MARKETING AGREEMENT
This Marketing Agreement is made and entered into and effective as of May 29,
1998, by and between Transamerica Life Insurance and Annuity Company
("Transamerica"), a North Carolina corporation, and Legacy Marketing Group
("LMG"), a California corporation, based on the following facts:
A. Concurrently herewith, LMG and Transamerica are entering into a certain
Administrative Services Agreement pursuant to which certain insurance
business is to be administered by LMG.
B. The objective of this Agreement is to provide an arrangement to sell
certain policies ("Policies") of Transamerica as specified in APPENDIX A.
C. Transamerica desires to appoint LMG to recruit, train, and appoint
Wholesalers and Producers in the sale of certain Policies issued by
Transamerica as specified in APPENDIX A. Wholesalers and Producers are
those licensed insurance agents contracted with LMG to sell Transamerica
products.
Based on the foregoing facts, LMG and Transamerica agree as follows:
1. APPOINTMENT OF LMG AND SCOPE OF AUTHORITY
1.1 Transamerica hereby appoints LMG to recruit, train, and appoint
Wholesalers and Producers in the solicitation of the Policies in the
geographic territory specified in APPENDIX A (the "Territory").
1.2 LMG is appointed by Transamerica for the purpose of soliciting
applications for and servicing the Policies referenced in APPENDIX A
and otherwise transacting the business of this Agreement. LMG accepts
such appointment and agrees to comply with all applicable laws and
regulations, and to diligently devote itself to the business of this
appointment in order to sell the Policies referenced in APPENDIX A as
well as prevent the termination of such Policies through conservation
procedures mutually agreed upon by Transamerica and LMG.
1.3 LMG shall cause each new Wholesaler and Producer to enter into
Wholesaler and Producer Agreements in the form shown in APPENDIX C.
Transamerica will not be a party to the Wholesaler and Producer
agreements and shall have no obligation or liability thereunder. If
such a Wholesaler or Producer Agreement is modified by LMG, LMG will
provide Transamerica with copies, within ten (10) business days of
such modifications. LMG shall file appointments of Wholesalers and
Producers in the appropriate states' insurance departments and other
jurisdictions. LMG will report weekly to Transamerica a list of
current appointments, adding new appointments and terminations from
the list each week. Consideration for such appointments and
terminations is provided for in the Administrative Services Agreement,
executed concurrently herewith this Marketing Agreement.
1.4 It is understood and agreed that LMG is an independent contractor and
nothing herein shall be construed to create the relationship of
employer or employee between Transamerica and LMG or between
Transamerica and any officer, employee, Wholesaler, Producer or other
associated person of LMG. Neither LMG nor any Wholesaler or Producer
has authority to incur any liability on behalf of or to bind
Transamerica in any way or change its rights, duties, or obligations,
except as may be set forth in that Administrative Services Agreement
between Transamerica and LMG, executed concurrently herewith.
1.5 All Wholesalers and Producers who have been recruited and are
appointed to sell the Policies referenced in APPENDIX A by LMG shall
be identified by Transamerica as Wholesalers and Producers of LMG as
to such Policies. Any and all contracts entered into by and between
such Wholesalers or Producers with respect to such Policies shall be
coded through LMG and deemed Wholesalers and Producers of LMG.
Transamerica may terminate Transamerica's appointment of any
Wholesaler and Producer at its reasonable discretion, with prior
written agreement of LMG, such agreement shall not be unreasonably
withheld. Transamerica may not otherwise terminate, recode, or
otherwise disturb the relationship between LMG and its Wholesalers and
Producers with respect the Polices without the prior written consent
of LMG.
2. RIGHTS AND OBLIGATIONS OF TRANSAMERICA
2.1 It is acknowledged by both Transamerica and LMG that certain
obligations of Transamerica hereunder are to be performed by LMG as a
servicing organization, pursuant to the Administrative Services
Agreement between Transamerica and LMG. This does not relieve
Transamerica of any of its duties and obligations unless the specific
service is provided for in the Administrative Services Agreement,
executed concurrently herewith, whereby LMG has explicitly
acknowledged the responsibility of the service.
2.2 APPENDIX B will provide for the compensation payable to LMG from
Transamerica. APPENDIX B will be amended to conform with each new
product specification as it is developed and finalized.
APPENDIX B will be amended as new products are finalized. Such
amendment will be drafted by LMG, subject to Transamerica's written
approval, fifteen (15) days prior to the date on which Wholesalers and
Producers begin solicitation of the new product.
The marketing allowance of commissions may vary with the development
of each new product. Such marketing allowance will be specifically
provided for in APPENDIX B, or any subsequent amendments pertaining to
the new product.
2.3 The commissions specified in APPENDIX B shall be modified whenever
necessary to conform to the legal requirements of any state.
