SALES AGREEMENT
Agreement dated as of __________________, by and among American Equity
Investment Life Insurance Company ("Insurer"), an Iowa insurance company;
EquiTrust Marketing Services, Inc. ("Distributor"), a Delaware Corporation which
is a registered broker-dealer with the Securities and Exchange Commission under
the Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc.; ______________________, an ___________ corporation
("Broker-Dealer") also a registered broker/dealer with the SEC under the
Exchange Act and a member of the NASD; and ________________ a licensed insurance
agency associated with Broker/Dealer ("Insurance Agency"); and each additional
insurance agency , if any , signatory hereto (all such insurance agencies
referred to collectively as "Agency").
RECITALS:
A. Pursuant to an agreement with Distributor (the "Underwriting
Agreement"), Insurer has appointed Distributor as the principal underwriter of
the class or classes of variable insurance contracts identified in Schedule 1 to
this Agreement at the time that this Agreement is executed, and such other class
or classes of variable insurance contracts that may be added to Schedule 1 from
time to time in accordance with Section 10 of this Agreement (each, a "class of
Contracts"; all such classes, the "Contracts"). Each class of Contracts will be
issued by Insurer through one or more separate accounts of Insurer ("Separate
Accounts"). Pursuant to the Underwriting Agreement, Insurer has authorized
Distributor to enter into separate written agreements with broker-dealers
pursuant to which such broker-dealers would be authorized to participate in the
sale of the Contracts and would agree to use their best efforts to solicit
applications for the Contracts.
B. Broker-Dealer and Insurance Agency are engaged in the business of
selling various investment products, including variable insurance contracts.
C. The parties to this Agreement desire that Broker-Dealer and Insurance
Agency be authorized to solicit applications for the sale of the Contracts,
subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
and covenants hereinafter set forth, the parties agree as follows:
1. ADDITIONAL DEFINITIONS
a. REGISTRATION STATEMENT - With respect to each class of Contracts, the
most recent effective registration statement(s) filed with the SEC or
the most recent effective post-effective amendment(s) thereto,
including financial statements included therein and all exhibits
thereto.
b. PROSPECTUS - With respect to each class of Contracts, the prospectus
for such class of Contracts included within the Registration Statement
for such class of Contracts; provided, however, that, if the most
recently filed prospectus filed pursuant to Rule 497 under the 1933
Act subsequent to the date on which the Registration Statement became
effective differs from the prospectus on file at the time the
Registration Statement became effective, the term "Prospectus" shall
refer to the most recently filed prospectus filed under Rule 497 from
and after the date on which it shall have been filed.
c. 1933 ACT - The Securities Act of 1933, as amended.
d 1934 ACT - The Securities Exchange Act of 1934, as amended.
e. 1940 ACT - The Investment Company Act of 1940, as amended.
f. FUND - Registered investment companies in which the Separate Account
invests.
g. AGENT - An individual associated with Insurance Agency and
Broker-Dealer who is appointed by Insurer as an agent for the purpose
of soliciting applications.
h. PREMIUM - A payment made under a Contract to purchase benefits under
such Contract.
i. ADMINISTRATIVE OFFICE - The administrative office of the Insurer
identified in the most recently filed prospectus filed pursuant to
Rule 497.
j. AGENT'S MANUAL - Any written rules, regulations and procedures
provided by Insurer to insurance agents appointed to sell the
Contracts, which may be collected in a manual, as revised from time to
time.
k. SEC - The Securities and Exchange Commission.
l. NASD - The National Association of Securities Dealers, Inc. and its
affiliates.
1. AUTHORIZATION OF BROKER-DEALER AND INSURANCE AGENT
a. Pursuant to the authority granted to it in the Underwriting Agreement,
Distributor hereby authorizes Broker-Dealer under the securities laws,
and Insurer hereby authorizes Insurance Agency under the insurance
laws, each in a non-exclusive capacity, to sell the Contracts.
