PARTICIPATION AGREEMENT
Among
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS,
OPPENHEIMERFUNDS, INC.
and
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
THIS AGREEMENT (the "Agreement") made and entered into as of the day of ,
199 by and among American Enterprise Life Insurance Company (hereinafter the
"Company"), on its own behalf and on behalf of each separate account of the
Company named in Schedule 1 to this Agreement, as may be amended from time to
time by mutual consent (hereinafter collectively the "Accounts"), Xxxxxxxxxxx
Variable Account Funds (hereinafter the "Fund") and OppenheimerFunds, Inc.
(hereinafter the "Adviser").
WHEREAS, the Fund is an open-end management investment company
and is available to act as the investment vehicle for separate accounts now in
existence or to be established at any date hereafter for variable life insurance
policies and variable annuity contracts (collectively, the "Variable Insurance
Products") offered by insurance companies (hereinafter "Participating Insurance
Companies");
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares, each designated a "Portfolio", and each representing
the interests in a particular managed pool of securities and other assets;
WHEREAS, the Fund has obtained an order from the Securities
and Exchange commission, dated July 16, 1986 (File No. 812-6324) granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of sections 9(a),
13(a), 15(a) and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter 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 Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (hereinafter the
"Mixed and Shared Funding Exemptive Order");
WHEREAS, the Fund 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 (hereinafter the "1933 Act");
WHEREAS, the Adviser is duly registered as an investment
adviser under the federal Investment Advisers Act of 1940;
WHEREAS, the Company has registered or will register certain
variable annuity and/or life insurance contracts under the 1933 Act (hereinafter
"Contracts") (unless an exemption from registration is available);
WHEREAS, the Accounts are or will be duly organized, validly
existing segregated asset accounts, established by resolution of the board of
Directors of the Company, to set aside and invest assets attributable to the
aforesaid variable contracts (the Contract(s) covered by this Agreement are
specified in Schedule 2 attached hereto, as may be modified by mutual consent
from time to time);
WHEREAS, the Company has registered or will register the
Accounts as unit investment trusts under the 1940 Act (unless an exemption from
registration is available);
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares in the Portfolios (the
Portfolios covered by this Agreement are specified in Schedule 3 attached hereto
as may be modified by mutual consent from time to time), on behalf of the
Accounts to fund the Contracts named in Schedule 2, as may be amended from time
to time by mutual consent, and the Fund is authorized to sell such shares to
unit investment trusts such as the Accounts at net asset value; and
NOW, THEREFORE, in consideration of their mutual promises, the Fund, the
Adviser and the Company agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to the Company those shares of
the Fund which the Company orders on behalf of the Account, executing such
orders on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the order for the shares of the Fund. For purposes
of this Section 1.1, the Company shall be the designee of the Fund for receipt
of such orders from each Account and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund receives written (or facsimile)
notice of such order by 10:00 a.m. New York 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 Fund calculates its net asset value pursuant
to the rules of the Securities and Exchange Commission.
1.2. The Company shall pay for Fund shares on the next
Business Day after it places an order to purchase Fund shares in accordance with
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire
pursuant to the instructions of the Fund's treasurer or by a credit for any
shares redeemed or by any other method agreed to by the parties.
1.3. The Fund agrees to make Fund shares available
indefinitely for purchase at the applicable net asset value per share by the
Company for its Accounts listed in Schedule 1 on those days on which the Fund
calculates its net asset value pursuant to rules of the SEC; provided, however,
that the Board of Trustees of the Fund (hereinafter the "Trustees") may refuse
to sell shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio 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, in the best interests of the shareholders
of any Portfolio.
1.4. The Fund agrees to redeem, upon the Company's request,
any full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.4, the Company shall be the designee of the Fund for receipt of
requests for redemption and receipt by such designee shall constitute receipt by
the Fund; provided that the Fund receives written (or facsimile) notice of such
request for redemption by 10:00 a.m. New York time on the next following
Business Day.
1.5. The Fund shall endeavor to pay for the Fund shares
redeemed on the same Business Day the Fund receives notice of the redemption
order in accordance with Section 1.4 hereof, but in no event shall payment be
made beyond the time period specified in the Fund's prospectus or statement of
additional information. 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
or by any other method agreed to by the parties.
