PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this day of , 1999 by and between
XXXXXXX XXXXX VARIABLE INSURANCE TRUST, an unincorporated business trust formed
under the laws of Delaware (the "Trust"), XXXXXXX, SACHS & CO., a New York
limited partnership (the "Distributor"), and IDS LIFE INSURANCE COMPANY, a
Minnesota life insurance company (the "Company"), on its own behalf and on
behalf of each separate account of the Company identified herein.
WHEREAS, the Trust is a series-type mutual fund offering shares of
beneficial interest (the "Trust shares") consisting of one or more separate
series ("Series") of shares, each such Series representing an interest in a
particular investment portfolio of securities and other assets (a "Fund"), and
which Series may be subdivided into various classes ("Classes") with each such
Class supporting a distinct charge and expense arrangement; and
WHEREAS, the Trust was established for the purpose of serving as an
investment vehicle for insurance company separate accounts supporting variable
annuity contracts and variable life insurance policies to be offered by
insurance companies and may also be utilized by qualified retirement plans; and
WHEREAS, the Distributor has the exclusive right to distribute Trust shares to
qualifying investors; and
WHEREAS, the Company desires that the Trust serve as an investment
vehicle for a certain separate account(s) of the Company and the Distributor
desires to sell shares of certain Series and/or Class(es) to such separate
account(s);
NOW, THEREFORE, in consideration of their mutual promises, the Trust,
the Distributor and the Company agree as follows:
ARTICLE I
Additional Definitions
1.1. "Account" -- the separate account of the Company described more
specifically in Schedule 1 to this Agreement as amended by the parties from time
to time. If more than one separate account is described on Schedule 1, the term
shall refer to each separate account so described.
1.2. "Business Day" -- each day that the Trust is open for business as provided
in the Trust's Prospectus.
1.3. "Code" -- the Internal Revenue Code of 1986, as amended, and any successor
thereto.
1.4. "Contracts" -- the class or classes of variable annuity contracts and/or
variable life insurance policies issued by the Company and described more
specifically on Schedule 2 to this Agreement as amended by the parties from time
to time.
1.5. "Contract Owners" -- the owners of the Contracts, as distinguished from all
Product Owners.
1.6. "Participating Account" -- a separate account investing all or a portion of
its assets in the Trust, including the Account.
1.7. "Participating Insurance Company" -- any insurance company investing in the
Trust on its behalf or on behalf of a Participating Account, including the
Company.
1.8. "Participating Plan" -- any qualified retirement plan investing in the
Trust.
1.9. "Participating Investor" -- any Participating Account, Participating
Insurance Company or Participating Plan, including the Account and the Company.
1.10. "Products" -- variable annuity contracts and variable life insurance
policies supported by Participating Accounts, including the Contracts.
1.11. "Product Owners" -- owners of Products, including Contract Owners.
1.12. "Trust Board" -- the board of trustees of the Trust.
1.13. "Registration Statement" -- with respect to the Trust shares or a class of
Contracts, the registration statement filed with the SEC to register such
securities under the 1933 Act, or the most recently filed amendment thereto, in
either case in the form in which it was declared or became effective. The
Contracts' Registration Statement for each class of Contracts is described more
specifically on Schedule 2 to this Agreement. The Trust's Registration Statement
is filed on Form N-1A (File No. 333-35883).
1.14. "1940 Act Registration Statement" -- with respect to the Trust or the
Account, the registration statement filed with the SEC to register such person
as an investment company under the 1940 Act, or the most recently filed
amendment thereto. The Account's 1940 Act Registration Statement is described
more specifically on Schedule 1 to this Agreement. The Trust's 1940 Act
Registration Statement is filed on Form N-1A (File No. 811-08361).
1.15. "Prospectus" -- with respect to shares of a Series (or Class) of the Trust
or a class of Contracts, each version of the definitive prospectus or supplement
thereto filed with the SEC pursuant to Rule 497 under the 1933 Act. With respect
to any provision of this Agreement requiring a party to take action in
accordance with a Prospectus, such reference thereto shall be deemed to be to
the version for the applicable Series, Class or Contracts last so filed prior to
the taking of such action. For purposes of Article IX, the term "Prospectus"
shall include any statement of additional information incorporated therein.
1.16. "Statement of Additional Information" -- with respect to the shares of the
Trust or a class of Contracts, each version of the definitive statement of
additional information or supplement thereto filed with the SEC pursuant to Rule
497 under the 1933 Act. With respect to any provision of this Agreement
requiring a party to take action in accordance with a Statement of Additional
Information, such reference thereto shall be deemed to be the last version so
filed prior to the taking of such action.
1.17. "SEC" -- the Securities and Exchange Commission.
1.18. "NASD" -- The National Association of Securities Dealers, Inc.
1.19. "1933 Act" -- the Securities Act of 1933, as amended.
1.20. "1940 Act" -- the Investment Company Act of 1940, as amended.
ARTICLE II
Sale of Trust Shares
2.1. Availability of Shares
(a) The Trust has granted to the Distributor exclusive
authority to distribute the Trust shares and to select which Series or
Classes of Trust shares shall be made available to Participating
Investors. Pursuant to such authority, and subject to Article X hereof,
the Distributor shall make available to the Company for purchase on
behalf of the Account, shares of the Series and Classes listed on
Schedule 3 to this Agreement, as amended by the parties from time to
time, such purchases to be effected at net asset value and with no
sales charge in accordance with Section 2.3 of this Agreement. Such
Series and Classes shall be made available to the Company in accordance
with the terms and provisions of this Agreement until this Agreement is
terminated pursuant to Article X or the Distributor suspends or
terminates the offering of shares of such Series or Classes in the
circumstances described in Article X.
(b) Notwithstanding clause (a) of this Section 2.1, Series or
Classes of Trust shares in existence now or that may be established in
the future will be made available to the Company, subject to the
Distributor's rights set forth in Article X to suspend or terminate the
offering of shares of any Series or Class or to terminate this
Agreement.
(c) The parties acknowledge and agree that: (i) the Trust may
revoke the Distributor's authority pursuant to the terms and conditions
of its distribution agreement with the Distributor; and (ii) the Trust
reserves the right in its sole discretion, exercised in good faith, to
refuse to accept a request for the purchase of Trust shares.
2.2. Redemptions. The Trust shall redeem, at the Company's request, any full or
fractional Trust shares held by the Company on behalf of the Account, such
redemptions to be effected at net asset value and with no sales charge in
accordance with Section 2.3 of this Agreement. Notwithstanding the foregoing,
(i) the Company shall not redeem Trust shares attributable to Contract Owners
except in the circumstances permitted in Article X of this Agreement, and (ii)
the Trust may delay redemption of Trust shares of any Series or Class to the
extent permitted by the 1940 Act, any rules, regulations or orders thereunder,
or the Prospectus for such Series or Class.
2.3. Purchase and Redemption Procedures
(a) The Trust hereby appoints the Company as an agent of the
Trust for the limited purpose of receiving purchase and redemption
requests on behalf of the Account (but not with respect to any Trust
shares that may be held in the general account of the Company) for
shares of those Series or Classes made available hereunder, based on
allocations of amounts to the Account or subaccounts thereof under the
Contracts, other transactions relating to the Contracts or the Account
and customary processing of the Contracts. Receipt of any such requests
(or effectuation of such transaction or processing) on any Business Day
by the Company as such limited agent of the Trust prior to the Trust's
close of business as defined from time to time in the applicable
Prospectus for such Series or Class (which as of the date of execution
of this Agreement is defined as the close of regular trading on the New
York Stock Exchange (normally 4:00 p.m. New York Time)) shall
constitute receipt by the Trust on that same Business Day, provided
that the Trust receives actual and sufficient notice of such request by
9:30 a.m. New York time (8:30 a.m. Central Time) on the next following
Business Day. The Trust reserves discretion to extend the time by which
notice must be received in accordance with the preceding sentence on a
case by case basis if a Fund experiences a delay in calculating its net
asset value which extends past 7:00 p.m. New York time (6:00 Central
time) in accordance with Section 2.4 hereof. Such notice may be
communicated by telephone to the office or person designated for such
notice by the Trust, and shall be confirmed by facsimile.
(b) The Company shall pay for shares of each Series or Class
on the same day that it provides actual notice to the Trust of a
purchase request for such shares. Payment for Series or Class shares
shall be made in Federal funds transmitted to the Trust by wire. Such
wire transfer will be initiated by the Company's bank by 1:00 p.m.
Central time and received by the Trust by the close of business of the
Federal funds wire system on the day the Trust receives actual notice
of the purchase request for Series or Class shares (unless the Trust
determines and so advises the Company that sufficient proceeds are
available from redemption of shares of other Series or Classes effected
pursuant to redemption requests tendered by the Company on behalf of
the Account). In no event may proceeds from the redemption of shares
requested pursuant to an order received by the Company after the
Trust's close of business on any Business Day be applied to the payment
for shares for which a purchase order was received prior to the Trust's
close of business on such day. If the issuance of shares is canceled
because Federal funds are not timely received when required for
settlement on related purchases of portfolio securities, the Company
shall indemnify the respective Fund and Distributor for 50% of all
costs, expenses and losses relating to failure to meet such settlement
obligations. Upon the Trust's receipt of Federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall
become the responsibility of the Trust. If Federal funds are not
received on time, the Series or Class shares purchased by such payment
shall be executed at the net asset value next computed following
receipt of payment.
