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Exhibit (A)(3)(a)(i)
DISTRIBUTION AGREEMENT
AGREEMENT made this 11th day of August, 1987 between The Manufacturers
Life Insurance Company of America ("ManuLife America") a stock life insurance
company domiciled in the Commonwealth of Pennsylvania, on its own behalf and on
behalf of Separate Account Four ("Account") of ManuLife America and ManEquity,
Inc., ("ManEquity"), a Colorado corporation;
WITNESSETH
WHEREAS, the Account is an account established and maintained by
ManuLife America pursuant to the laws of the Commonwealth of Pennsylvania for
flexible premium variable life insurance policies issued by ManuLife America
(the "Policies"), under which income, gains and losses, whether or not realized,
from assets allocated to such account, are, in accordance with the Policies,
credited to or charged against such account without regard to other income,
gains, or losses of ManuLife America;
WHEREAS, ManuLife America has filed a registration statement for the
Account as a unit investment trust under the Investment Company Act of 1940 (the
"Investment Company Act");
WHEREAS, ManEquity is registered as a broker-dealer under the
Securities Exchange Act of 1934 ("Securities Exchange Act") and is a member of
the National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, ManuLife America has filed a registration statement for the
policies under the Securities Act of 1933 (the "Securities Act") and proposes to
issue and sell the Policies through the Account to the public through ManEquity
acting as principal underwriter for the Account;
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NOW, THEREFORE in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
parties do hereby agree as follows:
Section 1. Principal Underwriter
(a) Appointment.
ManuLife America grants to ManEquity the exclusive right during the
term of this Agreement, subject to the registration requirements of the
Securities Act and the Investment Company Act and the provisions of the
Securities Exchange Act, to be the distributor and principal underwriter of the
Policies issued through the Account in each state or other jurisdiction where
the Policies may legally be sold, including any supplementary benefits which
ManuLife America may make available in connection therewith. ManEquity shall
offer the Policies for sale and distribution at premium rates to be set by
ManuLife America.
(b) Responsibilities.
ManEquity will assume full responsibility for the securities activities
of, and for securities law compliance by, its associated persons, (as that term
is defined in Section 3(a)(18) of the Securities Exchange Act) including, as
applicable, compliance with the NASD Rules of Fair Practice and Federal and
State Laws and Regulations. ManEquity, directly or through ManuLife America as
its agent, will:
(i) make timely filings with the SEC, NASD, and other
regulatory authorities, of any sales literature or materials relating to the
Account, as required by law to be filed; and
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(ii) make available to ManuLife America copies of any
agreements or plans intended for use in connection with the sale of the Policies
in sufficient number and in adequate time for clearance by the appropriate
regulatory authorities before they are used, and it is agreed that the parties
will use their best efforts to obtain such clearance by the appropriate
regulatory authorities before they are used and that the parties will use their
best efforts to obtain such clearance as expeditiously as reasonably possible.
ManEquity will train the associated persons, use its best efforts to
prepare them to complete satisfactorily any and all applicable NASD and state
qualification examinations, register the associated persons as its registered
representatives before they engage in securities activities, and supervise and
control them in the performance of such activities.
ManEquity shall be under no obligation to effectuate any particular
amount of sales of Policies or to promote or make sales, except to the extent
ManEquity deems advisable or to the extent otherwise mutually agreed to by
ManEquity and ManuLife America.
Section 2. Dealer Agreements.
(a) Authority
ManEquity is hereby authorized to enter into separate written dealer
agreements, on such terms and conditions as ManEquity may determine not
inconsistent with the Agreement, with organizations which agree to participate
in the distribution of the Policies and to use their best efforts to solicit
applications for the Policies. Such organizations and their agents or
representatives soliciting applications for Policies shall be duly and
appropriately licensed, registered or otherwise qualified for the sale of such
Policies (and the riders and other policies offered in connection therewith)
under the Insurance Laws and any applicable Blue Sky Laws of each state or other
jurisdiction in which such Policies may be lawfully sold and in which ManuLife
America is licensed to
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sell the Policies. Each such organization shall be both registered as a
broker/dealer under the Securities Exchange Act and a member of the NASD, or if
not so registered or not such a member, then the agents and representatives of
such organization soliciting applications for the Policies shall be agents and
registered representatives of a broker/dealer and NASD member which is the
parent of such organization and which maintains full responsibility for the
training, supervision, and control of the agents or representatives selling the
Policies.
(b) Responsibilities.
ManEquity shall have the responsibility for the supervision of all such
organizations to the extent required by law and shall assume any legal
responsibilities of ManuLife America for the acts, commissions, or defalcations
of any such organizations. Applications for the Policies solicited by such
organizations through their agents or representatives shall be forwarded to
ManEquity. All payments for the Policies shall be made by check to ManuLife
America and remitted promptly by such organizations to ManEquity.
