DISTRIBUTION AGREEMENT
AGREEMENT dated as of February 17, 1999, by and between GREAT AMERICAN
LIFE INSURANCE COMPANY of NEW YORK ("GALIC of NY"), a New York insurance
company, and AAG SECURITIES, INC. ("AAGS"), an Ohio corporation.
WITNESSETH:
WHEREAS, AAGS is a broker-dealer that engages in the distribution of
investment products; and
WHEREAS, AAGS, together with AAG INSURANCE AGENCY, INC. and certain
affiliated insurance agencies ("AAGI"), an insurance agency that is affiliated
with AAGS, desires to distribute variable annuity contracts and variable life
insurance contracts (collectively, "variable insurance products") offered by
GALIC of NY; and
WHEREAS, GALIC of NY desires to issue certain variable insurance
products described more fully below to the public through AAGS acting as the
principal underwriter and AAGI acting as the principal insurance agent for such
products;
NOW, THEREFORE, in consideration of their mutual promises, GALIC of NY
and AAGS hereby agree as follows:
1. Additional Definitions.
a. Contracts -- The class or classes of variable annuity contracts
set forth on Schedule 1 to this Agreement as in effect at the time
this Agreement is executed, and such other classes of variable
insurance products that may be added to Schedule 1 from time to
time in accordance with Section 14.b of this Agreement, and
including any riders to such contracts and any other contracts
offered in connection therewith. For this purpose and under this
Agreement generally, a "class of Contracts" shall mean those
Contracts issued by GALIC of NY on the same policy form or forms
and covered by the same Registration Statement.
b. Registration Statement -- At any time that this Agreement is in
effect, each currently effective registration statement, or
currently effective post-effective amendment thereto, relating to
a class of Contracts, including financial statements included in,
and all exhibits to, such registration statement or post-effective
amendment. For purposes of Section 12 of this Agreement, the term
"Registration Statement" means any document which is or at any
time was a Registration Statement within the meaning of this
Section 1.b.
c. Prospectus -- The prospectus and statement of additional
information, if any, included within a Registration Statement,
except that, if the most recently filed prospectus and statement
of additional information filed pursuant to Rule 497 under the
1933 Act subsequent to the date on which a Registration Statement
became effective differs from the prospectus and statement of
additional information included within such Registration Statement
at the time it became effective, the term "Prospectus" shall refer
to the most recently filed prospectus and statement of additional
information filed under Rule 497 under the 1933 Act, from and
after the date on which they each shall have been filed. For
purposes of Section 12 of this Agreement, the term "any
Prospectus" means any document which is or at any time was a
Prospectus within the meaning of this Section 1.c.
d. Fund -- An investment company which is included in the Variable
Account and is an investment alternative under a Contract.
e. Variable Account -- A separate account supporting a class or
classes of Contracts and specified on Schedule 2 as in effect at
the time this Agreement is executed, or as it may be amended from
time to time in accordance with Section 14.b of this Agreement.
f. 1933 Act -- The Securities Act of 1933, as amended.
g. 1934 Act -- The Securities Exchange Act of 1934, as amended.
h. 1940 Act -- The Investment Company Act of 1940, as amended.
i. SEC -- The Securities and Exchange Commission.
j. NASD -- The National Association of Securities Dealers, Inc.
k. Regulations -- The rules and regulations promulgated by the SEC
under the 1933 Act, the 1934 Act and the 1940 Act as in effect at
the time this Agreement is executed or thereafter promulgated.
l. Distributor -- A person registered as a broker-dealer and licensed
as a life insurance agent or affiliated with a person so licensed,
and authorized to distribute the Contracts pursuant to a sales
agreement as provided for in Section 2 of this Agreement.
m. Intermediary Distributor -- A Distributor authorized to recruit
other persons to become Distributors pursuant to a sales agreement
as provided for in Section 2 of this Agreement.
n. Affiliate -- With respect to a person, any other person
controlling, controlled by, or under common control with, such
person.
o. Representative -- When used with reference to AAGS, AAGI, a
Distributor or GALIC of NY, an individual who is an associated
person, as that term is defined in the 1934 Act, thereof.
p. Application -- An application for a Contract.
q. Premium -- A payment made under a Contract by an applicant or
purchaser to purchase benefits under the Contract.
r. Customer Service Center -- GALIC of NY Annuity Service Center, 000
Xxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, or such other location
as may be designated in writing from time to time by GALIC of NY.
s. Agent's Manual -- The Agent's Manual attached hereto as Exhibit B.
2. Distribution Activities
a. Authority GALIC of NY authorizes AAGS on an exclusive basis, and
AAGS accepts such authority, subject to the registration
requirements of the 1933 Act and the 1940 Act and the provisions
of the 1934 Act, to be the distributor and principal underwriter
of the Contracts. GALIC of NY hereby authorizes AAGS to solicit
Applications and Premiums directly from customers and prospective
customers and to select all persons who will be authorized to
engage in solicitation activities with respect to the Contracts,
such selection activity to include the recruitment and appointment
of third parties as Distributors which in turn may be authorized
as Intermediary Distributors to engage in solicitation activities
involving the solicitation of Applications and Premiums directly
from customers and prospective customers and/or as Intermediary
Distributors to recruit other third parties to act as
Distributors, in each case as AAGS and AAGI may in their sole
discretion so provide or limit. AAGS shall enter into separate
written sales agreements with such Distributors. Such sales
agreements shall be substantially in the form attached to this
Agreement as Exhibit A, but may include such additional or
alternative terms and conditions that are not otherwise
inconsistent with this Agreement, subject to GALIC of NY's review
and prior written consent, which consent shall not be unreasonably
withheld.
