Exhibit 1.A.(3)(d)
NEW ENGLAND SECURITIES CORPORATION
VARIABLE PRODUCT SALES AGREEMENT
This Agreement is made and entered into as of _____, 199_, by and among New
England Securities Corporation ("NES"), a Massachusetts corporation, New England
Life Insurance Company ("NELICO"), a Massachusetts corporation and ___________
corporation, ("Contractor").
NES, principal underwriter of the Variable Products, hereby authorizes
Contractor to solicit applications for the purchase of such Variable Products,
in consideration of and subject to the following terms and conditions:
1. Definitions. For the purposes of this Agreement the following terms
-----------
are as defined:
1.1 "Variable Products" shall mean the variable life insurance policies
and/or variable annuity contracts issued by NELICO.
1.2 "Insurance Company" shall mean NELICO.
1.3 "Prospectus" shall mean the then-current prospectus for the Insurance
Company separate investment account that issues the Variable Product
together with the prospectus for any underlying mutual fund in which
the separate investment account may invest, and any supplements or
"stickers" to each such prospectus.
1.4 "Registered Representative" shall mean an individual who is duly
registered with the National Association of Securities Dealers, Inc.
("NASD") in compliance with the Securities Exchange Act of 1934, as
amended (the "1934 Act") and who is licensed as a life insurance
agent for the sale of variable life insurance and variable annuity
contracts in the jurisdictions in which applications are to be
solicited.
1.5 "Insurance Subsidiary" shall mean a subsidiary of the Contractor
formed as a domestic corporation that has obtained insurance agent or
broker licenses under applicable state law.
2. Licensing and Registration. Contractor represents that it is a
--------------------------
properly registered securities broker and/or dealer under applicable
federal and state securities laws and regulations. Each party hereto
represents that it is a member in good standing of the NASD, and
agrees to notify immediately the other should it cease to be either a
member in good standing of the NASD, and/or should it cease to be a
member of the NASD. It is further agreed that all rules and/or
regulations of the NASD now in effect or hereafter adopted, which are
binding upon underwriters and dealers in the distribution of variable
life insurance products and variable annuity contracts and such other
regulations applicable to Contractor and NES, shall be deemed to be a
part of this Agreement to the same extent as if set forth herein.
3. Contract Relationship. Throughout the term of this Agreement, the
---------------------
relationship of Contractor to NES shall be that of an independent
contractor. Contractor, and its employees, representatives and agents,
if any, are not and shall not be employees of NES.
1
To preserve such independent contractor relationship, the parties
agree that Contractor at all times shall:
3.1 Pay all of its own overhead expenses, including but without
limitation, expenses for clerical assistance, rent, postage,
telephone and similar expenses, and federal and state income taxes
and payroll taxes under the Federal Insurance Contribution Act and
any applicable state unemployment, disability or other laws with
respect to its income.
3.2 Maintain such policies of workers compensation insurance as are
customary.
3.3 Not in any way hold itself out to any of its customers or potential
customers as being affiliated with NES.
3.4 Control the mode of conducting its business with complete discretion,
except as otherwise expressly provided in this Agreement.
3.5 Not enter into any agreement for or on behalf of NES, or create any
obligation, express or implied, by or in favor of NES.
3.6 Not accept payment for services for or on behalf of NES.
3.7 Not accept service of process for NES.
3.8 Not be a principal underwriter with respect to the Variable Products
or shares of the New England Zenith Fund.
4. Compensation.
------------
4.1 The Contractor, or if required by state law, the Insurance
Subsidiary, shall receive compensation with respect to sales of
Variable Products in transactions solicited by Registered
Representatives in accordance with the terms and conditions of NES'
then current distribution agreements applicable to sales of such
Variable Products, and in accordance with the terms and conditions
contained in the applicable Insurance Company broker-dealer insurance
marketing agreements, as may be amended from time to time. Such
compensation shall be remitted to Contractor or the Insurance
Subsidiary, as the case may be, through a General Agent of the
Insurance Company who is a Registered Representative of NES or by such
other procedures as NES shall specify. NES or such General Agent may
offset against any compensation payable to Contractor or the Insurance
Subsidiary any indebtedness owing from Contractor or the Insurance
Subsidiary to NES, the Insurance Company, or such General Agent.
4.2 Compensation shall be refunded by Contractor or the Insurance
Subsidiary, as the case may be, to NES, or its agent, in accordance
with the terms and conditions of the applicable Insurance Company
broker-dealer insurance marketing agreement, as amended from time to
time. Such refund may be effected, at NES' option, by deduction by NES
from other moneys to be paid to Contractor or the Insurance
Subsidiary.