Broker-Dealer and Insurance Agency accept such authorization and shall
use their best efforts to find purchasers for the Contracts in each
case acceptable to Insurer. Distributor and Insurer acknowledge that
Broker-Dealer and Insurance Agency are each an independent contractor
in the performance of their respective duties and obligations under
this Agreement. Accordingly, Broker-Dealer and Insurance Agency are
not obliged or expected to give full time and energies to the
performance of their obligations hereunder, nor
are Broker-Dealer and Insurance Agency obliged or expected to
represent Distributor or Insurer exclusively. Nothing herein
contained shall constitute Broker-Dealer, Insurance Agency, the Agents
or any agents or representatives of Broker-Dealer or Insurance Agency
as employees of Distributor or Insurer in connection with the
solicitation of applications and Premiums for the Contracts.
b. Broker-Dealer and Insurance Agency acknowledge that no territory is
exclusively assigned hereunder, and that Insurer and Distributor may
in their sole discretion authorize and appoint one or more persons in
any jurisdiction in which Broker-Dealer and Insurance Agency transact
business, to solicit applications and Premiums for the Contracts.
c. Insurance Agency is vested under this Agreement with power and
authority to select and recommend individuals associated with
Insurance Agency for appointment as Agents of the Insurer, and only
individuals so recommended by Insurance Agency shall become Agents,
provided that the conditions of Section 3 are satisfied, and provided
further that Insurer reserves the right to refuse to appoint any
proposed agent or, once appointed, to terminate or refuse to renew the
appointment at any time with or without cause. [INITIAL AND RENEWAL
STATE APPOINTMENT FEES FOR INSURANCE AGENCY AND APPOINTEES OF
INSURANCE AGENCY AS AGENTS OF INSURER WILL BE PAID BY INSURER IN
ACCORDANCE WITH ITS THEN-APPLICABLE REQUIREMENTS.]
d. Neither Broker-Dealer nor Insurance Agency shall expend or contract
for the expenditure of the funds of Distributor or Insurer, except as
may otherwise be agreed in writing. Broker-Dealer and Insurance
Agency each shall pay all expenses incurred by each of them in the
performance of this Agreement, unless otherwise specifically provided
for in this Agreement or unless Distributor and Insurer shall have
agreed in advance in writing to share the cost of any such expenses.
Neither Broker-Dealer nor Insurance Agency shall possess or exercise
any authority on behalf of Insurer or Distributor other than that
expressly conferred on Broker-Dealer or Insurance Agency by this
Agreement. In particular, and without limiting the foregoing, neither
Broker-Dealer nor Insurance Agency shall have any authority, nor shall
either grant such authority to any Agent, on behalf of Insurer: to
make, alter or discharge any Contract or other insurance policy or
annuity entered into pursuant to a Contract; to waive any Contract
forfeiture provision; to extend the time of paying any Premiums; or to
receive any monies or Premiums from applicants for or purchasers of
the Contracts (except for the sole purpose of forwarding monies or
Premiums to Insurer).
e Broker-Dealer and Insurance Agency acknowledge that Insurer has the
right in its sole discretion to reject any applications or Premiums
received by it and to return or refund to an applicant such
applicant's Premiums.
3. LICENSING AND REGISTRATION OF BROKER-DEALER, INSURANCE AGENCY AND AGENTS
a. Broker-Dealer represents and warrants that it is a broker-dealer
registered with the SEC under the 1934 Act, and is a member of the
NASD. Broker-Dealer shall, at all times when performing its functions
and fulfilling its obligations under this Agreement, be duly
registered as a broker-dealer under the 1934 Act and in each state or
other jurisdiction in which Broker-Dealer intends to perform its
functions and fulfill its obligations hereunder, as required, and be a
member in good standing of the NASD.
b. Insurance Agency represents and warrants that it is a licensed life
insurance agent where required to solicit applications. Insurance
Agency shall, at all times when performing its functions and
fulfilling its obligations under this Agreement, be duly licensed to
sell the Contracts in each state or other jurisdiction in which
Insurance Agency intends to perform its functions and fulfill its
obligations hereunder.
