(3) (b) Form of Sales Agreement
-1-
VAR0119
Transamerica Occidental Life Insurance Company
1150 South Olive Street
Los Angeles, CA 90015
Transamerica Life Insurance and Annuity Company
401 North Tryon Street
Charlotte, NC 28202
Transamerica Life Insurance Company of New York
100 Manhattanville Road
Purchase, NY 10577
Transamerica Assurance Company
1150 South Olive Street
Los Angeles, CA 90015
VARIABLE INSURANCE PRODUCTS SALES AGREEMENT
The parties to this agreement are: (i) the Insurance Company which has executed
this agreement on the signature page (referred to as "the Insurance Company");
(ii) the Insurance Company's underwriter, Transamerica Securities Sales
Corporation (referred to as "the Underwriter"), and (iii) the Broker-Dealer
named below (referred to as "you" or "the Broker"). The Insurance Company and
the Underwriter are collectively referred to as "we", "us" or "the Company". If
more than one Insurance Company has executed this agreement, each such execution
shall be deemed to create a new and separate agreement between the Insurance
Company, the Underwriter and the Broker. In that case, the terms of this
agreement shall apply separately with regard to each such agreement and no
Insurance Company shall be liable for the obligations or actions of any other
Insurance Company.
This agreement is effective on the date set forth below.
The terms of this agreement are as follows:
1. APPOINTMENT
You are appointed by the Company for the purpose of soliciting
applications for and servicing variable insurance products
("Contracts") and otherwise transacting the business of this agreement.
You accept such appointment and agree to comply with all applicable
laws and regulations, and to diligently devote yourself to the business
of this appointment in order to sell new Contracts and prevent the
termination of existing Contracts.
1.1 TERRITORY; NON-EXCLUSIVITY
Unless otherwise specified by us, you are authorized to solicit
applications in any jurisdiction in which we are authorized to offer
such Contracts and in which you are licensed and authorized to
represent us. We reserve the right to limit your territory at any
time.
You are not obligated to represent us exclusively, and you do not have
an exclusive right to solicit Contracts for us in any area.
1.2 INDEPENDENT CONTRACTOR
You are an independent contractor. Nothing contained in this agreement
is to be construed to create the relation of employer and employee
between the Company and you. You may exercise your own judgment as to
the time and manner in which you may perform the services required to
be performed by you under this agreement. We may, from time to time,
prescribe rules and regulations concerning the conduct of the business
covered by this agreement which do not interfere with such freedom of
action.
2. SOLICITATION OF APPLICATIONS
We will inform you from time to time which products you are authorized
to sell. Solicitation of Contracts authorized under this agreement will
be performed by you or by solicitors in accordance with the terms set
forth below.
A solicitor is a properly licensed registered representative who is
employed by or associated with you and is appointed by us to solicit
Contracts in your name. You are responsible for assuring that all
solicitors are persons of good character.
You agree not to allow any solicitor to engage in the services
authorized under this agreement, except in accordance with this
Section.
At our option, we may refuse to contract with or appoint any proposed
solicitor and may terminate any agreement with or appointment of a
solicitor. You will be solely responsible for the payment of any
compensation to solicitors, and you agree to hold us harmless from all
claims for commissions or other compensation by any solicitor.
2.1 LICENSING
Neither you nor any solicitor may engage in any activities under this
agreement unless and until you and they are properly licensed and/or
registered, as required, to perform such services in the particular
state or jurisdiction involved in accordance with all applicable laws
and regulations, including, but not limited to, any certification or
continuing education requirements and any applicable rules or other
requirements of the National Association of Securities Dealers
("NASD").
You agree to undertake and pay for all actions necessary to acquire and
maintain any necessary licenses and registrations for yourself and/or
the solicitors. We will take the necessary actions, including the
payment of applicable fees, to appoint you and the solicitors to
represent us in the states in which you and they reside. We will
appoint you and the solicitors to represent us in additional states at
your expense.
2.2 SUPERVISION
You are responsible for the performance of solicitors and your
employees and associated persons. You agree to take all necessary steps
to communicate the Company's rules and regulations to such persons, and
to assure that they comply with such rules and regulations, as well as
all other applicable laws and regulations. You will supervise and train
registered representatives and other associated persons to ensure
compliance with Company policies and applicable laws.