(c) Payment for Series or Class shares redeemed by the Account
or the Company shall be made in Federal funds transmitted by wire to
the Company or any other person properly designated in writing by the
Company, such funds normally to be transmitted by 6:00 p.m. New York
Time (5:00 p.m. Central Time) on the next Business Day after the Trust
receives actual notice of the redemption order for Series or Class
shares (unless redemption proceeds are to be applied to the purchase of
Trust shares of other Series or Classes in accordance with Section
2.3(b) of this Agreement), except that the Trust reserves the right to
redeem Series or Class shares in assets other than cash and to delay
payment of redemption proceeds to the extent permitted by the 1940 Act,
any rules or regulations or orders thereunder, or the applicable
Prospectus. In any event, absent extraordinary circumstances specified
in Section 22(e) of the 1940 Act, the Trust shall make such payment
within five (5) calendar days after the date the redemption order is
placed in order to enable the Company to pay redemption proceeds within
the time specified in Section 22(e) of the 1940 Act or such shorter
period of time as may be required by law. The Trust shall not bear any
responsibility whatsoever for the proper disbursement or crediting of
redemption proceeds by the Company; the Company alone shall be
responsible for such action.
(d) Any purchase or redemption request for Series or Class
shares held or to be held in the Company's general account shall be
effected at the net asset value per share next determined after the
Trust's actual receipt of such request, provided that, in the case of a
purchase request, payment for Trust shares so requested is received by
the Trust in Federal funds prior to close of business for determination
of such value, as defined from time to time in the Prospectus for such
Series or Class. If such Federal funds are not received on time, the
Series of Class shares purchased by such payment shall be executed at
the net asset value next computed following receipt of payment.
(e) Prior to the first purchase of any Trust shares hereunder,
the Company and the Trust shall provide each other with all information
necessary to effect wire transmissions of Federal funds to the other
party and all other designated persons pursuant to such protocols and
security procedures as the parties may agree upon. Should such
information change thereafter, the Trust and the Company, as
applicable, shall notify the other in writing of such changes,
observing the same protocols and security procedures, at least three
Business Days in advance of when such change is to take effect. The
Company and the Trust shall observe customary procedures to protect the
confidentiality and security of such information, but neither party
shall be liable to the other party for any breach of security.
(f) The procedures set forth herein are subject to any
additional terms set forth in the applicable Prospectus for the Series
or Class or by the requirements of applicable law.
2.4. Net Asset Value. The Trust shall make the net asset value per share for
each Series or Class available to the Company as soon as reasonably practicable
after the net asset value per share for such Series or Class is calculated on
any Business Day, and shall use its best efforts to make the NAV available no
later than 7:00 p.m. New York Time (6:00 p.m. Central time) on such day. The
Trust will notify the Company as soon as possible if it is determined that the
net asset value per share will be available after 7:00 p.m. New York Time (6:00
p.m. Central Time) on any Business Day, and the Trust and the Company will
mutually agree upon a final deadline for timely receipt of the NAV on such
Business Day. The Trust shall calculate such net asset value in accordance with
the Prospectus for such Series or Class.
2.5. Dividends and Distributions. The Trust shall furnish same-day notice by
wire or telephone (followed by written confirmation) on or prior to the payment
date to the Company of any income dividends or capital gain distributions
payable on any Series or Class shares. The Company, on its behalf and on behalf
of the Account, hereby elects to receive all such dividends and distributions as
are payable on any Series or Class shares in the form of additional shares of
that Series or Class. The Company reserves the right, on its behalf and on
behalf of the Account, to revoke this election and to receive all such dividends
and capital gain distributions in cash; to be effective, such revocation must be
made in writing and received by the Trust at least ten Business Days prior to a
dividend or distribution date.
2.6. Book Entry. Issuance and transfer of Trust shares shall be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Trust shares shall be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the Account.
2.7. Pricing Errors. Any material errors in the calculation of net asset value,
dividends or capital gain information shall be reported immediately upon
discovery to the Company. An error shall be deemed "material" based on the
Trust's interpretation of the SEC's position and policy with regard to
materiality, as it may be modified from time to time. If the Company is provided
with materially incorrect net asset value information, the Company shall be
entitled to an adjustment to the number of shares purchased or redeemed to
reflect the correct net asset value per share. Neither the Trust, any Fund, the
Distributor, nor any of their affiliates shall be liable for any information
provided to the Company pursuant to this Agreement which information is based on
incorrect information supplied by or on behalf of the Company to the Trust or
the Distributor.
2.8. Limits on Purchasers. The Distributor and the Trust shall sell Trust shares
only to insurance companies and their separate accounts and to persons or plans
("Qualified Persons") that qualify to purchase shares of the Trust under Section
817(h) of the Code and the regulations thereunder without impairing the ability
of the Account to consider the portfolio investments of the Trust as
constituting investments of the Account for the purpose of satisfying the
diversification requirements of Section 817(h). The Distributor and the Trust
shall not sell Trust shares to any insurance company or separate account unless
an agreement complying with Article VIII of this Agreement is in effect to
govern such sales. The Company hereby represents and warrants that it and the
Account are Qualified Persons.
ARTICLE III
Representations and Warranties
3.1. Company. The Company represents and warrants that: (i) the Company is an
insurance company duly organized and in good standing under Indiana insurance
law; (ii) the Account is a validly existing separate account, duly established
and maintained in accordance with applicable law; (iii) each Account's 1940 Act
Registration Statement has been or will be filed with the SEC in accordance with
the provisions of the 1940 Act and the Account has been or will be duly
registered as a unit investment trust thereunder prior to the sale of the
Contracts; (iv) the Contracts' Registration Statements have been or will be
filed with and declared effective by the SEC prior to the sale of any Contracts;
(v) the Contracts will be issued in compliance in all material respects with all
applicable Federal and state laws; (vi) the Contracts will be filed, qualified
and/or approved for sale, as applicable, under the insurance laws and
regulations of the states in which the Contracts will be offered prior to the
sale of Contracts in such states; and (vii) the Account will maintain its
registration under the 1940 Act and will comply in all material respects with
the 1940 Act during the term of this Agreement. The Company will notify the
Trust promptly if for any reason it is unable to perform its obligations under
this Agreement.
3.2. Trust. The Trust represents and warrants that: (i) the Trust is an
unincorporated business trust duly formed and validly existing under the
Delaware law; (ii) the Trust's 1940 Act Registration Statement has been filed
with the SEC in accordance with the provisions of the 1940 Act and the Trust is
duly registered as an open-end management investment company thereunder; (iii)
the Trust's Registration Statement has been declared effective by the SEC; (iv)
the Trust shares will be issued in compliance in all material respects with all
applicable federal laws; (v) the Trust will remain registered under and will
comply in all material respects with the 1940 Act during the term of this
Agreement; (vi) each Fund of the Trust will maintain its qualification as a
"regulated investment company" under Subchapter M of the Code and will comply
with the diversification standards prescribed in Section 817(h) of the Code and
the regulations thereunder to the extent applicable to funds underlying
insurance company separate accounts; and (vii) the investment policies of each
Fund are in material compliance with any investment restrictions set forth on
Schedule 4 to this Agreement. The Trust, however, makes no representation as to
whether any aspect of its operations (including, but not limited to, fees and
expenses and investment policies) otherwise complies with the insurance laws or
regulations of any state. The Trust will notify the Company promptly if for any
reason it is unable to perform its obligations under this Agreement.
3.3. Distributor. The Distributor represents and warrants that: (i) the
Distributor is a limited partnership duly organized and in good standing under
New York law; (ii) the Distributor is registered as a broker-dealer under
federal and applicable state securities laws and is a member of the NASD; and
(iii) the Distributor is registered as an investment adviser under federal
securities laws. The Distributor will notify the Company promptly if for any
reason it is unable to perform its obligations under this Agreement.
3.4. Legal Authority. Each party represents and warrants that the execution and
delivery of this Agreement and the consummation of the transactions contemplated
herein have been duly authorized by all necessary corporate, partnership or
trust action, as applicable, by such party, and, when so executed and delivered,
this Agreement will be the valid and binding obligation of such party
enforceable in accordance with its terms and will not violate its charter
documents or by-laws, rules or regulations, or any agreement to which it is a
party.
3.5. Bonding Requirement. Each party represents and warrants that all of its
directors, officers, partners and employees, as applicable, dealing with the
money and/or securities of the Trust are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Trust in an amount not less than the amount required by the applicable rules of
the NASD and the federal securities laws. The aforesaid bond shall include
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company. All parties shall make all reasonable efforts to see that this bond or
another bond containing these provisions is always in effect, shall provide
evidence thereof promptly to any other party upon written request therefor, and
shall notify the other parties promptly in the event that such coverage no
longer applies.
