EXHIBIT 13(B)
AGREEMENT BETWEEN
FRANKLIN FINANCIAL SERVICES CORPORATION
AND
THE FRANKLIN LIFE INSURANCE COMPANY
THIS AGREEMENT entered into this 30th day of June 1971, by and between The
Franklin Life Insurance Company, an Illinois insurance corporation, having its
original office at Franklin Square, Springfield, Illinois (the "Company"), and
Franklin Financial Services Corporation, a Delaware corporation, having its
principal office- at Franklin Square, Springfield, Illinois ("FFSC"),
W I T N E S S E T H:
WHEREAS, the Company is engaged in the issuance of life insurance policies
and annuity contracts, pursuant to insurance laws in the District of Columbia,
Puerto Rico, and in all states of the United States except New York through its
licensed life insurance agents, and desires to issue and sell variable annuity
contracts (the "Contracts") through all or some of the said agents; and
WHEREAS, the Contracts may be deemed to be securities under the Securities
Exchange Act of 1934 (the "Act'), and applicable state laws, and the sale of
such securities may be deemed to be through an instrumentality of interstate
commerce within the meaning of Section 15(a) of the Act; and
WHERMS, FFSC is a wholly-owned subsidiary of the Company and FFSC is
registered as a broker-dealer under Section 15(b) of the Act and also is
registered as a member of the National Association of securities Dealers, Inc.
("NASD"); and
WHEREAS, it is the desire of the parties to enter into an agreement
pursuant to which certain agents of the Company who are to be authorized to sell
the Contracts will be registered representatives of FFSC ("Agents'), which will
be responsible for selecting, training, and supervising them for that purpose,
all as more particularly described herein,
NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:
1. The Company will advise FFSC of the names of the agents who are to be
authorized by the Company to sell the Contracts. FFSC will then select the
agents in the sale of variable annuity contracts and will use its best efforts
to qualify such agents under applicable federal and state laws to engage in the
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sale of the Contracts. Agents so trained and qualified will be registered
representatives of FFSC under applicable requirements of the NASD and, in
addition to all other requirements for such qualifications will be required
to.comply with applicable examination requirements before being permitted to
engage in the sale of Contracts.
2. FFSC will regularly advise the Company of the qualifications of each
Agent under applicable federal and state laws.
3. Before any Agent will be authorized to offer or sell the Contracts,
the Company, FFSC and the Agent will enter into a mutually satisfactory
agreement pursuant .to which the Agent will acknowledge that he will be a
registered representative of FFSC in connection with his selling activities
related to the Contracts, that such activities will be under the supervision and
control of FFSC and the supervisor or supervisors designated by FFSC, and that
the Agent's right to continue to sell the Contracts is subject to his continued
compliance with such agreement and all rules, procedures and standards
established by FFSC.
4. FFSC will maintain its registration under the Act and its membership
in the NASD and will fully comply with the requirements of the NASD and of
applicable law and will establish such rules and procedures as may be necessary
adequately to supervise the securities activities of the Agents. Upon request
by FFSC, the Company will furnish or require the Agents to furnish such
appropriate records as may be necessary to insure such supervision.
5. In the event any Agent fails or refuses to submit to submit
supervision of FFSC, or otherwise fails to meet the rules, procedures and
standards imposed by FPSC on its registered representatives, FFSC shall promptly
advise the Company thereof and shall notify such Agent that he is no longer
authorized to offer or sell the Contracts, and FFSC and the Company shall take
whatever additional action may be necessary to terminate the sales activities of
such Agent relating to the Contracts.
6. It is contemplated that all or some of the home office supervisors,
Regional Managers, or General. Agents of the Company will become qualified as
registered representatives of FFSC and in that capacity will, subject to the
policies of FFSC, supervise the selling activities of Agents relating to the
Contracts. In the event any such person shall fail- or refuse -to provide such
supervision to
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FFSC's satisfaction, FFSC (with the cooperation. of the Company) shall furnish a
qualified person to perform such supervision or, if FFSC is unable to furnish
such supervision, the authority of the unsupervised Agents to sell the Contracts
shall be withdrawn forthwith.
7. All purchase payments on the Contracts will be promptly paid to the
Company. Commissions payable to Agents in connection with sales of the
Contracts shall be paid by the Company to the Agents through the General Agents
or otherwise under the Company's usual agency contracts and nothing contained
herein shall obligate FPSC to-pay any commissions or other remuneration to the
Agents or to reimburse any such Agents for expenses incurred by them, nor shall
FFSC have any interest whatsoever in any commissions or other remuneration
payable to Agents by the Company. Commissions so paid by the Company shall be
appropriately reflected in the books and records maintained by or on behalf of
FFSC.
8. FFSC will assume full responsibility for the sales activities of-the
Agents relating to the Contracts and for initial and continued compliance by
itself and Agents with applicable rules of NASD and federal and state securities
laws, and in connection therewith may demand and receive such assurances from
the Company as it deems appropriate demonstrating compliance with the Act, the
Securities Act of 1933 and the investment Company Act of 1940.
9. FFSC may request that all or some of the notices and the books and
records required to be prepared, sent, and/or maintained by it, as a registered
broker-dealer or as a member of the NASD, in connection with the sale of the
Contracts, be prepared, sent and/or maintained by the Company, at the Company's
expense, as agent for FFSC. The Company agrees that such books and records are
the property of FFSD, will be made- and preserved in accordance with Rules
17a-3afid.17a-4 under the Act, and will be subject to examination by the
Securities and Exchange Commission in accordance with Section 17(a) of the Act.
10. FFSC will provide for prospectuses and such other material as the
Company and FFSC may mutually determine to be necessary or desirable, and which
are authorized by applicable law, for use in connection with the offering or
sale of the Contracts. The Company, at its own expense, will qualify or
register the Contracts in all jurisdictions where such qualification or
registration is required and
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will obtain all necessary approvals of the offering and sale of the Contracts in
accordance with the requirements of the NASD and applicable federal and state
law.
11. This Agreement may not be assigned by either party except by mutual
consent and shall continue for a period of one year and from year to year
thereafter subject to termination by either party at any time upon 30 days
written notice to the other party and to the Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE FRANKLIN LIFE INSURANCE COMPANY
By:
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President
ATTEST:
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Secretary
FRANKLIN FINANCIAL SERVICES CORPORATION
By:
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President
ATTEST:
- --------------------------
Secretary
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AMENDMENT TO
AGREEMENT BETWEEN THE FRANKLIN LIFE INSURANCE
COMPANY AND FRANKLIN FINANCIAL SERVICES CORPORATION
The Agreement between FRANKLIN FINANCIAL SERVICES.CORPORATION, and THE
FRANKLIN LIFE INSURANCE COMPANY dated June 30, 1971 is amended by deleting
Paragraph 10 thereof and substituting the following:
"10. FFSC will provide for prospectuses and such other material as
the Company and FFSC may mutually determine to be necessary or desirable,
and which are authorized by applicable law, for use in connection with the
offering or sale of 'the Contracts, the expense of which, as between the
Company and FFSC shall be borne by the Company. The Company, at its own
expense, will qualify or register the Contracts in all jurisdictions where
such qualification or registration is required and will obtain all
necessary approvals of the offering and sale of the Contracts in accordance
with the requirements of the NASD and applicable federal and state laws."
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed this 15th day of May, 1975.
THE FRANKLIN LIFE INSURANCE COMPANY
By:
-----------------------------------
President
ATTEST:
- --------------------------
Secretary
FRANKLIN FINANCIAL SERVICES CORPORATION
By:
-----------------------------------
President
ATTEST:
- --------------------------
Secretary
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