Contracts,
and to undertake to provide sales services relative to the Contracts and
otherwise to perform all duties and functions necessary and proper for the
distribution of the Contracts.
(b) To the extent necessary to offer the Contracts, CNL shall be
duly registered or otherwise qualified under the securities laws of any
state or other jurisdiction. The sales representatives of CNL soliciting
applications for the Contracts shall be duly and appropriately licensed,
registered or otherwise qualified for the sale of such Contracts (and the
riders offered in connection therewith, if any) under the federal
securities laws, any applicable state insurance laws and securities laws of
each state or other jurisdiction in which such Contracts may lawfully be
sold and in which Charter National is licensed to sell Contracts. CNL
shall be responsible for the training, supervision, and control of its
representatives for the purposes of the NASD Rules of Fair Practice and
federal and state securities law requirements applicable in connection with
the offering and sale of the procedures in compliance with NASD Rules of
Fair Practice, Section 27, Paragraph 2177.
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(c) CNL agrees to offer the Contracts for sale in accordance with
the prospectuses therefor filed with the Securities and Exchange Commission
("Commission") then in effect. CNL is not authorized to give any
information or to make any representations concerning the Contracts other
than those contained in such current prospectus or in such sales literature
as may be authorized by Charter National.
(d) All purchase payments made or other monies payable under the
Contracts shall be paid or remitted by or on behalf of Contractowners
directly to Charter National or its designated servicing agent and shall
become the exclusive property of Charter National. Charter National will
retain all such payments and monies except to the extent such payments and
monies are allocated to the Variable Account.
2. Sales Agreements.
(a) CNL is hereby authorized to enter into separate written
agreements, on such terms and conditions as CNL may determine to be not
inconsistent with this Agreement, with broker/dealers registered as such
under the Securities Exchange Act which agree to participate in the
distribution of the Contracts and to use their best efforts to solicit
applications for the Contracts. All such sales agreements shall provide
that each broker/dealer will assume full responsibility for continued
compliance by itself and its representatives with applicable federal and
state securities laws, and shall be in such form and contain such other
provisions as Charter National may from time to time require. Such
broker/dealer shall assume any legal responsibility of Charter National for
the acts, commissions, or defalcations of such representatives insofar as
they relate to the sale of the Contracts. Such broker/dealers and their
representatives soliciting applications for the Contracts shall be duly and
appropriately licensed, registered, or otherwise qualified for the sale of
such Contracts (and the riders offered in connection therewith, if any)
under the federal securities laws, any applicable state insurance and
securities laws of each state or other jurisdiction in which such Contracts
may be lawfully sold and in which Charter National is licensed to sell the
Contracts. Each such organization shall be both registered as a
broker/dealer under the Securities Exchange Act and a member of the NASD,
or if not so registered or not such a member, then the representatives of
such organization soliciting applications for Contracts shall be registered
representatives of a registered broker/dealer and NASD member which is an
affiliate of such organization and which maintains full responsibility for
the training, supervision, and control of the representatives selling the
Contracts.
(b) Applications for the Contracts solicited by such
organizations through their representatives shall be forwarded to Charter
National. All payments for Contracts shall be made by check or money order
payable to "Charter National Life Insurance Company" and remitted promptly
by such organizations to Charter National as agent for CNL. Charter
National will also accept wire transfers via Federal Funds to an account
designated by Charter National. All broker/dealers who agree to
participate in the distribution of the Contracts shall act as independent
contractors and nothing herein contained shall constitute such
broker/dealers or their agents or employees as employees of Charter
National in connection with the sale of the Contracts.
3. Compensation. Charter National shall pay CNL commissions for
performing the sales services set forth herein for Contracts sold under
dealer sales agreements that CNL enters into with other broker/dealers
pursuant to paragraph 2, above, the amount of which commissions are as set
forth in Schedule A to this Agreement, which Schedule may be hereafter
amended from time to time by mutual agreement of Charter National and CNL.
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4. Reimbursement Expenses. Upon prior written agreement between
Charter National and CNL, Charter National will reimburse CNL for certain
marketing expenses to which CNL may contractually agree to through sales
agreements with other broker/dealers pursuant to paragraph 2.
5. Administrative Services. Charter National agrees to maintain all
required books of account and related financial records on behalf of CNL.
All such books of account and records shall be maintained and preserved
pursuant to Rules 17a-3 and 17a-4 under the Securities Exchange Act (or the
corresponding provisions of any future federal securities laws or
regulations). In addition, Charter National will maintain records of all
sales commissions paid to sales representatives of CNL in connection with
the sale of the Contracts. All such books and records shall be maintained
by Charter National on behalf of and as agent for CNL whose property they
are and shall remain for all purposes, and shall at all times be subject to
reasonable periodic, special, or other examination by the Commission and
all other regulatory bodies having jurisdiction. Charter National also
agrees to send to CNL's customers all required confirmations on customer
transactions.
6. Reports. CNL shall have the responsibility for maintaining the
records of sales representatives licensed, registered, and otherwise
qualified to sell the Contracts and for furnishing periodic reports thereof
to Charter National.
7. Regulation.
(a) This Agreement shall be subject to the provisions of the
Investment Company Act and the Securities Exchange Act and the rules,
regulations, and rulings thereunder and of the NASD, from time to time in
effect, including such exemptions from the Investment Company Act as the
Commission may grant, and the terms hereof shall be interpreted and
construed in accordance therewith. Without limiting the generality of the
foregoing, the term "assigned" shall not include any transactions exempted
from section 15(b)(2) of the Investment Company Act.