3. RESPONSIBILITIES OF THE BROKER
You will abide by the following in the conduct of your activities under
this agreement:
3.1 COMPANY REGULATIONS
To the extent they do not conflict with the terms of this agreement,
you will conform to the rules and regulations of the Company now or
hereafter in force. Such rules and regulations will constitute a part
of this agreement. This provision shall not be construed to alter the
relationship of the parties as provided in Section 1.2 above.
3.2 LIMITATION OF AUTHORITY
You have no authority to alter, modify, waive or change any of the
terms, rates or conditions of our contracts or policies whether or not
covered by this agreement. You have no authority to obligate us in any
manner whatsoever nor to receive monies due to us, except as otherwise
provided in this agreement or as may be authorized in writing by us.
3.3 COMPANY RECORDS
All documents, records, software and other data and information, in
whatever form they may be, which pertain to the Company's policyholders
or any other business of the Company, are and will remain the property
of the Company. Any such property in your possession shall be at any
time and all times open to inspection by the Company or its authorized
representative, and upon termination of this agreement you will
promptly turn all such property over to the Company or its authorized
representatives.
You acknowledge that all documents, records, software and other data,
information and supplies referred to in this Section 3.3 are
confidential and proprietary to the Company, and you agree to preserve
the confidentiality and privacy of the Company in all of the same; and
you further agree that you will not, without the Company's prior
written consent, release or disclose any of the same or their contents
to any person, or otherwise use any of the same or their contents in
any manner, except in furtherance of the business of this agreement or
as required by legal process.
Nothing contained in this Section 3.3 is intended to restrict your
right to retain possession of your records and other materials relating
solely to your producers and solicitors.
3.4 ACCOUNTS AND RECORDS
You agree that you will keep customary and accurate accounts of
receipts and disbursements and will, at our request and in accordance
with our instructions, account for all Contracts, receipts, premiums
and other monies or securities received and all property and supplies
received from the Company. We may, at any time, make copies of the
records of such accounts, records and documents, and all such records,
documents, supplies and other property relating to the business
transacted under this agreement will be the property of the Company,
open to inspection at all times by our authorized representatives, and
at the termination of this agreement will be delivered to us upon
demand. We will furnish you a current statement of your commission
account within a reasonable time after receipt of a written request
from you.
3.5 COLLECTION AND REMITTANCE OF COMPANY MONEY
Where authorized by us, you may accept premiums or purchase payments in
accordance with our rules and regulations in force at the time of
payment. We have the right at any time to revoke such authority in
whole or in part and to limit it in any way. ALL MONIES OR OTHER
CONSIDERATIONS RECEIVED BY YOU AS FULL OR PARTIAL PAYMENT OF PREMIUMS
OR FOR ANY OTHER ITEM, WITHOUT EXCEPTION, SHALL BE HELD BY YOU IN TRUST
SEPARATE FROM YOUR OWN OR OTHER FUNDS AND WILL BE IMMEDIATELY DELIVERED
AND PAID TO THE COMPANY. Such remittances must be applied to the
relevant item. You are not authorized to deposit any such monies or
checks in your own account or any trust account, nor to accept any
check made payable to you for any premium or other item.
3.6 ADVERTISING
(I) You agree that you 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 the Company or to any Company Contract, or
cause, authorize or permit any person to do so, without our
prior written consent. You agree that you will not use the
name of the Company 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.
(ii) In making offers of the contracts, you agree to deliver the
applicable currently effective prospectuses, as required by
law.
(iii) You agree that you and your solicitors will not misrepresent
the Contracts and will make no oral or written representation
which is inconsistent with the terms of the Contracts,
prospectuses or sales literature or is misleading in any way.
(iv) The Company will use reasonable efforts to provide you with
information and marketing assistance, including providing,
without charge, reasonable quantities of advertising
materials, sales literature, reports and current prospectuses.
(v) The Company will deliver to you, and you agree to use, only
sales literature and advertising material which conforms to
all applicable legal requirements and which has been
authorized by us.
