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Exhibit (b)(3)(iii)
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PROMOTIONAL AGENT AGREEMENT
AGREEMENT ("Agreement") made as of this 1st day of January, 1996 by and
among NASL Financial Services, Inc. ("NASL Financial"), a broker-dealer
registered under the Securities Exchange Act of 1934 ("1934 Act") and a member
of the National Association of Securities Dealers, Inc. ("NASD"), First North
American Life Assurance Company ("First North American"), a stock life insurance
company, and Xxxx Xxxxx Associates, Inc. ("Promotional Agent"), also registered
as a broker-dealer under the 1934 Act and a member of the NASD, and NAWL Holding
company, Inc. ("NAWL") a holding Company owning all voting stock of Promotional
Agent and North American Security Life Insurance Company ("NASL"), the parent
company of First North American. This Agreement hereby supercedes all prior
promotional agent agreements by and among the parties.
I. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
set forth below:
Insurance Products - fixed and variable annuity contracts issued by
First North American as of the date of this Agreement together with any products
developed during the period of this Agreement that are regulated as insurance
products under the laws of the several States of the United States, some of
which are also regulated as securities under the federal securities laws.
Selling Agreements - contracts among Broker-Dealers, Promotional Agent
and NASL Financial and First North American providing for the distribution of
Financial Services Products issued, sponsored or developed by First North
American.
Broker-Dealers - brokerage firms and insurance agencies that have
entered into Selling Agreements to distribute Insurance Products to retail
customers.
II. INTRODUCTION
WHEREAS, First North American is in the business of issuing,
developing and sponsoring various Insurance Products;
WHEREAS, First North American distributes such Insurance Products
through NASL Financial, which is the principal underwriter of all its products
regulated under the federal securities laws;
WHEREAS, NASL Financial is authorized to enter into Selling Agreements,
with First North American's consent, with Broker-Dealers for the distribution of
Insurance Products; and
WHEREAS, Promotional Agent wishes to assist NASL Financial in making
arrangements with Broker-Dealers for the distribution of Insurance Products and
in promoting the sale thereof through such Broker-Dealers, and NASL Financial
wishes the Promotional Agent to do so;
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
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III. APPOINTMENT OF PROMOTIONAL AGENT
A. APPOINTMENT
NASL Financial hereby appoints Promotional Agent as its non-exclusive
agent for the promotion of sales of the Insurance Products specified in Schedule
A hereto through Broker-Dealers, and Promotional Agent accepts such appointments
subject to the terms and conditions set forth herein.
IV. DUTIES OF PROMOTIONAL AGENT
A. PROMOTION OF CONTRACTS
Promotional Agent agrees to use its best efforts to promote the sale of
Insurance Products through Broker-Dealers, and in furtherance thereof
Promotional Agent shall to the extent it deems appropriate and at its own
expense:
(i) Use its best efforts to secure duly qualified Broker-Dealers
to enter into Selling Agreements for the distribution of
Insurance Products;
(ii) Assist the Broker-Dealers who have entered into Selling
Agreements in obtaining for their registered representatives
pursuant to Section V, paragraph A (i) of this Agreement all
necessary licenses, registrations and appointments required by
applicable regulatory authorities so as to enable such
registered representatives to sell Insurance Products;
(iii) Arrange on a periodic basis and preside over educational
meetings with Broker-Dealers who have entered into Selling
Agreements so as to ensure that their registered
representatives are familiar with the provisions and features
of the Insurance Products;
(iv) Provide technical assistance at the time of sale of Insurance
Products to Broker-Dealers who have entered into Selling
Agreements;
(v) Prepare sales and promotional materials, such materials being
subject, however, to the prior approval of First North
American as provided in Section VII B of this Agreement, and
engage public relations advisors as required;
(vi) Hold seminars for customers and potential customers of
Broker-Dealers who have entered into Selling Agreements;
(vii) Provide assistance to Broker-Dealers who have entered into
Selling Agreements in the ongoing servicing of Insurance
Products;
(viii) Provide advice to First North American on the development and
redesign of Insurance Products for which it has or will be
granted exclusive promotional rights;
(ix) Bear costs of printing additional Prospectuses and Statements
of Additional Information for use in marketing activities; and
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(x) Bear costs of printing additional annual and semi- annual
reports for use in marketing activities.
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B. RIGHT TO REJECT SELECTED BROKER-DEALERS
In connection with securing Broker-Dealers to distribute Insurance
Products, Promotional Agent will use its best efforts to ascertain that each
Broker-Dealer wishing to execute a Selling Agreement shall have the highest
business ethics and reputation, be duly qualified with all federal, state and
other regulatory bodies to carry on the business of a Broker-Dealer, and
otherwise be a suitable person to represent NASL Financial and its affiliated
companies. NASL Financial may refuse to enter into a Selling Agreement with a
Broker-Dealer selected by Promotional Agent if such Broker-Dealer is deemed by
NASL Financial or First North American to be unsuitable for any reason. Neither
NASL Financial nor First North American will incur any obligation to compensate,
or reimburse the expenses of, Promotional Agent as a result of any such refusal.