(b) CNL shall submit to all regulatory and administrative bodies
having jurisdiction over the present and future operations of Charter
National or Variable Accounts, any information, reports or other material
which any such body by reason of this Agreement may request or require
pursuant to applicable laws or regulations. Without limiting the
generality of the foregoing, CNL shall furnish the State of Missouri
Secretary of State and/or the Director of Insurance with any information or
reports which the Secretary of State and/or the Director of Insurance may
request in order to ascertain whether the variable operations of Charter
National are being conducted in a manner consistent with any other
applicable law or regulations.
8. Suitability. Charter National and CNL each wish to ensure that the
Contracts distributed by CNL will be issued to purchasers for whom the
Contract will be suitable. CNL shall take reasonable steps to ensure that
the various sales representatives appointed by it shall not make
recommendations to an applicant to purchase a Contract in the absence of
reasonable grounds to believe that the purchase of the Contract is suitable
for such applicant. While not limited to the following, a sales
representative after reasonable inquiry of such applicant concerning the
applicant's insurance and investment objectives, financial situation and
needs, and the likelihood of whether the applicant will persist with the
Contract for such a period of time that Charter National's acquisition
costs are amortized over a reasonable period of time. CNL will require
that the applicant complete the Financial Questionnaire, Form #U4134, for
premium amounts in excess of $250,000. At its sole discretion, CNL may
require Form #U4134 for lesser amounts.
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9. Prospectuses and Promotional Material. Charter National shall
furnish CNL with Copies of all prospectuses, financial statements, and
other documents and materials which CNL reasonably requests for use in
connection with the distribution of the Contracts. Charter National shall
have responsibility for the preparation, filing, and printing of all
required prospectuses and/or registration statements in connection with the
Contracts, and the payment of all related expenses. CNL and Charter
National shall cooperate fully in designing, drafting, and reviewing sales
promotion materials, and with respect to the preparation of individual
sales proposals related to the sale of the Contracts. CNL shall not use
any such materials not provided or approved by Charter National.
10. Investigation and Proceedings.
(a) CNL and Charter National agree to cooperate fully in any
insurance regulatory investigation or proceeding or judicial proceeding
arising in connection with the Contracts distributed under this Agreement.
CNL and Charter National further agree to cooperate fully in any securities
regulatory inspection, inquiry, investigation or proceeding or any judicial
proceeding with respect to Charter National, CNL, their affiliates and
their representatives to the extent that such inspection, inquiry,
investigation or proceeding is in connection with Contracts distributed
under this Agreement. Without limiting the foregoing:
(i) CNL will be notified promptly of any customer complaint
or notice of any regulatory inspection, inquiry, investigation or
proceeding or judicial proceeding received by Charter National with respect
to CNL or any representative or which may affect Charter National's
issuance of any Contracts marketed under this Agreement; and
(ii) CNL will promptly notify Charter National of any
customer complaint or notice of any regulatory inspection, inquiry,
investigation or judicial proceeding received by CNL or any representative
with respect to Charter National or its affiliates in connection with any
Contracts distributed under this Agreement or any activity in connection
with any Contracts.
(b) In the case of a customer complaint, CNL and Charter National
will cooperate in investigating such complaint and shall arrive at a
mutually satisfactory response.
11. Exclusivity. The services of CNL hereunder are not to be deemed
exclusive, and CNL shall be free to render similar services to others so
long as its services hereunder are not impaired or interfered with thereby.
12. Benefit. This Agreement shall inure to the benefit of and be
binding upon the successors of the parties hereto.
13. Notices. All notices and other communications provided for
hereunder shall be in writing and shall be delivered by hand or mailed
first class, postage prepaid, addressed as follows:
(a) If to Charter National -
Charter National Life Insurance Company
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: X. X. Xxxxxxxx
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(b) If to CNL -
CNL, Inc.
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: X. X. Xxxxx, Xx.
or to such other address as Charter National or CNL shall designate by
written notice to the other.
14. Amendment. This Agreement may be amended from time to time by the
mutual agreement and consent of the parties hereto.
15. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
16. Termination. This Agreement shall be effective upon its execution.
It may be terminated at any time by either party hereto on 60 days' written
notice to the other party hereto, without the payment of any penalty. This
Agreement shall terminate automatically if it shall be assigned. Upon
termination of this Agreement, all authorizations, rights and obligations
shall cease except (i) the obligation to settle accounts hereunder, issued
pursuant to applications received by Charter National prior to termination
and (ii) the agreements contained in paragraph 9 hereof.
17. Applicable Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Missouri.
18. CounterParts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
shall be deemed one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
(seal)
Attest: CHARTER NATIONAL LIFE INSURANCE COMPANY
________________________ By: ________________________________
/S/ X. X. Xxxxxxxx
Title: Secretary Title: Executive Vice President
(seal)
Attest: CNL, INC.
________________________ By: ________________________________
/S/ X. X. Xxxxx, Xx.
Title: Secretary Title: Vice President
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SCHEDULE A
Charter National shall pay CNL the following commissions with respect
to the Contracts sold by broker/dealers:
FLEXIBLE PREMIUM DEFERRED ANNUITY
SCHEDULE OF COMMISSIONS
Commissions payable for contracts issued:
A commission equal to an annual rate of .45% of the daily sum of the
accumulated values of all policies bearing a form number of P1258 payable
monthly.
This Schedule of Commissions will take effect on the date shown below.
CHARTER NATIONAL LIFE CNL, INC.
INSURANCE COMPANY
By ___________________________ By ________________________
/S/ X. X. Xxxxxxxx /S/ X. X. Xxxxx, Xx.