3.7 ERRORS AND OMISSIONS
You are encouraged to maintain errors and omissions insurance covering
your activities under this agreement. If you carry such insurance at
any time, you agree to provide us with copies of the current binders
evidencing the issuance of the errors and omissions, and within ten
business days of each date such insurance is discontinued, suspended,
reduced or terminated for any reason.
3.8 COMPLIANCE WITH ADDITIONAL RULES
You agree to abide by all laws, rules and regulation, including,
without limitation, the rules of the NASD, insurance laws and state and
federal securities and banking laws and including, without limitation,
the maintenance of licenses and books and records required by
applicable laws and regulations.
4. COMPANY RIGHT OF ACTION
We are not obligated to accept any business produced by you or by a
solicitor. We may reject applications for insurance without specifying
the reason therefor, as well as settlements tendered or made
thereunder, or take up and cancel any Contract for any reason and
return the premium thereon or any part thereof.
We, in our sole discretion, may at any time and from time to time do
the following:
(i) modify or amend any Contract form;
(ii) fix or change maximum and minimum limits on the amount for which
any Contract form may be issued;
(iii) modify or alter the conditions or terms under which any
Contract form may be sold or regulate its sale in any way;
(iv) discontinue or withdraw any Contract form from any geographic
area or market segment, without prejudice to continuation of
such form in any other area or market segment;
(v) cease doing business in any area.
5. COMPENSATION
For each Contract sold under this agreement, we will pay you
commissions as set forth in the applicable Commission Rate Schedule.
You may also be eligible for compensation under other programs
established by us from time to time. Payment of commissions and any
other compensation will be subject to the terms and conditions of this
agreement and to our rules and regulations in effect from time to time.
Such rules and regulations may be changed by us at any time without
notice. In any states in which you may not receive commissions pursuant
to state insurance law, we will pay such commissions to the insurance
agency or agencies with which you have associated yourself, as
specified in the applicable Commission Rate Schedule.
The commissions and any other compensation payable by us to you will be
payment in full for all services performed by you. Except as we may
otherwise agree, you are not entitled to reimbursement for any expenses
incurred by you.
5.1 COMMISSIONS
General - The "applicable Commission Rate Schedule" means the
Commission Rate Schedule published by us from time to time for the type
of Contract involved. Commission Rate Schedules are subject to change
without notice. Copies may be obtained at any time.
Repayment of Commissions - If any commission or other compensation to
which you are not entitled under the terms of this agreement is paid to
or retained by you, you will pay the same to the Company upon demand.
You will pay to us upon demand all commissions received by or credited
to you, or premiums collected, or evidence of indebtedness representing
the same, taken on applications on which Contracts are not issued by
us, or on Contracts declined by the applicant, or on Contracts canceled
by us, and all commissions received or credited on premiums or any part
thereof which for any reason we may return. In case of any provision
requiring a refund of commissions or other compensation, we may, at our
election, debit your account for the amount of the refund without
demand or notice, or may demand the refund, or both, but debiting your
account in such manner will not relieve you of your obligation to make
the refund.
Changes in Compensation - We reserve the right to change the rate of
commissions and/or any other compensation payable under this agreement.
Any such change will apply only to Contracts issued or other triggering
events occurring after the effective date of the change.
When Due - Commissions will be paid in accordance with our normal
commission processing schedule. Commissions will be payable only on
premiums paid in cash to and accepted by us on Contracts which were
produced hereunder by you or by solicitors or producers while operating
under your supervision. No premium will be considered paid in cash to
the Company until it has been actually collected and transmitted to us
and recorded on our records. Commissions and other compensation will
accrue only as such premiums otherwise would become due.
Commissions Paid in Advance - If we pay you a commission or other
compensation on a premium which is or becomes due but which has not yet
actually been paid to the Company, and if such premium is not paid in
cash to the Company, you will refund any commission or other
compensation which you have received on such premium.
Conditions - Commissions and any other compensation under this
agreement will be payable to you only if and so long as you are in
existence and are continuously and properly licensed to transact
insurance business for us and we may legally pay such commissions and
other compensation.
