UNDERWRITING AGREEMENT
AGREEMENT dated as of this 1st day of May, 1999, by and
between American Equity Investment Life Insurance Company, an
Iowa corporation ("INSURER"), on its behalf and on behalf of
American Equity Life Variable Account and American Equity Life
Annuity Account (the "SEPARATE ACCOUNTS"); and American Equity
Capital, Inc., ("DISTRIBUTOR"), an Iowa corporation which is a
registered broker-dealer with the Securities and Exchange
Commission (the "SEC") under the Securities Exchange Act of 1934
(the "1934 ACT") and a member of the National Association of
Securities Dealers, Inc. ("NASD").
RECITALS
A. Distributor is a broker-dealer that engages in the
distribution of variable insurance products and other investment
products; and
B. Insurer desires to issue certain variable insurance
products described more fully below to the public through
Distributor acting as principal underwriter;
NOW, THEREFORE, in consideration of the premises and of the
mutual promises and covenants hereinafter set forth, the parties
agree as follows:
1. DEFINITIONS
A. CONTRACTS -- The class or classes of variable
insurance products set forth on Schedule 1 to this
Agreement as in effect at the time this Agreement is
executed, and such other classes of variable products
that may be added to Schedule 1 from time to time in
accordance with Section 11.b of this Agreement, and
including any riders to such contracts and any other
contracts offered in connection therewith. For the
purpose of this Agreement, a "CLASS OF CONTRACTS" shall
mean those Contracts issued by Insurer on the same
policy form or forms and covered by the same
registration statement.
B. REGISTRATION STATEMENT -- With respect to each Class of
Contracts, the most recent post-effective registration
statement filed with the SEC or the most recent
effective post-effective amendment thereto, including
financial statements included therein and all exhibits
thereto. For purposes of Section 9 of this Agreement,
the term "Registration Statement" means any document
which is or at any time was a Registration Statement
within the meaning of this Section 1.B.
C. 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. For purposes of Section 9 the term "any
Prospectus" means any document which is or at any time
was a Prospectus within the meaning of this Section
1.C.
D. FUNDS -- The registered investment companies in which
the Separate Accounts invest.
E. VARIABLE ACCOUNTS -- The separate accounts supporting
any Class of Contracts and specified in Schedule 1 as
in effect at the time this Agreement is executed, or as
it may be amended from time to time in accordance with
Section 11.B of this Agreement.
F. 1933 ACT -- The Securities Act of 1933, as amended.
G. 1934 ACT -- The Securities Exchange Act of 1934, as
amended.
H. 1940 Act -- The Investment Company Act of 1940, as
amended.
I. SEC -- The Securities and Exchange Commission.
J. NASD -- The National Association of Securities Dealers,
Inc. and any affiliates.
K. REGULATIONS -- The rules and regulations promulgated by
the SEC under the 1933 Act, the 1934 Act and the 1940
Act as in effect at the time this Agreement is executed
or thereafter promulgated.
L. SELLING BROKER-DEALER -- A person registered as a
broker-dealer and licensed as a life insurance agent or
affiliated with a person so licensed, and authorized to
distribute the Contracts pursuant to a sales agreement
as provided for in Section 4 of this Agreement.
M. REPRESENTATIVE -- When used with reference to
Distributor or a Selling Broker-Dealer, an individual
who is an associated person, as that term is defined in
the 1934 Act, thereof.
N. APPLICATION - An application for a Contract.
O. PREMIUM -- A payment made under a Contract to purchase
benefits under the Contract.
P. ADMINISTRATIVE OFFICE -- The administrative office of
the Insurer identified in the most recently filed
prospectus filed pursuant to Rule 497.
2. AUTHORIZATION AND APPOINTMENT OF DISTRIBUTOR.
A. SCOPE AND AUTHORITY. Insurer hereby authorizes
Distributor on an exclusive basis, and Distributor
accepts such authority, subject to the requirements and
provisions of the 1933 Act, the 1934 Act and the 1940
Act, as well as all terms and conditions of this
Agreement, to be the distributor and principal
underwriter for the sale of the Contracts to the public
in each state and other jurisdiction in which the
Contracts may lawfully be sold during the term of this
Agreement. Insurer hereby authorizes Distributor to
grant authority to Selling Broker-Dealers to solicit
Applications and Premiums to the extent the Distributor
deems appropriate and consistent with the marketing
program for the Contracts or a Class of Contracts,
subject to the conditions set forth in Section 4 of
this Agreement. The Contracts shall be offered for
sale and distribution at premium rates set from time to
time by Insurer. Distributor shall use its best
efforts to market the Contracts actively through
Selling Broker-Dealers in accordance with Section 4 of
this Agreement, subject to compliance with applicable
laws, including rules of the NASD.
B. LIMITS ON AUTHORITY. Distributor shall act as an
independent contractor and nothing herein contained
shall constitute Distributor or its agents, officers,
or employees as agents, officers or employees of
Insurer solely by virtue of their activities in
connection with the sale of Contracts hereunder.
Distributor and its Representatives shall not have
authority, 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 due date
for payment of any Premium; or to receive monies or
Premiums (except for the sole purpose of forwarding
monies or Premiums to Insurer). Distributor shall not
expend, nor contract for the expenditure of, funds of
the Insurer. Distributor shall not possess or exercise
any authority on behalf of Insurer other than that
expressly conferred on Distributor by this Agreement.
3. SOLICITATION ACTIVITIES.
A. NO SALES BY DISTRIBUTOR REPRESENTATIVES. The
Distributor will not solicit applications from the
public for Contracts through Distributor
Representatives.
B. REPRESENTATIONS AND WARRANTIES OF DISTRIBUTOR.
Distributor represents and warrants to Insurer that
Distributor is and shall remain during the term of this
Agreement (i) registered as a broker-dealer under the
1934 Act; (ii) a member of the NASD; (iii) duly
registered under applicable state securities laws; and
(iv) in compliance with Section 9(a) of the 1940 Act.
4. SELLING BROKER-DEALERS. Insurer and Distributor shall
insure that sales of the contracts by Selling Broker-Dealers
comply with the following conditions, and any additional
conditions Insurer may specify from time to time.
A. DUAL REGISTRATION/LICENSING. Every Selling
Broker-Dealer shall be (i) registered as a
broker-dealer with the SEC; (ii) a member of the NASD;
and (iii) if required, licensed as an insurance agent
with authority to sell variable products or associated
with an insurance agent so licensed. Any individuals
to be authorized to act on behalf of Selling
Broker-Dealer shall be (i) duly registered with the
NASD as representatives of Selling Broker-Dealer with
authority to sell variable products; and (ii) licensed
as insurance agents with authority to sell variable
products. Insurer shall verify that Selling
Broker-Dealer and its Representatives are duly licensed
under applicable state insurance law to sell the
Contracts or, if Broker-Dealer is not so licensed, that
it is associated with an entity so licensed.
B. APPOINTMENT OF REPRESENTATIVES. Every Selling
Broker-Dealer (or, if applicable, its associated
insurance agency) and each of its Representatives shall
have been appointed by Insurer; provided that Insurer
reserves the right to refuse to appoint any proposed
person, or once appointed, to terminate such
appointment.
C. WRITTEN SALES AGREEMENT. Every Selling Broker-Dealer
must enter into a written sales agreement with
Distributor and Insurer which sales agreement, among
other things, will require such Selling Broker-Dealer
to use its best efforts to solicit Applications for the
Contracts and to comply with applicable laws and
regulations, including the Insurer's rules and
regulations as reflected in any written rules,
regulations and procedures provided by Insurer to
insurance agents appointed to sell its insurance
contracts, as revised from time to time.
D. SUITABILITY. In view of the fact that Insurer and
Distributor want to ensure that Contracts will be sold
to purchasers for whom the Contracts will be suitable,
the written Sales Agreement shall require that Selling
Broker-Dealers and their Representatives not make
recommendations to an applicant to purchase a Contract
in the absence of reasonable grounds to believe that
the purchase of the Contract is suitable for the
applicant. While not limited to the following, a
determination of suitability shall be based on
information supplied by an applicant after reasonable
inquiry concerning the applicant's other security
holdings, insurance and investment objectives,
financial situation and needs, and the likelihood that
the applicant will continue to make premium payments
contemplated by the Contract applied for and will keep
the Contract in force for a sufficient period of time
so that Insurer's acquisition costs are amortized over
a reasonable period of time.
5. MARKETING MATERIALS
A. PREPARATION AND FILING. Subject to Section 11.J below,
Insurer shall be primarily responsible for the design
and preparation of all promotional, sales and
advertising material related to the Contracts.
Distributor shall be responsible for filing such
material as required, with the NASD and any state
securities regulatory authorities at Insurer's expense.
Insurer shall be responsible for filing all
promotional, sales or advertising material, as
required, with any state insurance regulatory
authorities. Insurer shall be responsible for
preparing the Contract forms and filing them with
applicable state insurance regulatory authorities, and
for preparing the Prospectuses and Registration
Statements and filing them with the SEC and state
regulatory authorities, to the extent required. The
parties shall notify each other expeditiously of any
comments provided by the SEC, NASD or any securities or
insurance regulatory authority on such material, and
will cooperate expeditiously in resolving and
implementing any comments, as applicable.
B. USE IN SOLICITATION ACTIVITIES. Subject to Section
11.J below, Insurer shall be responsible for furnishing
Distributor with such Applications, Prospectuses and
other materials for use by Distributor and Selling
Broker-Dealers in their solicitation activities with
respect to the Contracts. Insurer shall notify
Distributor of those states or jurisdictions which
require delivery of a statement of additional
information with a prospectus to a prospective
purchaser.
6. COMPENSATION AND EXPENSES.
A. COMPENSATION. Subject to Section 11.J below, Insurer
shall pay compensation for sales of the Contracts in
accordance with Schedule 2 hereto. Upon Distributor's
request, Insurer shall pay compensation directly to
Selling-Broker-Dealers, on Distributor's behalf,
subject to the provisions of Section 7 of this
Agreement.
B. EXPENSES. Subject to Section 11.J below, Insurer shall
pay all expenses in connection with:
(1) the preparation and filing of each registration
statement (including each pre-effective and
post-effective amendment thereto) and the
preparation and filing of each Prospectus
(including any preliminary and each definitive
Prospectus);
(2) the preparation, underwriting, issuance and
administration of the Contracts;
(3) any registration, qualification or approval or
other filing of the Contracts or Contract forms
required under the securities or insurance laws of
the states in which the Contracts will be offered;
(4) all registration fees for the Contracts payable to
the SEC;
(5) the printing of promotional materials, definitive
Prospectuses for the Contracts and any supplements
thereto for distribution;
(6) any applicable postage costs; and
(7) any out-of-pocket expenses incurred by Distributor
in carrying out its obligations under this
Agreement.
7. COMPLIANCE.
A. MAINTAINING REGISTRATION AND APPROVALS. Subject to
Section 11.J below, Insurer shall be responsible for
maintaining the registration of the Contracts with the
SEC and any state securities regulatory authority with
which such registration is required, and for gaining
and maintaining the approval of the Contract forms
where required under the insurance laws and regulations
of each state or other jurisdiction in which the
Contracts are to be offered.
B. CONFIRMATIONS AND THE 1934 ACT COMPLIANCE.
Distributor, shall confirm to each applicant for and
purchaser of a Contract in accordance with Rule 10b-10
under the 1934 Act acceptance of premiums and such
other transactions as are required by Rule 10b-10 or
administrative interpretations thereunder. Distributor
shall maintain and preserve such books and records with
respect to such confirmations in conformity with the
requirements of Rules 17a-3 and 17a-4 under the 1934
Act to the extent such requirements apply. Distributor
acknowledges that such books and records are at all
times subject to inspection by the SEC in accordance
with Section 17(a) of the 1934 Act.
C. ISSUANCE AND ADMINISTRATION OF CONTRACTS. Insurer
shall be responsible for issuing the Contracts and
administering the Contracts and the Variable Account,
provided, however, that Distributor shall have full
responsibility for the securities activities of all
persons employed by the Insurer, engaged directly or
indirectly in the Contract operations, and for the
training, supervision and control of such persons to
the extent of such activities.
8. INVESTIGATIONS AND PROCEEDINGS.
A. COOPERATION. Distributor and Insurer shall cooperate
fully in any securities or insurance regulatory
investigation or proceeding or judicial proceeding
arising in connection with the offering, sale or
distribution of the Contracts distributed under this
Agreement. Without limiting the forgoing, Insurer and
Distributor shall notify each other promptly of any
customer complaint or notice of any regulatory
investigation or proceeding or judicial proceeding
received by either party with respect to the Contracts.
B. CUSTOMER COMPLAINTS. In the case of any customer
complaints, Distributor and Insurer will cooperate in
investigating such complaint and any response by
Distributor or Insurer to such complaint will be sent
to the other party for review and 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 response shall be
communicated by telephone or electronic mail.
9. INDEMNIFICATION.
A. BY INSURER. Insurer shall indemnify and hold harmless
Distributor and each person who controls or is
associated with Distributor 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 Distributor and/or any such
person may become subject, under any statute or
regulation, any NASD rule or interpretation, at common
law or otherwise, insofar as such losses, claims,
damages or liabilities:
(1) arise out of or are based upon any untrue
statement or alleged untrue statement of a
material fact or omission or alleged omission to
state a material fact required to be stated
therein or necessary to make the statements
therein not misleading, in light of the
circumstances in which they were made, contained
in any (i) Registration Statement or in any
Prospectus or (ii) blue sky application or other
document executed by Insurer specifically for the
purpose of qualifying any or all of the Contracts
for sale under the securities laws of any
jurisdiction; provided that Insurer shall not be
liable in any such case to the extent that such
loss, claim, damage or liability arises out of, or
is based upon, an untrue statement or alleged
untrue statement or omission or alleged omission
made in reliance upon information furnished in
writing to Insurer by Distributor specifically for
use in the preparation of any such Registration
Statement or any such blue sky application or any
amendment thereof or supplement thereto;
(2) result from any breach by Insurer of any provision
of this Agreement.
This indemnification agreement shall be in addition to
any liability that Insurer may otherwise have;
provided, however, that no person shall be entitled to
indemnification pursuant to this provision if such
loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless
disregard of duty by the person seeking
indemnification.
B. BY DISTRIBUTOR. Distributor shall indemnify and hold
harmless Insurer and each person who controls or is
associated with the 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 Insurer and/or any such
person may become subject under any statute or
regulation, any NASD rule or interpretation, at common
law or otherwise, insofar as such losses, claims,
damages or liabilities:
(1) arise out of or are based upon any untrue
statement or alleged untrue statement of a
material fact or omission or alleged omission to
state a material fact required to be stated
therein or necessary to make the statements
therein not misleading, in light of the
circumstances in which they were made, contained
in any (i) Registration Statement or in any
Prospectus or (ii) blue sky application or other
document executed by Insurer specifically for the
purpose of qualifying any or all of the Contracts
for sale under the securities laws of any
jurisdiction; in each case to the extent, but only
to the extent, that such untrue statement or
alleged untrue statement or omission or alleged
omission was made in reliance upon information
furnished in writing by Distributor to Insurer
specifically for use in the preparation of any
such Registration Statement or any such blue sky
application or any amendment thereof or supplement
thereto;
(2) result from any breach by Distributor of any
provision of this Agreement.
This indemnification shall be in addition to any
liability that Distributor may otherwise have;
provided, however, that no person shall be entitled to
indemnification pursuant to this provision if such
loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless
disregard of duty by the person seeking
indemnification.
C. GENERAL. Promptly after receipt by a party entitled to
indemnification ("Indemnified Person") under this
Section 9 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
9 ("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 9. 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
expense incurred by such indemnified person in
defending himself or herself.
The indemnification provisions contained in this
Section 9 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 9.
10. TERMINATION. This Agreement shall terminate automatically
if it is assigned by a party without the prior written
consent of the other party. (The term "assigned" shall not
include any transaction exempted from Section 15(b)(2) of
the 1940 Act.) This Agreement may be terminated at any time
for any reason by either party upon 90 days' written notice
to the other party, without payment of any penalty. This
Agreement may be terminated at the option of either party to
this Agreement upon the other party's material breach of any
provision of this Agreement or of any representation or
warranty made in this Agreement, unless such breach has been
cured within 30 days after receipt of notice of breach from
the non-breaching party. Upon termination of this Agreement
all authorizations, rights and obligations shall cease
except the obligation to settle accounts hereunder,
including commissions on Premiums subsequently received for
Contracts in effect at the time of termination or issued
pursuant to Applications received by Insurer prior to
termination.
11. MISCELLANEOUS.
A. BINDING EFFECT. This Agreement shall be binding on and
shall inure to the benefit of the respective successors
and assigns of the parties hereto provided that neither
party shall assign this Agreement or any rights or
obligations hereunder without the prior written consent
of the other party.
B. SCHEDULES. The parties to this Agreement may amend
Schedule 1 to this Agreement from time to time to
reflect the addition of any class of Contracts and
Variable Accounts. The provisions of this Agreement
shall be equally applicable to each such class of
Contracts and each Variable Account that may be added
to the Schedule, unless the context otherwise requires.
Insurer may amend Schedule 2 unilaterally, from time to
time. Any other change in the terms or provisions of
this Agreement shall be by written agreement between
Insurer and Distributor.
C. 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 either party to insist
upon strict compliance with any 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.
D. NOTICES. All notices hereunder are to be made in
writing and shall be given to the address set forth
below or to such other address as such party may
hereafter specify by a notice complying with this
Section. Each such notice to a party shall be either
hand delivered, sent by fax with written confirmation
of transmission or sent 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.
1.) If to Insurer, to:
American Equity Investment Life Insurance Company
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxx Xxxxxx, Xxxx 00000
Fax No. 000-000-0000
2.). If to Distributor, to:
American Equity Capital, Inc.
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxx Xxxxxx, Xxxx 00000
Fax No. 000-000-0000
E. INTERPRETATION; JURISDICTION. Except as set forth in
Section 11.J below, this Agreement constitutes the
whole Agreement between the parties hereto with respect
to the subject matter hereof, and supersedes all prior
written or oral understandings, agreements or
negotiations between the parties with respect to such
subject matter. No prior writings by or between the
parties with respect to the subject matter hereof shall
be used by either 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.
F. 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.
G. SECTION AND OTHER 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.
H. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which taken together shall
constitute one and the same instrument.
I. REGULATION. This Agreement shall be subject to the
provisions of the 1933 Act, 1934 Act and the 1940 Act
and the rules and regulations of the NASD, from time to
time in effect, including such exemptions from the 1940
Act as the SEC may grant, and the terms hereof shall be
interpreted
and construed in accordance therewith.
J. Any obligation of Insurer pursuant to this Agreement
may be performed by Insurer or Insurer may contract
with qualified third parties to provide those services
or assume those responsibilities necessary to satisfy
Insurer's obligations under this Agreement. Insurer
has entered into agreements with EquiTrust Marketing
Services, Inc., EquiTrust Investment Management
Services, Inc. and EquiTrust Life Insurance Company, to
provide all or part of the services and meet certain
obligations of Insurer under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by such authorized officers on the
date specified below.
INSURER:
AMERICAN EQUITY INVESTMENT
LIFE INSURANCE COMPANY
By: /s/ X.X. Xxxxx, President Date: May 1, 1999
DISTRIBUTOR:
AMERICAN EQUITY CAPITAL, INC.
By: /s/ Xxxxx X. Xxxxxx, CFO Date: May 1, 1999
SCHEDULE 1
Separate Accounts
Effective __________________
American Equity Life Variable Account
American Equity Life Annuity Account
SCHEDULE 2
Compensation
Effective ___________________
NONE