1.6. The Company agrees to purchase and redeem the shares of
the Portfolios named in Schedule 3 offered by the then current prospectus and
statement of additional information of the Fund in accordance with the
provisions of such prospectus and statement of additional information
1.7. The Fund 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 Portfolios' shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares of
that Portfolio. The Company reserves the right to revoke this election on ten
Business Days' notice to the Fund and the Adviser and thereafter to receive all
such dividends and distributions in cash. The Fund will notify the Company of
the number of shares so issued as payment of such dividends and distributions.
1.8. The Fund shall make the net asset value per share for
each Portfolio available to the Company on a daily basis as soon as reasonably
practicable after the net asset value per share is calculated and will use its
best efforts to make such
net asset value per share available by 5:30 p.m. New York time, but in no event
later than 6:00 p.m. New York time each Business Day.
1.9. The Fund agrees that its shares will be sold only to
Participating Insurance Companies and their separate accounts or to such other
persons permitted under applicable tax laws and/or regulations, a Revenue Ruling
or private letter ruling granted by the Internal Revenue Service.
ARTICLE II. Sales Material, Prospectuses and Other Reports
2.1. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee a copy of each Contract prospectus or
statement of additional information in which the Fund or the Adviser is named
prior to the filing of such document with the Securities and Exchange
Commission. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or the Adviser is named, at least ten Business Days
prior to its use. No such material shall be used if the Fund or its designee
reasonably object to such use within ten Business Days after receipt of such
material.
2.2. The Fund and/or the Adviser shall furnish, or shall cause
to be furnished, to the Company or its designee a copy of each Fund prospectus
or statement of additional information in which the Company is named prior to
the filing of such document with the Securities and Exchange Commission. The
Fund 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 is named, at least ten Business Days prior to its use. No such
material shall be used if the Company or its designee reasonably object to such
use within five Business Days after receipt of such material.
2.3. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser 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 Fund shares, as such
registration statement, prospectus and statement of additional information may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature, published reports in the public domain or
other promotional materials approved by the Fund or its designee, except as
required by legal process or regulatory authorities or with the permission of
the Fund. Nothing in this Section 2.3 will be construed as preventing the
Company or its agents from giving advice on investments in the Fund.
2.4. The Fund and/or the Adviser shall not give any
information or make any representations or statements on behalf of the Company
or concerning the Company, the Accounts or the Contracts other than the
information or representations contained in the 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, in reports or proxy statements for
the Company, or in materials approved by the Company for distribution including
sales literature or other promotional materials, except as required by legal
process or regulatory authorities or with the permission of the Company.
2.5. For purposes of this Article II, the phrase "sales
literature or other promotional material" includes, without limitation,
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 billboard
or electronic media), and sales literature (such as brochures, circulars, market
letters and form letters), distributed or made generally available to customers
or the public.
2.6. The Fund and the Adviser hereby consent to the Company's
use of the names "Xxxxxxxxxxx Variable Account Funds" and OppenheimerFunds" in
connection with the marketing of the Contracts, subject to the terms of Sections
2.1 and 2.3 of this Agreement. Such consent will terminate with the termination
of this Agreement.
2.7. The Fund or the Adviser shall provide a camera-ready copy
of and/or a computer diskette containing its current prospectus within a
reasonable period of its filing date, and provide other assistance as is
reasonably necessary in order for the Company once each year (or more frequently
if the prospectus for the Fund is supplemented or amended) to have the
prospectus for the Fund and the prospectuses for the other investment options
under the Contracts printed together in one document (such printing and
distribution to existing and prospective Contract owners to be at the Company's
expense). The Adviser shall be permitted to review and approve the typeset form
of the Fund's prospectus prior to such printing provided the prospectus has been
provided within a reasonable period.
2.8. At the option of the Company, the Fund or the Adviser
shall either: (i) provide the Company (at the Fund's expense) with as many
copies of the Fund's statement of additional information, reports to
shareholders, other information relating to the Fund necessary to prepare
financial reports, and other communications to shareholders as the Company shall
reasonably require for distribution to existing and/or
prospective Contract owners (at the Company's expense), or (ii) camera-ready,
computer diskette and/or a printed copy, if appropriate, of such materials for
printing (at the Fund's expense) and distribution (at the Company's expense) to
existing and/or prospective Contract owners, within a reasonable period of the
filing date for definitive copies of such material. The Adviser shall be
permitted to review and approve the typeset form of such materials prior to such
printing provided such materials have been provided within a reasonable period.
