SELLING AGREEMENT
FOR
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
This SELLING AGREEMENT ("Agreement") is entered into as of Effective Date of
Agreement>> ("Effective Date") by and between American Enterprise Life Insurance
Company ("Company"), American Express Financial Advisors Inc. ("Distributor",
together with Company, "American Express"), Name of Broker Dealer
("Broker-Dealer"), and Lead Insurance Agency and its affiliated insurance
agencies identified on Exhibit A who have also executed this Agreement or an
Affiliate Participation Agreement (each an "Agency").
Recitals
The purpose of this Agreement is to establish the terms and conditions under
which Broker-Dealer and Agency (referred to and defined further in Section 1.1
herein as "Authorized Selling Firm") will market and sell Company's variable
annuity and/or variable life insurance products. American Express and Authorized
Selling Firm intend that Authorized Selling Firm will be responsible for
managing and supervising the marketing and sales of Company's variable annuity
and/or variable life insurance products by its Producers pursuant to this
Agreement.
In consideration of the mutual covenants contained herein, the parties agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:
1.1 "Authorized Selling Firm" means the Broker-Dealer taken together with
the Agency or Agencies, with respect to the sale of Products under this
Agreement, in accordance with the terms and conditions of the SEC
no-action letter First of America Brokerage Service, Inc. (dated
September 28, 1995).
1.2 "Broker-Dealer" is an entity duly registered as a broker-dealer with
the Securities and Exchange Commission ("SEC"), the National
Association of Securities Dealers ("NASD"), and states where required.
1.3 "Company Rules" mean any written instructions, bulletins, manuals,
training materials, and any underwriting or suitability guidelines
provided to Authorized Selling Firm by the Company.
1.4 "Producer" is a duly licensed individual who sells Products as an
employee or independent contractor of Agency and who is appropriately
registered with the NASD and licensed and appointed in accordance with
all applicable insurance laws.
1.5 "Products" are those variable annuity and/or life insurance products
issued by Company which will be marketed or sold by Agency,
Broker-Dealer and their Producers under this Agreement, and which are
set forth in the Product Exhibit(s) attached hereto.
1.6 "Replacement" is the sale of a Product which is funded by the purchaser
with money obtained from the liquidation of another life insurance
policy or annuity contract, either of which was previously issued
either by Company or by any other life insurance company.
1.7 "Agency" is an insurance agency licensed in one or more states, and
affiliated with Broker-Dealer by ownership or contract with respect to
the sale of Products under this Agreement. Broker-Dealer may also act
as "Agency".
1.8 "Territory" may be any 48 of the 50 United States (all states other
than New York and New Hampshire), and the District of Columbia, but
includes only those jurisdictions in which Agency is authorized to
market and sell the Products under this Agreement, as shown on each of
the Product Exhibits attached and, as updated from time to time.
1.9 "Contract" is the variable annuity or variable life insurance policy
validly issued by Company to a purchaser meeting underwriting standards
of the Company.
2. TERM OF AGREEMENT. This Agreement shall remain in effect beginning upon the
Effective Date, until such time it is terminated pursuant to Section 9,
"Termination."
3. APPOINTMENT AND AUTHORIZATION OF AGENCY AND BROKER-DEALER.
3.1 Appointment and Authorization of Agency and Broker-Dealer. Company and
Distributor hereby appoint Agency and hereby authorize Broker-Dealer to
solicit sales of and sell Products in accordance with the terms and
conditions of this Agreement as an Authorized Selling Firm, and Agency and
Broker-Dealer hereby accept the appointment and authorization. These two
appointments, taken together, constitute the appointment of Authorized
Selling Firm. Authorized Selling Firm's authority will be nonexclusive, and
will be limited to the performance of the services and responsibilities set
forth in this Agreement.
4. DUTIES, OBLIGATIONS AND LIMITATIONS OF AUTHORIZED SELLING FIRM. Commencing
on the Effective Date, Authorized Selling Firm will faithfully perform all
of Authorized Selling Firm's duties within the scope of the agency
relationship created under this Agreement to the best of Authorized Selling
Firm's knowledge, skill and judgment. As Authorized Selling Firm, Agency
and Broker-Dealer shall be jointly and severally responsible and liable to
American Express for the faithful performance of all obligations and duties
except those which this Agreement specifically identifies as duties of
Broker-Dealer. Authorized Selling Firm's duties shall include, but not be
limited to the following:
4.1 Recruitment of Producers. Authorized Selling Firm may recruit
Producers to sell under the supervision of Authorized Selling Firm. A
Producer so recruited may not solicit or sell Products prior to
acquiring any required state insurance license(s) in the state(s)
where such Producer will solicit and sell Products, being registered
with the NASD as a representative of the Broker-Dealer, being
appointed by Company as an agent, and completing the training
described in Section 4.4.11.