Accounting Year - We reserve the right at any time and from time to
time, without notice to you, to change the period comprising our
accounting year or subdivisions thereof.
6. INDEBTEDNESS
6.1 LIEN AND OFFSETS
You grant us a first lien on all commissions and any other compensation
payable to you under this agreement or under any other existing or
future agreement with Transamerica Occidental Life Insurance Company,
Transamerica Life Insurance and Annuity Company, Transamerica Assurance
Company, Transamerica Life Insurance Company of New York, or any other
company which is a subsidiary or affiliate of Transamerica Occidental
Life Insurance Company, Transamerica Corporation or Transamerica
Insurance Corporation of California (referred to individually and
collectively as "Transamerica entity" or "Transamerica entities"), as
security for the payment of any existing or future debit balance or
other indebtedness of yours to us. We may at any time and from time to
time, with or without notice or judicial action, exercise our lien by
offsetting such indebtedness against any commissions and other
compensation otherwise due to you. These liens shall not be
extinguished by the termination of this agreement or any other
agreement.
All debit balances and other indebtedness of yours to us will be
debited to your account, but debiting your account will not relieve you
of your obligation to repay the indebtedness. You may not offset
against any such indebtedness any compensation accrued or to accrue
under this agreement or under any other agreement with us.
We will be under no obligation to pay any commissions or other
compensation to you, your executors, administrators or assigns, under
this agreement or under any other existing or future agreement with us
now or hereafter existing as long as your account with any Transamerica
entity has a debit balance.
Any debit balance of your account shall be payable to us upon demand
and shall bear interest, payable monthly, at the rate declared by us
from time to time. Any future change in interest rate may, at our
option, be applied to the then remaining balance of any debit balance
theretofore created as well as to debit balances thereafter created.
6.2 MULTI-COMPANY ASSIGNMENT OF COMMISSIONS
In order to effectuate the rights of offset set forth in Section 6.1,
you hereby assign to each of the Transamerica entities, their
successors and assigns, all of your right, title and interest in and to
any and all commissions or other compensation now due and payable, or
which becomes due in the future, under the terms of any and all agency
contracts between you and any Transamerica entity. Each Transamerica
entity shall receive and retain such commissions or other compensation
only to the extent necessary to secure repayment of any of your present
or future indebtedness to such Transamerica entity.
You authorize us to make payment of all sums due to you under this
agreement to any Transamerica entity which may be entitled to such
payment under this Section 6.
7. DISPUTES AND LITIGATION
Each party agrees to cooperate fully with each other in the resolution
of all matters arising out of the business of this agreement. Any
disputes between you and us will be settled through binding
arbitration.
7.1 COMPLAINTS AND CLAIMS
You agree to notify us promptly of any complaint, claim or dispute
involving an applicant, Contract or contractholder.
You will not litigate any dispute with an applicant or policyholder, on
any matter relating to the business of this agreement, without our
prior written consent.
We may settle any claim against us or you arising out of the business
of this agreement. If you disagree with our settlement, you may seek
arbitration pursuant to Section 7.2.
7.2 DISPUTE RESOLUTION
The parties agree that this agreement involves "commerce" within the
meaning of the Federal Arbitration Act, and that any dispute between
the parties arising out of or related to this agreement will be
resolved by binding arbitration in accordance with this Section and the
procedural and discovery rules of the Federal Arbitration Act. The
arbitration will take place in Los Angeles, California, unless we
mutually agree to another location. The arbitration will be determined
by one neutral arbitrator as agreed upon by the Company and you. If the
parties fail to appoint an arbitrator on a timely basis or are unable
to agree on the choice of an arbitrator on a timely basis, the
arbitrator will be appointed by the office of the Judicial Arbitration
and Mediation Service in the city where the arbitration takes place, or
by another mutually agreeable arbitration service. The arbitrator's
decision will be binding on the parties and the decision will be final
with no right of appeal. The award of the arbitrator may be entered as
a final judgment in any court which has jurisdiction thereof. The cost
of arbitration, including the fees of the arbitrator, will be borne by
the party or parties as the arbitrator decides.
