Exhibit 10.2
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement is entered into as of
September 25, 2002, among Life Investors Insurance Company of America,
Transamerica Life Insurance Company, (collectively "Aegon"), and Xxxxx/Xxxxxx
Consulting, Inc. ("Xxxxx/Xxxxxx").
WHEREAS, Aegon sells life and variable life policies by and through
duly licensed and appointed agents employed or engaged by Xxxxx/Xxxxxx and its
affiliates (not including Long, Xxxxxx & Associates, LLC which will be acquired
by Xxxxx/Xxxxxx simultaneously with the execution of this Agreement) with whom
Aegon has entered into an Appointment Agreement. All such policies (except
private placement variable universal life policies and modified separate account
policies) issued either before or during the term of this Agreement, are
hereinafter defined as the "Policies". Persons who own Policies are referred to
hereafter as "Policyowners".
WHEREAS, Xxxxx/Xxxxxx provides on behalf of carriers services in
support of the sales process, including marketing and ongoing administrative
backoffice and client service work.
WHEREAS, Aegon desires to retain and Xxxxx/Xxxxxx desires to be
retained for the purpose of performing such services on behalf of Aegon.
In consideration of the mutual promises, conditions and covenants as
set forth below, the parties agree as follows:
1.0 APPOINTMENT.
Aegon appoints and authorizes Xxxxx/Xxxxxx to assist Aegon and to
provide administrative support thereto for the Policies, pursuant to the terms
and conditions of this Agreement and the executed Appointment Agreement.
2.0 COMPENSATION.
While this Agreement is in effect, Aegon will pay Xxxxx/Xxxxxx
according to the compensation schedule attached to this Agreement as Schedule A.
3.0 BASIC LEVEL OF SERVICES.
Xxxxx/Xxxxxx shall provide a basic level of marketing, administrative
and processing services on behalf of and as directed by Aegon. These basic
services shall include but not be limited to:
(i) Arrange and preside over educational meetings of
Xxxxx/Xxxxxx' sales and service representatives on as needed basis to
ensure that they are familiar with the features of the Policies;
(ii) Prepare and deliver annual policy reviews to
Policyowners in a format approved by Aegon;
(iii) Provide Aegon four times annually with the
opportunity to participate with Xxxxx/Xxxxxx' sales representatives on
conference calls to present educational product information;
(iv) Distribute Aegon issued marketing materials to
customers and Xxxxx/Xxxxxx sales representatives;
(v) Report cash values and other policy related
information prepared by Aegon to Policyowners on a regular basis;
(vi) Assist with death claim processing for Policyowners;
(vii) Assist Xxxxx/Xxxxxx' sales representatives and life
licensed employees in obtaining all necessary appointments and filing
the appointments with the applicable insurance regulatory authority;
(viii) Provide technical assistance to Xxxxx/Xxxxxx' sales
representatives and their administrative staff in the ongoing servicing
of Policyowners;
(ix) Provide results from Study Groups;
(x) Provide periodic product comparisons in a format
approved by Aegon and Xxxxx/Xxxxxx; and
(xi) Use best efforts to promote Aegon products in
appropriate forums.
4.0 TERM AND TERMINATION.
4.0.1 This Agreement will become effective as of the date set forth
above and will remain in force until December 31, 2032 unless otherwise
terminated by the parties for cause pursuant to this Article 4.0.
4.0.2 This Agreement may be terminated immediately for cause by
Aegon upon occurrence of one of the following:
(i) Upon Xxxxx/Xxxxxx' bankruptcy, insolvency or
assignment of commissions for the benefit of creditors, conviction of
Xxxxx/Xxxxxx of any felony or fraud or of any crime involving
dishonesty;
(ii) Upon Xxxxx/Xxxxxx' material failure to acquire or
continuously maintain all licenses required by state or federal law or
cancellation of or refusal to renew by the insurance regulatory
authority any license, certificate or other regulatory approval
required by Xxxxx/Xxxxxx to perform their duties under this Agreement;
(iii) Upon any material violation by Xxxxx/Xxxxxx or its
officers, employees or agents of any rule or regulation of any
regulatory authority having jurisdiction which would materially
adversely affect Xxxxx/Xxxxxx' ability to satisfy its obligations under
this Agreement; or
(iv) Upon Xxxxx/Xxxxxx' failure to perform or observe any
material term, covenant or agreement contained in this Agreement which
failure shall remain unremedied for 30 days after the receipt from
Aegon of written notice thereof.
