AMENDED AND RESTATED
FUND PARTICIPATION AGREEMENT
THIS AMENDED AND RESTATED FUND PARTICIPATION AGREEMENT ("Agreement") is made
and entered into as of June 1, 2006 by and among the following parties:
o AMERICAN CENTURION LIFE ASSURANCE COMPANY ("American Centurion
Life"), organized under the laws of the State of New York, on its
own behalf and on behalf of each of its separate accounts named in
Schedule A to this Agreement, as may be amended from time to time
(each account referred to as an "Account");
o AMERICAN ENTERPRISE LIFE INSURANCE COMPANY ("American Enterprise
Life"), organized under the laws of the State of Indiana, on its
own behalf and on behalf of each of its separate accounts named in
Schedule A to this Agreement, as may be amended from time to time
(each account referred to as an "Account");
o AMERICAN PARTNERS LIFE INSURANCE COMPANY ("American Partners
Life"), organized under the laws of the state of Arizona, on its
own behalf and on behalf of each of its separate accounts named in
Schedule A to this Agreement, as may be amended from time to time
(each account referred to as an "Account");
o IDS LIFE INSURANCE COMPANY ("IDS Life"), organized under the laws
of the State of Minnesota, on its own behalf and on behalf of each
of its separate accounts named in Schedule A to this Agreement, as
may be amended from (each account referred to as the "Account");
o IDS LIFE INSURANCE COMPANY OF NEW YORK ("IDS Life of New York"),
organized under the laws of the State of New York, on its own
behalf and on behalf of each of its separate accounts named in
Schedule A to this Agreement, as may be amended from (each account
referred to as the "Account");
each of American Centurion Life, American Enterprise Life, American Partners
Life, IDS Life and IDS Life of New York hereinafter also referred to as a
"Company"; and
o AMERICAN CENTURY INVESTMENT SERVICES, INC. ("ACIS").
WHEREAS, each Company offers to the public certain qualified and
nonqualified variable annuity contracts (each, a "Contract;" and collectively,
the "Contracts"), which the Company has registered under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, each Company wishes to offer as investment options under the
Contracts, shares of certain series and classes of American Century Variable
Portfolios, Inc. and American
Century Variable Portfolios II, Inc. (each an "Issuer" and collectively the
"Issuers") as designated by the Company and agreed to by Issuer for each of
the Company's Accounts as listed on Schedule A to this agreement as may be
amended from time to time (each, a "Fund," and collectively, the "Funds"),
each a series of mutual fund shares registered under the Investment Company
Act of 1940, as amended (the " 1940 Act"), and issued by the Issuer; and
WHEREAS, on the terms and conditions hereinafter set forth ACIS desires
to make shares of the Funds available as investment options under the
Contracts;
NOW, THEREFORE, the Company and ACIS agree as follows:
A. AMENDMENT AND RESTATEMENT; FORM OF AGREEMENT.
(a) ACIS acknowledges the planned merger of both American Enterprise
Life and American Partners Life with and into IDS Life (the "Merger") and the
"intact transfer" (the "Transfer") of the Accounts of American Enterprise Life
and American Partners Life to IDS Life by operation of law and incident to the
Merger, on December 31, 2006 at 10:59:59 p.m. Central Time (the "Effective
Time"), subject to all necessary regulatory approvals being obtained in
connection with the Merger and the Transfer, and the re-naming of IDS Life to
RiverSource Life Insurance Company simultaneously with the Merger. On and
after the Effective Time, all references in this Agreement and its Schedule to
American Enterprise Life, American Partners Life and IDS Life shall mean and
refer to RiverSource Life Insurance Company. ACIS consents to the transfer of
the rights and obligations of American Enterprise Life and American Partners
Life under this Agreement to IDS Life at the Effective Time of the Merger.
(b) ACIS also acknowledges the planned merger of American Centurion
Life with and into IDS Life of New York (the "Merger") and the "intact
transfer" (the "Transfer") of the Accounts of American Centurion Life to IDS
Life of New York by operation of law and incident to the Merger, on December
31, 2006 at 10:59:59 p.m. Central Time (the "Effective Time"), subject to all
necessary regulatory approvals being obtained in connection with the Merger
and the Transfer, and the re-naming of IDS Life of New York to RiverSource
Life Insurance Co. of New York simultaneously with the Merger. On and after
the Effective Time, all references in this Agreement and its Schedule to
American Centurion Life and IDS Life of New York shall mean and refer to
RiverSource Life Insurance Co. of New York. ACIS consents to the transfer of
the rights and obligations of American Centurion Life under this Agreement to
IDS Life of New York at the Effective Time of the Merger
(c) This Agreement shall amend and supersede the following agreements
as of the date stated above among the Company named therein, the Issuers,
American Century Investment Management, Inc. ("ACIM") and/or ACIS with respect
to all investments by the Company named therein and its Accounts prior to the
date of this Agreement, as though identical separate agreements had been
executed by the parties hereto on the dates as indicated below:
o Fund Participation Agreement, dated August 21, 1998, by and
among American Enterprise Life, the Issuer and ACIM, as
amended by the
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following documents: (a) Amendment No. 1 to Fund
Participation Agreement dated July 1, 2002; and, (b)
Amendment No. 2 to Fund Participation Agreement dated
October 2, 2002.
