EXHIBIT 1-A(4)
AGREEMENT BETWEEN FRANKLIN FINANCIAL SERVICES CORPORATION AND
THE AMERICAN FRANKLIN LIFE INSURANCE COMPANY
THIS AGREEMENT dated July 15, 1991 by and between The American Franklin
Life Insurance Company, an Illinois legal reserve stock life insurance
corporation, having its principal office at Xxxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxx (the "Company"), and Franklin Financial Services Corporation, a
Delaware corporation, having its principal office at Franklin Square,
Springfield, Illinois ("Franklin Financial");
WITNESSETH:
WHEREAS, the Company is engaged in the issuance of life insurance
policies and annuity contracts, pursuant to insurance laws in several of the
states, territories and possessions of the United States except New York through
its licensed life insurance agents, and desires to issue and sell flexible
premium variable life insurance policies (the "Policies") through all or some
of' the said agents; and
WHEREAS, the Policies may be deemed to be securities under the
Securities Exchange of 1934 (the "Act"), and applicable state laws, and the sale
of such securities may be deemed to be through an instrumentality of interstate
Commerce within the meaning of Section 15(a) of the Act; and
WHEREAS, Franklin Financial is an affiliate of the Company and Franklin
Financial is registered as a broker-dealer under Section 15(b) of the Act and
also is registered as a member of the National Association of Securities
Dealers, Inc. ("NASD"); and
WHEREAS, it is the desire of the parties to enter into an agreement
pursuant to which certain agents of the Company ("Agents") who are to be
authorized to sell the Policies will be registered representatives of Franklin
Financial, which will be responsible for selecting, training and supervising
them for that purpose, all as more particularly described herein;
NOW, THEREFORE, it is hereby agreed as follows:
1. The Company will advise Franklin Financial of the names of the Agents who are
to be authorized by the Company to sell the Policies. Franklin Financial will
then select the Agents and train them in the sale of variable life policies and
will use its best efforts to qualify such agents under applicable federal and
state laws to engage in the sale of the Policies. Agents so trained and
qualified will be registered representatives of Franklin Financial under
applicable requirements of the NASD and, in addition to all other requirements
for such qualification, will be required to
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comply with applicable examination requirements before being permitted to engage
in the sale of the Policies.
2. Franklin Financial will regularly advise the company of the qualifications of
each Agent under applicable federal and state law.
3. Before any Agent will be authorized to offer or sell the Policies, the
Company, Franklin Financial and the Agent will enter into a mutually
satisfactory agreement pursuant, to which the Agent will acknowledge that he
will be a registered representative of Franklin Financial in connection with his
selling activities related to the Policies, that such activities will be under
the supervision and control of Financial and the supervisor or supervisors
designated by Franklin Financial, and that the Agent's right to convince sell
the Policies is subject to his continued-compliance with such agreement and all
rules, procedures and standards established by Franklin Financial.
4. Franklin Financial will maintain its registration under the Act and its
membership in the NASD and of applicable law and will establish such rules and
procedures as may be necessary adequately to supervise the selling activities of
the Agents. Upon request by Franklin Financial, the Company will furnish or
require the Agents to furnish such appropriate records as may be necessary to
insure such supervision.
5. In the event any Agent fails or refuses to submit to such supervision of
Franklin Financial, or otherwise fails to meet the rules, procedures and
standards imposed by Franklin Financial on its registered representatives,
Franklin Financial shall promptly advise the Company thereof and shall notify
such Agent that he is no longer authorized to offer or sell the Policies, and
Franklin Financial and the Company shall take whatever additional action may be
necessary to terminate the sales activities of such Agent relating to the
Policies.
6. It is contemplated that all or some of the home office supervisors, Regional
Managers, or General Agents of the Company will become qualified as registered
representatives of Franklin Financial and in that capacity will, subject to the
policies of Franklin Financial, supervise the selling activities of Agents
relating to the Policies. In the event any such person shall fail or refuse to
provide such supervision to Franklin Financial's satisfaction, Franklin
Financial (with the cooperation of the Company) shall furnish a qualified person
to perform such supervision or, if Franklin Financial is unable to furnish such
supervision, the authority of the unsupervised Agents to sell the Policies shall
be withdrawn forthwith.
7. Commissions payable to Agents in connection with sales of the Policies shall
be paid by the Company to the Agents through the General Agents or otherwise
under the Company's usual agency contracts and nothing contained herein shall
obligate Franklin Financial to pay any commissions or other remuneration to the
Agents or to reimburse any such Agents for expenses incurred by them, nor shall
Franklin Financial have any interest whatsoever in any commissions or
remuneration payable to Agents by the Company. All deductions from premiums for
sales charges and all contingent deferred sales charges received by Franklin
Financial under the Sales Agreement dated the date hereof between Franklin
Financial and Separate Account VUL-2 of The
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American Franklin Life Insurance Company, a separate account established by the
Company pursuant to Article XIV-1/2 of the Illinois Insurance Code (the "Fund"),
in excess of amounts necessary to pay other sales or promotional expenses
incurred BY Franklin Financial, shall be remitted to the Company to the extent
necessary to reimburse the Company for such commissions or other remuneration to
the Agents paid by the Company. The amount of such commissions and other
remuneration to the Agents not so reimbursed shall be deemed to have been
contributed to the capital of Franklin Financial and all such commissions so
paid by the Company shall be appropriately reflected in the books and records
maintained by or on behalf of Franklin Financial.
8. Franklin Financial will assume full responsibility for the sales activities
of the Agents relating to the Policies and for initial and continued compliance
by itself and Agents with applicable rules of NASD and federal and state
securities laws, and in connection therewith may demand and receive such
assurances from the Company as it deems appropriate demonstrating compliance
with the Act, the Securities Act of 1933, as amended, and the Investment Company
Act of 1940, as amended.
9. Franklin Financial may request that all or some of the notices and the books
and records required to be prepared, sent, and/or maintained by it, as a
registered broker-dealer or as a member of the NASD, in connection with the sale
of the Policies, be prepared, sent and/or maintained by the Company, at the
Company's expense, as agent for Franklin Financial. The Company agrees that such
books and records are the property of Franklin Financial, will be made and
preserved in accordance with Rules 17a-3 and 17a-4 under the Act, and will be
subject to examination by the Securities and Exchange Commission in accordance
with Section 17(a) of the Act.
10. Franklin Financial will provide such prospectuses and such other material as
the Company and Franklin Financial may mutually determine to be necessary or
desirable, and which are authorized by applicable law, for use in connection.
with the offering or sale of the Policies. The Company, at its own expense, will
qualify or register the Policies in all jurisdictions where such qualification
or registration is required and will obtain all necessary approvals of the
offering and sale of the Policies in accordance with the requirements of the
NASD and applicable federal and state law.
11. This Agreement may not be assigned by either party except by mutual consent
and shall continue for a period of one year and from year to year thereafter
subject to termination by either party at any time upon 30 days' written notice
to the other party and to the Securities and Exchange Commission.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE AMERICAN FRANKLIN LIFE
INSURANCE COMPANY
By:
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Name: Xxxx X. Xxxxxx
Title: President
FRANKLIN FINANCIAL SERVICES
CORPORATION
By:
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Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Secretary
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