4.0.3 This Agreement may be terminated immediately for cause by
Xxxxx/Xxxxxx upon occurrence of one of the following:
(i) Upon Aegon's bankruptcy, insolvency, conviction of
their officers or supervisory personnel of any felony or fraud or of
any crime involving dishonesty;
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(ii) Upon Aegon's material failure to acquire or
continuously maintain all licenses required by state or federal law, or
cancellation of or refusal to renew by the insurance regulatory
authority any license, certificate or other regulatory approval
required by Aegon to perform their duties under this Agreement;
(iii) Upon any material violation by Aegon or its officers,
employees or agents of any rule or regulation of any regulatory
authority having jurisdiction which would materially adversely affect
Aegon's ability to satisfy its obligations under this Agreement; or
(iv) Upon Aegon's failure to perform or observe any
material term, covenant or agreement contained in this Agreement which
failure shall remain unremedied for 30 days after the receipt from
Xxxxx/Xxxxxx of written notice thereof.
5.0 RECORDS.
5.0.1 Maintenance of Records Relating to Transactions Arising Under
this Agreement. Xxxxx/Xxxxxx shall maintain at their principal offices, for the
duration of this Agreement and six years thereafter, a system of files to
contain books and records of all transactions arising under this Agreement.
These books and records shall be maintained in accordance with the standards
required by all regulatory authorities having jurisdiction over the transactions
contemplated by this Agreement. Notwithstanding this provision, in the event
that this Agreement is terminated, Xxxxx/Xxxxxx shall at Aegon's sole option
transfer copies of records to Aegon or its authorized representative. In such
case, Aegon or its authorized representative, as the case may be, shall
acknowledge in writing that it is responsible for retaining the records of
Xxxxx/Xxxxxx as required herein.
5.0.2 Maintenance of Records Relating to Compliance with this
Agreement. Xxxxx/Xxxxxx and Aegon shall maintain books and records necessary to
establish each party's compliance with this Agreement and both Xxxxx/Xxxxxx and
Aegon shall maintain such books and records for three years after the
termination of this Agreement.
5.0.3 Aegon's Right to Inspect. Aegon, its employees or authorized
representatives may audit, inspect and examine at reasonable times, during
regular business hours and with at least 72 hours prior notice, the books and
records of Xxxxx/Xxxxxx of all transactions arising under this Agreement
necessary to ensure compliance with this Agreement.
5.0.4 Xxxxx/Xxxxxx' Right to Inspect. Xxxxx/Xxxxxx, its employees or
authorized representatives may audit, inspect and examine the books and records
of Aegon at reasonable times, during regular business hours and with at least 72
hours prior notice. Xxxxx/Xxxxxx agrees to limit its review of the books and
records of Aegon to the extent necessary to ensure compliance with this
Agreement.
5.0.5 Survival of Records Provisions. The records provisions shall
survive the termination of this Agreement.
6.0 INDEMNIFICATION/LEGAL PROCEEDINGS.
6.0.1 Indemnity Definitions. The following definitions shall apply
for purposes of this Article:
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"Aegon Claim" means any civil, administrative and/or criminal action,
claim, suit, and/or legal proceeding of any kind that is brought against an
Aegon Indemnitee by a third party (the "Claimant") unaffiliated with such
Indemnitee which arises out of, is based upon, or otherwise relates to any loss,
damage, liability, deficiency, cause of action, costs or expense, including
reasonable attorneys' fees and costs of litigation, on account of any (i)
misrepresentation, whether or not intentional, made by Xxxxx/Xxxxxx in
connection with this Agreement; (ii) failure of Xxxxx/Xxxxxx to fulfill any of
its agreements or covenants under this Agreement; (iii) event of default; or
(iv) negligent or willful or wanton conduct by Xxxxx/Xxxxxx or persons employed
or appointed by Xxxxx/Xxxxxx in connection with this Agreement.