C. PROMOTIONAL AGENT'S EXPENSES
Promotional Agent will be responsible for all expenses (excluding first
time and renewal insurance licensing expenses) incurred in recruiting
Broker-Dealers to distribute Insurance Products and in performing its other
duties under this Agreement. Promotional Agent shall also be responsible for
those expenses specified in the attached Schedule B ("Statement of Expenses and
Compensation") with respect to each category of Insurance Products under this
Agreement.
D. MARKETING OF SIMILAR PRODUCTS
Promotional Agent agrees that it will not promote the sale of insurance
products similar to or competitive with Insurance Products without the consent
of NAWL.
E. DISPUTES WITH BROKER-DEALERS
Promotional Agent will provide reasonable assistance to NASL Financial
in resolving any differences and disputes between NASL Financial and
Broker-Dealers which have entered into Selling Agreements under the auspices of
Promotional Agent. Promotional Agent shall not have the right to establish any
procedures for the settlement of, or to settle, any disputes on behalf of NASL
Financial without first obtaining NASL Financial's written approval of such
procedure or settlement. Promotional Agent will at all times represent NASL
Financial's best interests in resolving any such disputes.
F. REQUIRED REPORTS
Promotional Agent agrees, within 90 days after expiration of each
calendar year, to furnish First North American with a written statement of
amounts received under or on account of this Agreement and amounts expended
thereunder during such calendar year. Such statement will specify the
compensation or profits received under this Agreement by the respective
directors, officers and other principal management personnel of Promotional
Agent, and such other items and further detail as First North American may
reasonably require.
V. DUTIES OF NASL FINANCIAL AND FIRST NORTH AMERICAN
A. DUTIES
NASL Financial or First North American shall to the extent they deem
appropriate and at their own expense:
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(i) Where permitted, obtain such corporate registrations and agent
licenses as are necessary to carry on business and issue and
sell Insurance Products in all states of the United States and
its territories and shall process all licensing, registration
and appointment applications of Broker-Dealers;
(ii) Underwrite fixed and variable annuities and variable life
policies;
(iii) Issue variable life policies, fixed and variable annuities and
provide full administration services therefor;
(iv) Design, in consultation with Promotional Agent, such
additional Insurance Products as may be agreed upon from time
to time which can be marketed by Promotional Agent pursuant to
this Agreement;
(v) Draft and file as required, prospectuses, contracts,
application forms and Selling Agreements;
(vi) Comply with all other legal and regulatory requirements in
respect of Insurance Products; and
(vii) Review marketing materials prepared by Promotional Agent
promptly.
B. COOPERATION OF NASL FINANCIAL AND FIRST NORTH AMERICAN
NASL Financial and First North American agree that to the extent the
cooperation or concurrence of one is required to enable the other to fulfill its
obligations pursuant to this Agreement, they will cooperate or concur to the
extent permitted by law.
C. NON-LIMITATION
This Agreement shall not be construed so as to in any way limit or
affect the rights of First North American, NAWL, NASL or its parent, The
Manufacturers Life Insurance Company or any of their associates or affiliates
from designing or distributing through other channels any product within or
outside the United States including variable annuities, fixed annuities,
variable life products or mutual funds.
VI. COMPENSATION
A. COMPENSATION SCHEDULE
In consideration of providing the services called for under this
Agreement, with respect to each category of Insurance Products the Promotional
Agent shall receive the compensation detailed in Schedule B ("Statement of
Expenses and Compensation") attached hereto and as amended from time to time
pursuant to Section X, paragraph I of this Agreement. Such compensation shall
constitute full compensation to Promotional Agent for all services performed and
expenses incurred under this Agreement.
VII. LIMITATIONS ON PROMOTIONAL AGENT'S AUTHORITY
A. SOLICITATION
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Nothing contained herein shall be construed as granting authority to
Promotional Agent to sell Insurance Products directly to, or solicit
applications for Insurance Products directly from, customers or prospective
customers.
B. MARKETING MATERIALS
Promotional Agent will not use any marketing materials without First
North American's or NASL Financial's (as applicable) prior review and written
approval.
C. RESTRICTION ON INFORMATION
Neither Promotional Agent nor its representatives, employees and
affiliated companies are authorized to give any information or make any
representations concerning Insurance Products other than those contained in any
registration statements or related prospectuses and statements of additional
information filed with the Securities and Exchange Commission relating thereto
or in such sales literature as may be specifically authorized in writing by
First North American or NASL Financial (as applicable).
VIII. RECORDS
A. RECORD-KEEPING DUTIES
Promotional Agent, NASL Financial and First North American agree to
keep all necessary records as are required of each by applicable federal and
state law and acceptable business practices and to render any necessary
assistance to one another for the accurate and timely preparation of such
records. The parties to this Agreement, their representatives and the
representatives of any regulatory body with jurisdiction, during normal business
hours and upon five (5) days written notice, shall have access to any records
pertaining to this Agreement maintained by the other parties hereto for purposes
of reviewing or copying same.
IX. CUSTOMER CONFIDENTIALITY
CONFIDENTIALITY
Promotional Agent agrees that the names and addresses of all customers
and prospective customers of NASL Financial and of any affiliated company, which
may come to the attention of Promotional Agent or any company or person
affiliated with Promotional Agent, are confidential. Such customer information
shall not be used without the prior written consent of NASL Financial by
Promotional Agent or any company or person affiliated with Promotional Agent for
any purposes whatsoever except as may be necessary in connection with Insurance
Products covered by this Agreement.
X. GENERAL PROVISIONS
A. WAIVER
Failure of any party to insist upon strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of any of the
conditions, but the same shall remain in full force and effect. No waiver of any
of the provisions of this Agreement shall be deemed to be, or shall constitute,
a waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver.
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B. BINDING EFFECT
This Agreement shall be binding on, and shall inure to the benefit of,
the parties to it and their respective successors and permitted assigns,
provided that this Agreement or any rights or obligations hereunder may not be
assigned without the prior written consent of the parties hereto.
C. REGULATIONS
All parties agree to observe and comply with all laws, rules and
regulations applicable to the business contemplated by this Agreement.
D. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Massachusetts.
E. COMPLAINTS AND INVESTIGATIONS
Promotional Agent, NASL Financial and First North American agree to
cooperate fully in the event of any regulatory investigation, inquiry or
proceeding, judicial proceeding or customer complaint involving Insurance
Products.
F. TERMINATION
(a) This Agreement shall be for a period of five (5) years from the
date first mentioned above renewable automatically for one year periods
thereafter unless terminated by any party at the end of the five year period or
thereafter at the end of any one year period. .
(b) This Agreement will terminate automatically if either NASL
Financial (or any successor thereto) or Promotional Agent should cease to be a
registered broker-dealer under the 1934 Act or a member of the NASD. Termination
shall not affect the obligations of the parties under Section IX of this
Agreement or under paragraph D of this Section X.
(c) This Agreement may be terminated by mutual consent of all the
parties to the Agreement.
I. AMENDMENT
This Agreement or any schedule annexed hereto may be amended only in
writing signed by all the parties.
J. COUNTERPART
This Agreement may be signed by the parties in counterpart.
The parties hereby execute this Agreement effective the date first
mentioned above.
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XXXX XXXXX ASSOCIATES, INC.
Date: January 1, 1996
By: A. Xxxxx Xxxxx, President
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Name and Title
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NASL FINANCIAL SERVICES, INC.
Date: December 13, 1996
By: Xxxxxxx X. Xxxxxx, President
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Name and Title
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
(with respect to Insurance Products only)
Date: December 13, 1996
By: Xxxxxx Xxxxx, President
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Name and Title
NAWL HOLDING COMPANY, INC.
Date: January 1, 1996
By: H. Xxxxxxx Xxxx
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Name and Title
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SCHEDULE A
(i) Variable Annuities
(ii) Fixed annuities and/or fixed accounts
(iii) Such other Insurance Products as are from time to time agreed by the
parties to the foregoing Agreement and added to this Schedule A in
accordance therewith.
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SCHEDULE B
Statement of Expenses and Compensation
1. FINANCIAL SERVICE PRODUCTS
Subject to the terms and conditions of this Agreement, NASL Financial
will pay to Promotional Agent compensation of 1% of the premiums,
purchase payments and sales proceeds received and accepted under all
Insurance Products distributed through Broker-Dealers having a Selling
Agreement with First North American as a direct result of Promotional
Agent's efforts (the "Promotional Agent Fee"). First North American
shall pay Promotional Agent said compensation on a monthly basis.
2. EXCHANGES
No commission will be paid to Promotional Agent upon exchanges among
Insurance Products.
3. COMMISSION CHARGE BACKS
Contract owner's exercise of "FREE LOOK":
In the event a contract is returned to First North American pursuant to
such provision, the full Promotional Agent Fee paid thereon shall be
charged back to Promotional Agent.
Refund of premium, purchase payment or Sales Proceeds:
Should any premium or purchase payment on any contract issued by First
North American be refunded, for any reason, Promotional Agent shall
repay or return Promotional Agent Fees received by, it with respect to
such-premium, purchase payment or sales proceeds.
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