Sage Life Assurance of America, Inc.
Sage Distributors, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
NATIONAL
SELLING AGREEMENT
FOR
THIS AGREEMENT ("Agreement") is effective as set forth below by and between Sage
Life Assurance of America, Inc. and its affiliate, Sage Distributors, Inc.
(collectively, "Sage" or "We", "Us" or "Our"), Stamford, Connecticut, both
incorporated under the laws of the State of Delaware, and
_________________("National Marketing Firm"), incorporated under the laws of the
State of _____________________________, and (if applicable)
_______________________ a life insurance agency associated with National
Marketing Firm ("Insurance Agency,") and any affiliated broker-dealer listed on
the signature pages ("Affiliated Broker-Dealer;" collectively, these entities
are referred to as "You" or "Your"). National Marketing Firm [is][is not] a
registered broker-dealer with the Securities and Exchange Commission ("SEC") and
a member of the National Association of Securities Dealers, Inc. ("NASD"). In
consideration of the mutual promises set forth in this Agreement, the parties
agree as follows:
1. Agreements By Us
A. We authorize You during the term of this Agreement to sell Our products
("Products" as described in the attached Exhibits) where approved, to
suitable customers, provided that the Products are legally qualified for
sale where the sales are made. Such sales shall be made by You or through
those broker-dealers You have recruited and which have entered into a
Selling Agreement with Us ("Selling Firm").
B. During the term of this Agreement, We will notify You if the SEC or any
jurisdiction issues any stop order with respect to any Product registration
statement or initiates any proceedings that may prevent the sale of any
Product in any jurisdiction.
C. During the term of this Agreement, We will advise You of any amendment to
any registration statement and/or any amendment, sticker or supplement to
any Prospectus.
2. Agreements By You
A. Representations of Your Broker-Dealer. Broker-dealer(s) identified above
(hereinafter referred to in the singular) represents that it (i) is a
registered broker-dealer with the SEC, and is a member in good standing of
the NASD, and (ii) is in compliance with the rules and regulations of the
SEC, the NASD, and the securities laws and regulations of all states in
which it is registered or into or from which its registered representatives
will make offers or sales of the Products. You have provided Us with
Broker-Dealer's current NASD Form BD, and upon our request You will provide
Us with Broker-Dealer's then current Form BD. Broker-dealer acknowledges
that it is responsible for the supervision of its registered
representatives, and for their compliance with all securities laws, rules
and regulations, including those involving sales practices. Broker-Dealer
represents that it is or will become registered, as required, in those
states and jurisdictions where its registered representatives will solicit,
offer, and sell the Products. Broker-Dealer represents that each registered
representative who solicits, offers, and sells the Products will be a duly
registered representative of the Broker-Dealer. Broker-Dealer represents
that each registered representative will hold all registrations and
licenses required by the NASD and any state or jurisdiction.
B. Representations of Insurance Agency. Your Insurance Agency identified above
represents that it is or will become licensed and appointed to sell the
Products, wherever Your agents ("Producers") will sell the Products. You
represent that each of Your Producers who sell the Products will be
licensed agents of the Insurance Agency, and that each Producer will hold
all licenses and appointments required by any jurisdiction to sell the
Products.
C. Additional Representations. You represent and warrant that You and Your
Selling Firms have conducted a civil and criminal background investigation
of each of Your Producers and those of Your Selling Firms who sell Our
Products, and are satisfied that those Producers are and will continue to
be honest, trustworthy, qualified to sell Our Products, and are not in
violation of the Violent Crime Control and Law Enforcement Act of 1994
(18U.S.C. 1033 et. seq.) nor require a waiver from state regulatory
authorities under such Act to sell our Products. You represent that every
Producer will be appointed by Us before he or she offers or sells any of
Our Products. You acknowledge that we reserve the right to refuse to
appoint any person who has been involved in any disciplinary action
required to be reported on Form U-4, or whose background check indicates to
Us, in Our sole discretion, that the person is unsuitable for appointment
as an agent for Us. You acknowledge that We are not authorized by
applicable rules to pay any commission with respect to any sales made by a
Producer before that Producer is appropriately registered and licensed, and
appointed by Us as an insurance agent.
D. Sales Practices and Supervision. You and Your Selling Firms and the
Producers of each (collectively "You" for this subsection) agree to use
Your best efforts to lawfully sell and service Our Products and agree to
the following:
(i) You shall only use advertising material, illustrations and
sales literature, including prospectuses, which have been
first approved by Us and, if required, filed with the NASD
and any jurisdiction. You agree to discard immediately any
outdated sales and advertising material, illustrations,
and prospectuses or any materials that We notify you to
discontinue using.