Section 3. Payments and Costs.
In connection with the sale of the Policies, ManEquity is responsible
for all amounts (including the sales commissions described in the prospectus for
the Policies) due to the sales representatives or to broker/dealers who have
entered into dealer agreements with ManEquity.
(b) As between ManuLife America and ManEquity, ManuLife America will
bear the cost of all services and expenses, including legal services and
expenses and registration, filing and other fees, in connection with:
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(i) registering and qualifying the Account, the Policies and
(to the extent requested by ManEquity) the associated persons with Federal and
state regulatory authorities and the NASD, and (ii) printing and distributing
all registration statements and prospectuses (including amendments), Policies,
notices, periodic reports, proxy solicitation material, sales literature and
advertising filed or distributed in connection with the sale of the Policies.
Section 4. Life Insurance Agents.
(a) ManEquity is authorized to appoint the organizations described in
Section 2(a) above as independent general agents of ManuLife America for the
sale of the Policies and any supplementary benefits or policies in connection
therewith. ManuLife America will undertake to apply for life insurance agent
licenses in the appropriate states or jurisdictions of the designated agents or
representatives of those organizations so appointed by ManEquity; provided that
ManuLife America reserves the right to refuse to appoint any proposed agent, or
once appointed to terminate the same.
(b) ManuLife America retains the right to appoint and discharge any
life insurance agents, general agents or organizations appointed by ManuLife
America.
(c) Anyone or any party selling the Policies must be duly licensed
insurance producers. ManuLife America shall have the responsibility for
arranging for such licenses.
(d) All premium funds collected by ManEquity or any organization
appointed by ManEquity pursuant to Section 2(a) above, or their representatives,
shall be held at all times in a fiduciary capacity and promptly be forwarded to
ManuLife America. ManEquity will advise ManuLife America of the amount of gross
premiums received.
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Section 5. Suitability.
(a) ManuLife America wishes to ensure that the Policies distributed by
ManEquity will be issued to purchasers for whom the Policy will be suitable.
ManEquity shall take reasonable steps to ensure that the various agents
appointed by it or by organizations appointed by ManEquity pursuant to 2(a)
above shall not make recommendations to an applicant to purchase a Policy and
shall not issue a Policy in the absence of reasonable grounds to believe that
the purchase of the Policy is suitable for such applicant. ManEquity shall
adhere to the Standards of Suitability for the Policy adopted by ManuLife
America. The Standards of Suitability are set forth in Schedule A, which
schedule is incorporated herein. While not limited to the following, a
determination of suitability shall be based on information furnished to an agent
after reasonable inquiry of such applicant concerning the applicant's insurance
and investment objectives, financial situation and needs, and the likelihood
that the applicant will persist with the Policy for such a period of time that
ManuLife America's acquisition costs are amortized over a reasonable period to
time.
(b) ManuLife America, however, retains the ultimate right of control
over and responsibility for, marketing the Policies.
(c) ManuLife America also retains the right to reject applications for
the Policies and maintains responsibility for all insurance underwriting aspects
in connection with such applications.
Section 6. Promotion Materials.
ManEquity shall have the responsibility for consulting with respect to
the design and the drafting and legal review and filing of sales promotion
materials, and for the preparation of individual sales proposals related to the
sale of the Policies. All sales and
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promotional materials for the Policies must first be reviewed and approved by
ManuLife America. ManEquity and any organization appointed by ManEquity pursuant
to Section 2(a) above shall not give any information or make any representations
concerning any aspect of the Policies or ManuLife America's operations to any
person or entity unless such information or representations are contained in the
prospectuses for the Policies, or are contained in sales or promotional
materials approved by ManuLife America.
Section 7. Reports.
ManEquity shall have the responsibility for: maintaining the records of
agents licensed, registered and otherwise qualified to sell the Policies;
calculating and furnishing periodic reports to ManuLife America of the
commissions and service fees payable to agents, brokers, general agents and
sales managers of ManuLife America and its affiliates; and for furnishing
periodic reports to ManuLife America as to the sale of Policies made pursuant to
this Agreement.
Section 8. Records.
ManEquity shall maintain and preserve such accounts, books, and other
documents as are required of it by applicable laws and regulations. The books,
accounts and records of ManuLife America, the Account and ManEquity as to all
transactions hereunder shall be maintained so as to clearly and accurately
disclose the nature and details of the transactions, including such accounting
information as necessary to support the reasonableness of the amounts to be paid
by ManuLife America hereunder. Without limiting the foregoing, ManEquity will:
(a) maintain and preserve in accordance with Rules 17a-3 and
17a-4 under the Securities Exchange Act all books and records required to be
maintained in connection with the offer and sale of the Policies, which books
and records shall remain the property of ManEquity and shall be subject to
inspection by the securities and
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Exchange Commission ("SEC") in accordance with Section 17(a) of the Securities
Exchange Act; and
(b) before or upon completion of each transaction for which a
confirmation is legally required, send a written confirmation for each such
transaction reflecting the facts of the transaction.