c. Broker-Dealer and Insurance Agency shall ensure that no individual
shall solicit applications or Premiums for the Contracts on their
behalf in any state or other jurisdiction in which the Contracts may
lawfully be sold unless (i) such individual is an associated person of
Broker-Dealer (as that term is defined in Section 3(a)(18) of the 0000
Xxx) and duly registered with the NASD and any applicable state
securities regulatory authority as a registered person of
Broker-Dealer qualified to solicit applications or Premiums for the
Contracts in such state or jurisdiction, (ii) duly licensed,
registered or otherwise qualified to solicit applications or Premiums
for the Contracts to be offered and sold by such individual under the
insurance laws of such state or jurisdiction, and (iii) duly appointed
by Insurer to solicit applications or Premiums for Contracts in such
state or jurisdiction. INSURER SHALL BE SOLELY RESPONSIBLE FOR
BACKGROUND INVESTIGATIONS OF THE AGENTS TO DETERMINE THEIR
QUALIFICATIONS, GOOD CHARACTER AND MORAL FITNESS TO SELL THE
CONTRACTS. ALL MATTERS CONCERNING THE LICENSING OF ANY INDIVIDUALS
RECOMMENDED FOR APPOINTMENT BY INSURANCE AGENCY UNDER ANY APPLICABLE
STATE INSURANCE LAW SHALL BE A MATTER DIRECTLY BETWEEN INSURANCE
AGENCY AND SUCH INDIVIDUAL, AND SHALL FURNISH INSURER WITH PROOF, OF
PROPER LICENSING OF SUCH INDIVIDUAL OR OTHER PROOF, REASONABLY
ACCEPTABLE TO INSURER, OF SATISFACTION BY SUCH INDIVIDUAL AS AN AGENT
OF INSURER. INSURANCE AGENCY AND BROKER-DEALER SHALL NOTIFY INSURER
AND DISTRIBUTOR IMMEDIATELY UPON TERMINATION (FOR WHATEVER REASON) OF
AN AGENT'S ASSOCIATION WITH BROKER-DEALER AND INSURANCE AGENCY.
d. Without limiting the foregoing, Broker-Dealer and Insurance Agency
represent that they are in compliance with the terms and conditions of
XXXXXX & XXXXXX (SUB. NOM. FIRST OF AMERICA BROKERAGE SERVICE, INC.)
(avail. Sept. 28, 1995) issued by the Staff of the SEC with respect to
the non-registration as a broker-dealer of an insurance agency
associated with a registered broker-dealer. Broker-
Dealer and Insurance Agency shall notify Distributor immediately in
writing if Broker-Dealer and/or Insurance Agency fail to comply with
any such terms and conditions and shall take such measures as may be
necessary and as promptly as practicable under the circumstances to
cure any such non-compliance.
4. BROKER-DEALER AND INSURANCE AGENCY COMPLIANCE
a. Broker-Dealer, and not Distributor, shall be responsible for
securities training, supervision and control of the Agents in
connection with their solicitation activities with respect to the
Contracts and shall supervise Agents' compliance with applicable
federal and state securities law and NASD requirements in connection
with such solicitation activities.
b. Broker-Dealer and Insurance Agency hereby represent and warrant that
they are duly in compliance with all applicable federal and state
securities laws and regulations, and all applicable insurance laws and
regulations. Broker-Dealer and Insurance Agency each shall carry out
their respective obligations under this Agreement in continued
compliance with such laws and regulations. Further, Broker-Dealer and
Insurance Agent shall comply, and shall ensure that Agents comply,
with the rules and procedures set for the in the Agents Manual, and
the rules set forth below, and Broker-Dealer and Insurance Agency
shall be solely responsible for such compliance.
(1) Broker-Dealer, Insurance Agency and Agents shall not offer or
attempt to offer the Contracts, nor solicit applications or
Premiums for the Contracts, nor deliver Contracts, in any state
or jurisdiction in which the Contracts have not been approved for
sale. For purposes of determining where the Contracts may be
offered and applications or Premiums solicited, Broker-Dealer and
Insurance Agency may rely on written notification, as revised
from time to time, that they receive from Insurer pursuant to
this Agreement.
