EVERGREEN VARIABLE ANNUITY TRUST
PARTICIPATION AGREEMENT
THIS AGREEMENT is made this 13th day of August, 2001 between Evergreen
Variable Annuity Trust, an open-end management investment company organized as a
Delaware business trust (the "Trust"), and IDS Life Insurance Company, a life
insurance company organized under the laws of the State of Minnesota (the
"Company"), on its own behalf and on behalf of each segregated asset account of
the Company set forth on Schedule A, as may be amended from time to time (the
"Accounts").
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and the offer and sale of its shares are registered under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust desires to act as an investment vehicle for separate
accounts established for variable life insurance policies and variable annuity
contracts to be offered by insurance companies that have entered into
participation agreements with the Trust (the "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each series representing an interest in a particular managed
portfolio of securities and other assets (the "Portfolios"); and
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission ("Commission") granting Participating Insurance Companies
and their separate account(s) exemptions from the provisions of Section(s) 9(a),
13(a), 15(a) and 15(b) of 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 and variable life insurance separate accounts of
both affiliated and nonaffiliated life insurance companies and certain qualified
pension and retirement plans (the "Shared Trust Exemptive Order"); and [Please
provide a copy of this order and notice.]
WHEREAS, the Company has registered or will register under the 1933
Act, unless exempt therefrom, certain variable life insurance policies and/or
variable annuity contracts identified by the form number(s) listed on Schedule
A, as may be amended from time to time (the "Contracts"); and
WHEREAS, the Company has registered or will register each Account,
unless exempt therefrom, as a unit investment trust under the 1940 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account,
established by resolution of the Board of Directors of the Company on the date
shown for that Account on Schedule A, to set aside and invest assets
attributable to the Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Portfolios at net
asset value on behalf of each Account to fund the Contracts;
NOW, THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE I
Sale of Trust Shares
1.1. The Trust shall make shares of its Portfolios available to the
Accounts at the net asset value next computed after receipt of such purchase
order by the Trust (or its agent), as established in accordance with the
provisions of the then current prospectus of the Trust. Shares of a particular
Portfolio of the Trust shall be ordered in such quantities and at such times as
determined by the Company to be necessary to meet the requirements of the
Contracts. The trustees of the Trust (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, necessary and in the best interest of the shareholders of such
Portfolio.
1.2. The Trust will redeem any full or fractional shares of any
Portfolio when requested by the Company on behalf of an Account at the net asset
value next computed after receipt by the Trust (or its agent) of the request for
redemption, as established in accordance with the provisions of the then current
prospectus of the Trust. Payment shall be made the same business day that the
Trust receives notice of the order in federal funds initiated by wire by 2:00
p.m. New York time as long as the banking system is open for business. If the
banking system is closed, payment will be transmitted the next day that the
banking system is open for business. If payment is received by Company after
2:00 p.m. New York time, the Trust shall, upon Company's request, promptly
reimburse Company for any charges, costs, fees, interest or other expenses
incurred in connection with advances, borrowings, or overdrafts. In no event
shall payment be delayed for more than five (5) calendar days to enable the
Company to pay redemption proceeds within the period specified under the 1940
Act.
1.3. For the purposes of Sections 1.1. and 1.2., the Trust hereby
appoints the Company as its agent for the limited purpose of receiving and
accepting purchase and redemption orders resulting from investment in and
payments under the Contracts. Receipt by the Company shall constitute receipt by
the Trust provided that: (a) such orders are received by the Company in good
order prior to the close of the regular trading session of the New York Stock
Exchange, and
(b) the Trust receives notice of such orders 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. The Trust will confirm receipt of
each trade (ending share balances by account and fund) by 1:00 p.m. New York
time on the day the trade is placed with the Trust (using a mutually agreed upon
format).
1.4 IDS Life can give notice of purchase orders to Evergreen by 2:00
p.m. New York time and its bank can initiate a wire transfer by 2:00 p.m. New
York time. IDS Life cannot, however, guarantee payment by 2:00 p.m. New York
time. Purchase orders that are transmitted to the Trust in accordance with
Section 1.3. shall be paid for on the same Business Day that the Trust receives
notice of the order. Payment shall be made in federal funds initiated by wire by
2:00 p.m. New York time as long as the banking system is open for business. If
the banking system is closed, payment will be transmitted the next day that the
banking system is open for business.