Furthermore, Transamerica reserves the right to withdraw its Policies
from any state or other jurisdiction, with 180 days written notice to
LMG, unless mandated by any law, regulation, regulatory agency or
court of law to do so immediately.
2.4 Transamerica shall have sole responsibility for filing advertising
materials, pertaining to the business underwritten by Transamerica, in
those states that so require prior to approving their use by LMG. All
costs associated with such filings will be the responsibility of
Transamerica.
2.5 LMG shall have no authority, nor shall it represent itself as having
such authority, other than as specifically set forth in this
Agreement. Without limiting the generality of the foregoing sentence,
LMG specifically agrees that it will not do any of the following
without the prior written consent of Transamerica:
(i) Litigation: Institute or prosecute any legal proceedings in
connection with any matter pertaining to the offering and/or sale
of the Policies identified in APPENDIX A or Transamerica's
business or accept service of process on behalf of Transamerica.
(ii) Alterations: Waive, amend, modify, alter, terminate or change any
term, provision or condition stated in any Policy Form or
discharge any contract in the name of Transamerica.
(iii)Advice to Policyholders/Prospective Policyholders: Offer tax,
legal, or investment advice to any policyholder or prospective
policyholder of Transamerica under any circumstances, with
respect to a Policy.
2.6 Agent Initial Appointment Fees--Transamerica shall be responsible for
payment of LMG's Wholesaler and Producer resident initial appointment
fees for such Wholesalers and Producers who have satisfied LMG's and
Transamerica's agreed upon selection and compliance criteria. In
addition, LMG will provide for Transamerica an annual projected number
of anticipated new initial Wholesaler and Producer appointments and
must receive Transamerica's approval of this number in order to
receive such initial resident fee payments. LMG's Wholesalers and
Producers will be responsible for any non-resident initial appointment
fees. Such non-resident appointment requirements will comply with
Transamerica's policies and procedures in effect as of the execution
of this Agreement. If Transamerica changes such policies and
procedures, the responsibility for payment of such non-resident
initial appointment fees will be mutually agreed by both LMG and
Transamerica.
Agent Renewal Appointment Fees--Transamerica will be responsible for
payment of LMG's Wholesaler and Producer resident renewal appointment
fees for contracted Wholesalers and Producers provided such
individuals have produced new first year commission business during
the prior twelve (12) months preceding the renewal date. The
Wholesalers and Producers will be responsible for any non-resident
renewal appointment fees. Such non-resident appointment requirements
will comply with Transamerica's policies and procedures in effect as
of the execution of this Agreement. If Transamerica changes such
policies and procedures, the responsibility for payment of such
non-resident renewal appointment fees will be mutually agreed by both
LMG and Transamerica.
Agent Termination Fees--Transamerica will be responsible for LMG's
Wholesaler and Producer Appointment termination fees in the states
which mandate such fees.
3. MODIFICATION AND TERMINATION OF AGREEMENT
3.1 This Agreement may be modified or amended at any time by mutual
agreement of the parties, provided the modification or amendment is in
writing, signed by authorized personnel, as provided in APPENDIX D of
this Agreement.
3.2 The termination of this Agreement is governed by the following
provisions:
(a) LMG or Transamerica may terminate this Agreement with or without
cause by twelve (12) months written notice to the other, sent by
mail. This Agreement may be terminated by mutual agreement of the
parties in writing at any time. LMG and Transamerica shall
provide fifteen (15) days' written notice of termination or
cancellation of this Agreement to the appropriate Departments of
Insurance. LMG and Transamerica shall fulfill any lawful
obligations with respect to such policies affected by this
Agreement, regardless of any dispute between LMG and
Transamerica.
(b) In the event that any state insurance department withdraws or
cancels LMG's license (or the license of the individual who is
acting on behalf of LMG in such states that do not permit the
licensing of corporations), or right to sell or conduct its
business, LMG will stop its marketing activity under this
Agreement in that state and notify Transamerica. Transamerica may
terminate the authority of LMG with regard to such affected
Policies which termination of authority shall be effective
immediately.
(c) LMG shall provide Transamerica ninety (90) days prior written
request if LMG desires to increase its fees or charges to
Transamerica or to change the manner of payment or to change any
of the other terms of this Agreement. Transamerica must respond
in writing to such request within sixty (60) days of receipt.
Transamerica reserves the right to re-price any products or
mandate the sale of affected products be ceased if LMG's proposed
changes affects Transamerica's profitability of its products.
(d) If either of the parties hereto shall materially breach this
Agreement or be materially in default in the performance of any
of its duties and obligations hereunder (the defaulting party),
the other party hereto may give written notice thereof to the
defaulting party and if such default or breach shall not have
been remedied within forty-five (45) days after such written
notice is given, then the party giving such written notice may
terminate this Agreement by giving thirty (30) days written
notice of such termination to the defaulting party.