(2) Broker-Dealer, Insurance Agency and Agents shall not solicit
applications or Premiums for the Contracts without delivering the
Prospectus for the Contracts, and, where required by state
insurance law, the then-currently effective statement of
additional information for the Contracts, and the then-currently
effective prospectus(es) for the Fund(s).
(3) Broker-Dealer, Insurance Agency and Agents shall not recommend
the purchase of a Contract to an applicant unless each has
reasonable grounds to believe that such purchase is suitable for
the applicant in accordance with, among other things, applicable
regulations of any state insurance regulatory authority, the SEC
and the NASD. While not limited to the following, a
determination of suitability shall be based on information
supplied by the applicant after a reasonable inquiry concerning
the applicant's insurance and investment objectives, financial
situation and
needs and the likelihood that the applicant will continue to make
premium payments. Each application or related documentation
obtained by an agent of Broker-Dealer shall bear the initials of
a principal of Broker-Dealer indicating the application has been
reviewed by such principal for suitability, completeness and
accuracy.
(4) Broker-Dealer, Insurance Agency and all Agents shall accept
initial Premiums in the form of a check or money order only if
made payable to the name of Insurer and signed by the applicant
for the Contract. Broker-Dealer, Insurance Agency and Agent
shall not accept third-party checks or cash for Premiums.
(5) Broker-Dealer, Insurance Agency and Agents shall not encourage a
prospective applicant to surrender or exchange an instrument
contract in order to purchase a Contract, nor to encourage a
Contract owner to lapse, terminate, surrender, exchange or cancel
his or her Contract or discontinue paying Premiums thereunder.
(6) Broker-Dealer and Insurance Agency shall ensure that all checks
and money orders and applications for the Contracts received by
either of them or an Agent shall be remitted promptly, and in any
event not later than noon of the next business day after receipt,
to the Administrative Office. In the event that any other
Premiums are sent to an Agent, Insurance Agency or Broker-Dealer,
rather than to the Administrative Office, Insurance Agency and
Broker-Dealer shall promptly (and in any event, not later than
noon of the next business day) remit such Premiums to the
Administrative Office. Insurance Agency and Broker-Dealer
acknowledge that if any Premium is held at any time by either of
them such Premium shall be held on behalf of Insurer, and
Insurance Agency or Broker-Dealer shall segregate such Premium
from their own funds and promptly (and in any event, by noon of
the next business day) remit such Premium to the Insurer. All
such Premium, whether by check, money order or wire, shall at all
times be the property of Insurer.
(7) Upon issuance of a Contract by Insurer and delivery of such
Contracts to Insurance Agency, Insurance Agent or Agent 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. Broker-Dealer and Insurance Agency shall
return promptly to Insurer all receipts, if applicable, for
delivered Contracts, all undelivered Contracts and all receipts,
if applicable, for cancellation, in accordance with the
instructions set forth in the Agents Manual. Broker-Dealer,
Insurance Agency, and the Agents in connection with the offer or
sale of the Contracts, shall not give any information or make any
representations or statements, written or oral, concerning the
Contracts, a Fund or Fund shares, other than or inconsistent with
information or representations contained in the
Prospectuses, statements of additional information and
Registration Statements for the Contracts, or a Fund, or in
reports or proxy statements therefor, or in promotional, sales or
advertising material or other information supplied and approved
in writing by Distributor and Insurer.
c. Broker-Dealer and Insurance Agency understand, acknowledge, and
represent that Contracts and Premiums thereunder shall not be
solicited, offered, or sold in connection with any so-called "market
timing" or "asset reallocation" program, plan, arrangement or service
that has not been approved in advance in writing by Insurer and
Distributor. Should Distributor or Insurer determine in their sole
discretion that Broker-Dealer or Insurance Agency is soliciting,
offering, or selling, or has solicited, offered, or sold, Contracts or
Premiums subject to any so-called "market timing" or "asset
reallocation" program, plan, arrangement or service, Distributor or
Insurer may take such action which is necessary, in their sole
discretion, to halt such solicitations, offers or sales. Furthermore,
in addition to any indemnification provided in Section 11 of this
Agreement and any other liability that Broker-Dealer and Insurance
Agency might have, Broker-Dealer and Insurance Agency shall each be
liable to Distributor and Insurer and each Fund affected by any
so-called "market timing" or "asset reallocation" program, plan,
arrangement or service, for any damages or losses, actual or
consequential, sustained by Distributor or Insurer or any Fund, as a
result of any so-called "market timing" or "asset reallocation"
program, plan, arrangement or service which causes such losses or
damages following solicitation, offer, or sale of a Contract or
Premiums subject to "market timing" or "asset reallocation" or similar
service by Broker-Dealer or Insurance Agency.