1.5. The Trust shall furnish same-day notice, on or before ex-dividend
date (using a mutually agreed upon format), to the Company of any income
dividends or capital gain distributions payable on shares of any Portfolio. 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 and to
receive all such income dividends and capital gain distributions in cash. The
Trust shall notify the Company of the number of shares so issued as payment of
such dividends and distributions. For each calendar year Trust will provide
Company with a dividend and capital gain payment schedule.
1.6 The Trust shall make the net asset value per share for each
Portfolio 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 6:30 p.m., New
York time (using a mutually agreed upon format). The Trust will promptly notify
Company when and if the Trust does not communicate the net asset value per share
by 6:30 p.m. New York time, 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.
1.7. The Trust agrees that its shares will be sold only to
Participating Insurance Companies and their separate accounts and to certain
qualified pension and retirement plans to the extent permitted by the Shared
Trust Exemptive Order. No shares of any Portfolio will be sold directly to the
general public. The Company agrees that the Trust shares will be used only for
the purposes of funding the Contracts and Accounts listed in Schedule A, as
amended from time to time.
1.8. The Trust agrees that all Participating Insurance Companies shall
have the obligations and responsibilities regarding pass-through voting and
conflicts of interest corresponding to those contained in Section 2.12. and
Article IV of this Agreement.
ARTICLE II
Obligations of the Parties
2.1. The Trust shall bear the costs of registering and qualifying the
Trust's shares, and of preparing and filing the Trust's prospectus, registration
statement, Trust sponsored proxy materials (or similar materials such as voting
instruction solicitation materials), reports to shareholders, and all statements
and notices required by federal or state law. The Trust shall pay all taxes on
the issuance and/or transfer of the Trust's shares.
2.2. The Trust shall provide the Company, at the Trust's expense, with
an electronic form acceptable to the Company of the Trust's current prospectus,
annual report and semi-annual reports. The Trust will render other assistance as
is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus for the Trust is amended) to have the prospectus,
annual report or semi-annual report for the Trust printed together in one
document with other prospectuses, annual reports or semi-annual reports (with
the Trust bearing its proportionate share of the expense). The prospectuses,
annual report, semi-annual report, and any Trust sponsored proxy material will
be customized to include only those portions of the Trust in use for each
Contract. In addition, the prospectuses, annual report and semi-annual report
will be provided to the Company ten (10) Business Days prior to the date on
which they must be mailed. The Trust shall bear the printing and mailing costs
(or duplicating costs with respect to the statement of additional information)
associated with distributing the Trust's current prospectus, statement of
additional information, annual report, semi-annual report, Trust sponsored proxy
material or other shareholder communications, including any amendments or
supplements to any of the foregoing, to the extent required to be provided by
the Trust to its then-current shareholders, including the Company. The Company
shall bear any costs of preparing, printing, recording, taping or disseminating
sales literature or other marketing materials or the costs of printing and
mailing prospective Contract purchasers copies of the Trust's prospectus,
statement of additional information, periodic reports or other printed
materials.
2.3. The Company will bear the costs of registering and qualifying the
Accounts for sale, printing (or duplicating costs with respect to the statement
of additional information) and mailing costs associated with the delivery of the
Accounts' current prospectuses and statements of additional information, private
placement memoranda, annual and semi-annual reports, Contracts, Contract
applications, sales literature or other promotional material, Account sponsored
proxy materials and voting solicitation instructions.
2.4 The Company will bear the responsibility and correlative expense
for administrative and support services for Contract owners. The Trust
recognizes the Company as the sole shareholder of shares of the Trust issued
under this Agreement.
2.5. The Company agrees and acknowledges that the Trust's adviser, is
the sole owner of
the name and xxxx "Evergreen" and that all use of any designation comprised in
whole or in part of Evergreen (an "Evergreen Xxxx") under this Agreement shall
inure to the benefit of the Trust and its adviser. Except as provided in Section
2.10, the Company shall not use any Evergreen Xxxx on its own behalf or on
behalf of the Accounts or Contracts in any registration statement,
advertisement, sales literature or other materials relating to the Accounts or
Contracts without the prior written consent of the Trust and its adviser. Upon
termination of this Agreement for any reason, the Company shall cease all use of
any Evergreen Xxxx(s) as soon as reasonably practicable.