Title: Executive Vice President Title: Vice President
Effective Date: 09/01/88
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EXPENSE REIMBURSEMENT AGREEMENT
This Expense Reimbursement Agreement (the "Agreement") is made and entered
into this 1st day of June, 1988, by and between Charter National Life
Insurance Company, a Missouri corporation ("CHARTER"), and CNL, Inc., a
Missouri corporation("CNL").
WHEREAS, CNL is a wholly owned subsidiary of CHARTER and acts as Principal
Underwriter for the variable insurance products issued by CHARTER; and
WHEREAS, CNL incurs certain expenses associated with the development of new
markets and distribution systems for CHARTER'S variable insurance policies
and contracts, the distribution of commissions earned by the broker-dealers
marketing such variable products, and the maintenance of appropriate
regulatory standing from which to conduct these operations on CHARTER's
behalf; and
WHEREAS, both parties desire to reduce to writing their agreement with
regard to the reimbursement of expenses;
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth below, the parties agree as follows:
1. Term. The Agreement shall take effect retroactively as of January 1,
1988, and continue in force until such time as it is terminated.
2. Services. CNL shall: provide assistance in developing markets for
CHARTER's variable insurance products; distribute commissions to broker-
dealers; and maintain registrations and licenses required by various
regulatory authorities.
3. Compensation. Compensation payable for services provided shall be
determined as set out in a Schedule of Expense Reimbursement (the
"Schedule"). A copy of the current Schedule is attached hereto and
incorporated herein by reference.
4. Entire Agreement. The Agreement and the Schedule contain the entire
understanding of the parties hereto.
5. Prior Agreement. The Agreement supersedes and replaces the Expense
Reimbursement Agreement entered into by and between the parties on January
1, 1988, which shall be cancelled retroactive to its stated effective date.
6. Information/Reports. Each party shall furnish information or reports
as requested by any applicable regulatory authority.
7. Amendment. Either party may request amendment of the Agreement or
the Schedule at any time. To become effective, such amendment must be in
writing, dated and signed by both parties.
8. Termination. The Agreement may be terminated at any time on written
notice by either party, with or without cause. Prompt settlement shall be
made of any amount due either party as of the effective date of
termination.
9. Headings. The headings inserted in the Agreement are for convenience
only and shall not affect the interpretation thereof.
Expense Reimbursement Agreement
June 1, 1988
Page 2
10. Severability. If any part of the Agreement shall be found to be void
or unenforceable for any reason, the remainder of the Agreement shall be
severable and may be enforced accordingly.
11. Applicable Law. The Agreement has been entered into in, and shall be
construed under the laws of, the State of Missouri.
12. Counterparts. The Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
shall be deemed one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers on the date first above written.
CHARTER NATIONAL LIFE INSURANCE COMPANY
Attest:
_________________________ By:____________________________________
/S/ P. M. Xxxxx /S/ Xxxxx X. Xxxxxxx
Secretary President
CNL, INC.
Attest:
____________________________ By:____________________________________
/S/ P. M. Xxxxx /S/ Xxx Xxxxx
Secretary Vice President
SCHEDULE OF EXPENSE REIMBURSEMENT
Amounts due under the Expense Reimbursement Agreement (the "Agreement")
executed on June 1, 1988, by and between Charter National Life Insurance
company (CHARTER") and CNL, Inc. ("CNL"), shall be determined at the end of
every month as follows:
Formula
-----------
Compensation due from CHARTER to CNL shall be
calculated based on:
A. Expenses incurred by Regional and Assistant actual amounts
Regional Directors under non-vouchered expense disbursed
allowance agreements
and
B. Services as Principal Underwriter for variable 1.25% of net
policies and contracts issued by CHARTER earned premiums
The amount calculated above shall be offset against any amount otherwise
owned by CNL to CHARTER, with the resulting net amount to be paid by the
proper party on or before the 20th of the following month.
This Schedule shall take effect as of January 1, 1988, and shall remain in
force until amended in accordance with the terms of the Agreement.
Executed by the duly authorized officers of both parties hereto on this 1st
day of June, 1988.
CHARTER NATIONAL LIFE INSURANCE COMPANY
Attest:
_________________________ By:____________________________________
/S/ P. M. Xxxxx /S/ Xxxxx X. Xxxxxxx
Secretary President
CNL, INC.
Attest:
___________________________ By:____________________________________
/S/ P. M. Xxxxx /S/ Xxx Xxxxx
Secretary Vice President
MARKETING AND SOLICITATION AGREEMENT
AGREEMENT, dated as of September 30, 1988 by and among Xxxxxxx Fund
Distributors, Inc. ("Xxxxxxx"), Charter National Life Insurance Company
("Charter National"), Charter National Variable Annuity Account (the
"Variable Account") and CNL, Inc. ("CNL").
WHEREAS, Charter National has created and plans to sell annuity
contracts bearing a form number of P1258 which will invest in the Xxxxxxx
Variable Life Investment Fund and which it will call "Flexible Premium
Variable Deferred Annuities" (the "Contracts"), and the Contracts have
been registered under the Securities Act of 1933 (the "Securities Act");
and
WHEREAS, the Variable Account is a segregated asset account
established and maintained by Charter National pursuant to the laws of the
State of Missouri and is a unit investment trust registered with the
Securities and Exchange Commission (the "SEC"), and payments under each
Contract will be allocated at the discretion of the owner of the Contract
(the "Owner") to one or more subaccounts (the "Subaccounts") of the
Variable Account; and
WHEREAS, CNL, a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Securities Exchange Act"), is the principal
underwriter of the Contracts and, as such, wishes to retain Xxxxxxx, a
broker-dealer registered under the Securities Exchange Act, to advertise
and be the sole agent in connection with the solicitation of applicants to
purchase the Contracts, and Xxxxxxx has agreed to advertise and be the
sole agent in connection with the solicitation of applicants to purchase
the Contracts.