(e) Notwithstanding anything herein to the contrary, Transamerica or
LMG may immediately terminate this Agreement with cause, upon
written notice to the other. Cause is generally defined as
fraudulent, criminal, unethical activity or blatant disregard for
the terms and conditions of this Agreement, however this list is
not exhaustive.
(f) Termination of this Agreement by default or breach by
Transamerica shall not constitute a waiver of any rights of LMG
in reference to services performed prior to such termination;
termination of this Agreement by default or breach by LMG shall
not constitute a waiver by Transamerica of any other rights it
might have under this Agreement.
(g) Termination of this Agreement does not affect in any way the
Administrative Services Agreement executed concurrently herewith.
4. RIGHTS AND OBLIGATIONS OF LMG
4.1 At all times during the term of this Agreement, LMG (or the licensed
individual who is acting on behalf of LMG in such states that do not
permit the licensing of corporations) and all Wholesalers and
Producers shall be properly licensed with each state or other
jurisdiction and properly appointed with Transamerica in each state or
other jurisdiction within the Territory before engaging in any
activity which under the laws of such state or other jurisdiction
makes such licensing and appointment necessary. Without limiting the
generality of the foregoing, all such Wholesalers and Producers shall
at all times bear the cost of maintaining all licenses required by any
such state.
4.2 LMG will itself and will communicate to and cause each Wholesalers and
Producer to use only forms, applications, advertising (as such term is
generally defined by the regulation of the state or other jurisdiction
in which Policies, referenced in APPENDIX A, are solicited), office
procedures, guides and rules furnished, authorized or promulgated by
Transamerica and agreed to by both parties and in each state or other
jurisdiction where any Wholesalers or Producer solicits Policies,
referenced in APPENDIX A,. No written advertising or sales materials
of any kind, including sales illustrations, or recruiting material
referencing the Policies, referenced in APPENDIX A, of Transamerica
shall be authorized by LMG until after it has been approved in writing
by Transamerica. LMG will provide such materials with sufficient
lead-time to allow appropriate review by Transamerica. Transamerica
will then use its best efforts to provide a timely response within
five (5) business days. No oral presentation of any kind shall be
authorized by LMG which does not conform to applicable statutes and
regulations or which does not accurately reflect the terms and
conditions of the Policies, referenced in APPENDIX A, being sold. All
recruiting practices of LMG shall comply with all applicable laws,
ordinances, and regulations of the appropriate authorities.
Transamerica shall be responsible for the maintenance of the
advertising files and logs, as mandated by applicable laws and
regulations.
4.3 LMG agrees to provide insurance coverages as appropriate and agreed to
by Transamerica.
(a) LMG will possess an adequate fidelity bond for any losses caused
by the dishonesty of LMG's employees or agents (not Wholesalers
or Producers) with limits of at least $3 million. LMG will also
maintain a surety bond(s) as so required in the states which it
is compelled to do so. LMG will file such bond, if so required,
with the appropriate agency. The bond shall be executed by a
corporate insurer authorized to transact business in the states
which mandate the maintenance of such bond.
(b) LMG will possess and maintain at all times errors and omissions
coverage with a limit of not less than $2 million written by an
insurer authorized to transact business in the states which
mandate the maintenance of such insurance. Such coverage will
comply with the requirements of the states in which such
insurance coverage is required.
(c) LMG will possess and maintain commercial, general and liability
insurance with limits of not less than $1 million per occurrence
combined single limit. Transamerica shall be named as an
additional insured and such coverage shall be primary with
respect to any other insurance maintained by Transamerica.
(d) LMG will make available and encourage the purchase of a group
Errors and Omissions plan with a limit of at least $1 million per
Wholesaler and Producer.
(e) The above insurance coverages shall be provided by insurance
companies with a minimum Best's rating A- or otherwise acceptable
to Transamerica. Any deductible or self insured retention must be
declared to and accepted by Transamerica in its reasonable
discretion. Each insurance policy required by this contract shall
be endorsed to state that coverage can not be materially changed
except after thirty (30) days prior notice by mail (10 days in
the event of non-payment of premium) has been given to
Transamerica. LMG shall provide Transamerica with certificates of
insurance and/or endorsements evidencing the above coverage
within fifteen (15) days of each insurance policy renewal and
within sixty (60) days of execution of this Agreement.