AAGS is hereby vested with power and authority to select and
recommend AAGS Representatives, and to authorize a Distributor to
select and recommend Distributor Representatives, for appointment
as agents of GALIC of NY, and only Representatives so recommended
by AAGS or a Distributor shall become agents of GALIC of NY with
authority to engage in solicitation activities with respect to the
Contracts. AAGS shall be solely responsible for background
investigations of the AAGS Representatives to determine their
qualifications, good character, and moral fitness to sell the
Contracts. GALIC of NY shall appoint in the appropriate states or
jurisdictions such selected and recommended agents, provided that
GALIC of NY reserves the right, which right shall not be exercised
unreasonably, to refuse to appoint as agent any AAGS
Representative or Distributor Representative, or, once appointed,
to terminate the same at any time with or without cause. No other
individuals, persons or entities shall have authority to engage in
solicitation activities with respect to the Contracts, unless
expressly approved in writing by AAGS, in its sole discretion,
except to the extent permitted by the following paragraph.
AAGS shall use its best efforts to market the Contracts
actively, directly or through Distributors, subject to applicable
material market and regulatory conditions.
AAGS and AAGS Representatives shall not have authority, and
shall not grant authority to Distributors or Distributor
Representatives, on behalf of GALIC of NY: to make, alter or
discharge any Contract or other contract entered into pursuant to
a Contract; to waive any Contract forfeiture provision; to extend
the time of paying any Premium; or to receive any monies or
Premiums (except for the sole purpose of forwarding monies or
Premiums to GALIC of NY). AAGS shall not expend, nor contract for
the expenditure of, the funds of GALIC of NY. AAGS shall not
possess or exercise any authority on behalf of GALIC of NY other
than that expressly conferred on AAGS by this Agreement.
b. Solicitation Activities, Applications and Premiums
Solicitation activities shall be subject to applicable laws and
regulations, the Agent's Manual, and the rules set forth herein.
(1) GALIC of NY shall forward to AAGS Applications and other
materials for use by AAGS and the Distributors in their
solicitation activities with respect to the Contracts. GALIC
of NY shall notify AAGS in writing of those states or
jurisdictions which require delivery of a statement of
additional information with a prospectus to a prospective
purchaser.
(2) AAGS shall require that AAGS Representatives appointed by
GALIC of NY as agents not make recommendations to an applicant
to purchase a Contract in the absence of reasonable grounds to
believe that the purchase of the Contract is suitable for the
applicant. While not limited to the following, a determination
of suitability shall be based on information supplied to an
AAGS Representative after a reasonable inquiry concerning the
applicant's insurance and investment objectives and financial
situation and needs.
(3) All Premiums paid by check or money order that are collected
by AAGS or any AAGS Representative shall be remitted promptly
in full, together with any Applications, forms and any other
required documentation, to the Customer Service Center. Checks
or money orders in payment of Premiums shall be drawn to the
order of "Great American Life Insurance
Company of New York." Premiums may be transmitted by wire
order from AAGS to the Customer Service Center in accordance
with the procedures set forth in the Agent's Manual. If any
Premium is held at any time by AAGS, AAGS shall hold such
Premium in a fiduciary capacity and such Premium shall be
remitted promptly to GALIC of NY. All such Premiums, whether
by check, money order or wire, shall be the property of GALIC
of NY.
(4) AAGS acknowledges that GALIC of NY shall have the
unconditional right to reject, in whole or in part, any
Application. In the event an Application is rejected, any
Premium submitted therewith shall be returned by GALIC of NY
to the applicant. GALIC of NY shall notify AAGS and, if
applicable, the Distributor who submitted the Application, of
such action. In the event that a purchaser exercises his right
to cancel under his Contract, any amount to be refunded as
provided in such Contract shall be so refunded to the
purchaser by GALIC of NY. GALIC of NY shall notify AAGS and,
if applicable, the Distributor who solicited the Contract, of
such action.
(5) AAGS shall not encourage a prospective applicant to surrender
or exchange an insurance contract in order to
purchase a Contract, nor shall AAGS encourage any
Contractholder to surrender or exchange a Contract in order to
purchase another insurance contract. AAGS shall require,
through all sales agreements entered into pursuant to Section
2.a of this Agreement, that each Distributor likewise agree
not to encourage a prospective applicant to surrender or
exchange any insurance contract in order to purchase a
Contract, nor to encourage a Contractholder to surrender or
exchange a Contract in order to purchase another insurance
contract.
c. Independent Contractor
AAGS shall act as an independent contractor in the performance of
its duties and obligations under this Agreement and nothing herein
contained shall constitute AAGS or AAGS Representatives or
employees or the Distributors or their respective Representatives
or employees as employees of GALIC of NY in connection with the
distribution of the Contracts.
d. Supervision and 1934 Act Compliance
AAGS shall train, supervise and be solely responsible for the
conduct of AAGS Representatives in their solicitation of
Applications and Premiums, and shall supervise their compliance
with applicable rules and regulations of any securities regulatory
agencies that have jurisdiction over variable insurance product
activities. AAGS understands and acknowledges that neither it nor
its Representatives is authorized by GALIC of NY to give any
information or make any representation in regard to a class of
Contracts in connection with the offer or sale of such class of
Contracts that is not in accordance with the then-currently
effective Prospectus or for such class of Contracts or in the
then-currently effective prospectus or statement of additional
information for the Funds, or in current advertising materials for
such class of Contracts authorized by GALIC of NY.
GALIC of NY, as agent for AAGS, shall confirm to each
applicant for and purchaser of a Contract in accordance with Rule
10b-10 under the 1934 Act acceptance of Premiums and such other
transactions as are required by Rule 10b-10 or administrative
interpretations thereunder. GALIC of NY shall maintain and
preserve such books and records with respect to such confirmations
in conformity with the requirements of Rules 17a-3 and 17a-4 under
the 1934 Act to the extent such requirements apply. GALIC of NY
shall maintain all such books and records and hold such books and
records on behalf of and as agent for AAGS whose property they are
and shall remain, and acknowledges that such books and records are
at all times subject to inspection by the SEC in accordance with
Section 17(a) of the 1934 Act, the NASD and any state agency which
has jurisdiction.