WHEREAS, Charter National, as the insurance company issuing the
Contracts, wishes to appoint Xxxxxxx and certain of its subsidiaries
("insurance agency subsidiaries"), which are licensed or qualified to be
licensed as insurance agents, to be its insurance agents in connection
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with the solicitation of applicants to purchase the Contracts, and Xxxxxxx
and the insurance agency subsidiaries have agreed to be insurance agents
of Charter National in connection with the solicitation of applicants to
purchase the Contracts.
WHEREAS, Xxxxxxx, in its sole discretion, has chosen to fulfill
certain of its responsibilities and obligations under this Agreement by
acting through the insurance agency subsidiaries or other affiliates, and
Charter National and CNL have no objection to this arrangement.
WHEREAS, Charter National and CNL wish to retain Xxxxxxx to perform
certain administrative services for Charter National and CNL and Xxxxxxx
wishes to perform such services.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration the sufficiency of which is hereby expressly
acknowledged, the parties hereto agree as follows:
1. Appointment of Xxxxxxx.
Charter National, as the insurance company hereby appoints Xxxxxxx and the
insurance agency subsidiaries to be its insurance agents in connection
with the solicitation of applicants to purchase the Contracts and Xxxxxxx
and the insurance agency subsidiaries accept such appointment. CNL, as
the principal underwriter for the Contracts, hereby appoints Xxxxxxx to be
its sole agent in connection with the solicitation of applicants to
purchase the Contracts and Xxxxxxx accepts such appointment.
Charter National and CNL hereby appoint Xxxxxxx to provide them with
administrative services (the "Subject Services"). The Subject Services
shall include, but not be limited to, assisting applicants who purchase
Contracts in setting up new accounts, assisting in the preparation of
account statements, reports and other communications with Owners,
assisting
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in the transferring of funds between mutual funds associated with
Xxxxxxx and the Charter National Variable Account (the "Variable
Account"), and answering customer service inquiries directed to Xxxxxxx.
2. Authority and Duties of Xxxxxxx.
For purposes of complying with sections 2.1 and 2.2, Xxxxxxx shall include
all subsidiaries of Xxxxxxx organized to solicit applicants to purchase
the Contracts.
2.1 Authorization.
Xxxxxxx is hereby authorized to solicit applications for the purchase of
the Contrasts through direct mail, media advertising and sales personnel
(individually a "Telemarketing Employee" and collectively "Telemarketing
Personnel") in such states where Xxxxxxx is qualified to do business and,
where necessary, Xxxxxxx and its Telemarketing Personnel are licensed
under the state insurance laws and the state securities authorities. This
authorization is exclusive and is limited to the states in which Charter
National has variable annuity authority and the Contract is approved for
sale. Such states are listed on Schedule A hereto and Xxxxxxx shall
notify CNL and Charter in writing of those states in which Xxxxxxx intends
to solicit applicants.
2.2 Licensing of Representatives
Charter National and CNL shall assist Xxxxxxx in fulfilling the insurance
licensing requirements of any state designated by Xxxxxxx and shall assist
Xxxxxxx in the licensing of Telemarketing Personnel under applicable
insurance laws to sell the Contracts. Xxxxxxx shall assume all costs in
connection with the licensing of Xxxxxxx or any of its telemarketing
personnel and will reimburse Charter National for any fees required in the
insurance licensing of Xxxxxxx or its Telemarketing Personnel.
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2.3 Applications for Contracts.
All applications for Contracts shall be made on application forms prepared
by Charter National, and shall be sent by the applicants directly to
Charter. All applications are subject to acceptance or rejection by
Charter National at its sole discretion.
2.4 Prospectuses, Etc.
Xxxxxxx shall be provided with prospectuses relating to the Contracts and
such other material as Charter National and Xxxxxxx determine between them
to be necessary or desirable for use in connection with sales of the
Contracts. No representations in connection with the sales of the
Contracts, other than those contained in the Prospectus, approved sales
literature, or approved advertising applicable to the Contracts, shall be
made by Xxxxxxx or its representatives.
2.5 Advertising.
Xxxxxxx shall be responsible for promoting and advertising the Contracts
to prospective applicants. The amount and types of sales literature and
advertising employed by Xxxxxxx, which may but will not necessarily
include brochures, letters, illustrations and other similar materials
transmitted directly to potential applicants or published in print or
audio-visual media, shall be determined by Xxxxxxx, but only after
consultation with and subject to approval by Charter National and CNL,
which approval will not be unreasonably withheld. The sales literature
and advertising employed by Xxxxxxx shall not contain any information
regarding Charter National, CNL, the Variable Account or any of their
affiliates other than information, including the prospectus for the
Contracts, supplied to Xxxxxxx by Charter National in writing. Xxxxxxx
shall be responsible for filing with the NASD any sales literature and
advertising employed and agrees to provide Charter with copies of all
material submitted to the NASD as well as any NASD comments. Charter
National shall be responsible for filing sales and advertising material
with any States which require the receipt or approval of such material.
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2.6 Offering and Advertising Expenses.