4.2 Licensing, Registration and Appointment of Agency and Producers.
Agency shall be responsible for the preparation and submission of
proper licensing forms and the assurance that all Producers recruited
by Authorized Selling Firm are appropriately licensed as insurance
agents in the state(s) where such Producers will solicit and sell
Products. Broker-Dealer shall be responsible for the preparation and
submission to the NASD of proper representative registration forms and
the assurance that all Producers are and remain registered as
representatives of Broker-Dealer with the NASD. Authorized Selling
Firm shall recommend Producers for appointment with Company, but
Company shall retain sole authority to make appointments and may, by
written notice to Authorized Selling Firm, refuse to permit any
Producer to solicit contracts for the sale of the Products. Company
shall be responsible for the preparation and submission of proper
appointment forms and the payment of appointment fees in those states
that require the Company to appoint Producers.
4.3 Compliance with Company Policies and Applicable Laws. Authorized
Selling Firm will comply with all Company Rules and with all
applicable federal and state laws and regulations.
4.4 Supervision and Administration. Authorized Selling Firm shall have
full, joint and several responsibility for the training and
supervision of all of its Producers who are engaged directly or
indirectly in the offer or sale of the Products, and all such
Producers shall be subject to the control of Authorized Selling Firm
with respect to their securities and insurance regulated activities in
connection with the Products. Authorized Selling Firm shall be
responsible for all acts or omissions of Producers. Agency's
supervisory and administrative responsibilities include, but are not
limited to:
4.4.1 ensuring that Producers comply with Company Rules and all federal and
state laws and regulations applicable to the Products;
4.4.2 ensuring that Producers comply with all terms of the Agreement in
soliciting, selling and providing service for Products;
4.4.3 supplying sales literature and application forms approved by Company
to Producers;
4.4.4 assisting Producers in responding to customer inquiries;
4.4.5 promptly delivering to Producers relevant Company communications and
Company Rules concerning Products, such as changes in rates,
regulatory notices or new Product announcements;
4.4.6 on all Replacement sales, ensuring that Producers provide Product
applicants sufficient information and disclosures to ensure the
suitability of the Replacement sale. Such information includes that
which is required by the rules of the NASD and any state insurance
authority but is not limited to:
(a) all fees, expenses and possible charges, such as surrender
charges, on both the new and the surrendered investments;
(b) any change in the investment risk to the Product
applicant;
(c) any change in the nature or the provider of any guarantees
associated with the Product and/or the surrendered product;
All such information will be retained by Agency for seven
years from the date of the completion and signature of any
application, and will be made available to Company as is shown
in Section 4.8, "Accurate Record; Audit," herein
4.4.7 notifying Company if any Agency or Producer fails to maintain the
required state insurance license or becomes inactive;
4.4.8 promptly informing Company of any violation of law or Company Rules by
Authorized Selling Firm or Producer, or of any allegation by Contract
holder or regulatory agency of wrongdoing as regards the activities of
Authorized Selling Firm, or a Producer with respect to the Products;
and
4.4.9 any other duties necessary or appropriate to perform Authorized
Selling Firm's obligations under this Agreement.
4.4.10 Broker-Dealer will fully comply with and will ensure Agency's and
Producers' compliance with the requirements of the NASD, the SEC and
all other applicable federal and state laws, and, with Agency, will
establish and maintain such rules and procedures as may be necessary
to cause diligent supervision of the securities activities of Agency
and Producers. Broker-Dealer's duties with respect to Agency and
Producers' securities activities, include, but are not limited to:
(a) delivering to each person submitting an application a prospectus for
the Product to be furnished by American Express in the form required
by the applicable federal laws or by the acts or statutes of any
applicable state, province or country;
(b) reviewing all Product applications for accuracy and completeness, and
to determine the suitability of the sale, which includes reasonable
efforts to obtain information concerning the applicant's financial and
tax status, investment objectives and any other information used or
considered reasonable in making a Product recommendation;
(c) complying with all applicable requirements of the Securities Exchange
Act of 1934 ("1934 Act") and the NASD, including the requirements to
maintain and preserve books and records pursuant to Section 17(a) of
the 1934 Act and the rules thereunder and making such records and
files available to staff of American Express and personnel of state
insurance departments, the NASD, SEC or other regulatory agencies
which have authority over American Express.
