PRINCIPAL UNDERWRITER AND SERVICING AGREEMENT
AGREEMENT made this _____ day of January, 1994 by and between Fortis
Investors, Inc., a corporation organized and existing under the laws of the
State of Minnesota, (the "Distributor") and First Fortis Life Insurance
Company, an insurance company organized and existing under the laws of the
State of New York (the "Company").
WITNESSETH:
WHEREAS, the Company and its Separate Account A (the "Account"), a
separate investment account registered under the Investment Company Act of
1940 (the "1940 Act"), propose to offer for sale certain variable annuity
contracts, and any riders (hereafter, the "Contracts"), interests under which
(including certain general account interests) may be deemed to be securities
under the Securities Act of 1933 (the "1933 Act") and the laws of some states;
and
WHEREAS, the Account will invest solely in shares of Fortis Series
Funds, Inc. ("Shares"); and
WHEREAS, the Distributor is registered as a broker-dealer with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange
Act of 1934 (the "1934 Act") and is a member of the National Association of
Securities Dealers, Inc. (the "NASD"); and
WHEREAS, certain personnel of the Company or its affiliates may engage,
or may be deemed to be engaged, directly or indirectly, in the offering,
selling, advertising or marketing of Contracts and Shares; confirming
transactions as required by 1934 Act Rule 10b-10; maintenance of records
required by 1934 Act Rules 17a-3 and 17a-4 or other SEC and NASD rules
applicable to registered broker-dealers; and payment of commissions
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with respect to Contracts (all Company personnel engaged in these
activities, as well as all other persons who Section 3(a)(18) of the 1934
Act defined as associated persons of the Distributor, being referred to
herein as "Associated Persons," a term which as used in this Agreement does
not include persons associated with other broker-dealer firms or banks that
are engaged by the Distributor to offer and sell Contracts);
NOW, THEREFORE, in consideration of the covenants and mutual promises
herein contained and of other good and valuable consideration, the receipt
and legal sufficiency of which are hereby acknowledged, the Distributor and
the Company agree as follows:
1. APPOINTMENT OF DISTRIBUTOR. The Distributor will act as the exclusive
principal underwriter for the Contracts during the term of this Agreement in
each state or other jurisdiction where the Contracts may legally be sold. The
Distributor shall at all times function as, and be deemed to be, an
independent contractor and will be under no obligation to effectuate any
particular amount of sales of Contracts or to promote or make sales, except
to the extent the Distributor deems advisable. Anything in this Agreement to
the contrary notwithstanding, the Company retains the ultimate right to
control the sale of the Contracts, including the right to suspend sales in
any jurisdiction or jurisdictions, to appoint and discharge agents of the
Company, or to refuse to sell a Contract to any applicant for any reason
whatsoever.
2. DISTRIBUTION RESPONSIBILITIES OF THE DISTRIBUTOR. The Distributor
will assume full responsibility for securities law compliance by the
Associated Persons with respect to Contracts and Shares, including, as
applicable, compliance with the NASD Rules of Fair Practice and Federal and
state securities laws and regulations. The Distributor, directly or
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through the Company as its agent, will (a) make timely filings with the SEC,
NASD, and any other securities regulatory authorities of any sales literature
or materials relating to the Account of the Shares, as required by law to be
filed, (b) make available to the Company copies of any agreements or plans
intended for use in connection with the sale of the Contracts in sufficient
numbers and in adequate time for clearance by the appropriate regulatory
authorities before they are used, and (c) train the Associated Persons, use
its best efforts to prepare them to complete satisfactorily any and all
applicable NASD and state securities examinations, register the Associated
Persons as its registered representatives or principals to the extent
legally required before they engage in securities activities, and diligently
supervise and control them in the performance of such activities. The parties
agree to use their best efforts to obtain any required clearances by
regulatory agencies as expeditiously as reasonably possible and shall not use
any materials, plan or agreement in any jurisdiction unless all fillings have
been made and approvals obtained that are necessary to make said use proper
and legal therein. The Company will be responsible for filling the Contracts
with and obtaining all necessary approvals thereof from state insurance
regulatory authorities.