c. Broker-Dealer and Insurance Agency shall promptly furnish to Insurer
or its authorized agent any reports and information that Insurer may
reasonably request for the purpose of meeting Insurer's reporting and
recordkeeping requirements under the insurance laws of any state,
under any applicable federal and state securities laws, rules and
regulations.
d. Broker-Dealer shall secure and maintain a fidelity bond (including
coverage for larceny and embezzlement), issued by a reputable bonding
company, covering all of its directors, officers, agents and employees
who have access to funds of Insurer or Distributor. This bond shall
be maintained at Broker-Dealer's expense in at least the amount
prescribed under Rule 3020 of the NASD Conduct Rules. Broker-Dealer
shall provide Distributor with a copy of said bond before executing
this Agreement. Broker-Dealer shall also secure and maintain errors
and omissions insurance acceptable to Insurer and covering
Broker-Dealer and Agents (registered representatives). Broker-Dealer
hereby assigns any proceeds received from a fidelity bonding company,
errors and omissions or other liability coverage, to Insurer or
Distributor as their interest may appear, to the extent of their loss
due to activities covered by the bond, policy or other liability
coverage. If there is any deficiency, whether due to a deductible or
otherwise, Broker-Dealer shall promptly pay such amounts on demand.
Broker-Dealer hereby agrees to
indemnify and hold harmless Insurer and Distributor from any such
deficiency and from the costs of collection thereof, including
reasonable attorneys' fees.
5. SALES MATERIALS
a. During the term of this Agreement, Distributor and Insurer will
provide Broker-Dealer and Insurance Agency, without charge, with as
many copies of Prospectuses (and any supplements thereto), current
Fund prospectuses (and any supplements thereto), and applications for
the Contracts, as Broker-Dealer or Insurance Agency may reasonably
request. Upon termination of this Agreement, Broker-Dealer and
Insurance Agency will promptly return to Distributor any Prospectuses,
applications, Fund prospectuses, and other materials and supplies
furnished by Distributor or Insurer to Broker-Dealer or Insurance
Agency or to the Agents.
b. During the term of this Agreement, Distributor and Insurer will be
responsible for providing and approving all promotional, sales and
advertising material to be used by Broker-Dealer and Insurance Agency
in the course of their solicitation activities hereunder. Distributor
will file such materials or will cause such materials to be filed with
the SEC, the NASD, and/or with any state securities regulatory
authorities, as appropriate. Broker-Dealer and Insurance Agency shall
not use or implement, nor shall they allow any Agent to use or
implement, any promotional, sales or advertising material relating to
the Contracts or otherwise advertise the Contracts without the prior
written approval of Distributor and Insurer.
6. COMMISSIONS AND EXPENSES
a. COMPENSATION. During the term of this Agreement, Broker-Dealer and
Insurance Agency shall be compensated for services performed
hereunder, based on the Contracts for which Insurance Agency is the
Broker-of-Record and at the COMMISSION RATES AND FEES SET FORTH IN
SCHEDULE 2 TO THIS AGREEMENT, as such SCHEDULE 2 MAY BE AMENDED OR
MODIFIED UPON _____ DAYS NOTICE. ANY amendment to Schedule 2 will be
applicable to any Contract for which an application or Premium is
received by the Administrative Office on or after the effective date
of such amendment or which is in effect after the effective date of
such amendment. Compensation shall be paid on behalf of Insurer and
Distributor to Insurance Agency on its behalf and on behalf of
Broker-Dealer. Compensation with respect to any Contract shall be
paid to Insurance Agency only for so long as Insurance Agent is the
Broker-of-Record for such Contract.