Xxxxxxx will pay all advertising costs relating to the offering and
advertising of the Contracts. During the first twelve months (or longer
period if agreed by Xxxxxxx and Charter National) that this Agreement is
in effect, CNL will reimburse Xxxxxxx for 50% of all expenses incurred in
connection with the offering and advertising of the Contracts, which will
include the cost of printing prospectuses. The total reimbursement by CNL
shall not exceed $600,000. During the second, third and fourth years that
this Agreement is in effect, Xxxxxxx shall expend not less than 0.40%
times the net asset value of the Variable Account attributable to the
Contracts at the end of the preceding year in connection with the offering
and advertising of the Contracts, including the printing of prospectuses
except those delivered to Owners of the Contracts.
Expenses relating to the preparation of the Xxxxxxx Variable Life
Investment Fund prospectus will be paid by Xxxxxxx. Expenses relating to
the preparation of the Contracts prospectus will be paid by Charter
National. After this agreement has been in effect for 12 months, Xxxxxxx
will pay for the printing of all prospectuses and will be reimbursed by
Charter for those prospectuses to be delivered to Owners of the Contracts.
2.7 Confirmations
CNL, as agent for Xxxxxxx, will confirm to the applicant in accordance
with Rule 10b-10 under the Securities Exchange Act the initial allocation
of premiums to the Subaccounts, the issuance of the Contract and such
other information required by Rule 10b-10 or administrative
interpretations thereunder. CNL will also notify the applicant that
Xxxxxxx was the broker-dealer through which the applicant was solicited
and confirm certain subsequent Contract transactions.
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2.8 Maintenance of Books and Records.
Charter National, CNL, the Variable Account and Xxxxxxx agree to keep all
records required by federal and state laws, to maintain books, accounts
and records so as to clearly and accurately disclose the precise nature
and details of the transactions, and to assist one another in the timely
preparation of records and reports.
2.9 Regulatory matters.
Charter National, CNL, the Variable Account and Xxxxxxx shall each submit
to all regulatory and administrative bodies which have jurisdiction over
the Contracts or persons soliciting their purchase any information,
reports or other material required pursuant to applicable laws or
regulations.
2.10 Reporting.
Each party hereto shall promptly furnish to any other party hereto any
reports and information which such other party may request for the purpose
of meeting reporting and recordkeeping requirements under the insurance
laws of the state of Missouri and any other state or jurisdiction and
under the federal or state securities laws or the rules of the National
Association of Securities Dealers, Inc. (the "NASD").
2.11 Notification of Complaints.
Charter National and CNL shall immediately notify Xxxxxxx, and Xxxxxxx
shall immediately notify Charter National and CNL, at the address in the
notice provision of this Agreement, of any sales-related or other complaint
or grievance relating to the Contracts or the transactions contemplated
herein which shall come to their attention, and shall promptly reduce such
notice to writing if oral. Charter National, CNL and Xxxxxxx shall
promptly furnish to the other party all written materials in connection
with any such complaints or grievances and will cooperate with each other
in the investigation of such complaints or grievances.
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2.12 Notification of Regulatory Proceedings.
Charter National shall immediately notify Xxxxxxx, at the address in the
notice provision of this Agreement, of (i) the issuance by any regulatory
body of any stop order with respect to the registration statement or any
prospectus relating to the Contracts, (ii) any request by the SEC for any
amendment to such registration statement or any prospectus, or (iii) the
initiation of any proceedings for that purpose or for any other purpose
relating to the registration or offering of the Contracts, and of any
other action or circumstances that may prevent the lawful offer or sale of
any of the Contracts in any state or jurisdiction. Charter National will
make every reasonable effort to prevent the issuance of any stop order and
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
CNL shall immediately notify Xxxxxxx, at the address in the notice
provision of this Agreement, of the issuance by any regulatory body of any
order with respect to the operation or business of CNL, or the initiation
of any proceeding for any purpose relating to the sale of the Contracts,
and of any other actions or circumstances that may prevent the lawful
offer or sale of any of the Contracts in any state or jurisdiction.
Xxxxxxx shall immediately notify Charter National, at the address in the
notice provision of this Agreement, of the issuance by any regulatory body
of any order with respect to the operation or business of Xxxxxxx, or the
initiation of any proceeding for any purpose relating to the sale of the
Contracts, and of any other actions or circumstances that may prevent the
lawful offer or sale of any of the Contracts in any state or jurisdiction.
In addition, Xxxxxxx shall promptly advise Charter National if any of its
Telemarketing Personnel are subject to any proceedings or are sanctioned
or suspended by the NASD or any state or other jurisdiction.
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2.13 Non-Solicitation.
Neither Charter National nor CNL shall, either while this Agreement is in
force or after its termination, 1). contact applicants for the Contracts
solicited by Xxxxxxx for the purpose of inducing them to purchase, other
than the Contract described herein, any of its products or those of their
affiliates; 2). advise or induce Owners of Contracts solicited by Xxxxxxx
to surrender their Contracts or advise them to purchase other Contracts
whose subaccounts invest in funds which are not managed by Xxxxxxx; 3).
sell or disclose in any manner a list, partial or complete, of the
prospective owners of the Contracts solicited by Xxxxxxx or its
Telemarketing Personnel; except for as follows:
(a) as may be required pursuant to federal or state laws or
regulations, or NASD rules,
(b) as may occur inadvertently rather than as a pattern of conduct,
(c) with Xxxxxxx'x prior written consent, or
(d) pursuant to an order of the Securities and Exchange Commission
(including any action taken pursuant to an undertaking required by such
order).
2.14 Relationship Between the Parties.
Charter National, the Variable Account, CNL and Xxxxxxx are independent
contractors. Nothing contained in this Agreement shall create, or shall
be construed to create, the relationship of an employer and employee
between any of Charter National, the Variable Account, CNL and Xxxxxxx.