ARTICLE IV
Regulatory Requirements
4.1. Trust Filings. The Trust shall amend the Trust's Registration Statement and
the Trust's 1940 Act Registration Statement from time to time as required in
order to effect the continuous offering of Trust shares in compliance with
applicable law and to maintain the Trust's registration under the 1940 Act for
so long as Trust shares are sold.
4.2. Contracts Filings. The Company shall amend the Contracts' Registration
Statement and the Account's 1940 Act Registration Statement from time to time as
required in order to effect the continuous offering of the Contracts in
compliance with applicable law or as may otherwise be required by applicable
law, but in any event shall maintain a current effective Contracts' Registration
Statement and the Account's registration under the 1940 Act for so long as the
Contracts are outstanding unless the Company has supplied the Trust with an SEC
no-action letter, opinion of counsel or other evidence satisfactory to the
Trust's counsel to the effect that maintaining such Registration Statement on a
current basis is no longer required. The Company shall be responsible for filing
all such Contract forms, applications, marketing materials and other documents
relating to the Contracts and/or the Account with state insurance commissions,
as required or customary, and shall use its best efforts: (i) to obtain any and
all approvals thereof, under applicable state insurance law, of each state or
other jurisdiction in which Contracts are or may be offered for sale; and (ii)
to keep such approvals in effect for so long as the Contracts are outstanding.
4.3. Voting of Trust Shares. With respect to any matter put to vote by the
holders of Trust shares ("Voting Shares"), the Company will provide
"pass-through" voting privileges to owners of Contracts registered with the SEC
as long as the 1940 Act requires such privileges in such cases. In cases in
which "pass-through" privileges apply, the Company will (i) provide for the
solicitation of voting instructions from Contract Owners of SEC-registered
Contracts; (ii) vote Voting Shares attributable to Contract Owners in accordance
with instructions or proxies timely received from such Contract Owners; and
(iii) vote Voting Shares held by it that are not attributable to reserves for
SEC-registered Contracts or for which it has not received timely voting
instructions in the same proportion as instructions received in a timely fashion
from Owners of SEC-registered Contracts. The Company shall be responsible for
ensuring that it calculates "pass-through" votes for the Account in a manner
consistent with the provisions set forth above and with other Participating
Insurance Companies. Neither the Company nor any of its affiliates will in any
way recommend action in connection with, or oppose or interfere with, the
solicitation of proxies for the Trust shares held for such Contract Owners,
except with respect to matters as to which the Company has the right under Rule
6e-2 or 6e-3(T) under the 1940 Act, to vote Voting Shares without regard to
voting instructions from Contract Owners. The Trust shall comply with all
provisions of the 1940 Act requiring voting by shareholders, as they may be
amended from time to time. Further, the Trust will act in accordance with the
SEC's interpretation of the requirements of Section 16 of the 1940 Act with
respect to periodic elections of directors and with whatever rules the SEC may
promulgate with respect thereto.
4.4. State Insurance Restrictions. The Company: shall notify the Trust of any
applicable state insurance laws of which it becomes aware that restrict the
Trust's investments or otherwise affect the operation of the Trust or the
Distributor, shall notify the Trust of any changes in such laws and acknowledges
and agrees that neither the Trust nor the Distributor shall bear any
responsibility for determination of the applicability of such laws to the
Trust's investments or the Trust's or Distributor's operations. Schedule 4 sets
forth the investment restrictions that the Company and/or other Participating
Insurance Companies have determined are applicable to any Fund and with which
the Trust has agreed to comply as of the date of this Agreement. The Company
shall inform the Trust of any investment restrictions imposed by state insurance
law of which the Company becomes aware that may become applicable to the Trust
or a Fund from time to time as a result of the Account's investment therein,
other than those set forth on Schedule 4 to this Agreement. Upon receipt of any
such information from the Company or any other Participating Insurance Company,
the Trust shall determine whether it is in the best
interests of shareholders to comply with any such restrictions. If the Trust
determines that it is not in the best interests of shareholders (it being
understood that "shareholders" for this purpose shall mean Product Owners) to
comply with a restriction determined to be applicable by the Company, the Trust
shall so inform the Company, and the Trust and the Company shall discuss
alternative accommodations in the circumstances up to and including giving the
Company the right to discontinue offering the Trust and/or any applicable Fund
as an investment option under the Contracts issued in a state. If the Trust
determines that it is in the best interests of shareholders to comply with such
restrictions, the Trust and the Company shall amend Schedule 4 to this Agreement
to reflect such restrictions, subject to obtaining any required shareholder
approval thereof.
4.5. Drafts of Filings. The Trust and the Company shall provide to each other
copies of draft versions of any Registration Statements, Prospectuses,
Statements of Additional Information, periodic and other shareholder or Contract
Owner reports, proxy statements, solicitations for voting instructions,
applications for exemptions, requests for no-action letters, and all amendments
or supplements to any of the above, prepared by or on behalf of either of them
and that mentions the other party by name. Such drafts shall be provided to the
other party sufficiently in advance of filing such materials with regulatory
authorities in order to allow such other party a reasonable opportunity to
review the materials.
4.6. Copies of Filings. The Trust and the Company shall provide to each other at
least one complete copy of all Registration Statements, Prospectuses, Statements
of Additional Information, periodic and other shareholder or Contract Owner
reports, proxy statements, solicitations of voting instructions, applications
for exemptions, requests for no-action letters, and all amendments or
supplements to any of the above, that relate to the Trust, the Contracts or the
Account, as the case may be, promptly after the filing by or on behalf of each
such party of such document with the SEC or other regulatory authorities (it
being understood that this provision is not intended to require the Trust to
provide to the Company copies of any such documents prepared, filed or used by
Participating Investors other than the Company and the Account).
7.2. Regulatory Responses. Each party shall promptly provide to all
other parties copies of responses to no-action requests,
notices, orders and other rulings received by such party with
respect to any filing covered by Section 4.6 of this
Agreement.
7.2. Complaints and Proceedings
(a) The Trust and/or the Distributor shall immediately notify
the Company of: (i) the issuance by any court or regulatory body of any
stop order, cease and desist order, or other similar order (but not
including an order of a regulatory body exempting or approving a
proposed transaction or arrangement) with respect to the Trust's
Registration Statement or the Prospectus of any Series or Class; (ii)
any request by the SEC for any amendment to the Trust's Registration
Statement or the Prospectus of any Series or Class; (iii) the
initiation of any proceedings for that purpose or for any other
purposes relating to the registration or offering of the Trust shares;
or (iv) any other action or circumstances that may prevent the lawful
offer or sale of Trust shares or any Class or Series in any state or
jurisdiction, including, without limitation, any circumstance in which
(A) such shares are not registered and, in all material respects,
issued and sold in accordance with applicable state and federal law or
(B) such law precludes the use of such shares as an underlying
investment medium for the Contracts. The Trust will make every
reasonable effort to prevent the issuance of any such stop order, cease
and desist order or similar order and, if any such order is issued, to
obtain the lifting thereof at the earliest possible time.
(b) The Company shall immediately notify the Trust and the
Distributor of: (i) the issuance by any court or regulatory body of any
stop order, cease and desist order, or other similar order (but not
including an order of a regulatory body exempting or approving a
proposed transaction or arrangement) with respect to the Contracts'
Registration Statement or the Contracts' Prospectus; (ii) any request
by the SEC for any amendment to the Contracts' Registration Statement
or Prospectus; (iii) the initiation of any proceedings for that purpose
or for any other purposes relating to the registration or offering of
the Contracts; or (iv) any other action or circumstances that may
prevent the lawful offer or sale of the Contracts or any class of
Contracts in any state or jurisdiction, including, without limitation,
any circumstance in which such Contracts are not registered, qualified
and approved, and, in all material respects, issued and sold in
accordance with applicable state and federal laws. The Company will
make every reasonable effort to prevent the issuance of any such stop
order, cease and desist order or similar order and, if any such order
is issued, to obtain the lifting thereof at the earliest possible time.
(c) Each party shall immediately notify the other parties when
it receives notice, or otherwise becomes aware of, the commencement of
any litigation or proceeding against such party or a person affiliated
therewith in connection with the issuance or sale of Trust shares or
the Contracts.
(d) The Company shall provide to the Trust and the Distributor
any complaints it has received from Contract Owners pertaining to the
Trust or a Fund, and the Trust and Distributor shall each provide to
the Company any complaints it has received from Contract Owners
relating to the Contracts.
4.9. Cooperation. Each party hereto shall cooperate with the other parties and
all appropriate government authorities (including without limitation the SEC,
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 by any such authority relating to this Agreement or the
transactions contemplated hereby. However, such access shall not extend to
attorney-client privileged information. The Trust agrees to provide the Company
with any information not otherwise available to the Company which is required by
state insurance law to enable the Company to obtain the authority needed to
issue the Contract in any applicable state.