"Xxxxx/Xxxxxx Claim" means any civil, administrative and/or criminal
action, claim, suit, and/or legal proceeding of any kind that is brought against
a Xxxxx/Xxxxxx Indemnitee by a third party (the "Claimant") unaffiliated with
such Indemnitee which arises out of, is based upon, or otherwise relates to any
loss, damage, liability, deficiency, cause of action, costs or expense,
including reasonable attorneys' fees and costs of litigation, on account of any
(i) misrepresentation, whether or not intentional, made by Aegon in connection
with this Agreement; (ii) failure of Aegon to fulfill any of its agreements or
covenants under this Agreement; (iii) event of default; or (iv) negligent or
willful or wanton conduct by Aegon or persons employed or appointed by Aegon in
connection with this Agreement.
"Claim" means Aegon Claim or Xxxxx/Xxxxxx Claim as appropriate.
"Costs" means any damages, settlements, judgments, losses, expenses,
interest, penalties, reasonable legal fees and disbursements (including without
limitation fees and costs for investigators, expert witnesses and other
litigation advisors) and other costs incurred by an Indemnitee to investigate,
defend or settle a Claim, except that no settlement payments shall be included
in Costs unless the applicable Indemnitor has given its prior express written
consent to the settlement, which consent shall not be unreasonable withheld.
"Indemnitee" shall mean a party entitled to the right of
Indemnification under this Agreement.
"Indemnitor" shall mean a party obligated to provide indemnification
hereunder.
6.0.2 Xxxxx/Xxxxxx' Liability. In accordance with the procedures set
forth herein, Xxxxx/Xxxxxx shall indemnify and hold harmless Aegon and its
directors, officers, employees, affiliates, agents, representatives, successors
and assigns (collectively, "Aegon entities"), from and against any and all Aegon
Claims and related Costs filed or assessed against any of the Aegon entities.
6.0.3 Aegon's Liability. In accordance with the procedures set forth
herein. Aegon shall indemnify and hold harmless Xxxxx/Xxxxxx and its directors,
officers, employees, affiliates, agents, representatives, successors and assign
(collectively, "Xxxxx/Xxxxxx
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entities"), from and against any and all Xxxxx/Xxxxxx Claims and related Costs
filed or assessed against any of the Xxxxx/Xxxxxx entities.
6.0.4 Indemnification Claim Notice and Case Management. In the event
that any Claim is brought against any Indemnitee that might require
indemnification from Indemnitors, the Indemnitee promptly shall give notice
thereof to each of the Indemnitors. The failure to give such notice shall not
affect the Indemnitee's ability to seek reimbursement unless such failure has
materially and adversely affected the Indemnitor's ability to successfully
defend a Claim. At any time after such notice, any Indemnitor may deliver to the
Indemnitee its written acknowledgement that Indemnitee is entitled to
indemnification under this Article 6.0 for all Costs associated with the Claim.
The Indemnitors shall thereafter be entitled to assume the defense of the Claim
and shall bear all expenses associated therewith, including without limitation,
payment on a current basis of all previous Costs incurred by the Indemnitee in
relation to the Claim from the date the Claim was brought. After notice from any
Indemnitor to the Indemnitee of an election to assume the defense of any Claim,
the Indemnitee shall not be liable to the Indemnitors for any Costs related to
the Claim. Until such time as Indemnitee receives notice of an Indemnitor's
election to assume the defense of any Claim, Indemnitee may defend itself
against the Claim and may hire counsel and other experts of its choice and
Indemnitors shall be liable for payment of counsel and other expert fees on a
current basis as the same are billed.
6.0.5 Cooperation and Updates. To the extent that an Indemnitee
makes a claim for indemnification against an Indemnitor, Indemnitee and
Indemnitor shall each give the other reasonable access during normal business
hours to its books, records and employees and those books, records and employees
within its control in connection with the Claim for which indemnification is
sought hereunder and shall otherwise cooperate with one another in the defense
of any such Claim. Regardless of which party defends a particular Claim, the
defending party shall give the other parties written notice of any significant
development in the case as soon as practicable, but in any event within five (5)
business days after such development.
