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EXHIBIT 3(b)
FIRST SUNAMERICA LIFE INSURANCE COMPANY
1 SunAmerica Center
Los Angeles, CA 90067-6022
Mailing Address:
P. O. Box 54299
Los Angeles, CA 90054-0299
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SELLING
AGREEMENT
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SELLING AGREEMENT
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This SELLING AGREEMENT ("Agreement"), dated _____________________, is by and
among FIRST SUNAMERICA LIFE INSURANCE COMPANY ("Insurer"), SUNAMERICA CAPITAL
SERVICES, INC. ("Distributor") and _________________________________________ ,
together with its duly licensed insurance affiliates indicated on the signature
page hereof (the "Affiliate" and collectively, "Broker/Dealer").
If no Affiliate is indicated on the signature page, Broker/Dealer is acting as
general agent hereunder and shall be responsible for the duties of broker/dealer
and general agent hereunder. If state law does not permit Broker/Dealer to hold
a corporate insurance license, the appropriate duly licensed insurance affiliate
identified on the signature page shall act as general agent hereunder. Upon
execution, such Affiliate agrees to be bound by the terms hereof as if it were
included in the definition of Broker/Dealer.
1. APPOINTMENT. This Agreement is for the purpose of arranging for the
distribution of certain variable and fixed annuity contracts and any other life
insurance products identified on Exhibit 1 (the "Contracts"), issued by the
Insurer and, in the case of variable contracts, for which Distributor is
distributor, through sales people who are licensed agents of the Insurer for
insurance purposes, are associated with and registered representatives of
Broker/Dealer (each, a "Subagent"). In consideration of the mutual promises and
covenants contained in this Agreement, the Insurer and Distributor each appoint
Broker/Dealer and, as provided in Section 3, its Subagents, to solicit and
procure applications for the Contracts. This appointment is not deemed to be
exclusive in any manner and only extends to those jurisdictions where the
Contracts have been approved for sale and in which Insurer and Broker/Dealer are
both licensed as required by prevailing regulatory requirements.
2. REPRESENTATIONS AND WARRANTIES.
A. Each party hereto represents and warrants to each other party, as
follows:
(i) It is duly organized, validly existing and in good standing under
the laws of the state of its incorporation or other corresponding
applicable law and has all requisite power, corporate or otherwise to
carry on its business as now being conducted and to perform its
obligations as contemplated by this Agreement.
(ii) It has all licenses, approvals, permits and authorizations of,
and registrations with, all authorities and agencies, including
non-governmental self-regulatory agencies, required under all federal,
state, and local laws and regulations to enable it to perform its
obligations as contemplated by this Agreement.
(iii) The execution, delivery and performance of this Agreement have
been duly and validly authorized by all necessary corporate action, if
applicable, and this Agreement constitutes the legal, valid and
binding agreement of such party, enforceable against it in accordance
with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and
general principles of equity.
B. Broker/Dealer additionally represents and warrants as follows:
(i) It is registered as a broker and dealer under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and is a member in
good standing of the National Association of Securities Dealers, Inc.
("NASD").
(ii) It will comply with all applicable laws, rules and regulations
of, as well as any and all directives and guidelines issued by any
agency or other regulatory body with authority over Broker/Dealer or
over the premises on which Broker/Dealer and its Subagents are
soliciting the sale of Contracts.
(iii) It is duly licensed as a corporate insurance agent or it has
identified on the signature page its Affiliate which holds such
license and such Affiliate has executed this Agreement.
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3. SUBAGENTS. Broker/Dealer is authorized to recommend Subagents for appointment
to solicit sales of the Contracts. Broker/Dealer is responsible for
investigating the character, work experience and background of any proposed
Subagent prior to recommending appointment by Insurer. No Subagent shall act on
behalf of Insurer until properly appointed by Insurer. To the extent that
Exhibit 1 does not include all annuity Contracts of Insurer which are registered
as securities under the Federal Securities laws, Broker/Dealer is responsible
for ensuring that its Subagents, unless otherwise agreed to with Insurer in
writing, do not offer to sell any other variable annuity contracts issued by
Insurer, other than the Contracts, unless a selling agreement with respect
thereto has been executed by the parties. Broker/Dealer is responsible for
supervising the activities of its Subagents and for ensuring that Subagents are
properly licensed and in compliance with all applicable federal, state and local
laws and regulations and all rules and procedures of Insurer. Broker/Dealer
shall notify Insurer promptly, in writing, of any giving or receiving of notice
of termination of any subagent. Insurer reserves the right to refuse to appoint
any proposed Subagent and to terminate any relationship with any Subagent, with
or without cause, at any time. By submitting a Subagent for appointment,
Broker/Dealer warrants that: (1) such Subagent is recommended for appointment;
(2) such Subagent is fully licensed under applicable laws to transact business
with Insurer and is a duly registered representative of Broker/Dealer; and (3)
all background investigations required by state and federal laws have been made
with respect to such Subagent.