3. Marketing Materials
GALIC of NY shall be primarily responsible for the design
and preparation of all promotional, sales and advertising material
relating to the Contracts. It is understood that as a general
matter GALIC of NY shall initiate and design all forms of
promotional, sales and advertising material for the Contracts.
Prior to any use with members of the public, the following
procedures shall be observed:
x. XXXXX of NY shall provide to AAGS copies of all promotional, sales
and advertising material developed by GALIC of NY for AAGS' review
and written approval, and AAGS shall be given a reasonable amount
of time to complete its review.
b. If any such promotional, sales or advertising material names a
Fund or a Fund's investment adviser, GALIC of NY shall then
furnish such material to such Fund or such Fund's distributor, and
approval shall be obtained from such Fund or such Fund's
distributor before use.
c. The parties shall respond on a prompt and timely basis in
approving any such material and shall act reasonably in connection
therewith.
d. AAGS shall be responsible for filing such material it develops, as
required, with the NASD and any state securities regulatory
authorities.
x. XXXXX of NY shall be responsible for filing all promotional, sales
or advertising material, as required, with any state insurance
regulatory authorities.
f. The parties shall notify each other expeditiously of any comments
provided by the NASD or any securities or insurance regulatory
authority on such material, and will cooperate expeditiously in
resolving and implementing any comments, as applicable.
4. Compensation and Expenses
x. XXXXX of NY shall pay commissions to AAGS on Premiums paid under
Contracts sold pursuant to this Agreement and any sales agreements
entered into pursuant to Section 2 of this Agreement in the
amounts set forth on Schedule 2. AAGS shall be responsible for all
tax reporting information which AAGS is required to provide under
applicable tax law to its agents, Representatives or employees
with respect to the Contracts.
b. With respect to this Agreement, GALIC of NY shall be obligated to
pay all expenses in connection with:
(1) the preparation and filing of each Registration Statement
(including each pre-effective and post-effective amendment
thereto) and the preparation and filing of each Prospectus
(including any preliminary and each definitive Prospectus);
(2) the preparation, underwriting, issuance and administration of
the Contracts;
(3) any registration, qualification or approval of the Contracts
for offer and sale required under the securities, blue-sky
laws or insurance laws of the states and other jurisdictions
in the Territory;
(4) the expenses of printing the Prospectuses and the Contracts
and the Funds (any supplements thereto) for distribution to
prospective customers;
(5) all registration fees for the Contracts payable to the SEC and
the NASD;
(6) the printing of definitive Prospectuses for the Contracts and
any supplements thereto for distribution to existing
Contractowners;
c. AAGS shall be obligated to pay the following expenses related to
its distribution of the Contracts:
(1) the compensation of AAGS Representatives and employees and any
Distributors;
(2) expenses associated with the initial licensing and training of
AAGS Representatives and other employees involved in the
distribution of the Contracts;
(3) the costs of any promotional, sales and advertising material
that AAGS develops for its use in connection with the sale of
the Contracts; and
(4) any other expenses incurred by AAGS or its Representatives or
employees for the purpose of carrying out the obligations of
AAGS hereunder.
d. Other than as specifically provided in this Agreement, GALIC of NY
shall pay all expenses that it incurs in connection with this
Agreement and AAGS shall pay all expenses that it incurs in
connection with this Agreement; it being understood that neither
AAGS nor AAGI shall be responsible for any expenses relating to
the Contracts or the processing of Contracts, Premiums or
Applications, including without limitation any expenses incurred
in connection with the return of Premiums solicited by
Distributors for Applications rejected or not timely received by
GALIC of NY, or relating to any of the matters or acts
contemplated by this Agreement, except to the extent expressly set
forth herein.
5. Representations and Warranties of GALIC of NY
GALIC of NY represents and warrants to AAGS, on the
effective date of each Registration Statement for the Contracts
(or for each class of Contracts) and at each time that AAGS sells
a Contract and, with respect to Sections 5.g., 5.i., and 5.j.
below, also on the date of this Agreement, as follows:
a. Such Registration Statement has been declared effective by the SEC
or has become effective in accordance with the Regulations.
b. Such Registration Statement and the related Prospectus comply in
all material respects with the provisions of the 1933 Act and the
1940 Act and the Regulations, and neither the Registration
Statement nor the Prospectus contains an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in light of the circumstances in which they were made;
provided, however, that none of the representations and warranties
in this Section 5.b. shall apply to statements or omissions from a
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to GALIC of NY in writing by
AAGS expressly for use in such Registration Statement.
x. XXXXX of NY has not received any notice from the SEC with respect
to such Registration Statement pursuant to Section 8(e) of the
1940 Act and no stop order under the 1933 Act has been issued and
no proceeding therefor has been instituted or threatened by the
SEC.
d. The auditors who certified the financial statements included in
such Registration Statement and the related Prospectus are
independent public auditors as required by the 1933 Act and the
Regulations.
e. The financial statements included in such Registration Statement
present fairly the respective financial positions of GALIC of NY
and the Variable Account (as applicable) at the dates indicated;
and such financial statements have been prepared in conformity
with generally accepted accounting principles in the United States
applied on a consistent basis.
f. Subsequent to the respective dates as of which information is
given in such Registration Statement or the related Prospectus,
there has not been any material adverse change in the condition,
financial or otherwise, of GALIC of NY or the Variable Account (as
applicable) which would cause such information to be materially
misleading.
x. XXXXX of NY has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of New
York with full power and authority to own, lease and operate its
properties and conduct its business in the manner described in
such Registration Statement, is duly qualified to transact the
business of a life insurance company, and is in good standing, in
New York and each other state or jurisdiction in which the
Contracts will be offered for sale.
h. The form of the Contracts has been approved to the extent required
by the New York Insurance Commissioner and by the governmental
agency responsible for regulating insurance companies in each
other state or jurisdiction in which the Contracts will be offered
for sale.