The Trust agrees and acknowledges that Company or its parent are the
sole owners of the name and xxxx "IDS Life" and that all use of any
designation comprised in whole or in part of IDS Life or American Express (an
"IDS Life Xxxx") under this Agreement shall inure to the benefit of Company.
Except as provided in Section 2.6, the Trust shall not use any IDS Life Xxxx on
its own behalf or on behalf of the Trust in any registration statement,
advertisement, sales literature or other materials relating to the Trust without
the prior written consent of Company. Upon termination of this Agreement for any
reason, the Trust shall cease all use of any IDS Life Xxxx(s) as soon as
reasonably practicable.
2.6. The Company shall furnish, or cause to be furnished, to the Trust
or its designee, a copy of each Contract prospectus or statement of additional
information in which the Trust or its investment adviser is named prior to the
filing of such document with the Commission. The Company shall also furnish, or
shall cause to be furnished, to the Trust or its designee, each piece of sales
literature or other promotional material including private placement memoranda,
in which the Trust or its investment adviser is named, at least ten Business
Days prior to its use. No such material shall be used if the Trust or its
designee reasonably objects to such use within five Business Days after receipt
of such material.
2.7. The Company will provide to the Trust at least one complete copy
of each report, solicitation for voting instructions, application for exemption,
request for no-action relief, and any amendment to any of the above (or any
amendment to the registration statement, prospectus or statement of additional
information) that materially affect the Trust or its investment adviser within
10 Business Days of the filing of the document with the Commission, the NASD, or
other regulatory authorities.
2.8. For purposes of this Article II, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements,
newspapers, magazines, or other periodicals, radio, television, telephone or
tape recording, videotape display, signs or billboards, motion pictures, or
other public media, including, for example, on-line networks such as the
Internet or other electronic 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, shareholder newsletters, 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, and registration statements,
prospectuses, statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under the rules of the NASD, the 1933 Act or the 0000 Xxx.
2.9. The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust or
its investment adviser in connection with the sale of the Contracts other than
information or representations contained in and accurately derived from the
registration statement, prospectus or statement of additional information for
the Trust shares (as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time), annual
and semi-annual reports of the Trust, Trust-sponsored proxy statements, in
published reports for the Trust which are in the public domain or approved by
the Trust for distribution, or in sales literature or other promotional material
approved by the Trust or its designee, except as required by legal process or
regulatory authorities or with the written permission of the Trust or its
designee.
2.10. The Trust shall furnish or cause to be furnished, to the Company
or its designee, a copy of each Trust prospectus or statement of additional
information in which the Company or the Accounts are named prior to the filing
of such document with the Commission. The Trust 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 or the Accounts are named, at
least ten Business Days prior to its use. No such material shall be used if the
Company or its designee reasonably objects to such use within five Business Days
after receipt of such material.
2.10(a). The Trust will provide to the Company at least one complete
copy of each report, solicitation for voting instructions, application for
exemption, request for no-action relief, and any amendment to any of the above
(or any amendment to the registration statement, prospectus or statement of
additional information, that materially affects the Trust and the Contracts
within 10 Business Days of the filing of the document with the Commission, the
NASD, or other regulatory authorities.
2.11. The Trust 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 information or representations
contained in and accurately derived from the registration statement, prospectus,
statement of additional information or private placement memorandum for the
Contracts (as such registration statement, prospectus, statement of additional
information or private placement memorandum may be amended or supplemented from
time to time), in published reports for the Trust which are in the public domain
or approved by the Trust for distribution, 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 written permission of the Company.
2.12. At the request of either party to this Agreement, the other party
will make available to the requesting party's independent auditors and/or
representatives of the appropriate regulatory agencies, all records, data and
access to operating procedures that may be reasonably requested.
