EXHIBIT 8(e)
MARKETING AGREEMENT
Between
DFA SECURITIES, INC.
And
FIRST PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
Table of Contents
Section Description Page
------- ------------ ----
1 Sales of the Contract......... 1
2 Representations and
Warranties.................... 3
3 Contracts, Sales Material 5
and Information...............
4 Indemnification............... 7
5 Term and Termination.......... 14
6 Notices....................... 15
7 Miscellaneous................. 16
THIS AGREEMENT, made and entered into this 15th day of November 1996, by
and between First Providian Life and Health Insurance Company ("Company"), on
its own behalf and on behalf of First Providian Life and Health Insurance
Company Separate Account C, a segregated asset account of the Company
("Account"), and DFA Securities Inc. ("DFAS") (collectively, "Parties").
Company and DFAS intending to be legally bound, hereby agree as follows:
1. Sales of the Contracts
1.1 Company and DFAS hereby agree to perform the duties and assume the
responsibilities set forth herein in connection with the offering of certain
mutually agreed upon variable annuity contracts ("Contracts") in substantially
the forms appearing at Schedule 1.1 hereto. Company shall establish and
maintain subdivisions of the Account as required by law to perform Company's
obligations under the Contracts, including the obligation to establish a
subdivision for each portfolio offered by DFA Investment Dimensions Group Inc.
("Fund") and accepted by Company for investment under the Contract.
1.2 DFAS will assist, or through one or more independent contractors will
have assistance provided to, Company in developing a marketing program for the
Contracts. Either DFAS or its independent contractors will be available at
reasonable times to assist Company and investment advisors whose clients
purchase the Contracts in understanding the Fund and its investment strategies
and to provide information
regarding the Fund. DFAS' assistance will not involve the handling of monies
and/or securities of the Contracts.
1.3 Neither DFAS nor any of its affiliates or independent contractors
shall have any authority as the Company's agent or otherwise to, and DFAS shall
not (a) make any promise or incur any debt on behalf of Company; (b) hold itself
out as an employee of Company; (c) misrepresent, add, alter, waive, discharge,
or omit any material provision(s) of the Contracts or the then current
prospectuses for the Contracts or confirmation statements or any other Company
materials; (d) engage in exchanges of Contracts for other deferred annuity
contracts; (e) pay or allow to be paid to any owner of a Contract ("Owner") or
potential purchaser any rebate or other inducement not specified in the
Contracts; (f) give or offer to give any specific advice or opinion regarding
any specific tax or estate planning result for any individual or entity in
connection with the purchase of any Contract; or (g) take any other action
beyond the scope of the authority granted under this Agreement.
1.4 Except as required by law or regulation, DFAS and the Company each
agree that all information communicated to it by the other, including, without
limitation, the names and addresses of Owners, shall be received in strict
confidence, shall be used by the recipient party only for the purposes of this
Agreement or the Participation Agreement of even date herewith among Fund, DFAS,
Dimensional Fund Advisors Inc. and Company and that no such information shall be
disclosed by the recipient party, its agents or employees without the prior
written consent of the other party; provided, however, that this Paragraph 1.4
shall not prohibit persistency programs with respect to the Contracts.
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1.5 To the extent required by applicable law, including the administrative
requirements of regulatory authorities, or as mutually agreed between Company
and DFAS, Company reserves the right to modify any of the Contracts in any
respect whatsoever. Company reserves the right in its sole discretion to
suspend the sale of any of the Contracts, in whole or in part, or to accept or
reject any application for the sale of a Contract. Company agrees to notify
DFAS upon the occurrence of any event Company believes might necessitate a
material modification or suspension. Company and DFAS further agree to provide
prompt notice to each other of any communications received from any regulatory
authority with respect to the sale of the Contracts.
1.6 DFAS and Company agree that the Contracts will only be accepted from
agents with whom the Company has executed a General Agent Contract. DFAS
reserves the right to reject contracts submitted by agents whom DFAS has
determined to be market timers.
2. Representations and Warranties
2.1 Company represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that it has legally and
validly established the Account prior to any issuance or sale thereof as a
segregated asset account under the laws of New York and that it has and will
maintain the capacity to issue all Contracts that may be sold; and that it is
properly licensed, qualified and in good standing to sell the Contracts in New
York.