4.4 Each party shall be excused from performance for any period and to the
extent that the party is prevented from performing any services, in
whole or in part as a result of delays caused by an act of God, war,
civil disturbance, court order, labor dispute, or other cause beyond
that parties reasonable control, including failures or fluctuations in
electrical power, heat, light, air conditioning, or telecommunications
equipment and such non-performance shall not be a default or a ground
for termination. Notwithstanding the above, LMG agrees that it will
establish and maintain reasonable recovery steps, including technical
disaster recovery facilities, uninterruptable power supplies for
computer equipment and communications and that as a result thereof LMG
will use its best efforts to ensure that the Computer System shall be
operational within 48 hours of a performance failure. Within ninety
(90) days of the execution of this Agreement, LMG will establish a
general business recovery plan. Such plan will include, at a minimum,
procedures for answering calls; processing premium and on-line
operation of LMG's administrative systems. A comprehensive business
recovery plan will be implemented prior to December 31, 1998. LMG will
forward copies of both plans to Transamerica for their records. LMG
will provide for the off-premises site for storage of backup software
for the operating systems and data files.
4.5 LMG may rely on instructions of any person indicated on Transamerica's
"Schedule of Authorized Personnel," attached hereto as APPENDIX D.
Each of such persons is authorized to give instructions under this
section with respect to any matter arising in connection with this
Agreement. LMG shall not be liable for, and shall be indemnified by
Transamerica against, any loss arising from any action taken or
omitted by LMG in good faith in reliance upon such instructions.
4.6 Transamerica shall immediately, within five (5) business days, provide
LMG with written notice of any change of authority of persons
authorized and enumerated in APPENDIX D to provide LMG with
instructions or directions relating to services to be performed by LMG
under this Agreement.
4.7 In the event malfunction of the LMG systems, used in the offering
and/or sale of Polices specified in APPENDIX A, causes an error or
mistake in any record, report, data, information or output under the
terms of this Agreement, LMG shall at its expense correct and
reprocess such records. LMG will reimburse Transamerica for any costs
and/or expenses associated with such error or mistake. In the event
Transamerica discovers any such errors or mistake it shall, within
three (3) business days after discovery, notify LMG in writing of such
error or mistake in any record, report, data, information or output
received by Transamerica.
4.8 LMG is responsible for the payment to Transamerica of all monies which
LMG collects on behalf of Transamerica. However, until Transamerica
receives all monies due, the same shall be a debt payable by the
debtor upon demand for which Transamerica may at its option offset
with commissions otherwise due until such liability is satisfied. Any
indebtedness to Transamerica or its affiliates or subsidiaries shall
be a first lien against monies otherwise due under this Agreement. LMG
shall be responsible for all commission debit balances with the
exception of:
(i) Transamerica will consider sharing of these expenses on a case by
case basis, and such sharing of the expense will be mutually
agreed upon by both parties. Transamerica will only consider such
a request after reasonable collection efforts by LMG.
(ii) Commission debit balances resulting from any actions of law or
regulation, regulatory agency or court of law. Transamerica shall
be responsible for these debit balances once they are deemed to
be uncollectable after reasonable collection efforts by LMG.
4.9 LMG, in performance of its marketing obligations and duties, will not
itself and will use its best efforts to prevent Wholesalers or
Producers appointed hereunder, in the performance of their obligations
and duties hereunder, from any of the following:
(a) Enter into any agreement or incur any obligation on behalf of
Transamerica, except with its written permission, or commit
Transamerica to:
(i) pay any money to any such Wholesalers, Producer or employee,
or
(ii) a date that a payment will be made.
(b) Assign this Agreement or any compensation, other than commissions
payable to Wholesalers and Producers, payable under it without
the prior written consent of Transamerica.
(c) Solicit applications for Transamerica in any manner prohibited by
or inconsistent with the provisions of this Agreement or the
rules and regulations mutually agreed by both parties, now or
hereafter in force.
(d) With respect to any Policy,
(i) make any alterations, modifications or endorsements or
otherwise alter Transamerica 's obligations as stated in the
Policy, as referenced in APPENDIX A;
(ii) collect or receive any premiums after the initial premium,
except as may be required in the Administrative Services
Agreement executed concurrently herewith, between
Transamerica and LMG;
(iii)adjust or settle any claim; except as provided for in the
Administrative Services Agreement, executed concurrently
herewith.
(e) Initiate any civil or criminal action or proceeding, whether or
not brought in the name of Transamerica, which may in any way
involve or affect Transamerica, its affiliates, their business,
operations, or any Policy, as referenced in APPENDIX A, issued by
Transamerica.
(f) Use or authorize the use of any written, oral or visual
communication, circular, advertisement or other publication:
LMG agrees that it will not place into use, or distribute to any
person, any advertising, sales material or other document
(including, without limitation, illustrations, telephone scripts
and training materials) referring directly or indirectly to
Transamerica or its Policies, or cause, authorize or permit any
person to do so, without Transamerica's prior written consent.