i. The execution and delivery of this Agreement and the consummation
of the transactions contemplated herein have been duly authorized
by all necessary corporate action by GALIC of NY, and when so
executed and delivered this Agreement shall be the valid and
binding obligation of GALIC of NY enforceable in accordance with
its terms. The consummation of the transactions contemplated by
this Agreement, and the fulfillment of the terms of this
Agreement, shall not conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without notice
or lapse of time) a default under, the articles of incorporation
or code of regulations of GALIC of NY, or any indenture,
agreement, mortgage, deed of trust, or other instrument to which
GALIC of NY is a party or by which it is bound, or violate any
law, or, to the best of GALIC of NY's knowledge, any order, rule
or regulation applicable to GALIC of NY of any court or of any
federal or state regulatory body, administrative agency or any
other governmental instrumentality having jurisdiction over GALIC
of NY or any of its properties.
j. No consent, approval, authorization or order of any court or
governmental authority or agency is required for the issuance or
sale of the Contracts or for the consummation of the transactions
contemplated by this Agreement, that has not been obtained.
x. XXXXX of NY has filed with the SEC all statements and other
documents required for registration under the provisions of the
1940 Act and the Regulations thereunder, of the Variable Account
supporting the Contracts, and such registration has been effected;
further, there are no contracts or documents of GALIC of NY which
are required to be filed as exhibits to such Registration
Statement by the 1933 Act, the 1940 Act or the Regulations which
have not been so filed.
x. XXXXX of NY has obtained all exemptive or other orders of the SEC
necessary to make the public offering and consummate the sale of
such Contracts pursuant to this Agreement and to permit the
operation of the Variable Account supporting such Contracts as
contemplated in the related Prospectus.
m. Such class of Contracts has been duly authorized by GALIC of NY
and conforms to the descriptions thereof in the Registration
Statement for such class of Contracts and the related Prospectus
and, when issued as contemplated by such Registration Statement,
shall constitute legal, validly issued and binding obligations of
GALIC of NY in accordance with their terms.
6. Undertakings of GALIC of NY
x. XXXXX of NY shall use its best efforts:
(1) to maintain the registration of the Contracts with the SEC and
any state securities commissions of any state or other
jurisdiction in which the Contracts will be offered for sale
where the securities or blue-sky laws of such state or other
jurisdiction require registration of the Contracts, including
without limitation using its best efforts to prevent a stop
order from being issued or if a stop order has been issued to
cause such stop order to be withdrawn;
(2) to gain approval of the Contract forms where required under
the insurance laws and regulations of each state or other
jurisdiction in which the Contracts will be offered for sale;
and
(3) to keep such registrations and approvals in effect thereafter
so long as the Contracts are outstanding.
x. XXXXX of NY shall take all action required to cause the Contracts
to comply, and to continue to comply, as annuity contracts and as
registered securities under applicable laws and regulations, and
to cause each Registration Statement and each related Prospectus
to comply, and to continue to comply, with:
(1) all applicable federal laws and regulations; and
(2) all applicable laws and regulations of each state and other
jurisdiction in which the Contracts will be offered for sale.
x. XXXXX of NY shall notify AAGS immediately or in any event as soon
as possible under the circumstances:
(1) When a Registration Statement has become effective or any
post-effective amendment with respect to a Registration
Statement becomes effective thereafter;
(2) Of any request by the SEC for any amendment to a Registration
Statement, for any supplement to a Prospectus, or for
additional information;
(3) Of any event which makes any material statement made in a
Registration Statement or a Prospectus untrue in any material
respect or results in a material omission in a Registration
Statement or a Prospectus;
(4) Of the issuance by the SEC of any stop order with respect to a
Registration Statement or any amendment thereto, or the
initiation of any proceedings for that purpose or for any
other purpose relating to the registration and/or offering of
the Contracts;
(5) In which states or jurisdictions registration of the Contracts
is required under the securities or blue-sky laws, and when
such registration(s) have become effective;
(6) In which states or jurisdictions approval of the Contract
forms is required under the applicable insurance laws and
regulations, and when such approvals have been obtained; and
(7) In what states or jurisdictions the Contracts may not be
lawfully sold.
x. XXXXX of NY shall furnish to AAGS without charge promptly after
filing five (5) complete copies of each Registration Statement and
any pre-effective or post-effective amendment thereto, including
financial statements and all exhibits not incorporated therein by
reference.
e. Schedule 3 attached to this Agreement is a list provided by GALIC
of NY of all states and jurisdictions in which the Contracts can
lawfully be offered as of the date of this Agreement. GALIC of NY
shall promptly notify AAGS of any change on Schedule 3.
x. XXXXX of NY shall provide AAGS, without charge, with as many
copies of each Prospectus (and any amendments or supplements to
such Prospectus) as AAGS may reasonably request.
x. XXXXX of NY shall timely file all required reports, statements and
amendments required to be filed by or for GALIC of NY and each
Variable Account under the 1933 Act, the 1934 Act, and/or the 1940
Act or the Regulations and under applicable state insurance
statutes and regulations.
x. XXXXX of NY shall deliver to AAGS, as soon as practicable after it
becomes available, the Quarterly Statements, Annual Statement for
GALIC of NY and for each Variable Account in the form filed with
the State of New York.
x. XXXXX of NY shall provide AAGS access to such records, officers
and employees of GALIC of NY at reasonable times as is necessary
to enable AAGS to fulfill its obligation, as the underwriter under
the 1933 Act for the Contracts, to perform due diligence and to
use reasonable care.
x. XXXXX of NY shall have the responsibility for maintaining the
appointment records of all agents appointed by GALIC of NY to
distribute the Contracts.