5. Covenants of Contractor. Contractor covenants and agrees that,
-----------------------
during the term of this Agreement:
2
5.1 Contractor is, and at all times during the term of this Agreement
shall be, a securities broker registered and in good standing with
the Securities and Exchange Commission ("SEC") as a broker-dealer
pursuant to Section 15(a) of the 1934 Act, a member in good standing
of the NASD, and a registered broker-dealer under state law to the
extent required in order to provide the services discussed in this
Agreement.
5.2 Contractor shall at all times conduct its business solely in
accordance with the rules and regulations of the SEC, the NASD, any
other appropriate self-regulatory organization and all appropriate
state insurance and securities authorities. Contractor shall assume
full responsibility for the securities activities of, and for
securities law compliance by, any "person associated" (as that term
is defined in Section 3(a)(18) of the 0000 Xxx) with Contractor,
including, as applicable, compliance with rules and regulations of
the NASD and with federal and state laws and regulations. Contractor
understands that if failure to comply with the rules, regulations,
and requirements of applicable state and federal law results in
disciplinary action against it by the NASD and any other regulatory
authority having jurisdiction, that such failure may result in the
suspension by NES, in the sole discretion of NES, of Contractor's
authority to represent NES or in the termination of this Agreement by
NES.
5.3 Contractor or the Insurance Subsidiary, as the case may be, shall
instruct purchasers to remit all premiums directly to the Insurance
Company or shall forward any premiums received from purchasers
directly to the Insurance Company.
5.4 Contractor agrees that NES will act as Contractor's agent in
providing customer confirmations pursuant to Rule l0b-10 under the
1934 Act.
5.5 Contractor will itself be, or will select persons associated with it
who are, trained and qualified to solicit applications for purchase
of the Variable Products in conformance with applicable state and
federal laws. Any such person shall be a Registered Representative of
Contractor in accordance with the rules of the NASD, be licensed to
offer the Variable Products in accordance with the insurance laws of
any jurisdiction in which such person solicits applications and be
licensed with and appointed by the applicable Insurance Company as an
insurance agent to solicit applications for the Variable Products.
The activities of all Registered Representatives of Contractor
referred to in this paragraph will be under the direct supervision
and control of Contractor. The right of such Registered
Representatives to solicit applications for the purchase of Variable
Products is subject to their continued compliance with the rules and
procedures which may be established by Contractor, NES or the
Insurance Companies, including those set forth in this Agreement.
5.6 Contractor and its Registered Representatives shall solicit
applications for the Variable Products in accordance with applicable
state insurance law requirements and other applicable federal and
state laws and regulations. Neither Contractor nor its Registered
Representatives shall offer the Variable Products for sale in any
state where such products are not qualified for sale under applicable
laws and regulations, where neither Contractor nor its Registered
Representatives is authorized to sell such Variable Products, or
where Contractor is not qualified to act as a broker-dealer.
3
5.7 Contractor shall be responsible for the training, supervision and
control of all non-registered personnel of any Insurance Subsidiary
and generally shall be responsible for supervising and inspecting
each such Insurance Subsidiary.
5.8 Contractor shall use its best efforts to maximize sales of the
Variable Products contemplated by this Agreement, but shall not be
required to devote its exclusive efforts thereto.
5.9 Contractor shall provide or shall cause its Registered
Representatives to provide a Prospectus whenever required by
applicable law in connection with the sale or delivery of Variable
Products pursuant to the provisions of this Agreement, and shall
fully explain or shall cause its Registered Representatives to
explain to a prospective customer or customers the terms of any
Variable Product offered or sold to such customers.
5.10 Contractor shall not make, nor permit its Registered Representatives
to make, any untrue or misleading statement or representation, and
shall not omit, nor permit its Registered Representatives to omit, to
state any material information or fact, pertaining to any aspect of
an offer or sale of Variable Products to a prospective customer or
customers.
5.11 Contractor shall not use, nor permit its Registered Representatives
to use, any Prospectus, prospecting material, advertising, sales
material, or related materials in connection with offers and sales of
the Variable Products, unless the same have been provided or approved
in advance in writing by NES. Contractor shall comply with such
instructions relating to the sale of Variable Products as may
reasonably be requested by NES.
5.12 Contractor shall at all times use its best efforts to obtain and
maintain in full force and effect policies of professional liability
insurance against errors and omissions in such amounts and on such
terms as are customary in the securities industry for a broker of
Contractor's size and type. Contractor shall allow NES to review such
policies from time to time upon NES' request in writing. Contractor
agrees promptly to notify NES of any change in any such policy.