4. SALES MATERIAL.
A. Broker/Dealer shall not use any electronic, written or audiovisual sales
material (including prepared scripts for oral presentations) in connection
with the sales of the Contracts or solicitations thereof, unless such
material has been provided by, or approved in writing in advance of such
use by, the Insurer and Distributor. Any electronic, written or audiovisual
sales material must be used in the format and medium provided to
Broker/Dealer and Broker/Dealer shall not convert any such material to
another format or medium unless approval is obtained from the Insurer and
Distributor prior to use.
B. In accordance with the requirements of federal and certain state laws,
Broker/Dealer shall, to the extent required by such laws, maintain complete
records indicating the manner and extent of distribution of any such sales
material. This material shall be made available to appropriate federal and
state regulatory agencies as required by law or regulation and to
Distributor and Insurer upon written request.
5. PROSPECTUSES. For any Contract which is a registered security, Broker/Dealer
warrants that solicitation will be made by use of currently effective
prospectuses for the Contract and the underlying funds; and if required by state
law, the Statement of Additional Information for the Contract; that the
prospectuses will be delivered concurrently with each sales presentation and
that no statements shall be made to a client superseding or controverting or
otherwise inconsistent with any statement made in the prospectus. The Insurer
and Distributor shall furnish Broker/Dealer, at no cost to such party,
reasonable quantities of currently effective prospectuses.
6. CONDUCT OF BUSINESS.
A. Broker/Dealer will fully comply with the requirements of all applicable
laws, rules and regulations of regulatory authorities (including
self-regulatory organizations) having jurisdiction over the activities of
Broker/Dealer or over the activities contemplated by this Agreement to be
conducted by Broker/Dealer.
B. Neither Broker/Dealer nor any Subagent shall solicit an application
from, or recommend the purchase of a Contract to, an applicant without
having reasonable grounds to believe, in accordance with, among other
things, applicable regulations of any state insurance commission, the
Securities and Exchange Commission ("SEC") and the NASD, that such purchase
is suitable for the applicant. While not limited to the following, a
determination of suitability shall be based on information supplied after a
reasonable inquiry concerning the applicant's insurance and investment
objectives and financial situation and needs.
C. Broker/Dealer has or will have established, prior to its commencement of
any solicitation of sales of Contracts pursuant to the terms of this
Agreement, such rules, procedures, supervisory
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and inspection techniques as necessary to diligently supervise the
activities of its Subagents pursuant to this Agreement and to ensure
compliance with the terms of this Agreement necessary to establish diligent
supervision. Broker/Dealer shall be responsible for securities training,
supervision and control of its Subagents in connection with their
solicitation activities with respect to the Contracts and shall supervise
compliance with applicable federal and state securities laws and NASD
requirements in connection with such solicitation activities. Broker/Dealer
will observe, and will comply with, all requirements of any bank on whose
premises Broker/Dealer engages in sales activities pursuant to this
Agreement. Upon request by Insurer or Distributor, Broker/Dealer will
furnish appropriate records as are necessary to establish diligent
supervision.
D. Broker/Dealer will fully comply with the requirements of applicable
state insurance laws and regulations and will maintain all books and
records and file all reports required thereunder to be maintained or filed
by a licensed insurance agent. Broker/Dealer shall comply with the terms
and conditions of any letter issued by the Staff of the SEC with respect to
the non-registration as a broker-dealer under the 1934 Act of a corporation
licensed as an insurance agent and associated with a registered
broker-dealer. Broker/Dealer shall notify Distributor immediately in
writing if Broker/Dealer fails to comply with any such terms and conditions
and shall take such measures as may be necessary to comply with any such
terms and conditions.