ARTICLE III. Fees and Expenses
3.1. The Fund and Adviser shall pay no fee or other
compensation to the Company under this Agreement, and the Company shall pay no
fee or other compensation to the Fund or Adviser under this Agreement, except as
provided herein.
3.2. All expenses incident to performance by each party of its
respective duties under this Agreement shall be paid by that party. The Fund
shall see to it that all its shares are registered and authorized for issuance
in accordance with applicable federal law and, if and to the extent advisable by
the Fund, in accordance with applicable state laws prior to their sale. The Fund
shall bear the expenses for the cost of registration and qualification of the
Fund's shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, and the preparation of all statements
and notices required by any federal or state law. The Fund shall bear the
expenses of printing the Fund's statement of additional information and proxy
materials. The Company shall bear the expenses of printing the Fund's reports
and of tabulation of proxy votes.
3.3. The Company shall bear the expenses of printing and
distributing to existing and prospective Contract owners the Fund's prospectus
and reports to owners of Contracts issued by the Company and the expenses of
distributing the Fund's statement of additional information to existing and
prospective Contract owners and proxy materials to existing Contract owners.
3.4. If the Fund or any Portfolio adopts and implements a plan
pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses,
then, subject to obtaining any required exemptive orders or other regulatory
approvals, the Fund may make payments to the Company, to the underwriter for the
Contracts or to the Adviser if and in such amounts agreed to by the Fund in
writing, and the Company agrees to provide the Trustees [ ? ] as may be
reasonably requested in connection with such plan.
3.5. In the event the Fund adds one or more additional Portfolios and the
parties desire to make such Portfolios available to the respective Contract
owners as an underlying investment medium, the parties may agree to execute a
new Schedule 3 or an amendment to this Agreement authorizing the issuance of
shares of the new Portfolios to the particular Account. The amendment may also
provide for the sharing of expenses for the establishment of new Portfolios
among Participating Insurance Companies desiring to invest in such Portfolios
and the provision of funds as the initial investment in the new Portfolios.
ARTICLE IV. Representations and Warranties
4.1. The Company represents and warrants that it is an
insurance company duly organized and in good standing under the laws of the
State of Indiana.
4.2. The Fund represents and warrants that it is duly
organized and validly existing under the laws of the State of Massachusetts.
4.3. The Fund represents and warrants that the investments of
each Portfolio will comply with the diversification requirements set forth in
Section 817(h) of the Internal Revenue Code of 1986, as amended (hereinafter the
"Code"), and the rules and regulations thereunder, or any successor or similar
provision, or Revenue Ruling or private letter ruling granted by the Internal
Revenue Service. In the event the Fund fails to comply with these
diversification requirements, the Fund shall take all reasonable steps to notify
the Company of such noncompliance and to adequately diversify the Fund so as to
achieve compliance within the grace period afforded by Treasury Regulation
1.817-5, or any successor or similar provision, or Revenue Ruling or private
letter ruling granted by the Internal Revenue Service.
4.4. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the 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 so qualify or
that it might not so qualify in the future.
4.5. The Fund represents that its investment objectives,
policies and restrictions comply in all material respects with any applicable
state laws of which the Fund is aware as they may apply to the Fund. The Fund
agrees that it will endeavor to furnish the information required by state
insurance laws and requested by the Company to assist the Company in obtaining
the authority needed to issue the Contracts in the various states.
4.6. The Fund represents and warrants that all of its Trustees, officers,
employees, investment advisers and other individuals/entities having access to
the funds and/or securities of the Fund are and continue to be at all times
covered by a blanket fidelity bond or similar coverage (which may, at the Fund's
election, be in the form of a joint insured bond) for the benefit of the Fund in
an amount not less than the minimal coverage as required 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 or insurance company.
ARTICLE V. Potential Conflicts
5.1. The Board of Trustees of the Fund (the "Board") will
monitor the Fund for the existence of any material irreconcilable conflict
between the interests of the Contract owners of all separate accounts investing
in the Fund. An irreconcilable material 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 Portfolio
are being managed; (e) a difference in voting instructions given by variable
contract and variable life insurance contract owners; or (f) a decision by an
insurer to disregard the voting instructions of Contract owners. The Board shall
promptly inform the Company if it determines that an irreconcilable material
conflict exists and the implications thereof.