2.13. So long as, and to the extent that the Commission interprets the
1940 Act to require
pass-through voting privileges for variable contract owners, the Company will
provide pass-through voting privileges to owners of policies, unless exempt
therefrom, whose cash values are invested, through the Accounts, in shares of
the Trust and shall assist in the distribution of all proxy material furnished
by the Trust. With respect to each Account, the Company will vote shares of the
Trust held by the Account and for which no timely voting instructions from
policy owners are received in the same proportion as those shares for which
voting instructions are received. 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. The Company and its agents will in no way recommend or oppose
or interfere with the solicitation of proxies for Trust shares held by Contract
owners without the prior written consent of the Trust, which consent may be
withheld in the Trust's sole discretion.
2.14. The Trust shall be responsible for calculating the performance
information for the Trust. The Trust agrees to provide the Company with
performance information on a timely basis to enable the Company to calculate
performance information on a timely basis to enable the Company to calculate
performance information for the Contracts in accordance with applicable state
and federal law. The Company shall be responsible for calculating the
performance information of the Contracts.
ARTICLE III
Representations and Warranties
3.1. The Company represents and warrants that it is an insurance
company duly organized and validly existing under the laws of the State of
Minnesota and that it has legally and validly established, or will establish,
each Account as a segregated asset account under such law on the dates set forth
in Schedule A.
3.2. The Company represents and warrants that it has registered or,
prior to any issuance or sale of the Contracts, will register each Account,
unless exempt therefrom, as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the
Contracts.
3.3. The Company represents and warrants that the Contracts are, or
will be, registered under the 1933 Act to the extent required by the 1933 Act
prior to any issuance or sale of the Contracts, the Contracts will be issued and
sold in compliance in all material respects with all applicable federal and
state law.
3.4. The Trust represents and warrants that it is duly organized and
validly existing under the laws of the State of Delaware.
3.5. The Trust represents and warrants that the Trust shares offered
and sold pursuant to this Agreement will be registered under the 1933 Act, that
the Trust is and will remain registered
under the 1940 Act prior to any issuance or sale of such shares and for so long
as such shares are sold. The Trust shall amend its registration statement under
the 1933 Act and the 1940 Act from time to time as required in order to effect
the continuous offering of its shares. The Trust shall register and qualify its
shares for sale in accordance with the laws of the various states only if and to
the extent deemed advisable by the Trust. 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.
3.6. The Trust 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 (the "Code"), and the
rules and regulations thereunder. In the event of a breach of this Section 3.6
by the Trust, it will take all reasonable steps to: (1) immediately notify the
Company of such breach, and (2) adequately diversify the Trust so as to achieve
compliance within the grace period afforded by Section 1.817-5(b) of the rules
and regulations under the Code.
3.7. The Company represents that the Contracts are intended to be
treated as annuity or life insurance contracts under applicable provisions of
the Code and warrants and agrees that it will make every effort to maintain such
treatment and that it will notify the Trust 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.
3.8 The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular, the Trust either will provide for
annual meetings (except insofar as the Commission may interpret Section 16 of
the 1940 Act not to require such meetings) or, as the Trust currently intends,
to 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). 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 directors and with whatever rules
the Commission may promulgate with respect thereto.
3.9 In the event of an error in the computation of a Portfolio's net
asset value or any dividend or capital gain distribution (each, a "pricing
error"), the Trust shall notify the Company as soon as possible after the
discovery of the error. Such notification may be verbal, but shall be confirmed
promptly in writing. A pricing error shall be corrected in accordance with the
Trust's internal policies and procedures. If an adjustment is necessary to
correct a material error that occurred through no fault of the Company and such
adjustment has caused Contract owners to receive less than the number of shares
or redemption proceeds to which they are entitled, the number of shares of the
applicable Account will be adjusted and the amount of any underpayments will be
paid by the Trust the Company for crediting of such amounts to the Contract
owners' accounts. Upon notification by the Trust of any overpayment due to a
material error, the Company shall promptly remit to the Trust any overpayment
that has not been paid to Contract owners; however, the Trust acknowledges that
the Company will use reasonable efforts to to seek reimbursement of overpayments
from any Contract owner who, because of a pricing
error, may have underpaid for shares credited to such Contract owner's account.
The costs of correcting such adjustments, including reasonable administrative
costs, shall be borne by the Trust unless the Company is at fault in which case
such costs shall be borne by the Company.
