AMENDED AND RESTATED
PARTICIPATION AGREEMENT
AMONG
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
IDS LIFE INSURANCE COMPANY
AMERIPRISE FINANCIAL SERVICES, INC.
ALLIANCEBERNSTEIN L.P.
AND
ALLIANCEBERNSTEIN INVESTMENTS , INC.
DATED AS OF
AUGUST 1, 2006
AMENDED AND RESTATED
PARTICIPATION AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT, made and entered into as of the
1st day of August, 2006 ("Agreement"), by and among the following parties:
o American Enterprise Life Insurance Company, an Indiana life
insurance company ("American Enterprise Life") (on behalf of
itself and its "Separate Account" defined below);
o IDS Life Insurance Company a Minnesota life insurance company
("IDS Life") (on behalf of itself and its "Separate Account"
defined below);
Each of American Enterprise Life and IDS Life hereinafter are also referred to
as "Insurer".
o Ameriprise Financial Services, Inc., a Delaware corporation
("Contracts Distributor"), the principal underwriter with respect
to the American Enterprise Life Contracts referred to below and
the distributor of the IDS Life Contracts referred to below for
which IDS Life is the principal underwriter;
o AllianceBernstein L.P., a Delaware limited partnership
("Adviser"), the investment adviser of the Fund referred to below;
and
o AllianceBernstein Investments, Inc., a Delaware corporation
("Distributor"), the Fund's principal underwriter.
The Insurer, the Contracts Distributor, the Adviser and the Distributor are
collectively referred to as "Parties".
WITNESSETH THAT:
WHEREAS Insurer, the Distributor, and AllianceBernstein Variable
Products Series Fund, Inc. (the "Fund") desire that Class B shares of the
Fund as further described in Exhibit A,
attached hereto and incorporated by reference (the "Portfolios"; reference
herein to the "Fund" includes reference to each Portfolio to the extent the
context requires) be made available by Distributor to serve as underlying
investment media for those combination fixed and variable annuity contracts
of Insurer that are the subject of Insurer's Form N-4 registration statement
filed with the Securities and Exchange Commission (the "SEC"), and those
combination fixed and variable universal life insurance policies of Insurer
that are the subject of Insurer's Form N-6 registration statement filed with
the SEC, or such other forms as prescribed under applicable securities laws,
as further described in Exhibit A (collectively the "Contracts"), to be
offered through Contracts Distributor and other registered broker-dealer
firms as agreed to by Insurer and Contracts Distributor; and
WHEREAS the Contracts provide for the allocation of net amounts
received by Insurer to separate series (the "Divisions"; reference herein to
the "Separate Account" includes reference to each Division to the extent the
context requires) of the Separate Account for investment in Class B shares
of corresponding Portfolios of the Fund that are made available through the
Separate Account to act as underlying investment media,
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and Distributor will make Class B shares of the
Portfolios available to Insurer for this purpose at net asset value and with
no sales charges, all subject to the following provisions:
Section A. Amendment and Restatement; Form of Agreement
-------------------------------------------------------
A.1 Merger and Renaming of Insurer.
------------------------------
The Contracts Distributor, the Adviser and the Distributor acknowledge
the planned merger of American Enterprise Life with and into IDS Life (the
"Merger") and the "intact
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transfer" (the "Transfer") of the Separate Accounts of American Enterprise
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 Exhibit to American
Enterprise Life and IDS Life shall mean and refer to RiverSource Life
Insurance Company. The Contracts Distributor, the Adviser and the
Distributor consent to the transfer of the rights and obligations of
American Enterprise Life under this Agreement to IDS Life at the Effective
Time of the Merger.
A.2 Supersedes Prior Agreements.
