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manager. Under the DMAA, Farmers also provided certain benefits
to Mr. Farnsworth, including life and health insurance, in
accordance with Farmers’s rules. Mr. Farnsworth, in return,
agreed to recruit and train as many agents acceptable to Farmers
as might be required to produce sales in accordance with the
goals and objectives established by Farmers; to actively
represent only Farmers; to conform to Farmers’s regulations and
operating principles; to maintain in full force and effect any
required licenses; to provide service to policyholders through
the agents; to maintain and make available for audit by Farmers
adequate records, including profit and loss statements; and to
surrender on cancellation or termination of the DMAA agreement
all records, levy lists, cards, books, manuals, papers, forms, or
other material of whatsoever kind, and all copies thereof, having
to do with the business of Farmers. Farmers had the exclusive
right to decrease or otherwise change overwrite rates, schedules
or classifications.
The DMAA was terminable by either Farmers or Mr. Farnsworth
without cause on 30 days’ notice. The DMAA was also terminable
immediately by Farmers for cause on specified grounds.
The DMAA provided that upon cancellation by either party
without cause or as a result of Mr. Farnsworth’s death, Farmers
would have the right to pay Mr. Farnsworth the “contract value”
and terminate the contract. If Farmers did not exercise its
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Last modified: May 25, 2011