3. ADMINISTRATIVE FUNCTIONS AND SERVICES. Completed applications for the
Contracts shall be transmitted directly to the Company whereupon they shall
be reviewed by an agent for the Distributor and if approved by such agent,
the applications shall proceed to be processed by the Company for acceptance
or rejection in accordance with rules and procedures established by the
Company. Initial and subsequent premium payments under the Contracts shall be
made payable to the Company.
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The Company shall perform all other administrative function and services
in connection with the Contracts.
4. APPOINTMENT OF AGENTS. The Company shall undertake to appoint as life
insurance agents of the Company the Distributor's qualified representatives
and principals and, as appropriate upon the request of the Distributor, those
of other broker-dealers or banks who enter into sales agreements with the
Distributor, as set forth below. The Distributor shall be responsible for
ensuring that Associated Persons will engage in the offer and sale of
Contracts only if properly qualified under the insurance law of all relevant
jurisdictions. Although the Distributor may assist other broker-dealers and
banks or their representatives or principals in qualifying under relevant
insurance laws to sell Contracts, the responsibility for ensuring that all
such requirements have been met is that of such other broker-dealers or banks
and not the Distributor.
5. SUITABILITY. The Distributor shall take reasonable steps to ensure that
the various representatives and principals 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 said applicant. While not limited to the following, a determination of
suitability shall be based on information furnished to a representative after
reasonable inquiry of such applicant (and any other information known about
the applicant) concerning the applicant's retirement and investment
objectives and financial situation and needs.
6. SALES PRACTICES. No person shall use any sales aids, promotional
material, or sales literature with respect to Contracts or Shares which have
not been specifically approved in advance by the Distributor and the
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Company. The Company will be responsible for filing such items, as necessary,
with any insurance regulatory authorities, and where necessary, obtaining
approvals of said authorities. No person shall, in connection with the offer
or sale of the Contracts, make any representations regarding the Contracts,
the Shares, the Company, Fortis Advisers, Inc., or the Distributor, which are
not authorized by the Company and the Distributor or contained in a
then-effective Registration Statement of the Account or Fortis Series Fund,
Inc. under the 1933 Act ("Registration Statement").
7. COSTS AND EXPENSES. Except as otherwise specifically set forth
herein, or except as may otherwise be agreed between the parties from time to
time, each party to this Agreement shall bear all costs and expenses of
providing the services and performing the functions it undertakes pursuant to
this Agreement.
As between the Company and the Distributor, the Company will bear and/or
reimburse the Distributor for the cost of the following services and expenses
(but not any part of the Distributor's general overhead): direct services and
expenses and fees, including registration and filing fees, in connection with
(a) registering and qualifying the Account and the Contracts with Federal and
state regulatory authorities, (b) preparing, typesetting, printing and filing
registration statements, prospectuses and statements of additional information
(including amendments to any of the foregoing) pertaining to the Account and
the Contracts, (c) preparing, typesetting, printing and filing Contract forms,
(d) preparing, typesetting, printing, filing and distributing to Contract owners
confirmations, periodic statements of account, and periodic reports of the
Account to Contract owners, (e) audit and accounting expenses pertaining to
the Company and audit and financial statement preparation expenses
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pertaining to the Account, (f) preparation of and filing Forms N-SAR for the
account, (g) preparation of and filing required insurance regulatory reports
for the Account and the Company, (h) fees and expenses of legal counsel
retained to advise concerning the Account and the Contracts, and (i)
registering and qualifying Associated Persons with state insurance regulatory
authorities (including the training of Associated Persons for this purpose).
As between the Company and the Distributor, the Distributor will bear
(or reimburse the Company for) the costs of the following services and
expenses (but not any part of the Company's general overhead): direct services
and expenses and fees, including registration and filing fees, in
connection with (a) registering and qualifying the Associated Persons with
Federal and state securities regulatory authorities, including the NASD
(including the training of Associated Persons for this purpose),
(b) distributing copies of prospectuses and statement of additional
information pertaining to the Account, to the Contracts, or to Shares
purchased by the Account, (c) preparing, typesetting, filing with insurance
and securities regulatory authorities, printing and disseminating sales
literature and advertising in connection with the Contract or in connection
with Shares purchased by the Account, (d) costs of computer processing that
may be necessary for the Distributor to perform its responsibilities,
including compensation responsibilities, hereunder, and (e) assisting other
broker-dealers and banks or their representatives or principals in qualifying
under relevant insurance laws to sell Contracts.