5.2. The Company has reviewed a copy of the Mixed and Shared
Funding Exemptive Order, and in particular, has reviewed the conditions to the
requested relief set forth therein. The Company agrees to be bound by the
responsibilities of a participating insurance company as set forth in the Mixed
and Shared Funding Exemptive Order, including without limitation the requirement
that the Company report any potential or existing conflicts of which it is aware
to the Board. The Company will assist the Board in carrying out its
responsibilities in monitoring such conflicts under the Mixed and Shared Funding
Exemptive Order, by providing the Board in a timely manner with all information
reasonably necessary for the Board to consider any issues raised. This includes,
but is not limited to, an obligation by the Company to inform the Board whenever
Contract owner voting instructions are disregarded and by confirming in writing,
at the Fund's request, that the Company is unaware of any such potential or
existing material irreconcilable conflicts.
5.3. If it is determined by a majority of the 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 Trustees), take
whatever steps are necessary to remedy or eliminate the irreconcilable material
conflict up to and including: (1) withdrawing the assets allocable to some or
all of the subaccounts of the Accounts from the Fund or any Portfolio and
reinvesting such assets in a different investment medium, including (but not
limited to) another Portfolio of the Fund, or submitting the question whether
such segregation should be implemented to a vote of all affected Contract owners
and, as appropriate, segregating the assets of any appropriate group (i.e.,
annuity contract owners, life insurance contract
owners, or variable 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 (2) establishing a new
registered management investment company or managed separate account.
5.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the subaccount of
the Account's investment in the Fund and terminate this Agreement; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. No charge or penalty will be
imposed as a result of such withdrawal. Any such withdrawal and termination must
take place within six (6) months after the Fund gives written notice that this
provision is being implemented, and until the end of the six month period the
Fund shall continue to accept and implement orders by the Company for the
purchase and redemption of shares of the Fund.
5.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the subaccount of the Account's investment in the Fund and terminate
this Agreement within six months after the Board informs the Company in writing
that it has determined that such decision has created an irreconcilable material
conflict; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as
determined by a majority of the disinterested members of the Board. No charge or
penalty will be imposed as a result of such withdrawal. Until the end of the
foregoing six month period, the Fund shall continue to accept and implement
orders by the Company for the purchase and redemption of shares of the Fund,
subject to applicable regulatory limitation.
5.6. For purposes of Sections 5.3 through 5.6 of this
Agreement, a majority of the disinterested members of the Board shall determine
whether any proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Fund be required to establish a new funding
medium for the Contracts. The Company shall not be required by Section 5.3 to
establish a new funding medium for Contracts if an offer to do so has been
declined by vote of a majority of Contract owners materially adversely affected
by the irreconcilable material conflict. In the event that the Board determines
that any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the particular subaccount of the
Account's investment in the Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination, provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the disinterested members of the Board. No charge or
penalty will be imposed as a result of such withdrawal. ARTICLE VI.
Indemnification
6.1. The Company agrees to indemnify and hold harmless the
Fund and the Adviser and each person, if any, who controls or is associated with
the Fund and the
Adviser within the meaning of such terms under applicable federal securities
laws and any Trustees, officers, employees and agents of the foregoing
(collectively, the "Indemnified Parties" for purposes of this Article VI)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or expenses (including
the reasonable costs of investigating or defending any alleged loss, claim,
damage, liability or expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, the "Losses"), to which the Indemnified
Parties may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any
untrue statements or alleged untrue statements of
material fact contained in a registration statement,
prospectus or statement of additional information for
the Contracts or in the Contracts themselves or in
sales literature generated by the Company on behalf
of the Contracts or Accounts (or any amendment or
supplement to any of the foregoing) (collectively,
the "Company Documents" for purposes of this Article
VI), 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, provided
that this indemnity 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 was accurately derived from
information furnished to the Company by
or on behalf of the Fund or the Adviser for use in
Company Documents or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(b) arise out of or result from statements
or representations (other than statements or
representations contained in and accurately derived
from Fund Documents as defined in Section 6.2(a)) or
wrongful conduct of the Company or persons under its
control, with respect to the sale or acquisition of
the Contracts or Fund shares; or
(c) arise out of or result from any untrue
statement or alleged untrue statement of a material
fact contained in Fund Documents as defined in
Section 6.2(a) 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 if such statement or omission was made
in reliance upon and accurately derived from written
information furnished to the Fund or the Adviser by
or on behalf of the Company; or
(d) arise out of or result from any failure
by the Company to provide the services or furnish the
materials required under the terms of this Agreement;
or
(e) arise out of or result from 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 of this Agreement by the
Company.
