EXHIBIT 3(e)
SELLING GROUP AGREEMENT
SIERRA INVESTMENT SERVICES CORPORATION
AND AMERICAN GENERAL LIFE INSURANCE COMPANY
This Selling Group Agreement ("Agreement") is made by and among Sierra
Investment Services Corporation, a registered broker - dealer and the
distributor for the variable life insurance policies and/or annuity contracts
set forth in Schedule A ("Distributor"),
____________________________________________________________________________
("Selling Group Member")
____________________________________________________________________________
("Associated Agency")
and, as the fourth party, American General Life Insurance Company ("AGL").
Selling Group Member is registered with the Securities and Exchange Commission
("SEC") as a broker-dealer under the Securities Exchange Act of 1934 ("1934
Act"), as amended and under any appropriate regulatory requirements of state
law, and is a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD"), unless Selling Group Member is exempt from
the broker-dealer registration requirements of the 1934 Act. Unless exempt,
Selling Group Member maintains a level of qualification with the NASD
appropriate to enable it to offer and sell the products set forth in Schedule
A. Selling Group Member is affiliated with Associated Agency, which is
properly licensed under the insurance laws of the state(s) in which Selling
Group Member will act under this Agreement.
This Agreement is for the purpose of providing for the distribution of certain
variable life insurance policies and/or annuity contracts set forth in
Schedule A and any successor or additional SEC registered insurance products
(as discussed in Part (1) "NEW PRODUCTS" of this Agreement) to be issued by
AGL and distributed through Distributor and sold by representatives who are
state insurance licensed and appointed agents of AGL and who are associated
with Associated Agency and are also NASD registered representatives of Selling
Group Member ("Sales Persons"). The policies and/or annuity contracts set
forth in Schedule A, along with any successor or additional SEC registered
insurance products, are referred to collectively herein as the "Contracts."
American General Securities Incorporated, a broker-dealer wholly owned by AGL,
shall be the principal underwriter of the Contracts, unless specifically
otherwise so stated.
In consideration of the mutual promises and covenants contained in this
Agreement, AGL and Distributor appoint Selling Group Member and those persons
associated with Associated Agency who are NASD registered representatives of
Selling Group Member and state insurance licensed agents of AGL to solicit and
procure applications for the Contracts. These appointments are not deemed to
be exclusive in any manner and only extend to those jurisdictions where the
Contracts have been approved for sale. Selling Group Member is authorized to
collect the first purchase payment
or premium (collectively "Premiums") on the Contracts and, unless Selling
Group Member and AGL have otherwise agreed, shall remit such premiums in full
dollar amount to AGL. Unless Selling Group Member and AGL have otherwise
agreed, applications shall be taken only on preprinted application forms
supplied by AGL. All completed applications and supporting documents are the
sole property of AGL and must be promptly delivered to AGL. All applications
are subject to acceptance by AGL at its sole discretion.
(1) NEW PRODUCTS
AGL and Distributor may propose, and AGL may issue additional or successor
products, in which event Selling Group Member will be informed of the product
and will be provided with a Concession Schedule for the new product(s).. If
Selling Group Member does not agree to distribute the new product(s) on the
terms set forth, it must notify Distributor in writing within 30 days of
receipt of the Concession Schedule for such product(s). If Selling Group
Member does not provide such written notification, Selling Group Member will
be deemed to have thereby agreed to distribute such product(s) and agreed to
the related Concession Schedule which shall be attached to and made a part of
this Agreement.
(2) SALES PERSONS
Associated Agency is authorized to recommend Sales Persons for appointment by
AGL to solicit applications for the Contracts. Associated Agency warrants that
all such Sales Persons shall not commence solicitation nor aid, directly or
indirectly, in the solicitation of any application for any Contract until that
Sales Person is appropriately licensed for such product under applicable
insurance laws and is a currently NASD registered representative of Selling
Group Member. Associated Agency shall be responsible for all fees required to
obtain and/or maintain any licenses or registrations required by state or
federal law, for Associated Agency and its Sales Persons. From time to time,
AGL will provide Associated Agency and Selling Group Member with information
regarding the jurisdictions in which AGL is authorized to solicit applications
for the Contracts and any limitations on the availability of such Contracts in
any jurisdiction.