b. CONDITIONS TO COMPENSATION. Broker-Dealer and Insurance Agency
recognize that all compensation payable to them hereunder will be
disbursed by or on behalf of Insurer after Premiums are received and
accepted by Insurer and that no compensation of any kind other than
that described in this Agreement is payable to Insurance Agency for
the performance of its obligations hereunder.
c. REFUND OF COMPENSATION. No compensation shall be payable, and
Broker-Dealer agrees to reimburse Distributor for any compensation
paid to Broker-Dealer or its Representatives, or Insurance Agency
under each of the following conditions: (i) if Insurer, in its sole
discretion, determines not to issue the Contract applied for; (ii) if
Insurer refunds the Premiums upon the applicant's surrender or
withdrawal pursuant to any "free-look" privilege; (iii) if Insurer
refunds the Premiums paid by applicant as a result of a complaint by
applicant, recognizing that Insurer has sole discretion to refund
Premiums; and (iv) if Insurer determines that any person signing an
application who is required to be licensed or any other person or
entity receiving compensation for soliciting purchase of the Contracts
is not duly licensed to sell the Contracts in the jurisdiction of such
sale or attempted sale.
d. INDEBTEDNESS AND RIGHT OF SETOFF. Nothing contained herein shall be
construed as giving Broker-Dealer or Agent the right to incur any
indebtedness on behalf of Insurer or Distributor. Broker-Dealer
hereby authorizes Insurer and Distributor to set off liabilities of
Broker-Dealer to Insurer and Distributor against any and all amounts
otherwise payable to Broker-Dealer.
e. COMMISSION SHARING. Broker-Dealer and Insurance Agency represent that
no commissions or other compensation will be paid for services
rendered in soliciting the purchase of the contracts by any person or
entity not duly registered or licensed by the required authorities and
appointed by Insurer to sell the Contract in the state in which such
solicitation occurred; provided however, that this provision shall not
prohibit the payment of compensation of the surviving spouse or other
beneficiary of a person entitled to receive such compensation pursuant
to a bona fide contract calling for such payment.
7. INTERESTS IN AGREEMENT. Agents shall have no interest in this Agreement or
right to any commissions to be paid to Insurance Agency hereunder.
Insurance Agency shall be solely responsible for the payment of any
commission or consideration of any kind to Agents. Broker-Dealer and
Insurance Agency shall be solely responsible under applicable tax laws for
the reporting of compensation paid to Agents. Insurance Agency shall have
no right to withhold or deduct any commission from any Premiums in respect
of the Contracts which it may collect, subject to Schedule 2 to this
Agreement. Insurance Agency shall have no interest in any compensation
paid by Insurer to Distributor, now or hereafter, in connection with the
sale of any Contracts hereunder.
8. TERM AND EXCLUSIVITY OF AGREEMENT. This Agreement may not be assigned
except upon the written consent of all parties; provided, however, that the
rights, obligations, duties and responsibilities of Distributor may be
assigned to a properly qualified affiliate of Insurer upon the written
consent of Distributor and Insurer. This Agreement shall continue for an
indefinite term, subject to the termination by either party by ten-days'
advance written notice to the other party, except that in the event
Distributor or Broker-Dealer ceases to be a registered broker-dealer or a
member of the NASD, this Agreement
shall immediately terminate. Upon its termination, all authorizations,
rights and obligations shall cease, except the agreements in SECTIONS 5,
8, 11, 12, 14, 15, 18 and the payment of any accrued but unpaid
compensation to Broker-Dealer and Insurance Agent.
9. COMPLAINTS AND INVESTIGATIONS
a. Distributor, Insurer, Broker-Dealer and Insurance Agency each shall
cooperate fully in any securities or insurance regulatory
investigation or proceeding or judicial proceeding arising in
connection with the Contracts marketed under this Agreement.