Contractor understands that Contractor is not covered under any
insurance policy, including but not limited to any errors and
omissions coverage, maintained by NES or any affiliate of NES.
5.13 Contractor agrees to furnish to NES such information as may from time
to time be requested by NES for the purpose of complying with the
applicable provisions of federal or state securities laws and the
by-laws, rules or regulations of the NASD or any other securities
regulatory authority. Contractor also agrees to furnish to NES such
information as may from time to time be requested by NES for the
purpose of updating the financial and other information supplied by
Contractor to NES prior to entering this Agreement. Contractor shall
immediately notify the Compliance Department of NES of any
proceeding, suit or action, whether criminal, civil or
administrative, or the commencement by the NASD or any other
securities regulatory authority or any other state or federal
authority of any investigation, if such proceeding, suit, action or
investigation arises out of or in connection with Contractor's
activities as broker or dealer with respect to Variable Products.
Contractor shall promptly notify NES if it becomes the subject of any
disciplinary or license revocation proceeding, or if it is the
subject of any governmental order, that affects its right or ability
to perform broker-dealer services. Contractor shall also immediately
notify the Compliance Department of NES of any complaint by a
prospect or customer or regulatory authority regarding the Variable
4
Products or Contractor's activities as broker or dealer. NES and the
Insurance Company reserve the right to resolve any such complaints
involving the Variable Products by a prospect or customer or
regulatory authority. Any response by NES or the Insurance Company to
a complaint will be sent to Contractor for approval not less than
five business days before its being sent to the prospect, customer or
regulatory authority except that if a more prompt response is
required, the proposed response shall be communicated by telephone.
Contractor shall not be liable to NES or the Insurance Company on
account of any settlement of any claim or action effected without the
consent of Contractor.
5.14 Contractor shall advise NES of any claim or demand, including without
limitation, any pending or threatened litigation for which NES or the
Insurance Company would be entitled to indemnity or contribution
pursuant to paragraph 7 of this Agreement.
5.15 All covenants of Contractor contained in this Agreement shall be
deemed to be continuing representations and warranties of Contractor
which shall survive the termination of this Agreement.
6. Covenants of NES. NES covenants and agrees that, during the term of
----------------
this Agreement:
6.1 NES is, and at all times during the term of this Agreement shall be,
a securities broker registered and in good standing with the SEC as a
broker-dealer pursuant to Section 15(a) of the 1934 Act and a member
in good standing of the NASD.
6.2 NES shall at all times conduct its business solely in accordance
with the rules and regulations of the SEC, the NASD, any other
appropriate self-regulatory organization and all appropriate state
securities authorities.
6.3 NES shall advise Contractor of any claim or demand, including without
limitation, any pending or threatened litigation, for which
Contractor would be entitled to indemnity or contribution pursuant to
paragraph 7 of this Agreement.
6.4 All covenants of NES contained in this Agreement shall be deemed to
be continuing representations and warranties of NES which shall
survive the termination of this Agreement.
7. Indemnification. Contractor and NES agree as follows:
---------------
7.1 Contractor agrees to indemnify and hold NES and the Insurance Company
harmless from any and all cost, expense and liability, including
reasonable attorneys' fees, resulting from any claims, demands,
liabilities, losses, damages or expenses (collectively, "Claims")
arising out of or relating to (a) any offers and/or sales by
Contractor of securities other than the Variable Products
contemplated by this Agreement, (b) any business or activity of
Contractor not expressly contemplated by this Agreement, and (c) any
applications for Variable Products, solicitations of applications for
the Variable Products or offers to sell or sales of Variable Products
to the extent such Claims result from acts or omissions by
Contractor, its representatives, agents, sub-agents or any Insurance
Subsidiary. For purposes of this sub-paragraph 7.1, NES shall be
deemed to include its "controlling persons" as defined in Section 15
of the Securities Act of 1933 and Section 20(a) of the 1934 Act.
5
7.2 NES agrees to indemnify and hold Contractor harmless from any and all
cost, expense and liability, including reasonable attorneys' fees,
resulting from any Claims arising out of or relating to any offer to
sell or sales of Variable Products made pursuant to this Agreement to
the extent such Claims result from acts or omissions by persons other
than the Contractor or persons with respect to whose activities the
Contractor is responsible. For purposes of this sub-paragraph 7.2,
Contractor shall be deemed to include its "controlling persons" as
defined in Section 15 of the Securities Act of 1933 and Section 20(a)
of the 1934 Act.