(3) SALES MATERIAL
Associated Agency and Selling Group Member shall not utilize in their efforts
to market the Contracts, any written brochure, prospectus, descriptive
literature, printed and published material, audio-visual material or standard
letters unless such material has been provided preprinted by AGL or
Distributor or unless AGL and Distributor have provided written approval for
the use of such literature. In accordance with the requirements of the laws of
the several states, Associated Agency and Selling Group Member shall maintain
complete records indicating the manner and extent of distribution of any such
solicitation material, shall make such records and files available to staffs
of AGL and/or Distributor in field inspections and shall make such material
available to personnel of state insurance departments, the NASD or other
regulatory agencies, including the SEC, which have regulatory authority over
AGL or Distributor. Associated Agency and Selling Group Member jointly and
severally hold AGL, Distributor and their affiliates, directors, officers and
employees harmless from and indemnify them for any liability arising from the
use of any material which either (a) has not
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been specifically approved in writing by AGL and Distributor, or (b) although
previously approved, has been disapproved by AGL or Distributor, in writing
for further use.
(4) PROSPECTUSES
Selling Group Member and Associated Agency warrant that solicitation of
applications for Contracts will be made by use of a currently effective
prospectus, that a prospectus will be delivered concurrently with each sales
presentation and that no statements shall be made to a client superseding or
controverting any statement made in the registration statement or prospectus.
AGL and Distributor shall furnish Selling Group Member and Associated Agency,
at no cost to Selling Group Member or Associated Agency, reasonable quantities
of prospectuses to aid in the solicitation of applications for Contracts.
(5) SELLING GROUP MEMBER COMPLIANCE
Selling Group Member shall be responsible for making suitability
determinations in compliance with federal and state securities laws and shall
supervise Associated Agency and Sales Persons in determining client
suitability.
Selling Group Member shall fully comply with the requirements of the NASD and
of the 1934 Act and such other applicable federal and state laws and will
establish rules, procedures, and supervisory and inspection techniques
necessary to diligently supervise the activities of its NASD registered
representatives who are state insurance licensed agents or solicitors of AGL,
in connection with offers and sales of the Contracts. Such supervision shall
include providing, or arranging for, initial and periodic training in the
provisions of and other information regarding the Contracts. Upon request by
Distributor or AGL, Selling Group Member will furnish appropriate records as
are necessary to establish diligent supervision and client suitability.
Selling Group Member shall fully cooperate in any insurance or securities
regulatory examination, investigation, or proceeding or any judicial
proceeding with respect to AGL, Distributor, Selling Group Member, and/or
Associated Agency and their respective affiliates, agents and representatives
to the extent that such examination, investigation, or proceeding arises in
connection with the Contracts. Selling Group Member shall immediately notify
Distributor and AGL if its broker-dealer registration or the registration of
any of its Sales Persons is revoked, suspended, or terminated.
(6) ASSOCIATED AGENCY AND SALES PERSON COMPLIANCE
Associated Agency shall fully comply with the requirements of state insurance
laws and applicable federal laws and will establish rules and procedures
necessary to diligently supervise the activities of the Sales Persons. Upon
request by Distributor or AGL, Selling Group Member will furnish appropriate
records as are necessary to establish such supervision. Associated Agency and
Sales Persons shall be responsible for making suitability determinations in
compliance with federal and state securities laws.
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Associated Agency shall fully cooperate in any insurance or securities
regulatory examination, investigation, or proceeding or any judicial
proceeding with respect to AGL, Distributor, Selling Group Member, and/or
Associated Agency and their respective affiliates, agents and representatives
to the extent that such examination, investigation, or proceeding arises in
connection with the Contracts. Associated Agency shall immediately notify
Distributor and AGL if its insurance license or the license of any of its
Sales Persons is revoked, suspended, or terminated.
