AMENDED AND RESTATED
PARTICIPATION AGREEMENT
AMONG
AMERICAN CENTURION LIFE ASSURANCE COMPANY
IDS LIFE INSURANCE COMPANY OF NEW YORK
AMERIPRISE FINANCIAL SERVICES, INC.
ALLIANCEBERNSTEIN L.P.
AND
ALLIANCEBERNSTEIN INVESTMENTS, INC.
DATED AS OF
AUGUST 1, 2006
AMENDED AND RESTATED
PARTICIPATION AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT, made and entered into as of the 1st
day of August, 2006 ("Agreement"), by and among the following parties:
o American Centurion Life Assurance Company, a New York life
insurance company ("American Centurion Life") (on behalf of itself
and its "Separate Account" defined below);
o IDS Life Insurance Company of New York, a New York life insurance
company ("IDS Life of New York") (on behalf of itself and its
"Separate Account" defined below);
Each of American Centurion Life and IDS Life of New York hereinafter are also
referred to as "Insurer".
o Ameriprise Financial Services, Inc., a Delaware corporation
("Contracts Distributor"), the principal underwriter with respect
to the Contracts referred to below;
o AllianceBernstein L.P., a Delaware limited partnership
("Adviser"), the investment adviser of the Fund referred to below;
and
o AllianceBernstein Investments, Inc., a Delaware corporation
("Distributor"), the Fund's principal underwriter.
The Insurer, the Contracts Distributor, the Adviser and the Distributor are
collectively referred to as "Parties".
WITNESSETH THAT:
WHEREAS Insurer, the Distributor, and AllianceBernstein Variable
Products Series Fund, Inc. (the "Fund") desire that Class B shares of the Fund
as further described in Exhibit A, attached hereto and incorporated by
reference (the "Portfolios"; reference herein to the "Fund" includes reference
to each Portfolio to the extent the context requires) be made available by
Distributor to serve as underlying investment media for those combination
fixed and variable annuity contracts of Insurer that are the subject of
Insurer's Form N-4 registration statement filed with the Securities and
Exchange Commission (the "SEC"), and those combination fixed and variable
universal life insurance policies of Insurer that are the subject of Insurer's
Form N-6 registration statement filed with the SEC, or such other forms as
prescribed under applicable securities laws, as further described in Exhibit A
(collectively the "Contracts"), to be offered through Contracts Distributor
and other registered broker-dealer firms as agreed to by Insurer and Contracts
Distributor; and
WHEREAS the Contracts provide for the allocation of net amounts received
by Insurer to separate series (the "Divisions"; reference herein to the
"Separate Account" includes reference to each Division to the extent the
context requires) of the Separate Account for investment in Class B shares of
corresponding Portfolios of the Fund that are made available through the
Separate Account to act as underlying investment media,
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and Distributor will make Class B shares of the
Portfolios available to Insurer for this purpose at net asset value and with
no sales charges, all subject to the following provisions:
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Section A. Amendment and Restatement; Form of Agreement
-------------------------------------------------------
A.1 Merger and Renaming of Insurer.
------------------------------
The Contracts Distributor, the Adviser and the Distributor acknowledge
the planned merger of American Centurion Life with and into IDS Life of New
York (the "Merger") and the "intact transfer" (the "Transfer") of the Separate
Accounts of American Centurion Life to IDS Life of New York by operation of
law and incident to the Merger, on December 31, 2006, at 10:59:59 p.m. Central
Time (the "Effective Time"), subject to all necessary regulatory approvals
being obtained in connection with the Merger and the Transfer, and the
re-naming of IDS Life of New York to RiverSource Life Insurance Co. of New
York simultaneously with the Merger. On and after the Effective Time, all
references in this Agreement and its Exhibit to American Centurion Life and
IDS Life of New York shall mean and refer to RiverSource Life Insurance Co. of
New York. The Contracts Distributor, the Adviser and the Distributor consent
to the transfer of the rights and obligations of American Centurion Life under
this Agreement to IDS Life of New York at the Effective Time of the Merger.
A.2 Supersedes Prior Agreements.
---------------------------
This Agreement shall amend and supersede the following agreements as of
the date stated above among the Insurer, the Contracts Distributor, the
Adviser and the Distributor with respect to all investments by the Insurer or
the Separate Accounts prior to the date of this Agreement, as though identical
separate agreements had been executed by the parties hereto on the dates as
indicated below:
(a) Participation Agreement, dated February 1, 2003, by and
among American Centurion Life, the Contracts Distributor, the Adviser and the
Distributor, as amended by Amendment No. 1 to Participation Agreement, dated
November 23, 2005.
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(b) Participation Agreement, dated March 1, 2000, by and among
IDS Life of New York, the Contracts Distributor, the Adviser and the
Distributor, as amended by the following documents: (i) Amendment No. 1 to
Participation Agreement, dated August 13, 2001; (ii) Amendment No. 2 to
Participation Agreement, dated November 7, 2002; (iii) Amendment No. 3 to
Participation Agreement, dated August 18, 2003; and (iv) Amendment No. 4 to
Participation Agreement, dated November 23, 2005.
A.3 Separate Agreements until Merger.
--------------------------------
In addition, the Parties hereby further amend and restate their
agreements as set forth herein in contemplation of the Transfer of the
Separate Accounts of American Centurion Life to IDS Life of New York on
December 31, 2006, incident to the Merger. Although the Parties have executed
this Agreement in this form for administrative convenience, this Agreement
shall create a separate participation agreement with each Insurer until the
Effective Time of the Merger.
Section 1. Additional Portfolios
--------------------------------
The Fund has and may, from time to time, add additional Portfolios,
which will become subject to this Agreement, if, upon the written consent of
each of the Parties hereto, they are made available as investment media for
the Contracts.
Section 2. Processing Transactions
----------------------------------
2.1 Timely Pricing and Orders.
-------------------------
The Adviser or its designated agent will provide closing net asset
value, dividend and capital gain information for each Portfolio to Insurer at
the close of trading on each day (a "Business Day") on which (i) the New York
Stock Exchange is open for regular trading, (ii) the Fund calculates the
Portfolio's net asset value and (iii) Insurer is open for business. The Fund
or its designated agent will use its best efforts to provide this information
by 6:00 p.m., Eastern
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Time, but in no event later than 7:00 p.m. Eastern time. The Fund will notify
the Insurer as soon as possible if it is determined that this information will
be available after 7:00 p.m. Eastern time, and the Fund and the Insurer will
mutually agree upon a final deadline for timely receipt of this information on
that Business Day. Insurer will use these data to calculate unit values, which
in turn will be used to process transactions that receive that same Business
Day's Separate Account Division's unit values. Such Separate Account
processing will be done the same evening, and corresponding orders with
respect to Fund shares will be placed the morning of the following Business
Day. Insurer will use its best efforts to place such orders with the Fund by
10:00 a.m., Eastern Time.
2.2 Timely Payments.
---------------
Insurer will transmit orders for purchases and redemptions of Fund
shares to Distributor, and will wire payment for net purchases to a custodial
account designated by the Fund on the day the order for Fund shares is placed,
to the extent practicable. Payment for net redemptions will be wired by the
Fund to an account designated by Insurer on the same day as the order is
placed, to the extent practicable, and in any event be made within five
calendar days after the date the order is placed in order to enable Insurer to
pay redemption proceeds within the time specified in Section 22(e) of the
Investment Company Act of 1940, as amended (the "1940 Act").
2.3 Price.
-----
The Parties agree that Portfolio share purchase and redemption orders
resulting from Contract owner purchase payments, surrenders, partial
withdrawals, routine withdrawals of charges, or other transactions under
Contracts will be executed at the net asset values as determined as of the
close of regular trading on the New York Stock Exchange on the Business Day
that Insurer receives such orders and processes such transactions, which,
Insurer agrees shall
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occur not earlier than the Business Day prior to Distributor's receipt of the
corresponding orders for purchases and redemptions of Portfolio shares. For
the purposes of this section, Insurer shall be deemed to be the agent of the
Fund for receipt of such orders from holders or applicants of contracts, and
receipt by Insurer shall constitute receipt by the Fund. All other purchases
and redemptions of Portfolio shares by Insurer will be effected at the net
asset values next computed after receipt by Distributor of the order therefor,
and such orders will be irrevocable. Insurer hereby elects to reinvest all
dividends and capital gains distributions in additional shares of the
corresponding Portfolio at the record-date net asset values until Insurer
otherwise notifies the Fund in writing, it being agreed by the Parties that
the record date and the payment date with respect to any dividend or
distribution will be the same Business Day.
Section 3. Costs and Expenses
-----------------------------
3.1 General.
-------
Except as otherwise specifically provided herein, each Party will bear
all their own expenses incident to its performance under this Agreement.
3.2 Registration.
------------
The Fund will bear the cost of its registering as a management investment
company under the 1940 Act and registering its shares under the Securities Act
of 1933, as amended (the "1933 Act"), and keeping such registrations current
and effective; including, without limitation, the preparation of and filing
with the SEC of Forms N-SAR and Rule 24-2 Notices respecting the Fund and its
shares and payment of all applicable registration or filing fees with respect
to any of the foregoing. Insurer will bear tile cost of registering the
Separate Account as a unit investment trust under the 1940 Act and registering
units of interest under the Contracts under the 1933 Act and keeping such
registrations current and effective; including, without limitation, the
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preparation and filing with the SEC of Forms N-SAR and Rule 24-2 Notices
respecting the Separate Account and its units of interest and payment of all
applicable registration or filing fees with respect to any of the foregoing.
3.3 Other (Non-Sales-Related) Expense.
---------------------------------
The Fund will bear the costs of preparing, filing with the SEC and
setting for printing the Fund's prospectus, statement of additional
information and any amendments or supplements thereto (collectively, the "Fund
Prospectus"), periodic reports to shareholders, Fund proxy material and other
shareholder communications and any related requests for voting instructions
from Participants (as defined below). The Fund or the Distributor will bear
the cost of mailing to existing Participants (as defined below) any Fund
Prospectus, periodic report to shareholders, Fund proxy material and other
shareholder communications and any related request for voting instructions.
Insurer will bear the costs of preparing, filing with the SEC and setting for
printing, the Separate Account's prospectus, statement of additional
information and any amendments or supplements thereto (collectively, the
"Separate Account Prospectus"), any periodic reports to owners, annuitants or
participants under the Contracts (collectively, "Participants"), and other
Participant communications. The Fund and Insurer each will bear the costs of
printing in quantity and delivering to existing Participants the documents as
to which it bears the cost of preparation as set forth above in this Section
3.3, it being understood that reasonable cost allocations will be made in
cases where any such Fund and/or Insurer documents are printed or mailed on a
combined or coordinated basis. If requested by Insurer, the Fund will provide
annual Prospectus, annual reports, semi-annual reports and other shareholder
communications text to Insurer on diskette or other medium agreed to by the
Parties. The Fund or the Distributor will bear the cost of tabulation of proxy
votes. In the event that the Fund initiates (i) a reorganization
7
of a Portfolio as defined by Section 2 of the 1940 Act, or (ii) a change in
the name of a Portfolio or the Fund, the Fund or the Distributor shall
reimburse Insurer for the Insurer's internal and out-of-pocket costs
associated with the aforementioned actions. Insurer agrees to use its best
efforts to minimize any costs incurred under this Section and shall provide
the Fund with acceptable documentation of any such costs incurred.
3.4 Other Sales-Related Expense.
---------------------------
Expenses of distributing the Portfolio's shares and the Contracts will
be paid by Contracts Distributor and other parties, as they shall determine by
separate agreement.
3.5 Parties to Cooperate.
--------------------
The Adviser, Insurer, Contracts Distributor, and Distributor each agrees
to cooperate with the others, as applicable, in arranging to print, mail
and/or deliver combined or coordinated prospectuses or other materials of the
Fund and Separate Account.
3.6 Use of Fund or Adviser Name by Insurer.
--------------------------------------
(a) The Insurer will furnish, or will cause to be furnished to
the Fund or the Adviser, each piece of sales literature or other promotional
material in which the Fund or the Adviser is named, at least ten (10) Business
Days prior to its use. No such material will be used if the Fund or the
Adviser reasonably objects to such use within five (5) Business Days after
receipt of such material.
(b) The Insurer will not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund, in
connection with the sale of Contracts other than the information or
representations contained in a registration statement, prospectus or statement
of additional information for Fund shares, as such registration statement
prospectus and statement of additional information may be amended or
supplemented, from time to time, or
8
in published reports for the Fund which are in the public domain or approved
by the Fund or the Adviser for distribution, or in the sales literature or
other material provided by the Fund, except with the permission of the Fund or
the Adviser. The Fund and the Adviser agree to respond to any request for
approval on a prompt and timely basis. Nothing in this Section will be
construed as preventing the Insurer or its employees or agents from giving
advice on investment in the Fund.
(c) The Fund and the Adviser hereby consent to the Insurer's use
of the name AllianceBernstein L.P. and AllianceBernstein Variable Products
Series Fund, Inc. and appropriate variations thereof in connection with the
marketing the Contracts, subject to the terms of this Section. Such consent
will terminate with the termination of this Agreement.
3.7 Use of Insurer Name by Fund or Adviser.
--------------------------------------
(a) The Fund or Adviser will furnish, or will cause to be
furnished, to the Insurer or its designee, each piece of sales literature or
other promotional material in which the Insurer or its separate account is
named, at least ten (10) Business Days prior to its use. No such material win
be used if the Insurer reasonably objects to such use within five (5) Business
Days after receipt of such material.
(b) The Fund and the Adviser will not give any information or
make any representations or statements on behalf of the Insurer or concerning
the Insurer, each Account, or the Contracts other than the information or
representations contained in a registration statement prospectus or statement
of additional information for the Contracts, as such registration statement
prospectus and statement of additional information may be amended or
supplemented, from time to time, or in published reports for each Account or
the Contacts which are in the public domain or approved by the Insurer for
distribution to Contract owners, or in the sales literature or other
9
material provided by the Insurer, except with the permission of the Insurer.
The Insurer agrees to respond to any request for approval on a prompt and
timely basis.
3.8 Sales Literature and Other Promotional Materials.
------------------------------------------------
For purposes of this Section 3, the phrase "sales literature and other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical) radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media (e.g., on-line
networks such as the Internet or other electronic messages), sales literature,
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, registration statements, statements of
additional information, shareholder reports, and proxy materials and any other
material constituting sales literature or advertising under the rules of the
National Association of Securities Dealers, Inc. ("NASD"), the 1933 Act or the
1940 Act.
3.9 Calculation of Performance Information.
--------------------------------------
The Adviser will be responsible for calculating the performance information
for the Fund. The Insurer will be responsible for calculating the performance
information for the Contracts. The Adviser will be liable to the Insurer for
any material mistakes it makes in calculating the performance information for
the Fund which cause losses to the Insurer. The Insurer will be liable to the
Adviser for any material mistakes it makes in calculating the performance
information for the Contracts which cause losses to the Adviser. Each Party
will be liable for any
10
material mistakes it makes in reproducing the performance information for the
Contracts or the Fund, as appropriate. The Fund and the Adviser agree to
provide the Insurer with performance information for the Fund on a timely
basis to enable the Insurer to calculate performance information for the
Contracts in accordance with applicable state and federal law.
Section 4. Legal Compliance
---------------------------
4.1 Tax Laws.
--------
(a) The Adviser will use its best efforts to qualify and to
maintain qualification of each Portfolio as a regulated investment company
("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), and the Adviser or Distributor will notify Insurer immediately
upon having a reasonable basis for believing that a Portfolio has ceased to so
qualify or that it might not so qualify in the future.
(b) Insurer represents that it believes, in good faith, that the
Contracts will be treated as annuity or life insurance contracts under
applicable provisions of the Code and that it will make every effort to
maintain such treatment Insurer will notify the Fund and Distributor
immediately upon having a reasonable basis for believing that any of the
Contracts have ceased to be so treated or that they might not be so treated in
the future.
(c) The Fund will use its best efforts to comply and to maintain
each Portfolio's compliance with the diversification requirements set forth in
Section 817(h) of the Code and Section 1.817-5(b) of the regulations under the
Code, and the Fund, Adviser or Distributor will notify Insurer immediately
upon having a reasonable basis for believing that a Portfolio has ceased to so
comply or that a Portfolio might not so comply in the future.
(d) Insurer represents that it believes, in good faith, that the
Separate Account is a "segregated asset account" and that interests in the
Separate Account are offered exclusively
11
through the purchase of or transfer into a "variable contact" within the
meaning of such terms under Section 817(h) of the Code and the regulations
thereunder. Insurer will make every effort to continue to meet such
definitional requirements, and it will notify the Fund and Distributor
immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the
future.
(e) The Adviser will manage the Fund as a RIC in compliance with
Subchapter M of the Code and will use its best efforts to manage to be in
compliance with Section 817(h) of the Code and regulations thereunder. The
Fund has adopted and will maintain procedures for ensuring that the Fund is
managed in compliance with Subchapter M and Section 817(h) and regulations
thereunder.
(f) Should the Distributor or Adviser become aware of a failure
of Fund, or any of its Portfolios, to be in compliance with Subchapter M of
the Code or Section 817(h) of the Code and regulations thereunder, they
represent and agree that they will immediately notify Insurer of such in
writing.
4.2 Insurance and Certain Other Laws.
--------------------------------
(a) The Adviser will use its best efforts to cause the Fund to
comply with any applicable state insurance laws or regulations, to the extent
specifically requested in writing by Insurer. If it cannot comply, it will so
notify Insurer in writing. The Adviser agrees that it will or will cause the
Fund to furnish the information required by state insurance laws so that the
Insurer can obtain the authority needed to issue the Contracts in the various
states.
(b) Insurer represents and warrants that (i) it is an insurance
company duly organized, validly existing and in good standing under the laws
of the State of New York and has full corporate power, authority and legal
right to execute, deliver and perform its duties and
12
comply with its obligations under this Agreement, (ii) it has legally and
validly established and maintains the Separate Account as a segregated asset
account under the laws of the State of New York, and (iii) the Contracts
comply in all material respects with all other applicable federal and state
laws and regulations.
(c) Contracts Distributor represents and warrants that Contracts
Distributor is a business corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware and has full corporate
power, authority and legal right to execute, deliver, and perform its duties
and comply with its obligations under this Agreement.
(d) Distributor represents and warrants that it is a business
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has full corporate power, authority and
legal right to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.
(e) Distributor represents and warrants that the Fund is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Maryland and has full power, authority, and legal right
to execute, deliver, and perform its duties and comply with its obligations
under this Agreement.
(f) Adviser represents and warrants that it is a limited
partnership, duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full power, authority, and legal right
to execute, deliver, and perform its duties and comply with its obligations
under this Agreement.
4.3 Securities Laws.
---------------
(a) Insurer represents and warrants that (i) interests in the
Separate Account pursuant to the Contacts will be registered under the 1933
Act to the extent required by the 1933
13
Act and the Contracts will be duly authorized for issuance and sold in
compliance with applicable law, (ii) the Separate Account is or will be
registered and will remain registered under the 1940 Act to the extent
required by the 1940 Act, (iii) the Separate Account does and will comply in
all material respects with the requirements of the 1940 Act and the rules
thereunder, (iv) the Separate Account's 1933 Act registration statement
relating to the Contracts, together with any amendments thereto, will, at all
times comply in all material respects with the requirements of the 1933 Act
and the rules thereunder, and (v) the Separate Account Prospectus will at all
times comply in all material respects with the requirements of the 1933 Act
and the rules thereunder.
(b) The Adviser and Distributor represent and warrant that (i)
Fund shares sold pursuant to this Agreement will be registered under the 1933
Act to the extent required by the 1933 Act and duly authorized for issuance
and sold in compliance with Maryland law, (ii) the Fund is and will remain
registered under the 1940 Act to the extent required by the 1940 Act, (iii)
the Fund will amend the registration statement for its shares under the 1933
Act and itself under the 1940 Act from time to time as required in order to
effect the continuous offering of its shares, (iv) the Fund does and will
comply in all material respects with the requirements of the 1940 Act and the
rules thereunder, (v) the Fund's 1933 Act registration statement, together
with any amendments thereto, will at all times comply in all material respects
with the requirements of the 1933 Act and rules thereunder, and (vi) the Fund
Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(c) The Fund will register and qualify its shares for sale in
accordance with the laws of any state or other jurisdiction only if and to the
extent reasonably deemed advisable by the Fund, Insurer or any other life
insurance company utilizing the Fund.
14
(d) Distributor and Contracts Distributor each represents and
warrants that it is and will remain registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended, and is and will remain
a member in good standing of the National Association of Securities Dealers
Inc. (the "NASD").
4.4 Notice of Certain Proceedings and Other Circumstances.
-----------------------------------------------------
(a) Distributor or the Fund shall immediately notify Insurer of
(i) the issuance by any court or regulatory body of any stop order, cease and
desist order, or other similar order with respect to the Fund's registration
statement under the 1933 Act or the Fund Prospectus, (ii) any request by the
SEC for any amendment to such registration statement or Fund Prospectus, (iii)
the initiation of any proceedings for that purpose or for any other purpose
relating to the registration or offering of the Fund's shares, or (iv) any
other action or circumstances that may prevent the lawful offer or sale of
Fund shares in any state or jurisdiction, including, without limitation, any
circumstances in which (1) the Fund's shares are not registered and, in all
material respects, issued and sold in accordance with applicable state and
federal law or (2) such law precludes the use of such shares as an underlying
investment medium of the Contracts issued or to be issued by Insurer.
Distributor and the Fund will make every reasonable effort to prevent the
issuance of any such stop order, cease and desist order or similar order and,
if any such order is issued, to obtain the lifting thereof at the earliest
possible time.
(b) Insurer and Contracts Distributor shall immediately notify
the Fund of (i) the issuance by any court or regulatory body of any stop
order, cease and desist order or similar order with respect to the separate
Account's registration statement under the 1933 Act relating to the Contracts
or the Separate Account Prospectus, (ii) any request by the SEC for any
amendment to such registration statement or Separate Account Prospectus, (iii)
the initiation of
15
any proceedings for that purpose or for any other purpose relating to the
registration or offering of the Separate Account interests pursuant to the
Contracts, or (iv) any other action or circumstances that may prevent the
lawful offer or sale of said interests in any state or jurisdiction,
including, without limitation, any circumstances in which said interests are
not registered and, in all material respects, issued and sold in accordance
with applicable state and federal law. Insurer and Contracts Distributor will
make every reasonable effort to prevent the issuance of any such stop order,
cease and desist order or similar order and, if any such order is issued, to
obtain the lifting thereof at the earliest possible time.
4.5 Insurer to Provide Documents.
----------------------------
Upon request Insurer will provide the Fund and the Distributor one
complete copy of SEC registration statements, Separate Account Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
applications for exemptions, requests for no-action letters, and amendments to
any of the above, that materially relate to the Separate Account or the
Contracts, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.
4.6 Fund to Provide Documents.
-------------------------
Upon request, the Fund will provide to Insurer one complete copy of SEC
registration statements, Fund Prospectuses, reports, any preliminary and final
proxy material, applications for exemptions, requests for no-action letters,
and all amendments to any of the above, that materially relate to the Fund or
its shares, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.
4.7 Market Timing.
-------------
Insurer acknowledges that the Fund's Board of Directors has adopted
policies and
16
procedures reasonably designed to detect and deter frequent purchases and
redemptions of Portfolio shares or excessive or short-term trading that might
disadvantage owners investing in Portfolios of the Fund on a long term basis
through the Contracts and other variable contracts issued by insurers not
affiliated with Insurer. These policies and procedures are described in the
Fund's registration statement. Adviser and Distributor acknowledge that
Insurer, on behalf of its Separate Account(s), has adopted policies and
procedures reasonably designed to detect and deter frequent transfers of
contract value among the subaccounts of the Separate Account(s) including
those investing in Portfolios of the Fund which are available as investment
options under the Contracts. These policies and procedures are described in
the registration statements of the Separate Account(s) through which the
Contracts are offered.
The Insurer will cooperate with the Fund's, the Adviser's and the
Distributor's reasonable requests in taking steps to deter and detect such
transfers by Contract owners. Subject to applicable law and the terms of each
Contract, the Insurer will furnish other information the Fund, directly or
through its agent, reasonably requests regarding frequent transfers by
Contract owners among the subaccounts investing Portfolios of the Fund which
are available under the Contracts. In addition, in compliance with Rule 22c-2
under the 1940 Act, the Insurer hereby agrees to (i) provide, promptly upon
request by Fund, directly or through its agent, the taxpayer identification
number of all Contract owners that purchased, redeemed, transferred, or
exchanged shares of Portfolios of the Fund held under a Contract, and the
amount and dates of such Contract owner's purchases, redemptions, transfers,
and exchanges involving such Portfolios; and (ii) execute any instructions
from the Fund, directly or through its agent, to restrict or prohibit further
purchases or exchanges of shares of the Portfolios by a Contract owner who has
been identified by the Fund, directly or through its agent, as having engaged
in transactions in Portfolio shares
17
that violate the policies adopted by the Fund for the purpose of eliminating
or reducing any dilution of the value of the outstanding shares of the
Portfolio. If the requested information is not on the Insurer's books and
records, the Insurer agrees to use reasonable efforts to: (i) provide or
arrange to provide to the Fund, directly or through its agent, the requested
information regarding Contract owners who hold an account with an indirect
intermediary; or (ii) if directed by the Fund, directly or through its agent,
block further purchases of shares of the Portfolios from such indirect
intermediary. For purposes of the preceding sentence "indirect intermediary"
has the same meaning as in Rule 22c-2 under the 1940 Act. The Insurer further
agrees to either assess any applicable redemption fee that the Fund has
adopted to curtail frequent trading, or communicate to the Fund or its agent
any information necessary for the Fund or its agent to assess such redemption
fees directly against payment of redemption proceeds. The parties shall
negotiate in good faith such additional terms and conditions regarding
implementation of the foregoing obligations of the parties under Rule 22c-2 as
any party may wish to address.
4.8 Compliance with USA Patriot Act.
The Parties to this Agreement represent and warrant that they shall
comply with all the applicable laws and regulations designed to prevent money
laundering including without limitation the International Money Laundering
Abatement and Anti-Terrorist Financing Act of 2001 (Title III of the USA
PATRIOT ACT), and if required by such laws or regulations will share
information with each other about individuals, entities, organizations and
countries suspected of possible terrorist or money laundering activities in
accordance with Section 314(b) of the USA PATRIOT ACT.
18
Section 5. Mixed and Shared Funding
-----------------------------------
5.1 General.
-------
The Fund has obtained an order exempting it from certain provisions of
the 1940 Act and rules thereunder so that the Fund is available for investment
by certain other entities, including, without limitation, separate accounts
funding variable life insurance policies and separate accounts of insurance
companies ("Participating Insurance Companies") unaffiliated with Insurer
("Mixed and Shared Funding Order"). The Parties recognize that the SEC has
imposed terms and conditions for such orders that are substantially identical
to many of the provisions of this Section 5.
5.2 Disinterested Directors.
-----------------------
The Fund agrees that the Fund's Board of Directors (the "Board of
Directors") shall at all times consist of directors a majority of whom (the
"Disinterested Directors") are not interested persons of Adviser or
Distributor within the meaning of Section 2(a)(19) of the 1940 Act.
5.3 Monitoring for Material Irreconcilable Conflicts.
------------------------------------------------
The Fund agrees that its Board of Directors will monitor for the
existence of any material irreconcilable conflict between the interests of the
participants in all separate accounts of life insurance companies utilizing
the Fund, including the Separate Account. Insurer agrees to inform the Board
of Directors of the Fund of the existence of or any potential for any such
material irreconcilable conflict of which it is aware. The concept of a
"material irreconcilable conflict" is not defined by the 1940 Act or the rules
thereunder, but the Parties recognize that such a conflict may arise for a
variety of reasons, including, without limitation:
(a) an action by any state insurance or other regulatory
authority;
(b) a change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax or
securities regulatory authorities;
19
(c) an administrative or judicial decision in any relevant
proceeding;
(d) the manner in which the investments of any Portfolio are
being managed;
(e) a difference in voting instructions given by variable
annuity contract and variable life insurance contract participants or by
participants of different life insurance companies utilizing the Fund, or
(f) a decision by a life insurance company utilizing the Fund to
disregard the voting instructions of participants.
Insurer will assist the Board of Directors in carrying out its
responsibilities by providing the Board of Directors with all information
reasonably necessary for the Board of Directors to consider any issue raised,
including information as to a decision by Insurer to disregard voting
instructions of Participants. The Board of Directors will record in its
minutes, or other appropriate records, all reports received by it and all
action with regard to a material irreconcilable conflict.
5.4 Conflict Remedies.
-----------------
(a) It is agreed that if it is determined by a majority of the
members of the Board of Directors or a majority of the Disinterested Directors
that a material irreconcilable conflict exists, Insurer and the other life
insurance companies utilizing the Fund will, at their own expense and to the
extent reasonably practicable (as determined by a majority of the
Disinterested Directors), take whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, which steps may include, but
are not limited to:
(i) withdrawing the assets allocable to some or all of the
separate accounts (or the subaccounts of the separate
accounts) from the Fund or any Portfolio and
reinvesting such assets in a different
20
investment medium, including another Portfolio of the
Fund, or submitting the question whether such
segregation should be implemented to a vote of all
affected participants and, as appropriate, segregating
the assets of any particular group (e.g., annuity
contract owners or participants, life insurance
contract owners or all contract owners and
participants of one or more life insurance companies
utilizing the Fund) that votes in favor of such
segregation, or offering to the affected contract
owners or participants the option of making such a
change; and
(ii) establishing a new registered investment company of
the type defined as a "Management Company" in Section
4(3) of the 1940 Act or a new separate account that is
operated as a Management Company.
(b) If the material irreconcilable conflict arises because of
Insurer's decision to disregard Participant voting instructions and that
decision could conflict with the majority of Participant voting instructions
and represents a minority position or would preclude a majority vote, Insurer
may be required, at the Fund's election, to withdraw the Separate Account's
(or sub-account's) investment in the Fund provided, however, that such
withdrawal and termination will be limited to the extent required by the
foregoing irreconcilable material conflict as determined by a majority of the
disinterested directors of the Board of Directors. No charge or penalty will
be imposed as a result of such withdrawal. Any such withdrawal must take place
within six months after the Fund gives notice to Insurer that this provision
is being implemented,
21
and until the end of such six-month period, Distributor and the Fund shall
continue to accept and implement orders by Insurer for the purchase and
redemption of shares of the Fund.
(c) If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to Insurer
conflicts with the majority of other state regulators, then Insurer will
withdraw the Separate Account's (or sub-account's) investment in the Fund
within six months after the Fund's Board of Directors informs Insurer that it
has determined that such decision has created a material irreconcilable
conflict, provided that such withdrawal will be limited to the extent required
by the irreconcilable material conflict as determined by a majority of the
disinterested directors of the Fund Board. No charge or penalty will be
imposed as a result of such withdrawal. Until the end of such six-month
period, Distributor and Fund shall continue to accept and implement orders by
Insurer for the purchase and redemption of shares of the Fund.
(d) Insurer agrees that any remedial action taken by it in
resolving any material irreconcilable conflict will be carried out at its
expense and with a view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested
Directors will determine whether or not any proposed action adequately
remedies any material irreconcilable conflict. In no event, however, will the
Fund or Distributor be required to establish a new funding medium for any
Contracts. Insurer will not be required by the terms hereof to establish a new
funding medium for any Contracts if an offer to do so has been declined by
vote of a majority of Participants materially adversely affected by the
material irreconcilable conflict.
22
5.5 Notice to Insurer.
-----------------
The Fund will promptly make known in writing to Insurer the Board of
Directors' determination of the existence of a material irreconcilable
conflict, a description of the facts that give rise to such conflict and the
implications of such conflict.
5.6 Information Requested by Board of Directors.
-------------------------------------------
Insurer and the Fund will at least annually submit to the Board of
Directors of the Fund such reports, materials or data as the Board of
Directors may reasonably request so that the Board of Directors may fully
carry out the obligations imposed upon it by the provisions hereof, and said
reports, materials and data will be submitted at any reasonable time deemed
appropriate by the Board of Directors. All reports received by the Board of
Directors of potential or existing conflicts, and all Board of Directors
actions with regard to determining the existence of a conflict, notifying life
insurance companies utilizing the Fund of a conflict and determining whether
any proposed action adequately remedies a conflict, will be properly recorded
in the minutes of the Board of Directors or other appropriate records, and
such minutes or other records will be made available to the SEC upon request.
5.7 Compliance with SEC Rules.
-------------------------
If, at any time during which the Fund is serving as an investment medium
for variable life insurance policies, 1940 Act Rules 6e-3(T) or, if
applicable, 6e-2 are amended or Rule 6e-3 is adopted to provide exemptive
relief with respect to mixed and shared funding, the Parties agree that they
will comply with the terms and conditions thereof and that the terms of this
Section 5 shall be deemed modified if and only to the extent required in order
also to comply with the terms and conditions of such exemptive relief that is
afforded by any of said rules that are applicable.
23
Section 6. Termination
----------------------
6.1 Events of Termination.
---------------------
Subject to Section 6.4 below, this Agreement will terminate as to a
Portfolio:
(a) at the option of Insurer or Distributor upon at least sixty
days' advance written notice to the other Parties, or if later, upon the
receipt of any required exemptive relief or orders from the SEC, unless
otherwise agreed in a separate written agreement among the Parties; or
(b) at the option of the Fund upon (i) at least sixty days'
advance written notice to the other Parties, and (ii) approval by (1) a
majority of the disinterested Directors upon a finding that a continuation of
this Contract is contrary to the best interests of the Fund, or (2) a majority
vote of the shares of the affected Portfolio in the corresponding Division of
the Separate Account (pursuant to the procedures set forth in Section 11 of
this Agreement for voting Trust shares in accordance with Participant
instructions); or
(c) at the option of the Fund, upon receipt of the written
notice to the other Parties by the Fund, upon institution of formal
proceedings against Insurer or Contracts Distributor by the NASD, the SEC, any
state insurance regulator or any other regulatory body regarding Insurer's
obligations under this Agreement or related to the sale of the Contracts, the
operation of the Separate Account, or the purchase of the Fund shares, if, in
each case, the Fund reasonably determines in good faith that such proceedings,
or the facts on which such proceedings would be based, have a material
likelihood of imposing material adverse consequences on the Portfolio to be
terminated; or
(d) at the option of Insurer, upon receipt of the written notice
to the other Parties by the Insurer, upon institution of formal proceedings
against the Fund, Adviser, or Distributor by the NASD, the SEC, or any state
insurance regulator or any other regulatory body
24
regarding the Fund's, Adviser's or Distributor's obligations under this
Agreement or related to the operation or management of the Fund or the
purchase of Fund shares, if, in each case, Insurer reasonably determines that
such proceedings, or the facts on which such proceedings would be based, have
a material likelihood of imposing material adverse consequences on Insurer,
Contracts Distributor or the Division corresponding to the Portfolio to be
terminated; or
(e) at the option of any Party, upon receipt of the written
notice to the other Parties, in the event that (i) the Portfolio's shares are
not registered and, in all material respects, issued and sold in accordance
with any applicable state and federal law or (ii) such law precludes the use
of such shares as an underlying investment medium of the Contracts issued or
to be issued by Insurer; or
(f) upon termination of the corresponding Division's investment
in the Portfolio pursuant to Section 5 hereof; or
(g) at the option of Insurer, upon receipt of the written notice
to the other Parties by the Insurer, if the Portfolio ceases to qualify as a
RIC under Subchapter M of the Code or under successor or similar provisions;
or
(h) at the option of Insurer, upon receipt of the written notice
to the other Parties by the Insurer, if the Portfolio fails to comply with
Section 817(h) of the Code or with successor or similar provisions; or
(i) at the option of Insurer, upon receipt of the written notice
to the other Parties by the Insurer, if Insurer reasonably believes that any
change in a Fund's investment adviser or investment practices will materially
increase the risks incurred by Insurer.
25
6.2 Funds to Remain Available.
-------------------------
Except (i) as necessary to implement Participant-initiated transactions,
(ii) as required by state insurance laws or regulations, (iii) as required
pursuant to Section 5 of this Agreement or (iv) with respect to any Portfolio
as to which this Agreement has terminated, Insurer shall not (1) redeem Fund
shares attributable to the Contracts, or (2) prevent Participants from
allocating payments to or transferring amounts from a Portfolio that was
otherwise available under the Contracts, until, in either case, 60 calendar
days after Insurer shall have notified the Fund or Distributor of its
intention to do so.
6.3 Survival of Warranties and Indemnifications.
-------------------------------------------
All warranties and indemnifications will survive the termination of this
Agreement.
6.4 Continuance of Agreement for Certain Purposes.
---------------------------------------------
Notwithstanding any termination of this Agreement, the Distributor shall
continue to make available shares of the Portfolios pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (the "Existing Contracts"), except as
otherwise provided under Section 5 of this Agreement. Specifically, and
without limitation, the Distributor shall facilitate the sale and purchase of
shares of the Portfolios as necessary in order to process premium payments,
surrenders and other withdrawals, and transfers or reallocations of values
under Existing Contracts.
26
Section 7. Parties to Cooperate Respecting Termination
------------------------------------------------------
The other Parties hereto agree to cooperate with and give reasonable
assistance to Insurer in taking all necessary and appropriate steps for the
purpose of ensuring that the Separate Account owns no shares of a Portfolio
after the Final Termination Date with respect thereto.
Section 8. Assignment
---------------------
This Agreement may not be assigned by any Party, except with the written
consent of each other Party.
Section 9. Class B Distribution Payments
----------------------------------------
From time to time during the term of this Agreement the Distributor may
make payments to the Insurer pursuant to a distribution plan adopted by the
Fund with respect to the Class B shares of the Portfolios pursuant to Rule
12b-1 under the 1940 Act (the "Rule 12b-1 Plan") in consideration of the
Insurer's furnishing distribution services relating to the Class B shares of
the Portfolios and providing administrative, accounting and other services,
including personal service and/or the maintenance of Participant accounts,
with respect to such shares. The Distributor has no obligation to make any
such payments, and the Insurer waives any such payment, until the Distributor
receives monies therefor from the Fund. Any such payments made pursuant to
this Section 9 shall be subject to the following terms and conditions:
(a) Any such payments shall be in such amounts as the
Distributor may from time to time advise the Insurer in writing but in any
event not in excess of the amounts permitted by the Rule l2b-l Plan. Such
payments may include a service fee in the amount of .25 of 1% per annum of the
average daily net assets of the Fund attributable to the Class B shares of a
Portfolio held by clients of the Insurer. Any such service fee shall be paid
solely for personal service and/or the maintenance of Participant accounts.
27
(b) The provisions of this Section 9 relate to a plan adopted by
the Fund pursuant to Rule 12b-1. In accordance with Rule 12b-1, any person
authorized to direct the disposition of monies paid or payable by the Fund
pursuant to this Section 9 shall provide the Funds Board of Directors, and the
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
(c) The provisions of this Section 9 shall remain in effect for
not more than a year and thereafter for successive annual periods only so long
as such continuance is specifically approved at least annually in conformity
with Rule 12b-1 and the 1940 Act. The provisions of this Section 9 shall
automatically terminate in the event of the assignment (as defined by the 0000
Xxx) of this Agreement, in the event the Rule l2b-1 Plan terminates or is not
continued. In addition, the provisions of this Section 9 may be terminated at
any time, without penalty, by either the Distributor or the Insurer with
respect to any Portfolio on not more than 60 days' nor less than 30 days'
written notice delivered or mailed by registered mail, postage prepaid, to the
other Party. Notwithstanding termination of this Section 9 or termination of
this Agreement, provided that the Rule 12b-1 Plan or any such similar plan
remain in effect, the provisions of this Section 9 shall remain in effect with
regard to Existing Contracts and the Insurer shall continue to receive
payments therefore.
Section 10. Notices
-------------------
Notices and communications required or permitted by Section 2 hereof
will be given by means mutually acceptable to the Parties concerned. Each
other notice or communication required or permitted by this Agreement will be
given to the following persons at the following addresses by registered,
certified or overnight mail and facsimile numbers, or such other persons,
28
addresses or facsimile numbers as the Party receiving such notices or
communications may subsequently direct in writing:
Insurer
American Centurion Life Assurance Company
IDS Life Insurance Company of New York
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx X. Xxxxx III, Vice President
FAX: (000) 000-0000
Contracts Distributor
Ameriprise Financial Services, Inc.
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Vice President
FAX: (000) 000-0000
If to Insurer or Contracts Distributor, a copy to:
Ameriprise Financial Services, Inc.
50607 Ameriprise Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Vice President and Group Counsel
AllianceBernstein Investments, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
FAX: (000) 000-0000
AllianceBernstein L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
FAX: (000) 000-0000
Section 11. Voting Procedures
-----------------------------
Subject to the cost allocation procedures set forth in Section 3 hereof,
Insurer will provide such information regarding Participants so that
Distributor can distribute all proxy material
29
furnished by the Fund to Participant. Insurer will vote Fund shares in
accordance with instructions received from Participants. Insurer will vote
Fund shares that are (i) not attributable to Participants or (ii) attributable
to Participants, but for which no instructions have been received, in the same
proportion as Fund shares for which said instructions have been received from
Participants. Insurer agrees that it will disregard Participant voting
instructions only to the extent it would be permitted to do so pursuant to
Rule 6e-3 (T)(b)(15)(iii) under the 1940 Act if the Contracts were variable
life insurance policies subject to that rule. Other Participating Life
Insurance Companies utilizing the Fund will be responsible for calculating
voting privileges in a manner consistent with that of Insurer, as prescribed
by this Section 11.
The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular, the Fund either will provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the
1940 Act not to require such meetings) or, as the Fund currently intends, to
comply with Section 16(c) of the 1940 Act (although the Fund is not one of the
trusts described in Section 16(c) of that Act) as well as with Sections 16(a)
and, if and when applicable, 16(b). Further, the Fund will act is accordance
with the SEC's interpretation of the requirements of Section 16(a) with
respect to periodic elections of directors and with whatever rules the SEC may
promulgate with respect thereto.
Section 12. Foreign Tax Credits
-------------------------------
The Adviser agrees to consult in advance with Insurer concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to the Fund's shareholders.
30
Section 13. Indemnification
---------------------------
13.1 Indemnification of Fund, Distributor and Adviser by Insurer.
-----------------------------------------------------------
(a) Except to the extent provided in Sections 13.1(b) and
13.1(c), below, Insurer agrees to indemnify and hold harmless the Fund,
Distributor and Adviser and each person, if any, who controls the Fund,
Distributor or Adviser within the meaning of Section 15 of the 1933 Act, and
each of their directors and officers, (collectively, the "Indemnified Parties"
for purposes of this Section 13.1) against any and all losses, claims,
expenses, damages, liabilities (including amounts paid in settlement with the
written consent of Insurer) or actions in respect thereof (including, to the
extent reasonable, legal and other expenses), to which the Indemnified Parties
may become subject under any statute, regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact
contained in the Separate Account's 1933 Act
registration statement, the Separate Account
Prospectus, the Contracts or, to the extent prepared
by Insurer or Contracts Distributor, sales literature
or advertising for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission
to state therein 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; provided that this agreement to
indemnify shall not apply as to any Indemnified Party
if such statement or omission or such alleged
31
statement or omission was made in reliance upon and in
conformity with information furnished to Insurer or
Contracts Distributor by or on behalf of the Fund,
Distributor or Adviser for use in the Separate
Account's 1933 Act registration statement, the
Separate Account Prospectus, the Contracts, or sales
literature or advertising (or any amendment or
supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or
representations contained in the Fund's 1933 Act
registration statement Fund Prospectus, sales
literature or advertising of the Fund, or any
amendment or supplement to any of the foregoing, not
supplied for use therein by or on behalf of Insurer or
Contracts Distributor) or the negligent illegal or
fraudulent conduct of Insurer or Contracts Distributor
or persons under their control (including, without
limitation, their employees and "Associated Persons,"
as that term is defined in paragraph (m) of Article I
of the NASD's By-Laws), in connection with the sale or
distribution of the Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact
contained in the Fund's 1933 Act registration
statement, Fund Prospectus, sales literature or
advertising of the Fund, or any amendment or
supplement to any of the foregoing, or the omission or
alleged omission to state therein a
32
material fact required to be stated therein or
necessary to make the statements therein not
misleading if such a statement or omission was made in
reliance upon and in conformity with information
furnished to the Fund, Adviser or Distributor by or on
behalf of Insurer or Contracts Distributor for use in
the Fund's 1933 Act registration statement, Fund
Prospectus, sales literature or advertising of the
Fund, or any amendment or supplement to any of the
foregoing; or
(iv) arise as a result of any failure by Insurer or
Contracts Distributor to perform the obligations,
provide the services and furnish the materials
required of them under the terms of this Agreement.
(b) Insurer shall not be liable under this Section 13.1 with
respect to any losses, claims, expenses, damages, liabilities or actions to
which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of that Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to
Distributor or to the Fund.
(c) Insurer shall not be liable under this Section 13.1 with
respect to any action against an Indemnified Party unless the Fund,
Distributor or Adviser shall have notified Insurer in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the action shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify Insurer of any
such action shall not relieve Insurer from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
33
account of this Section 13.1, except to the extent that the failure to notify
results in the failure of actual notice to Insurer and Insurer is damaged
solely as a result of the failure to give such notice. In case any such action
is brought against an Indemnified Party, Insurer shall be entitled to
participate, at its own expense, in the defense of such action. Insurer also
shall be entitled to assume the defense thereof with counsel approved by the
Indemnified Party named in the action, which approval shall not be
unreasonably withheld. After notice from Insurer to such Indemnified Party of
Insurer's election to assume the defense thereof, the Indemnified Party will
cooperate fully with Insurer and shall bear the fees and expenses of any
additional counsel retained by it, and Insurer will not be liable to such
Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection
with the defense thereof, other than reasonable costs of investigation.
13.2 Indemnification of Insurer and Contracts Distributor by Adviser.
---------------------------------------------------------------
(a) Except to the extent provided in Sections 13.2(d) and 13.2(e),
below, Adviser agrees to indemnify and hold harmless Insurer and Contracts
Distributor and each person, if any, who controls Insurer or Contracts
Distributor within the meaning of Section 15 of the 1933 Act, and each of
their directors and officers, (collectively, the "Indemnified Parties" for
purposes of this Section 13.2) against any and all losses, claims, expenses,
damages, liabilities (including amounts paid in settlement with the written
consent of Adviser) or actions in respect thereof (including, to the extent
reasonable, legal and other expenses) to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact
contained in the Fund's 1933
34
Act registration statement, Fund Prospectus, sales
literature or advertising of the Fund or, to the
extent not prepared by Insurer or Contracts
Distributor, sales literature or advertising for the
Contracts (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein 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; provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity
with information furnished to Distributor, Adviser or
the Fund by or on behalf of Insurer or Contracts
Distributor for use in the Fund's 1933 Act
registration statement, Fund Prospectus, or in sales
literature or advertising (or any amendment or
supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or
representations contained in the Separate Account's
1933 Act registration statement, Separate Account
Prospectus, sales literature or advertising for the
Contracts, or any amendment or supplement to any of
the foregoing, not supplied for use therein by or on
behalf of Distributor, Adviser, or the Fund) or the
negligent, illegal or fraudulent conduct of the Fund,
Distributor,
35
Adviser or persons under their control (including,
without limitation, their employees and Associated
Persons), in connection with the sale or distribution
of the Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact
contained in the Separate Account's 1933 Art
registration statement, Separate Account Prospectus,
sales literature or advertising covering the
Contracts, or any amendment or supplement to any of
the foregoing, or the omission or alleged omission to
state therein 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, if such statement or omission was made
in reliance upon and in conformity with information
furnished to Insurer or Contracts Distributor by or on
behalf of the Fund, Distributor or Adviser for use in
the Separate Account's 1933 Act registration
statement, Separate Account Prospectus, sales
literature or advertising covering the Contracts, or
any amendment or supplement to any of the foregoing;
or
(iv) arise as a result of any failure by the Fund, Adviser
or Distributor or persons under their respective
control or subject to their authorization to perform
the obligations, provide the services and furnish the
materials required of them under the terms of this
Agreement including, but not limited to, a failure,
whether
36
unintentional in good faith or otherwise, any material
error in or untimely calculation or reporting of the
daily net asset value per share or dividend or capital
gain distribution rate (referred to in this Section
13.2(a)(iv) as an "error"); provided, however, that
the foregoing will not apply where such error is the
result of incorrect information supplied by or on
behalf of the Insurer to the Fund or the Adviser, and
will be limited to (1) reasonable administrative costs
necessary to correct such error, and (2) amounts which
the Insurer has paid out of its own resources to make
Contract owners whole as a result of such error; or
(v) arise out of or result from any material breach of any
representation and/or any warranty made by the Adviser
or the Fund in this Agreement, or arise out of or
result from any other material breach of this
Agreement by the Adviser or the Fund or persons under
their respective control or subject to their
authorization.
(b) Except to the extent provided in Sections 13.2(d) and
13.2(e) hereof, Adviser agrees to indemnify and hold harmless the Indemnified
Parties from and against any and all losses, claims, expenses, damages,
liabilities (including amounts paid in settlement thereof with, except as set
forth in Section 13.2(c) below, the written consent of Adviser) or actions in
respect thereof (including, to the extent reasonable, legal and other
expenses) to which the Indemnified Parties may become subject directly or
indirectly under any statute, regulation, at common law or otherwise, insofar
as such losses, claims, expenses, damages, liabilities or actions directly or
indirectly result from or arise out of the failure of any Portfolio to operate
as a
37
regulated investment company in compliance with (i) Subchapter M of the Code
and regulations thereunder and (ii) Section 817(h) of the Code and regulations
thereunder (except to the extent that such failure is caused by Insurer),
including, without limitation, any income taxes and related penalties,
rescission charges, liability under state law to Contract owners or
Participants asserting liability against Insurer or Contracts Distributor
pursuant to the Contracts, the costs of any ruling and closing agreement or
other settlement with the Internal Revenue Service, and the cost of any
substitution by Insurer of shares of another investment company or portfolio
for those of any adversely affected Portfolio as a funding medium for the
Separate Account that Insurer deems necessary or appropriate as a result of
the noncompliance.
(c) The written consent of Adviser referred to in Section
13.2(b) above shall not be required with respect to amounts paid in connection
with any ruling and closing agreement or other settlement with the Internal
Revenue Service.
(d) Adviser shall not be liable under this Section 13.2 with
respect to any losses, claims, expenses, damages, liabilities or actions to
which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of such Indemnified Party's
reckless disregard of its obligations and duties under this Agreement or to
Insurer, Contracts Distributor or the Separate Account.
(e) Adviser shall not be liable under this Section 13.2 with
respect to any action against an Indemnified Party unless Insurer or Contracts
Distributor shall have notified Adviser in writing within a reasonable time
after the summons or other first legal process giving information of the
nature of the action shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of such service on any
designated agent),
38
but failure to notify Adviser of any such action shall not relieve Adviser
from any liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this Section 13.2. In case
any such action is brought against an Indemnified Party, Adviser will be
entitled to participate, at its own expense, in the defense of such action.
Adviser also shall be entitled to assume the defense thereof (which shall
include, without limitation, the conduct of any ruling request and closing
agreement or other settlement proceeding with the Internal Revenue Service),
with counsel approved by the Indemnified Party named in the action, which
approval shall not be unreasonably withheld. After notice from Adviser to such
Indemnified Party of Adviser's election to assume the defense thereof, the
Indemnified Party will cooperate fully with Adviser and shall bear the fees
and expenses of any additional counsel retained by it and Adviser will not be
liable to such Indemnified Party under this Agreement for any legal or other
expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof, other than reasonable costs of
investigation.
13.3 Effect of Notice.
----------------
Any notice given by the indemnifying Party to an Indemnified Party
referred to in Section 13.1(c) or 13.2(e) above of participation in or control
of any action by the indemnifying Party will in no event be deemed to be an
admission by the indemnifying Party of liability, culpability or
responsibility, and the indemnifying Party will remain free to contest
liability with respect to the claim among the Parties or otherwise.
Section 14. Limitation of Liability
-----------------------------------
Except as previously 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,
39
punitive or exemplary damages of any Fund arising from this Agreement,
including, without limitation, lost revenues, loss of profits or loss of
business.
Section 15. Arbitration
-----------------------
Any controversy of claim arising or relating to this Agreement, or the
breach thereof, will be settled by arbitration administered by the American
Arbitration Association in accordance with its Commercial Arbitration Rules
and Title 9 of the U.S. Code. Judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The
number of arbitrators will be three, one of whom will be appointed by the
Insurer or an affiliate, one of whom will be appointed by the Fund and/or the
Adviser or an affiliate; and the third of whom will be selected by mutual
agreement, if possible, within 30 days of the selection of the second
arbitrator and thereafter by the administering authority. The arbitrators will
have no authority to award punitive damages or any other damages not measured
by the prevailing Party's actual damages, and may not, in any event, make any
ruling, finding or award that does not conform to the terms and conditions of
this Agreement. Any Party may make an application to the arbitrators seeking
injunctive relief to maintain the status quo until such time as the
arbitration award is rendered or the controversy is otherwise resolved. Any
Party may apply to any court having jurisdiction hereof and seek injunctive
relief in order to maintain the status quo until such time as the arbitration
award is rendered or the controversy is otherwise resolved.
Section 16. Confidentiality
---------------------------
Notwithstanding anything to the contrary contained in this Agreement, in
addition to and not in lieu of other provisions in this Agreement:
(a) "Confidential Information" includes but is not limited to
all proprietary and confidential information of the Contracts Distributor,
Insurer and their subsidiaries, affiliates
40
and licensees (collectively the "Protected Parties" for purposes of this
Section 16), including without limitation all information regarding the
customers of the Protected Parties; or the accounts, account numbers, names,
addresses, social security numbers or any other personal identifier of such
customers; or any information derived therefrom.
(b) Neither the Distributor nor the Adviser may use or disclose
Confidential Information for any purpose other than to carry out the purpose
for which Confidential Information was provided to Distributor and/or Adviser
as set forth in the Agreement; and the Distributor and the Adviser agree to
cause all their employees, agents and representatives, or any other Party to
whom the Distributor and/or the Adviser may provide access to or disclose
Confidential Information to limit the use and disclosure of Confidential
Information to that purpose.
(c) The Distributor and the Adviser acknowledge that all
computer programs and procedures or other information developed or used by the
Protected Parties or any of their employees or agents in connection with the
Insurer's performance of its duties under this Agreement are the valuable
property of the Protected Parties.
(d) The Distributor and the Adviser agree to implement
appropriate measures designed to ensure the security and confidentiality of
Confidential Information, to protect such information against any anticipated
threats or hazards to the security or integrity of such information, and to
protect against unauthorized access to, or use of, Confidential Information
that could result in substantial harm or inconvenience to any customer of the
Protected Parties; the Distributor and the Adviser further agree to cause all
their agents, representatives or subcontractors of, or any other Party to whom
the Distributor and/or the Adviser may provide
41
access to or disclose Confidential Information to implement appropriate
measures designed to meet the objectives set forth in this Section 16.
(e) The Distributor and the Adviser acknowledge that any breach
of the agreements in this Section 16 would result in immediate and irreparable
harm to the Protected Parties for which there would be no adequate remedy at
law and agree that in the event of such a breach, the Protected Parties will
be entitled to equitable relief by way of temporary and permanent injunctions,
as well as such other relief as any court of competent jurisdiction deems
appropriate. The provisions contained in this Section 16 will survive any
termination of this Agreement
Section 17. Applicable Law
--------------------------
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with New York law, without regard for that state's
principles of conflict of laws.
Section 18. Execution in Counterparts
-------------------------------------
This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
Section 19. Severability
------------------------
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 20. Rights 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, that the Parties are entitled to under
federal and state laws.
42
Section 21. Restrictions on Sales of Fund Shares
------------------------------------------------
Insurer agrees that the Fund will be permitted (subject to the other
terms of this Agreement) to make its shares available to separate accounts of
other life insurance companies.
Section 22. Headings
--------------------
The Table of Contents and headings used in this Agreement are for
purposes of reference only and shall not limit or define the meaning of the
provisions of this Agreement.
43
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers signing below.
ATTEST: AMERICAN CENTURION LIFE ASSURANCE COMPANY
IDS LIFE INSURANCE COMPANY OF NEW YORK
AMERIPRISE FINANCIAL SERVICES, INC.
By: /s/ Xxxxx Xxxxxx By: /s/ Xxx X. Xxxxx III
--------------------------- --------------------------------------
Name: Xxxxx Xxxxxx Name: Xxx X. Xxxxx III
Title: Assistant Secretary of
each company Title: Vice President of each company
ALLIANCEBERNSTEIN L.P.
By: /s/ Xxxx X. Xxxxx
--------------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
ALLIANCEBERNSTEIN INVESTMENTS, INC.
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Senior Vice President
44
EXHIBIT A
---------
AMERICAN CENTURION LIFE ASSURANCE COMPANY
FUNDS-CLASS B SHARES OF:
-----------------------
AllianceBernstein Variable Products Series Funds, Inc., Growth and Income
Portfolio
AllianceBernstein Variable Products Series Funds, Inc., International Value
Portfolio
AllianceBernstein Variable Products Series Funds, Inc., Total Return Portfolio
COMBINATION FIXED AND VARIABLE ANNUITY CONTRACTS:
-------------------------------------------------
CONTRACT NAME SEC REGISTRATION NUMBER
--------------------------------------------------------------------------------
RiverSource Innovations(SM) Variable Annuity...........................333-73958
RiverSource Endeavor Select(SM) Variable Annuity.......................333-10105
COMBINATION FIXED AND VARIABLE LIFE INSURANCE POLICIES:
------------------------------------------------------
None
IDS LIFE INSURANCE COMPANY OF NEW YORK
FUNDS-CLASS B SHARES OF:
-----------------------
AllianceBernstein Variable Products Series Funds, Inc., Global Technology
Portfolio
AllianceBernstein Variable Products Series Funds, Inc., Growth and Income
Portfolio
AllianceBernstein Variable Products Series Funds, Inc., International Value
Portfolio
COMBINATION FIXED AND VARIABLE ANNUITY CONTRACTS:
-------------------------------------------------
CONTRACT NAME SEC REGISTRATION NUMBER
--------------------------------------------------------------------------------
RiverSource Retirement Advisor 4 Advantage Variable
Annuity................................................................333-91691
RiverSource Retirement Advisor 4 Select Variable
Annuity................................................................333-91691
RiverSource Retirement Advisor 4 Access Variable
Annuity................................................................333-91691
RiverSource Retirement Advisor Advantage Plus(SM)
Variable Annuity.......................................................333-91691
(New York)
RiverSource Retirement Advisor Advantage(SM) Variable
Annuity................................................................333-91691
(New York)
RiverSource Retirement Advisor Select(SM) Variable
Annuity................................................................333-91691
(New York)
IDS of New York Life Flexible Annuity....................................33-4174
IDS of New York Employee Benefit Annuity................................33-52567
IDS of New York Life Variable Retirement Annuity.........................2-78194
IDS of New York Life Combination Retirement Annuity......................2-78194
COMBINATION FIXED AND VARIABLE LIFE INSURANCE POLICIES:
-------------------------------------------------------
IDS Life of New York Variable Universal Life IV........................333-44644
IDS Life of New York Variable Universal Life IV -
Estate Series..........................................................333-44644
IDS Life of New York Succession Select(SM) Variable Life
Insurance..............................................................333-42257