Broker-Dealer and Insurance Agency will be notified promptly of any
customer complaint or notice of any regulatory investigation or
proceeding or judicial proceeding received by Distributor or Insurer
with respect to Broker-Dealer, Insurance Agency or any Agent; and
Broker-Dealer and Insurance Agency will promptly notify Distributor
and the Insurer of any written customer complaint or notice of any
regulatory investigation or proceeding or judicial proceeding received
by Broker-Dealer or Insurance Agency with respect to themselves or any
Agent in connection with this Agreement or any Contract.
b. In the case of a customer complaint, Distributor, Insurer,
Broker-Dealer and Insurance Agency will cooperate in investigating
such complaint and any response by Broker-Dealer or Insurance Agency
to such complaint will be sent to Distributor for approval not less
than five business days prior to its being sent to the customer or
regulatory authority, except that if a more prompt response is
required, the proposed response shall be communicated by telephone or
facsimile.
10. MODIFICATION OF AGREEMENT. This Agreement supersedes all prior agreements,
either oral or written, between the parties relating to the Contracts and,
except for any amendment of Schedule 1 pursuant to the terms of Section 2
hereof or Schedule 2 pursuant to the terms of Section 6 hereof, may not be
modified in any way unless by written agreement signed by all of the
parties.
11. INDEMNIFICATION
a. Broker-Dealer and Insurance Agency, jointly and severally, shall
indemnify and hold harmless Distributor and Insurer and each person
who controls or is associated with Distributor or Insurer within the
meaning of such terms under the federal securities laws, and any
officer, director, employee or agent of the foregoing, against any and
all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of,
any action, suit or proceeding or any claim asserted), to which they
or any of them may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon:
(1) violation(s) by Broker-Dealer, Insurance Agency, or an Agent of
federal or state securities law or regulation(s), insurance law
or regulation(s), or any rule or requirement of the NASD:
(2) any unauthorized use of promotional, sales or advertising
material, any oral or written misrepresentations or any unlawful
sales practices concerning the Contracts, by Broker-Dealer,
Insurance Agency or an Agent;
(3) claims by the Agents or other agents or representatives of
Insurance Agency or Broker-Dealer for commissions or other
compensation or remuneration of any type;
(4) any failure on the part of Broker-Dealer, Insurance Agency, or an
Agent to submit Premiums or applications to Insurer, or to submit
the correct amount of a Premium, on a timely basis and in
accordance with this Agreement and the Agents Manual, subject to
applicable law;
(5) any failure on the part of Broker-Dealer, Insurance Agency, or an
Agent to deliver Contracts to purchasers thereof on a timely
basis and in accordance with the Agents Manual; or
(6) a breach by Broker-Dealer or Insurance Agency of any provision of
this Agreement.
(7) any other acts or omission of Broker-Dealer, Insurance Agency or
Agent which results in a claim against Distributor, Insurer their
agents or employees.
This indemnification will be in addition to any liability which
Broker-Dealer and Insurance Agency may otherwise have.
b. Distributor and Insurer, jointly and severally, shall indemnify and
hold harmless Broker-Dealer and Insurance Agency and each person who
controls or is associated with Broker-Dealer or Insurance Agency
within the meaning of such terms under the federal securities laws,
and any officer, director, employee or agent of the foregoing, against
any and all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of,
any action, suit or proceeding or any claim asserted), to which they
or any of them may become subject under any statute or regulation,
NASD rule or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or based upon any
breach by Distributor or Insurer of any provision of this Agreement.
This indemnification will be in addition to any liability which
Distributor and Insurer, jointly and severally, may otherwise have.
c. Promptly after receipt by a party entitled to indemnification
("indemnified person") under this Section 11 of notice of the
commencement of any action as to which a claim will be made against
any person obligated to provide indemnification under this Section 11
("indemnifying party"), such indemnified person shall notify the
indemnifying party in writing of the commencement thereof as soon as
practicable thereafter, but failure to so notify the indemnifying
party shall not relieve the indemnifying party from any liability
which it may have to the indemnified person otherwise than on account
of this Section 11, except to the extent that the omission results in
a failure of actual notice to the indemnifying party and such
indemnifying party is damaged solely as a result of the failure to
give such notice. The indemnifying party will be entitled to
participate in the defense of the indemnified person but such
participation will not relieve such indemnifying party of the
obligation to reimburse the indemnified person for reasonable legal
and other expenses incurred by such indemnified person in defending
himself or itself. The indemnifying party, upon the request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others
the indemnifying party may designate in such proceeding and shall pay
the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent, but if such proceeding for the plaintiff,
the indemnifying party shall indemnify the indemnified party from and
against any loss or liability by reason of such settlement or
judgement.