2.15 Violation of Law.
Nothing contained in this Agreement shall require Charter National, CNL,
the Variable Account, Xxxxxxx or the Fund to do anything which, in its
judgment, would be a violation of any federal or state law or regulation
or NASD rule applicable to it.
8
2.16 Consent to Provide Additional Fund Options
While this agreement is in effect and upon mutual consent by Charter
National and Xxxxxxx additional Fund options may be made available to
Owners of Contracts solicited by Xxxxxxx.
3. Compensation.
3.1 Compensation Payable to Xxxxxxx.
(a). CNL shall pay Xxxxxxx compensation for the marketing and
solicitation services to be provided by Xxxxxxx hereunder, which
compensation shall be equal to .25% on an annual basis of the daily net
asset value of the Variable Account attributable to the Contracts, such
amount to be payable within 30 days after the end of each month.
(b). CNL shall pay Xxxxxxx a fee for Xxxxxxx'x performance of Subject
Services described in Section 1 equal to .15% on an annual basis of the
daily net asset value of the Variable Account attributable to the
Contracts, such amount to be payable within 30 days after the end of each
month.
3.2 Upon Termination.
Xxxxxxx shall continue to receive the compensation described in Section
3.1 (a) until such time as all Contracts sold by Xxxxxxx under this
agreement cease to have an interest in the Variable Account.
In the event Xxxxxxx terminates this agreement or materially breaches this
agreement as described in Section 10.5 prior to fulfilling its obligation
under Section 2.6 to incur marketing expenditures of not less than 0.40%
times the net asset value of the Variable Account attributable to the
Contracts in the second, third and fourth years of this agreement, any
amount not spent by Xxxxxxx with respect to this obligation will offset
compensation due Xxxxxxx under Section 3.1 (a).
9
Xxxxxxx and its affiliates retain all rights, whether created by statute
or common law, to the term "Xxxxxxx" and to all trademarks, tradenames,
service marks and other similar rights incorporating the term "Xxxxxxx."
Charter National agrees that upon termination of this agreement Charter
National will discontinue the use of the term "Xxxxxxx" in the marketing
name of the Contracts described herein.
4. Representations and Warranties of Charter National and CNL.
4.1 Authority.
Each of Charter National, CNL and the Variable Account represents and
warrants to Xxxxxxx that it has full power and authority to enter into
this Agreement and that it has all appropriate licenses to carry on its
business as contemplated hereby and Charter National represents that it
has full power and authority to issue the Contracts.
4.2 Registration Statements, Prospectuses, the Variable Account and
CNL.
Charter National represents and warrants to Xxxxxxx as follows, with
respect to each Contract:
(a) Charter National has filed with the SEC a registration statement
under the Securities Act as described in Schedule B, which has become
effective with the SEC (the "Contracts Registration Statement").
(b) The prospectus and Statement of Additional Information relating
to each Contract contained in the Contracts Registration Statement,
including any supplements or amendments thereto (the "Contracts
Prospectus"), contains all statements and information which are required
to be stated therein by the Securities Act and the Investment Company Act
and the rules and regulations thereunder (the "Regulations") and in all
respects conforms to the requirements thereof, and the Contracts
Prospectus does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the
foregoing representations shall
10
not apply to information contained in or omitted from the Contracts
Prospectus in reliance upon, and in conformity with, information furnished
to Charter National in writing by Xxxxxxx or the Fund specifically for use
in the preparation thereof.
(c) The Variable Account has been duly established and is validly
existing under the Insurance Law of the State of Missouri and is
registered as a unit investment trust with the SEC.
(d) CNL is registered as a broker-dealer under the Securities
Exchange Act and in such states and other jurisdictions as the business
transacted by it requires, is a member in good standing of the NASD, has
obtained any other approvals, licenses, authorizations, orders or consents
which are necessary to enter into and carry out all transactions
contemplated by this Agreement, and is bonded as required by all
applicable laws and regulations.
5. Representations and Warranties of Xxxxxxx.
5.1 Authority.
Xxxxxxx represents and warrants to Charter National, CNL and the Variable
Account that it has full power and authority to enter into this Agreement.
5.2 Licenses.
Xxxxxxx represents and warrants to Charter National, CNL and the Variable
Account that it has notified CNL, pursuant to Section 2.1 hereof, of all
jurisdictions in which Xxxxxxx will solicit applicants, and it has taken
all actions in order to qualify to solicit applicants in those states, and
that it is registered as a broker dealer under the Securities Exchange Act
and in such states and other jurisdictions as the business transacted by
it requires, is a member in good standing of the NASD, has obtained any
other approvals, licenses, authorizations, orders or consents which are
necessary to enter into and carry out all transactions contemplated by
this Agreement, and is bonded as required by all applicable laws and
regulations.
11
5.3 Qualifications of Telemarketing Personnel.
Xxxxxxx represents and warrants to Charter National, CNL and the Variable
Account that each Telemarketing Employee receiving compensation for
soliciting applicants for the Contracts or answering customer inquiries
will be a registered representative or principal of Xxxxxxx and shall
possess all licenses necessary or appropriate to sell life insurance
and/or variable contracts in the state of such signing or solicitation,
and will have received an appropriate appointment or license by or through
Xxxxxxx insurance agencies or brokers and, where necessary, through
Charter National and a level of qualification with the NASD appropriate
for the Contracts.
5.4 Representations Upon Assignment.
If Xxxxxxx assigns this Agreement as provided in paragraph 11.1 below, the
representations made in paragraphs 5.1 through 5.3 above shall be read to
apply to the affiliate where the context so requires.