The parties hereby recognize and acknowledge that certain of the
operating expenses of Fortis Series Fund, Inc. will be borne by Fortis Series
Fund, Inc., and Fortis Advisers, Inc. These include the costs of
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registering and qualifying the Shares with state and Federal regulatory
authorities; preparing and typesetting registration statements, prospectuses
and statements of additional information pertaining to the Shares; preparing,
typesetting, printing, filing and distributing to Contract owners and
annuitants annual and semi-annual reports to shareholders and proxy
solicitation materials with respect to Shares; other expenses of shareholder
meetings; and preparing and filing Form N-SAR for Fortis Series Fund, Inc.
In connection with the sale of the Contracts, Distributor will pay all
amounts (including sales commissions and overrides at rates established by
Distributor) paid to sales representatives, agents or managers, or to any
other broker-dealers or banks who have entered into sales agreements with the
Distributor, provided that appropriate records of all commission payments
shall be maintained by the Distributor or by the Company, pursuant to Section
8 below. Any such agreement with another broker-dealer or bank shall be
subject to the Company's approval as to form and substance.
8. RECORDS AND CONFIRMATION. The Distributor, directly or through the
Company as its agent (but at the Distributor's expense), will (a) maintain
and preserve in accordance with Rules 17a-3 and 17a-4 under the 1934 Act all
books and records required to be maintained in connection with the offer and
sale of the Contracts being distributed pursuant to this Agreement, which
books and records shall be the joint property of the Distributor and the
Company and shall be subject to inspection by the Securities and Exchange
Commission in accordance with Section 17(a) of the 1934 Act and (b) upon or
prior to completion of each Contract transaction for which a confirmation is
legally required, send a written confirmation for each such transaction
reflecting the facts of the transaction. Copies
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of all records maintained hereunder by the Company as the Distributor's agent
will be promptly surrendered by the Company at the request of the Distributor
and will be available at any time during business hours to
properly-constituted governmental authorities and furnished to them in true,
correct and current hard copy form, should the same be required by said
authorities.
The Company or the Distributor (but at the Company's expense), will
maintain and preserve all records in connection with the Contracts and the
Account in accordance with Rules 31a-1 and 31a-2 under the 1940 Act. To the
extent maintained and preserved by the Distributor, such records shall be the
property of the Company and shall be returned to the Company upon request.
9. SECURITIES LAW REGISTRATION. The Distributor will execute such
papers and do such acts and things as shall from time to time be reasonably
requested by the Company for the purpose of (a) maintaining the registration
of the Contracts under the 1933 Act and the Account under the 1940 Act and
(b) qualifying and maintaining qualification of the Contracts for sale under
the applicable laws of any state.
Each party hereto shall advise the other promptly of (a) any action of
the SEC or any authorities of any state or territory, of which it has
knowledge, affecting the registration or qualification of the Account or the
Contracts, or the right to offer the Contracts for sale or (b) the happening
of any event which makes untrue any statement, or which requires the making
of any change in any Registration Statement or any current prospectus or
statement of additional information, in order to make the statement therein
not materially misleading.
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10. COMPENSATION. As compensation for the Distributor's assuming the
expenses and performing the distribution services to be assumed and performed
by it pursuant to this Agreement, the Distributor shall receive from the
Company such amounts and at such times as may from time to time be agreed
upon by the Distributor and the Company as reflected in Schedule A to this
Agreement.
The Company will receive all amounts charged as "sales charges" in
connection with the Contracts, and all other amounts assessed as charges
under the Contracts.
11. MISCELLANEOUS. This Agreement shall become effective as of the
date of its execution, shall continue in full force and effect until
terminated; may be amended at any time by mutual agreement of the parties
hereto; and may be terminated at any time without penalty on sixty days'
written notice by either party to the other.
The Distributor will not assign or delegate its responsibilities under
this Agreement, except with the consent of the Company.
This Agreement shall be construed in accordance with the laws of the
State of New York.
The Distributor shall keep confidential any information obtained
pursuant to this Agreement and shall disclose such information only if the
Company has authorized such disclosure, or if such disclosure is expressly
required by applicable Federal or state authorities.
The Distributor and the Company agree to cooperate fully in any
insurance regulatory examination, investigation, or proceeding or any judicial
proceeding arising in connection with the Contracts. The Distributor and the
Company further agree to cooperate fully in any securities regulatory
examination, investigation or proceeding or any judicial proceeding with
respect to the Company, the Distributor, their
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affiliates and their agents or representatives, to the extent that such
examination, investigation or proceeding is in connection with Contracts
distributed under this Agreement. The Distributor shall furnish applicable
Federal and state regulatory authorities with any information or reports in
connection with its services under this Agreement which such authorities may
request in order to ascertain whether the Company's operations are being
conducted in a manner consistent with any applicable law or regulations.
12. INDEMNIFICATION. The Distributor shall indemnify and hold harmless
the Account, the Company and each of its directors and officers, and each
person who controls the Company against any loss, liability, claim, damage,
or expense (including the reasonable cost of investigating or defending any
alleged loss, liability, claim, damage or expense and reasonable counsel fees
incurred in connection therewith) (1) arising by reason of any person's
acquiring any Contract or interest thereunder, which may be based upon the
1933 Act, the 1940 Act, or on any other Federal or state statute, or at
common law, on the ground that any Registration Statement of the Company or
the Account or the prospectus or statement of additional information
contained therein, as from time to time amended or supplemented, or any
annual or interim reports of the Company or the Account to Contract owners,
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, but only to the extent that such statement
or omission was made in reliance upon, and in conformity with, information
furnished to the Company in writing in connection therewith by or on behalf of
the Distributor or (2) otherwise arising out of the Distributor's negligence,
bad faith, willful misfeasance
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or reckless disregard of its responsibilities hereunder.
The Company shall indemnify and hold harmless the Distributor, its
agents and employees, and each person, if any, who controls the Distributor
against any loss, liability, claim, damage, or expense described in part (1)
of the foregoing indemnity, except as to statements (or omissions) made (or
not made) in reliance upon, and conformity with, information furnished to the
Company in writing by or on behalf of the Distributor for use in connection
with the Registration Statement of the Company or the Account, or the
prospectus or statement of additional information contained therein as from
time to time amended and supplemented, or in connection with any annual or
interim reports to Contract owners; provided, however, that in no case is the
indemnity of the Company in favor of the Distributor and any such controlling
persons to be deemed to protect the Distributor or any such controlling
persons against any liability to the Company or its Contract owners to which
the Distributor or any such controlling person would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the
performance of their duties or by reason of reckless disregard of their
obligations and duties under this Agreement.
No person from whom indemnity may be sought under this Section 12
("Indemnitor") shall be liable to indemnify or hold harmless any person
("Indemnitee") pursuant to this Section 12, unless the Indemnitee shall have
notified the Indemnitor in writing of the nature of the claim as to which
indemnity is being sought hereunder within a reasonable time after the
Indemnitee shall have been served with a summons or other first legal process
giving notice thereof (or shall have received notice of such services on any
designated agent), such notice giving information of the nature of the claim
as to which indemnity is sought hereunder, but failure
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to notify the Indemnitor of any such claim shall not relieve it from any
liability which it may have to the Indemnitee otherwise than on account of
its indemnity agreement contained in Section 12. The Indemnitor will be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any such claim,
but if the Indemnitor elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to the Indemnitee. In the
event the Indemnitor elects to assume the defense of any such suit and retain
such counsel, the Indemnitee shall bear the fees and expense of any
additional counsel retained by it. In case the Indemnitor does not elect to
assume the defense of any such suit, it will reimburse the Indemnitee for the
reasonable fees and expenses of any counsel retained by the Indemnitee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
FORTIS INVESTORS, INC.
By: ________________________________
Name and Title: Xxxx X. Xxxxxxxx, President
FIRST FORTIS LIFE INSURANCE COMPANY
By: _________________________________
Name and Title: Xxxxx X. Xxxxxxx, Vice President
DAP369
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