(7) AGL COMPLIANCE
AGL represents that the prospectus(es) and registration statement(s) relating
to the Contracts contain no untrue statements of material fact or omission to
state a material fact, the omission of which makes any statement contained in
the prospectus and registration statement misleading. AGL agrees to indemnify
Distributor, Associated Agency and Selling Group Member from and against any
claims, liabilities and expenses which may be incurred by any of those parties
under the Securities Act of 1933, the 1934 Act, the Investment Company Act of
1940, common law or otherwise arising out of a breach of the representation in
this paragraph.
(8) COMPENSATION
AGL will remit to Associated Agency compensation as set forth in Schedule B
hereto.
(9) COMPLAINTS, INVESTIGATIONS AND PROCEEDINGS
Associated Agency and Selling Group Member shall cooperate with AGL and
Distributor in any regulatory investigation or proceeding or judicial
proceeding relating to the solicitation of applications for, or servicing of,
Contracts by Associated Agency and/or Selling Group Member and their Sales
Persons. Further, Associated Agency and Selling Group Member shall promptly
provide AGL and Distributor with a copy of any of the following relating to
the sale or servicing of any Contract: (i) any notice of claim against AGL or
Distributor, (ii) any notice of regulatory investigation or proceeding or
judicial proceeding, and (iii) all legal documents pertaining to the
foregoing.
(10) INDEMNIFICATION
Selling Group Member and Associated Agency agree to, jointly and severally,
hold harmless and indemnify AGL and Distributor and any of their respective
affiliates, employees, officers, agents and directors (collectively,
"Indemnified Persons") against any and all claims, liabilities and expenses
(including, without limitation, losses occasioned by an rescission of any
Contract pursuant to a "free look" provision or by any return of initial
purchase payment in connection with an incomplete application), and including
without limitation reasonable attorneys' fees and expenses and any loss
attributable to the investment experience under a Contract, that any
Indemnified Person may incur from liabilities resulting or arising out of or
based upon (a) any untrue or alleged untrue statement
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other than statements contained in the registration statement or prospectus
relating to any Contract, (b) (i) any inaccurate or misleading, or allegedly
inaccurate or misleading sales material used in connection with any marketing
or solicitation relating to any Contract, other than sales material provided
preprinted by AGL or Distributor, and (ii) any use of any sales material that
either has not been specifically approved in writing by AGL and Distributor or
that, although previously approved in writing by AGL and Distributor, has been
disapproved, in writing by either of them, for further use, or (c) any act or
omission of a Sales Person, director, officer or employee of Selling Group
Member and Associated Agency, including without limitation any failure of
Selling Group Member, Associated Agency or any Sales Person to be registered
as required as a broker-dealer under the 1934 Act, or licensed in accordance
with the rules of any applicable self regulatory organization or insurance
regulator.
AGL shall indemnify and hold harmless Selling Group Member, Associated Agency
and Distributor and their employees, officers, agents and directors against
any losses, claims, damages or liabilities, joint or several, including but
not limited to reasonable attorneys' fees and court costs, to which Selling
Group Member, Associated Agency or Distributor or such employee, officer,
agent or director, becomes subject under the Securities Act of 1933 or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue or alleged
statement in any registration statement or any post-effective amendment or any
supplement to the prospectus for a Contract, or in any sales material
preprinted by AGL and not subsequently disapproved by AGL, in writing, for
further use, or the omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(11) FIDELITY BOND
Associated Agency represents that all directors, officers, employees and Sales
Persons of Associated Agency licensed pursuant to this Agreement or who have
access to funds of AGL are and will continue to be covered by a blanket
fidelity bond including coverage for larceny, embezzlement and other
defalcation, issued by a reputable bonding company. This bond shall be
maintained at Associated Agency's expense. Such bond shall be at least
equivalent to the minimal coverage required under the NASD Rules of Fair
Practice, and endorsed to extend coverage to life insurance and annuity
transactions. Associated Agency acknowledges that AGL may require evidence
that such coverage is in force and Associated Agency shall promptly give
notice to AGL of any notice of cancellation or change of coverage.