---------------------------
This Agreement shall amend and supersede the following agreements as of
the date stated above among the Insurer, the Contracts Distributor, the
Adviser and the Distributor with respect to all investments by the Insurer
or the Separate 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:
(a) Participation Agreement, dated January1, 2000, by and among
American Enterprise Life, the Contracts Distributor, the Adviser and the
Distributor, as amended by the following documents: (i) Amendment No. 1 to
Participation Agreement, dated February 10, 2000; (ii) Amendment No. 2 to
Participation Agreement, dated April 13, 2000; (iii) Amendment No. 3 to
Participation Agreement, dated April 17, 2000; (iv) Amendment No. 4 to
Participation Agreement, dated May 1, 2002; (v) Amendment No. 5 to
Participation Agreement, dated July 15, 2002; (vi) Amendment No. 6 to
Participation Agreement, dated January 3, 2003; and (vii) Amendment No. 7 to
Participation Agreement, dated November 23, 2005.
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(b) Participation Agreement, dated March 1, 2000, by and among IDS
Life, the Contracts Distributor, the Adviser and the Distributor, as amended
by the following documents: (i) Amendment No. 1 to Participation Agreement,
dated August 13, 2001; (ii) Amendment No. 2 to Participation Agreement,
dated February 13, 2002; (iii) Amendment No. 3 to Participation Agreement,
dated May 31, 2002; (iv) Amendment No. 4 to Participation Agreement,
datedSeptember 15, 2002; (v) Amendment No. 5 to Participation Agreement,
dated December 15, 2002; (vi) Amendment No. 6 to Participation Agreement,
dated September 30, 2003; and (vii) Amendment No. 7 to Participation
Agreement, dated November 23, 2005.
A.3 Separate Agreements until Merger.
--------------------------------
In addition, the Parties hereby further amend and restate their
agreements as set forth herein in contemplation of the Transfer of the
Separate Accounts of American Enterprise Life to IDS Life on December 31,
2006, incident to the Merger. Although the Parties have executed this
Agreement in this form for administrative convenience, this Agreement shall
create a separate participation agreement with each Insurer until the
Effective Time of the Merger.
Section 1. Additional Portfolios
--------------------------------
The Fund has and may, from time to time, add additional Portfolios,
which will become subject to this Agreement, if, upon the written consent of
each of the Parties hereto, they are made available as investment media for
the Contracts.
Section 2. Processing Transactions
----------------------------------
2.1 Timely Pricing and Orders.
-------------------------
The Adviser or its designated agent will provide closing net asset
value, dividend and capital gain information for each Portfolio to Insurer
at the close of trading on each day (a "Business Day") on which (i) the New
York Stock Exchange is open for regular trading, (ii) the
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Fund calculates the Portfolio's net asset value and (iii) Insurer is open
for business. The Fund or its designated agent will use its best efforts to
provide this information by 6:00 p.m., Eastern Time, but in no event later
than 7:00 p.m. Eastern time. The Fund will notify the Insurer as soon as
possible if it is determined that this information will be available after
7:00 p.m. Eastern time, and the Fund and the Insurer will mutually agree
upon a final deadline for timely receipt of this information on that
Business Day. Insurer will use these data to calculate unit values, which in
turn will be used to process transactions that receive that same Business
Day's Separate Account Division's unit values. Such Separate Account
processing will be done the same evening, and corresponding orders with
respect to Fund shares will be placed the morning of the following Business
Day. Insurer will use its best efforts to place such orders with the Fund by
10:00 a.m., Eastern Time.
2.2 Timely Payments.
---------------
Insurer will transmit orders for purchases and redemptions of Fund
shares to Distributor, and will wire payment for net purchases to a
custodial account designated by the Fund on the day the order for Fund
shares is placed, to the extent practicable. Payment for net redemptions
will be wired by the Fund to an account designated by Insurer on the same
day as the order is placed, to the extent practicable, and in any event be
made within five calendar days after the date the order is placed in order
to enable Insurer to pay redemption proceeds within the time specified in
Section 22(e) of the Investment Company Act of 1940, as amended (the "1940
Act").