LMG agrees that it will not use the name of Transamerica on any
business card, letterhead or marquee or in any directory listing,
or in any other manner, or cause, authorize or permit any
producer or other person to do so, without our prior written
consent. LMG agrees that it will not, nor will LMG knowingly
permit its Wholesalers and/or Producers to misrepresent
Transamerica or its Policies, as referenced in APPENDIX A, and
will make no oral or written representation which is inconsistent
with the terms of such policies or sales literature or is
misleading in any way, or refer to any insurance company tending
to bring it into disrepute.
(g) Knowingly or willfully violate the insurance laws or the
regulations of the Insurance Department of any State or any other
jurisdiction in which LMG represents Transamerica.
(h) Knowingly or willfully misapply or embezzle funds of Transamerica
or any other person or entity.
(i) Knowingly or willfully perpetrate any fraud against Transamerica
or any other person or entity.
4.10 LMG agrees that the compensation payable pursuant to Section 2.2 shall
be accepted by it as full compensation from Transamerica for its
marketing services hereunder, except as otherwise agreed by mutual
consent of LMG and Transamerica.
4.11 LMG will be solely responsible for any commissions to be paid to its
Wholesalers or Producers, which are earned as a result the selling of
Transamerica products through LMG.
5. HOLD HARMLESS AND INDEMNIFICATION
5.1 Transamerica shall not be responsible for and LMG shall indemnify and
hold Transamerica harmless from and against, any and all costs,
expenses, losses, damages, charges, counsel fees, payments, and
liability which may be asserted against Transamerica or for which it
may be held liable, caused by:
(a) LMG's refusal or material failure to comply with the terms of
this Agreement;
(b) LMG's gross negligence or gross misconduct, or material breach of
any representation or warranty of LMG hereunder.
(c) LMG's failure to comply with federal, state or local laws or
regulations, in the performance of its obligations hereunder
(except for any such failure which results from LMG's following
directions or instructions from Transamerica).
(d) Liability which arises primarily out of instructions which
Transamerica receives from LMG with respect to the subject matter
of this Agreement (to the extent that LMG is required to instruct
and/or direct Transamerica in the performance of Transamerica's
duties under this Agreement, and Transamerica reasonably relies
on such instructions).
5.2 LMG shall not be responsible for and Transamerica shall indemnify and
hold LMG harmless from and against, any and all costs, expenses,
losses, damages, charges, counsel fees, payments, and liability which
may be asserted against LMG or for which it may be held liable, caused
by:
(a) Transamerica's refusal or material failure to comply with the
terms of this Agreement;
(b) Transamerica's gross negligence or gross misconduct, or material
breach of any representation or warranty of Transamerica
hereunder;
(c) Transamerica's failure to comply with federal, state or local
laws or regulations in the performance of its obligations
hereunder;
(d) Any aspect of LMG's method of processing, servicing, and
marketing the policies referenced in APPENDIX A if Transamerica
has given LMG specific, written approval of such aspect of such
method of processing, servicing and marketing such policies. For
purposes of the foregoing, the description of any aspect of the
method of processing, servicing, and marketing such policies set
forth in APPENDIX C of the Administrative Services Agreement
shall be considered to be written approval by Transamerica of
such aspect. Additionally, LMG may, from time to time, request
Transamerica's written approval of some aspect of LMG's method of
processing, servicing, and marketing the policies. In such event,
Transamerica shall respond to such request with Transamerica's
written approval or disapproval within 14 business days or, if
applicable, such shorter period as LMG shall notify Transamerica
as necessary to enable compliance with any law or regulation or
any provision of this Agreement or the Administrative Services
Agreement. Any such request for approval from LMG to Transamerica
under this Section 5.2(d) shall (a) include notice to
Transamerica of the time in which Transamerica is required to
respond, (b) include a statement that Transamerica's approval is
requested pursuant to this Section 5.2(d) of this Agreement and
(c) shall be directed to one of the authorized personnel listed
in APPENDIX D of this Agreement.
(e) Transamerica's errors and/or mistakes in its use of LMG computer
software or computer hardware or its use of the control
procedures pertaining to such computer software or computer
hardware;
(f) Liability which arises primarily out of instructions which LMG
receives from Transamerica with respect to the subject matter of
this Agreement (to the extent that Transamerica instructs and/or
directs LMG in the performance of LMG's duties under this
Agreement and LMG reasonably relies on such instructions;
(g) Any failure of the policy features, policy forms, advertising
materials, or any governmental filings made by Transamerica, to
comply with applicable law, including but not limited to any
state or federal insurance or securities laws.
5.3 If any claim is made by a party which would give rise to a right or
indemnification under Sections 5.1 and 5.2, the party entitled to
indemnification (the "Indemnified Party") promptly will give notice of
the claim to the party required to provide indemnification (the
"Indemnifying Party"). The Indemnifying Party shall have the right, at
its option and its own expense and by its own counsel, to participate
in the defense of any such indemnified claim for which indemnification
is provided by this Agreement. Notwithstanding the foregoing, the
Indemnifying Party shall not have the right to control or represent
the Indemnified Party in the defense of any claim.