2.2 Company represents and warrants that the Contracts are or will be
registered under the Securities Act of 1933 (the "1933 Act").
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2.3 Company represents and warrants that it has or will have registered
the Account as a unit investment trust in accordance with the provisions of the
Investment Company Act of 1940 (the "1940 Act") to serve as a segregated
investment account for the Contracts.
2.4 Company represents that the Contracts are currently treated as annuity
contracts, under applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will maintain such treatment and that it will
notify DFAS promptly upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so treated in
the future.
2.5 DFAS represents and warrants that it is lawfully established and
validly existing under the laws of the State of Delaware.
2.6 DFAS does not charge any fees or expenses in connection with its
obligations under this Agreement.
2.7 DFAS represents and warrants that it is and will be a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD") and is
and will be registered as a broker-dealer with the Securities and Exchange
Commission ("SEC"). DFAS further represents that it and any independent
contractor acting on behalf of DFAS under this Agreement will perform its
obligations hereunder in accordance with all applicable state and federal laws
and regulations, including without limitation the Securities Exchange Act of
1934 (the "1934 Act"), the 1940 Act and state insurance laws of which it is
aware, provided DFAS shall have no obligation to conduct an independent
investigation, or of which Company has made it aware by providing DFAS with
written advice.
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2.8 DFAS represents and warrants that it is and will remain duly
registered and licensed in all material respects under all applicable federal
and state securities laws.
3. Contracts, Sales Material and Information
3.1 Company shall file the Contracts in New York and use its best efforts
to secure approval for sale of the Contracts in New York, and Company further
agrees to maintain such approvals.
3.2 In the event Company and DFAS agree that DFAS will prepare sales
literature or other promotional material for the Contracts pursuant to Section
3.4 below, all such sales material prepared by DFAS will be filed by Company
with the appropriate state regulatory authorities as required in New York and
Company will use its best efforts to effect prompt review of such material in
New York and to provide DFAS with such assistance as DFAS may reasonably require
in order to develop sales literature in compliance with the laws and regulations
of New York. Company shall be responsible for filing all such material in
compliance with the federal securities law and the rules of the NASD.
3.3 Company shall promptly inform DFAS as to the status of all such sales
literature filings and shall promptly notify DFAS of all approvals or
disapprovals of sales literature filings in New York. Except for internal
correspondence, inquiries, meetings and discussions, DFAS shall promptly provide
Company with copies of correspondence and written reports of inquiries, meetings
and discussions concerning the Contracts and Owner complaints respecting the
Contracts.
3.4 DFAS shall not, unless otherwise agreed to by Company, create any
sales literature or other promotional material for the Contracts. In the event
Company and
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DFAS agree that DFAS will prepare sales literature or other promotional material
for the Contracts, DFAS shall furnish to company each piece of such literature
or material at the earliest practical stage of its development, and Company
commits to comment upon, approve or disapprove all proposed advertising within
five (5) business days of receipt from DFAS. No such material shall be used if
Company reasonably objects to such use after receipt of such material. Each
Party agrees to cooperate with the other to facilitate the other's ongoing
efforts to comply with all applicable laws and regulations.
3.5 Except with Company's consent, DFAS shall not give any material
information or make any material representations on behalf of Company or
concerning Company, the Account, or the Contracts other than the information or
representations contained in: (a) a registration statement or prospectus for
the Contracts, as amended or supplemented from time to time; (b) published
reports for the Account which are in the public domain or approved by Company
for distribution to Contract Owners; or (c) sales literature or other
promotional material approved by Company.
3.6 No Party shall use the other Party's names, logos, trademarks or
service marks, whether registered or unregistered, without the prior written
consent of such Party.
3.7 DFAS will provide to Company at least one complete copy of all
requests for no action letters, and all amendments thereto that relate to the
Company, the Account or the Contracts, (a) in draft form prior to the filing of
such document with the SEC or other regulatory authorities with reasonable time
allowed for Company to provide DFAS with its comments, and (b) in final form as
filed.
3.8 Company will provide to DFAS at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports,
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solicitations for voting instructions, sales literature and other promotional
materials, applications for exemptions, requests for no action letters and all
amendments to any of the above, that relate to the Contracts, (a) in draft form
prior to the filing of such document with the SEC, with reasonable time allowed
for DFAS to provide Company with its comments and (b) in final form as filed.