ARTICLE V
Sale, Administration and Servicing of the Contracts
5.1. Sale of the Contracts. The Company shall be responsible for the sale and
marketing of the Contracts. The parties will administer and service the
Contracts as set forth in Section 5.2 in accordance with federal and state law
and will allocate expenses as between the Company and the Trust as set forth in
Sections 7.3 and 7.4. The Company shall ensure that all persons offering the
Contracts are duly licensed and registered under applicable insurance and
securities laws. The Company shall ensure that each sale of a Contract satisfies
applicable suitability requirements under insurance and securities laws and
regulations, including without limitation the rules of the NASD. The Company
shall adopt and implement procedures reasonably designed to ensure that
information concerning the Trust and the Distributor that is intended for use
only by brokers or agents selling the Contracts (i.e., information that is not
intended for distribution to Contract Owners or offerees) is so used.
5.2. Administration and Servicing of the Contracts. The Company shall be
responsible for the issuance, service, and administration of the Contracts and
for the administration of the Separate Accounts supporting such Contracts, such
functions to be performed in all respects commensurate with those standards
prevailing in the variable insurance industry. This administration will include:
(a) preparing, typesetting, printing and distributing current Contracts
prospectuses to be used in the solicitation of new sales;
(b) printing and distributing current Fund prospectuses to be used in the
solicitation of new sales;
(c) preparing, typesetting, printing, and mailing annual Contracts prospectuses
to existing Contract Owners;
(d) printing and mailing annual Fund prospectuses to existing Contract Owners;
(e) preparing, typesetting, printing, and mailing (where required) supplements
to existing Contracts prospectuses;
(f) printing and mailing (where required) supplements to existing Fund
prospectuses;
(g) printing and mailing periodic reports for the Fund prospectuses; and
(h) timely payment of Contract Owner redemption requests and processing of
Contracts transactions.
The Distributor shall prepare and typeset current Fund prospectuses to be used
in solicitation of new Contract sales.
The Trust shall perform the following services:
(a) preparing and typesetting annual Fund prospectuses to be sent to existing
Contract Owners;
(b) preparing and typesetting supplements to existing Fund prospectuses;
(c) preparing, typesetting, printing and mailing proxy materials for the Funds;
and
(d) preparing and typesetting periodic reports for the Funds.
5.3. Customer Complaints. The Company shall promptly address all customer
complaints and resolve such complaints consistent with high ethical standards
and principles of ethical conduct.
5.4. Trust Prospectuses and Reports.
5
(a) In order to enable the company to fulfill its obligations
under this Agreement and the federal securities laws, the Trust shall
provide the Company with (a) a copy, in camera-ready form, computer
disk or form otherwise suitable for printing or duplication of (i) the
Trust's Prospectus for the Series and Classes listed on Schedule 3 and
any supplement thereto; (ii) any Trust periodic shareholder reports;
and (iii) each Statement of Additional Information and any supplement
thereto. The Trust shall provide the Company with advance written
notice, within reasonable time limits set by the Company, when any such
material (including supplements) shall become available; it being
understood, however, that circumstances surrounding certain supplements
may not allow for advance notice. The Company may not alter any
material so provided by the Trust or the Distributor (including without
limitation presenting or delivering such material in a different
medium, e.g., electronic or Internet) without the prior written consent
of the Distributor which consent shall not be unreasonably withheld.
(b) Alternate Arrangements: The Trust and the Company from
time to time may agree upon alternate arrangements to those set forth
in Sections 5.4 (a).
5.5. Performance Information. The Distributor shall be responsible for
calculating the performance information for the Funds. The Company shall be
responsible for calculating the performance information for the Contracts. The
Distributor shall be liable to the Company for any material mistakes it makes in
calculating the performance information for the Funds which cause losses to the
Company. The Company shall be liable to the Distributor for any material
mistakes it makes in calculating the performance information for the Contracts
which cause losses to the Distributor. Each party shall be liable for any
material mistakes it makes in reproducing the performance information for
Contracts or the Funds, as appropriate. The Trust and the Distributor agree to
provide the Company with performance information for the Funds on a timely basis
to enable the Company to calculate performance information for the Contracts in
accordance with applicable state and federal law.
7.2. Advertising Material. The Company shall be responsible for designing and
paying for all marketing materials that relate to the Contracts; provided,
however, that the Company shall send copies of all marketing materials created
for the Contracts to the Distributor for approval prior to use. The Distributor
shall provide a written approval of such marketing material within 10 calendar
days or a reasonable period of time after receiving such marketing material;
provided, however, that the Company shall not interpret a lack of response by
the Distributor within such time period as approval to use such proposed, but
unapproved, marketing material to solicit sales of the Contracts. The Company
shall be responsible for making any required filings of such marketing material
with the NASD and with State Insurance Departments
5.7. Trademarks, Names, Logos, etc. The parties agree that the use of any
company names, tradenames, trademarks, servicemarks and logos by the parties
shall be governed by the applicable provisions of the Master Agreement dated
February 1, 1999 between the Company, the Distributor, American Centurion Life
Assurance Company, IDS Life Insurance Company, IDS Life Insurance Company of New
York, American Express Financial Advisors Inc., and American Express Service
Corporation (the "Master Agreement").
5.8. Representations by Company. Except with the prior written consent of the
Trust, the Company shall not give any information or make any representations or
statements about the Trust or the Funds nor shall it authorize or allow any
other person to do so except information or representations contained in the
Trust's Registration Statement or the Trust's Prospectuses or in reports or
proxy statements for the Trust, or in sales literature or other promotional
material approved in writing by the Trust or its designee in accordance with
this Article V, or in published reports or statements of the Trust in the public
domain.
5.9. Representations by Trust. Except with the prior written consent of the
Company, the Trust shall not give any information or make any representations or
statements on behalf of the Company or concerning the Company, the Account or
the Contracts nor shall it authorize or allow any other person to do so other
than the information or representations contained in the Contracts' Registration
Statement or Contracts' Prospectus or in published reports of the Account which
are in the public domain or in sales literature or other promotional material
approved in writing by the Company or its designee in accordance with this
Article V.
5.10. Advertising. For purposes of this Article V, the phrase "sales literature
or other promotional material" includes, but is not limited to, any material
constituting sales literature or advertising under the NASD rules, the 1940 Act
or the 1933 Act.
ARTICLE VI
Compliance with Code
6.1. Section 817(h). Each Fund of the Trust shall comply with Section 817(h) of
the Code and the regulations issued thereunder to the extent applicable to the
Fund as an investment company underlying the Account and the Trust and the
Distributor shall use their best efforts to ensure that each Fund will continue
to so comply. The Trust and the Distributor shall notify the Company immediately
upon having a reasonable basis for believing that a Fund has ceased to so comply
or that it might not so comply in the future. In the event a Fund of the Trust
fails to comply with such sections of the Code or regulations thereunder, the
Trust and the Distributor will take all reasonable steps to adequately diversify
the Fund so as to achieve compliance within the grace period afforded by
Treasury Regulation 1.817-5.
6.2. Subchapter M. Each Fund of the Trust shall maintain the qualification of
the Fund as a regulated investment company (under Subchapter M or any successor
or similar provision) and the Trust and the Distributor shall use their best
efforts to ensure that each Fund will continue to so qualify. The Trust and the
Distributor shall notify the Company immediately upon having a reasonable basis
for believing that a Fund has ceased to so qualify or that it might not so
qualify in the future.
6.3. Contracts. The Company ensures that the Contracts qualify for treatment as
necessary as annuity or life insurance contracts, upon their availability, under
the Code. The Company shall use its best efforts to ensure that the Contracts
continue to qualify for such treatment. The Company shall notify the Distributor
immediately upon having a reasonable basis for believing that Contracts have
ceased to qualify for treatment as annuity or life insurance contracts under the
Code or that they might not so qualify in the future.
ARTICLE VII
Expenses
7.1. Expenses. All expenses incident to each party's performance under this
Agreement (including expenses expressly assumed by such party pursuant to this
Agreement) shall be paid by such party to the extent permitted by law.
7.2. Trust Expenses. Expenses incident to the Trust's performance of its duties
and obligations under this Agreement include but are not limited to:
(a) registration and qualification of Trust shares under the federal securities
laws, including preparation of the Trust's Registration Statement;
(b) all costs attributable to the Trust set forth in Section 5.2 hereof;
(c) filing with the SEC of the Trust's Prospectus, Trust's Statement of
Additional Information, Trust's Registration Statement, Trust proxy
materials and shareholder reports;
(d) preparation of all statements and notices required by any federal or state
securities law;
(e) all taxes on the issuance or transfer of Trust shares;
(f) payment of all applicable fees relating to the Trust, including, without
limitation, all fees due under Rule 24f-2 in connection with sales of Trust
shares to qualified retirement plans, custodial, auditing, transfer agent
and advisory fees, fees for insurance coverage and Trustees' fees; and
(g) any expenses permitted to be paid or assumed by the Trust pursuant to a
plan, if any, under Rule 12b-1 under the 1940 Act.