4.4.11 Authorized Selling Firm shall be responsible for ensuring that their
Producers who market and sell the Products are trained on (i) the
product specifications and features, (ii) all Company Rules and other
requirements communicated to Authorized Selling Firm that American
Express has adopted to satisfy insurance laws and regulations
regarding replacements, and (iii) standards that American Express has
established for and communicated to Authorized Selling Firms and their
Producers to use in meeting their respective duties to ensure suitable
sales of the Products before they begin to solicit or sell Products.
If Authorized Selling Firm chooses not to use Company-provided
materials in training their Representatives on (i), (ii) and (iii)
above, then Authorized Selling Firm shall provide to American Express,
for approval, documentation of its own form and content of training to
be used, prior to the execution of this Agreement.
After the execution of this Agreement, to the extent that Authorized
Selling Firm uses training material related to the sale of the
Products that is materially different from that contained in the
Company-provided training material, Authorized Selling Firm must
provide that training material to American Express for approval prior
to use. Authorized Selling Firm shall also be responsible for assuring
that its Producers comply with all Company-provided materials, and
with the applicable suitability requirements of the National
Association of Securities Dealers, Inc. ("NASD"), and any state or
federal law, as amended from time to time, in selling the Products.
4.5 Collection and Submission of Premiums. American Express and Authorized
Selling Firm agree that Authorized Selling Firm will assure its
Producers' collection and timely remittance of premiums received from
the sale of Products. All premiums associated with sales of variable
life insurance policies will be remitted using the Check with
Application method described below. Generally, five methods of
collection and remittance are available for variable annuity sales.
Authorized Selling Firm will decide which of the methods listed below
it will employ for variable annuity sales.
4.5.1 Check with Application: in which the premium is paid in a check from
the applicant payable to Company.
4.5.2 Gross Sweep: in which the premium will be deposited into a
Company-owned account. Company, upon notification of a sale, will
deposit the premium into its own premium receipt account.
4.5.3 Gross ACH Through Clearing Broker: in which the Authorized Selling
Firm contracts with a Clearing Broker to transfer and clear funds from
sales (the "Clearing Broker"). The Clearing Broker will remit the
entire premium to Company using the ACH transfer facility available to
financial institutions. If this method is chosen, then Section 7.1.4
is applicable.
4.5.4 Net Wire: in which the Authorized Selling Firm transfers and clears
premiums from sales, retaining its commission and forwarding the net
amount only to Company.
4.5.5 Net Wire Through Clearing Broker: in which the Authorized Selling Firm
contracts with a Clearing Broker to transfer and clear funds from
sales (the "Clearing Broker"). The Clearing Broker remits the premium
(net of commissions) to Company, and remits the remaining portion of
the premium (commission) to Agency. If this method is chosen, then
Section 7.1.4 is applicable.
4.6 Solicitation. Authorized Selling Firm, through Producers, will solicit
applicants who appear to meet Company's and Distributor's underwriting
and suitability standards, provided that nothing in this Agreement
shall be deemed to require Authorized Selling Firm to solicit any
particular customer's application for an annuity.
4.7 Company Property. Authorized Selling Firm will safeguard, maintain and
account for all policies, forms, manuals, equipment, supplies,
advertising and sales literature furnished to Authorized Selling Firm
and Producers by American Express and will destroy or return the same
to American Express promptly upon request.
4.8 Accurate Record; Audit. As required by applicable laws and Company's
policies and procedures, Authorized Selling Firm will keep
identifiable and accurate records and accounts of all business and
transactions effected pursuant to this Agreement. Upon reasonable
notice and at reasonable times, continuing during a period of one year
following the termination of this Agreement, Authorized Selling Firm
will permit American Express to visit, inspect, examine, audit and
verify, at Authorized Selling Firms offices or elsewhere, any of the
properties, accounts, files, documents, books, reports, work papers
and other records belonging to or in the possession or control of
Authorized Selling Firm relating to the business covered by this
Agreement, and to make copies thereof and extracts therefrom, provided
that such audit shall not unreasonably interfere with Authorized
Selling Firm's normal course of business.
4.9 Approved Advertising. No sales promotions, promotional materials, or
any advertising relating to Products or Company or Distributor ("Sales
Material") shall be used by Authorized Selling Firm or Producers
unless the specific item has been approved in writing by Company
and/or Distributor before use. Any promotional material developed by
Authorized Selling Firm will become the sole property of Company
and/or Distributor once approved. Any modification of the promotional
materials to enable the use of such in a financial institution setting
must also be approved in accordance with this section.
4.10 Fidelity Bond. Authorized Selling Firm represents and warrants that
all directors, officers, employees and representatives of Agency who
are appointed pursuant to this Agreement as Producers for Company or
who have access to funds of Company, including but not limited to
funds submitted with applications for Products or funds being returned
to owners, are and shall be covered by a blanket fidelity bond,
including coverage for larceny and embezzlement, issued by a reputable
bonding company acceptable to Company. Broker-Dealer shall maintain
the bond at Broker-Dealer and/or Agency's expense. Company may require
evidence, satisfactory to it, that such coverage is in force.
Authorized Selling Firm shall give prompt written notice to Company of
cancellation or change of coverage.
4.11 Limitations. Authorized Selling Firm shall have no authority with
respect to American Express, nor shall it represent itself as having
such authority, other than as is specifically set forth in this
Agreement. Without limiting the foregoing, neither Agency nor
Broker-Dealer shall, without the express written consent of Company
and/or Distributor, as applicable:
4.11.1 make, waive, alter or change any term, rate or condition stated in any
Company Contract or Company or Distributor approved form, or discharge
any Contract in the name of Company;
4.11.2 waive a forfeiture;
4.11.3 extend the time for the payment of premiums or other monies due
Company;
4.11.4 institute, prosecute or maintain any legal proceedings on behalf of
Company or Distributor in connection with any matter pertaining to
Company's business, nor accept service of process on behalf of Company
or Distributor;
4.11.5 transact business in contravention of the rules and regulations of any
insurance department and/or other governmental authorities having
jurisdiction over any subject matter embraced by this Agreement;
4.11.6 make, accept or endorse notes, or endorse checks payable to Company or
Distributor, or otherwise incur any expense or liability on behalf of
Company or Distributor;
4.11.7 offer to pay or pay, directly or indirectly, any rebate of premium or
any other inducement not specified in the Products to any Contract
holder;
4.11.8 misrepresent the Products for the purpose of inducing a Contract
holder in any other company to lapse, forfeit or surrender his/her
insurance therewith;
4.11.9 give or offer to give any advice or opinion regarding the taxation of
any customer's income or estate in connection with the purchase of any
Product;
4.11.10 enter into an agreement with any person or entity to market or sell
the Products without the written consent of Company and Distributor;
4.11.11 use Company's or Distributor's names, logos, trademarks, service marks
or any other proprietary designation without the prior written
permission of Company; or
4.11.12 engage in any program designed to replace Products with any variable
annuity or variable life insurance products of other companies, at any
time while this Agreement is in force; or provide data to any other
person or organization which would allow or facilitate such
replacement of Company's Products. Nothing herein shall preclude the
replacement of Company's fixed annuity products with Company's own
variable annuity or variable insurance products, so long as such sales
are suitable and documented according to Section 4.4.6, Replacement
Sales. (See also Section 9.3, Post Termination Limitations, and
Section 11, Confidentiality, generally.)
5. COMPANY AND DISTRIBUTOR REPRESENTATIONS AND RESPONSIBILITIES.
5.1 Representations.
5.1.1 Company represents and warrants that (a) it is duly incorporated in
the State of Indiana and licensed in all states in the Territory; (b)
that all Products, and all Sales Material (as defined in Section 4.9,
above) provided by Company or Distributor have been filed and approved
as required by state insurance departments shown in the Product
Exhibit(s); and (c) that these materials comply with all applicable
laws and regulations and rules of the NASD.
5.1.2 Distributor represents and warrants that it is duly registered as a
broker-dealer with the SEC, the NASD, all fifty states and the
District of Columbia, and is qualified to do business in all states in
which Company is licensed and qualified to do business.
5.1.3 Distributor and Company represent and warrant that Company, as issuer
and on behalf of the underlying investment account(s), has registered
the underlying investment account(s) of the Products with the SEC as a
security under the Securities Act of 1933 ("1933 Act") and as a unit
investment trust under the Investment Company Act of 1940.
5.1.4 Company represents and warrants that the prospectuses and registration
statements relating to the Products do not contain any untrue
statements of material fact or any omission to state a material fact,
the omission of which makes any statement contained in the
prospectuses and registration statements misleading.
5.2 Prospectuses, Sales Literature and Advertising. American Express will
provide to Authorized Selling Firm, without any expense to Authorized
Selling Firm, prospectuses for the Products and such other Sales
Material (as defined is Section 4.9, above) as American Express
determines is necessary or desirable for use in connection with sales
of the Products.
5.3 Transmission of Contracts for Delivery to Contract Owners. Company
will transmit variable annuity contracts directly to Contract holders.
Variable life insurance policies will be transmitted to Producers for
delivery to Contract holders.
5.4 Confirmations. Upon Company's acceptance of any payment for a Product,
Company as agent for Distributor will deliver to each contract owner a
statement confirming the transaction in accordance with Rule 10b-10
under the 1934 Act.
5.5 Contract Holder Services. Company shall provide administrative,
accounting and other services to Contract holders as necessary and
appropriate, in the same manner as such services are provided to
Company's other Contract holders.
5.6 Reservation of Rights. Notwithstanding any other provision of this
Agreement or any other agreement between Company and/or Distributor
and Agency and/or Broker-Dealer, Company reserves the unconditional
right to modify any of the Products in any respect whatsoever or to
suspend the sale of any Products in whole or in part at any time and
without prior notice. Company reserves the unconditional rights to
refuse to accept applications procured by Authorized Selling Firm or
Producers which fail to meet underwriting or other standards of
Company.
5.7 Company Rules. American Express shall provide Authorized Selling Firm
with Company Rules as soon as is practicable. Company and Distributor
shall provide all revisions, modifications and replacements of such
Company Rules to Authorized Selling Firm promptly after issuance by
Company and/or Distributor.
5.8 Compliance with Applicable Laws. Company will comply with all
applicable federal and state laws and regulations.
6. COMPENSATION. Company shall pay a total compensation on premiums
collected pursuant to this Agreement based on the rates of commission
set forth on the attached Product Exhibit(s). OPTIONAL: [and its
compensation addendum(s)]. No compensation will be paid on the sale of
a product under this Agreement if that sale involves replacement of an
asset or investment issued by Company or by another insurance company
owned or controlled by American Express Company. The Product
Exhibit(s) included in this Agreement are subject to change by Company
at anytime, but only upon written notice to Agency. No such change
shall affect compensation for any Products(s) sold whose applications
are received by Company in Minneapolis, MN prior to effective date of
such change.
6.1 Product Exhibits. Any Product Exhibit(s) included in this Agreement or
subsequently made a part hereof may provide other or additional
conditions regarding compensation and, if so, will be controlling to
the extent of such other or additional conditions.
6.2 Expenses. Except as otherwise provided in this Agreement, or
subsequently agreed to in writing by American Express, Authorized
Selling Firm will be responsible for all costs and expenses of any
kind and nature incurred by Authorized Selling Firm in the performance
of its duties under this Agreement.
6.3 For Cause Termination Compensation Obligations. In the event of
termination of this Agreement for one or more of the reasons specified
below in Section 9.1, Termination for Cause, no further compensation
shall thereafter be payable.
6.4 Post Termination Compensation Obligations. Upon termination of this
Agreement, Company's obligation to pay compensation to Agency or
Producers shall immediately cease except that:
6.4.1 Company will pay compensation, as the same become due and
payable, upon Products for which the application has been
taken and the required premium has been collected (or has
become irrevocably collectable from a third party) as of the
date of termination, and for which the Company subsequently
issues a policy.
6.4.2 Company will charge back against those commissions due
identified in Product Exhibit(s) in the event of surrenders of
Products sold prior to the termination of this Agreement by
Authorized Selling Firm or Producers. Company will invoice
Agency unless Company and Agency agree upon another method of
payment of such amounts.
6.4.3 Subject to Section 6.4.1, above, Company will pay Supplemental
Trail Commissions as set forth in and as provided by any
Product Exhibit in effect as of the time of the effective date
of termination of this Agreement.
6.5 Compensation Limitations. Agency will not pay or share commissions with
any person or entity that is not appropriately licensed and/or
appointed to sell Products, if such action would violate any applicable
law, rule, or regulation.
6.6 OPTIONAL Advance Commissions on IRS Section 2-1035 Exchanges. Company
will advance commissions monthly, in accordance to the Base Commission
schedules identified in the variable annuity Product Exhibit(s), based
on premium expected to be deposited with Company to effect an IRS
Section 2-1035 exchange of one investment product for a variable
annuity product sold under this Agreement. In the event that the
expected premium does not reach Company within 90 days of the date of
the contract application, the entire commission for the transaction
will be charged back during the next normal commission cycle.>>
7. INDEMNIFICATION.
7.1 Indemnification of Company and Distributor. Authorized Selling Firm
shall indemnify, defend and hold harmless American Express and any of
its officers, directors and employees, from and against any and all
losses, claims, damages, liabilities, actions, costs or expenses to
which American Express, or any of its officers, directors and
employees, may become subject (including any legal or other expenses
incurred by it in connection with investigating any claim against it
and defending any action and, provided Authorized Selling Firm will
have given prior written approval of such settlement or compromise,
which consent will not be unreasonably withheld or delayed, any
amounts paid in settlement or compromise) insofar as such losses,
claims, damages, liabilities, actions, costs or expenses arise out of
or are based upon:
7.1.1 The acts or omissions of Authorized Selling Firm or any of its
employees, agents or Producers while acting (whether under actual or
apparent authority, or otherwise) on behalf of Authorized Selling Firm
or American Express in connection with this Agreement;
7.1.2 Any breach of any covenant or agreement made by Authorized Selling
Firm under this Agreement; or
7.1.3 The inaccuracy or breach of any representation or warranty made by
Authorized Selling Firm under this Agreement.
7.1.4 The acts or omissions of the Clearing Broker or any employee or agent
of Clearing Broker while performing the activities covered by this
Agreement. The indemnity obligation of this paragraph will extend to
any regulatory penalties incurred by Company as a result of said
activities.
This indemnification obligation shall not apply to the extent that
such alleged act or omission is attributable to American Express
either because (1) American Express directed the act or omission, or
(2) the act or omission by Authorized Selling Firm or any of its
employees, agents or Producers was the result of their compliance with
the Company Rules.
7.2 Indemnification of Agency and Broker-Dealer. American Express shall
indemnify, defend and hold harmless Authorized Selling Firm, any of
its officers, directors and employees, from and against any and all
losses, claims, damages, liabilities, actions, costs or expenses to
which Authorized Selling Firm, or any of its officers, directors and
employees, may become subject (including any legal or other expenses
incurred by it in connection with investigating any claim against it
and defending any action and, provided American Express will have
given prior written approval of such settlement or compromise, which
consent will not be unreasonably withheld or delayed, any amounts paid
in settlement or compromise) insofar as such losses, claims, damages,
liabilities, actions, costs or expenses arise out of or are based
upon:
7.2.1 The acts or omissions of American Express, or any employee or agent of
American Express, (excluding Authorized Selling Firm or Producers)
while acting (whether under actual or apparent authority or otherwise)
on behalf of American Express in connection with this Agreement;
7.2.2 Any breach of any covenant or agreement made by American Express under
this Agreement; or
7.2.3 The inaccuracy or breach of any representation or warranty made by
American Express under this Agreement.
7.3 Limitation of Liability. Except as expressly stated herein, as between
the parties, in no event will any party to this Agreement be
responsible to any other party for any incidental, indirect,
consequential, punitive, or exemplary damages of any kind arising from
this Agreement, including without limitation, lost revenues, loss of
profits or loss of business. The parties agree that the losses and
damages arising under and/or covered by Section 7.1 and 7.2 shall be
subject to this limitation.
8. ARBITRATION. The parties agree to attempt to settle any
misunderstandings or disputes arising out of this Agreement through
consultation and negotiation in good faith and a spirit of mutual
cooperation. However, if those attempts fail, the parties agree that
any misunderstandings or disputes arising from this Agreement will be
decided by arbitration which will be conducted, upon request of either
party, before three arbitrators (unless both parties agree on one
arbitrator) designated by the American Arbitration Association located
in the city of Company's principal place of business. The parties
further agree that the arbitrator(s) will decide which party must bear
the expenses of the arbitration. This agreement to arbitrate shall not
preclude either party from obtaining provisional remedies such as
injunctive relief or the appointment of a receiver from a court having
jurisdiction, before, during or after the pendency of the arbitration.