EACH PARTY HERETO HEREBY WAIVES THE RIGHT TO A TRIAL BY EITHER A JURY
OR A COURT, INCLUDING BUT NOT LIMITED TO A TRIAL OF ANY ISSUE
CONCERNING THE VALIDITY OF THIS SECTION 7.2 OR ANY PORTION THEREOF, AND
THE RIGHT OF APPEAL FROM THE ARBITRATOR'S AWARD. EACH PARTY HERETO
WAIVES ANY CLAIM TO RECOVER PUNITIVE DAMAGES AND NON-COMPENSATORY
DAMAGES AGAINST THE OTHER PARTY.
8. TERMINATION
Any party may terminate this agreement with or without cause by giving
written notice to the other parties, specifying the effective date of
termination.
9. MISCELLANEOUS PROVISIONS
Certain provisions of this agreement are emphasized for the convenience
of the reader. Nevertheless, all provisions apply equally.
9.1 PREVIOUS AGREEMENTS
Any and all prior agreements between the parties hereto authorizing the
solicitation of SEC registered products, are hereby terminated and are
superseded by this agreement.
9.2 AMENDMENTS
Neither party will not be bound by any promise, agreement,
understanding or representation heretofore or hereafter made unless the
same is made by an instrument in writing, signed by one of its
officers, which expresses by its terms an intention to modify this
agreement.
9.3 FORBEARANCE
Forbearance or neglect on the part of either party to insist upon
compliance with the terms of this agreement or the rules and
regulations of the Company shall not be construed as or constitute a
waiver thereof.
9.4 AGREEMENT NON-ASSIGNABLE
You may not assign this agreement or any of the rights, authorities and
benefits provided hereunder without our prior written consent. We agree
not to withhold our consent unreasonably. Any attempted assignment as
collateral security or assignment for the benefit of creditors will be
subject to our rules and policies then in effect.
9.5 SEVERABILITY
This is a severable agreement. If any provision of this agreement would
require a party to take action prohibited by applicable federal or
state law or prohibit a party from taking action required by applicable
federal or state law, then it is the intention of the parties hereto
that such provision shall be enforced to the extent permitted under the
law, and, in any event, that all other provisions of this agreement
shall remain valid and duly enforceable as if the provision at issue
had never been a part of this agreement.
9.6 INDEPENDENT AGREEMENT
The compensation provided by this agreement is separate from any
compensation or consideration provided under any other agreement you
may have with us or with one of our affiliates. Except as set forth in
our applicable rules and regulations, your activities under this
agreement will not be taken into account for purposes of any
compensation or benefits under any such agreement.
9.7 APPLICABLE LAW
This Agreement shall be construed in accordance with the laws of the
state of domicile of the contracting Insurance Company without giving
effect to principles of conflict of laws. For Transamerica Occidental
Life Insurance Company that state is California; for Transamerica Life
Insurance and Annuity Company that state is North Carolina; for
Transamerica Life Insurance Company of New York that state is New York;
and for Transamerica Assurance Company that state is Missouri.
9.8 TRADEMARKS
The provision of Contracts and prospectuses and sales literature for
the Contracts and underlying funding vehicles to the Broker shall not
provide the Broker with any license to use any tradenames, trademarks,
service marks or logos or proprietary information of the Company or any
underlying funding vehicle or any affiliates thereof, except to the
extent necessary for Broker to distribute the Contracts in accordance
with the terms of this agreement.
9.9 CONFIDENTIALITY
Each party shall keep confidential any confidential information it may
acquire as a result of this Agreement.
9.10 SURVIVAL
The following provisions will survive the termination of this
agreement: Sections 3, 5, 6, 7, 9.4, 9.5, 9.6, 9.7.
10. CORPORATIONS; PARTNERSHIPS
The additional provisions set forth below apply to this agreement.
10.1 OFFICIAL ACTIONS
You may designate one or more individuals to deal with us on your
behalf. Such designation must be made by your board of directors if you
are a corporation or by any general partner if you are a partnership.
In the absence of a designation, we may (but are not obligated to) deal
with your president or any vice president (if you are a corporation) or
any general partner (if you are a partnership).