6.0.6 Settlement. If an Indemnitee is defending a Claim and: (1) a
settlement proposal is made by the Claimant, or (2) the Indemnitee desires to
present a settlement proposal to the Claimant, then the Indemnitee promptly
shall notify the Indemnitor of such settlement proposal together with its
counsel's recommendation. If the Indemnitee desires to enter into the settlement
and the Indemnitor does not consent within five (5) business days (unless such
period is extended, in writing, by mutual agreement of the parties hereto), then
Indemnitor, from the time they fail to consent forward, shall defend the Claim
and shall further indemnify the Indemnitee for all Costs associated with the
Claim which are in excess of the proposed settlement amount even if the same
were not originally covered under this Article 6.0. If an Indemnitor is
defending a Claim and a settlement requires an admissions of liability by
Indemnitee or would require Indemnitee to either take action (other than purely
ministerial action) or refrain from taking action (due to an injunction or
otherwise), Indemnitor may agree to such settlement only after obtaining the
express, written consent of Indemnitee.
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6.0.7 Indemnification Disputes. In the event that there is a dispute
between an Indemnitee and an Indemnitor over whether the Indemnitor is liable
for a Claim, then:
(i) Indemnitee shall defend the Claim in accordance with
the provisions of Section 6 hereof in the same manner and under the
same terms as though there were no dispute and Indemnitor had failed to
elect to defend the Claim itself and Indemnitee shall have the right to
settle such Claim pursuant to Section 6.0.6 hereof;
(ii) In addition, Indemnitor must advise Indemnitee of
such a dispute and the reasons therefore, in writing, within thirty
(30) days after the Claim is first tendered to Indemnitor unless the
Indemnitee and Indemnitor mutually agree, in writing, to extend the
time; and
(iii) The Indemnitee and the Indemnitor shall use good
faith efforts to resolve any dispute as to Indemnitor's indemnification
obligation.
Should those efforts fail to resolve the dispute, the ultimate
resolution shall be determined in a de novo proceeding, separate and apart from
the underlying Claim brought by the Claimant, before a court of competent
jurisdiction. No finding or judgment in any litigation on the underlying Claim,
except for Cost amounts, shall be given any weight in the court proceedings on
the indemnification issue. Either party may initiate such proceedings with a
court of competent jurisdiction at any time following the termination of the
efforts by such parties to resolve the dispute (termination of such efforts
shall be deemed to have occurred 30 days from the commencement of the same
unless such time period of extended by the written mutual agreement of the
parties). The prevailing party in such a proceeding shall be entitled to recover
reasonable attorneys' fees, costs and expenses. From and after the dates on
which responsibility for a disputed indemnity Claim is resolved: (i) Indemnitor
shall pay all Costs that are determined by the parties or the court, as the case
may be, to be allocable to any such Claim which is determined to be a Claim
subject to indemnity and (ii) Indemnitee shall reimburse Indemnitor for all
Costs previously paid by Indemnitor which are allocable to such Claim determined
to be a claim not subject to indemnity.
6.0.8 Multiple Claims. If the Claimant asserts both Claims subject
to indemnity and Claims not subject to indemnity in the same action, Indemnitee
shall defend the Claim in accordance with the provisions of Section 6.0.4 hereof
in the same manner as though Indemnitor had failed to elect to defend the Claim
itself and Indemnitee shall have the right to settle such Claims pursuant to
Section 6.0.6 hereof (subject to Indemnitor's right to assume the defense of
such Claims pursuant to such Section 6.0.4). Indemnitor and Indemnitee each
shall be responsible for all Costs associated with the Claim for which they are
responsible (i.e., Indemnitor for Claims subject to indemnity and Indemnitee for
Claims not subject to indemnity). The parties shall use good faith efforts to
agree on a reasonable and appropriate allocation of such Costs. If the parties
fail to agree on the appropriate allocation, the dispute shall be decided in
accordance with the methodology set forth in Section 6.0.7 (iii) hereof.
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6.0.9 Survival of Indemnification Provisions. The indemnification
provisions of this Article 6.0 shall survive the termination of this Agreement.
7.0 RELATIONSHIP.
Nothing contained herein is intended to create the relationship of
employer and employee between the parties hereto. Xxxxx/Xxxxxx shall be an
independent contractor and free to exercise its own judgement as to the time,
place and means of performing all acts hereunder, but shall conform to all legal
requirements and to all regulations of Aegon not unreasonably interfering with
such freedom of action or judgment.
Xxxxx/Xxxxxx and Aegon agree that with respect to the fulfillment of
their respective duties and obligations hereunder, each will conduct themselves
in accordance with the highest standards of good faith, fair dealing and
commercial reasonableness.
8.0 ASSIGNMENT.
No assignment by operation of law or otherwise of this Agreement or of
compensation payable hereunder shall be valid unless authorized in writing by
Aegon. Every assignment shall be subject to (a) any indebtedness and obligation
of Xxxxx/Xxxxxx that may be due or become due to Aegon or its affiliates; and
(b) any applicable NASD, SEC, or state insurance or securities regulation
pertaining to such assignments.
9.0 AMENDMENTS.
9.0.1 Writing Required. No waiver or amendment of this Agreement
shall be effective unless it is in writing and signed by a duly authorized
officer of Aegon and Xxxxx/Xxxxxx. The failure of Aegon or Xxxxx/Xxxxxx to
enforce any provisions of this Agreement shall not constitute a waiver of any
such provision or a course of conduct or a waiver in the future of that same
provision.
9.0.2 Past Waiver. No past waiver of a provision of this Agreement
by Aegon or Xxxxx/Xxxxxx shall constitute a course of conduct or a waiver in the
future of that same provision.
10.0 NOTICE.
Any and all notices required to be given under this Agreement or which
either of the parties may desire to give shall be in writing and shall be deemed
to be delivered when sent by certified mail, postage prepaid, return receipt
requested or sent by Federal Express or other recognized overnight courier
service, and addressed as follows:
If to Xxxxx/Xxxxxx:
Xxxxx Xxxxxxx
Xxxxx/Xxxxxx, Inc.
0000 Xxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
And
Xxxx Xxxxxx
Xxxxx/Xxxxxx, Inc.
000 Xxxxx Xxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxxxxxx, XX 00000
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If to Aegon:
Transamerica Life Insurance Company
Attn: President, Extraordinary Markets
0000 Xxxxxxxx Xx XX
Xxxxx Xxxxxx, XX 00000-0000
11.0 SEVERABILITY.
Any provision of this Agreement which is prohibited, unenforceable or
not authorized in any jurisdiction shall, as to such jurisdiction, by
ineffective to the extent of such prohibition, unenforceability or,
non-authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in any
other jurisdiction.
12.0 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Iowa, without reference to its conflicts of laws
provisions.
13.0 SURVIVAL OF CERTAIN PROVISIONS.
The following provisions of this Agreement shall survive the
termination or cancellation of this Agreement:
(i) Article 5 - Records
(ii) Article 6 - Indemnification
14.0 CONFIDENTIALITY.
Each of the parties agrees that the terms and conditions of this
Agreement are confidential and, unless otherwise required by law, shall not be
disclosed by either party except to such party's officers, employees, directors,
attorneys, accountants, advisors and representatives, without the consent of the
other party.
15.0 HEADINGS.
Section headings in this Agreement are included herein for convenience
of reference only and shall not affect the meaning or interpretation of this
Agreement. References to Schedules, shall, unless otherwise indicated, refer to
Schedules attached to this Agreement, which shall be incorporated in and
constitute a part of this Agreement.
16.0 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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LIFE INVESTORS INSURANCE COMPANY OF AMERICA
By: /s/
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Its: Vice President
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TRANSAMERICA LIFE INSURANCE COMPANY
By: /s/
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Its: Vice President
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XXXXX/XXXXXX CONSULTING, INC.
By: /s/ Xxxxxx X. Xxxx
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Its: Chief Financial Officer
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