5.4 The provisions of this Agreement shall not be construed to require any
party to be indemnified or held harmless for such party's own
negligence.
5.5 The indemnification provision of Sections 5.1 and 5.2 of this
Agreement shall not be construed to restrict or limit any
indemnification provision which may be set forth in any other section
of this Agreement.
6. RIGHTS AND OBLIGATIONS OF BOTH PARTIES
6.1 Each party agrees that it will not, knowingly or willingly, directly
or indirectly, at any time during the term of this Agreement or within
five (5) years thereafter, induce or attempt to induce any
policyholder or contract holder of the other party to terminate,
reduce coverage, or replace any Policy, as referenced in APPENDIX A,
or otherwise disturb the relationship between the other party and any
of its policyholders or contract holders.
6.2 During the term of this Agreement, Transamerica agrees not to develop
any proprietary products with any current or former (within two (2)
years of termination) LMG Wholesaler or Producer without the express
written approval of LMG. Transamerica is not restricted from
developing proprietary products with any agent licensed with
Transamerica and not licensed with LMG.
6.3 Any LMG Wholesaler or Producer who desires to sell Transamerica
products not jointly developed by LMG may do so and will need to
contract directly with Transamerica. LMG will not be entitled to any
compensation on this business.
6.4 Any Agent for Transamerica who desires to sell the Transamerica--LMG
proprietary products will need to contract with LMG to sell such
product.
6.5 Transamerica and LMG agree to provide the other with ninety (90) days
written notice of any intent to make significant changes or
modifications to any contract or Policy form for products co-developed
by Transamerica and LMG. Both parties will make best efforts to
achieve a satisfactory resolution to the cause of the proposed changes
and may also agree to extend the timeframe to implement such change if
such change is pursued; unless mutually agreed upon in writing by LMG
and Transamerica.
7. PROPRIETARY AND CONFIDENTIAL INFORMATION
7.1 LMG acknowledges that certain information received from Transamerica
may be proprietary and/or confidential in nature. All such information
shall be used by the recipient solely for purposes of soliciting
Policies pursuant to this Agreement. LMG agrees to indemnify and hold
Transamerica harmless from any and all loss and expenses sustained by
Transamerica as a result of the unauthorized use of proprietary and/or
confidential information by LMG, or its Wholesalers or Producers.
7.2 Transamerica acknowledges that certain information received from LMG
may be proprietary and/or confidential in nature. All such information
shall be used by the recipient solely for purposes of soliciting
Policies pursuant to this Agreement. Transamerica agrees to indemnify
and hold LMG harmless from any and all loss and expenses sustained by
LMG as a result of the unauthorized use of proprietary and/or
confidential information by Transamerica.
8. VESTING OF RENEWAL COMMISSIONS
8.1 LMG, its successors, executors, assigns, or administrators is vested
as to commissions provided in APPENDIX B, and shall continue to
receive commissions on premiums on Policies received by Transamerica
for as long as the Policy remains in force.
9. NON-COMPETE PROVISION*
*CONFIDENTIAL TERMS HAVE BEEN REDACTED
10. GENERAL PROVISIONS
10.1 The parties agree this Agreement is an honorable undertaking, and
agree to cooperate each with the other in carrying out its provisions.
10.2 Each party will cause its employees and Wholesalers and Producers to,
upon receipt of any summons or other notice of suit or regulatory
authority inquiry wherein the other party is named in any manner,
forward any and all such documents within five (5) business days to
the attention of the other party by telefax, express or overnight
mail, or courier.
10.3 The waiver of any breach of any term, covenant or condition of this
Agreement shall not be deemed a waiver of any subsequent breach of the
same or any other term, covenant, or condition. No term, covenant, or
condition of this Agreement shall be deemed to have been waived unless
such waiver is in writing signed by the party charged therewith.
10.4 For any notice under this Agreement, notice shall be sufficient and
effective five (5) business days after deposit in the U.S. Mail,
postage prepaid, return receipt requested, or upon receipt if
delivered personally or by fax or facsimile or by a delivery service.
Such notice shall be directed as follows:
To LMG:
Legacy Marketing Group
Attn: R. Preston Pitts, President
1179 North McDowell Blvd.
Petaluma, CA 94954
To Transamerica:
Transamerica Life Insurance and Annuity Company
Attn: Ron Wagley, Senior Vice President and
Chief Agency Officer
1150 South Olive
Los Angeles, CA 90015-2211
With a copy to:
Transamerica Life Insurance and Annuity Company
Attention: General Counsel
1150 South Olive
Los Angeles, CA 90015-2211
10.5 To the extent that the Rules and Regulations do not conflict with the
terms of this Agreement, LMG and Transamerica will conform to the
rules and regulations as mutually agreed upon by LMG and Transamerica.