E. Broker/Dealer shall promptly notify Insurer and Distributor of any
written customer complaint or notice of any regulatory investigation or
proceeding received by Broker/Dealer or any Subagent relating to a Contract
or any activities undertaken in connection with this Agreement. Insurer and
Broker/Dealer shall each cooperate fully in any investigation or proceeding
including but not limited to any securities or insurance regulatory
investigation or proceeding or judicial proceeding arising in connection
with the Contracts.
F. Broker/Dealer shall pay all expenses incurred by it in the performance
of this Agreement unless otherwise specifically provided for in this
Agreement or in a writing signed by Insurer and/or Distributor and
Broker/Dealer.
G. Applications shall be taken only on preprinted application forms
supplied by the Insurer. The Contract forms and applications are the sole
property of the Insurer. No person other than the Insurer has the authority
to make, alter or discharge any policy, Contract application, Contract
certificate, supplemental contract or form issued by the Insurer. No person
other than the Insurer has the right to waive any provision with respect to
any Contract or policy. No person other than the Insurer 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 the Insurer.
H. Broker/Dealer and Subagent shall accept premiums in the form of a check
or money order made payable to Insurer. Broker/Dealer shall ensure that all
checks and money orders and applications for the Contracts received by it
or any Subagent are remitted promptly to Insurer. In the event that any
other premiums are sent to a Subagent or Broker/Dealer rather than to
Insurer, they shall promptly remit such premiums to Insurer. Broker/Dealer
acknowledges that if any premium is held at any time by it, such premium
shall be held on behalf of Insurer, and Broker/Dealer shall segregate such
premium from its own funds and promptly remit such premium to Insurer. All
such premiums, whether by check, money order or wire, shall at all times be
the property of Insurer.
I. Upon issuance of a Contract by Insurer and delivery of such Contract to
Broker/Dealer, Broker/Dealer shall promptly deliver such Contract to its
purchaser. For purposes of this provision, "promptly" shall be deemed to
mean not later than five calendar days, or such shorter period as is
reasonable under the circumstances. Broker/Dealer shall return promptly to
Insurer all receipts for delivered Contracts, all undelivered Contracts and
all receipts for cancellation, in accordance with the instructions from
Insurer.
J. Unless required by a determination of suitability, during the term of
this Agreement and after termination hereof, Broker/Dealer covenants on
behalf of itself and any Subagent appointed hereunder, that they shall not
solicit, induce or attempt to solicit or induce Contract owners to
terminate, surrender, cancel, replace or exchange such Contract.
Broker/Dealer acknowledges and agrees that the provisions contained in this
Section 6 may be enforced by an action for an injunction, as well as or in
addition to any action for damages.
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7. COMMISSION PAYMENTS.
A. Broker/Dealer shall be entitled to receive a commission based upon
premiums received and accepted by the Insurer for Contracts issued pursuant
to this Agreement, based on the applicable rate of commission set forth in
the Commission Schedule attached hereto as Exhibit 1 which is incorporated
herein by reference. Broker/Dealer shall be solely responsible for the
payment of any commission or consideration of any kind to Subagents.
B. In no event shall the Insurer be liable for the payment of any
commissions with respect to any solicitation made, in whole or in part, by
any person not appropriately licensed and registered prior to the
commencement of such solicitation.
C. If a Contract is returned to the Insurer pursuant to the "Free Look"
provision or any other right to examine provision of the Contract, the full
commission paid by the Insurer will be unearned and shall be returned to
the Insurer upon demand or, in the absence of such demand, charged back to
the recipient of the commission. Broker/Dealer covenants and agrees to
promptly deliver Contracts and to hold the Insurer harmless from and
against any claim arising from market loss resulting from their breach of
this covenant.
D. In no event shall Insurer incur obligations under this Agreement to
issue any Contracts or pay any commission in connection therewith if the
Contract owner is over the maximum issue age with respect to that product
when the Contract application was accepted. With respect to such Contracts,
the full commission paid by the Insurer will be unearned and shall be
returned to the Insurer upon demand or, in the absence of such demand,
charged back to the recipient of the commission.