7.2. Company Expenses. Expenses incident to the Company's performance of its
duties and obligations under this Agreement include, but are not limited to, the
costs of:
(a) registration and qualification of the Contracts under the federal
securities laws;
(b) filing with the SEC of the Contracts' Prospectus and Contracts'
Registration Statement;
(c) all costs attributable to the Company set forth in Section 5.2 hereof; and
(d) payment of all applicable fees relating to the Contracts, including,
without limitation, all fees due under Rule 24f-2.
Expenses incident to the Company's performance of its duties and obligations
under this Agreement are as set forth in Appendix A.
7.4. 12b-1 Payments. The Trust shall pay no fee or other compensation to the
Company under this Agreement, except that if the Trust or any Series or Class
adopts and implements a plan pursuant to Rule 12b-1 under the 1940 Act to
finance distribution expenses, then payments may be made to the Company in
accordance with such plan. The Trust currently does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-1 under the 1940
Act or in contravention of such rule, although it may make payments pursuant to
Rule 12b-1 in the future. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1 and such formulation is required by the 1940 Act
or any rules or order thereunder, the Trust undertakes to have a Board of
Trustees, a majority of whom are not interested persons of the Trust, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.
ARTICLE VIII
Potential Conflicts
8.1. Exemptive Order. The parties to this Agreement acknowledge that the Trust
has filed an application with the SEC to request an order (the "Exemptive
Order") granting relief from various provisions of the 1940 Act and the rules
thereunder to the extent necessary to permit Trust shares to be sold to and held
by variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated Participating Insurance Companies and other
Qualified Persons (as defined in Section 2.8 hereof). It is anticipated that the
Exemptive Order, when and if issued, shall require the Trust and each
Participating Insurance Company to comply with conditions and undertakings
substantially as provided in this Article VIII. The Trust will not enter into a
participation agreement with any other Participating Insurance Company unless it
imposes the same conditions and undertakings on that company as are imposed on
the Company pursuant to this Article VIII.
8.2. Company Monitoring Requirements. The Company will monitor its operations
and those of the Trust for the purpose of identifying any material
irreconcilable conflicts or potential material irreconcilable conflicts between
or among the interests of Participating Plans, Product Owners of variable life
insurance policies and Product Owners of variable annuity contracts, it is being
understood that the Company is assuming the obligation to monitor the operations
of the Trust solely to comply with the explicit terms of the Exemptive Order and
further, that such monitoring is for the sole purpose of identifying any
conflicts that would affect its policyowners and would be limited to monitoring
the operations of the Trust based on information provided to the Company by the
Trust.
8.3. Company Reporting Requirements. The Company shall report any conflicts or
potential conflicts of which it is aware to the Trust Board and will provide the
Trust Board, at least annually, with all information reasonably necessary for
the Trust Board to consider any issues raised by such existing or potential
conflicts or by the conditions and undertakings required by the Exemptive Order.
The Company also shall assist the Trust Board in carrying out its obligations
including, but not limited to: (a) informing the Trust Board whenever it
disregards Contract Owner voting instructions with respect to variable life
insurance policies, and (b) providing such other information and reports as the
Trust Board may reasonably request. The Company will carry out these obligations
with a view only to the interests of Contract Owners.
8.4. Trust Board Monitoring and Determination. The Trust Board shall monitor the
Trust for the existence of any material irreconcilable conflicts between or
among the interests of Participating Plans, Product Owners of variable life
insurance policies and Product Owners of variable annuity contracts and
determine what action, if any, should be taken in response to those conflicts. A
majority vote of Trustees who are not interested persons of the Trust as defined
in the 1940 Act (the "disinterested trustees") shall represent a conclusive
determination as to the existence of a material irreconcilable conflict between
or among the interests of Product Owners and Participating Plans and as to
whether any proposed action adequately remedies any material irreconcilable
conflict. The Trust Board shall give prompt written notice to the Company and
Participating Plan of any such determination.
8.5. Undertaking to Resolve Conflict. In the event that a material
irreconcilable conflict of interest arises between Product Owners of variable
life insurance policies or Product Owners of variable annuity contracts and
Participating Plans, the Company will, at its own expense, take whatever action
is necessary to remedy such conflict as it adversely affects Contract Owners up
to and including (1) establishing a new registered management investment
company, and (2) withdrawing assets from the Trust attributable to reserves for
the Contracts subject to the conflict and reinvesting such assets in a different
investment medium (including another Fund of the Trust) or submitting the
question of whether such withdrawal should be implemented to a vote of all
affected Contract Owners, and, as appropriate, segregating the assets supporting
the Contracts of any group of such owners that votes in favor of such
withdrawal, or offering to such owners the option of making such a change. The
Company will carry out the responsibility to take the foregoing action with a
view only to the interests of Contract Owners.
8.6. Withdrawal. If a material irreconcilable conflict arises because of the
Company's decision to disregard the voting instructions of Contract Owners of
variable life insurance policies and that decision represents a minority
position or would preclude a majority vote at any Fund shareholder meeting,
then, at the request of the Trust Board, the Company will redeem the shares of
the Trust to which the disregarded voting instructions relate. No charge or
penalty, however, will be imposed in connection with such a redemption.
8.7. Expenses Associated with Remedial Action. In no event shall the Trust be
required to bear the expense of establishing a new funding medium for any
Contract. The Company shall not be required by this Article to establish a new
funding medium for any Contract if an offer to do so has been declined by vote
of a majority of the Contract Owners materially adversely affected by the
irreconcilable material conflict.
8.8. Successor Rules. 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
provisions of the 1940 Act or the rules promulgated thereunder with respect to
mixed and shared funding on terms and conditions materially different from those
contained in the Exemptive Order, then (i) the Trust and/or the Company, as
appropriate, shall take such steps as may be necessary to comply with Rules 6e-2
and 6e-3(T), as amended, or Rule 6e-3, as adopted, as applicable, to the extent
such rules are applicable, and (ii) Sections 8.2 through 8.5 of this Agreement
shall 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 IX
Indemnification
9.1. Indemnification by the Company. The Company hereby agrees to, and shall,
indemnify and hold harmless the Trust, the Distributor and each person who
controls or is affiliated with the Trust or the Distributor within the meaning
of such terms under the 1933 Act or 1940 Act (but not any Participating
Insurance Companies or Qualified Persons) and any officer, trustee, partner,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and with the
written consent of the Company any amounts paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement of any material fact
contained in the Contracts Registration Statement, Contracts Prospectus,
sales literature or other promotional material prepared by the Company for
the Contracts or the Contracts themselves (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances in
which they were made; provided that this obligation to indemnify shall not
apply if such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of the Trust or the Distributor for use in the Contracts
Registration Statement, Contracts Prospectus or in the Contracts or sales
literature or promotional material for the Contracts (or any amendment or
supplement to any of the foregoing) or otherwise for use in connection with
the sale of the Contracts or Trust shares; or
(b) arise out of any untrue statement of a material fact contained in the Trust
Registration Statement, any Prospectus for Series or Classes or sales
literature or other promotional material of the Trust or the Contracts
(prepared by the Trust) (or any amendment or supplement to any of the
foregoing), or the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading
in light of the circumstances in which they were made, if such statement or
omission was made in reliance upon and in conformity with information
furnished to the Trust or Distributor in writing by or on behalf of the
Company; or
(c) arise out of or are based on any wrongful conduct of, or violation of
applicable federal or state law by, the Company or persons under its
control or subject to its authorization, with respect to the purchase of
Trust Shares or the sale, marketing or distribution of the Contracts
including, without limitation, any impermissible use of broker-only
material, unsuitable or improper sales of the Contract or unauthorized
representations about the Contract or the Trust. Persons subject to
Company's authorization with respect to the sale, marketing or distribution
of the Contracts include broker-dealers or agents authorized to sell the
Contracts.
(d) arise as a result of any failure by the Company or persons under its
control (or subject to its authorization) to provide services, furnish
materials or make payments as required under this Agreement; or
(e) arise out of any material breach by the Company or persons under its
control (or subject to its authorization) of this Agreement; or
(f) any breach of any warranties contained in Article III hereof, any failure
to transmit a request for redemption or purchase of Trust shares or payment
therefor on a timely basis in accordance with the procedures set forth in
Article II, or any unauthorized use of the names or trade names of the
Trust or the Distributor.
This indemnification is in addition to any liability that the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is caused by the
willful misfeasance, bad faith, gross negligence or reckless disregard of duty
by the party seeking indemnification. Any loss, claim, damage or liability that
may arise out of Sections 5.7 and 10.7 and Article XIV hereof are excluded from
indemnification under this Section 9.1.