7. Conditions to Obligations of AAGS
The obligations of AAGS hereunder are subject to the accuracy of the
representations and warranties of GALIC of NY contained in this
Agreement, to the performance by GALIC of NY of its obligations
hereunder, and to the condition that prior to the time that AAGS begins
offering the Contracts and each time, during the period in which AAGS
is offering the Contracts, that an amendment to a Registration
Statement becomes effective, AAGS shall have received an officer's
certificate executed by a senior executive officer of GALIC of NY to
the effect that the representations and warranties set forth in Section
5 of this Agreement are true and correct;
8. Representations and Warranties of AAGS
AAGS represents and warrants to GALIC of NY, on the date hereof and at
each time that AAGS sells a Contract, as follows:
a. AAGS has taken all actions including, without limitation, those
necessary under its articles of incorporation, code of regulations
and applicable state corporate law, necessary to authorize the
execution, delivery and performance of this Agreement and all
transactions contemplated hereunder.
b. AAGS is and shall remain registered during the term of this
Agreement as a broker-dealer under the 1934 Act, is a member with
the NASD, and is duly registered under applicable state securities
laws.
c. AAGS shall solicit, and shall instruct Distributors to solicit,
sales of the Contracts only in those states or jurisdictions
listed on Schedule 3 as in effect at the time of solicitation.
d. AAGS is and shall remain during the term of this Agreement in
compliance with Section 9(a) of the 1940 Act.
9. Undertakings of AAGS
a. All solicitation and sales activities engaged in by AAGS and the
AAGS Representatives in regard to the Contracts shall be in
compliance with all applicable federal and state securities laws
and regulations, as well as all applicable insurance laws and
regulations. No AAGS Representative shall solicit the sale of a
Contract unless at the time of such solicitation such individual
is:
(1) Properly licensed by the NASD and all other applicable state
insurance and securities regulatory authorities; and
(2) Appointed as an insurance agent of GALIC of NY except as may
be otherwise agreed to by GALIC of NY.
b. Neither AAGS nor any AAGS Representative shall give any
information or make any representation in regard to a class of
Contracts in connection with the offer or sale of such class of
Contracts that is not in accordance with the then-currently
effective Prospectus for such class of Contracts, or in the
then-currently effective prospectus or statement of additional
information for a Fund, or in current advertising materials for
such class of Contracts authorized by GALIC of NY.
c. Neither AAGS nor any AAGS Representative shall offer, attempt to
offer, or solicit Applications for the Contracts or deliver the
Contracts, in any state or other jurisdiction as to which GALIC of
NY has notified AAGS in accordance with Section 6.c.(7) of this
Agreement that such Contracts may not legally be sold or offered
for sale.
10. Records
GALIC of NY and AAGS each shall maintain such accounts, books and other
documents as are required to be maintained by each of them by
applicable laws and regulations and shall preserve such accounts, books
and other documents for the periods prescribed by such laws and
regulations. The accounts, books and records of GALIC of NY, the
Variable Account(s) and AAGS as to all transactions hereunder shall be
maintained so as to clearly and accurately disclose the nature and
details of the transactions, including such accounting information as
necessary to support the reasonableness of the amounts paid by GALIC of
NY hereunder. Each party or designee thereof shall have the right to
inspect and audit such accounts, books and records of the other party
during normal business hours upon reasonable written notice to the
other party. Each party shall keep confidential all information
obtained pursuant to such an inspection or audit, and shall disclose
such information to third parties only upon receipt of written
authorization from the other party, except as required by law.
11. Examinations, Investigations and Proceedings
a. Cooperation
GALIC of NY and AAGS shall cooperate fully in any insurance
regulatory examination or investigation or proceeding or judicial
proceeding arising in connection with the offering, sale or
distribution of the Contracts distributed under this Agreement.
Further, GALIC of NY and AAGS shall cooperate fully in any
securities regulatory investigation or proceeding or judicial
proceeding with respect to GALIC of NY, AAGS, their Affiliates and
their agents, Representatives or employees to the extent that such
investigation or proceeding is in connection with the offering,
sale or distribution of the Contracts distributed under this
Agreement. Without limiting the foregoing, GALIC of NY and AAGS
shall notify each other promptly of any customer complaint or
notice of any regulatory investigation or proceeding or judicial
proceeding received by either party with respect to GALIC of NY,
AAGS or any of their Affiliates, agents, Representatives or
employees or which may affect GALIC of NY's issuance of any
Contract marketed under this Agreement.
b. Customer Complaint
In the case of a customer complaint, AAGS and GALIC of NY shall
cooperate in investigating such complaint and any response by
either party to such complaint shall be sent to the other party
for written approval not less than five business days prior to its
being sent to the customer or any regulatory authority, except
that if a more prompt response is required, the proposed response
shall be communicated by telephone or facsimile. In any event,
neither party shall release any such response without the other
party's prior written approval. GALIC of NY shall maintain all
complaint records by applicable regulations and applicable
insurance laws and regulations. AAGS shall maintain all records
required by the rules and regulations of the NASD.
12. Indemnification
a. By GALIC of NY
GALIC of NY shall indemnify and hold harmless AAGS and each
person who controls or is associated with AAGS within the meaning
of such terms under the federal securities laws, and any officer,
director, employee or agent of the foregoing, against any and all
losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement
of, any action, suit or proceeding or any claim asserted), to
which AAGS and/or any such person may become subject, under any
statute or regulation, any NASD rule or interpretation, at common
law or otherwise, insofar as such losses, claims, damages or
liabilities:
(1) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, in light of the circumstances in which they were
made, contained in any (i) Registration Statement or in any
Prospectus; or (ii) blue-sky application or other document
executed by GALIC of NY specifically for the purpose of
qualifying any or all of the Contracts for sale under the
securities laws of any jurisdiction; provided that GALIC of NY
shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of, or is based
upon, an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon information
furnished in writing to GALIC of NY by AAGS specifically for
use in the preparation of any such Registration Statement or
any such blue-sky application or any amendment thereof or
supplement thereto; or.
(2) result because of the terms of any Contract or because of any
breach by GALIC of NY of any provision of this Agreement or of
any Contract or which proximately result from any activities
of GALIC of NY's officers, directors, employees or agents or
their failure to take any action in connection with the sale,
processing or administration of the Contracts; or
(3) result from any breach of any representation or warranty made
by GALIC of NY in this Agreement.