This provision shall not be construed to alter the relationship of the
parties as provided above.
10.6 Each party expressly represents and warrants that it has the authority
to enter into this Agreement and that it is not or will not be, by
virtue of entering into this Agreement or otherwise, in breach of any
other agreement with any other insurance company, association, firm,
person or corporation. Each party warrants that the other party will
be free from interference or disturbance in its use of all products,
advertising, marketing techniques and all information provided by the
originating party.
10.7 This Agreement shall be binding upon the successor and assignees of
Transamerica as well as upon LMG's successor and permissive assignees.
10.8 This Agreement is transferable by assignment or otherwise by either
party only with written consent of the other party.
10.9 The persons signing this Agreement on behalf of Transamerica and LMG
warrant, covenant and represent that they are authorized to execute
this document on behalf of such corporations pursuant to their bylaws
or a resolution of their board of directors.
10.10In the event of a dispute between LMG and Transamerica, Transamerica
agrees to continue to pay any commissions due to any Wholesaler or
Producer.
10.11This Agreement, including APPENDICES A, B, C and D attached and the
provisions thereof, constitute the entire agreement between the
parties. This Agreement shall be governed and construed in accordance
with the laws of the State of California. Any similar agreement signed
prior to the execution dates below is null and void and abrogated
hereby. No change, waiver, or discharge shall be valid unless in
writing and signed by an authorized representative of the party
against whom such change, waiver, or discharge is sought to be
enforced. No delay or omission by either party to exercise any right
or power shall impair such right or power or be construed as a waiver.
A waiver by either of the parties of any of the covenants to be
performed by the other or any breach shall not be construed to be a
waiver of any succeeding breach or of any other covenant.
10.12LMG shall provide reasonable access during normal business hours to
any location from which LMG conducts its business and provides
services to Transamerica pursuant to this Agreement to auditors
designated in writing by Transamerica for the purpose of performing
audits for Transamerica. Transamerica shall give reasonable advance
written notice of an audit and include in that notice the matters
which it will audit. LMG shall provide the auditors any assistance
they may reasonably require. Such auditors shall have the right during
normal business hours to audit any business record, activity,
procedure, or operation of LMG that is reasonably related to the
business marketed under this Agreement, including the right to
interview any LMG personnel involved in providing or supporting such
responsibilities.
LMG will comply with all the relevant provisions contained in
applicable state codes or statutes. If any provision of this Agreement
is in conflict with the laws of the State which governs this
Agreement, such provision will be deemed to be amended to conform with
such laws. Further, if the laws of the State which governs this
Agreement require the inclusion of certain provisions of relevant
statutes, this contract shall be deemed to be amended to conform with
such laws.
10.13LMG and Transamerica agree to inform the other of any changes its
legal structure, and of any changes in its officers or partners. LMG
and Transamerica also agree to inform the other of any transfer of its
stock or partnership interests.
10.14LMG will not use Transamerica's name, trademarks, logo, or the name
of any affiliate of Transamerica in any way or manner not specifically
authorized in writing by Transamerica.
Transamerica will not use LMG's name, trademarks, logo or the name of
any affiliate of LMG in any way or manner not specifically authorized
in writing by LMG.
Transamerica will provide to LMG electronic formats and camera ready
art of its trademark, pyramid logo, digitized officers' signatures for
use on Policy Forms and signature stamps of authorized personnel to be
used exclusively for agent appointment forms filed with regulatory or
governmental agencies. Those properties combined with the Transamerica
marks listed below:
Transamerica
TALIAC
Transamerica Life Insurance and Annuity Company
Transamerica Life and Annuity
Transamerica Life
The Pyramid Logo
make up the Transamerica marks and names ("Marks and Names") licensed
herein. Any marketing name or service mark adopted by the parties to
identify the Policy, as referenced in APPENDIX A, contemplated in this
Agreement shall be owned by Transamerica and considered one of the
Marks and Names.
As Transamerica is an owner-authorized user of those Marks and Names,
Transamerica desires to exercise control over the use of said Marks
and Names. Transamerica desires to license the Marks and Names for use
by LMG in the claims servicing, policy servicing and administrative
services outlined in this Agreement.
Accordingly the parties agree as follows:
(a) License of Marks and Names: Transamerica hereby grants a
non-exclusive license unto LMG at no cost to use the Marks and
Names solely in connection with the Services provided under this
Agreement.
(b) Manner of Use: LMG shall not use the Marks and Names in any
manner or format which differs from the electronic versions
provided by Transamerica to LMG. If LMG deems a change in format
for its limited use is necessary, a request for such change must
be submitted in writing to Transamerica for its approval. Said
request must include the version as originally supplied and the
requested change, as well as the reason such a change is
requested. Transamerica's approval of a request change shall not
be unreasonably withheld.