6. Indemnification.
6.1 Of Xxxxxxx With Respect to the Contracts Prospectus.
Charter National will indemnify and hold harmless Xxxxxxx and any
insurance agency or broker subsidiaries of Xxxxxxx organized to sell the
Contracts against any and all losses, claims, damages or liabilities (or
actions in respect thereof), to which Xxxxxxx may become subject, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Contracts
Prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and will
reimburse Xxxxxxx for any legal or other expenses reasonably incurred by
it in connection with investigating or defending against such loss, claim,
damage, liability or action in respect thereof; provided, however, that
Charter National
12
shall not be liable in any such case to the extent that any 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 the Contracts Registration Statement or any such amendment or
supplement in reliance upon and in conformity with information furnished
in writing by Xxxxxxx specifically for use in the preparation thereof.
Charter National shall not indemnify Xxxxxxx for any action where an
applicant for any of the Contracts was not furnished or sent or given, at
or prior to written confirmation of the sale of the Contract, a copy of
the appropriate Contracts Prospectus, or if requested, the related
Statement of Additional Information, and any supplements or amendments to
either furnished to Xxxxxxx by Charter National.
The foregoing indemnities shall, upon the same terms and conditions,
extend to and inure to the benefit of each director and officer of Xxxxxxx
and any person controlling Xxxxxxx within the meaning of Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act.
6.2 Of Charter National, CNL and the Variable Account With Respect
to the Xxxxxxx Variable Life Investment Fund Prospectus.
Xxxxxxx will indemnify and hold harmless Charter National against any and
all losses, claims, damages or liabilities (or actions in respect thereof),
to which Charter National may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Fund Prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse Charter National for any legal
or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or
action in respect thereof.
13
The foregoing indemnities shall, upon the same terms and conditions,
extend to and inure to the benefit of each director and officer of Charter
National and any person controlling Charter National within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange
Act.
6.3 Of Charter National, CNL and the Variable Account With Respect
to Negligence.
Xxxxxxx shall indemnify and hold harmless Charter National, CNL and the
Variable Account from any losses, claims, damages or liabilities (or
actions in respect thereof) to which Charter National, CNL or the Variable
Account may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or result from
negligent, fraudulent or unauthorized acts or omissions by Xxxxxxx, its
employees or Telemarketing Personnel or principals, including but not
limited to negligent, fraudulent or unauthorized solicitation of
applications for the Contracts, except as stated herein.
The foregoing indemnities shall, upon the same terms and conditions,
extend to and inure to the benefit of each director and officer of Charter
National, CNL and the Variable Account and any person controlling Charter
National, CNL and the Variable Account within the meaning of Section 15 of
the Securities Act or Section 20 of the Securities Exchange Act.
6.4 Of Xxxxxxx With Respect to Negligence.
Charter National shall indemnify and hold harmless Xxxxxxx against any
losses, claims, damages or liabilities (or actions in respect thereof) to
which Xxxxxxx may become subject, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or result from
negligent, fraudulent or unauthorized acts or omissions by Charter
National, CNL or the Variable Account or the employees of any of them.
14
The foregoing indemnities shall, upon the same terms and conditions,
extend to and inure to the benefit of each director and officer of Xxxxxxx
and any person controlling Xxxxxxx within the meaning of Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act.
6.5 Of Xxxxxxx with Respect to the Contracts.
Charter National shall indemnify and hold harmless Xxxxxxx against any
losses, claims, damages or liabilities (or actions in respect thereof) to
which Xxxxxxx may become subject, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or result from
Charter National's performance of, or failure to perform, its duties under
the Contracts or Charter National's alleged performance, or alleged
failure to perform, its duties under the Contracts.
6.6 Notice of Actions.
Promptly after receipt by an indemnified party of notice of the
commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may otherwise have to any indemnified party otherwise
than on account of its indemnity agreement contained in this paragraph.
In case any such action shall be brought against any indemnified party,
and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the
extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party).
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall
15
not be liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
7. Regulations.
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 the business described herein is to be transacted.
8. Suitability.
CNL will require that the applicant complete the Financial Questionnaire,
Form #U4134, for premium amounts in excess of $250,000. CNL may, at its
sole discretion, require Form #U4134 for lesser amounts.
9. Non-Exclusivity.
The services of Xxxxxxx, Charter National, and CNL hereunder are not to be
deemed exclusive, and each party shall be free to render similar services
to others so long as its services hereunder are not impaired or interfered
with thereby. Charter National, CNL, and Xxxxxxx agree that none of the
parties to this agreement have any property rights as to marketing
approach or product design.
10. Effectiveness and Termination.
10.1 Effectiveness.
This Agreement shall be effective upon execution by the parties and will
remain in effect unless terminated as provided in paragraph 10.2, 10.3, or
11.1 below.
10.2 Termination.
This Agreement may be terminated by either Charter National or Xxxxxxx at
any time by ninety (90) days' written notice to the other.
16
10.3 Termination for Cause.
In the event of any material breach (as defined in paragraphs 10.4 and
10.5 below) of this Agreement by any party, the aggrieved party may, at
its option, terminate this Agreement by giving notice of termination,
effective upon the date specified in such termination notice. This remedy
shall be in addition to any other remedies available under this Agreement
or at law.
10.4 Material Breach by Charter National, CNL or the Variable
Account.
Charter National, CNL and the Variable Account shall be deemed to have
materially breached this Agreement and failed to perform hereunder upon
the occurrence of any of the following events:
(a) Charter National, CNL or the Variable Account shall become
insolvent or otherwise admit in writing its inability to pay its debts
when they become due, become bankrupt, seek protection under any law for
the protection of insolvents, or have a receiver or conservator appointed
for it under any law pertaining to the insolvency of Charter, CNL or the
Variable Account; or
(b) Charter National, CNL or the Variable Account shall breach any
material provision of this Agreement and such breach shall remain uncured
for more than thirty (30) days following Charter National's receipt of
Xxxxxxx'x written notice of such breach.