E. With respect to any Contract that is rescinded, as determined by the
Insurer in its sole discretion (other than a rescission with respect to
which a surrender charge applies), or if the Insurer otherwise determines
that a commission has not been earned (but such determination may not
contravene any other provision of this Agreement), 100% of such unearned
commission will be returned to the Insurer upon demand or, in the absence
of such demand, charged back to the recipient of the commission.
F. Compensation for the sale of any Contract which is renewed, changed,
exchanged or otherwise converted from any other contract issued by the
Company shall be paid according to the Insurer's guidelines and practices.
G. With respect to any Contract, or group of Contracts which the Insurer in
its sole discretion deems to be a single case, and which at the time of
application submission the initial purchase payment is greater than
$500,000, the Insurer may determine in its sole discretion that the
commissions set forth on Exhibit 1 not apply. In the event the Insurer
determines that the commission(s) do not apply, the Insurer may establish
an alternate commission for such Contract or Contracts.
8. INDEMNIFICATION
A. Broker/Dealer shall indemnify, defend and hold harmless Insurer and
Distributor and each person who controls or is associated with Insurer or
Distributor within the meaning of the federal securities laws and any
director, officer, corporate agent, employee, attorney and any
representative thereof, from and against all losses, expenses, claims,
damages and liabilities (including any costs of investigation and legal
expenses and any amounts paid in settlement of any action, suit or
proceeding of any claim asserted) which result from, arise out of or are
based upon:
(i) any breach by Broker/Dealer or its Affiliate of any representation,
warranty or other provision of this Agreement, including any acts or
omissions of Broker/Dealer, Affiliate, Subagents and other associated
persons; or
(ii) any violation by Broker/Dealer, any Affiliate or any Subagent of any
federal or state
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securities law or regulation, insurance law or regulation or any rule or
requirement of the NASD;
(iii) the use by Broker/Dealer, any Affiliate or any Subagent of any sales
or promotional material which has not received specific written approval of
Insurer and Distributor as provided in Section 4 of this Agreement, any
oral or written misrepresentations or any unlawful sales practices
concerning the Contracts by Broker/Dealer, any Affiliate or any Subagent;
or
(iv) Claims by Subagents or other agents or representatives of
Broker/Dealer for commissions or other compensation or remuneration of any
type.
B. The indemnification provided for herein shall survive termination of
this Agreement.
9. FIDELITY BOND. Broker/Dealer represents that all directors, officers,
employees, representatives and/or Subagents who are appointed pursuant to this
Agreement or who have access to funds of the Insurer are and will continue to be
covered by a blanket fidelity bond including coverage for larceny, embezzlement
or any other defalcation, issued by a reputable bonding company. This bond shall
be maintained at Broker/Dealer's expense. Such bond shall be at least equivalent
to the minimal coverage required under the NASD Rules of Fair Practice, endorsed
to extend coverage to life insurance and annuity transactions. Broker/Dealer
acknowledges that the Insurer may require evidence that such coverage is in
force and Broker/Dealer shall promptly give notice to the Insurer of any notice
of cancellation or change of coverage. Broker/Dealer assigns any proceeds
received from the fidelity bond company to the Insurer to the extent of the
Insurer's loss due to activities covered by the bond. If there is any
deficiency, Broker/Dealer will promptly pay the Insurer that amount on demand,
and Broker/Dealer shall indemnify and hold harmless the Insurer from any
deficiency and from the cost of collection.
10. MARKET TIMER PROGRAM. Insurer has available a Market Timer Program which
allows a market timer service to effect multiple transfers or other
transactions. Parties may use this program at the discretion of Insurer and upon
execution of a Market Timer Agreement. Among other provisions, the Market Timer
Agreement specifies that if the impact of processing exchange transactions
received from all outside sources is deemed to be injurious to one of the
separate accounts or a subaccount thereof, then Insurer in its sole discretion
may elect not to process the exchanges and that Insurer will notify the Market
Timer Service of the inability to process the requested exchange. Insurer
reserves the right to terminate participation in or the entire Market Timer
Program at any time and for any reason.
11. TERMINATION.
A. NORMAL TERMINATION. This Agreement shall continue for an indefinite
term, subject to the termination by either party upon written notice to the
other parties hereto, which shall be effective upon receipt thereof. In
addition, Insurer may terminate this Agreement without notice if
Broker/Dealer fails to satisfy the Insurer's production requirements, as
determined in the sole discretion of the Insurer.
B. AUTOMATIC TERMINATION FOR CAUSE. This Agreement shall automatically
terminate upon: (1) a material breach of this Agreement, including without
limitation the failure to comply with the laws or regulations of any state
or other governmental agency or body having jurisdiction over the sale of
insurance; and (2) the suspension, revocation or non-renewal of any then
required insurance or securities license of Broker/Dealer, or the
deregistration of the Broker/Dealer or its termination of membership with
the NASD.
C. RIGHTS AND OBLIGATIONS. Upon termination of this Agreement, except as
otherwise provided herein, all authorizations, rights and obligations shall
cease. If this Agreement is terminated for cause as described above,
Broker/Dealer's right to receive compensation shall immediately terminate.
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13. GENERAL PROVISIONS.
A. WAIVER. Waiver by 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 CONTRACTOR. Broker/Dealer is an independent contractor and
its Subagents who are appointed as insurance agents of Insurer are agents
of Broker/Dealer and not employees, agents or representatives of Insurer or
Distributor.
C. INDEPENDENT ASSIGNMENT. No assignment of this Agreement or of
commissions or other payments under this Agreement shall be valid without
the prior written consent of the Insurer.
D. NOTICE. Any notice pursuant to this Agreement shall be mailed, postage
paid, 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
not inconsistent with such law or regulation. The invalidity or illegality
of any provision of this Agreement shall not be deemed to affect the
validity or legality of any other provision of this Agreement.
F. AMENDMENT. No Amendment to this Agreement shall be effective unless in
writing and signed by all the parties hereto.
G. CALIFORNIA LAW. This Agreement shall be construed in accordance with the
laws of the State of California.
H. EFFECTIVENESS. This Agreement shall be effective as of the date set
forth above.
IN WITNESS WHEREOF, this Agreement has been executed by duly authorized
representatives of the parties to this Agreement as of the date set forth above.
"INSURER":
FIRST SUNAMERICA LIFE INSURANCE COMPANY
By:
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Name:
Title:
"DISTRIBUTOR":
SUNAMERICA CAPITAL SERVICES, INC.
By:
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J. Steven Neamtz, President
"BROKER/DEALER":
By:
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Name:
Title:
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The undersigned is affiliated with Broker/Dealer and represents that it holds
the necessary corporate insurance license to act a general agent in connection
with the sale of Contracts in the state of New York. By executing this Agreement
below, the undersigned agrees to be bound by the terms and conditions of the
Agreement.
"AFFILIATE":
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By:
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Name:
Title:
Tax I.D. Number:
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BANK RIDER
This rider is appended to that certain Selling Agreement dated
____________________________between First SunAmerica Life Insurance Company
("Insurer"), SunAmerica Capital Services, Inc. ("Distributor") and BHC
Securities, Inc., together with its duly licensed insurance affiliates indicated
on Annex I of the Selling Agreement ("Broker/Dealer"). This Rider is to be
executed by any Broker/Dealer which is selling, or intends to sell, Contracts on
the premises of any federal or state chartered bank, thrift or savings and loan
institution (collectively, "Bank"). Pursuant hereto, Broker/Dealer represents
and warrants that it will comply with the requirements of applicable laws,
regulations and guidelines of any regulatory authority having jurisdiction over
the activities of Bank or occurring on Bank premises, including without
limitation, the Interagency Statement on Retail Sales of Nondeposit Investment
Products (Board of Governors of the Federal Reserve System, Federal Deposit
Insurance Corporation, Office of the Comptroller of the Currency, and Office of
Thrift Supervision, February 14, 1994) and any subsequent release designed to
provide governance to banks in connection with the sale of nondeposit investment
products ("applicable banking laws"). Broker/Dealer agrees that it shall be
responsible for ensuring that applicable banking laws are complied with in
connection with the activities undertaken pursuant to the Selling Agreement,
including without limitation, ensuring that all advertisements and sales
literature used by Broker/Dealer comply with applicable banking laws.
Broker/Dealer further agrees that it shall inform the Insurer in writing of any
legends and other disclosures that are required by applicable banking laws to be
contained in advertisements or sales literature for policies issued by the
Insurer.
"BROKER/DEALER":
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By:
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Name:
Title:
