PARTICIPATION AGREEMENT
By and Among
XXXXX FARGO VARIABLE TRUST
And
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
And
XXXXXXXX INC.
THIS AGREEMENT, made and entered into as of the 3rd day of March, 2000,
by and among American Enterprise Life Insurance Company, an Indiana corporation
(the "Company"), on its own behalf and on behalf of each separate account of the
Company named in Exhibit A to this Agreement, as may be amended from time to
time (each separate account, a "Separate Account"), and Xxxxx Fargo Variable
Trust, an open-end diversified management investment company organized under the
laws of the State of Delaware (the "Trust"), and Xxxxxxxx Inc., an Arkansas
corporation (the "Underwriter").
WHEREAS, the Trust engages in business as an open-end diversified,
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance contracts and variable annuity contracts to be offered by insurance
companies which have entered into participation agreements substantially similar
to this Agreement ("Participating Insurance Companies"); and
WHEREAS, beneficial interests in the Trust are divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets (each, a "Fund"); and
WHEREAS, an order from the U.S. Securities and Exchange Commission (the
"SEC" or "Commission"), dated September 28, 1998 (File No. 812-11158), grants
Participating Insurance Companies and variable annuity separate accounts and
variable life insurance separate accounts relief from the provisions of Sections
9(a), 13(a), 15(a) and 15(b) of the Investment Company
Act of 1940, as amended (the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Trust
to be sold to and held by variable annuity separate accounts and variable life
insurance separate accounts of both affiliated and unaffiliated Participating
Insurance Companies and qualified pension and retirement plans ("Mixed and
Shared Funding Order"), and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Company has registered or will register certain variable
annuity and variable life insurance contracts under the 1933 Act and named in
Exhibit A to this Agreement, as it may be amended from time to time (the
"Contracts"); and
WHEREAS, the Separate Accounts are duly organized, validly existing
segregated asset accounts, established by resolution of the Board of Directors
of the Company under the insurance laws of the State of Indiana, to set aside
and invest assets attributable to the Contracts; and WHEREAS, the Company has
registered the Separate Accounts as unit investment trusts under the 1940 Act;
and
WHEREAS, the Underwriter is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a
member in good standing of the National Association of Securities Dealers, Inc.
(the "NASD");
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Funds named in
Exhibit B on behalf of the Separate Accounts to fund the Contracts, and the
Underwriter is authorized to sell such shares to unit investment trusts such as
the Separate Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Trust, and the Underwriter agree as follows:
ARTICLE 1 Sale of Trust Shares
1.1. The Underwriter agrees to sell to the Company those shares of the Trust
which the Company orders on behalf of the Separate Accounts, executing such
orders on a daily basis at the net asset value next computed after receipt
and acceptance by the Trust or its designee of the order for the shares of
the Trust. For purposes of this Section 1.1, the Company shall be the
designee of the Trust for receipt of such orders from each Separate Account
and receipt by such designee shall constitute receipt by the Trust;
provided that the Company shall use its best efforts to provide notice to
the Trust of such order by 9:30 a.m. Eastern Time on the next following
Business Day. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the relevant Fund calculates its
net asset value.
1.2. The Trust agrees to make its shares available indefinitely for purchase at
the applicable net asset value per share by Participating Insurance
Companies and their separate accounts on those days on which the Trust
calculates its net asset value pursuant to rules of the SEC; provided,
however, that the Board of Trustees of the Trust (hereinafter the
"Trustees") may refuse to sell shares of any Fund to any person, or suspend
or terminate
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the offering of shares of any Fund, if such action is required by law or by
regulatory authorities having jurisdiction, or is, in the sole discretion
of the Trustees, acting in good faith and in light of their fiduciary
duties under federal and any applicable state laws, necessary in the best
interests of the shareholders of any Fund.
1.3. The Trust and the Underwriter agree that shares of the Trust will be sold
only to Participating Insurance Companies and their separate accounts, and
to qualified pension and retirement plans. No shares of the Trust will be
sold to the general public.
1.4. The Trust and the Underwriter will not sell Trust shares to any insurance
company or separate account unless an agreement containing provisions
substantially the same as Articles 1, 3, 5, 7, and Section 2.8 of Article 2
of this Agreement are in effect to govern such sales.
1.5. The Trust will not accept a purchase order from a qualified pension or
retirement plan if such purchase would make the plan shareholder an owner
of 10 percent or more of the assets of a Fund unless such plan executes an
agreement with the Trust governing participation in such Fund that includes
the conditions set forth herein to the extent applicable. A qualified
pension or retirement plan will execute an application containing an
acknowledgment of this condition at the time of its initial purchase of
shares of any Fund.
1.6. The Trust agrees to redeem for cash, upon the Company's request, any full
or fractional shares of the Trust held by the Company, executing such
requests on a daily basis at the net asset value next computed after
receipt and acceptance by the Trust or its designee of the request for
redemption. For purposes of this Section 1.6, the Company shall be the
designee of the Trust for receipt of requests for redemption from each
Separate Account and receipt by such designee shall constitute receipt by
the Trust; provided the that the Company shall use its best efforts to
provide notice to the Trust of request for redemption by 9:30 a.m. Eastern
Time on the next following Business Day. Payment shall be in federal funds
transmitted by wire to the Company's account as designated by the Company
in writing from time to time.
1.7. Each purchase, redemption, and exchange order placed by the Company shall
be placed separately for each Fund and shall not be netted with respect to
any Fund. However, with respect to payment of the purchase price by the
Company, the Company shall net purchase orders with respect to each Fund
and shall transmit one net payment for all Funds in accordance with Section
1.8; and with respect to payment of redemption proceeds by the Trust, the
Trust shall net redemption orders with respect to each Fund and shall
transmit one net payment for all Funds in accordance with Section 1.8.
1.8. The Company agrees that purchases and redemptions of Fund shares offered by
the then current prospectus of the Fund shall be made in accordance with
the provisions of such prospectus. The Company agrees that all net amounts
available under the variable life insurance contracts with the form
number(s) which are listed on Schedule A attached hereto and incorporated
herein by this reference, as such Schedule A may be amended from time to
time hereafter by mutual written agreement of all the parties hereto (the
"Contracts") shall be invested in the Funds, in such other Funds managed by
Xxxxx Fargo
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Bank as may be mutually agreed to in writing by the parties hereto, or
in the Company's general account, provided that such amounts may also
be invested in an investment company other than the Trust if (a) such
other investment company, or series thereof, has investment objectives
or policies that are substantially different from the investment
objectives and policies of all the Funds of the Trust which are
actually used by the Company to fund the Contracts; or (b) the Company
gives the Fund and the Underwriter 30 days written notice of its
intention to make such other investment company available as a funding
vehicle for the Contacts; or (c) such other investment company was
available as a funding vehicle for the Contracts prior to the date of
this Agreement and the Company so informs the Fund and Underwriter
prior to their signing this Agreement (a list of such funds appearing
on Schedule C to this Agreement); or (d) the Fund or Underwriter
consents to the use of such other investment company.
1.9. In the event of net purchases, the Company shall initiate the wire
transfer for payment of shares by 2:00 p.m. Eastern Time on the next
Business Day after an order to purchase the Shares is deemed to be
received in accordance with the provisions of Section 1.1 hereof. In
the event of net redemptions, the Trust shall pay the redemption
proceeds in accordance with the terms of the then-current prospectus
for the Trust. Absent extraordinary circumstances specified in Section
22(e) of the 1940 Act, the Trust shall make such payment within five
(5) calendar days after the date the redemption order is placed in
order to enable the Company to pay redemption proceeds within the time
period specified in Section 22(e) of the 1940 Act or such shorter
period of time as may be required by law. All such payments shall be
in federal funds transmitted by wire. For purposes of Section 2.4 and
Section 2.11, upon receipt by the Trust of the federal funds so wired,
such funds shall cease to be the responsibility of the Company and
shall become the responsibility of the Fund.
1.10. Issuance and transfer of the Trust's shares will be by book entry
only. Stock certificates will not be issued to the Company or any
Separate Account. Purchase and redemption orders for Trust shares will
be recorded in an appropriate title for each Separate Account or the
appropriate subaccount of each Separate Account.
1.11. The Trust shall furnish same-day notice (by wire or telephone, followed
by written confirmation) to the Company of any income, dividends, or
capital gain distributions payable on the Trust's shares. The Company
hereby elects to receive all such dividends and distributions as are
payable on the Fund shares in the form of additional shares of that
Fund. The Company reserves the right to revoke this election and to
receive all such dividends and distributions in cash. The Trust shall
notify the Company of the number of shares so issued as payment of
such dividends and distributions.
1.12. The Trust shall make the net asset value per share for each Fund
available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall
use its best efforts to make such net asset value per share available
by 5:30 p.m. Central Time. The Trust shall notify the Company as soon
as possible if it is determined that the net asset value per share
will be available after 6:00 p.m. Central Time on any business day,
and the Trust and the Company will mutually agree upon a final
deadline for timely receipt of the net asset value on such business
day.
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ARTICLE 2 Representations and Warranties
2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act, unless exempt therefrom, and that
the Contracts will be issued and sold in compliance with all
applicable federal and state laws and that the sale of the Contracts
shall comply in all material respects with state insurance suitability
requirements. The Company further represents and warrants that: (i) it
is an insurance company duly organized and in good standing under
applicable law; (ii) it has or shall have legally and validly
established each Separate Account as a segregated asset account under
applicable state law and has or shall have registered each Separate
Account as a unit investment trust in accordance with the provisions
of the 1940 Act, unless exempt therefrom, to serve as segregated
investment accounts for the Contracts; and (iii) it will maintain such
registration, if required, for so long as any Contracts are
outstanding. The Company shall amend any registration statement under
the 1933 Act for the Contracts and any registration statement under
the 1940 Act for the Separate Accounts from time to time as required
in order to effect the continuous offering of the Contracts or as may
otherwise be required by applicable law. The Company shall register
and qualify the Contracts for sale in accordance with the securities
laws of the various states only if, and to the extent, deemed
necessary by the Company.
2.2. Subject to Article 6 hereof, the Company represents that the Contracts
are currently and at the time of issuance will be treated as life
insurance, endowment, or annuity contracts under applicable provisions
of the Internal Revenue Code and that it will make every effort to
maintain such treatment and that it will notify the Trust and the
Underwriter immediately upon having a reasonable basis for believing
that the Contracts have ceased to be so treated or that they might not
be so treated in the future.
2.3. The Company represents that any prospectuses offering life insurance
Contracts that could become "modified endowment contracts," as that
term is defined in Section 7702A of the Internal Revenue Code describe
"modified endowment contracts" and the Company will notify a Contract
owner if his or her Contract is or will become a modified endowment
contract (or policy).
2.4. The Company represents and warrants that all of its directors, officers,
employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Trust are covered by a blanket
fidelity bond or similar coverage in an amount not less than $5
million. The Company agrees that any amounts received under such bond
in connection with claims that derive from arrangements described in
this Agreement will be held by the Company for the benefit of the
Trust. The Company agrees to see that this bond or another bond
containing these provisions is always in effect, and agrees to notify
the Trust and the Underwriter in the event that such coverage no
longer applies. The aforesaid includes coverage for larceny and
embezzlement and is issued by a reputable bonding company.
2.5. The Trust represents and warrants that Trust shares sold pursuant to
this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law, and that the
Trust is and shall remain registered under the 1940 Act for as long as
the Trust shares are sold. The Trust shall amend the registration
statement for its
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shares under the 1933 and the 1940 Acts from time to time as required
in order to effect the continuous offering of its shares. The Trust
shall register and qualify the shares for sale in accordance with the
laws of the various states only if, and to the extent, deemed
advisable by the Trust or the Underwriter.
2.6. The Trust represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code, and
that it will make every effort to maintain such qualification (under
Subchapter M or any successor or similar provision) and that it will
notify the Company immediately upon having a reasonable basis for
believing that it has ceased to qualify or that it might not so qualify
in the future.
2.7. The Trust makes no representations as to whether any aspect of its
operations, including but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the
various states, except that the Trust represents that it is and shall
at all times remain in compliance with the laws of the state of
Delaware to the extent required to perform this Agreement. The Trust
agrees that it will furnish the information required by state insurance
laws so that the Company can obtain the authority needed to issue the
Contracts in the various states.
2.8. The Trust represents and warrants that to the extent that it decides to
finance distribution expenses pursuant to Rule 12b-1 under the 1940
Act, the Trust undertakes to have its Board of Trustees, a majority of
whom are not interested persons of the Trust, formulate and approve any
plan under Rule 12b-1 ("Rule 12b-1 Plan") to finance distribution
expenses. The Trust shall notify the Company immediately upon
determining to finance distribution expenses pursuant to Rule 12b-1.
2.9. The Trust represents that it is lawfully organized and validly existing
under the laws of Delaware and that it does and will comply with
applicable provisions of the 0000 Xxx.
2.10. The Trust represents and warrants that it all of its trustees,
officers, employees and other individuals/entities having access to the
funds and/or securities of the Trust are and continue to be at all
times covered by a blanket fidelity bond or similar coverage for the
benefit of the Trust in an amount not less than the minimal coverage as
required currently by Rule 17g-1 of the 1940 Act or related provisions
as may be promulgated from time to time. The aforesaid bond includes
coverage for larceny and embezzlement and is issued by a reputable
bonding company.
2.11. The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
The Underwriter further represents that it will sell and distribute the
Trust's shares in accordance with all applicable federal and state
securities laws, including without limitation the 1933 Act, the 1934
Act, and the 0000 Xxx.
2.12. The Underwriter represents and warrants that the Trust's investment
manager, Xxxxx Fargo Funds Management, LLC, is registered as an
investment adviser under all applicable federal and state securities
laws and that the investment manager will perform its obligations to
the Trust in accordance with any applicable state and federal
securities laws.
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ARTICLE 3 Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company, at the Company's expense,
with as many copies of the Trust's current prospectus as the Company
may reasonably request. If requested by the Company in lieu thereof,
the Trust shall provide, at the Trust's expense, such documentation
including a final copy of a current prospectus set in type, a computer
disk or other medium agreed to by the parties and other assistance as
is reasonably necessary in order for the Company at least annually (or
more frequently if the Trust's prospectus is amended more frequently)
to have the new prospectus for the Trust printed together with other
prospectuses in one document; in such case at the Company's expense.
3.2. The Trust's prospectus shall state that the statement of additional
information for the Trust is available from the Underwriter (or, in the
Trust's discretion, the Prospectus shall state that such statement is
available from the Trust).
3.3. The Trust, at its expense, shall provide the Company with copies of its
proxy material, if any, reports to shareholders and other
communications to shareholders in such quantity as the Company shall
reasonably require. The Trust shall bear the cost of distributing proxy
material to existing Contract owners or participants and the Company
shall bear the cost of distributing reports to shareholder and other
communications to shareholders to existing Contract owners or
participants.
3.4. The Trust hereby notifies the Company that it is appropriate to include
in the prospectuses pursuant to which the Contracts are offered
disclosure cross-referencing the discussion in the Trust's prospectus
on the potential risks of mixed and shared funding.
3.5. To the extent required by law the Company shall:
(1) assist in the solicitation of voting instructions from Contract
owners or participants;
(2) vote the Trust shares held in each Separate Account in accordance
with instructions received from Contract owners or participants;
and
(3) vote Trust shares held in each Separate Account for which no
timely instructions have been received, in the same proportion as
Trust shares of such Fund for which instructions have been
received from the Company's Contract owners or participants;
for so long as and to the extent that the SEC continues to interpret
the 1940 Act to require pass-through voting privileges for variable
contract owners. The Company reserves the right to vote Trust shares
held in any segregated asset account in its own right, to the extent
permitted by law. Participating Insurance Companies shall be
responsible for assuring that each of their separate accounts
participating in the Trust calculates voting privileges in a manner
consistent with other Participating Insurance Companies and as
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required by the Mixed and Shared Funding Order. The Trust will notify
the Company of any changes of interpretation or amendment to the Mixed
and Shared Funding Order.
3.6. The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular, the Trust will either
provide for annual meetings (except to the extent that the Commission
may interpret Section 16 of the 1940 Act not to require such meetings)
or comply with Section 16(c) of the 1940 Act (although the Trust 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) of the 1940
Act. Further, the Trust will act in accordance with the Commission's
interpretation of the requirements of Section 16(a) with respect to
periodic elections of Trustees and with whatever rules the Commission
may promulgate with respect thereto.
ARTICLE 4 Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Trust
or the Underwriter, each piece of sales literature or other promotional
material in which the Trust or the Trust's investment manager,
sub-advisers or Underwriter is named, at least five business days prior
to its use. No such material shall be used if the Trust or the
Underwriter reasonably objects in writing to such use within five
business days after receipt of such material.
4.2. The Company represents and agrees that sales literature for the
Contracts prepared by the Company or its affiliates will be consistent
with every law, rule, and regulation of any regulatory agency or
self-regulatory agency that applies to the Contracts or to the sale of
the Contracts, including, but not limited to, NASD Conduct Rule 2210
and IM-2210-2 thereunder.
4.3. The Company shall not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust in
connection with the sale of the Contracts other than the information
or representations contained in the registration statement, prospectus
or statement of additional information for the Trust shares as such
registration statement, prospectus or statement of additional
information may be amended or supplemented from time to time, or in
reports or proxy statements for the Trust, or in sales literature or
other promotional material approved by the Trust, or by the
Underwriter or in published reports for the Trust which are in the
public domain or approved by the Trust or the Underwriter for
distribution, except with the permission of the Trust or the
Underwriter. The Trust and the Underwriter agree to respond to any
request for approval on a prompt and timely basis. The Company shall
adopt and implement procedures reasonably designed to ensure that
information concerning the Trust, the Underwriter, or any of their
affiliates which is intended for use by brokers or agents selling the
Contracts (i.e., information that is not intended for distribution to
Contract owners or prospective Contract owners) is so used, and
neither the Trust, the Underwriter, nor any of their affiliates shall
be liable for any losses, damages, or expenses relating to the
improper use of such broker only materials by agents of the Company or
its affiliates who are unaffiliated with the Trust or the Underwriter.
The parties hereto agree that this Section 4.3 is not intended to
designate or otherwise imply that the Company is an underwriter or
distributor of the Trust's shares. Nothing in this Section 4.3 shall
be construed as
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preventing the Company or its employees or agents from giving advice on
investment in the Trust.
4.4. The Trust or the Underwriter shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company, its
Separate Account, or the Contracts are named, at least five business
days prior to its use. No such material shall be used if the Company
reasonably objects in writing to such use within five business days
after receipt of such material.
4.5. The Trust represents and agrees that sales literature for the Trust
prepared by the Trust or its affiliates in connection with the sale of
the Contracts will be consistent with every law, rule, and regulation
of any regulatory agency or self regulatory agency that applies to the
Trust or to the sale of Trust shares, including, but not limited to,
NASD Conduct Rule 2210 and IM-2210-2 thereunder.
4.6. The Trust and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the
Company, each Separate 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 or statement of additional
information may be amended or supplemented from time to time, or in
published reports for each Separate Account which are in the public
domain or approved by the Company for distribution to Contract owners
or participants, or in sales literature or other promotional material
approved by the Company, or in published reports for the Separate
Account or the Contracts which are in the public domain or approved by
the Company for distribution, except with the permission of the
Company. The Company agrees to respond to any request for approval on
a prompt and timely basis. The Trust and the Underwriter shall xxxx
information produced by or on behalf of the Trust "FOR BROKER USE
ONLY" which is intended for use by brokers or agents selling the
Contracts (i.e., information that is not intended for distribution to
Contract owners or prospective Contract owners) is so used, and
neither the Company nor any of its affiliates shall be liable for any
losses, damages, or expenses arising on account of the use by brokers
of such information with third parties in the event that is not so
marked.
4.7. The Trust will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional
information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for
no-action letters, and all amendments to any of the above, that relate
to the Trust or its shares, contemporaneously with the filing of such
document with the SEC or other regulatory authorities.
4.8. The Company will provide to the Trust at least one complete copy of all
registration statements, prospectuses, statements of additional
information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for
exemptions, requests for no action letters, and all amendments to any
of the above, that relate to the Contracts or each Separate Account,
contemporaneously with the filing of such document with the SEC or
other regulatory authorities. The Company shall promptly inform the
Trust of the results of any examination by the SEC (or other
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regulatory authorities) that relates to the Trust, and the Company
shall provide the Trust with a copy of relevant portions of any
"deficiency letter" or other correspondence or written report
regarding such examination.
4.9. For purposes of this Article 4, the phrase "sales literature or 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), 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, prospectuses, statements of additional information,
shareholder reports, and proxy materials and any other material
constituting sales literature or advertising under NASD Conduct Rules,
the 1940 Act or the 0000 Xxx.
4.10. The Underwriter shall be responsible for calculating the performance
information for the Trust. The Company shall be responsible for
calculating the performance information for the Contracts. The Trust
and/or the Underwriter agree to provide the Company with performance
information for the Trust on a timely basis to enable the Company to
calculate performance information for the Contracts in accordance with
applicable state and federal law.
ARTICLE 5 Fees and Expenses
5.1. The Trust and Underwriter shall pay no fee or other compensation to the
Company under this Agreement, except subject to a Rule 12b-1 Plan to
finance distribution expenses, in which case, subject to obtaining any
required exemptive orders or other regulatory approvals, the
Underwriter may make payments to the Company or to the underwriter for
the Contracts if and in amounts agreed to by the Underwriter in
writing. Each party, however, shall, in accordance with the allocation
of expenses specified in this Agreement, reimburse other parties for
expenses initially paid by one party but allocated to another party.
In addition, nothing herein shall prevent the parties hereto from
otherwise agreeing to perform, and arranging for appropriate
compensation for, other services relating to the Trust and/or to the
Separate Accounts.
5.2. All expenses incident to performance by the Trust of this Agreement
shall be paid by the Trust to the extent permitted by law. All Trust
shares will be duly authorized for issuance and registered in
accordance with applicable federal law and to the extent deemed
advisable by the Trust, in accordance with applicable state law, prior
to sale. The Trust shall bear the expenses for the cost of
registration and qualification of the Trust's shares, preparation and
filing of the Trust's prospectus and registration statement, Trust
proxy materials and reports, printing proxy materials and annual
reports for existing Contract owners, setting in type the Trust's
prospectuses, the preparation of all statements and notices required
by any federal or state law, all taxes on the issuance or transfer of
the
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Trust's shares, and any expenses permitted to be paid or assumed
by the Trust pursuant to any Rule 12b-1 Plan under the 1940 Act duly
adopted by the Trust.
5.3. The Company shall bear the expenses of printing and distributing the
Trust prospectuses and shareholder reports. The Company shall bear all
expenses associated with the registration, qualification, and filing of
the Contracts under applicable federal securities and state insurance
laws; the cost of preparing, printing, and distributing the Contracts'
prospectuses and statements of additional information; and the cost of
printing and distributing annual individual account statements for
Contract owners as required by state insurance laws.
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ARTICLE 6 Diversification
6.1. The Trust will make every effort to at all times invest money from the
Contracts in such a manner as to ensure that the Contracts will be
treated as variable contracts under the Internal Revenue Code and the
regulations issued thereunder. Without limiting the scope of the
foregoing, the Trust will comply with Section 817(h) of the Internal
Revenue Code and Treasury Regulation 1. 817-5, relating to the
diversification requirements for variable annuity, endowment, or life
insurance contracts and any amendments or other modifications to such
Section or Regulations or successors thereto.
ARTICLE 7 Potential Conflicts
7.1. If and to the extent that the Trust engages in mixed and shared funding
as contemplated by exemptive relief provided by the SEC and applicable
to the Trust, this Article VII shall apply.
7.2. The Board of Trustees of the Trust (the "Trust Board") will monitor the
Trust for the existence of any material irreconcilable conflict among
the interests of the Contract owners of all separate accounts
investing in the Trust. A material irreconcilable conflict may arise
for a variety of reasons, including: (a) an action by any state
insurance 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; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any
Fund are being managed; (e) a difference in voting instructions given
by variable annuity contract owners, variable life insurance contract
owners, and trustees of qualified pension or retirement plans; (f) a
decision by a Participating Insurance Company to disregard the voting
instructions of Contract owners; or (g) if applicable, a decision by a
qualified pension or retirement plan to disregard the voting
instructions of plan participants. The Trust Board shall promptly
inform the Company if it determines that a material irreconcilable
conflict exists and the implications thereof. A majority of the Trust
Board shall consist of Trustees who are not "interested persons" of
the Trust.
7.3. The Company has reviewed a copy of the Mixed and Shared Funding Order,
and in particular, has reviewed the conditions to the requested relief
set forth therein. The Company agrees to assist the Trust Board in
carrying out its responsibilities under the Mixed and Shared Funding
Order, by providing the Trust Board with all information reasonably
necessary for the Trust Board to consider any issues raised. This
includes, but is not limited to, an obligation by the Company to inform
the Trust Board whenever Contract owner voting instructions are
disregarded. The Trust Board shall record in its minutes or other
appropriate records, all reports received by it and all action with
regard to a conflict.