10.5 Material Breach by Xxxxxxx.
Xxxxxxx shall be deemed to have materially breached this Agreement and
failed to perform hereunder upon the occurrence of any of the following
events:
17
(a) Xxxxxxx shall become insolvent or otherwise admit in writing its
inability to pay its debts when they become due, become bankrupt, seek
protection under any law for the protection of insolvents, or have a
receiver or conservator appointed for it under any law pertaining to the
insolvency of Xxxxxxx, or
(b) Xxxxxxx shall breach any material provision of this Agreement and
such breach shall remain uncured for more than thirty (30) days following
Xxxxxxx'x receipt of Charter National's written notice of such breach.
10.6 Survival Provisions.
Upon termination of this Agreement, the provisions of the following shall
survive:
(a) paragraphs 2.6, 2.10, 2.11, 2.12, 2.13, 3.1 (a), and 3.2
(b) Sections 4, 5 and 6,
(c) this paragraph 10.6, and
(d) Section 11.
11. Miscellaneous.
11.1 Benefit.
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 Xxxxxxx nor Charter National may assign this Agreement or any
rights or obligations hereunder (except to an affiliate in order to comply
with applicable laws or regulations) and this Agreement will terminate
automatically in the event of a purported assignment by either such party.
If this Agreement is assigned to an affiliate as permitted herein, the
assignor shall not be relieved of its obligations hereunder.
18
11.2 Notices.
All notices and other communications provided for hereunder shall be in
writing and shall be delivered by hand or mailed first class, postage
prepaid, addressed as follows:
(a) If to Charter National:
Charter National Life Insurance Company
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
(b) If to CNL:
CNL, Inc.
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
(c) If to the Variable Account:
Charter National Variable Account
0000 Xxxxxxxx Xxx.
Xx. Xxxxx, Xxxxxxxx 00000
(d) If to Xxxxxxx
Xxxxxxx Funds Distributors, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
or to such other address as Charter national CNL, the Variable Account or
Xxxxxxx shall designate by written notice to the others.
11.3 Limitations.
No party other than Charter National shall have the authority on behalf of
Charter National to make, alter, or discharge any Contract issued by
Charter National; to waive any forfeiture or to grant or permit any
extension of time for making any premium payments; to alter
19
the forms which Charter National may prescribe or to substitute other
forms in place of those prescribed by Charter National; or to enter into
any proceeding in a court of law or before a regulatory agency in the name
of or on behalf of Charter National.
11.4 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 or
shall constitute a waiver of any other provisions, whether or not similar,
nor shall any waiver constitute a continuing waiver.
11.5 Applicable Law.
This Agreement and the rights and obligations of the parties created
hereby shall be construed in accordance with the laws of the State of
Massachusetts.
11.6 Enforceability.
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
11.7 Entire Agreement.
The parties declare that there are not other oral or other agreements or
understandings among them affecting this Agreement or relating to the
selling or servicing of the Contracts, except as disclosed herein. This
Agreement supersedes all prior agreements among the parties and
constitutes the entire Agreement among the parties.
This Agreement may be modified only if in writing and if executed by those
persons authorized to enter into Agreements on behalf of the parties
hereto.
11.8 Miscellaneous
The headings in this Agreement are for purposes of reference only and
shall not limit or define the meaning hereof.
20
This Agreement may be executed in several counterparts, each of which
is an original, but all of which together shall constitute one instrument.
IN WITNESS, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers as of the date first above written.
21
XXXXXXX FUND DISTRIBUTORS, INC.
By: ______________________________
/S/Xxxxx X. Xxx
Name: Xxxxx X. Xxx
Title: President
CHARTER NATIONAL LIFE INSURANCE COMPANY
By: ______________________________
/S/ G. Xxxxxx Xxxxxxxx
G. Xxxxxx Xxxxxxxx
Executive Vice President
CNL, Inc.
By: ___________________________
/S/ Xxxxxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxx, Xx.
Vice President
22
CHARTER NATIONAL VARIABLE ANNUITY ACCOUNT
By: CHARTER NATIONAL LIFE INSURANCE COMPANY
By: ____________________________
/S/ Xxxxx X.Xxxxxxx
Xxxxx X.Xxxxxxx
President
23
Schedule A
Listing of States in which Charter National has Variable Authority and the
Contract is approved.
Alabama Nebraska
Alaska Nevada
Arizona New Hampshire
Arkansas New Mexico
Colorado North Carolina
Delaware North Dakota
District of Columbia Ohio
Florida Oklahoma
Georgia Oregon
Hawaii Rhode Island
Idaho South Carolina
Indiana South Dakota
Iowa Tennessee
Kansas Utah
Kentucky Vermont
Louisiana Virginia
Maryland Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Missouri
September 30, 1988
SCHEDULE A
Charter National shall pay CNL the following commissions with respect to
the Contracts sold as a percentage of premiums received:
FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
Policy Form # 1258
Commissions payable for contracts issued:
A commission of .5% on new and additional payments. The commission is
payable monthly.
This Schedule of Commissions will take effect on the date shown below.
CHARTER NATIONAL LIFE INSURANCE COMPANY
By_______________________________
/S/ Xxxxxxx X. Xxxxx, Xx.
Title: Senior Vice President
CNL, INC
By_______________________________
/S/ Xxxxxxxx X. Xxxxxxxxxx
Title: Vice President
Effective Date: 1/25/91