10.2 CHANGES
You agree to inform us of any changes in your legal structure, and of
any changes in your officers or partners. You also agree to inform us
of any transfer of your stock or partnership interests. Upon receipt of
such information, we may elect to terminate this agreement upon five
days' written notice to you.
10.3 STATUS
We may, from time to time, require you to provide us with evidence of
your continued existence and good standing.
11. REPRESENTATIONS AND WARRANTIES; COMPLIANCE
You represent, warrant and covenants that:
(i) You are, and will remain during the term of this Agreement, a
properly licensed and registered broker-dealer under
applicable state and federal securities law and a member in
good standing of the NASD.
(ii) You will solicit applications for Contracts only through
properly licensed insurance agents ("Insurance Agent"), duly
appointed by the appropriate Insurance Company. For purposes
of this Agreement, all acts and omissions of any Insurance
Agent within the scope of this Agreement shall be deemed to be
acts or omissions of Broker.
(iii) You are in compliance, and will remain in compliance, with all
applicable laws, rules and regulations, including, without
limitation, those of the NASD and state and federal
securities, banking and insurance laws.
(iv) You have taken and will continue to take the actions
appropriate to supervise your representatives and other
associated persons to ensure compliance with all applicable
laws and regulations.
(v) You will comply, and will cause each Insurance Agent to
comply, with any applicable Company policies and procedures,
including, without limitation, those regarding replacements of
Contracts, as amended from time to time.
(vi) You will not solicit or sell any Contracts in connection with
any "market timing" or "asset allocation" program or service,
and if the Company determines in its sole discretion that you
are soliciting or have solicited Contracts subject to any such
program, the Company may take such action it deems necessary
to halt such solicitations or sales, and in addition to any
indemnification provided in Section 12 of this Agreement and
any other liability that you may have, you will be liable to
the Company and each underlying funding vehicle affected by
any such program, for any damages or losses, actual or
consequential, sustained by them as a result of such program.
12. INDEMNIFICATION
12.1 Broker shall indemnify and hold harmless the Company, and each
employee, director, officer and shareholder of the Company, against any
losses, claims, damages or liabilities, including but not limited to
reasonable attorney fees and court costs, to which the Company or any
employee, officer, director or shareholder may be subject, which arise
out of or are based on any violation of the terms of this Agreement,
any Company policies or procedures or any applicable law by Broker, its
representatives, the Insurance Agent, its agents and any employee,
officer, director, shareholder, principal, partner and affiliate of the
Broker or Insurance Agent. In the event the Company suffers a loss
resulting from Broker or Insurance Agent activities, Broker hereby
assigns any proceeds received under its fidelity bond to the Company to
the extent of such losses. If there is any deficiency amount, whether
due to a deductible or otherwise, Broker-Dealer shall promptly pay the
Company such amount on demand and Broker-Dealer shall indemnify and
hold harmless the Company from any such deficiency and from the costs
of collection thereof (including reasonable attorney fees).
12.2 The Company shall indemnify and hold harmless Broker and each employee,
officer, director or shareholder of Broker, against any losses, claims,
damages or liabilities, including but not limited to reasonable
attorney fees and court costs, to which Broker or any employee,
officer, director or shareholder becomes subject which arises out of or
is based on any violation of the terms of this Agreement or any
applicable law by the Company and any employee or officer.
This Agreement is effective as of ___________________, 199___.
Transamerica Occidental Life Insurance Company Transamerica Life Insurance Company of New York
1150 South Olive Street 100 Manhattanville Road
Los Angeles, CA 90015 Purchase, NY 10577
Signature: Signature:
Name: John Dohmen Name: Alan T. Cunningham
Title: Vice President Title: President
Transamerica Life Insurance and Annuity Company Transamerica Securities Sales Corporation
401 North Tryon Street 1150 South Olive Street
Charlotte, NC 28202 Los Angeles, CA 90015
Signature: Signature:
Name: Matt R. Coben Name: Barbara A. Kelley
Title: Vice President Title: President
BROKER:
Address:
City, State, Zip:
Phone:
Signature:
Name:
Title: