Document:

exv4w1

 

Exhibit 4.1

No. 150

SPECIMEN

SEE REVERSE FOR RESTRICTIONS ON TRANSFER

 

 

This security has not been registered with the U. S. Securities and Exchange Commission (“SEC”)
and cannot be sold or transferred absent registration in accordance with applicable federal and
state securities laws or an exemption from registration. This security is part of an issue
offered and sold by the issuer pursuant to the exemption from registration in section 3 (a)
(11) of the Securities Acts of 1933, as amended, and rule 147 thereunder and cannot be resold
during such the State of Oklahoma. Any sales or transfers of this security must be made
pursuant to an effective registration statement of counsel in form and substance satisfactory
to the issuer and its counsel that registration is not necessary.exv10w1

 

Exhibit 10.1

ADMINISTRATIVE

SERVICES AGREEMENT

BETWEEN

TRINITY LIFE INSURANCE COMPANY

AND

INVESTORS HERITAGE LIFE INSURANCE COMPANY

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	SECTION	 	 	 	 	 
	NUMBER	 	DESCRIPTION	 	 	PAGE	 
	1
	 	Parties	 	 	1	 
	2.
	 	Purpose	 	 	1	 
	3.
	 	Products	 	 	1	 
	4.
	 	Administrative Services and Pricing Agreement	 	 	1	 
	5.
	 	Complaints and Litigation	 	 	3	 
	6.
	 	Performance of Administrative Services	 	 	3	 
	7.
	 	Records and Reports	 	 	4	 
	8.
	 	Compensation	 	 	5	 
	9.
	 	Confidentiality	 	 	5	 
	10.
	 	Auditing Rights	 	 	5	 
	11.
	 	Term and Termination	 	 	5	 
	12.
	 	Notice	 	 	6	 
	13.
	 	Indemnification and Liability	 	 	6	 
	14.
	 	Assignment	 	 	7	 
	15.
	 	Governing Law	 	 	7	 
	16.
	 	Waiver	 	 	7	 
	17.
	 	Entire Contract and Amendments	 	 	7	 
	18.
	 	Arbitration	 	 	7	 
	19.
	 	Authorization	 	 	8	 
	20.
	 	Construction	 	 	8	 
	21.
	 	Effective Date	 	 	9	 

EXHIBITS

A Service Pricing Agreement

B Reports Covered By this Agreement

C Authorized Officers of the Administrator

 

 

ADMINISTRATIVE

SERVICES AGREEMENT

between

TRINITY LIFE INSURANCE COMPANY

and

INVESTORS HERITAGE LIFE INSURANCE COMPANY

1. Parties

     1.1 The parties to this Agreement are Trinity Life Insurance Company (hereinafter
referred to as “TLIC”), a corporation, whose principal place of business is at 7633 E.
63rd Place, Suite 230, Tulsa, Oklahoma 74133, and Investors Heritage Life Insurance
Company (hereinafter referred to as “Administrator”), a Kentucky corporation, whose principal place
of business is at 200 Capitol Avenue, Frankfort, Kentucky 40601.

     1.2 The registered agent and address for service of process for TLIC is Greg Zahn, 7633 E.
63rd Place, Suite 230, Tulsa, Oklahoma 74133 and for Administrator is Robert M. Hardy,
Jr., 200 Capitol Avenue, Frankfort, Kentucky 40601.

2. Purpose

     The parties desire to enter into an Agreement to provide for the performance by Administrator
of certain administrative services for TLIC in connection with certain life insurance products.

3. Products

     3.1 All of the life insurance products developed, filed, approved and sold
by TLIC shall be covered by this Agreement (the “TLIC products”). New Business Fees listed in
Exhibit A, “Service Agreement Pricing” will be negotiated for any new non- underwritten or limited
underwritten products prior to being sold.

4. Administrative Services and Pricing Agreement

     4.1 Administrator will perform administrative services for TLIC as set forth
in paragraph 4.2 and as priced in accordance with the Service Agreement Pricing attached as
Exhibit A, with respect to the policies and certificates issued for the TLIC products
(“Administrative Services”). Exhibit B may be amended from time to time upon written notice by the
Administrator. All Administrative Services will be performed in a manner reasonably acceptable to
and approved by both parties.

3

 

	4.2	 	The Administrative Services shall include the following items:
	 
	a.	 	Underwrite all applications for life insurance;
	 
	b.	 	Provide actuarial services for all life insurance;
	 
	c.	 	Issue all policies;
	 
	d.	 	Assist TLIC in the development of TLIC’s life insurance and related products
	 
	e.	 	Maintain the policy and administrative forms and records for all insurance products
covered by this Agreement. Administrator shall be responsible for maintaining necessary
materials and supplies in sufficient quantities necessary to perform its
duties hereunder. Expenses for these materials are identified as “pass-through fees” and
listed on Exhibit A. No changes to printed material shall be made without the mutual
consent of the parties.
	 
	f.	 	Provide billing, collection, receipt, and accounting of premiums, including any
return premiums;
	 
	g.	 	Furnish TLIC the information necessary for TLIC’s 1099 reporting requirements;
	 
	h.	 	Investigate, adjudicate, settle, and pay all claims;
	 
	i.	 	Prepare a monthly settlement report and other reports listed on Exhibit B;
	 
	j.	 	Provide maintenance and summary of accounting records;
	 
	k.	 	Prepare all statutory filings and actuarial certifications for submission
by TLIC to the appropriate regulatory entity;
	 
	I.	 	Prepare initial drafts of financial statements and notes for TLIC’s SEC
filings; provided however, Administrator shall not be responsible for final
preparation, certification or filing of any of TLIC’s SEC filings or for any work
necessary to comply with the requirements of Sarbanes- Oxley or other similar federal
or state laws or regulations;
	 
	m.	 	Respond to agent and policyholder inquiries;
	 
	n.	 	Pay commissions reported on a monthly basis;
	 
	o.	 	Submit all of the insurance forms for approval to the appropriate
state’s Department of Insurance; and

4

 

	 	p.	 	Prepare the initial drafts of the Federal Form 1120L for TLIC and the
Oklahoma state income and/or premium tax returns for submission by TLIC to
appropriate regulatory authorities. Administrator shall not be responsible for
the final preparation, certification or filing of any federal or state tax
filings.

     4.3 TLIC shall retain responsibility for making certain that its agents are
properly licensed and appointed.

5. Complaints and Litigation

     5.1 Each party will inform the other on a timely basis of and TLIC will respond to all
insurance Department complaints, or complaints or inquiries from any other state, federal or
local governmental agency, or other inquiries or notices (“Complaints”) regarding TLIC’s
products. TLIC will forward to Administrator, in a timely manner, any Complaint so that
Administrator can determine if it should respond to such Complaint. If appropriate, Administrator
may forward a draft of its response to TLIC for review. Each party may respond on its own behalf,
and will advise the other of its intent to do so.

     5.2 Administrator will inform TLIC immediately of any litigation relating to TLIC’s products
of which Administrator becomes aware. TLIC will immediately inform Administrator of any
litigation that names Administrator as a party. Administrator shall not be responsible or liable
for any contractual dispute between TLIC, its insureds or its agents.

6. Performance of Administrative Services

     6.1 Administrator agrees to perform all functions contemplated by this Agreement in a timely
and professional manner.

     6.2 Administrator will employ individuals with the necessary skills to perform the
Administrative Services according to Paragraph 6.1. above, and/or contract with the appropriate
consultants who have the necessary professional qualifications to perform in a like manner.

7. Records and Reports

     7.1 All original books, records, documents, accounts, and vouchers, or true copies of the same
produced by Administrator pursuant to this Agreement, shall be located at the home or branch office
of Administrator.

     7.2 All original copies of the items listed above, shall be available to TLIC upon request.
All information or data in any computerized records held by Administrator concerning TLIC’s
products or related transactions shall be available to TLIC upon request. Upon termination of
this Agreement, Administrator shall provide any or all of

5

 

this property to TLIC upon TLIC’s request at the home or branch office of Administrator.
Administrator shall not dispose of these records without the prior consent of TLIC. Administrator
shall comply with all applicable record retention statutes and regulations of the Commonwealth of
Kentucky, the state of Oklahoma and any other applicable
jurisdictions.

     7.3 To the extent either party requests copies of any information, readable copies of all such
information contained in the records maintained hereunder shall be delivered to the other party’s
home office, or at any other place mutually agreeable to the parties, within fifteen (15) days
after written request is made for such records by an officer of either party. Either party will
comply with all reasonable requests to produce readable copies in less than fifteen (15) days if
either needs such copies to respond to threatened or actual litigation, complaints, examinations or
regulatory inquiries from any state, federal, or local governmental agencies.

     7.4 In the event of the termination of this Agreement, Administrator’s records in the
possession of Administrator and the use and control of those records shall remain the property of
TLIC and shall be returned to TLIC or its representative at TLIC’s request.

     7.5 Section 7 shall survive the termination of this Agreement.

8. Compensation

As full and complete consideration for the services to be provided hereunder, the parties agree to
accept the Pricing Agreement attached as Exhibit A which provides for an annual base fee paid to
the administrator on a monthly basis and payment of pass through fees billed as indicated. The
Pricing Agreement may be modified from time to time, as agreed upon by the parties. New Business
Fees listed in Exhibit A, “Service Agreement Pricing,” will be negotiated for any new
non-underwritten or limited underwritten products prior to being sold.

9. Confidentiality

     9.1 Administrator and
TLIC acknowledge that certain information
concerning the other’s business is confidential or trade secret information, and neither party
shall permit the duplication, use, or disclosure of any such ‘confidential or trade secret
information’ to any person (other than its own employees, agents, representatives, independent
contractors or consultants who must have such information for the performance of obligations
hereunder), unless such duplication, use, or disclosure is specifically authorized in writing by
the other party. Provided, however, that Administrator and TLIC will be responsible for assuring
that all such employees, agents, representatives, independent contractors, or consultants comply
with section 9 of this Agreement. ‘Confidential or trade secret information’ includes, but is not
limited to all records, marketing materials, forms, rates and any materials used by the parties
under this Agreement that are not meant for public dissemination. ‘Confidential or trade

6

 

secret information’ is not meant to include any information which, at the time of disclosure,
is generally known to the public or the insurance industry.

     9.2 Both parties agree to comply with federal privacy notice requirements.

     9.3 Section 9 shall survive the termination of this Agreement.

10. Auditing Rights

     TLIC, at its own expense, shall have the right to conduct such audit activities as deemed
appropriate by both parties including the right to audit the appropriate books and records of
Administrator from time to time to verify the accuracy of the information supplied by
Administrator to TLIC and to permit TLIC to fulfill its contractual
obligations to insureds. If
TLIC requests such audits, they will be performed during regular office hours in a manner least
likely to disturb the day-to-day operation of Administrator. Administrator also recognizes the
right of TLIC’s independent auditors and state insurance examiners to examine the books and
records of Administrator that are applicable only to TLIC and will make reasonable efforts to
allow them to do so.

11. Term and Termination

     The Effective Date of the Agreement is the 1st day of January, 2007, and this
Agreement shall be effective for a period of five (5) years to
and including December 31, 2011.
This Agreement may be terminated at any time by either party providing prior written notice of
termination to the other party at least 180 days before the effective date of termination.
Provided, however, the Agreement may be terminated with respect to the services provided in
Paragraph 4.2.1 by either party providing prior written notice to the other party at least 90 days
before the effective date of termination.

12. Notice

     12.1 Any and all notices, designations, consents, offers, acceptances, or any other
communication provided for herein shall be given in writing by hand delivery, by overnight
carrier, by registered or certified mail or by facsimile transmission and shall be addressed as
follows:

For
TLIC:

Trinity Life Insurance Company

Attn: Scott Engebritson, President

7633 E.
63rd Place
 Suite 230

 Tulsa, Oklahoma 74133

7

 

For Administrator:

Investors Heritage Life Insurance Company

Attention: Harry Lee Waterfield II, President

Post Office Box 717

Frankfort, Kentucky 40602-0717

Notices sent by hand delivery shall be deemed effective on the date of hand delivery. Notices sent
by overnight carrier shall be deemed effective on the next business day after being placed into the
hands of the overnight carrier. Notices sent by registered or certified mail shall be deemed
effective on the third business day after being deposited into the post office. Notices sent by
facsimile transmission shall be deemed to be effective on the day when sent if sent prior to 4:30
p.m. (the time being determined by the time zone of the recipient) otherwise they shall be deemed
effective on the next business day.

13. Indemnification and Liability

     Each party shall indemnify and shall be liable to the other for any material claims and
damages, and any associated costs and reasonable attorney fees, resulting from the negligent acts
or omissions, intentional acts or omissions, or regulatory violations in disregard of usual and
customary operating procedures of such parties by their employees, officers, common-law agents,
independent contractors or consultants. TLIC shall indemnify and hold Administrator harmless from
any and all claims from any of TLlC’s policyowners, insureds or beneficiaries, unless any such
claim is the direct result of Administrator’s gross negligence or willful misconduct.

14. Assignment

     No right or obligation under this Agreement may be assigned by either party without the
written consent of the other.

15. Governing Law

     The parties to this Agreement expressly and explicitly agree that this Agreement is entered
into and approved in the Commonwealth of Kentucky, that the laws of Kentucky shall govern the
rights and duties of the parties and the interpretation of this Agreement, and that the
Commonwealth of Kentucky shall be the exclusive and proper forum in which to bring and litigate
any action arising under this Agreement.

8

 

16. Waiver

     Any waiver by either party of any requirement hereunder shall be deemed to be a specific
limited waiver and shall not be deemed to be a continuing waiver nor a waiver of any other
requirement hereof.

17. Entire Contract and Amendments

     This Agreement constitutes the entire agreement between the parties concerning the subject
matter hereof. No amendment to or modification of this Agreement shall be valid unless set forth
in a written instrument executed by authorized officers of both parties.

18. Arbitration

     18.1 Should any controversy arise between the parties which cannot be resolved in the normal
course of business with respect to the interpretation of this Agreement for the performance of the
respective obligations of the parties under this Agreement, the controversy shall be submitted to
arbitration in accordance herewith.

     18.2 The Board of Arbitration shall consist of two Arbitrators and an Umpire, all of whom
shall be active or retired executive officers of insurance or reinsurance companies having no
direct or indirect financial interest in either party or its affiliates. The seat of this Board of
Arbitration shall be Frankfort, Kentucky unless disputants agree otherwise in writing. One
Arbitrator shall be chosen by Administrator and the other by the TLIC. The umpire shall be chosen
by the two Arbitrators.

     18.3 Arbitration may be initiated by either party (the petitioner) demanding arbitration and
naming its Arbitrator. The other party (the respondent) shall have thirty (30) days within which
to designate its Arbitrator after receiving demand, in writing, from the petitioner. In case the
respondent fails to designate its Arbitrator within the time stated above, the petitioner is
expressly authorized and empowered to name the second Arbitrator; and respondent shall not be
deemed to be aggrieved thereby. The Arbitrators shall designate an Umpire within thirty (30) days
after both Arbitrators have been named. In the event the two Arbitrators do not agree within thirty
(30) days on the selection of an Umpire, each of them shall immediately name three (3) names, of
whom the other two shall decline two (2); and the decision shall be made by drawing lots. The three
(3) arbitrators shall be referred to as the Board of Arbitration.

     18.4 Each party shall submit its case to the Board of Arbitration within forty five (45) days
from the date of appointment of the Umpire, but this period of time may be extended by unanimous
consent, in writing, of the members of the Board of Arbitration (the Board). The Board shall
interpret this Agreement as an honorable engagement rather than as a legal obligation and shall
make its award with a view to effecting the general purpose and intent of this Agreement in a
reasonable manner,

9

 

rather than in accordance with the literal interpretation of the Agreement. The Board shall be
relieved from all judicial formalities and may abstain from following the strict rules of the law.
The decision of the Board, or a majority of the Board, in writing, rendered at the earliest
convenient date, shall be final and binding upon all parties.

     18.5 Administrator and TLIC shall each pay the fee of its own Arbitrator and one-half of the
fee of the Umpire, and the remaining costs of the Arbitration shall be borne and paid by the party
incurring the costs.

     In the event both Arbitrators are chosen by the petitioner, as provided in the third paragraph
of this Section, Administrator and TLIC shall each pay one-half of the fees of both the Arbitrators
and the Umpire; and the remaining cost of the Arbitration shall be borne and paid by the party
incurring the cost.

     18.6 This Article shall survive cancellation of this Agreement.

19. Authorization

     TLIC agrees to grant binding authorization for certain officers of Administrator, as set forth
on Exhibit C, to sign any and all necessary documents relating to the performance of services set
forth in Section 4. These documents include, but are not limited to, underwriting reports,
actuarial reports, account commission agreements, override commission agreements, master policies,
amendments, letters and checks.

20. Construction

     To the extent that 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. If any
term or provision of this Agreement shall be found by a court of competent jurisdiction to be
illegal or otherwise unenforceable, the same shall not invalidate the whole of this Agreement, but
such term or provision shall be deemed modified to the extent necessary in the court’s opinion to
render such term or provision enforceable, and the rights and obligations of the parties shall be
construed and enforced accordingly, preserving to the fullest permissible extent the intent and
agreements of the parties herein set forth.

10

 

21. Effective Date

     The effective date of this Agreement shall be the 1st day of February, 2007.

TRINITY LIFE INSURANCE COMPANY (“TLIC”)

	 	 	 
	By:
/s/  Gregg Zahn

	         	By: /s/ James C. Smith

	Title:
Sr. V. P. Marketing
	 	Title: Secretary and Treasurer
	Date: 1/11/07

	 	Date: 1/11/07

INVESTORS HERITAGE LIFE INSURANCE COMPANY (“ADMINISTRATOR”)

	 	 	 
	By:
/s/ Harry Lee Waterfield

	         	By: /s/ Jane S. Jackson

	Title:
President

	 	Title: Secretary 
	Date: 1/11/07

	 	Date: 1/11/07

11

 

EXHIBIT A

SERVICE AGREEMENT PRICING

Trinity Life Insurance Company

Service Agreement Pricing

Pricing Structure

Our pricing structure is established so that there are no required start-up costs. Our fees
are established based on the greater of an annual minimum fee, billed and collected on a monthly
basis, or monthly per policy administration and new business fees. The annual minimum fees are as
follows:

	 	 	 	 	 
	 	 	Annual Base Fee
	Year 1
	 	$	120,000	 
	Year 2
	 	 	132,500	 
	Year 3
	 	 	145,000	 
	Year 4
	 	 	155,000	 
	Year 5
	 	 	165,000	 

The Policy Administration annual fees, on a per policy basis, along with new business
underwriting fees per application received are as follows:

	 	 	 	 	 
	Policy Administration Annual Fees:
	 	 	 	 
	Premium paying traditional life (with traditional riders except annuity)
	 	$	19.20	 
	Flexible premium deferred annuity rider
	 	 	3.00	 
	Traditional paid-up, RPU, and ETI
	 	 	14.40	 
	Terminated policies
	 	 	1.20	 
	 
	 	 	 	 
	New Business Fees (per application, depending upon underwriting required)
	 	 	$40.00
– 75.00	 
	 
	Excludes pass through fees outlined below
	 	 	 	 

In addition to the annual base fee, the fees for preparation of base financial information for
filing with the SEC, which are subject to the same scope limitations on accounting services as
discussed above, are outlined as follows:

SEC
Form 10-Q draft preparation —    $7,500  per quarterly filing

SEC Form 1Q-K draft preparation —  $15,000 per annual filing

Other pass through fees, which are billed and collected as needed and/or as incurred, are as
follows:

	 	§ 	 	Product development costs
	 
	 	§ 	 	Product filing fees

12

 

	 	§ 	 	Underwriting reports (APS, MIB, MVR, Focus, etc.) and associated software
costs, if any
	 
	 	§ 	 	Postage
	 
	 	§ 	 	Printing costs
	 
	 	§ 	 	Travel and lodging
	 
	 	§ 	 	Non-company audits
	 
	 	§ 	 	Software costs for NAIC filings and tax return preparation

Any other fees relative to new product types or additional accounting, actuarial or administration
requirements currently outside the scope of this proposal, including additional work necessary to
satisfy Sarbanes-Oxley and other such regulatory requirements, will be negotiated with the Company
prior to providing such services.

Initial Term

As stated above, the initial term of this agreement shall be for five years.

13

 

EXHIBIT B

Report(s) Covered by this Agreement

1. A Monthly Summary Settlement Report

2. List of Resisted Claims

3. Annual list of Pending Litigation (from Page 3)

4. Annual 1099 Reporting

5. Monthly Commission Reports

6. Statutory Statements

7. Initial
Drafts of Financial Statements and Notes for SEC filings

14

 

EXHIBIT C

     Officers of Administrator Authorized to Sign on Behalf of TLIC

Harry
Lee Waterfield, II
Chairman of the Board;

President and Chief Executive Officer

Robert
M. Hardy, Jr.

Vice President and General Counsel

Raymond L. Carr

Chief Financial Officer

Vice President, Administrative Operations

Larry Johnson

Assistant Vice President, Administrative Operations

Julie Hunsinger

Vice President and Chief Actuary

Jimmy Mclver

Treasurer

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]