(ii)You, and specifically Your broker-dealer, have established
and implemented compliance and supervisory procedures for
the supervision of the sales practices and conduct of Your
Producers.
(iii) You agree that determination of suitability shall be
Your sole responsibility.
(iv)You agree that neither You nor any of Your affiliates will
engage in any program sponsored by someone other than Us
or Our affiliates or provide data to any other person
which will allow for the replacement of any of Our
Products.
(v) You and Your Producers are responsible for all costs and
expenses incurred in performing Your obligations under
this Agreement.
E. Handling of Customer Payments. All payments for Products collected by You
or Your Selling Firms shall be immediately remitted together with such
applications, forms and other required documentation to Us. Payments from
customers shall be in accordance with the procedures established by Us from
time to time. No payment is deemed received by Us until actually received
by Us. You acknowledge that We retain the unconditional right to reject, in
whole or part, any application for a Product. Upon Our acceptance of an
application for a Product submitted by You, We shall send the appropriate
documentation representing the Product to You and You shall make prompt
delivery to the customer. We reserve the right to transmit such
documentation directly to the customer.
F. Independent Contractor. You agree that You and Your Selling Firms are and
shall act as independent contractors. Nothing in this Agreement makes You,
or Your employees, agents or Producers or those of Your Selling Firms,
employees of Ours. Neither You, Your Selling Firms nor Your employees,
agents, or Producers or those of Your Selling Firms, shall hold themselves
out to be Our employees, agents or registered representatives in any
dealings with the public.
G. Authority. You represent that You have the authority to act on behalf of
any and all subsidiaries and affiliates and Your Selling Firms, and are
exercising such authority on behalf of such subsidiaries and affiliates and
Selling Firms with respect to the obligations set forth in this Agreement
as well as the transfer of customer payments and forms, and the acceptance
of any compensation paid under this Agreement.
H. Training. You are responsible for training Your Producers and those of Your
Selling Firms with regard to Our Products and Our procedures before they
are permitted to sell any Product. We will, at Your request, provide
training to You, Your Producers and Your Selling Firms.
I. Use of Sales and Training Materials. You agree that any material that You
develop, approve or use for sales, advertising, training, explanatory or
other purposes in connection with the Products, and that references "Sage,"
or Our name or Our Products, will not be used without Our prior written
consent.
J. Compliance with Laws and Regulations. The sale of Our Products by You and
Your Producers and those of Your Selling Firms shall be undertaken only in
accordance with applicable laws and regulations, Our Code of Ethical
Principles and Market Conduct set forth in the attached Exhibits, and, if
applicable, in compliance with the Interagency Statement on Retail Sales of
Non-Deposit Investment Products, and any modification or amplification
thereof, issued by federal banking regulators. You understand and
acknowledge that neither You nor Your Producers, agents or employees, are
authorized by Us to give any information or make any representation in
connection with the sale of Our Products other than as contained in the
prospectus or sales or advertising material authorized in writing by Us.
K. Maintaining Records. You shall be responsible for maintaining the records
of Your Producers to demonstrate they are registered, licensed and
appointed and otherwise qualified to sell Our Products. You shall maintain
such records as required by applicable laws and regulations. The books,
accounts and records You maintain under the terms of this Agreement that
relate to the sale of Our Products, Us, and/or You shall be maintained so
as to clearly and accurately disclose the nature and details of the
transactions covered by the Agreement.
L. Proprietary Information. Any and all Product records developed by Us or
provided to Us by You, including customers files, sales aides, computer
software, customer names, addresses, telephone numbers and related
paperwork, literature, authorizations, manuals and supplies of every kind
and nature relating to Our Products and the servicing of Our Products are
and shall remain Our property. Any and all materials developed and provided
by Us shall be returned to Us (including all copies You make, except any
materials that regulatory authorities require that You retain or that are
necessary for the conduct of a financial examination by independent
auditors) upon termination of this Agreement. Any materials You develop in
support of the marketing, sales, advertising or training related to Us or
Our Products shall be destroyed upon the termination of the Agreement. You
shall keep confidential any information that is covered by this Agreement,
and shall only disclose such information if authorized in writing by Us or
expressly required by the laws or regulations of any jurisdiction or the
NASD or court rule or order. You will give us immediate telephonic notice
of any intended disclosure.
M. Non-Exclusivity. You acknowledge that the Products are made available by Us
and are distributed by You on a mutually non-exclusive basis.
N. Limitations. Unless one of Our authorized officers has provided prior
written authorization, neither You nor any of Your Producer shall have the
authority on Our behalf, directly or indirectly, (i) to alter in any manner
any Product or related form, (ii) alter in any manner any advertising
material or other written communications concerning the Product after they
have been approved by Us, (iii) waive or modify any terms, conditions or
limitations of the Product, forms, rates, illustrations, underwriting
rules, grant permits, special rates or interest rates or make endorsements,
(iv) incur any indebtedness on Our behalf, or expend or contract for the
expenditure of Our funds, and (v) adjust or settle any claim against Us, or
bind Us in any way.
O. Selling Firms. Any Selling Firms You recommend for appointment by Us must
be qualified to sell our Products, subject to the standards and conditions
set forth in the Procedures Supplement to this Agreement.
3. Compensation
A. Payment Schedule. We agree to pay compensation to [National Marketing Firm
(if a broker-dealer) or Affiliated Broker-Dealer] for the sale of each
Product lawfully sold by Your Producers, and if so directed by You, by the
Producers of Your Selling Firms. If requested by you, and required by the
law of any jurisdiction, we will pay such compensation to the Insurance
Agency in accordance with the First of America Brokerage Services, Inc. no
action letter dated September 28, 1995, and the Generic Comment Letter
issued by the SEC on November 3, 1995, PROVIDED that the requirements of
those letters are met. (See Exhibit X) The amount of compensation shall be
in accordance with the Compensation Schedules in the attached Exhibits.
Notwithstanding the foregoing, no compensation shall be payable for any
transaction not in compliance with all applicable insurance and securities
laws, rules and regulations at the time of sale of a Product and
thereafter. Notwithstanding any provision in the attached Compensation
Schedules concerning charge backs, if any Product is tendered for
redemption or not taken in accordance with applicable regulatory
requirements, no compensation shall be paid.
Payment of compensation as described in the attached Compensation Schedules
and Article 5 of the attached Procedures Supplement is due when an
application for a Product and premium payment is accepted by Us.
Compensation Schedules may be changed upon thirty (30) days written notice
to You, which shall be effective only for new applications received by Us
after the effective date of the change. You shall be solely responsible
for the payment of any compensation of any kind to Your Producers and,
if applicable, the Producers of Your Selling Firms.
B. Deductions by Us. We reserve the right to deduct any amount You or Your
Selling Firms owe Us from any compensation due to You from Us. This right
shall apply, but is not limited to the following: (i) compensation paid to
You for payments by a customer received by Us and later returned or
credited to such customer pursuant to such customer's exercise of
"free-look" rights; (ii) compensation paid to You for payments by a
customer received by Us and subsequently surrendered during the course of
any "charge-back" period as stated in the Compensation Schedules; and (iii)
any overpayment of compensation to You. Notwithstanding any provision of
this Section 3.B. to the contrary, We will not exercise Our right to deduct
amounts owed Us and not described in the preceding sentence unless You and
We have agreed to the amount. Any balance due Us after such deduction shall
be a debt of Yours and will accrue interest at eight percent (8%) per
annum. We shall have all rights of a creditor to collect amounts owed Us by
You.
C. Payment Upon Termination. Upon the termination of this Agreement, We will
pay commissions to You in accordance with Article 5 of the attached
Procedures Supplement on business placed with Us prior to the termination
date of this Agreement unless payment or receipt would violate any laws,
rules or regulations of any jurisdiction or the NASD.
4. Complaints and Investigations
A. Cooporation. The Parties agree to cooperate fully in any investigation or
proceeding, to the extent that such investigation or proceeding concerns
any matters related to this Agreement. Without limiting the foregoing:
(i) We shall promptly notify You of receipt of any customer complaint or notice
of any inquiry, investigation or proceeding concerning any matter related
to this Agreement, including those regarding Your Selling Firms and their
Producers.
(ii) You shall promptly notify Us of receipt of any customer complaint or notice
of any inquiry, investigation or proceeding concerning any matter relating
to this Agreement, including those regarding Your Selling Firms or their
Producers. You shall promptly notify Us of any NASD, federal or state
inquiry, investigation or proceeding, or litigation that has been initiated
against You or Your Producers, without regard as to whether it pertains to
this Agreement, however, this requirement does not extend to matters
involving an individual retail client as a complainant or litigant. You
shall promptly notify Us of any NASD, federal or state inquiry,
investigation or proceeding, or litigation that has been initiated against
any of Your Selling Firms or their Producers concerning any matter related
to this Agreement, however, this requirement does not extend to matters
involving an individual retail client as a complainant or litigant.