9.2. Indemnification by the Trust. The Trust hereby agrees to, and shall,
indemnify and hold harmless the Company and each person who controls or is
affiliated with the Company within the meaning of such terms under the 1933 Act
or 1940 Act and any officer, director, employee or agent of the foregoing,
against any and all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and with the written consent of the Trust any amounts paid in
settlement of, any action, suit or proceeding or any claim asserted), to which
they or any of them may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement of any material fact
contained in the Trust Registration Statement, any Prospectus for Series or
Classes or sales literature or other promotional material of the Trust (or
any amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading
in light of the circumstances in which they were made; provided that this
obligation to indemnify shall not apply if such statement or omission was
made in reliance upon and in conformity with information furnished to the
Trust or the Distributor in writing by or on behalf of the Company for use
in the Trust Registration Statement, Trust Prospectus or sales literature
or promotional material for the Trust (or any amendment or supplement to
any of the foregoing) or otherwise for use in connection with the sale of
the Contracts or Trust shares; or
(b) arise out of any untrue statement of a material fact contained in the
Contracts Registration Statement, Contracts Prospectus or sales literature
or other promotional material for the Contracts (or any amendment or
supplement to any of the foregoing), or the omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in which
they were made, if such statement or omission was made in reliance upon
information furnished in writing by the Trust or on its behalf to the
Company; or
(c) arise out of or are based upon wrongful conduct of the Trust or its
Trustees or officers with respect to the sale of Trust shares; or
(d) arise as a result of any failure by the Trust to provide services, furnish
materials or make payments as required under the terms of this Agreement
including, but not limited to, any material errors in or untimely
calculation or reporting of the daily net asset value per share or dividend
or capital gain distribution rate (referred to in this Section 9.2(d) as an
"error"); provided, that the foregoing shall not apply where such error is
the result of incorrect information supplied by or on behalf of the Company
to the Trust or the Distributor, and shall be limited to (i) reasonable
administrative costs necessary to correct such error, (ii) amounts which
the Company has overpaid Contact Owners as a result of such error and which
the parties agree it is unreasonable to recoup from such Contract Owners;
and (iii) amounts which the Company has paid out of its own resources to
make Contract Owners whole as a result of such error; or
(e) arise out of any material breach by the Trust of this Agreement (including
any breach of Section 6.1 of this Agreement and any warranties contained in
Article III hereof);
it being understood that in no way shall the Trust be liable to the Company with
respect to any violation of insurance law to which it may be subject but of
which it is unaware. This indemnification is in addition to any liability that
the Trust may otherwise have; provided, however, that no party shall be entitled
to indemnification if such loss, claim, damage or liability is caused by the
willful misfeasance, bad faith, gross negligence or reckless disregard of duty
by the party seeking indemnification. Any loss, claim, damage or liability that
may arise out of Sections 5.7 and 10.7 and Article XIV hereof are excluded from
indemnification under this Section 9.2.
9.3. Indemnification by the Distributor. The Distributor hereby agrees to, and
shall, indemnify and hold harmless the Company and each person who controls or
is affiliated with the Company within the meaning of such terms under the 1933
Act or 1940 Act and any officer, director, employee or agent of the foregoing,
against any and all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they or any of them may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement of any material fact
contained in the Trust Registration Statement, any Prospectus for Series or
Classes or sales literature or other promotional material of the Trust (or
any amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading
in light of the circumstances in which they were made; provided that this
obligation to indemnify shall not apply if such statement or omission was
made in reliance upon and in conformity with information furnished in
writing by the Company to the Trust or Distributor for use in the Trust
Registration Statement, Trust Prospectus or sales literature or promotional
material for the Trust (or any amendment or supplement to any of the
foregoing) or otherwise for use in connection with the sale of the
Contracts or Trust shares; or
(b) arise out of any untrue statement of a material fact contained in the
Contracts Registration Statement, Contracts Prospectus or sales literature
or other promotional material for the Contracts (or any amendment or
supplement to any of the foregoing), or the omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in which
they were made, if such statement or omission was made in reliance upon
information furnished in writing by the Distributor or on its behalf to the
Company; or
(c) arise out of or are based upon any wrongful conduct of, or violation of
applicable federal and state law by, the Distributor or the Trust or
persons under their respective control with respect to the sale of Trust
shares; or
(d) arise as a result of any failure by the Trust, Distributor or persons under
their respective control to provide services, furnish materials or make
payments as required under the terms of this Agreement including, but not
limited to, any material errors in or untimely calculation or reporting of
the daily net asset value per share or dividend or capital gain
distribution rate (referred to in this Section 9.3(d) as an "error");
provided, that the foregoing shall not apply where such error is the result
of incorrect information supplied by or on behalf of the Company to the
Trust or the Distributor, and shall be limited to (i) reasonable
administrative costs necessary to correct such error, (ii) amounts which
the Company has overpaid Contact Owners as a result of such error, and
which the parties agree it is unreasonable to recoup from such Contract
Owners; and (iii) amounts which the Company has paid out of its own
resources to make Contract Owners whole as a result of such error; or
(e) arise out of any material breach by the Trust, Distributor or persons under
their respective control of this Agreement (including any breach of Section
6.1 of this Agreement and any warranties contained in Article III hereof)
or any unauthorized use of the names or trade names of the Company;
it being understood that in no way shall the Distributor be liable to the
Company with respect to any violation of insurance law to which it may be
subject but of which it is unaware. This indemnification is in addition to any
liability that the Distributor may otherwise have; provided, however, that no
party shall be entitled to indemnification if such loss, claim, damage or
liability is caused by the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty by the party seeking indemnification. Any loss,
claim, damage or liability that may arise out of Sections 5.7 and 10.7 and
Article XIV hereof are excluded from indemnification under this Section 9.3.
9.4. Rule of Construction. It is the parties' intention that, in the event of an
occurrence for which the Trust has agreed to indemnify the Company, the Company
shall seek indemnification from the Trust only in circumstances in which the
Trust is entitled to seek indemnification from a third party with respect to the
same event or cause thereof.
9.5. Indemnification Procedures. After receipt by a party, or any partner,
officer, director, employee or agent of any party, entitled to indemnification
under this Article IX ("indemnified party") of notice of the commencement of any
action, if a claim in respect thereof is to be made against any person obligated
to provide indemnification under this Article IX ("indemnifying party"), such
indemnified party will notify the indemnifying party in writing of the
commencement thereof as soon as practicable after the summons or other first
written notification giving information of the nature of the claim has been
served upon the indemnified party; provided that the failure to so notify the
indemnifying party will not relieve the indemnifying party from any liability
under this Article IX, except to the extent that the omission results in a
failure of actual notice to the indemnifying party and such indemnifying party
is damaged solely as a result of the failure to give such notice. The
indemnifying party, upon the request of the indemnified party, shall retain
counsel satisfactory to the indemnified party to represent the indemnified party
in the proceeding, and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (1) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (2) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article IX. The
indemnification provisions contained in this Article IX shall survive any
termination of this Agreement.
ARTICLE X
Relationship of the Parties; Termination
10.1. Non-Exclusivity and Non-Interference. The parties hereto acknowledge that
the arrangement contemplated by this Agreement is not exclusive; the Trust
shares may be sold to other insurance companies and investors (subject to
Section 2.8 hereof) and the cash value of the Contracts may be invested in other
investment companies; provided, however, that until this Agreement is terminated
pursuant to this Article X:
(a) the Company shall not, without prior notice to the Distributor
(unless otherwise required by applicable law), take any action
to operate the Account as a management investment company
under the 1940 Act;
(b) the Company shall not, without the prior written consent of
the Distributor (unless otherwise required by applicable law),
solicit, induce or encourage Contract Owners to change or
modify the Trust to change the Trust's distributor or
investment adviser, to transfer or withdraw Contract Values
allocated to a Fund, or to exchange their Contracts for
contracts not allowing for investment in the Trust;
(c) the Company shall not substitute another investment company
for one or more Funds without providing written notice to the
Distributor at least 60 days in advance of effecting any such
substitution; and
(d) the Company shall not withdraw the Account's investment in the
Trust or a Fund of the Trust except as necessary to facilitate
Contract Owner requests and routine Contract processing.
10.2. Termination of Agreement. This Agreement shall not terminate until (i) the
Trust is dissolved, liquidated, or merged into another entity, or (ii) as to any
Fund that has been made available hereunder, the Account no longer invests in
that Fund and the Company has confirmed in writing to the Distributor, if so
requested by the Distributor, that it no longer intends to invest in such Fund.
After an initial term of three years from February 1, 1999 (the Effective Date
of the Master Agreement), each party shall have the right, in its sole
discretion, to terminate this Agreement upon the expiration of 180 days after
the receipt by the other parties of written notice of termination from the party
terminating this Agreement. However, certain obligations of, or restrictions on,
the parties to this Agreement may terminate as provided in Sections 10.3 through
10.5 and the Company may be required to redeem Trust shares pursuant to Section
10.7 or in the circumstances contemplated by Article VIII. Article IX and
Sections 5.7 and 10.7 shall survive any termination of this Agreement.