7.4. If it is determined by a majority of the Trust Board, or a majority of
its disinterested Trustees, that a material irreconcilable conflict
exists, the Company shall, at its expense and to the extent reasonably
practicable (as determined by a majority of the disinterested
-12-
Trustees), take whatever steps are necessary to remedy or eliminate
the material irreconcilable conflict, up to and including: (a)
withdrawing the assets allocable to some or all of the Separate
Accounts from the relevant Fund and reinvesting such assets in a
different investment medium, including another Fund, or in the case of
insurance company participants submitting the question as to whether
such segregation should be implemented by a vote of all affected
Contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity Contract owners or life insurance
Contract owners of one or more Participating Insurance Companies) that
votes in favor of such segregation, or offering to the affected
Contract owners the option of making such a change; and (b)
establishing a new registered management investment company or managed
separate account.
7.5. If the Company's disregard of voting instructions could conflict with
the majority of Contract owner voting instructions, and the Company's
judgment represents a minority position or would preclude a majority
vote, the Company may be required, at the Trust's election, to
withdraw the Separate Account's investment in the Trust and terminate
this Agreement with respect to such Separate Account, and no charge or
penalty will be imposed as a result of such withdrawal. Any such
withdrawal and termination shall take place within six months after
written notice is given that this provision is being implemented,
subject to applicable law but in any event consistent with the terms
of the Mixed and Shared Funding Order. Until such withdrawal and
termination is implemented, the Underwriter and the Trust shall
continue to accept and implement orders by the Company for the
purchase and redemption of shares of the Trust. Such withdrawal and
termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of
disinterested Trustees.
7.6. If a particular state insurance regulator's decision applicable to the
Company conflicts with the majority of other state insurance
regulators, then the Company will withdraw the Separate Account's
investment in the Trust and terminate this Agreement with respect to
such Separate Account within six months after the Trust informs the
Company of a material irreconcilable conflict, subject to applicable
law but in any event consistent with the terms of the Mixed and Shared
Funding Order. Until such withdrawal and termination is implemented,
the Underwriter and the Trust shall continue to accept and implement
orders by the Company for the purchase and redemption of shares of the
Trust. Such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as
determined by a majority of disinterested Trustees.
7.7. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Trust Board shall determine whether
any proposed action adequately remedies any material irreconcilable
conflict, but in no event will the Trust or the Underwriter be required
to establish a new funding medium for the Contracts. The Company shall
not be required by Section 7.3 to establish a new funding medium for
the Contracts if an offer to do so has been declined by vote of a
majority of Contract owners materially adversely affected by the
material irreconcilable conflict.
7.8. The Trust Board's determination of the existence of a material
irreconcilable conflict and its implication will be made known in
writing to the Company.
-13-
7.9. The Company shall at least annually submit to the Trust Board such
reports, materials, or data as the Trust Board may reasonably request
so that the Trustees may fully carry out the duties imposed upon the
Trust Board by the Mixed and Shared Funding Order, and said reports,
materials and data shall be submitted more frequently if deemed
appropriate by the Trust Board.
7.10. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of
the 1940 Act or the rules promulgated thereunder with respect to mixed
or shared funding (as defined in the Mixed and Shared Funding Order) on
terms and conditions materially different from those contained in the
Mixed and Shared Funding Order, the Trust and/or the Company, as
appropriate, shall take such steps as may be necessary to comply with
Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable.
ARTICLE 8 Indemnification
8.1. Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the
Trust, the Underwriter, and each person, if any, who controls or is
associated with the Trust or the Underwriter within the meaning of
such terms under the federal securities laws and each director,
officer, employee, or agent of the foregoing (collectively, the
"indemnified parties" for purposes of this Section 8.1) against any
and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company), or litigation
(including 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, damages,
liabilities or expenses (or actions in respect thereof) or
settlements:
(1) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statements, prospectuses or statements of
additional information for the Contracts or contained in the
Contracts, or sales literature or other promotional material
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 the Company by or
on behalf of the Trust for use in the registration
statement, prospectus or statement of additional information
for the Contracts, or in the Contracts or sales literature
(or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Trust shares;
or
-14-
(2) arise out of or as a result of statements or representations
by or on behalf of the Company (other than statements or
representations contained in the Trust registration
statement, Trust prospectus, statement of additional
information or sales literature or other promotional
material of the Trust not supplied by the Company or persons
under its control) or wrongful conduct of the Company or
persons under its control, with respect to the sale or
distribution of the Contracts or Trust shares; or
(3) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Trust's
registration statement, prospectus, statement of additional
information, or sales literature or other promotional
material of the Trust or any amendment thereof, or
supplement thereto 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 a statement or omission was made in reliance upon and
in conformity with information furnished to the Trust by or
on behalf of the Company or persons under its control; or
(4) arise as a result of any failure by the Company or persons
under its control or subject to its authorization to provide
the services and furnish the materials or to make any
payments under the terms of this Agreement; or
(5) arise out of any material breach of any representation
and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach by the
Company of this Agreement;
except to the extent provided in Sections 8.1(b) and 8.4 hereof. This
indemnification shall be in addition to any liability, which the
Company may otherwise have.
(b) No party shall be entitled to indemnification by
the Company if such loss, claim, damage, liability or litigation is due
to the willful misfeasance, bad faith, gross negligence, or reckless
disregard of duty by the party seeking indemnification.
(c) The indemnified parties will promptly notify the
Company of the commencement of any litigation, proceedings, complaints
or actions against them in
-15-
connection with the issuance or sale of the Trust shares or the
Contracts or the operation of the Trust.
8.2. Indemnification By the Trust
(a) The Trust agrees to indemnify and hold harmless the Company
and each person, if any, who controls or is associated with the Company
within the meaning of such terms under the federal securities laws and
each director, officer, employee, or agent of the foregoing
(collectively, the "indemnified parties" for purposes of this Section
8.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Trust), or litigation (including 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, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the operations of the Trust
and:
(1) arise as a result of any failure by the Trust to provide the
services and furnish the materials under the terms of this
Agreement (including, but not limited to, a failure, whether
unintentional or in good faith or otherwise, to comply with
the diversification requirements and procedures related
thereto specified in Article 6 of this Agreement); or
(2) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Trust; or
(3) arise out of or result from any negligent act or omission of
the Trust or its agents;
except to the extent provided in Sections 8.3(b) and 8.4 hereof. This
indemnification shall be in addition to any liability, which the Trust
may otherwise have.