The institution and maintenance of such provisional remedies shall not
constitute a waiver of the right of a party to submit a dispute to
arbitration.
9. TERMINATION.
9.1 Termination for Cause. At any time during the Term of this Agreement,
American Express or Authorized Selling Firm may terminate this
Agreement immediately for cause upon written notice of such
termination to the other party. Such written notice shall state the
cause with specificity. As used in this Section, the term "cause"
shall include any one or more of the following:
9.1.1 the conviction of any party, its officers or supervisory
personnel of any felony, of fraud, or of any crime involving
dishonesty;
9.1.2 the intentional misappropriation by a party of funds or
property of any other party, or of funds received for it or
for annuity Contract holders;
9.1.3 the cancellation, or the refusal to renew by the issuing
insurance regulatory authority of, any license, certificate or
other regulatory approval required in order for any party to
perform its duties under this Agreement;
9.1.4 any action by a regulatory authority with jurisdiction over
the activities of a party that would place the party in
receivership or conservatorship or otherwise substantially
interfere or prevent such party from continuing to engage in
the lines of business relevant to the subject matter hereof;
or
9.1.5 a party becoming a debtor in bankruptcy (whether voluntary or
involuntary) or the subject of an insolvency proceeding.
9.2 Termination without Cause. American Express or Authorized Selling Firm
may terminate this Agreement without cause upon 30 days prior written
notice to the other parties.
9.3 Post Termination Limitation. For a period of one year after
termination of this Agreement, Authorized Selling Firm and Producers
shall not knowingly induce or cause, or attempt to induce or cause,
any concerted or organized effort to recommend, promote, encourage or
endorse the termination, surrender, or cancellation of any Product
sold pursuant to this Agreement.
10. INDEPENDENT CONTRACTOR. This Agreement is not a contract of
employment. Nothing contained in this Agreement shall be construed or
deemed to create the relationship of joint venture, partnership, or
employer and employee between American Express and Authorized Selling
Firm. Each party is an independent contractor and shall be free,
subject to the terms and conditions of this Agreement, to exercise
judgment and discretion with regard to the conduct of business.
11. CONFIDENTIALITY.
11.1 Each party agrees that, during the term of this Agreement and at all
times thereafter, it will not disclose to any unaffiliated person,
firm, corporation or other entity, nor use for its own account, any of
the other parties' trade secrets or confidential information,
including, without limitation, the terms of this Agreement; non-public
program materials; member or customer lists; proprietary information;
information as to the other party's business methods, operations or
affairs, or the processes and systems used in its operations and
affairs, or the processes and systems used in any aspect of the
operation of its business; all whether now known or subsequently
learned by it. If this Agreement is terminated, each party, within 60
days after such termination, will return to the other parties,
respectively, any and all copies, in whatever form or medium, of any
material disclosing any of the other parties' trade secrets or
confidential information as described above.
Nothing in this Agreement shall require a party to keep confidential
any information that:
11.1.1 the party can prove was known to it prior to any disclosure by any
other party;
11.1.2 is or becomes publicly available through no fault of the party;
11.1.3 the party can prove was independently developed by it outside the
scope of this Agreement and with no access to any confidential or
proprietary information of any other party;
11.1.4 is required to be disclosed to governmental regulators or pursuant to
judicial or administrative process or subpoena;
11.1.5 is required in order to perform that party's obligation under this
Agreement;
11.1.6 is required to be disclosed by any applicable law; or
11.1.7 is mutually agreed upon by all parties to this Agreement.
11.2 In the event Authorized Selling Firm during the term of this Agreement
and for a period of one year after the effective date of its
termination, engages in a concerted effort to promote, recommend or
encourage the termination, surrender, or cancellation of any Product
sold under this Agreement, without reasonable grounds to believe that
such termination, cancellation or surrender is in each individual
customer's best interest, then American Express will have the right to
contact present and former purchasers of the Products sold under this
Agreement with a view to retaining the assets in their accounts with
Company, without being found in violation of this Section 11.
12. ASSIGNMENT. The parties to this Agreement may not assign, either
wholly or partially, this Agreement or any of the benefits accrued or
to accrue under it, or subcontract their interests or obligations
under this Agreement, without the written approval of all parties.
13. AMENDMENT OF AGREEMENT. American Express reserves the right to amend
this Agreement at any time, but no amendment shall be effective until
approved in writing by Authorized Selling Firm, subject to the
provisions of Section 5.6, "Reservation of Rights," Section 6,
"Compensation" and Section 12, "Assignment," herein. Any affiliated
insurance agency signing below or which has executed an Affiliate
Participation Agreement acknowledges and agrees that Agency shall be
authorized to execute any amendment to this Agreement, including all
Exhibits, Addenda, Schedules and Product Exhibit(s), on its behalf,
and that such execution will be binding upon it.
14. MISCELLANEOUS.
14.1 Applicable Law. This Agreement shall be governed by and interpreted
under the laws of the State of Minnesota.
14.2 Severability. Should any part of this Agreement be declared invalid,
the remainder of this Agreement shall remain in full force and effect,
as if the Agreement had originally been executed without the invalid
provisions.
14.3 Notice. Any notice hereunder shall be in writing and shall be deemed
to have been duly given if sent by certified or registered mail,
postage prepaid, or via a national courier service with the capacity
to track its shipments, to the following addresses:
If to Company: If to Distributor:
American Enterprise Life Insurance Company American Express Financial Advisors Inc.
00 Xxxxx 0xx Xxxxxx 00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
Attn: Compliance Officer (Unit 1818) Attn: Compliance Officer (Unit 1818)
If to Agency: If to Broker-Dealer:
14.4 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns, subject to the provisions of this Agreement limiting
assignment.
14.5 Headings. The headings in this Agreement are for convenience only and
are not intended to have any legal effect.
14.6 Defined Terms. The terms defined in this Agreement are to be
interpreted in accordance with this Agreement. Such defined terms are
not intended to conform to specific statutory definitions of any
state.
14.7 Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes
all previous communications, representations, understandings and
agreements, either oral or written, between the parties or any
official representative thereof.
14.8 Survival. All terms and conditions of Section 6.4, "Post Termination
Compensation Obligations"; Section 7, "Indemnification"; Section 9.3
"Post Termination Limitations"; Section 11, "Confidentiality," and
(subject to Section 6.4.3) the Supplemental Trail Commission
provisions of any Product Exhibits in effect as of termination of
this Agreement, will survive termination of this Agreement.
14.9 No Waiver. No failure to enforce, nor any breach of any term or
condition of this Agreement, shall operate as a waiver of such term or
condition, or of any other term or condition, nor constitute nor be
deemed a waiver or release of any other rights at law or in equity, or
of claims which any party may have against any other party, for
anything arising out of, connected with, or based upon this Agreement.
Any waiver, including a waiver of this Section, must be in writing and
signed by the parties hereto.
American Enterprise Life Insurance Company Lead Agency Name
Company Agency
By: ___________________________ By: ______________________
Title: ________________________ Title: ___________________
Date: ________________________ Date: ___________________
American Express Financial Advisors Inc. Broker Dealer Name
Distributor Broker-Dealer
By: __________________________ By: ______________________
Title: _______________________ Title: ___________________
Date: _______________________ Date: ____________________
Affiliate Name Affiliate Name
Affiliated Agency Affiliated Agency
By: ___________________________ By: _______________________
Title: ________________________ Title: ____________________
Date: ________________________ Date: _____________________
EXHIBIT A
Agency and Affiliated Agencies, Authorized States, Product Description
and Premium Remittance
Effective Date of Agreement: Effective Date of Agreement
SUMMARY:
This Exhibit is intended to summarize the Authorized Selling Firm's Agency and
its affiliated insurance agencies, the states in which the Agency and Affiliated
Agencies holds an insurance license to sell Product, the Product Description and
the method of Premium remittance.
---------------------------------------------------------------- ------------------------------------------------ ---------------
Agency or Affiliated Agencies Authorized States of Agency Product Description Remittance of Premiums
or Affiliated Agencies (See Product Exhibits to identify states (See Section 4.5)
where product is available)
-------------------------------------------------------------------------------------------------------- ------------------------
-------------------------------------------------------------------------------------------------------- ------------------------
Agency States of Approval for Name of Product Premium Remittance
Agency
Affiliated Agencies
States of Approval for
Affiliated Agency
-------------------------------------------------------------------------------------------------------- ------------------------
Effective Revision Date: Effective Date of Revision
Purpose of Revision: Purpose of Revision