6.2. The Fund and the Adviser agree 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 applicable federal securities
laws and any directors, trustees, officers, employees and agents of the
foregoing (collectively, the "Indemnified Parties" for purposes of this Article
VI) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Fund and/or the Adviser) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal counsel
fees incurred in connection therewith) (collectively, the "Losses"), to which
the Indemnified Parties may become subject under any statute or regulation, or
at common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any
untrue statements or alleged untrue statements of
material fact contained in a registration statement,
prospectus or statement of additional information for
the Fund or in sales literature generated by the Fund
and/or the Adviser (or any amendment or supplement to
any of the foregoing) (collectively, the "Fund
Documents" for purposes of this Article VI), 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, provided that this indemnity
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 was accurately derived from
information furnished to the Fund or the Adviser by
or on behalf of the Company for use in Fund Documents
or otherwise for use in connection with the sale of
the Contracts or Fund shares; or
(b) arise out of or result from statements
or representations (other than statements or
representations contained in and accurately derived
from Company Documents) or wrongful conduct of the
Fund or the Adviser or persons under their control,
with respect to the sale or acquisition of the
Contracts or Fund shares; or
(c) arise out of or result from any untrue
statement or alleged untrue statement of a material
fact contained in Company Documents 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 if such
statement or omission was made in reliance upon and
accurately derived from written information furnished
to the Company by or on behalf of the Fund; or
(d) arise out of or result from any material
breach of any representation and/or warranty made by
the Fund in this
Agreement or arise out of or result from any
other material breach of this Agreement by the Fund
or the Adviser.
6.3. Neither the Company nor the Fund or the Adviser shall be
liable under the indemnification provisions of Sections 6.1 or 6.2, as
applicable, with respect to any Losses incurred or assessed against an
Indemnified Party that arise from such Indemnified Party's willful misfeasance,
bad faith or gross negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless disregard of
obligations or duties under this Agreement.
6.4. Neither the Company nor the Fund or the Adviser shall be
liable under the indemnification provisions of Sections 6.1 or 6.2, as
applicable, with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the other party in writing within a
reasonable time after the summons, or other first written notification, giving
information of the nature of the claim, complaint or action by a regulatory
authority shall have been served upon or otherwise received by such Indemnified
Party (or after such Indemnified Party shall have received notice of service
upon or other notification to any designated agent), but failure to notify the
party against whom indemnification is sought of any such claim shall not relieve
that part from any liability which it may have to the Indemnified Party in the
absence of Sections 6.1 and 6.2.
6.5. In case any such action is brought against the Indemnified Parties,
the indemnifying party shall be entitled to participate, at its own expense, in
the defense of such action. The indemnifying party also shall be entitled to
assume the defense thereof, with counsel reasonably satisfactory to the party
named in the action. After
notice from the indemnifying party to the Indemnified Party of an election to
assume such defense, 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 the Indemnified 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.
ARTICLE VII. Applicable Law
7.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
7.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the Securities and
Exchange Commission may grant (including, but not limited to, the Mixed and
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE VIII. Termination
8.1. This Agreement shall terminate with respect to some or all Portfolios:
(a) at the option of any party upon six
months' advance written notice to the other parties
or as otherwise agreed in writing by all parties; or
(b) at the option of the Company to the
extent that shares of Portfolios are not reasonably
available to meet the
requirements of its Contracts or are not
appropriate funding vehicles for the Contracts, as
determined by the Company reasonably and in good
faith. Prompt notice of the election to terminate for
such cause and an explanation of such cause shall be
furnished by the Company; or
(c) as provided in Article IV.
8.2. It is understood and agreed that the right of any party
hereto to terminate this Agreement pursuant to Section 6.1(a) may be exercised
for cause or for no cause.
