GENERAL AGENT AGREEMENT
FOR AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
VARIABLE ANNUITIES
This AGENCY AGREEMENT ("Agreement") is entered into by and between American
Enterprise Life Insurance Company ("Company"), American Express Financial
Advisors Inc. (Company's Broker-dealer), TCF Securities, Inc. ("General Agent")
and TCF Securities, Inc. (the broker-dealer for General Agent; for purposes of
this Agreement, "General Agent's Broker" ) effective as of June 11, 1997 (the
"Effective Date").
Recitals
The purpose of this Agreement is to establish the terms and conditions
under which General Agent will market and sell Company's variable annuities.
Company and General Agent intend that General Agent will be responsible for
managing and supervising the marketing and sales of Company's variable annuities
pursuant to this Agreement.
In consideration of the mutual covenants contained herein, the parties agree as
follow:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
following meanings.
1.1 "General Agent" is a financial institution or an insurance agency
affiliated with a financial institution, duly licensed or otherwise
qualified as an insurance agency in the states of the Territory,
which, either itself or through Producers who are its employees or
independent contractors, solicits and sells Products to the general
public.
1.2 "General Agent's Broker" is a broker-dealer registered with the
Securities and Exchange Commission ("SEC"), the National Association
of Securities Dealers ("NASD") and states where required. General
Agent and General Agent's Broker may be the same entity, if properly
registered as broker-dealer as required hereunder.
1.3 "Distributor" is an affiliate of Company which Company has engaged to
serve as principal underwriter and Distributor for Company's variable
annuities.
1.4 "Producer" is a duly licensed individual who sells Products as an
employee or independent contractor of General Agent.
1.5 "Products" are those annuity products issued by Company which will be
marketed or sold by General Agents and Producers under this Agreement
and are forth on Exhibit A and its Addenda attached hereto.
1.6 "Territory" is those states in which General Agent is permitted to
market and sell the Products, either by itself directly or through
Producers, and which states are listed on Exhibit A and its Addenda.
2. TERM OF AGREEMENT. Unless otherwise terminated pursuant to paragraph 8
hereof, the term of this Agreement shall be for a period of one year
commencing immediately upon the Effective Date (the "Term"). This Agreement
shall automatically renew thereafter for successive one year periods (each,
a "Renewal Period"), unless either party (1) notifies the other party
within 30 days of the expiration of the Term or of any Renewal Period of
the intention not to renew, or (2) otherwise terminates this Agreement
pursuant to the terms hereof.
3. APPOINTMENT OF GENERAL AGENT AND GENERAL AGENT'S BROKER.
3.1 Appointment of General Agent and General Agent's Broker. Company and
Distributor hereby appoint and authorize General Agent and General
Agent's Broker to perform the services and responsibilities set forth
in this Agreement on behalf of Company in accordance with the terms
and conditions of this Agreement, and General Agent and General
Agent's Broker hereby accept the appointments. General Agent's and
General Agent's Broker's authority will be nonexclusive, and will be
limited to the performance of the services and responsibilities set
forth in this Agreement.
3.2 Territory. Such appointment shall only extend to those states and
jurisdictions within the Territory in which Company, Distributor,
General Agent and General Agent's Broker are licensed or otherwise
duly qualified to sell the Products.
4. DUTIES, OBLIGATIONS AND LIMITATIONS OF GENERAL AGENT AND GENERAL AGENT'S
BROKER. Commencing on the Effective Date, General Agent and General Agent's
Broker will faithfully perform all of General Agent's and General Agent's
Broker duties within the scope of the agency relationship created under
this Agreement to the best of their knowledge, skill and judgment. General
Agent and General Agent's Broker shall be jointly and severally responsible
and liable to Company for the faithful performance of all obligations and
duties except those which this Agreement specifically identifies as duties
of General Agent's Broker. General Agent's and General Agent's Broker's
duties shall include, but not be limited to the following:
4.1 Recruitment of Producers. General Agent and General Agent's Broker may
recruit Producers to sell under the supervision of General Agent and
General Agent's Broker. Producers so recruited may not solicit or sell
Products prior to their obtaining the required state insurance
license(s) in the states where such Producers will solicit and sell
Products, being appointed as an agent by Company and completing
training conducted by General Agent and General Agent's Broker on the
Products, Product marketing methods, and regulatory and Company policy
compliance requirements.
4.2 Licensing and Appointment of General Agents and Producers. General
Agent shall be responsible for the preparation and submission of
proper insurance agent appointment and licensing forms and the
assurance that all Producers recruited by General Agent and General
Agent's Broker are appropriately licensed as insurance agents in the
states where such Producers will solicit and sell Products. General
Agent's Broker shall be responsible for the preparation and submission
to the NASD of proper representative registration forms and assurance
that all Producers are properly registered as representatives of
General Agent's Broker with the NASD. General Agent and General
Agent's Broker shall recommend Producers for appointment with Company,
but Company shall retain sole authority to make appointments and may,
by written notice to General Agent and General Agent's Broker, refuse
to permit any Producer to solicit contracts for the sale of the
Products.
4.3 Compliance with Company Policies and Applicable Law. General Agent and
General Agent's Broker will use reasonable efforts to comply with all
instructions, rules, bulletins, manuals and underwriting guides issued
in writing by Company ("Company Rules") to General Agent and General
Agent's Broker, and with all applicable federal and state laws and
regulations. Company will not issue any Company Rules that conflict
with this Agreement or any applicable insurance laws or regulations.
4.4 Supervision and Administration. General Agent and General Agent's
Broker shall be responsible for supervising and administering the
marketing, sales and customer service activities of General Agent,
General Agent's Broker and Producers. General Agent and General
Agent's Broker shall be responsible for all acts or omissions of
General Agent, General Agent's Broker and Producer. General Agent's
and General Agent's Broker's supervisory and administrative
responsibilities include, but are not limited to:
(1) ensuring that Producers comply with Company Rules and all federal
and state laws and regulations applicable to the Products;
(2) training Producers on Product features, Product marketing
methods, and requirements for compliance with applicable laws and
regulations and Company Rules prior to allowing a Producer to
sell a Product;
(3) providing Producers with advice and assistance with regard to
marketing and advertising of Products; and ensuring that no
promotional material or advertising is used, other than generic
promotional material and advertising. For the purposes of this
Agreement, "Generic Advertising" is defined as follows:
a) any advertising or promotional material which does not mention
Company by name; or
b) advertising or promotional material which meets the
requirements of SEC Rule 135a.
However, if the promotional material or advertising mentions
variable annuities and General Agent does not offer to the public
more than one variable annuity, such promotional material or
advertising will not be considered "generic advertising", but
shall be submitted in writing to Company for approval in
accordance with paragraph 4.10
(4) supplying to Producers sales literature and application forms
acceptable to General Agent and approved by Company;
(5) assisting Producers in responding to customer inquiries;
(6) promptly delivering to Producers relevant Company communications
and Company Rules concerning Products, such as changes in rates,
regulatory notices or new Product announcements;
(7) ensuring that Producers: (a) submit premium payments directly and
immediately to General Agent in accordance with Paragraph 4.5
herein; and (b) maintain any other documentation reasonably
requested by Company;
(8) maintaining an orderly process to resolve written customer
complaints to ensure Company can meet its obligations under state
insurance laws with respect to Producers and Product customers
according to the following guidelines:
(a) General Agent will maintain a separate log or files of all
such complaints relating to the Products, even those it believes
to be groundless or false, and will make such log or files
available to Company in the event of a request for it by any
regulator having jurisdiction over such complaints, Company or
General Agent within the Territory covered by this Agreement; and
(b) General Agent may make the determination of the validity of
such complaints, and need not inform Company of those which it
deems invalid;
(c) Company shall be entitled to review all files concerning such
complaints (even those which General Agent has determined to be
groundless or false) every quarter, at the General Agent's
principal place of business, during reasonable business hours
and, to make copies thereof and submit written questions to
General Agent thereon;
(d) General Agent will notify Company in the event of any notice
of hearing or filed action alleging wrongdoing of General Agent
or any Producer with respect to the Products or a Producer, by
any regulator with jurisdiction over the subject matter and
Territory. In the event of such a notice or hearing all such
complaint files or logs will become available to Company for
review;
(9) notifying Company if a Producer fails to maintain the required
state licenses, or becomes inactive;
(10) any other duties necessary or appropriate to perform General
Agent and General Agent's Broker obligations under this
Agreement.
(11) General Agent's Broker will itself fully comply and ensure
General Agent's and Producers' compliance with, the requirements
of the NASD, the SEC and all other applicable federal and state
laws, and, General Agent's Broker, will establish and maintain
such rules and procedures as may be necessary to cause diligent
supervision of the securities activities of General Agent and
Producers. General Agent's Broker's duties with respect to
General Agent's and Producers' securities activities include but
are not limited to:
(a) delivering to each person submitting an application a
prospectus to be furnished by Company and Distributor in the
form required by the applicable federal laws or by the acts
or statutes of any applicable state, province or country;
(b) ensuring that all sales literature or advertising used by
General Agent, General Agent's Broker, or Producers, other
than Generic Advertising concerning the Products has been
approved by Company and/or Distributor, in accordance with
Paragraph 4.10 or as mutually agreed in writing by the
parties;
(c) reviewing all Product applications for accuracy and
completeness, and to determine the suitability of the sale;
(d) complying with all applicable requirements of the 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 Company and Distributor and
personnel of state insurance departments, the NASD, SEC or
other regulatory agencies which have regulatory authority
over Company or Distributor. Any commissions and fees
relating to the Products will be reflected in the quarterly
FOCUS reports and the fee assessment reports filed by
General Agent's Broker with the NASD in accordance with the
NASD Rules of Fair Practice.
(e) maintaining an orderly process to resolve written customer
complaints to ensure that Company and Distributor can meet
their obligations under the NASD and SEC rules and
regulations with respect to Producers and Product customers
according to the following guidelines:
(i) General Agent and General Agent's Broker, will maintain
a separate log or files of all such complaints relating to
the Products, even those it believes to be groundless or
false, and will make such log or files available to Company
or Distributor in the event of a request for it by any
regulator having jurisdiction over such complaints, Company,
Distributor, General Agent or General Agent's Broker within
the Territory covered by this Agreement; and
(ii) General Agent and General Agent's Broker may make the
determination of the validity of such complaints, and need
not inform Company or Distributor of those which it deems
invalid;
(iii) Company and Distributor shall be entitled to review
all files concerning such complaints (even those which
General Agent or General Agent's Broker has determined to be
groundless or false) every quarter, at the General Agent's
or General Agent's Broker's principal place of business,
during reasonable business hours and, to make copies thereof
and submit written questions to General Agent or General
Agent's Broker thereon;
(iv) General Agent and General Agent's Broker will notify
Company or Distributor in the event of any notice of hearing
or filed action alleging wrongdoing of General Agent,
General Agent's Broker or any Producer with respect to the
Products or a Producer, by any regulator with jurisdiction
over the subject matter and Territory. In the event of such
a notice or hearing all such complaint files or logs will
become available to Company or Distributor for review;
4.5 Collection and Submission of Premiums. Gross Sweep (modified). General
Agent will assure its Producers' collection of the initial premium due
on all Products and will timely account for such premiums, directly
depositing them into an account established by the General Agent for
the benefit of Company, at a bank approved by Company, and notifying
Company by the next business day of the gross receipts and of the
purchaser and Product to which such receipts shall be applied. Upon
receipt of notification from General Agent, Company will sweep the
settlement account.
4.6 General Agent and General Agent's Broker Expenses. Except as otherwise
provided in this Agreement, or subsequently agreed to in writing by
the Company, General Agent and General Agent's Broker will be
responsible for all costs and expenses of any kind and nature incurred
by General Agent and General Agent's Broker in the performance of
their duties under this Agreement.
4.7 Solicitation. General Agent and General Agent's Broker, through
Producers, will have the right to solicit applicants who appear to
meet Company's and Distributor's underwriting standards; provided that
nothing in this Agreement shall be deemed to require General Agent or
General Agent's Broker to solicit any persons for a Product.
4.8 Company Property. General Agent, Producers, and General Agent's Broker
will safeguard, maintain and account for all policies, forms, manuals,
equipment, supplies, advertising and sales literature furnished to
General Agent and General Agent's Broker by Company and Distributor
and will destroy or return the same to Company and Distributor
promptly upon request.
4.9 Accurate Record; Audit. General Agent will keep identifiable and
accurate records and accounts of all business and transactions
effected pursuant to this Agreement for seven years beginning as to
any annuity contract, from the date of initial deposit of premium into
the contract. Upon reasonable notice and at reasonable times,
continuing during a period of one year following the termination or
expiration of this Agreement, General Agent and General Agent's Broker
will permit Company or Distributor to visit, inspect, examine, audit
and verify, at General Agent's or General Agent's Broker's 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 General Agent or General Agent's Broker
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 General Agent's or General Agent's
Broker's normal course of business.
4.10 Approved Advertising. No sales promotion materials or advertising
relating to the Products of the Company shall be used by General Agent
or its Producers, other than Generic Advertising, unless the specific
item has been approved in writing by the Company. For the purposes of
this Agreement, promotional materials and advertising shall not
include customer correspondence which is not a form letter (i.e. a
substantially identical letter sent to more than one person).
4.11 Fidelity Bond. General Agent and General Agent's Broker represent that
all directors, officers, employees and Producers of General Agent 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 covered by a blanket fidelity bond, including coverage
for larceny and embezzlement, issued by a reputable bonding company
acceptable to Company. The bond shall be maintained by General Agent
at General Agent's Broker's and/or General Agent's expense. It is
understood and agreed that there may be a deductible to the coverage
required hereunder. Company may require evidence, satisfactory to it,
that such coverage is in force. General Agent shall give prompt
written notice to Company of cancellation or change of coverage as
soon as General Agent or General Agent's Broker are informed of any
such event.
4.12 Limitations. General Agent and General Agent's Broker shall have no
authority with respect to Company, nor shall they represent themselves
as having such authority, other than as is specifically set forth in
this Agreement. Without limiting the foregoing, neither General Agent
nor General Agent's Broker shall, without the express written consent
of Company and/or Distributor, as applicable:
(1) make, waive, alter or change any term, rate or condition stated
in any Company contract or Company- or Distributor-approved form,
nor discharge any contract in the name of Company;
(2) waive a forfeiture;
(3) extend the time for the payment of premiums or other moneys due
Company;
(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 either Company or Distributor;
(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;
(6) make, accept or endorse notes, endorse checks payable to Company
or Distributor, or otherwise incur any expense or liability on
behalf of Company or Distributor, except that General Agent shall
be permitted to use Company's endorsement stamp for purposes of
depositing premium into the bank account established in the
Company's name;
(7) offer to pay or pay directly or indirectly any rebate of premium
or any other inducement not specified in the Products to any
owner or annuitant;
(8) misrepresent the Products for the purpose of inducing an annuity
contract-holder in any other company to lapse, forfeit or
surrender his/her insurance therewith;
(9) give or offer to give as a representative of Company any
individualized advice or opinion regarding the amount of taxation
of any customer's income or estate in connection with the
purchase of any Product, except that the foregoing does not
preclude General Agent or any Producer from giving advice or
opinions as a representative of Company concerning the taxation
of products generally or from giving individualized advice or
opinions regarding taxation in a capacity other than as a
representative of Company;
(10) without the written consent of Company or Distributor, enter into
an agreement with any person or entity, other than Producers
recommended to Company for appointment, to market or sell the
Products;
(11) use Company's names, logos, trademarks, service marks or any
other proprietary designation without the prior written
permission of Company.
5. COMPANY AND DISTRIBUTOR REPRESENTATIONS AND RESPONSIBILITIES.
5.1 Representations.
5.1.1Company represents and warrants that it is duly incorporated in
the state of Indiana and licensed in all states in the Territory,
that all Products have been filed with and approved by
appropriate state insurance departments, and that all sales
literature has been filed with the insurance departments where
required; all Products meet and will meet the requirements of all
applicable laws and regulations of the Territory in which the
Products are available for sale, and with the requirements of the
Securities Act of 1933 and all applicable regulations of the SEC,
and with rules of the NASD, and with any other applicable
insurance and securities laws and regulations.
5.1.2Company and Distributor represents and warrants and agrees that
Distributor is, and will remain during the term of this Agreement
will remain, duly registered as a broker-dealer with the
Securities and SEC, 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.
5.1.3Distributor 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 1933 Act and as a unit
investment trust under the Investment Company Act of 1940, and
that such investment account(s) will remain so registered during
the term of this agreement and at all relevant times thereafter.
5.1.4Company represents and warrants that the prospectus(es) and
registration statement(s) relating to the Products contain no
untrue statements of material fact or omission to state a
material fact, the omission of which makes any statement
contained in the prospectus(es) and registration statement(s)
misleading, and that during the term of this Agreement and at all
relevant time thereafter the prospectus (es) and registration
statement (s) will contain no such untrue statements of facts or
omissions.
5.1.5Company represents and warrants and agrees that all advertising
and sales literature prepared or approved by Company will meet
the requirements of all applicable laws and regulations of the
Territory in which the Products are available for sale, and with
the requirements of the Securities Act of 1933 and all applicable
regulations of the SEC, and with rules of the NASD, and with any
other applicable laws and regulations, and that such advertising
and sales literature, where required, will be filed with (and not
disproved by) the NASD and, where required, the insurance
regulators or agencies of the Territory where the Products are
available for sale.
5.1.6Company represents and warrants and agrees that the Products are
and at the time of offering by General Agent and General Agent's
Broker will be treated as deferred annuity contracts under
Section 72 of the Internal Revenue Code when held by a natural
person, and as such interest, dividends, capital gains and other
earnings under the contract will be deferred until withdrawn by
the customer. Company further represents and warrants and agrees
that Products designated as individual retirement annuities are
and at the time of offering by General Agent and General Agent's
Broker will qualify as individual retirement annuities as that
term is used in Section 408 (b) of the Internal Revenue Code when
the disclosure required by IRS regulation 1.408-6 (d) (4) is
given to the customer. Company will provide General Agent and
General Agent's Broker with a form of disclosure which meets the
requirement of regulation 1.408-6 (d) (4). Company will provide
General Agent and General Agent's Broker with an option of legal
counsel satisfactory to them confirming the representation,
warranties and covenants in this section.
5.1.7Company represents and warrants and agrees that assets held in
the Product's separate account are and at all time will be
legally separate from Company's general assets and are not
subject to claims of the Company's creditors, and that income,
gains and losses from assets held in the separate account are, in
accordance with the contract, credited to or charged against the
separate account without regard to other income, gains or losses
of the Company. Company will provide General Agent and General
Agent's Broker with an option of in-house legal counsel
satisfactory to them confirming the representations, warranties
and agreements in this section.
5.2 Prospectuses, Sales Literature and Advertising. Company and
Distributor will provide General Agent and General Agent's Broker,
without any expense to General Agent or General Agent's Broker
prospectuses relating to the Products, and such other sales literature
and advertising as Company 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 contracts for Products for delivery to annuity
contract-holder in accordance with administrative procedures
acceptable to General Agent and General Agent's Broker and Company.
5.4 Confirmations. Company agrees that, upon Company's acceptance of any
payment for a Product, Distributor will deliver to each contract owner
a statement confirming the transaction in accordance with Rule 10b-10
under the Securities and Exchange Act of 1934 .
5.5 Annuity Contract-holder Services. Company shall provide
administrative, accounting and other services to annuity
contract-holders as necessary and appropriate in the same manner as
such services are provided to Company's other annuity
contract-holders.
5.6 Reservation of Rights. Notwithstanding any other provision of this
Agreement or any other agreement between Company, Distributor and
General Agent or General Agent's Broker, 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 upon ninety (90) days written notice to General Agent.
However, if Company receives a written demand from any regulatory
agency or official having jurisdiction over Company or Products to
modify or suspend the sale of any Products in fewer than ninety (90)
days, then the shorter notice period will apply to notice given by
Company to General Agent. Company reserves the unconditional right to
refuse to accept applications procured by General Agent and General
Agent's Broker or Producers which fail to meet underwriting or other
standards of Company.
5.7 Company Rules. Company shall provide General Agent and General Agent's
Broker with Company Rules issued by Company and/or Distributor as soon
as is practicable. All revisions, modifications and replacements of
such Company Rules shall be provided by Company to General Agent and
General Agent's Broker promptly after issuance by Company and/or
Distributor.
5.8 Compensation. Company shall pay a total commission on premiums
collected pursuant to this Agreement based on the rates of commission
set forth on the attached Exhibit A and its Addenda. Company has the
right to charge General Agent for commissions paid in the event of
certain surrenders of annuity contracts as specified in Exhibit A and
its Addenda. Company will transmit payment of commissions to the
General Agent on the day that Company receives good funds from the
General Agent, if this option is shown in Exhibit A. "The day that
Company receives good funds," for purposes of this Agreement, ends at
2:00 P.M. If good funds are received after 2:00 P.M., the transmittal
of commission payment will occur on the next business day. At General
Agent's option, commission payments will be transmitted by direct
deposit into an account in General Agent's name at a bank designated
by General Agent. No compensation shall be paid unless all of the
following conditions precedent have been met to Company's
satisfaction:
5.8.1Licensing of Producer. Prior to the time of any solicitation of a
sale or a sale of a Product, Producer making such solicitation
and sale shall be licensed and appointed with Company in
accordance with the laws of the state(s) where the sale is being
made and, if applicable under the state insurance laws of the
state, where the customer resides.
5.8.2Licenses and Contracts. No person or entity, except Producers
satisfying the provisions of Paragraph 5.8.1, shall in any way
share in any commissions payable hereunder unless such person or
entity is licensed in accordance with the laws of the state(s) in
which the sale was made and, if applicable under the state
insurance laws of the state, where the customer resides; and
unless such person or entity shall have entered into an agreement
with General Agent which specifies such person or entity's rights
and obligations and makes provision for payment, including
splitting, of commissions. Notwithstanding the preceding
sentence, in those states which permit payment of a commission to
an entity which is not licensed as an insurance agency, Company
will pay commissions to an unlicensed entity which is a party to
this Agreement, but only after such entity has provided evidence
satisfactory to Company as to how Company may make such payments
in accordance with applicable state insurance laws.
6. INDEMNIFICATION.
6.1 Indemnification of Company. General Agent and General Agent's Broker
shall indemnify, defend and hold harmless Company and Distributor from
and against any and all losses, claims, damages, liabilities, actions,
costs or expenses to which Company or Distributor 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 General Agent or General Agent's Broker will have given prior
written approval of such settlement or compromise, which approval 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:
6.1.1The acts or omissions of General Agent, General Agent's Broker or
any employee or agent of General Agent or General Agent's Broker
while acting (whether under actual or apparent authority, or
otherwise) on behalf of General Agent, General Agent's Broker,
Company or Distributor in connection with this Agreement;
6.1.2Any breach of any covenant or agreement made by General Agent or
General Agent's Broker under this Agreement;
6.1.3The inaccuracy or breach of any representation or warranty made
by General Agent or General Agent's Broker under this Agreement.
This indemnification obligation shall not apply to the extent
that such alleged act or omission is attributable to Company
and/or Distributor either because (1) Company and/or Distributor
directed the act or omission; or (2) General Agent's, General
Agent's Broker's, or a Producer's act or omission was the result
of its compliance with the Company Rules.
6.2 Indemnification of General Agent and General Agent's Broker by
Company. Company and Distributor shall indemnify, defend and hold
harmless General Agent and General Agent's Broker from and against any
and all losses, claims, damages, liabilities, actions, costs or
expenses to which General Agent and General Agent's Broker 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 Company and Distributor will have given prior
written approval of such settlement or compromise, which approval 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:
6.2.1The acts or omissions of Company and/or Distributor, or any
employee or agent of Company and/or Distributor (excluding
General Agent and General Agent's Broker or Producers) while
acting (whether under actual or apparent authority, or otherwise)
on behalf of Company and/or Distributor in connection with this
Agreement;
6.2.2Any breach of any covenant or agreement made by Company or
Distributor under this Agreement;
6.2.3The inaccuracy or breach of any representation or warranty made
by Company or Distributor under this Agreement.
7. ARBITRATION. The parties agree that any controversy or claim arising
between them relating to this Agreement shall be resolved by binding
arbitration. This agreement to arbitrate shall continue in full force and
effect despite the expiration, rescission or termination of this Agreement.
All arbitration shall be undertaken pursuant to the Federal Arbitration
Act, and the decision of the arbitrator(s) shall be enforceable in any
court of competent jurisdiction. The arbitrator(s) shall apply the law of
the state of Minnesota and the arbitration shall be held in Minneapolis,
Minnesota. Any party may demand arbitration by sending written notice to
the other parties. The arbitration and the selection of arbitrator(s) shall
be conducted in accordance with such rules as may be agreed upon by the
parties, or, failing such agreement within 30 days after arbitration is
demanded, under the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"), as such rules may be modified by this
Agreement. In any dispute which involves more than $100,000 in damages,
three arbitrators shall be used. The arbitrator(s) shall (to the extent
such damages are not otherwise limited or prohibited by the terms of this
Agreement) have the authority to award actual money damages (with interest
on unpaid amounts from the date due), specific performance, and temporary
injunctive relief, but the arbitrator(s) shall not have the authority to
award exemplary, punitive, or consequential damages, and the parties
expressly waive any claimed right to such damages. The costs of the
arbitration, but not the costs and expenses of the parties, shall be shared
equally by the parties. If a party fails to proceed with arbitration,
unsuccessfully challenges the arbitration award, or fails to comply with
the arbitration award, the other parties are entitled to costs, including
reasonable attorney fees, for having to compel the arbitration or defend or
enforce the award. Notwithstanding the foregoing, the parties recognize
that certain business relationships could give rise to the need for a party
to seek certain emergency, provisional, temporary, injunctive or summary
relief. The parties agree that either shall be entitled to judicially
pursue such rights and remedies for emergency, provisional, temporary,
injunctive or summary relief, without thereby being deemed to have waived
its right to arbitration hereunder; however, each party agrees that,
immediately following the issuance of any emergency, provisional,
temporary, injunctive or summary relief, it will consent to the stay of any
further judicial proceedings pending arbitration of all underlying claims
between the parties.
8. TERMINATION.
8.1 Termination for Cause. At any time during the Term of this Agreement
and any Renewal Period, Company and Distributor or General Agent and
General Agent's Broker 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 paragraph, the term "cause" shall include any one or more of the
following:
(1) the conviction of any party, its officers or supervisory
personnel of any felony, of fraud or of any crime involving
dishonesty;
(2) the intentional misappropriation by a party of funds or property
of the other party or funds received for it or for policyholders
by such other party;
(3) the cancellation of or refusal to renew by the issuing insurance
regulatory authority any license, certificate or other regulatory
approval required in order for a party to perform its duties
under this Agreement;
(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 prevent or substantially
interfere with the ability of such party from continuing to
engage in the lines of business relevant to the subject matter
hereof;
(5) a party becoming a debtor in bankruptcy (whether voluntary or
involuntary) or the subject of an insolvency proceeding; or
(6) the breach by a party of any representation, warranty or covenant
under this Agreement after failure by the party to cure such
breach within 10 days after being given notice of the breach by
the terminating party.
8.2 Termination without Cause. Any party may terminate this Agreement
without cause upon ninety (90) days prior written notice to the other
parties.
8.3 Post Termination Limitations. Upon termination of this Agreement,
Company's obligation to pay commissions to General Agent, General
Agent's Broker or Producers shall immediately cease except as
otherwise provided in this Agreement; provided:
8.3.1Company shall pay commissions, as the same become due and
payable, upon Products for which the application has been taken
and the required initial premium has been collected as of the
date of termination and for which Company subsequently issues a
policy.
8.3.2Company will charge back, in accordance with Exhibit A and
addenda thereto, against those commissions identified in
Paragraph 8.3.1 and Exhibit A and Addenda thereto for surrender
of Products sold by General Agent and General Agent's Broker's or
Producers prior to the termination of this Agreement. After
termination of this Agreement, Company will invoice General Agent
for chargebacks unless General Agent and Company agree upon
another method of payment of such amounts.
8.3.3Company shall pay commissions in accordance with Exhibit A and
its Addenda, attached hereto, on all Products issued prior to
such termination.
8.3.4For a period of one year after termination of this Agreement,
General Agent and General Agent's Broker's shall not, and shall
not permit its Producers to, engage in any concerted effort to
promote, recommend or encourage the termination, surrender, or
cancellation of any Product sold pursuant to this Agreement
unless General Agent has reasonable grounds to believe such
promotion, recommendation or encouragement is in the individual
customer's best interests. In the event of breach of this
paragraph, it is understood that Section 10, Confidentiality,
will be void as regards Company's right to contact present and
former holders of Products old hereunder, with a view to
retaining their accounts.
9. 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 Company and Distributor and General Agent and General Agent's
Broker. 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.
10. CONFIDENTIALITY. Each party agrees that, during the term of this Agreement
and at all times thereafter, neither party will disclose to any
unaffiliated person, firm, corporation or other entity, nor use for its own
account, any of the other party's trade secrets or confidential
information, including, without limitation, the terms of this Agreement;
non-public program materials; 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 the operation of its business; all whether now known or
subsequently learned by it. It is understood that lists of Product
customers, or individually identifiable customer information, and lists of
current customers of the General Agent or its affiliates, are considered
confidential and proprietary information of General Agent and its
affiliates, as applicable. Therefore, General Agent and its affiliates
retain the exclusive right to solicit such customers for new or additional
business of any kind, except that nothing herein shall preclude Company
from soliciting customers to make additions to Products sold by General
Agent pursuant to this Agreement. Each party shall treat the other party's
confidential information with the same care as it treats its own
confidential information. Nothing in this Agreement shall require either
party to keep confidential any information that:
(1) the party can prove was known to the party prior to any disclosure by
the other;
(2) is or becomes publicly available through no fault of the party;
(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 the other party;
(4) is required to be disclosed pursuant to judicial or administrative
process or subpoena;
(5) is mutually agreed upon in writing by the parties to this Agreement to
be not confidential.
If this Agreement is terminated, each party within 60 days after such
termination will return to the other party any and all copies, in whatever
form or medium, of any material disclosing any of the other party's trade
secrets or confidential information as described above.
11. 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.
12. AMENDMENT OF AGREEMENT. Company and Distributor reserve the right to amend
this Agreement at any time, but no amendment shall be effective until
approved in writing by General Agent and General Agent's Broker, subject to
the provisions of Paragraph 5.6 herein.
13. MISCELLANEOUS.
13.1 Applicable Law. Any dispute arising out of this Agreement shall be
governed by and interpreted under the laws of the State of Minnesota.
13.2 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.
13.3 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, to the following addresses:
If to Company: If to General Agent:
American Enterprise Life Insurance Company TCF Securities, Inc.
00 Xxxxx 0xx Xxxxxx Sixth and Xxxxxx Streets
Minneapolis MN 55402 Xx. Xxxx, XX 00000
Attention: Compliance Officer Attention: President
Unit 1818
If To Company's Broker-dealer: If to General Agent's Broker-
dealer:
American Express Financial Advisors Inc. TCF Securities, Inc.
00 Xxxxx Xxxxxx Xxxxxx Sixth and Xxxxxx Streets
Minneapolis, MN 55402 Xx. Xxxx, XX 00000
Attention: Compliance Officer Attention: President
Unit 1818
13.4 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.
13.5 Headings. The headings in this Agreement are for convenience only and
are not intended to have any legal effect.
13.6 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.
13.7 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.
13.8 Survival. All terms and conditions of paragraphs 6, Indemnification,
8.3 Post-Termination Limitations and 10, Confidentiality, will survive
termination of this Agreement.
13.9 Breach. Neither any failure to enforce, nor any waiver or 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.
13.10Waiver of withdrawal charges. There will be no withdrawal charge to
owner or annuitant on any Products where the owner or annuitant is an
employee of TCF Financial Corporation or of any its direct or indirect
subsidiaries.
IN WITNESS WHEREOF the parties hereto, intending to be legally bound, have
caused this Agreement to be executed by their duly authorized officers.
American Enterprise Life Insurance Company TCF Securities, Inc.
By: _____________________________________ By: ____________________
Title: President Title: President
Date: June 11, 1997 Date: June 11, 1997
American Express Financial Advisors Inc. TCF Securities, Inc.
By: _____________________________________ By: ____________________
Title: Vice-President Title: President
Date: June 11, 1997 Date: June 11, 1997