B. Settlement by Us. Provided that We have given you notice and an opportunity
to participate according to Section 5.C. hereof, and you have declined to
participate, we reserve the right to settle any claim or complaint made by
a customer against Us concerning any conduct, act or omission by You or
Your Producers, or Your Selling Firms or their Producers. You shall, upon
our request, reimburse Us for the amount of any such settlement. Any
settlement payments You owe Us shall be reimbursed by You and will be Your
debt as described in Section 3.B.
5. Indemnification
A. By Us. We agree to hold You harmless and indemnify You against any and all
claims, liabilities and expenses which You may incur from liabilities
(including reasonable attorney fees and related expenses) arising from (i)
any acts or omissions of Us and Our employees and other associated persons,
including, but not limited to, claims by others that We have failed to
perform under any Product, or (ii) the failure or alleged failure of any
Product to comply with any applicable law or regulation.
B. By You. You agree to hold Us harmless and indemnify Us against any and all
claims, liabilities and expenses which We incur from liabilities (including
reasonable attorney fees and related expense) arising from any of Your acts
or omissions, and those of Your employees, Producers and other associated
persons including those of Your Selling Firms or their Producers.
C. Notice of Action. After receipt by an indemnified party of notice of the
commencement of any action with respect to which a claim will be made
against an indemnified party, such indemnified party shall notify the
indemnifying party promptly in writing of the commencement of the action.
The failure to so notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may otherwise have to any
indemnified party, except and to the extent the indemnifying party is
prejudiced thereby. In any such action where the indemnified party has
given the notice described in this Section 5, the indemnifying party shall
be entitled to participate in and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume
defense of the action. After notice to such indemnified party that the
indemnifying party has elected to assume defense of the action, the
indemnifying party shall not be liable to such indemnified party for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense other than reasonable costs of investigation.
6. Assignment
This Agreement shall not be assigned by any party without the written
consent of the other parties.
7. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Connecticut without regard to its conflict of laws
principles.
8. Revocation of Prior Agreements
This Agreement, and any subsequent written Amendments, Exhibits and
Schedules referring to Policies and Procedures, Compensation, and Codes
of Conduct now or subsequently attached to this Agreement, constitute
the entire agreement between the parties. This Agreement terminates and
supersedes all previous contracts, agreements or arrangements made between
the parties in connection with the Products described in this Agreement.
9. Severability
The provisions of this Agreement are severable. If any provision
of this Agreement or any amendment to it is found to be invalid,
such provision shall not affect any other provision of the
Agreement that can be given effect without the invalid provision.
10. Amendments
A. We reserve the right to amend this Agreement or any Schedule or Exhibit
attached hereto (except those specifically requiring mutual consent) at any
time. An amendment to the Agreement shall be effective thirty (30) days
from the date notice is given to You, unless You and We agree to an earlier
effective date. Amendments to Schedules and Exhibits shall be effective
without Your approval.
B. No amendment made by You shall be effective unless it is agreed to in
writing by Us.
11. Waiver
Failure of any party to require performance of any provision of this
Agreement shall not constitute a waiver of that party's right to
enforce such provision at a later time. Waiver of any breach of any
provision shall not constitute a waiver of any succeeding breach.
12. Termination
A. This Agreement shall immediately terminate:
(i) If You are dissolved, liquidated, or otherwise cease business operations;
(ii)If You fail, in Our judgment, to comply with any of Your obligations under
this Agreement in material respect;
(iii)If Insurance Agency's state insurance license or appointment required
under state insurance laws to offer the Product is revoked, suspended or
otherwise terminated by any state or other jurisdiction so as to render
You, in Our opinion, unable to perform Your obligations pursuant to this
Agreement;
(iv)If Broker-Dealer's SEC, state or NASD registration or membership is
suspended, terminated or otherwise restricted so as to render You, in Our
opinion, unable to perform Your obligations pursuant to this Agreement; or
(v) If You refuse to accept an amendment made in accordance with Section 10.
B. The termination date of this Agreement for any of the circumstances set
forth in section l2.A shall be the date of occurrence.
C. Notwithstanding the provisions of Section 12.A., any party shall have the
right to terminate this Agreement, with or without cause, for any reason.
Termination in accordance with this Section 12.C. shall be effective thirty
(30) days from the date notice is given by the terminating party. However,
You may terminate this Agreement immediately upon notice to Us if Your
reason for termination is Your unwillingness to accept any amendment to
this Agreement made by Us pursuant to Section 10.A.
D. Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except the provisions set forth in Sections 2.J,
2.K, 3.B, 3.C, 4, and 5 and 12E.
E. You shall not, for a period of twelve (12) months from the date of
termination of this Agreement, directly or indirectly, attempt to
replace or otherwise cause the termination, surrender, partial
surrender or loan from any of the Products sold by You or your
Producers. During the term of this Agreement and for twenty-four (24)
months thereafter, You agree not to induce or attempt to induce,
directly or indirectly, any National Marketing Firm, Selling Firm,
Producer, employee or agent to terminate their employment or business
relationship with Us or otherwise interfere with such employment or
business relationship. In the event of breach or threatened breach of
this Section, We shall, in addition to any other available remedies,
be entitled (without bond) to injunctive relief, as well as costs and
reasonable attorneys fees.
F. This Agreement shall terminate if at the end of any two consecutive
calendar years, for any reason, You are not credited with the level of
commissions necessary to meet Our minimum production requirement for each
such year as announced by Us during the prior calendar year.
G. Unless otherwise agreed in writing, termination of this Agreement
shall not terminate the Selling Agreements between Us and Your Selling
Firms.
13. Notice
Unless otherwise specifically noted herein, notice required by the terms of
this Agreement or any attachment hereto, shall be valid if in writing
and hand delivered, or sent by United States mail postage prepaid,
overnight delivery service or facsimile transmission to the other
parties at the address provided below such parties' signatures to this
Agreement.
14. Force Majeure
No party to this Agreement shall be responsible to the other for delays
or errors in their performance or other breach under this Agreement
occurring solely by reason of circumstances beyond their control,
including acts of civil or military authority, national emergencies,
fire, major mechanical breakdown, labor disputes, flood or
catastrophe, acts of God, insurrection, war, riots, delays of
supplier, or failure of transportation, communication or power supply.
15. Headings
The headings in this Agreement are for reference purposes only and shall
not be deemed part of this Agreement or affect its meaning or
interpretation.
16. Counterparts
This Agreement may be executed in any number of counterparts, all of which,
taken together, shall constitute one agreement, and any party hereto may execute
this Agreement by signing any such counterpart.
17. Arbitration
Any claim or controversy arising out of or relating to this Agreement shall be
subject to arbitration according to the Code of Arbitration Procedures of the
National Association of Securities Dealers then in effect. There shall be three
arbitrators. Each party shall select one arbitrator and the two arbitrators
selected shall mutually agree upon a third arbitrator. Cost of the arbitration
may be awarded in the discretion of the arbitrators. The award of the
arbitrator or arbitrators shall be final and binding, and judgment on the award
may be entered by any court having jurisdiction.
18. Insurance Coverage
Upon our request, You and Your Producers and agents shall provide
us with evidence of errors and omissions coverage and a fidelity
bond.
19. Compliance with Xxxxx-Xxxxx-Xxxxxx Act Title V Privacy
A. In entering into and performing under this Agreement, each
party may acquire or may be provided certain consumer
nonpublic personal information protected by Xxxxx-Xxxxx-Xxxxxx
Act Title V Section 502(b)(2) and its implementation
regulations.
B. Each party warrants to the other party that it will not disclose or use
such consumer nonpublic personal information for any purposes other than:
(i) to fulfill the contractual purposes for which it was provided the
information; and (ii) as may be permitted pursuant to Sec. 502(e) of the
G-L-B Act and applicable federal implementation regulations (e.g., SEC
Reg. S-P, Sections 248.14-15), such as to process the transaction
customers have requested, or as may be required by law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, it being effective on the date executed by Sage.
SAGE LIFE ASSURANCE OF AMERICA, INC.
By: _______________________ Date: ______________________
Name: Lincoln X. Xxxxxx
--------------------
Title: Executive Vice President
----------------------------
Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
SAGE DISTRIBUTORS, INC.
By: ______________________ Date: ______________________
Name: Lincoln X. Xxxxxx
--------------------
Title: President
-------------------
Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
_____________________________ [National Marketing Firm]
By: _________________________ Date: ______________________
Name: ______________________
Title: ______________________
Address: _____________________
_____________________________ [Insurance Agency]
By: _________________________ Date: ______________________
Name: ______________________
Title: ______________________
Address: _____________________
____________________________ [Affiliated Broker-Dealer]
By: _________________________ Date: ______________________
Name: ______________________
Title: ______________________
Address: _____________________