10.3. Termination of Offering of Trust Shares. The obligation of the Trust and
the Distributor to make Trust shares available to the Company for purchase
pursuant to Article II of this Agreement shall terminate at the option of the
Distributor, subject to compliance with applicable law, upon written notice to
the Company as provided below:
(a) upon institution of formal proceedings against the Company, by
the NASD, the SEC, the insurance commission of any state or
any other regulatory body regarding the Company's duties under
this Agreement or related to the sale of the Contracts, the
operation of the Account, the administration of the Contracts
or the purchase of Trust shares, which would, in the
Distributor's reasonable judgment exercised in good faith,
materially impair the Company's or Trust's ability to meet and
perform the Company's or Trust's obligations and duties
hereunder, such termination effective upon 15 days prior
written notice;
(b) in the event any of the Contracts are not registered where
required and in all material respects are not issued or sold
in accordance with applicable federal and/or state law, such
termination effective immediately upon receipt of written
notice;
(c) if the Distributor shall determine, in its sole judgment
exercised in good faith, that either (1) the Company shall
have suffered a material adverse change in its business or
financial condition or (2) the Company shall have been the
subject of material adverse publicity which is likely to have
a material adverse impact upon the business and operations of
either the Trust or the Distributor, such termination
effective upon 30 days prior written notice;
(d) if the Distributor suspends or terminates the offering of
Trust shares of any Series or Class to all Participating
Investors or only designated Participating Investors, if such
action is required by law or by regulatory authorities having
jurisdiction or if, in the sole discretion of the Distributor
acting in good faith, suspension or termination is necessary
in the best interests of the shareholders of any Series or
Class (it being understood that "shareholders" for this
purpose shall mean Product Owners), such notice effective
immediately upon receipt of written notice;
(e) upon the Company's assignment of this Agreement (including,
without limitation, any transfer of the Contracts or the
Account to another insurance company pursuant to an assumption
reinsurance agreement) unless the Trust consents thereto, such
termination effective upon 30 days prior written notice;
(f) if the Company is in material breach of any provision of this
Agreement, which breach has not been cured to the satisfaction
of the Trust within 10 days after written notice of such
breach has been delivered to the Company, such termination
effective upon expiration of such 10-day period; or
(g) upon the determination of the Trust's Board to dissolve,
liquidate or merge the Trust as contemplated by Section
10.2(i), upon termination of the Agreement pursuant to Section
10.2(ii), or upon notice from the Company pursuant to Section
10.4 or 10.5, such termination pursuant hereto to be effective
upon 15 days prior written notice.
Except in the case of an option exercised under clause (b) or (d) of this
Section 10.3 or under Sections 10.2(i) or (ii), the obligations shall terminate
only as to new Contracts and the Distributor shall continue to make Trust shares
available to the extent necessary to permit owners of Contracts in effect on the
effective date of such termination (hereinafter referred to as "Existing
Contracts") to reallocate investments in the Trust, redeem investments in the
Trust and/or invest in the Trust upon the making of additional purchase payments
under the Existing Contracts.
10.4. Termination of Investment in a Fund. The Company may elect to cease
investing in a Fund, promoting a Fund as an investment option under the
Contracts, or withdraw its investment or the Account's investment in a Fund,
subject to compliance with applicable law, upon written notice to the Trust
within 15 days of the occurrence of any of the following events (unless provided
otherwise below):
(a) if the Trust informs the Company pursuant to Section 4.4 that
it will not cause such Fund to comply with investment
restrictions as requested by the Company and the Trust and the
Company are unable to agree upon any reasonable alternative
accommodations;
(b) if shares in such Fund are not reasonably available to meet
the requirements of the Contracts as determined by the Company
(including any non-availability as a result of notice given by
the Distributor pursuant to Section 10.3(d)), and the
Distributor, after receiving written notice from the Company
of such non-availability, fails to make available, within 10
days after receipt of such notice, a sufficient number of
shares in such Fund or an alternate Fund to meet the
requirements of the Contracts; or
(c) if such Fund fails to meet the diversification requirements
specified in Section 817(h) of the Code and any regulations
thereunder and the Trust, upon written request, fails to
provide reasonable assurance that it will take action to cure
or correct such failure.
Such termination shall apply only as to the affected Fund and shall not apply to
any other Fund in which the Company or the Account invests.
10.5. Termination of Investment by the Company. The Company may elect to cease
investing in all Series or Classes of the Trust made available hereunder,
promoting the Trust as an investment option under the Contracts, or withdraw its
investment or the Account's investment in the Trust, subject to compliance with
applicable law, upon written notice to the Trust within 15 days of the
occurrence of any of the following events (unless provided otherwise below):
(a) upon institution of formal proceedings against the Trust or
the Distributor (but only with regard to the Trust) by the
NASD, the SEC or any state securities or insurance commission
or any other regulatory body;
(b) if, with respect to the Trust or a Fund, the Trust or the Fund
ceases to qualify as a regulated investment company under
Subchapter M of the Code, as defined therein, or any successor
or similar provision, or if the Company reasonably believes
that the Trust may fail to so qualify, and the Trust, upon
written request, fails to provide reasonable assurance that it
will take action to cure or correct such failure within 30
days;
(c) if the Trust or Distributor is in material breach of a
provision of this Agreement, which breach has not been cured
to the satisfaction of the Company within 10 days after
written notice of such breach has been delivered to the Trust
or the Distributor, as the case may be such termination
effective upon expiration of such 10-day period;
(d) If the Company shall determine, in its sole judgment exercised
in good faith, that either (1) the Distributor shall have
suffered a material adverse change in its business or
financial condition or (2) the Distributor or the Trust shall
have been the subject of material adverse publicity (excluding
with respect to the Trust, market events impacting the Trust's
performance) which is likely to have a material adverse impact
upon the business and operations of the Company, such
termination effective upon 30 days' prior written notice;
(e) If the Company suspends or terminates the offering of the
Contracts, if such action is required by law or by regulatory
authorities have jurisdiction or if, in the sole discretion of
the Company acting in good faith, suspension or termination is
necessary in the best interest of Contract Owners, such notice
effective immediately upon receipt of written notice; or
(f) Upon the Distributor's or the Trust's assignment of this
Agreement unless the Company consents thereto, such
termination effective upon 30 days' prior written notice.
10.6. Company Required to Redeem. The parties understand and acknowledge that it
is essential for compliance with Section 817(h) of the Code that the Contracts
qualify as annuity contracts or life insurance policies, as applicable, under
the Code. Accordingly, if any of the Contracts cease to qualify as annuity
contracts or life insurance policies, as applicable, under the Code, or if the
Trust reasonably believes that any such Contracts may fail to so qualify, the
Trust shall have the right to require the Company to redeem Trust shares
attributable to such Contracts upon notice to the Company and the Company shall
so redeem such Trust shares in order to ensure that the Trust complies with the
provisions of Section 817(h) of the Code applicable to ownership of Trust
shares. Notice to the Company shall specify the period of time the Company has
to redeem the Trust shares or to make other arrangements satisfactory to the
Trust and its counsel, such period of time to be determined with reference to
the requirements of Section 817(h) of the Code. In addition, the Company may be
required to redeem Trust shares pursuant to action taken or request made by the
Trust Board in accordance with the Exemptive Order described in Article VIII or
any conditions or undertakings set forth or referenced therein, or other SEC
rule, regulation or order that may be adopted after the date hereof. The Company
agrees to redeem shares in the circumstances described herein and to comply with
applicable terms and provisions. Also, in the event that the Distributor
suspends or terminates the offering of a Series or Class pursuant to Section
10.3(d) of this Agreement, the Company, upon request by the Distributor, will
cooperate in taking appropriate action to withdraw the Account's investment in
the respective Fund.
10.7. Confidentiality. Each party's obligation to keep confidential any
information acquired as a result of this Agreement shall be governed by the
applicable provisions of the Master Agreement.
ARTICLE XI
Applicability to New Accounts and New Contracts
The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect, as appropriate, changes in or relating to the
Contracts, any Series or Class, additions of new classes of Contracts to be
issued by the Company and separate accounts therefor investing in the Trust.
Such amendments may be made effective by executing the form of amendment
included on each schedule attached hereto. The provisions of this Agreement
shall be equally applicable to each such class of Contracts, Series, Class or
separate account, as applicable, effective as of the date of amendment of such
Schedule, unless the context otherwise requires. The parties to this Agreement
may amend this Agreement from time to time by written agreement signed by all of
the parties.
ARTICLE XII
Notice, Request or Consent
Any notice, request or consent to be provided pursuant to this
Agreement is to be made in writing and shall be given:
If to the Trust:
Xxxxxxx X. Grip
President
Xxxxxxx Sachs Variable Insurance Trust
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
If to the Distributor:
Xxxxxxx X. Grip
Vice President
Xxxxxxx Sachs & Co.