2.3 Price.
-----
The Parties agree that Portfolio share purchase and redemption orders
resulting from Contract owner purchase payments, surrenders, partial
withdrawals, routine withdrawals of charges, or other transactions under
Contracts will be executed at the net asset values as
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determined as of the close of regular trading on the New York Stock Exchange
on the Business Day that Insurer receives such orders and processes such
transactions, which, Insurer agrees shall occur not earlier than the
Business Day prior to Distributor's receipt of the corresponding orders for
purchases and redemptions of Portfolio shares. For the purposes of this
section, Insurer shall be deemed to be the agent of the Fund for receipt of
such orders from holders or applicants of contracts, and receipt by Insurer
shall constitute receipt by the Fund. All other purchases and redemptions of
Portfolio shares by Insurer will be effected at the net asset values next
computed after receipt by Distributor of the order therefor, and such orders
will be irrevocable. Insurer hereby elects to reinvest all dividends and
capital gains distributions in additional shares of the corresponding
Portfolio at the record-date net asset values until Insurer otherwise
notifies the Fund in writing, it being agreed by the Parties that the record
date and the payment date with respect to any dividend or distribution will
be the same Business Day.
Section 3. Costs and Expenses
-----------------------------
3.1 General.
-------
Except as otherwise specifically provided herein, each Party will bear
all their own expenses incident to its performance under this Agreement.
3.2 Registration.
------------
The Fund will bear the cost of its registering as a management
investment company under the 1940 Act and registering its shares under the
Securities Act of 1933, as amended (the "1933 Act"), and keeping such
registrations current and effective; including, without limitation, the
preparation of and filing with the SEC of Forms N-SAR and Rule 24-2 Notices
respecting the Fund and its shares and payment of all applicable
registration or filing fees with respect to any of the foregoing. Insurer
will bear tile cost of registering the Separate Account as a unit investment
6
trust under the 1940 Act and registering units of interest under the
Contracts under the 1933 Act and keeping such registrations current and
effective; including, without limitation, the preparation and filing with
the SEC of Forms N-SAR and Rule 24-2 Notices respecting the Separate Account
and its units of interest and payment of all applicable registration or
filing fees with respect to any of the foregoing.
3.3 Other (Non-Sales-Related) Expense.
---------------------------------
The Fund will bear the costs of preparing, filing with the SEC and
setting for printing the Fund's prospectus, statement of additional
information and any amendments or supplements thereto (collectively, the
"Fund Prospectus"), periodic reports to shareholders, Fund proxy material
and other shareholder communications and any related requests for voting
instructions from Participants (as defined below). The Fund or the
Distributor will bear the cost of mailing to existing Participants (as
defined below) any Fund Prospectus, periodic report to shareholders, Fund
proxy material and other shareholder communications and any related request
for voting instructions. Insurer will bear the costs of preparing, filing
with the SEC and setting for printing, the Separate Account's prospectus,
statement of additional information and any amendments or supplements
thereto (collectively, the "Separate Account Prospectus"), any periodic
reports to owners, annuitants or participants under the Contracts
(collectively, "Participants"), and other Participant communications. The
Fund and Insurer each will bear the costs of printing in quantity and
delivering to existing Participants the documents as to which it bears the
cost of preparation as set forth above in this Section 3.3, it being
understood that reasonable cost allocations will be made in cases where any
such Fund and/or Insurer documents are printed or mailed on a combined or
coordinated basis. If requested by Insurer, the Fund will provide annual
Prospectus, annual reports, semi-annual reports and other shareholder
communications text to
Page 7
Insurer on diskette or other medium agreed to by the Parties. The Fund or the
Distributor will bear the cost of tabulation of proxy votes. In the event that
the Fund initiates (i) a reorganization of a Portfolio as defined by Section 2
of the 1940 Act, or (ii) a change in the name of a Portfolio or the Fund, the
Fund or the Distributor shall reimburse Insurer for the Insurer's internal and
out-of-pocket costs associated with the aforementioned actions.
Insurer agrees to use its best efforts to minimize any costs incurred
under this Section and shall provide the Fund with acceptable documentation of
any such costs incurred.