3.9 For purposes of this Section 3, the phrase "sales literature or other
promotional material" shall be construed in accordance with all applicable
securities laws and regulations.
3.10 The Parties agree to review the Contracts during the last calendar
quarter of each year for possible changes and will make their personnel
reasonably available for this purpose.
4. Indemnification
4.1 Indemnification By Company
4.1(a) Company agrees to indemnify and hold harmless DFAS and its
directors and officers, and each person, if any, who controls it within the
meaning of Section 15 of the 1933 Act (the "Indemnified Party" for purposes of
this Section 4.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Company) or
litigation (including legal and other expenses), to which the Indemnified Party
may become subject under any statute, regulation, at common law or otherwise,
and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement, prospectus or sales literature for the
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Contracts or contained in the Contracts or any sales literature
for the Fund created by Company or agents of the company (or any
amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that this section 4.1(a) shall not apply as to the Indemnified
Party if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with written
information furnished to Company or agents of Company by or on
behalf of DFAS for use in the registration statement or
prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts; or
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(ii) arise out of, or as a result of, statements or
representations or wrongful conduct of Company or persons under
its control, with respect to the sale or distribution of the
Contracts; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement or prospectus covering the Fund, or any amendment
thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not
misleading, if such a statement or omission was made in reliance
upon written information furnished to DFAS by or on behalf of
Company; or
(iv) arise out of, or as a result of, any failure by
Company or persons under its control to provide the services and
furnish the materials contemplated under the terms of this
Agreement; or
(v) arise out of, or result from, any material breach of
any representation and/or warranty made by Company or persons
under its control in this Agreement or arise out of or result
from any other material breach of this Agreement by Company or
persons under its control; or
(vi) arise out of or are based upon noncompliance by DFAS
or its independent contractors with applicable state
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insurance laws in connection with DFAS' obligations under this
Agreement unless DFAS was aware of such law or Company made DFAS
aware of such law by providing DFAS with written advice;
as limited by and in accordance with the provisions of sections 4.1(b) and
4.1(c) hereof.
4.1(b) Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
the Indemnified Party would otherwise by subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to the
Company, the Account or the Contracts, whichever is applicable, or to the extent
of such Indemnified Party's negligence.
4.1(c) Company shall not be liable under this indemnification provision
with respect to any claim made against the Indemnified Party unless such
Indemnified Party shall have notified Company in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify Company of any such claim shall not
relieve Company from any liability which it may have to the Indemnified Party
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Party, Company shall be entitled to
participate, at its own expense, in the defense of such action provided that it
gives written notice of such intention to the Indemnified Parties. Company also
shall be entitled to assume and to control the defense thereof. After notice
from Company to
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such Party of Company's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and Company will not be liable to such Party under this Agreement for any legal
or other expenses subsequently incurred by such Party independently in
connection with the defense thereof other than reasonable costs of
investigation.
4.1(d) The Indemnified Party will promptly notify Company of the
commencement of any litigation or proceedings against it in connection with the
issuance or sale of the Contracts or the subject matter of this Agreement.
4.2 Indemnification by DFAS
4.2(a) DFAS agrees to indemnify and hold harmless Company and each of
its directors and officers and each person, if any, who controls Company within
the meaning of Section 15 of the 1933 Act (the "Indemnified Party" for purposes
of this Section 4.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of DFAS) or
litigation (including legal and other expenses) to which the Indemnified Party
may become subject under any statute, at common law or otherwise, and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature for the
Fund (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided
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that this section 4.2(a) shall not apply as to the Indemnified
Party if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with written
information furnished to DFAS by or on behalf of Company for use
in the registration statement or prospectus for the Fund (or any
amendment or supplement) or otherwise for use in connection with
the sale of the Contracts; or
(ii) arise out of, or as a result of, statements or
representations or wrongful conduct of DFAS or persons under its
control, with respect to the sale or distribution of the
Contracts (it is understood that the persons who are involved in
the sale or distribution of the contracts are not under the
control of DFAS); or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the
statements therein not misleading, if such statement or omission
was made in reliance upon written information furnished to
Company by or on behalf of DFAS; or
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(iv) arise out of, or as a result of, any failure by DFAS or
persons under its control to provide the services and furnish the
materials contemplated under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by DFAS or persons under its
control in this Agreement or arise out of or result from any
other material breach of this Agreement by DFAS or persons under
its control;
as limited by and in accordance with the provisions of Sections 4.2(b) and
4.2(c) hereof.