(b) No party shall be entitled to indemnification by the Trust
if such loss, claim, damage, liability or litigation is due to the
willful misfeasance, bad faith, gross negligence, or reckless
disregard of duty by the party seeking indemnification.
(c) The indemnified parties will promptly notify the Trust of
the commencement of any litigation, proceedings, complaints or
actions against them in connection with the issuance or sale of the
Contracts or the operation of each Separate Account.
8.3. Indemnification Procedure
-16-
Any person obligated to provide indemnification under this Article 8
("indemnifying party" for the purpose of this Section 8.4) shall not be
liable under the indemnification provisions of this Article 8 with
respect to any claim made against a party entitled to indemnification
under this Article 8 ("indemnified party" for the purpose of this
Section 8.4) unless such indemnified party shall have notified the
indemnifying party in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim shall have been served upon such indemnified party (or
after such party shall have received notice of such service on any
designated agent), but failure to notify the indemnifying party of any
such claim shall not relieve the indemnifying party from any liability
which it may have to the indemnified party against whom such action is
brought under the indemnification provision of this Article 8, except
to the extent that the failure to notify results in the failure of
actual notice to the indemnifying party and such indemnifying party is
damaged solely as a result of failure to give such notice. In case any
such action is brought against the indemnified party, the indemnifying
party will be entitled to participate, at its own expense, in the
defense thereof. The indemnifying party also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the indemnifying party to the
indemnified party of the indemnifying party's election to assume the
defense thereof, the indemnified party shall bear the fees and expenses
of any additional counsel retained by it, and the indemnifying party
will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation, unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article 8. The indemnification provisions contained in this Article 8
shall survive any termination of this Agreement.
ARTICLE 9 Applicable Law
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Delaware without
giving effect to conflicts of laws provisions thereof.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934,
and 1940 Acts, and the rules, regulations, and rulings thereunder,
including such exemptions from those statutes, rules and regulations as
the SEC may grant (including, but not limited to, the Mixed and Shared
Funding Order) and the terms hereof shall be interpreted and construed
in accordance therewith.
-17-
ARTICLE 10 Termination
10.1. This Agreement shall terminate automatically in the event of its
assignment, unless made with written consent of each party; or:
(a) at the option of any party upon ninety (90) days'
advance written notice to the other parties or, if later, upon receipt
of any required exemptive relief to orders from the SEC, unless
otherwise agreed in a separate written agreement among the parties; or
(b) at the option of the Company if shares of the Funds
delineated in Exhibit B are not reasonably available to meet the
requirements of the Contracts as determined by the Company; or
(c) at the option of the Trust upon institution of
formal proceedings against the Company by the NASD, the SEC, the
insurance commission of any state or any other regulatory body, which
would have a material adverse effect on the Company's ability to
perform its obligations under this Agreement; or
(d) at the option of the Company upon institution of
formal proceedings against the Trust or the Underwriter by the NASD,
the SEC, or any state securities or insurance department or any other
regulatory body, which would have a material adverse effect on the
Underwriter's or the Trust's ability to perform its obligations under
this Agreement; or
(e) at the option of the Trust or the Underwriter by
written notice to the Company, if the Company gives the Trust and the
Underwriter the written notice specified in Section 1.8(b) hereof and
at the time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement; provided,
however, any termination under this Section 10.1(e) shall be effective
sixty (60) days after the notice specified in Section 1.8(b) was given;
or
(f) at the option of the Company or the Trust upon a
determination by a majority of the Trust Board, or a majority of the
disinterested Trustees, that a material irreconcilable conflict exists
among the interests of (i) all contract owners of variable insurance
products of all separate accounts, or (ii) the interests of the
Participating Insurance Companies investing in the Trust as delineated
in Article 7 of this Agreement; or
(g) at the option of the Company if the Trust ceases
to qualify as a Regulated Investment Company under Subchapter M of the
Internal Revenue Code, or under any successor or similar provision, or
if the Company reasonably believes that the Trust may fail to so
qualify; or
(h) at the option of the Company if the Trust fails
to meet the diversification requirements specified in Article 6 hereof
or if the Company reasonably believes that the Trust will fail to meet
such requirements; or
(i) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement; or
-18-
(j) at the option of the Company, if the Company determines in
its sole judgment exercised in good faith, that either the Trust or the
Underwriter has suffered a material adverse change in its business,
operations, or financial condition since the date of this Agreement or
is the subject of material adverse publicity which is likely to have a
material adverse impact upon the business and operations of the Company
or the Contracts (including the sale thereof); or
(k) at the option of the Trust or Underwriter, if the Trust or
Underwriter respectively, shall determine in its sole judgment
exercised in good faith, that the Company has suffered a material
adverse change in its business, operations, or financial condition
since the date of this Agreement or is the subject of material adverse
publicity which is likely to have a material adverse impact upon the
business and operations of the Trust or Underwriter; or
(l) subject to the Trust's compliance with Article 6 hereof, at
the option of the Trust in the event any of the Contracts are not
issued or sold in accordance with applicable requirements of federal
and/or state law.
10.2. Notice Requirement
(a) In the event that any termination of this Agreement is based
upon the provisions of Article 7, such prior written notice shall be
given in advance of the effective date of termination as required by
such provisions.
(b) In the event that any termination of this Agreement is based
upon the provisions of Sections 10.l(b) - (d), 10.1(g) - (i) or
10.1(l) prompt written notice of the election to terminate this
Agreement for cause shall be furnished by the party terminating the
Agreement to the non-terminating parties, with said termination to be
effective upon receipt of such notice by the non-terminating parties.
(c) In the event that any termination of this Agreement is based
upon the provisions of Sections 10.1(j) or 10. l(k), prior written
notice of the election to terminate this Agreement for cause shall be
furnished by the party terminating this Agreement to the
nonterminating parties. Such prior written notice shall be given by
the party terminating this Agreement to the non-terminating parties at
least 30 days before the effective date of termination.
10.3. It is understood and agreed that the right to terminate this Agreement
pursuant to Section 10.1(a) may be exercised for any reason or for no
reason.
-19-
10.4. Effect of Termination
(a) Notwithstanding any termination of this Agreement pursuant
to Section 10.1 of this Agreement and subject to Section 1.3 of this
Agreement, the Company may require the Trust and the Underwriter to
continue to make available additional shares of the Trust for so long
after the termination of this Agreement as the Company desires
pursuant to the terms and conditions of this Agreement as provided in
paragraph (b) below, for all Contracts in effect on the effective date
of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the
Existing Contracts shall be permitted to reallocate investments in the
Trust, redeem investments in the Trust and/or invest in the Trust upon
the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.4 shall not apply to
any terminations under Article 7 and the effect of such Article 7
terminations shall be governed by Article 7 of this Agreement.
(b) If shares of the Trust continue to be made available after
termination of this Agreement pursuant to this Section 10.4, the
provisions of this Agreement shall remain in effect except for Section
10.l(a) and thereafter the Trust, the Underwriter, or the Company may
terminate the Agreement, as so continued pursuant to this Section
10.4, upon written notice to the other party, such notice to be for a
period that is reasonable under the circumstances but need not be for
more than 90 days or, if later, upon receipt of any required exemptive
relief to orders from the SEC.
-20-
10.5 The Company shall not redeem Fund shares attributable to the Contracts
(as opposed to Fund shares attributable to the Company's assets held in
the Account) except (i) as necessary to implement Contract Owner
initiated or approved transactions, or (ii) as required by state and/or
federal laws or regulations or judicial or other legal precedent of
general application (hereinafter referred to as a "Legally Required
Redemption"). Upon request, the Company will promptly furnish to the
Trust and the Underwriter the opinion of counsel for the Company (which
counsel shall be reasonably satisfactory to the Trust and the
Underwriter) to the effect that any redemption pursuant to clause (ii)
above is a Legally Required Redemption. Furthermore, except in cases
where permitted under the terms of the Contracts, the Company shall not
prevent Contract Owners from allocating payments to a Fund that was
otherwise available under the Contracts without first giving the Trust
or the Underwriter 90 days notice of its intention to do so.
ARTICLE 11 Notices
Any notice shall be deemed duly given only if sent by hand, evidenced
by written receipt or by certified mail, return receipt requested or by
any other method agreed to by the parties, to the other party at the
address of such party set forth below or at such other address as such
party may from time to time specify in writing to the other party. All
notices shall be deemed given three business days after the date
received or rejected by the addressee.
If to the Trust: Xxxxx Fargo Variable Trust
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Assistant Secretary
Copy: C. Xxxxx Xxxxxxx, Esq.
Vice President & Senior Counsel
Xxxxx Fargo Bank
Law Department
000 Xxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
If to the Company: American Enterprise Life Insurance Company
1765 AXP Financial Center
Xxxxxxxxxxx, XX 00000
Attention: Executive Vice President, Annuities
-21-
Copy: American Express Financial Advisors Inc.
50607 AXP Financial Center
Xxxxxxxxxxx, XX 00000
Attention: General Counsel's Office
If to the Underwriter: Xxxxxxxx Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Vice President
ARTICLE 12 Miscellaneous
12.1. All persons dealing with the Trust must look solely to the property of
the Trust for the enforcement of any claims against the Trust as
neither the Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Trust.
12.2. Use and Disclosure of Confidential Information
Notwithstanding anything to the contrary contained in this Agreement,
and in addition to and not in lieu of other provisions in this
Agreement:
(a) Confidential Information includes without limitation all
information regarding the customers of the Company or the customers of
any of the Company's subsidiaries, affiliates or licensees; or the
accounts, account numbers, names, addresses, social security numbers
or any other personal identifier of customers of any of the foregoing
information derived therefrom.
(b) Neither the Trust nor the Underwriter may use or disclose
Confidential Information for any purpose other than to carry out the
purpose for which Confidential Information was provided to the Trust
and/or the Underwriter as set forth in this Agreement, and agree to
cause any party to whom the Trust and/or the Underwriter may provide
access to or disclose Confidential Information to limit the use and
disclosure of Confidential Information to that purpose.
(c) The Trust and the Underwriter 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 of the customers of the Company or the customers
of any of the Company's subsidiaries affiliates or licensees; the
Trust and the Underwriter further agree to cause any party to whom the
Trust and/or the Underwriter may provide access to or disclose
Confidential
-22-
Information to implement appropriate measures designed to meet the
objectives set forth in this paragraph.
12.3. The captions 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.
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
12.5. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6. This Agreement shall not be assigned by any party hereto without the
prior written consent of all the parties.
12.7. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
SEC, the NASD, and state insurance regulators) and shall permit each
other and such authorities reasonable access to its books and records
in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
12.8. Each party represents that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as
applicable, by such party and when so executed and delivered this
Agreement will be the valid and binding obligation of such party
enforceable in accordance with its terms.
12.9. The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts,
the Separate Accounts or the Funds of the Trust or may amend other
applicable terms of this Agreement.
12.10. The Trust has filed a Certificate of Trust with the Secretary of State
of the State of Delaware. The Company acknowledges that the
obligations of or arising out of the Trust's Declaration of Trust are
not binding upon any of the Trust's Trustees, officers, employees,
agents or shareholders individually, but are binding solely upon the
assets and property of the Trust in accordance with its proportionate
interest hereunder. The Company further acknowledges that the assets
and liabilities of each Fund are separate and distinct and that the
obligations of or arising out of this instrument are binding solely
upon the assets or property of the Fund on whose behalf the Trust has
executed this instrument. The Company also agrees that the obligations
of each Fund hereunder shall be several and not joint, in accordance
with its proportionate interest hereunder, and the Company agrees not
to proceed against any Fund for the obligations of another Fund.
12.11. Except as otherwise expressly provided in this Agreement, neither the
Trust nor the underwriter nor any affiliate thereof shall use any
trademark, trade name, service xxxx or logo of the Company or any of
its affiliates, or any variation of any such trademark, trade name
service xxxx or logo, without the Company's prior consent, the
granting of which shall be at the Company's sole option. Except as
otherwise expressly provided in this Agreement, neither the Company
nor any affiliate thereof shall use any trademark, trade
-23-
name, service xxxx or logo of the Trust or of the Underwriter, or any
variation of any such trademark, trade name, service xxxx or logo,
without the prior consent of either the Trust or of the Underwriter,
as appropriate, the granting of which shall be at the sole option of
the Trust or of the Underwriter, as applicable.
-24-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Xxxxx Fargo Variable Trust
By: /s/ C. Xxxxx Xxxxxxx
--------------------
Name: C. Xxxxx Xxxxxxx
Title: Assistant Secretary
Date: January 10, 2002
American Enterprise Life Insurance Company Attest:
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx Xxxxx Xxxxxxx
------------------- --------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxx Xxxxx Xxxxxxx
Title: Executive Vice President, Annuities Title: Assistant Secretary
Date: January 2, 2002
Xxxxxxxx Inc.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Sr. Vice President
Date: January 23, 2002
-25-
SCHEDULE A
Separate Accounts and Contracts
Subject to the Participation Agreement
Separate Account: American Enterprise Variable Annuity Account
Established July 15, 1987
Contracts: Xxxxx Fargo Advantage(SM) Variable Annuity and Xxxxx Fargo
Advantage(SM) Builder Variable Annuity; Contract Form
Numbers 44209 and 44210 and state variations thereof.
American Express Signature One Variable Annuity(SM);
Contract Form Number 240180 and state variations
thereof.
-26-
SCHEDULE B
Funds Subject to the Participation Agreement
Xxxxx Fargo VT Asset Allocation Fund
Xxxxx Fargo VT Corporate Bond Fund
Xxxxx Fargo VT Equity Income Fund
Xxxxx Fargo VT Equity Value Fund
Xxxxx Fargo VT Growth Fund
Xxxxx Fargo VT International Equity Fund
Xxxxx Fargo VT Large Company Growth Fund
Xxxxx Fargo VT Money Market Fund
Xxxxx Fargo VT Small Cap Growth Fund
SCHEDULE C
Other Funds Available under the Contracts
Xxxxx Fargo Advantage(SM) Variable Annuity
Xxxxx Fargo Advantage(SM) Builder Variable Annuity
AXP(R) Variable Portfolio - Blue Chip Advantage Fund
AXP(R) Variable Portfolio - Capital Resource Fund
AXP(R) Variable Portfolio - Diversified Equity Income Fund
AXP(R) Variable Portfolio - Extra Income Fund
AXP(R) Variable Portfolio - Federal Income Fund
AXP(R) Variable Portfolio - New Dimensions Fund(R)
AXP(R) Variable Portfolio - Small Cap Advantage Fund
AIM V.I. Capital Appreciation Fund
AIM V.I. Value Fund
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Share Class
Fidelity VIP Dynamic Capital Appreciation Portfolio (Service Class 2)
Fidelity VIP High Income Portfolio (Service Class 2)
Fidelity VIP Mid Cap Portfolio (Service Class 2)
FTVIPT Franklin Income Securities Fund - Class 2
FTVIPT Franklin Real Estate Fund - Class 2
FTVIPT Franklin Small Cap Fund - Class 2
FTVIPT Franklin Mutual Shares Securities Fund - Class 2
Xxxxxxx Xxxxx VIT COREsm U.S. Equity Fund
Xxxxxxx Sachs VIT Global Income Fund
Xxxxxxx Xxxxx VIT Internet Tollkeeper Fundsm
Xxxxxxx Sachs VIT Mid Cap Value Fund
MFS(R) Investors Trust Series - Initial Class
(previously MFS(R) Growth with Income Series)
MFS(R) Utilities Series - Initial Class
Xxxxxx VT International Growth Fund - Class IB Shares
Xxxxxx VT Vista Fund - Class IB Shares
American Express Signature One Variable Annuity(SM)
AXP(R) Variable Portfolio - Blue Chip Advantage Fund
AXP(R) Variable Portfolio - Bond Fund
AXP(R) Variable Portfolio - Capital Resource Fund
AXP(R) Variable Portfolio - Cash Management Fund
AXP(R) Variable Portfolio - Diversified Equity Income Fund
AXP(R) Variable Portfolio - Extra Income Fund
AXP(R) Variable Portfolio - Federal Income Fund
AXP(R) Variable Portfolio - Growth Fund
AXP(R) Variable Portfolio - Managed Fund
AXP(R)Variable Portfolio - New Dimensions Fund(R)
American Express Signature One Variable Annuity(SM)
(continued)
AXP(R) Variable Portfolio - Small Cap Advantage Fund
AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund
AIM V.I. Value Fund
Alliance VP Premier Growth Portfolio (Class B)
Alliance VP Technology Portfolio (Class B)
Alliance VP U.S. Government/High Grade Securities Portfolio (Class B)
Baron Capital Funds Trust Capital Asset Fund - Insurance Shares
Credit Suisse Warburg Pincus Trust - Emerging Growth Portfolio
(previously Warburg Pincus Trust - Emerging Growth Portfolio)
Fidelity VIP III Growth & Income Portfolio (Service Class)
Fidelity VIP III Mid Cap Portfolio (Service Class)
Fidelity VIP Overseas Portfolio (Service Class)
FTVIPT Franklin Real Estate Fund - Class 2
FTVIPT Franklin Mutual Shares Securities Fund - Class 2
FTVIPT Xxxxxxxxx International Smaller Companies Fund - Class 2
Xxxxxxx Sachs VIT Capital Growth Fund
Xxxxxxx Xxxxx VIT CORE(SM) U.S. Equity Fund
Xxxxxxx Xxxxx VIT Global Income Fund
Xxxxxxx Sachs VIT International Equity Fund
Xxxxxxx Xxxxx VIT Internet Tollkeeper Fundsm
Janus Aspen Series Aggressive Growth Portfolio: Service Shares
Janus Aspen Series Global Technology Portfolio: Service Shares
Janus Aspen Series Growth Portfolio: Service Shares
Janus Aspen Series International Growth Portfolio: Service Shares
X.X. Xxxxxx U.S. Disciplined Equity Portfolio
Lazard Retirement Series Equity Portfolio
Lazard Retirement Series International Equity Portfolio
MFS(R) New Discovery Series - Initial Class
MFS(R) Research Series - Initial Class
MFS(R) Utilities Series - Initial Class
Royce Capital Fund Micro-Cap Portfolio
Royce Capital Fund Small-Cap Portfolio (previously Royce Premier Portfolio)
Third Avenue Value Portfolio
Xxxxxx International Small Cap
Xxxxxx U.S. Small Cap