ARTICLE IV
Potential Conflicts
4.1. The parties acknowledge that the Trust's shares may be made
available for investment to other Participating Insurance Companies. In such
event, the Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
Participating Insurance Companies. A material irreconcilable conflict may arise
for a variety of reasons, including: (a) an action by any state insurance
regulatory or other 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 annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Trustees shall promptly inform the Company
if they determine that a material irreconcilable conflict exists and the
implications thereof. The Trustees shall have sole authority to determine
whether a material irreconcilable conflict exists and their determination shall
be binding upon the Company.
4.2. The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Trustees. The Company will assist the
Trustees in carrying out their responsibilities under the Shared Trust Exemptive
Order and this Article IV by providing the Trustees, upon reasonable request,
with all information reasonably necessary for them to consider any issues raised
including, but not limited to, information as to a decision by the Company to
disregard Contract owner voting instructions.
4.3. If it is determined by a majority of the Trustees, or a majority
of the disinterested Trustees, that a material irreconcilable conflict exists
that affects the interests of Contract owners, the Company shall, in cooperation
with other Participating Insurance Companies whose contract owners are also
affected, at its expense and to the extent reasonably practicable (as determined
by Company and the Trustees jointly) take whatever steps are necessary to remedy
or eliminate the material irreconcilable conflict, which steps could include:
(a) withdrawing the assets allocable to some or all of the Accounts (or
subaccounts of the Accounts) from the Trust or any Portfolio and reinvesting
such assets in a different investment medium, including (but not limited to)
another Portfolio of the Trust, or submitting the question of whether or not
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 (b) establishing a new registered
management investment company or managed separate account and obtaining any
necessary approvals or orders of the Commission in connection therewith.
4.4. 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 Trust's election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect to such
Account; 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 Trustees. Any such withdrawal
and termination, assuming required regulatory approvals have been received, must
take place within six (6) months after the Trust gives written notice that this
provision is being implemented. Until the end of such six (6) month period, the
Trust shall continue to accept and implement orders by the Company for the
purchase and redemption of shares of the Trust.
4.5. If any 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 affected Account's investment in the Trust and terminate this
Agreement with respect to such Account within six (6) months after the Trust
gives written notice that it has determined that such decision has created a
material irreconcilable conflict; provided, however, that such withdrawal and
termination, assuming required regulatory approvals have been received, shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested Trustees. Until the end of such
six (6) month period, the Trust shall continue to accept and implement orders by
the Company for the purchase and redemption of shares of the Trust.
4.6. For purposes of Sections 4.3. through 4.5. of this Agreement, a
majority of the disinterested Trustees shall determine whether any proposed
action adequately remedies any material irreconcilable conflict. The Company
shall not be required by Section 4.3 to establish a new funding medium for the
Contracts. In the event that the Trustees determine that any proposed action
does not adequately remedy any material irreconcilable conflict, then the
Company will withdraw the Account's investment in the Trust and terminate this
Agreement within six (6) months after the Trust gives written notice 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 Trustees.
4.7. The Company shall at least annually submit to the Trustees such
reports, materials or data as the Trustees may reasonably request so that the
Trustees may fully carry out the duties imposed upon them by the Shared Trust
Exemptive Order and this Article IV. Said reports, materials and data shall be
submitted more frequently if deemed appropriate by the Trustees.
4.8. 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 and/or shared
funding (as defined in the Shared Trust Exemptive Order) on terms and conditions
materially different from those contained in the Shared Trust Exemptive Order,
then (a) the Trust and/or the Participating Insurance Companies, 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,
and (b) Sections 2.13, 3.8, 4.1, 4.2, 4.3, 4.4, and 4.5 of this Agreement will
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
ARTICLE V
Indemnification
5.1. The Company agrees to indemnify and hold harmless the Trust and
each person, if any, who controls the Trust within the meaning of Section 15 of
the 1933 Act, and any Trustee, officer, employee or agent of the foregoing,
(collectively, the "Indemnified Parties" for purposes of this Section 5.1.)