o Fund Participation Agreement, dated December 19, 1995, by
and among American Partners Life, TCI Portfolios, Inc. and
Investors Research Corporation, as amended by the following
documents: (a) Amendment No. 1 to Fund Participation
Agreement dated April 18, 1996; (b) Amendment No. 2 to Fund
Participation Agreement dated July 1, 2002; and (c)
Amendment No. 3. to Fund Participation Agreement dated
October 1, 2002.
o Fund Participation Agreement,dated April 24, 1996, by and
among IDS Life, TCI Portfolios, Inc. and Investors Research
Corporation, as amended by the following documents: (a)
Amendment No. 1 to Fund Participation Agreement dated April
15, 1999; (b) Amendment No. 2 to Fund Participation
Agreement dated July 1, 2002; (c) Amendment No. 3 to Fund
Participation Agreement dated July 1, 2002; and (d)
Amendment No. 4 to Fund Participation Agreement dated
October 1, 2005.
o Fund Participation Agreement,dated July 31, 1996, by and
among IDS Life of New York, TCI Portfolios, Inc. and
Investors Research Corporation, as amended by the following
documents: (a) Amendment No. 1 to Fund Participation
Agreement dated July 1, 2002; (b) Amendment No. 2 to Fund
Participation Agreement dated October 1, 2002; and (c)
Amendment No. 3 to Fund Participation Agreement dated
October 1, 2005.
o Fund Participation Agreement,dated April 24, 1996, by and
among American Centurion Life, TCI Portfolios, Inc. and
Investors Research Corporation, as amended by the following
documents: (a) Amendment No. 1 to Fund Participation
Agreement dated August 21, 1998; (b) Amendment No. 2 to Fund
Participation Agreement dated July 1, 2002; and (c)
Amendment No. 3 to Fund Participation Agreement dated
October 1, 2002.
Although the parties have executed this Agreement in this form for
administrative convenience, this Agreement shall constitute a separate
participation agreement with each Company until the Effective Time of the
Merger. On and after the Effective Time of the Merger described in subsection
(a) above, this agreement shall constitute a separate participation agreement
with RiverSource Life Insurance Company. On and after the Effective Time of
the Merger described in subsection (b) above, this agreement shall constitute
a separate participation agreement with RiverSource Life Insurance Co. of New
York.
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1. TRANSACTIONS IN THE FUNDS.
(a) Subject to the terms and conditions of this Agreement the Issuer
will make shares of the Funds available to be purchased, exchanged, or
redeemed, by each Company on behalf of its Accounts listed on Schedule A of
this Agreement as it may be amended from time to time through a single account
per Fund at the net asset value applicable to each order. The Funds' shares
shall be purchased and redeemed on a net basis in such quantity and at such
time as determined by the Company to satisfy the requirements of the Contracts
for which the Funds serve as underlying investment media. Dividends and
capital gains distributions will be automatically reinvested in full and
fractional shares of the Funds.
(b) Company will cooperate with ACIS's reasonable requests as
principal underwriter for the the Issuers in taking steps to deter and detect
short-term trading and other abusive trading practices by any Contract owner.
Subject to applicable law and the terms of each Contract, Company will provide
promptly upon request by ACIS as the designee of the Issuers:
o the Taxpayer Identification Number of all Contract owners
that purchased, redeemed, transferred, or exchanged shares
of a Fund held under a Contract; and,
o the amount and dates of such Contract owners' purchases,
redemptions, transfers and exchanges in subaccounts
available under the Contract which invest in shares of any
Fund.
The Company will execute any instructions from ACIS as the designee of the
Issuers, to restrict or prohibit further purchases, redemptions, transfers or
exchanges in subaccounts available under the Contract which invest in shares
of any Fund by any Contract owner who has been identified by ACIS as the
Issuers' designee, as having engaged in transactions that violate policies
established by the Issuers for the purpose of eliminating or reducing any
dilution of the value of the outstanding securities issued by the Fund.
The parties shall negotiate in good faith such additional terms and conditions
regarding implementation of the foregoing obligations of the parties under
Rule 22c-2 as any party may wish to address, including without limitation,
reimbursement of expenses the Company incurs in order to provide such
information to ACIS as the Issuers' designee and to execute any instructions
from ACIS as the Issuers' designee to restrict or prohibit purchases,
redemptions, transfers or exchanges by any Contract owner in subaccounts
available under a Contract which invest in shares of any Fund.
2. ADMINISTRATIVE SERVICES. The Company shall be solely responsible
for providing all administrative services for the Contract owners. The Company
agrees that it will maintain and preserve all records as required by law to be
maintained and preserved, and will otherwise comply with all laws, rules and
regulations applicable to the marketing of the Contracts and the provision of
administrative services to the Contract owners.
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3. PROCESSING AND TIMING OF TRANSACTIONS.
(a) ACIS hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund shares from the
Contract owners. On each day the New York Stock Exchange (the "Exchange") is
open for business (each, a "Business Day"), the Company may receive
instructions from the Contract owners for the purchase or redemption of shares
of the Funds ("Orders"). Orders received and accepted by the Company prior to
the close of regular trading on the Exchange (the "Close of Trading") on any
given Business Day (currently, 3:00 p.m. Central time) and transmitted to ACIS
by 9:00 am. Central time on the next following Business Day will be executed
by ACIS at the net asset value determined as of the Close of Trading on the
previous Business Day ("Day 1"). Any Orders received by the Company after the
Close of Trading and all Orders that are transmitted to ACIS after 9:00 a.m.