The indemnification provisions contained in this Section 11 shall
remain operative in full force and effect, regardless of any
termination of this Agreement. A successor by law of Distributor or
Insurer, as the case may be, shall be entitled to the benefits of the
indemnification provisions contained in this Section 11. After
receipt by a party entitled to indemnification ("indemnified party")
under this Section 11 of notice of the commencement of any action, if
a claim in respect thereof is to be made against any person obligated
to provide indemnification under this Section 11 ("indemnifying
party"), such indemnified party will notify the indemnifying party in
writing of the commencement thereof as soon as practicable thereafter,
provided that the omission so to notify the indemnifying party will
not relieve it from any liability under this Section 11.
12. RIGHTS, REMEDIES, ETC., ARE CUMULATIVE. The rights, remedies and
obligations contained in this Agreement are cumulative and are in addition
to any and all rights, remedies and obligations, at law or in equity, which
the parties hereto are entitled to under state and
federal laws. Failure of a party to insist upon strict compliance with any
of the conditions of this Agreement shall not be construed as a waiver of
any of the conditions, but the same shall remain in full force and effect.
No waiver of any of the provisions of this Agreement shall be deemed, or
shall constitute, a waiver of any other provisions, whether or not similar,
nor shall any waiver constitute a continuing waiver.
13. NOTICES. All notices hereunder are to be made in writing and shall be
given:
If to Insurer, to:
American Equity Investment Life Insurance Company
Suite 440
0000 Xxxxxxx Xxxxxxx
Xxxx Xxx Xxxxxx, Xxxx 00000
If to Distributor, to:
EquiTrust Marketing Services, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxx Xxx Xxxxxx, Xxxx 00000
If to Broker-Dealer, to:
If to Insurance Agency, to:
such other address as such party may hereafter specify in writing. Each such
notice to a party shall be either hand delivered or transmitted by registered or
certified United States mail with return receipt requested, or by overnight mail
by a nationally recognized courier, and shall be effective upon delivery.
14. INTERPRETATION, JURISDICTION, ETC. This Agreement constitutes the whole
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes all prior oral or written understandings, agreements or
negotiations between the parties with respect to the subject matter hereof. No
prior writings by or between the parties hereto with respect to the subject
matter hereof shall be used by a party in connection with the interpretation of
any provision of this Agreement. This Agreement shall be construed and its
provisions interpreted under and in accordance with the laws of the State of
Iowa without giving effect to principles of conflict of laws.
15. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or the breach hereof, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
and judgement upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
16. HEADINGS. The headings in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
17. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
18. SEVERABILITY. In the event that any provision of this Agreement would
require a party to take action prohibited by applicable federal or state law or
prohibit a party from taking action required by applicable federal or state law,
then it is the intention of the parties hereto that such provision shall be
enforced to the extent permitted under the law, and, in any event, that all
other provisions of this Agreement shall remain valid and duly enforceable as if
the provision at issue had never been a part hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY
By:_____________________________________
Name:___________________________________
Title:____________________________________
EQUITRUST MARKETING SERVICES, INC.
By:_____________________________________
Name:___________________________________
Title:____________________________________
RETAIL BROKER-DEALER
By:______________________________________
Name:___________________________________
Title:_____________________________________
INSURANCE AGENCY: ________________________
By:_______________________________________
Name:____________________________________
Title:______________________________________
SCHEDULE 1
CONTRACTS SUBJECT TO THIS AGREEMENT
EFFECTIVE _________________________, 1998
SCHEDULE 2
COMPENSATION SCHEDULE
EFFECTIVE _____________________, 1998