8. Application Procedures. Contractor shall comply with all procedures
----------------------
established by the Insurance Company and NES for the handling of
applications, initial premiums, and insurance policy proceeds. The
Insurance Company shall have the unqualified right to refuse any
application for a Variable Product.
9. Sales Material. No person is authorized to make any representations
--------------
concerning the Variable Products except those contained in the
currently applicable Prospectus and in sales literature issued and
approved by NES supplemental to such Prospectus. NES shall furnish
without charge additional copies of the current Prospectus and such
sales literature and other releases and information issued by NES in
reasonable quantities upon request. Contractor agrees that it shall in
all respects duly conform with all laws and regulations applicable to
the sale of the Variable Products. In the offer and sale of the
Variable Products, Contractor may not use any prospectus or
advertising, prospecting, or sales material not provided or approved
in writing by NES.
10. Confirmations: Books and Records. NES shall confirm or cause to be
--------------------------------
confirmed to customers of Contractor all policy transactions, as and
to the extent legally required. Contractor shall maintain all books
and records as required by Rules 17a-3 and 17a-4 under the 1934 Act,
except to the extent that NES may agree to maintain any such records
on Contractor's behalf. Records subject to any such agreement shall be
maintained by NES, either directly or through the services of NELICO
or an affiliate of NELICO, as agent for Contractor in compliance with
said rules, and such records shall be and remain the property of
Contractor and be at all times subject to inspection by the SEC in
accordance with Section 17(a) of the 1934 Act. Except for those books
and records maintained by or on behalf of Contractor in accordance
with Rules 17a-3 and 17a-4 under the 1934 Act, all books, documents,
prospectuses, application forms, or other materials or supplies in the
possession of Contractor which pertain to the Variable Products or to
the business of NES shall be the property of NES or the Insurance
Company, as the case may be, which at any and all times shall be open
to inspection by any duly authorized representative of NES or the
Insurance Company and at the termination of this Agreement shall be
returned to NES. All records and information obtained by Contractor
pursuant to this Agreement shall be deemed to be confidential in
nature, and Contractor shall not disclose or use any such records or
information in any manner whatsoever except as expressly authorized in
writing by NES or as required by federal or state regulatory
authorities or court order. Contractor shall submit to all regulatory
and administrative bodies having jurisdiction over the operations of
NES, the Insurance Company, or Contractor any information, reports or
other material obtained pursuant to this Agreement which any such body
may request or require pursuant to applicable laws or regulations.
6
11. Assignments. No assignment of this Agreement or of commissions
-----------
payable hereunder shall be made by Contractor without the prior
written consent of NES. Any such assignment of commissions is also
subject to the requirement and limitations thereon contained in any
applicable Insurance Company broker dealer insurance marketing
agreements.
12. Miscellaneous. This Agreement supersedes and cancels any prior
-------------
agreement between Contractor and NES with respect to the sale of the
Variable Products. Either party to this Agreement may cancel this
Agreement without cause at any time by written notice to the other.
13. Any notice to NES shall be given if mailed or telegraphed to it at
the address specified below, or at such other address as NES gives
notice of to Contractor:
Compliance Department
New England Securities Corporation
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Any notice to Contractor shall be duly given if mailed or telegraphed
to it at the address specified below, or at such other address as
Contractor gives notice of to NES:
--------------------------------------------
--------------------------------------------
--------------------------------------------
14. Governing Law. This Agreement shall be governed by the laws of The
-------------
Commonwealth of Massachusetts.
15. No Hire. Contractor and NELICO acknowledge that each will have access
-------
to the names of the other's Registered Representatives as a result of
performing their respective obligations under this Agreement, and that
each may establish close working relationships with such persons.
Therefore, Contractor and NELICO agree that while Registered
Representatives maintain their affiliation with each and for twelve
(12) months after their termination of the affiliation:
(a) Contractor and NELICO will not hire any Registered
Representatives of the other.
(b) Contractor and NELICO acknowledge that their Registered
Representatives hold important contractual and business
relationships with each and agree that each shall not interfere
in any way with the relationships, contractual or otherwise,
between the other and its Registered Representatives. Contractor
and NELICO shall not induce or encourage, or attempt to induce or
encourage, any Registered Representative of the other to
terminate or change his or her relationship with the other.
7
The parties hereto have executed this Agreement as a sealed instrument as of the
date first above written.
CONTRACTOR: NEW ENGLAND SECURITIES
CORPORATION
By: By:
--------------------------- ---------------------------
Title: Title:
--------------------------- ---------------------------
NEW ENGLAND
LIFE INSURANCE COMPANY
By:
---------------------------
Title:
---------------------------
8