4.2(b) DFAS shall not be liable under this indemnification provision with
respect to any losses, claims, damages, liabilities or litigation to which the
Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement, or to the
extent of such Indemnified Party's negligence.
4.2(c) DFAS shall not be liable under this indemnification provision with
respect to any claim made against the Indemnified Party unless such Indemnified
Party shall have notified DFAS in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify DFAS of any such claim shall not relieve DFAS from
any liability which it may have to the Indemnified Party otherwise than on
account of this indemnification provision. In case any such action is
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brought against the Indemnified Parties, DFAS will be entitled to participate,
at its own expense, in the defense thereof provided that it gives written notice
of such intention to the Indemnified Parties. DFAS also shall be entitled to
assume and to control the defense thereof. After notice from DFAS to such Party
of DFAS's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and DFAS
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such Party independently in connection with
the defense thereof other than reasonable costs of investigation.
4.2(d) The Indemnified Party will promptly notify DFAS of the commencement
of any litigation or proceedings against it in connection with the issuance or
sale of the Contracts or the subject matter of this Agreement.
5. Term and Termination
5.1 The initial term of this Agreement shall be from November 15, 1996
through November 14, 1999. This Agreement shall thereafter automatically renew
from year to year, provided that either Party may terminate this Agreement
without cause upon sixty (60) days' advance written notice to the other.
5.2 Notwithstanding any other provision of this Agreement, DFAS may
terminate this Agreement for cause on not less than thirty (30) days' prior
written notice to the Company, unless Company has cured such cause within thirty
(30) days of receiving such notice, for any material breach by Company of any
representation, warranty, covenant or obligation hereunder.
5.3 Notwithstanding any other provision of this Agreement, Company may
terminate this Agreement for cause on not less than thirty (30) days' prior
written notice
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to DFAS, unless DFAS has cured such cause within thirty (30) days of receiving
such notice, for any material breach by DFAS of any representation, warranty,
covenant or obligation under the Contracts or hereunder.
5.4 This Agreement shall automatically terminate at such time as there are
no subdivisions of the Account funding the Contracts that are invested in the
Fund.
5.5 Notwithstanding the termination of this Agreement, each Party shall
continue for so long as any Contracts remain outstanding to perform such of its
duties hereunder as are necessary to ensure the continued tax deferred status
thereof and the payment of benefits thereunder.
6. Notices
Any notice shall be deemed sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to DFAS:
Xxxxx X. Xxxxxxx
Vice President
DFA Securities Inc.
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
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If to Company:
Xxxxxxx X. Xxxxxxx
Providian Corporation
000 Xxxx Xxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxxx, Xxxxxxxx 00000
With a copy to:
First Providian Life and Health Insurance Company
000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxx 00000
Attention: Marketing Director
7. Miscellaneous
7.1 The captions in this Agreement are included for convenience of
reference only and in no way affect the construction or effect of any provisions
hereof.
7.2 If any portion of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
7.3 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
7.4 Each Party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the NASD and
state insurance and securities regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement.
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7.5 Each Party hereto grants to the other the right to audit its records
relating to the terms and conditions of this Agreement upon reasonable notice
during reasonable business hours in order to confirm compliance with this
Agreement.
7.6 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
7.7 This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior written consent of the other party
hereto.
7.8 In any dispute arising hereunder, each party waives its right to
demand a trial by jury and hereby consents to a bench trial of all such
disputes.
7.9 The terms of this Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of Kentucky; provided,
however, that all performances rendered hereunder shall be subject to compliance
with all applicable state and federal laws and regulations.
7.10 Sections 1.2 (excluding the first sentence), 1.3, 1.4, 1.5, 2, 3.6,
3.7, 3.8, 3.9, 4, 5.5, 6 and 7 hereof shall survive termination of this
Agreement
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed as of the date first set forth above.
FIRST PROVIDIAN LIFE AND HEALTH INSURANCE
COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
----------------------
Title: Vice President
--------------------
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DFA SECURITIES INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------
Title: Vice President and Secretary
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