This indemnification agreement shall be in addition to any liability
that GALIC of NY may otherwise have; provided, however, that no person
shall be entitled to indemnification pursuant to this provision if such
loss, claim, damage or liability is due to the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty by the person
seeking indemnification.
b. By AAGS
AAGS shall indemnify and hold harmless GALIC of NY and each person who
controls or is associated with GALIC of NY within the meaning of such
terms under the federal securities laws, and any officer, director,
employee or agent of the foregoing, against any and all losses, claims,
damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and
any amounts paid in settlement of, any action, suit or proceeding or
any claim asserted), to which GALIC of NY and/or any such person may
become subject under any statute or regulation, and NASD rule or
interpretation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities:
(1) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading, in light of the circumstances in which they
were made, contained in any (i) Registration Statement or in
any Prospectus (ii) blue-sky application or other document
executed by GALIC of NY specifically for the purpose of
qualifying any or all of the Contracts for sale under the
securities laws of any jurisdiction; in each case to the
extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission made
in reliance upon information furnished in writing to GALIC of
NY by AAGS specifically for use in the preparation of any such
Registration Statement or any such blue-sky application or any
amendment thereof or supplement thereto, or
(2) result because of any use by AAGS or any AAGS Representative
of promotional, sales or advertising material not authorized
by GALIC of NY or any verbal or written misrepresentations by
AAGS or any AAGS Representative or any unlawful sales
practices concerning the Contracts by AAGS or any AAGS
Representative under federal securities laws or NASD
regulations, but not including state insurance laws compliance
with which is a responsibility of GALIC of NY under this
Agreement or otherwise; or
(3) result from any claims by agents or Representatives or
employees of AAGS for commissions or other compensation or
remuneration of any type; or
(4) result from any breach by AAGS or any AAGS Representative of
any provision of this Agreement or any breach of any
representation or warranty made by AAGS in this Agreement.
This indemnification shall be in addition to any liability that AAGS
may otherwise have; provided, however, that no person shall be entitled
to indemnification pursuant to this provision if such loss, claim,
damage or liability is due to the willful misfeasance, bad faith, gross
negligence or reckless disregard of duty by the person seeking
indemnification.
c. General
After receipt by a party entitled to indemnification ("indemnified
party") under this Section 12 of notice of the commencement of any
action, if a claim in respect thereof is to be made against any person
obligated to provide indemnification under this Section 12
("indemnifying party"), such indemnified party shall notify the
indemnifying party in writing of the commencement thereof as soon as
practicable thereafter, provided that the omission to so notify the
indemnifying party shall not relieve the indemnifying party from the
liability under this Section 12, except to the extent that the omission
results in a failure of actual notice to the indemnifying party and
such indemnifying party is damaged solely as a result of this failure
to give such notice. The indemnifying party, upon the request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless ( 1) the
indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel or (2) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
shall indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
The indemnification provisions contained in this Section 12 shall
remain operative in full force and effect, regardless of (1) any
investigation made by or on behalf of GALIC of NY or by or on behalf of
any controlling person thereof, (2) delivery of any Contracts and
Premiums therefor, and (3) any termination of this Agreement. A
successor by law of GALIC of NY or AAGS, as the case may be, shall be
entitled to the benefits of the indemnification provisions contained in
this Section 11.
13. Termination
a. This Agreement shall be effective upon execution by the parties
hereto and will remain in effect unless terminated, as provided in
this Section 13.
b. This Agreement shall terminate automatically if it is assigned by
a party without the prior written consent of the other party.
c. This Agreement may be terminated at the option of either party to
this Agreement upon the other party's material breach of any
provision of this Agreement or of any representation made in this
Agreement, unless such breach has been cured within 10 days after
receipt of notice of breach from the non-breaching party.
d. Upon termination of this Agreement all authorizations, rights and
obligations shall cease except: (1) the obligation to settle
accounts hereunder, including commissions on Premiums subsequently
received for Contracts in effect at the time of termination or
issued pursuant to Applications received by GALIC of NY prior to
termination; and (2) the obligations contained in Sections 4, 6,
10, 11 and 12 hereof.
14. Miscellaneous
a. Binding Effect
Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated
herein have been duly authorized by all necessary corporate action
by such party and when so executed and delivered this Agreement
shall be the valid and binding obligation of such party
enforceable in accordance with its terms. This Agreement shall be
binding on and shall inure to the benefit of the respective
successors and assigns of the parties hereto of the respective
successors and assigns of the parties hereto provided that neither
party shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other party.
b. Amendment of Schedules
The parties to this Agreement may amend Schedules 1, 2 and 3 to
this Agreement from time to time to reflect additions of or
changes in any class of Contracts, Commissions or jurisdictions in
which Contracts may be offered and sold. The provisions of this
Agreement shall be equally applicable to each such class of
Contracts that may be added to the Schedules, unless the context
otherwise requires. Any other change in the terms or provisions of
this Agreement shall be by written agreement between GALIC of NY
and AAGS.
c. Rights, Remedies, etc. are Cumulative
The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies
and obligations, at law or in equity, which the parties hereto are
entitled to under state and federal laws. Failure of either party
to insist upon strict compliance with any of the conditions of
this Agreement shall not be construed as a waiver of any of the
conditions, but the same shall remain in full force and effect. No
waiver of any of the provisions of this Agreement shall be deemed,
or shall constitute, a waiver of any other provisions, whether or
not similar, nor shall any waiver constitute a continuing waiver.
d. Notices.
All notices hereunder are to be made in writing and shall be
given:
If to GALIC of NY, to:
Great American Life Insurance Company of New York
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: General Counsel
If to AAGS, to:
AAG Securities, Inc.
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: President
or such other address as such party may hereafter specify in
writing. Each such notice to a party shall be either hand
delivered or transmitted by registered or certified United States
mail with return receipt requested, and shall be effective upon
delivery.
e. Arbitration
Any controversy or claim arising out of relating to this
Agreement, or the breach hereof, shall be settled by arbitration
in the forum jointly selected by GALIC of NY and AAGS (but if
applicable law requires some other forum, then such other forum)
in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award
rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
f. Interpretation; Jurisdiction
This Agreement constitutes the whole agreement between the parties
thereto with respect to the subject matter hereof, and supersedes
all prior oral or written understandings, agreements or
negotiations between the parties with respect to such subject
matter. No prior writings by or between the parties with respect
to the subject matter hereof shall be used by either party in
connection with the interpretation of any provision of this
Agreement. This Agreement shall be construed and its provisions
interpreted under and in accordance with the internal laws of the
State of Ohio without giving effect to principles of conflict of
laws.
g. Severability
This is a severable Agreement. In the event that any provision of
this Agreement would require a party to take action prohibited by
applicable federal or state law or profit a party from taking
action required by applicable federal or state law, then it is the
intention of the parties hereto that such provision shall be
enforced to the extent permitted under the law, and, in any event,
that all other provisions of this Agreement shall remain valid and
duly enforceable as if the provision at issue had never been a
part hereof.
h. Section and Other Headings
The headings in this Agreement are included for convenience of
reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or
effect.
i. Counterparts
This Agreement may be executed in two or more counterparts, each
of which taken together shall constitute one and the same
instrument.
j. Regulation
This Agreement shall be subject to the provisions of the 1933 Act,
1934 Act and 1940 Act and the Regulations and the rules and
regulations of the NASD, from time to time in effect, including
such exemptions from the 1940 Act as the SEC may grant, and the
terms hereof shall be interpreted and construed in accordance
therewith.
IN WITNESS WHERE of, each party hereto represents that the officer signing this
Agreement on the party's behalf is duly authorized to execute this Agreement;
and the parties hereto have caused this Agreement to be duly executed by such
authorized officers on the date specified below.
GREAT AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By: --------------------------------------
Name: --------------------------------------
Title: --------------------------------------
AAG SECURITIES, INC.
By: --------------------------------------
Name: --------------------------------------
Title: --------------------------------------
Schedule 1
Contracts Subject to Distribution Agreement
================================= --------------------- ----------------------- =================================================
Contract Marketing NamePolicy Form Numbers
Endorsement Description
Numbers Of Endorsement
================================= --------------------- ----------------------- =================================================
Commodore Navigator XX0000X00 NY3443GE99 XXX Endorsement For Group Master Contract
================================= --------------------- ----------------------- =================================================
" NY3453GE99 Tax Sheltered Annuity Endorsement For Group
Master Contract
================================= --------------------- ----------------------- =================================================
" NY3463GE99 Qualified Loan Endorsement For Group Master
Contract
================================= --------------------- ----------------------- =================================================
" NY3483GE99 XXXX XXX Endorsement for Group Master contract
================================= --------------------- ----------------------- =================================================
" NY3349GE99 Qualified Pension, Profit Sharing & Annuity
Plan Endorsement For Group Master Contract
================================= --------------------- ----------------------- =================================================
" NY3513GE99 SIMPLE XXX Endorsement for Group Master Contract
================================= --------------------- ----------------------- =================================================
" NY3523GE99 Section 457 Governmental Plan Endorsement for
Group Master
================================= --------------------- ----------------------- =================================================
" NY3533GE99 Section 457(f) Governmental Plan Endorsement
For Group Master Contract
================================= --------------------- ----------------------- =================================================
" NY3553GE99 Successor Owner Endorsement For Group Master
Contract
================================= --------------------- ----------------------- =================================================
NY3333C99 NY3444CE99 XXX Endorsement For Group Master Contract
--------------------------------- --------------------- ----------------------- -------------------------------------------------
" NY3454CE99 Tax Sheltered Annuity Endorsement For
Certificate of Participation
--------------------------------- --------------------- ----------------------- -------------------------------------------------
================================= --------------------- ----------------------- =================================================
" NY3464CE99 Qualified Loan Endorsement For Certificate of
Participation
================================= --------------------- ----------------------- =================================================
" NY3484CE99 XXXX IRS Endorsement for Certificate of
Participation
================================= --------------------- ----------------------- =================================================
" NY3494CE99 Qualified Pension, Profit Sharing & Annuity
Plan Endorsement For Certificate of
Participation
================================= --------------------- ----------------------- =================================================
" NY3514CE99 SIMPLE XXX Endorsement For Certificate of
Participation
================================= --------------------- ----------------------- =================================================
" NY3524CE99 Section 457 Governmental Plan Endorsement For
Certificate of Participation
================================= --------------------- ----------------------- =================================================
" NY3534CE99 Section 457(f) Governmental Plan Endorsement
For Certificate of Participation
================================= --------------------- ----------------------- =================================================
" NY3554CE99 Successor Owner Endorsement For Certificate of
Participation
================================= --------------------- ----------------------- =================================================
NY3383Q99 XX0000X00 XXX Endorsement For Individual Qualified
Contract
================================= --------------------- ----------------------- =================================================
" NY3593E99 Tax Sheltered Annuity Endorsement For
Individual Qualified Contract
================================= --------------------- ----------------------- =================================================
" NY3603E99 Qualified Loan Endorsement For Individual
Qualified Contract
================================= --------------------- ----------------------- =================================================
NY3383Q99 NY3623E99 XXXX XXX Endorsement For Individual Qualified
Contract
================================= --------------------- ----------------------- =================================================
" NY3633E99 Qualified Pension, Profit Sharing & Annuity
Plan Endorsement For Individual Qualified
Contract
================================= --------------------- ----------------------- =================================================
" NY3643E99 Employer Plan Endorsement For Individual
Qualified Contract
================================= --------------------- ----------------------- =================================================
" NY3653E99 SIMPLE XXX Endorsement For Individual Qualified
Contract
================================= --------------------- ----------------------- =================================================
" XX0000X00 Section 457 Governmental Plan Endorsement For
Individual Qualified Contract
================================= --------------------- ----------------------- =================================================
NY3382NQ99 NY3683E99 Successor Owner Endorsement For Individual
Contract
================================= --------------------- ----------------------- =================================================
" NY3703E99 Unisex Endorsement For Individual Nonqualified
Contract
================================= --------------------- ----------------------- =================================================
" NY3604E99 Nonqualified Loan Endorsement For Individual
Nonqualified Contract
================================= --------------------- ----------------------- =================================================
Commodore Independence NY3342G99 NY3443GE99 Master Group Contract
================================= --------------------- ----------------------- =================================================
" NY3453CE99 Tax Sheltered Annuity Endorsement For Group
Master Contract
================================= --------------------- ----------------------- =================================================
" NY3463GE99 Qualified Loan Endorsement For Group Master
Contract
================================= --------------------- ----------------------- =================================================
" NY3483GE99 XXXX IRS Endorsement For Group Master Contract
================================= --------------------- ----------------------- =================================================
" NY3493GE99 Qualified Pension, Profit Sharing & Annuity
Plan Endorsement For Group Master Contract
================================= --------------------- ----------------------- =================================================
" NY3513GE99 SIMPLE XXX Endorsement For Group Master Contract
================================= --------------------- ----------------------- =================================================
" NY3523GE99 Section 457 Governmental Plan Endorsement For
Group Master Contract
================================= --------------------- ----------------------- =================================================
" NY3533GE99 Section 457(f) Governmental Plan Endorsement
For Group Master Contract
================================= --------------------- ----------------------- =================================================
NY3343C99 NY3444CE99 XXX Endorsement For Certificate of Participation
================================= --------------------- ----------------------- =================================================
" NY3454CE99 Tax Sheltered Annuity Endorsement For
Certificate of participation
================================= --------------------- ----------------------- =================================================
" NY3464CE99 Qualified Loan Endorsement For Certificate of
Participation
================================= --------------------- ----------------------- =================================================
" NY3484CE99 XXXX XXX Endorsement For Certificate of
Participation
================================= --------------------- ----------------------- =================================================
" NY3494CE99 Qualified Pension, Profit Sharing & Annuity
Plan Endorsement For Certificate of
Participation
================================= --------------------- ----------------------- =================================================
" NY3514CE99 SIMPLE XXX Endorsement For Certificate of
Participation
================================= --------------------- ----------------------- =================================================
" NY3524CE99 Section 457 Governmental Plan Endorsement For
Certificate of Participation
================================= --------------------- ----------------------- =================================================
" NY3534CE99 Section 457(f) Governmental Plan Endorsement
For Certificate of Participation
================================= --------------------- ----------------------- =================================================
NY3385Q99 XX0000X00 XXX Endorsement For Individual Qualified
Contract
================================= --------------------- ----------------------- =================================================
" NY3593E99 Tax Sheltered Annuity Endorsement For
Individual Qualified Contract
================================= --------------------- ----------------------- =================================================
" NY3603E99 Qualified Loan Endorsement For Individual
Qualified Contract
================================= --------------------- ----------------------- =================================================
NY3384NQ99 NY3604E99 Nonqualified Loan Endorsement For Individual
Nonqualified Contract
================================= --------------------- ----------------------- =================================================
NY3385Q99 NY3623E99 XXXX XXX Endorsement For Individual Qualified
Contract
================================= --------------------- ----------------------- =================================================
" NY3633E99 Qualified Pension, Profit Sharing & Annuity
Plan Endorsement For Individual Qualified
Contract
================================= --------------------- ----------------------- =================================================
" NY3643E99 Employer Plan Endorsement For Individual
Qualified Contract
================================= --------------------- ----------------------- =================================================
" NY3653E99 SIMPLE XXX Endorsement For Individual Qualified
Contract
================================= --------------------- ----------------------- =================================================
" XX0000X00 Section 457 Governmental Plan Endorsement For
Individual Qualified Contract
================================= --------------------- ----------------------- =================================================
NY3383Q99 NY3683E99 Successor Owner Endorsement For Individual
Contract
================================= --------------------- ----------------------- xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Xxxxxxxxx Xxxxxxxxx XX0000XXX00 Group Mater Application
================================= --------------------- ----------------------- =================================================
NY3352G99 NY3443GE99 XXX Endorsement For Group Master Contract
================================= --------------------- ----------------------- =================================================
" NY3453GE99 Tax Sheltered Annuity Endorsement For Group
Master Contract
================================= --------------------- ----------------------- =================================================
NY3387Q99 XX0000X00 XXX Endorsement For Individual Qualified
Contract
================================= --------------------- ----------------------- =================================================
" NY3593E99 Tax Sheltered Annuity Endorsement For
individual Qualified Contract
================================= --------------------- ----------------------- =================================================
" NY3603E99 Qualified Loan Endorsement For Individual
Qualified Contract
================================= --------------------- ----------------------- =================================================
NY3386NQ99 NY3604E99 Nonqualified Loan Endorsement For Individual
Nonqualified Contract
================================= --------------------- ----------------------- =================================================
NY3387Q99 NY3633E99 Qualified Pension, Profit Sharing & Annuity
Plan Endorsement For Individual Qualified
Contract
--------------------------------- --------------------- ----------------------- =================================================
NY3387Q99 NY3643E99 Employer Plan Endorsement For Individual
Qualified Contract
--------------------------------- --------------------- ----------------------- =================================================
--------------------------------- --------------------- ----------------------- =================================================
NY3387Q99 NY3653E99 SIMPLE XXX Endorsement For Individual Qualified
Contract
--------------------------------- --------------------- ----------------------- =================================================
Schedule 2
Commissions
Schedule 0
XXXXX XX XXX XXXX