8.3. Notwithstanding any termination of this Agreement, the
Fund shall, at the option of the Company, continue to make available additional
shares of the Fund (or any Portfolio) pursuant to the terms and conditions of
this Agreement for all Contracts in effect on the effective date of termination
of this Agreement for which shares of the Fund (or any Portfolio) serve as the
underlying medium unless such further sale of additional shares of the Fund is
prohibited by law or by regulatory authorities, or as determined by the Fund's
Board to be necessary to remedy or eliminate an irreconcilable conflict pursuant
to Article V hereof.
8.4. The provisions of this Article VIII shall survive the
termination of this Agreement, and as long as shares of the Fund are held on
behalf of Contract owners in accordance with Section 8.3, the provisions of this
Agreement shall survive the termination of this Agreement with respect to those
Contract owners.
ARTICLE IX. Notices
Any notice shall be sufficiently given when sent by registered
or certified mail 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 to
the other party.
If to the Fund:
Xxxxxxxxxxx Variable Account Funds
c/o OppenheimerFunds, Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Legal Department
If to the Adviser:
OppenheimerFunds, Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: General Counsel
If to the Company:
American Enterprise Life Insurance Company
c/o American Express Financial Advisors Inc.
IDS Tower 10
Xxxxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxxx
Director - Variable Assets Product Management
with a copy to:
Xxxx Xxxxx Xxxxxxx
Senior Counsel
ARTICLE X. Miscellaneous
10.1. The Fund and the Adviser acknowledge that the identities
of the customers of the Company or any of its affiliates (collectively the
"Protected Parties" for purposes of this Section 10.1), information maintained
regarding those customers, and 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
Company's performance of its duties under this Agreement are the valuable
property of the Protected Parties. The Fund and the Adviser agree that if they
come into possession of any list or compilation of the identities of or other
information about the Protected Parties' customers, or any other information or
property of the Protected Parties, other than such information as may be
independently developed or compiled by the Fund or the Adviser from information
supplied to them by the Protected Parties' customers who also maintain accounts
with the Fund, the Adviser or the Fund's transfer agent other than as Contract
owners, the Fund and the Adviser will hold such information or property in
confidence and refrain from using, disclosing or distributing any of such
information or other property except: (a) with the Company's prior written
consent; or (b) as required by legal or judicial process or regulatory
authority. The Fund and the Adviser acknowledge that any breach of the
agreements in this Section 10.1 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.
10.2. 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.
10.3. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
10.4. 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.
10.5. Each party hereto shall cooperate with each other party
and all appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the NASD and state securities and insurance
regulators) and shall permit 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.
10.6. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
10.7. It is understood by the parties that this Agreement is not an
exclusive arrangement in any respect.
10.8. The Company and the Adviser each understand and agree
that the obligations of the Fund under this Agreement are not binding upon any
shareholder of the Fund personally, but bind only the Fund and the Fund's
property; the Company and the Adviser each represent that it has notice of the
provisions of the Declaration of Trust of the Fund disclaiming shareholder
liability for acts or obligations of the Fund.
10.9. This Agreement shall not be assigned by any party hereto without the
prior consent of all the parties.
10.10. No provisions of this Agreement may be amended or
modified in any manner except by a written agreement properly authorized and
executed by all parties.
10.11. This Agreement sets forth the entire agreement between
the parties and supercedes all prior communications, agreements and
understandings, oral or written, between the parities regarding the subject
matter hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed as of the date specified
below.
Date:
AMERICAN ENTERPRISE LIFE
INSURANCE COMPANY
By:
Name:
Title:
ATTEST:
By:
Name:
Title:
XXXXXXXXXXX VARIABLE
ACCOUNT FUNDS
By:
Name:
Title:
OPPENHEIMERFUNDS, INC.
By:
Name:
Title:
SCHEDULE 1
Separate Accounts
American Enterprise Variable Annuity Account
SCHEDULE 2
Contracts
Contract Form 34560
Contract Form 43260
and state variations of these forms
SCHEDULE 3
Portfolios
Xxxxxxxxxxx Variable Account Funds/Xxxxxxxxxxx Growth Fund
Xxxxxxxxxxx Variable Account Funds/Xxxxxxxxxxx High Income Fund