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, "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 statement or
alleged untrue statement of any material fact contained in a registration
statement, prospectus or private placement memorandum for the Contracts or in
the Contracts themselves or in sales literature generated or approved by the
Company relating to the Contracts or Accounts (or any amendment or supplement to
any of the foregoing) (collectively, "Company Documents"), 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 written
information furnished to the Company by or on behalf of the Trust for use in
Company Documents or otherwise for use in connection with the sale of the
Contracts or Trust shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Trust Documents as defined in Section 5.2.(a)) or wrongful conduct of the
Company or persons under its control, with respect to the sale, distribution or
acquisition of the Contracts or Trust shares; or
(c) arise out of or result from any untrue statement or
alleged untrue statement of a
material fact contained in Trust Documents as defined in Section 5.2.(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 Trust 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, warranty or agreement made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement by the
Company; or
(f) arise out of or result from negligence or wrongful conduct
in the Company's administration of the Accounts or the Contracts.
5.2. The Trust agrees to indemnify and hold harmless the Company and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act, and any director, officer, partner, employee or agent of the
foregoing (collectively, the "Indemnified Parties" for purposes of this Section
5.2.) against any and all losses, claims, damages, liabilities or expenses
(including the reasonable costs of investigating or defending any alleged loss,
claim, damage, liability (including amounts paid in settlement with the written
consent of the Trust) or expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, "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 statement or
alleged untrue statement of any material fact contained in the registration
statement or prospectus for the Trust (or any amendment or supplement thereto),
(collectively, "Trust Documents"), 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 written information furnished to
the Trust by or on behalf of the Company for use in Trust Documents or otherwise
for use in connection with the sale of the Contracts or Trust 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 Trust or persons under its
control, with respect to the sale, distribution or acquisition of the Contracts
or Trust 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 form written information furnished to the Company by or on
behalf of the Trust; or
(d) arise out of or result from any failure by the Trust 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, warranty or agreement made by the Trust in this Agreement
(including a failure, whether unintentional or in good faith or otherwise, to
comply with the diversification requirements and procedures related thereto as
specified in Section 3.6 of this Agreement) or arise out of or result from any
other material breach of this Agreement by the Trust; or
(f) arise out of or result from negligence or wrongful conduct
in the Trust's administration of the Portfolios; of
(g) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset value per share or
dividend or capital gain distribution rate; or
5.3. Neither the Company nor the Trust shall be liable under the
indemnification provisions of Section 5.1. or 5.2., 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.
5.4. Neither the Company nor the Trust shall be liable under the
indemnification provisions of Section 5.1. or 5.2., 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 which 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 party from any liability which it may have to the
indemnified party in the absence of Sections 5.1. and 5.2. except to the extent
that the indemnifying party has been prejudiced by such failure to give notice.
5.5. 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 consent of the indemnified party
and with counsel mutually agreed to by the parties. If the indemnifying party
assumes 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.
5.6 The Trust agrees that the obligations assumed by the Company
shall be limited in any case to the Company and its assets and the Trust shall
not seek satisfaction of any such obligation from the shareholders of Company,
the directors, officers, employees or agents of the Company, or any of them.
Except as expressly stated herein, as between the parties, in no event will any
party to this Agreement be responsible to any other party for any incidental,
indirect, consequential, punitive or exemplary damages of any kind arising from
this Agreement, including without limitation, lost revenues, loss of profits or
loss of business.
5.7 Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, will be settled by arbitration administered by
the American Arbitration Association in accordance with its Commercial
Arbitration Rules and Title 9 of the U.S. Code. Judgment on the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof. The
number of arbitrators will be three, one of whom will be appointed by the
Company or an affiliate; one of whom will be appointed by the Fund and/or the
Adviser or an affiliate; and the third of whom will be selected by mutual
agreement, if possible, within thirty (30) days of the selection of the second
arbitrator and thereafter by the administering authority. The place of
arbitration will be in the Commonwealth of Massachusetts. The arbitrators will
have no authority to award punitive damages or any other damages not measured by
the prevailing party's actual damages, and may not, in any event, make any
ruling, finding or award that does not conform to the terms and conditions of
this Agreement. Any party may make an application to the arbitrators seeking
injunctive relief to maintain the status quo until such time as the arbitration
award is rendered or the controversy is otherwise resolved. Any party may apply
to any court having jurisdiction hereof and seek injunctive relief in order to
maintain the status quo until such time as the arbitration award is rendered or
the controversy is otherwise resolved.