(c) Quality Control: LMG's usage of the Marks and Names shall be
under the quality control of Transamerica as provided herein and
shall comply with Transamerica's standards. As provided in
Section 10.12, Transamerica may conduct reasonable audits of
LMG's usage of the Marks and Names in relation to the services
provided under this Agreement to ensure compliance with the terms
set forth in this section.
(d) Indemnification: Transamerica shall protect, indemnify, defend
and hold harmless LMG from any and all liability, damages, costs
or expenses, including reasonable attorneys' fees incurred in
connection with any claim or action arising from LMG's use of the
Marks and Names, limited to causes of action sounding in state or
federal trademark infringement and/or state or federal trademark
dilution. This indemnification shall survive termination of this
Agreement.
(e) Termination: The license to use the Marks and Names shall
terminate in accordance with the provisions of Section 3. Any use
of the Marks and Names that does not comply with the terms as set
forth in this Section will be considered a default in the
performance of LMG's material duties and or obligations. Upon
termination under Section 3, LMG shall cease and desist in the
use of the Marks and Names, except for limited use in
administering and servicing Policies issued prior to the date of
termination.
10.15In no event and under no circumstances, however, shall either party
under this Agreement be liable to the other party under any provision
of this Agreement for lost profits or for exemplary, speculative,
special, punitive or consequential damages.
10.16Survival: Sections 4.4, 4.7, 5, 6.1, 8, 10.12, and 10.14 shall
survive the termination of this Agreement.
In witness whereof, the parties here to have executed this Agreement to take
effect on the effective date specified.
LEGACY MARKETING GROUP
By /s/ R. Preston Pitts
__________________________________________________________
Title President
__________________________________________________________
Date 5/29/98
__________________________________________________________
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
By /s/ William N. Scott
____________________________________________________________
Title Vice President
_________________________________________________________
Date 6/1/98
__________________________________________________________
APPENDIX A
CONFIDENTIAL TERMS HAVE BEEN REDACTED
APPENDIX B
COMMISSION AND MARKETING ALLOWANCE FEES
*CONFIDENTAL TERMS HAVE BEEN REDACTED
COMMISSION
Multi Year Guarantee Product: 5 Year Surrender Charge Schedule
Transamerica will pay LMG on the last business day of the week *% of all
premiums received by LMG during that week.
Multi Year Guarantee Product: 10 Year Surrender Charge Schedule
Transamerica will pay LMG on the last business day of the week *% of all
premiums received by LMG during that week.
The above referenced commission percentages include *% which is paid back to
the carrier at the end of each fiscal year (fiscal year begins with the first
month that any premium for the Policies referenced in APPENDIX A is received by
LMG) for the first $100 million of premium paid, net of free looks. LMG will
retain the *% on all premiums received in excess of $100 million in each
fiscal year. Such year ends the last day of the calendar month immediately
preceding the month the first premium paid is received.
If the issue age is 84 as defined in the Death Benefit Proceeds provision of the
Policies referenced in APPENDIX A, initial commissions are reduced by *%. A
monthly trail commission of *% multiplied by original commission percentage
divided by 12 of the Annuity Cash Value is paid, beginning in policy year 2.
Additional premiums will be subject to the same commission percentages as the
initial premium.
Such commission will be part of the weekly commission process and will be paid
by Transamerica to LMG by authorizing LMG to write a check to itself against the
Transamerica Disbursement account for the total weekly commission amount.
MARKETING ALLOWANCE
Transamerica will pay LMG a Marketing Allowance equal to *% of all premium
paid, net of free looks. Transamerica will pay LMG such Marketing Allowance by
wire transfer within five (5) business days of receipt of such documentation.
LMG TRAIL COMMISSION
Transamerica will pay LMG an annual rate, paid monthly, of *% of the total
Annuity Cash Value of the policies sold under this Agreement. For the purpose of
the foregoing, Annuity Cash Value is the contract's Cash Value which reflects
any applicable reductions, loans, and withdrawals. The commission is based on
the total month end Annuity Cash Value and will be paid within six (6) business
days of month end by Transamerica via wire transfer to a LMG bank account.
APPENDIX C
WHOLESALER AND PRODUCER AGREEMENTS AND/OR APPROPRIATE AMENDMENTS
APPENDIX D
SCHEDULE OF AUTHORIZED PERSONNEL
Representing Transamerica
Ron Wagley, Senior Vice President and Chief Agency Officer
Paul Norris, Vice President
Representing Legacy Marketing Group
Lynda Regan, Chief Executive Officer
R. Preston Pitts, President
Greg C. Egger, Chief Marketing Officer
David Skup, Chief Financial Officer