Central time on the next following Business Day will be executed by ACIS at
the net asset value determined following receipt by the Issuer of such Order.
The day as of which an Order is executed by the Issuer pursuant to the
provisions set forth above is referred to herein as the "Effective Trade
Date".
(b) By 5:30 p.m. Central time on each Business Day, ACIS will provide
or cause to be provided to the Company via facsimile or other electronic
transmission acceptable to the Company the Funds' net asset value, dividend
and capital gain information and, in the case of income funds, the daily
accrual for interest rate factor (mil rate), determined at the Close of
Trading.
(c) By 9:00 am. Central time on each Business Day, the Company will
provide to ACIS via facsimile or other electronic transmission acceptable to
ACIS a report (referred to in subsection (a) above) stating whether the Orders
received by the Company from Contract owners by the Close of Trading on the
preceding Business Day resulted in the Account being a net purchaser or net
seller of shares of the Funds. As used in this Agreement, the phrase "other
electronic transmission acceptable to ACIS" includes the use of remote
computer terminals located at the premises of the Company, its agents or
affiliates, which terminals may be linked electronically to the computer
system of ACIS, its agents or affiliates (hereinafter, "Remote Computer
Terminals").
(d) Upon the timely receipt from the Company of the report described
in subsection (c) above, ACIS will execute the purchase or redemption
transactions (as the case may be) at the net asset value computed as at the
Close of Trading on Day 1. Payment for net purchase transactions shall be made
by wire transfer by the Company to the custodial account designated by the
Funds on the Business Day next following the Effective Trade Date. Such wire
transfers shall be initiated by the Company's bank prior to 3:00 p.m. Central
time and received by the Funds prior to 5:00 p.m. Central time on the Business
Day next following the Effective Trade Date. If payment for a purchase Order
is not timely received, such Order will be executed at the net asset value
next computed following receipt of payment. Payments for net redemption
transactions shall be made by wire transfer by the Issuer to the account
designated by the Company within the time period set forth in the applicable
Fund's then-current prospectus; provided, however, ACIS will use all
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reasonable efforts to settle all redemptions on the Business
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Day next following the Effective Trade Date. On any Business Day when the
Federal Reserve Wire Transfer System is closed, all communication and
processing rules will be suspended for the settlement of Order. Orders will be
settled on the next Business Day on which the Federal Reserve Wire Transfer
System is open and the Effective Trade Date will apply.
4. PROSPECTUS AND PROXY MATERIALS.
(a) ACIS shall provide to the shareholder of record copies of the
Issuer's proxy materials, periodic reports to shareholders and other materials
that are required by law to be sent to the Issuer's shareholders. In addition,
ACIS shall provide the Company copies of the Funds' prospectuses and periodic
reports to shareholders in sufficient quantity to distribute to each Contract
owner, together with such additional copies of the Funds' prospectuses as may
be reasonably requested by Company. If the Company elects to print a
prospectus that combines the prospectuses of the Funds with the prospectuses
of other investment options under the Contracts, ACIS shall provide the
Company with a copy of the Fund's prospectus in camera-ready art and/or
electronic format. If the Company provides for pass-through voting by the
Contract owners, ACIS will provide the Company with a sufficient quantity of
proxy materials for each contract owner. At Company's reasonable request, in
lieu of mailing such materials to the Company, ACIS may send such materials by
electronic transmission to the Company for printing.
(b) The cost of preparing, typesetting, printing and shipping to the
Company the Fund's separate prospectuses, proxy materials, periodic reports to
shareholders and other materials shall be paid by ACIS or its agents or
affiliates. If the Company elects to receive such materials by electronic
transmission, ACIS shall reimburse the Company for the reasonable costs of
typesetting and printing. Such reimbursement shall be limited to the cost of
typesetting and printing of such materials by ACIS. If the Company elects to
print a prospectus that combines the prospectuses of the Funds with the
prospectuses of other investment options under the Contracts, ACIS shall
provide the Company a copy of the Funds prospectus in camera-ready art and/or
other electronic format. The cost of preparing, typesetting and printing the
combined prospectus shall be borne by the Company.
The cost of mailing prospectuses, proxy materials, periodic fund reports
and other materials of the Issuer to the Contract owners and prospective
Contract owners shall be paid by the Company and shall not be the
responsibility of ACIS.
(c) In the event an Issuer initiates (i) a reorganization as defined
by Section 2 of the 1940 Act, or (ii) changes the Issuer's name or the name of
a Fund, ACIS will bear, or arrange for others to bear, any extraordinary
internal and out-of-pocket costs of a Company associated with the
aforementioned actions. Company agrees to use its best efforts to minimize any
costs incurred and shall provide ACIS or its designated agent with acceptable
documentation of any such costs incurred.
(d) ACIS, or its designee, will provide written instruction to all
Participating Insurance Companies including the Company each time an Issuer
amends or supplements a
6
Fund's current prospectus or statement of additional information directing the
Participating Insurance Companies including the Company as to whether the
amendment or supplement is to be provided (a) immediately to Contract owners
who have Contract value allocated to a Fund or (b) is to be held and combined
with another Issuer, Fund or Contract related mailing as permitted by
applicable federal securities laws. ACIS agrees that the instruction it gives
the Company in each instance will be identical to the instruction it provides
other Participating Insurance Companies.
5. COMPENSATION AND EXPENSES.
(a) ACIS will pay no fee or other compensation to a Company under this
Agreement.
(b) All expenses incident to performance by an Issuer of obligations
created by the inclusion of a Fund as an investment option under a Contract
under this Agreement including, but not limited to, the cost of registration
and qualification of the Funds' shares, will be paid by ACIS to the extent
permitted by law. All expenses incident to performance by the Company of its
duties under this Agreement, including but not limited to, the cost of
providing the administrative services to Contract owners, shall be paid by the
Company.
6. REPRESENTATIONS AND WARRANTIES.
(a) Each Company represents and warrants that: (i) this Agreement has
been duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms; (ii) it has established
each Account as a separate account under the insurance laws of the applicable
state as disclosed on Schedule A of this Agreement as it may be amended from
time to time, and has registered each Account as a unit investment trust
under the 1940 Act to serve as an investment vehicle for the Contracts; (iii)
each Contract provides for the allocation of net amounts received by the
Company to the Account for investment in the shares of one or more specified
investment companies selected among those companies available through the
Account to act as underlying investment media; (iv) selection of a particular
investment company is made by the Contract owner under a particular Contract,
who may change such selection from time to time in accordance with the terms
of the applicable Contract; and (v) the activities of the Company contemplated
by this Agreement comply in all material respects with all provisions of
federal and state insurance, securities, and tax laws applicable to such
activities.
(b) ACIS represents and warrants that: (i) this Agreement has been
duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of ACIS
and each Issuer, enforceable in accordance with its terms; and (ii) the
investments of the Funds will at all times be adequately diversified within
the meaning of Section 817(h) of the Internal Revenue Service Code of 1986, as
amended (the "Code"), and the regulations thereunder, and that at all times
while this Agreement is in effect all beneficial interests in each of the
Funds will be owned by one or more insurance companies or by any other party
permitted under Section 1.817-5(f)(3) of the Regulations promulgated under the
Code. In the event of a breach, ACIS will take reasonable steps to notify the
Company of such
7
breach and to cause the Fund to adequately diversify so as to achieve
compliance within the grace period afforded by Regulation 1.817-5.
(c) ACIS represents and warrants that each Fund's investment
objectives, policies and restrictions comply in all material respects with
applicable state investment laws as they may apply to the Funds. Neither
Issuer nor ACIS makes any representation as to whether any aspect of any
Fund's operations (including, but not limited to, fees and expenses and
investment policies, objections and restrictions) complies with the insurance
laws and regulations of any state. ACIS agrees that it will use reasonable
effort to furnish such information regarding the Funds as may be reasonably
required by state insurance laws so that the Company may obtain the authority
needed to issue the Contracts in any applicable state.
(d) ACIS represents and warrants that: (i) it will distribute the
Fund's shares in accordance with all applicable federal and state securities
laws including, without limitation, the 1933 Act, the Securities Exchange Act
of 1934 (the "1934 Act") and the 1940 Act; (ii) it is registered as a
broker-dealer with the SEC under the 1934 Act and is a member in good standing
of the National Association of Securities Dealers, Inc.; (iii) it will remain
duly registered under all applicable federal and state securities laws; and,
(iv) it will perform its obligations for the Funds in accordance in all
material respects with any applicable state and federal securities laws.
(e) The parties to this Agreement represent and warrant that they
shall comply with all the applicable laws and regulations designed to prevent
money laundering including without limitation the International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001 (Title III of
the USA PATRIOT ACT), and if required by such laws or regulations will share
information with each other about individuals, entities, organizations and
countries suspected of possible terrorist or money laundering activities in
accordance with Section 314(b) of the USA PATRIOT ACT.
7. ADDITIONAL COVENANTS AND AGREEMENTS.
(a) Each party shall comply with all provisions of federal and state
laws applicable to its respective activities under this Agreement.
(b) Each party shall promptly notify the other parties in the event
that it is, for any reason, unable to perform any of its obligations under
this Agreement.
(c) Each Company covenants and agrees that all Orders accepted and
transmitted by it hereunder with respect to its Accounts on any Business Day
will be based upon instructions that it received from the Contract owners in
proper form prior to the Close of Trading of the Exchange on the previous
Business Day.
(d) Each Company covenants and agrees that all Orders transmitted to
the Issuer, whether by telephone, telecopy, or other electronic transmission
acceptable to ACIS, shall be sent by or under the authority and direction of a
person designated by the Company as being duly authorized to act on behalf of
the owner of the Account. Absent actual knowledge to the
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contrary, ACIS shall be entitled to rely on the existence of such authority
and to assume that any person transmitting Orders for the purchase, redemption
or transfer of Fund shares on behalf of the Company is "an appropriate person"
as used in Sections 8-308 and 8-404 of the Uniform Commercial Code with
respect to the transmission of instructions regarding Fund shares on behalf of
the owner of such Fund shares. The Company shall maintain the confidentiality
of all passwords and security procedures issued, installed or otherwise put in
place with respect to the use of Remote Computer Terminals and assumes full
responsibility for the security therefor The Company further agrees to be
solely responsible for the accuracy, propriety and consequences of all data
transmitted to ACIS by the Company by telephone, telecopy or other electronic
transmission acceptable to ACIS.
(e) The Company agrees to make every reasonable effort to market its
Contracts. It will use its best efforts to give equal emphasis and promotion
to shares of the Funds as is given to other underlying investments of the
Account.
(f) The Company or its employees or agents will not give any
information or advice, or make any representations or statements on behalf of
or concerning the Issuer or the Funds, in connection with the sale of the
Contracts unless based upon information or representations contained in the
registration statement for the Funds' shares, as such registration statement
may be amended or supplemented from time to time, or in reports or proxy
statements of the Funds, or in published reports for the Funds that are
published in reputable financial publications or approved by ACIS for
distribution, or in sales literature or other material provided by ACIS. ACIS
agrees to use reasonable efforts to respond to any request for approval on a
prompt and timely basis.
(g) Notwithstanding anything in SECTION 7(f) above, the Company will
furnish, or will cause to be furnished, to ACIS, each piece of sales
literature or other promotional material in which the Funds, an Issuer or ACIS
is named, at least ten (10) business days prior to its use. No such material
will be used if ACIS reasonably objects to such use. ACIS agrees to use
reasonable efforts to respond to any request for approval on a prompt and
timely basis.
(h) ACIS will furnish or will cause to be furnished to the Company or
its designee, each piece of sales literature or other promotional material in
which the Company or its Account is named, at least ten (10) business days
prior to its use. No such material will be used if the Company reasonably
objects to such use. The Company agrees to use reasonable efforts to respond
to any request for approval on a prompt and timely basis.
(i) ACIS will not give any information or make any representations or
statements on behalf of any Company or concerning the Company, the Account, or
the Contracts unless based upon information or representations contained in
the registration statement for the Contracts, as such registration statement
may be amended or supplemented from time to time, or in reports for the
Contracts, or in published reports for the Account or the Contracts that are
published in reputable financial publications or are approved by the Company
for distribution, or in sales literature or other material provided by the
Company. The Company agrees to use reasonable efforts to respond to any
request for approval on a prompt and timely basis.
9
(j) The Company will provide to ACIS at least one complete copy of all
registration statements, annual and semi-annual reports, proxy statements, and
all amendments or supplements to any of the above that include a description
of or information regarding the Funds promptly after the filing of such
document with the SEC or other regulatory authority.
(k) For purposes of this SECTION 7, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media (e.g.,
on-line networks such as the Internet or other electronic messages), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational
or training materials or other communications distributed or made generally
available to some or all agents or employees, registration statements,
shareholder reports, and proxy materials and any other material constituting
sales literature or advertising under the rules of the National Association of
Securities Dealers, Inc. (the "NASD"), the 1933 Act or the 1940 Act.
8. USE OF NAMES. Except as otherwise expressly provided for in this
Agreement, neither ACIS nor the Funds shall use any trademark, trade name,
service xxxx or logo of the Company, or any variation of any such trademark
trade name, service xxxx or logo, without the Company's prior written consent
the granting of which shall be at the Company's sole option. Except as
otherwise expressly provided for in this Agreement, the Company shall not use
any trademark, trade name, service xxxx or logo of the Issuers or ACIS, or any
variation of any such trademarks, trade names, service marks, or logos,
without the prior written consent of either the Issuer or ACIS as appropriate,
the granting of which shall be at the sole option of ACIS and/or the Issuer.
9. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges to all
Contract owners so long as the SEC continues to interpret the 1940 Act as
requiring such privileges. It shall be the responsibility of the Company to
assure that it and the separate accounts of the other Participating Companies
(as defined in SECTION 11(a) below) participating in any Fund calculate voting
privileges in a consistent manner.
(b) The Company will distribute to Contract owners all proxy material
furnished by ACIS and will vote shares in accordance with instructions
received from such Contract owners. The Company shall vote Fund shares for
which no instructions have been received in the same proportion as shares for
which such instructions have been received. The Company and its agents shall
not oppose or interfere with the solicitation of proxies for Fund shares held
for such Contract owners.
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10. INDEMNITY.
(a) ACIS agrees to indemnify and hold harmless the Company and each
person, if any, who controls the Company within the meaning of the 1933 Act,
and any officers, directors, employees, agents, and affiliates of the
foregoing (collectively, the "Indemnified Parties" for purposes of this
SECTION 10(a)) against any losses, claims, expenses, damages or liabilities
(including amounts paid in settlement thereof) or litigation expenses
(including reasonable legal and other expenses) (collectively, "Losses"), to
which the Indemnified Parties may become subject, insofar as such Losses (i)
result from a breach by ACIS of a material provision of this Agreement,
including the incorrect calculation or reporting of the daily net asset value
per share or dividend or capital gain distribution rate, or (ii) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement or any prospectus of the
Funds or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading. ACIS will reimburse any legal or
other expenses reasonably incurred by the Indemnified Parties in connection
with investigating or defending any such Losses. ACIS shall not be liable for
indemnification hereunder if such Losses are attributable to the negligence or
misconduct of the Company performing its obligations under this Agreement or
as a result of a breach of SECTION 21.
(b) The Company agrees to indemnify and hold harmless ACIS and each
Issuer and each person, if any, who controls the Issuer or ACIS within the
meaning of the 1933 Act, and their respective officers, directors, employees,
agents, and affiliates of the foregoing (collectively, the "Indemnified
Parties" for purposes of this SECTION 10(b)) against any Losses to which the
Indemnified Parties may become subject, insofar as such Losses (i) result from
a breach by a Company of a material provision of this Agreement or (ii) arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the sales literature of a Company or in a
registration statement or any prospectus of a Company regarding the Contracts
or the Account if any, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or arise
out of or as a result of conduct, statements or representations of a Company
or its agents (other than statements or representations contained in the
prospectuses or sales literature of the Funds), with respect to the sale and
distribution of Contracts for which the Funds' shares serve as the underlying
investments, or (iii) result from the use by any person of a Remote Computer
Terminal. The Company will reimburse any legal or other expenses reasonably
incurred by the Indemnified Parties in connection with investigating or
defending any such Losses. The Company shall not be liable for indemnification
hereunder if such Losses are attributable to the negligence or misconduct of
ACIS or the Issuer in performing their obligations under this Agreement.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this SECTION 10. In
case any
11
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof the indemnifying party will be
entitled to participate therein and, to the extent that it may wish to, assume
the defense thereof with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof the indemnifying party will not be
liable to such indemnified party under this SECTION 10 for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation.
(d) If the indemnifying party assumes the defense of any such action,
the indemnifying party shall not, without the prior written consent of the
indemnified parties in such action, settle or compromise the liability of the
indemnified parties in such action, or permit a default or consent to the
entry of any judgment in respect thereof, unless in connection with such
settlement, compromise or consent, each indemnified party receives from such
claimant an unconditional release from all liability in respect of such claim
11. POTENTIAL CONFLICTS.
(a) The Company has received a copy of an application for exemptive
relief, as amended, filed by ACIM (then known as Investors Research
Corporation), an affiliate of ACIS, on December 21, 1987, with the SEC and the
order issued by the SEC in response thereto (the "Shared Funding Exemptive
Order"). The Company has reviewed the conditions to the requested relief set
forth in such application for exemptive relief. As set forth in such
application, each Board of Directors of the Issuers (each a "Board" and
collectively the "Boards") will monitor the Issuer for the existence of any
material irreconcilable conflict between the interests of the contract owners
of all separate accounts ("Participating Companies") investing in funds of the
Issuer. An irreconcilable material conflict may arise for a variety of
reasons, including: (i) an action by any state insurance regulatory authority;
(ii) a change in applicable federal or state insurance, tax, or securities
laws or regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar actions by insurance, tax or securities
regulatory authorities; (iii) an administrative or judicial decision in any
relevant proceeding; (iv) the manner in which the investments of any portfolio
are being managed; (v) a difference in voting instructions given by variable
annuity contract owners and variable life insurance contract owners; or (vi) a
decision by an insurer to disregard the voting instructions of contract
owners. The Boards shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
(b) Each Company will report any potential or existing conflicts of
which it is aware to the applicable Board. Each Company will assist each Board
in carrying out their responsibilities under the Shared Funding Exemptive
Order by providing the Board with all information reasonably necessary for the
Board to consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform the applicable Board whenever contract
owner voting instructions are disregarded.
12
(c) If a majority of a Board, or a majority of its disinterested Board
members, determines that a material irreconcilable conflict exists with regard
to contract owner investments in a Fund, the Board shall give prompt notice to
all Participating Companies. If the Board determines that the Company is
responsible for causing or mating said conflict, the Company shall at its sole
cost and expense, and to the extent reasonably practicable (as determined by a
majority of the disinterested Board members), take such action as is necessary
to remedy or eliminate the irreconcilable material conflict. Such necessary
action may include but shall not be limited to:
(i) withdrawing the assets allocable to the Account from the
Fund and reinvesting such assets in a different investment
medium or submitting the question of whether such
segregation should be implemented to a vote of all affected
contract owners and as appropriate, segregating the assets
of any appropriate group (i.e., annuity contract owners,
life insurance contract owners, or variable contract owners
of one or more Participating Companies) the votes in favor
of such segregation, or offering to the affected contract
owners the option of making such a change; and/or
(ii) establishing a new registered management investment company
or managed separate account.
(d) If a material irreconcilable conflict arises as a result of a
decision by a Company to disregard its contract owner voting instructions and
said decision represents a minority position or would preclude a majority vote
by all of its contract owners having an interest in an Issuer, the Company at
its sole cost, may be required, at the Board's election, to withdraw an
Accounts investment in the Issuer and terminate this Agreement; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board.
(e) For the purpose of this SECTION 11, a majority of the
disinterested Board members shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict but in no event will
the issuer be required to establish a new funding medium for any Contract. The
Company shall not be required by this SECTION 11 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
12. TERMINATION. This Agreement shall terminate as to the sale and
issuance of new Contracts:
(a) at the option of either the Company or ACIS upon six months'
advance written notice, except that if exemptive relief or an exemptive order
from the SEC is required in connection with such termination, at such later
date as may be necessary to obtain such exemptive relief, or such other date
agreed to by the parties;
13
(b) at the option of the Company if the Funds' shares are not
available for any reason to meet the requirement of Contracts as determined by
the Company. Reasonable advance notice of election to terminate shall be
furnished by Company;
(c) at the option of either the Company or ACIS, upon institution of
formal proceedings against the broker-dealer or broker-dealers marketing the
Contracts, an Account, the Company, or the Issuer by the NASD, the SEC or any
other regulatory body;
(d) upon termination of the Management Agreement between an Issuer and
its investment advisor. Notice of such termination shall be promptly furnished
to the Company. This SECTION 12(d) shall not be deemed to apply if
contemporaneously with such termination a new contract of substantially
similar terms is entered into between the Issuer and its investment advisor;
(e) upon the requisite vote of Contract owners having an interest in
an Issuer to substitute for the Issuer's shares the shares of another
investment company in accordance with the terms of Contracts for which the
Issuer's shares had been selected to serve as the underlying investment
medium. The Company will give 60 days' written notice to ACIS of any proposed
vote to replace the Funds' shares;
(f) upon assignment of this Agreement unless made with the written
consent of all other parties hereto;
(g) if an Issuer's shares are not registered, issued or sold in
conformance with Federal law or such law precludes the use of Fund shares as
an underlying investment medium of Contracts issued or to be issued by the
Company. Prompt notice shall be given by either party should such situation
occur; or
(h) at the option of ACIS, if ACIS reasonably determines in good faith
that the Company is not offering shares of the Fund in conformity with the
terms of this Agreement or applicable law.
(i) at the option of any party hereto upon a determination that
continuing to perform under this Agreement would, in the reasonable opinion of
the terminating party's counsel, violate any applicable federal or state law,
rule, regulation or judicial order.
(j) at the option of the Company, if the Company determines, in its
sole judgment exercised in good faith, that ACIS has suffered a material
adverse change in its business, operations or financial condition since the
date of this Agreement or is the subject of material adverse publicity that is
likely to have a material adverse impact upon the business and operations of
the Company, such termination to be effective sixty (60) days' after receipt
by ACIS of written notice of the Company's election to terminate this
Agreement.
(k) at the option of ACIS, if ACIS determines, in its sole judgment
exercised in good faith, that the Company has suffered a material adverse
change in its business, operations or
14
financial condition since the date of this Agreement or is the subject of
material adverse publicity that is likely to have a material adverse impact
upon the business and operations of a Fund or ACIS, such termination to be
effective sixty (60) days' after receipt by the Company of written notice of
ACIS's election to terminate this Agreement.
13. CONTINUATION OF AGREEMENT. Termination as the result of any cause
listed in Section 12 shall not affect the ACIS's obligation to furnish, under
the terms of this Agreement, shares of the Funds to Contracts then in force
for which its shares serve or may serve as the underlying medium (unless such
further sale of Fund shares is proscribed by law or the SEC or other
regulatory body).
14. NON-EXCLUSIVITY. Each of the parties acknowledges and agrees that
this Agreement and the arrangement described herein are intended to be
non-exclusive and that each of the parties is free to enter into similar
agreements and arrangements with other entities.
15. SURVIVAL. The provisions of SECTION 8 (use of names) and SECTION
10 (indemnity) of this Agreement shall survive termination of this Agreement.
16. AMENDMENT. Neither this Agreement, nor any provision hereof, may
be amended, waived, discharged or terminated orally, but only by an instrument
in writing signed by all of the parties hereto.
17. NOTICES. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent by telex,
telecopier, express delivery or registered or certified mail, postage prepaid,
return receipt requested, to the party or parties to whom they are directed at
the following addresses, or at such other addresses as may be designated by
notice from such party to all other parties.
To Company:
American Centurion Life Assurance Company
American Enterprise Life Insurance Company
American Partners Life Insurance Company
IDS Life Insurance Company
IDS Life Insurance Company of New York
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx X. Xxxxx, Vice President
Office: (000) 000-0000
Telecopier: (000) 000-0000
15
With a simultaneous copy to:
Ameriprise Financial Services, Inc.
50607 Ameriprise Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Vice President and Group Counsel
Office: (000) 000-0000
Telecopier: (000) 000-0000
To the Issuer or ACIS:
American Century Investments
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxx
Office: (000) 000-0000
Telecopier: (000) 000-0000
Any notice, demand or other communication given in a manner prescribed in this
Section 17 shall be deemed to have been delivered on receipt.
18. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned without
the written consent of all parties to the Agreement at the time of such
assignment. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective permitted successors and assigns.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement and
any party hereto may execute this Agreement by signing any such counterpart.
20. SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
21. CUSTOMER PRIVACY AND CONFIDENTIAL INFORMATION. Notwithstanding
anything to the contrary contained in this Agreement, in addition to and not
in lieu of other provisions of this Agreement:
(a) "Confidential Information" includes but is not limited to all
proprietary and confidential information of the Company and its subsidiaries,
affiliates and licensees (collectively, the "Protected Parties" for purposes
of this SECTION 21), including without limitation all information regarding
the customers of the Protected Parties; or the accounts, account numbers,
names, addresses, social security numbers or any other personal identifier of
such customers; or any information derived thereon.
16
(b) ACIS will not use or disclose Confidential Information for any
purpose other than to carry out the purpose for which Confidential Information
was provided to any of them as set forth in the Agreement; ACIS agrees to
cause all their employees, agents and representatives, or any other party to
whom they may provide access to or disclose Confidential Information to limit
the use and disclosure of Confidential Information to that purpose.
(c) ACIS acknowledges that all computer programs and procedures or
other information developed or used by the Protected Parties or any of their
employees or agents in connection with the Compay's performance of its duties
under this Agreement are the valuable property of the Protected Parties.
(d) ACIS agrees to implement appropriate measures desinged to ensure
the security and confidentiality of Confidential Information, to protect such
information against any anticipated threats or hazards to the security or
integrity of such information, and to protect against unauthorized access to,
or use of, Confidential Information that could result in substantial harm or
inconvenience to any customer of the Protected Parties; ACIS further agrees to
cause its agents, representatives or subcontractors, or any other party to
whom they may provide access to or disclose Confidential Information to
implement appropriate measures designed to meet the objectives set forth in
this Section 21.
(e) ACIS acknowledges that any breach of the agreements in this
Section 21 would result in immediate and irreparable harm to the Protected
Parties for which there would be no adequate remedy at law and agree that in
the event of such a breach, the Protected Parties will be entitled to
equitable relief by way of temporary and permanent injunctions, as well as
such other relief as any court of competent jurisdiction deems appropriate.
The provisions contained in this Section 21 will survive any termination of
this Agreement.
22. ACCESS TO BOOKS AND RECORDS. Each party to this Agreement agrees
to cooperate with each other party and all appropriate government authorities
(including without limitation the SEC, the NASD and state insurance
regulators) and will permit each other and such authorities reasonable access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby. Each party
agrees to permit the other party or the appropriate governmental authority to
make copies of portions of its books and records that relate to the party's
performance of its duties under this Agreement and which are the subject
matter of the investigation or inquiry.
23. ENTIRE AGREEMENT. This Agreement, including the Attachments
hereto, constitutes the entire agreement between the parties with respect to
the matters dealt with herein, and supersedes all previous agreements, written
or oral, with respect to such matters.
17
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
AMERICAN CENTURY INVESTMENT
SERVICES, INC. AMERICAN CENTURION LIFE
ASSURANCE COMPANY
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxx AMERICAN PARTNERS LIFE INSURANCE COMPANY
---------------------------- IDS LIFE INSURANCE COMPANY
Xxxxxxx X. Xxxxx IDS LIFE INSURANCE COMPANY OF
President NEW YORK
By: /s/ Xxx X. Xxxxx
----------------------------------------
Name: Xxx X. Xxxxx, Vice President of all
companies named above
ATTEST:
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Secretary of all companies
named above
SCHEDULE A
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
American Enterprise Variable Annuity Account established under Indiana law
July 15, 1987.
Fund Share Class
----------------------------- --------------
VP Income and Growth Class I
----------------------------- --------------
VP Inflation Protection Class II
----------------------------- --------------
VP International Class II
----------------------------- --------------
VP Ultra Class II
----------------------------- --------------
VP Value Class I
----------------------------- --------------
VP Value Class II
----------------------------- --------------
American Enterprise Variable Life Account established under Indiana law July
15, 1987.
Fund Share Class
----------------------------- --------------
None None
----------------------------- --------------
AMERICAN PARTNERS LIFE INSURANCE COMPANY
APL Variable Annuity Account established under Arizona law February 9, 1995.
Fund Share Class
----------------------------- --------------
VP Capital Appreciation Class I
----------------------------- --------------
VP Value Class I
----------------------------- --------------
IDS LIFE INSURANCE COMPANY
IDS Life Variable Account 10 established under Minnesota law August 23, 1995.
Fund Share Class
----------------------------- --------------
VP International Class I
----------------------------- --------------
VP International Class II
----------------------------- --------------
VP Mid Cap Value Class II
----------------------------- --------------
VP Ultra Class II
----------------------------- --------------
VP Value Class I
----------------------------- --------------
VP Value Class II
----------------------------- --------------
19
IDS Life Variable Life Separate Account established under Minnesota law
October 16, 1985.
Fund Share Class
----------------------------- --------------
VP International Class I
----------------------------- --------------
VP International Class II
----------------------------- --------------
VP Value Class I
----------------------------- --------------
VP Value Class II
----------------------------- --------------
AMERICAN CENTURION LIFE ASSURANCE COMPANY
ACL Variable Annuity Account 2 established under New York law October 12,
1995.
Fund Share Class
----------------------------- --------------
VP Income and Growth Class I
----------------------------- --------------
VP Inflation Protection Class II
----------------------------- --------------
VP International Class II
----------------------------- --------------
VP Ultra Class II
----------------------------- --------------
VP Value Class I
----------------------------- --------------
VP Value Class II
----------------------------- --------------
IDS LIFE INSURANCE COMPANYOF NEW YORK
IDS Life of New York Variable Annuity Account established under New York law
April 17, 1996.
Fund Share Class
----------------------------- --------------
VP International Class I
----------------------------- --------------
VP International Class II
----------------------------- --------------
VP Mid Cap Value Class II
----------------------------- --------------
VP Ultra Class II
----------------------------- --------------
VP Value Class I
----------------------------- --------------
VP Value Class II
----------------------------- --------------
IDS Life of New York Account 8 established under New York law September 12,
1985.
Fund Share Class
----------------------------- --------------
VP International Class I
----------------------------- --------------
VP International Class II
----------------------------- --------------
VP Value Class I
----------------------------- --------------
VP Value Class II
----------------------------- --------------
20