ARTICLE VI
Termination
6.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason with respect to some or all
of the Portfolios upon sixty (60) days' advance written notice delivered to the
other party or, if later, upon receipt of any required exemptive relief or
orders from the Commission, unless otherwise agreed in a separate written
agreement among the parties; or
(b) termination by the Company by written notice to the Trust with
respect to any Portfolio based upon the Company's determination that shares of
such Portfolio are not reasonably available to meet the requirements of the
Contracts or not consistent with the Company's obligations to Contract owners;
provided, however, that such a termination shall apply only to the Portfolio not
reasonably available and the Trust shall have ten (10) Business Days from the
initial notification by the Company of the deficiency to correct such
deficiency. If not cured within ten (10) Business Days, termination is
automatically effective; or
(c) termination by the Company by written notice to the Trust with
respect to any Portfolio in the event such Portfolio's shares are not
registered, issued or sold in accordance with applicable state and/or federal
law or such law precludes the use of such shares as the underlying investment
media of the Contracts issued or to be issued by the Company; or
(d) termination by the Company by written notice to the Trust with
respect to any Portfolio in the event that the Trust ceases to qualify as a
Regulated Investment Company under Subchapter M of the Code or any independent
or resulting failure under Section 817 of the Code, or under any successor or
similar provision of either, or if the Company reasonably believes that the
Trust may fail to so qualify; or
(e) termination by the Trust by written notice to the Company if the
Trust shall determine, in its sole judgment exercised in good faith, that the
Company and/or its affiliated companies has suffered a material adverse change
in its business, operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity and that material
adverse change or material adverse publicity will have a material adverse impact
upon the business and operations of the Company or the Trust; but no such
termination shall be effective under this subsection (e) until the Company has
been afforded a reasonable opportunity to respond to a statement by the Trust
concerning the reason for notice of termination hereunder; or
(f) termination by the Company by written notice to the Trust if the
Company shall determine, in its sole judgment exercised in good faith, that
either the Trust or an investment adviser to the Trust has suffered a material
adverse change in its business, operations, financial condition or prospects
since the date of this Agreement or is the subject of material adverse publicity
and that material adverse change or material adverse publicity will have a
material adverse impact upon the business and operations of the Trust; but no
such termination shall be effective under this subsection (f) until the Trust
has been afforded a reasonable opportunity to respond to a statement by the
Company concerning the reason for notice of termination hereunder; or
(g) termination by the Trust in the event that formal administrative
proceedings are instituted against the Company by the NASD, the Commission, an
insurance commissioner or any other regulatory body regarding the Company's
duties under this Agreement or related to the sale of the Contracts, the
operation of any Account, or the purchase of the Trust's shares; provided,
however, that the Trust determines in its sole judgment exercised in good faith,
that any such administrative proceedings will have a material adverse effect
upon the ability of the Company to perform its obligations under this Agreement;
(h) termination by the Company in the event that formal administrative
proceedings are instituted against the Trust by the NASD, the Commission, any
state securities or insurance department or any other regulatory body regarding
the Trust's duties under this Agreement, provided, however, that the Company
determines in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon the ability
of the Trust to perform its obligations under this Agreement;
(i) at the option of the Company, upon receipt of the Company's written
notice by the other parties, with respect to any Portfolio if the Trust fails to
meet the diversification requirements specified in Section 3.6 hereof or if the
Company reasonably and in good faith believes the Trust may fail to meet such
requirements;
(j) at the option of the Company or the Trust upon a determination by a
majority of the Trustees, or a majority of the disinterested Trustees, that an
irreconcilable material conflict exists among the interests of: (1) all contract
owners of variable insurance products of all separate accounts; or (2) the
interests of the Participating Insurance Companies investing in the Trust as set
forth in Article IV of this Agreement; or
(k) at the option of the Company or the Trust upon receipt of any
necessary regulatory approvals and/or the vote of the Contract owners having an
interest in the Account (or any subaccount) to substitute the shares of another
investment company for the corresponding Portfolio shares of the Trust in
accordance with the terms of the Contracts for which those Portfolio shares had
been selected to serve as the underlying investment media. The Company will give
sixty (60) days' prior written notice to the Trust of the date of any proposed
vote or other action taken to replace the Trust's shares
6.2. Notwithstanding any termination of this Agreement, the Trust
shall, at the option of the Company, continue to make available additional
shares of the Trust (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, provided that the Company continues to pay the costs set
forth in Article II.