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
If to the Company:
Xxxxxxx X. Xxxxx
President
IDS Life Insurance Company
IDS Tower 10
Xxxxxxxxxxx, XX 00000
With a Copy To:
Law Department (Unit 52)
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 5540
or at such other address as such party may from time to time specify in writing
to the other party. Each such notice, request or consent to a party shall be
sent by registered or certified United States mail with return receipt requested
or by overnight delivery with a nationally recognized courier or such other
method as agreed to by the parties, and shall be effective upon receipt. Notices
pursuant to the provisions of Article II may be sent by facsimile to the person
designated in writing for such notices.
ARTICLE XIII
Miscellaneous
13.1. Interpretation. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the state of
Delaware, without giving effect to the principles of conflicts of laws, subject
to the following rules:
(a) This Agreement shall be subject to the provisions of the 1933
Act, 1940 Act and Securities Exchange Act of 1934, as amended,
and the rules, regulations and rulings thereunder, including
such exemptions from those statutes, rules, and regulations as
the SEC may grant, and the terms hereof shall be limited,
interpreted and construed in accordance therewith.
(b) 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.
(c) 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.
(d) 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.
13.2. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.
13.3. No Assignment. Neither this Agreement nor any of the rights and
obligations hereunder may be assigned by the Company, the Distributor or the
Trust without the prior written consent of the other parties.
13.4. Declaration of Trust. A copy of the Declaration of Trust of the Trust is
on file with the Secretary of State of the State of Delaware, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as trustees, and is not binding upon any of the Trustees, officers or
shareholders of the Trust individually, but binding only upon the assets and
property of the Trust. No Series of the Trust shall be liable for the
obligations of any other Series of the Trust.
ARTICLE XIV
Year 2000 Warranty
The agreement among the parties with regard to Year 2000
representations and warranties shall be as set forth in Section 10.6 of the
Master Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized officer
on the date specified below.
XXXXXXX XXXXX VARIABLE INSURANCE TRUST
(Trust)
Date: ___________ By: _______________________________________
Name:
Title:
XXXXXXX, SACHS & CO.
(Distributor)
Date: ___________ By:___________________________________________
Name:
Title:
IDS LIFE INSURANCE COMPANY
(Company)
Date: ___________ By:____________________________________________
Name:
Title:
ATTEST
Date: ___________ By:____________________________________________
Name:
Title:
Schedule 1
Accounts of the Company
Investing in the Trust
Effective as of the date the Agreement was executed, the following separate
accounts of the Company are subject to the Agreement:
------------------------------- ---------------------------- ---------------------------- ============================
Date Established by
Name of Account Board of Directors of the SEC 1940 Act Registration Type of Product Supported
Company Number by Account
------------------------------- ---------------------------- ---------------------------- ============================
------------------------------- ---------------------------- ---------------------------- ============================
IDS Life Variable Account 10 August 23, 1995 811-07355 Variable Annuity
------------------------------- ---------------------------- ---------------------------- ============================
============================== ============================ ===========================
Name of Subaccount Investing in Fund or Fund Date Established by Board
Series of Directors of the
Company
============================== ============================ ===========================
------------------------------ ---------------------------- ===========================
1UE Xxxxxxx Xxxxx VIT CORE
2UE U.S. Equity Portfolio
3UE
------------------------------ ---------------------------- ===========================
------------------------------ ---------------------------- ===========================
1MC Xxxxxxx Sachs VIT Mid Cap
2MC Value Portfolio
3MC
------------------------------ ---------------------------- ===========================
------------------------------ ---------------------------- ===========================
1SE Xxxxxxx Xxxxx VIT CORE
2SE Small Cap Equity Portfolio
3SE
------------------------------ ---------------------------- ===========================
-----------------------------------------------------------------------------
[Form of Amendment to Schedule 1]
Effective as of , the following separate accounts of the Company are hereby
added to this Schedule 1 and made subject to the Agreement:
------------------------------- ---------------------------- ---------------------------- ============================
Date Established by
Name of Account Board of Directors of the SEC 1940 Act Registration Type of Product Supported
Company Number by Account
------------------------------- ---------------------------- ---------------------------- ============================
------------------------------- ---------------------------- ---------------------------- ============================
============================== ============================ ===========================
Name of Subaccount Investing in Fund or Fund Date Established by Board
Series of Directors of the
Company
============================== ============================ ===========================
============================== ---------------------------- ===========================
------------------------------ ---------------------------- ===========================
------------------------------ ---------------------------- ===========================
IN WITNESS WHEREOF, the Trust, the Distributor and the Company hereby amend this
Schedule 1 in accordance with Article XI of the Agreement.
Xxxxxxx Sachs Variable Insurance Trust IDS Life Insurance Company
Xxxxxxx, Xxxxx & Co. Attest
Schedule 2
Classes of Contracts
Supported by Separate Accounts
Listed on Schedule 1
Effective as of the date the Agreement was executed, the following classes of
Contracts are subject to the Agreement:
------------------------------- ---------------------------- ---------------------------- ============================
SEC 1933 Act Registration
Contract Marketing Name Number Contract Form Number Annuity or Life
------------------------------- ---------------------------- ---------------------------- ============================
------------------------------- ---------------------------- ---------------------------- ============================
American Express Retirement 333-79311 31043-NQ Annuity
Advisor Variable Annuitysm 31044-Q
31045-XXX
31046-NQ
31047-Q
31048-XXX and state
variations thereof
------------------------------- ---------------------------- ---------------------------- ============================
------------------------------- ---------------------------- ---------------------------- ============================
------------------------------- ---------------------------- ---------------------------- ============================
-------------------------------------------------------------------------------------------------------------------
[Form of Amendment to Schedule 2]
Effective as of _______, the following classes of Contracts are hereby added to
this Schedule 2 and made subject to the Agreement:
------------------------------- ---------------------------- ---------------------------- ============================
Contract Marketing Name SEC 1933 Act Registration
Number Contract Form Number Annuity or Life
------------------------------- ---------------------------- ---------------------------- ============================
------------------------------- ---------------------------- ---------------------------- ============================
------------------------------- ---------------------------- ---------------------------- ============================
------------------------------- ---------------------------- ---------------------------- ============================
------------------------------- ---------------------------- ---------------------------- ============================
------------------------------- ---------------------------- ---------------------------- ============================
IN WITNESS WHEREOF, the Trust, the Distributor and the Company hereby amend this
Schedule 2 in accordance with Article XI of the Agreement.
--------------------------------- --------------------------------
Xxxxxxx Sachs Variable Insurance Trust IDS Life Insurance Company
--------------------------------- --------------------------------
Xxxxxxx, Xxxxx & Co. Attest
Schedule 3
Trust Classes and Series (and Corresponding Subaccount)
Available Under
Each Class of Contracts
Effective as of the date the Agreement was executed, the following Trust Classes
and Series are available under the Contracts:
-------------------------------------------------- ============================================================
Contract Marketing Name Trust Classes and Series (Subaccount)
-------------------------------------------------- ============================================================
-------------------------------------------------- ============================================================
American Express Retirement Advisor Variable Xxxxxxx Sachs VIT CORE U.S. Equity Portfolio (1UE, 2UE,
Annuitysm 3UE)
Xxxxxxx Xxxxx VIT Mid Cap Value Portfolio (1MC, 2MC, 3MC)
Xxxxxxx Sachs VIT CORE Small Cap Equity Portfolio (1SE,
2SE, 3SE)
-------------------------------------------------- ============================================================
-------------------------------------------------------------------------------------------------------------------
[Form of Amendment to Schedule 3]
Effective as of __________________, this Schedule 3 is hereby amended to reflect
the following changes in Trust Classes and Series:
-------------------------------------------------- =======================================================
Contract Marketing Name Trust Classes and Series (Subaccount)
-------------------------------------------------- =======================================================
-------------------------------------------------- =======================================================
-------------------------------------------------- =======================================================
-------------------------------------------------- =======================================================
-------------------------------------------------- =======================================================
-------------------------------------------------- =======================================================
IN WITNESS WHEREOF, the Trust, the Distributor and the Company hereby amend this
Schedule 3 in accordance with Article XI of the Agreement.
--------------------------------- -----------------------------
Xxxxxxx Xxxxx Variable Insurance Trust IDS Life Insurance Company
--------------------------------- -----------------------------
Xxxxxxx, Sachs & Co. Attest
Schedule 4
Investment Restrictions
Applicable to the Trust
Effective as of the date the Agreement was executed, the following investment
restrictions are applicable to the Trust:
-----------------------------------------------------------------------------
[Form of Amendment to Schedule 4]
Effective as of ___________________, this Schedule 4 is hereby amended to
reflect the following changes:
IN WITNESS WHEREOF, the Trust, the Distributor and the Company hereby amend this
Schedule 4 in accordance with Article XI of the Agreement.
--------------------------------- ------------------------------
Xxxxxxx Xxxxx Variable Insurance Trust IDS Life Insurance Company
--------------------------------- ------------------------------
Xxxxxxx, Sachs & Co. Attest