Associated Agency assigns any proceeds received from the fidelity bond company
to AGL to the extent of AGL's loss due to activities covered by the bond. If
there is any deficiency, Associated Agency will promptly pay AGL that amount
on demand. Associated Agency indemnifies and holds harmless AGL from any
deficiency and from the cost of collection.
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(12) LIMITATIONS OF AUTHORITY
The Contract forms are the sole property of AGL. No person other than AGL has
the authority to make, alter or discharge any policy, Contract, certificate,
supplemental contract or form issued by AGL. No party has the right to waive
any provision with respect to any Contract or policy. No person has the
authority to enter into any proceeding in a court of law or before a
regulatory agency in the name of or on behalf of AGL.
(13) ARBITRATION
The parties agree that any controversy between or among them arising out of
their business or pursuant to this Agreement that cannot be settled by
agreement shall be taken to arbitration as set forth herein. Such arbitration
will be conducted in the forum, and according to the securities arbitration
rules then in effect, of the American Arbitration Association, NASD, or any
registered national securities exchange. Arbitration may be initiated by
serving or mailing a written notice. The notice must specify which forum and
rules will apply to the arbitration. This specification will be binding on all
parties.
Any award the arbitrator makes will be final, and judgment on it may be
entered in any court having jurisdiction. Any party to the arbitration may
request that the arbitrator's award include findings of fact and conclusions
of law. Each party shall bear its own costs of arbitration. This arbitration
agreement shall be enforced and interpreted exclusively in accordance with
applicable federal law, including the Federal Arbitration Act.
(14) GENERAL PROVISIONS
(A) Waiver
Failure of any of the parties to promptly insist upon strict
compliance with any of the obligations of any other party under this
Agreement will not be deemed to constitute a waiver of the right to
enforce strict compliance.
(B) Independent Contractors
Distributor, Selling Group Member and Associated Agency are
independent contractors and not employees or subsidiaries of AGL;
Selling Group Member and Associated Agency are independent
contractors and not employees or subsidiaries of Distributor.
(C) Independent Assignment
No assignment of this Agreement or of commissions or other payments
under this Agreement shall be valid without prior written consent of
AGL and Distributor.
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(D) Notice
Any notice pursuant to this Agreement may be given electronically
(other than vocally by telephone) or by mail, postage paid,
transmitted to the last address communicated by the receiving party
to the other parties to this Agreement.
(E) Severability
To the extent this Agreement may be in conflict with any applicable
law or regulation, this Agreement shall be construed in a manner
consistent with such law or regulation. The invalidity or illegality
of any provisions of this Agreement shall not be deemed to affect the
validity or legality of any other provision of this Agreement.
(F) Amendment
This Agreement may be amended only in writing and signed by all
parties. No amendment will impair the right to receive commissions as
accrued with respect to Contracts issued and applications procured
prior to the amendment.
(G) Termination
This Agreement may be terminated by any party upon 30 days' prior
written notice. It may be terminated, for cause, by any party
immediately. Termination of this Agreement shall not impair the right
to receive commissions accrued with respect to applications procured
prior to the termination except as otherwise specifically provided in
Schedule B.
(H) GOVERNING LAW
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA.
(I) This Agreement replaces and supersedes any other agreement or
understanding related to the Contracts, between or among the parties
to this Agreement.
By signing below, the undersigned agree to have read and be bound by the terms
and conditions of this Agreement.
Date:__________________________
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SIERRA INVESTMENT SERVICES CORPORATION
By:________________________________________________
Name and Title
Selling Group Member: ____________________________
Address: _________________________________________
_________________________________________
_________________________________________
By: _________________________________________
_________________________________________
Associated Agency: _______________________________
Address: _________________________________________
_________________________________________
By: _________________________________________
American General Life Insurance Company
0000-X Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
By:________________________________________________
Name and Title
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