6.3. The provisions of Article V shall survive the termination of this
Agreement, and the provisions of Article IV and Section 2.12. shall survive the
termination of this Agreement as long as shares of the Trust are held on behalf
of Contract owners in accordance with Section 6.2.
ARTICLE VII
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 in writing
to the other party.
If to the Trust:
Evergreen Funds
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Legal Department
If to the Company:
IDS Life Insurance Company
1765 AXP Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Executive Vice President, Annuities
with a copy to:
IDS Life Insurance Company
50607 AXP Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel's Office
ARTICLE VIII
Miscellaneous
8.1. 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.
8.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
8.3. 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.
8.4. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
8.5. The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising directly or indirectly under this Agreement, of
any and every nature whatsoever, shall be satisfied solely out of the assets of
the Trust and that no Trustee, officer, agent or holder of shares of beneficial
interest of the Trust shall be personally liable for any such liabilities.
8.6. Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Commission, the NASD and state 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.
8.7. 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.
8.8. The parties to this Agreement acknowledge and agree that this
Agreement shall not be exclusive in any respect.
8.9. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and assigns, provided that no party
may assign this Agreement without the prior written consent of the other party.
8.10. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties.
8.11. Notwithstanding anything to the contrary contained in this
Agreement, in addition to and not in lieu of other provisions in this Agreement:
(a) "Confidential Information" includes but is not limited to all
proprietary and confidential information of the Company and its subsidiaries,
affiliates and licensees (collectively the "Protected Parties" for purposes of
this Section 8.11), including without limitation all information regarding the
customers of the Protected Parties; or the accounts, account numbers, names,
addresses, social security numbers or any other personal identifier of such
customers; or any information derived therefrom.
(b) The Trust shall not use or disclose Confidential Information for
any purpose other than to carry out the purpose for which Confidential
Information was provided to the Trust as set forth in the Agreement; and the
Trust agrees to cause all its employees, agents and representatives, or any
other party to whom the Trust may provide access to or disclose Confidential
Information to limit the use and disclosure of Confidential Information to that
purpose.
(c) The Trust acknowledges that all computer programs and procedures or
other information developed or used by the Protected Parties or any of their
employees or agents in connection with the Company's performance of its duties
under this Agreement are the valuable property of the Protected Parties.
(d) The Trust agrees to implement appropriate measures designed to
ensure the security and confidentiality of Confidential Information, to protect
such information against any anticipated threats or hazards to the security or
integrity of such information, and to protect against unauthorized access to, or
use of, Confidential Information that could result in substantial harm or
inconvenience to any customer of the Protected Parties; the Trust further agrees
to cause all its agents, representatives or subcontractors of, or any other
party to whom the Trust may provide access to or disclose Confidential
Information to implement appropriate measures designed to meet the objectives
set forth in this Section 8.11.
(e) The Trust acknowledges that any breach of the agreements in this
Section 8.11 would result in immediate and irreparable harm to the Protected
Parties for which there would be no adequate remedy at law and agree that in the
event of such a breach, the Protected Parties will be entitled to equitable
relief by way of temporary and permanent injunctions, as well as such other
relief as any court of competent jurisdiction deems appropriate. The provisions
contained in this Section 8.11 will survive any termination of this Agreement.
IN WITNESS WHEREOF, the parties have each caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative as
of the date and year first above written.
IDS LIFE INSURANCE EVERGREEN VARIABLE
COMPANY ANNUITY TRUST
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
------------------- -------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxx
Title: Executive Vice President, Annuities Title: Assistant Secretary
ATTEST:
By: /s/ Xxxx Xxxxx Xxxxxxx
-----------------------
Name: Xxxx Xxxxx Xxxxxxx
Title: Assistant Secretary
SCHEDULE A
Separate Accounts, Contracts and Designated Portfolios
Name of Separate Accounts and Date
Established by Board of Directors
IDS Life Variable Account 10,
Established August 23, 1995
Contracts Funded by Separate Account
American Express Retirement Advisor AdvantageSM Variable Annuity
Designated Portfolios
Evergreen VA Capital Growth Fund, L Class