Section 9. Compensation.
For the services rendered, expenses assumed and the continuing
obligations set forth herein, ManEquity shall receive from ManuLife America such
amounts and at such times as may from time to time be agreed upon by ManEquity
and ManuLife America.
Section 10. Liability for Other Party.
Neither party to this Agreement shall be liable to the other for any
action taken or omitted by it, or any of its officers, agents or employees, in
performing their responsibilities under this Agreement in good faith and without
gross negligence, willful misfeasance or reckless disregard of such
responsibilities, unless otherwise mutually agreed in writing.
Section 11. Notification of Parties.
Both parties to this Agreement shall advise the other promptly of:
(a) Any action of the SEC or any authorities of any state or
other jurisdiction, of which it has knowledge, affecting registration or
qualification of the Account or the Policies, or the right to offer the Policies
for sale; and
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(b) the happening of any event which makes untrue any
statement, or which requires the making of any change, in the registration
statements or prospectuses in order to make the statements therein not
misleading.
Section 12. Investigation and Proceedings.
(a) ManEquity and ManuLife America agree to cooperate fully in
any insurance regulatory investigation or proceeding or judicial proceeding
arising in connection with the Policies distributed under this Agreement.
ManEquity and ManuLife America further agree to cooperate fully in any
securities regulatory investigation or proceeding or judicial proceeding with
respect to ManuLife America, ManEquity, their affiliates and their agents or
representatives to the extent that such investigation or proceeding is in
connection with Policies distributed under this Agreement. Without limiting the
foregoing:
(i) ManEquity will be notified promptly of any
customer complaint or notice of any regulatory
investigation or proceeding or judicial proceeding
received by ManuLife America with respect to
ManEquity or any agent or representative or which may
affect ManuLife America's issuance of any Policy
marketed under this Agreement;
(ii) ManEquity will promptly notify ManuLife America
of any customer complaint or notice of any regulatory
investigation or proceeding received by ManEquity or
its affiliates with respect to ManEquity or any agent
or representative in connection with any Policy
distributed under this Agreement or any activity in
connection with any such Policy.
(b) In the case of a customer complaint, ManEquity
and
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ManuLife America will cooperate in investigating such complaint and any response
to such complaint will be sent to the other party to this Agreement for approval
not less than five business days prior to its being sent to the customer or
regulatory authority, except that if a more prompt response is required, the
proposed response shall be communicated by telephone or fax.
Section 13. Guarantee.
ManuLife America undertakes to guarantee the performance of any
obligations ManEquity may have pursuant to Section 27(f) of the Investment
Company Act, as amended, and paragraph (b) of Rule 27d-2 adopted by the
Securities and Exchange Commission, to make refunds of charges required of the
principal underwriter of Policies issued in connection with the Account.
Section 14. Termination.
This Agreement shall terminate automatically if it shall be assigned.
This Agreement may be terminated at any time by either party hereto on 60 days'
written notice to the other party hereto, without the payment of any penalty.
Upon termination of this Agreement all authorizations, rights and obligations
shall cease except:
(a) the obligation to settle accounts hereunder, including
commissions on premiums subsequently received for Policies in effect at the time
of termination; and
(b) the agreements contained in paragraphs 11 and 12 hereof.
Section 15. Regulation.
This Agreement shall be subject to the provisions of the Investment
Company Act and the Securities Exchange Act and the rules, regulations, and
rulings thereunder and to
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the NASD, from time to time in effect, including such exemptions from the
Investment Company Act as the SEC may grant, and the terms hereof shall be
interpreted and construed in accordance therewith.
ManEquity shall submit to all regulatory and administrative bodies
having jurisdiction over the operations of the Account, present or future, any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
Section 16. Severability.
Should any portion of this Agreement for any reason be held to be void
in law or in equity, the Agreement shall be construed, insofar as is possible,
as if such portion had never been contained therein.
Section 17. Governing Law.
This Agreement shall be construed in accordance with, and governed by,
the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal by their duly authorized officers as of the date first
mentioned above.
Attest: THE MANUFACTURERS LIFE INSURANCE
COMPANY OF AMERICA
______________________________ By: _______________________________
Its: ______________________________
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Attest: MANEQUITY, INC.
______________________________ By: _______________________________
Its: ______________________________