3.4 Other Sales-Related Expense.
---------------------------
Expenses of distributing the Portfolio's shares and the Contracts will
be paid by Contracts Distributor and other parties, as they shall determine
by separate agreement.
3.5 Parties to Cooperate.
--------------------
The Adviser, Insurer, Contracts Distributor, and Distributor each
agrees to cooperate with the others, as applicable, in arranging to print,
mail and/or deliver combined or coordinated prospectuses or other materials
of the Fund and Separate Account.
3.6 Use of Fund or Adviser Name by Insurer.
--------------------------------------
(a) The Insurer will furnish, or will cause to be furnished to the
Fund or the Adviser, each piece of sales literature or other promotional
material in which the Fund or the Adviser is named, at least ten (10)
Business Days prior to its use. No such material will be used if the Fund or
the Adviser reasonably objects to such use within five (5) Business Days
after receipt of such material.
(b) The Insurer will not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund,
in connection with the sale of Contracts other than the information or
representations contained in a registration statement, prospectus or
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statement of additional information for Fund shares, as such registration
statement prospectus and statement of additional information may be amended
or supplemented, from time to time, or in published reports for the Fund
which are in the public domain or approved by the Fund or the Adviser for
distribution, or in the sales literature or other material provided by the
Fund, except with the permission of the Fund or the Adviser. The Fund and
the Adviser agree to respond to any request for approval on a prompt and
timely basis. Nothing in this Section will be construed as preventing the
Insurer or its employees or agents from giving advice on investment in the
Fund.
(c) The Fund and the Adviser hereby consent to the Insurer's use of
the name AllianceBernstein L.P. and AllianceBernstein Variable Products
Series Fund, Inc. and appropriate variations thereof in connection with the
marketing the Contracts, subject to the terms of this Section. Such consent
will terminate with the termination of this Agreement.
3.7 Use of Insurer Name by Fund or Adviser.
--------------------------------------
(a) The Fund or Adviser will furnish, or will cause to be
furnished, to the Insurer or its designee, each piece of sales literature or
other promotional material in which the Insurer or its separate account is
named, at least ten (10) Business Days prior to its use. No such material
win be used if the Insurer reasonably objects to such use within five (5)
Business Days after receipt of such material.
(b) The Fund and the Adviser will not give any information or make
any representations or statements on behalf of the Insurer or concerning the
Insurer, each Account, or the Contracts other than the information or
representations contained in a registration statement prospectus or
statement of additional information for the Contracts, as such registration
statement prospectus and statement of additional information may be amended
or supplemented, from time to time,
9
or in published reports for each Account or the Contacts which are in the
public domain or approved by the Insurer for distribution to Contract
owners, or in the sales literature or other material provided by the
Insurer, except with the permission of the Insurer. The Insurer agrees to
respond to any request for approval on a prompt and timely basis.
3.8 Sales Literature and Other Promotional Materials.
------------------------------------------------
For purposes of this Section 3, the phrase "sales literature and 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, statements of additional information, 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. ("NASD"), the 1933 Act or the 1940 Act.
3.9 Calculation of Performance Information.
--------------------------------------
The Adviser will be responsible for calculating the performance information
for the Fund. The Insurer will be responsible for calculating the
performance information for the Contracts. The Adviser will be liable to the
Insurer for any material mistakes it makes in calculating the performance
information for the Fund which cause losses to the Insurer. The Insurer will
be
10
liable to the Adviser for any material mistakes it makes in calculating the
performance information for the Contracts which cause losses to the Adviser.
Each Party will be liable for any material mistakes it makes in reproducing
the performance information for the Contracts or the Fund, as appropriate.
The Fund and the Adviser agree to provide the Insurer with performance
information for the Fund on a timely basis to enable the Insurer to
calculate performance information for the Contracts in accordance with
applicable state and federal law.
Section 4. Legal Compliance
---------------------------
4.1 Tax Laws.
--------
(a) The Adviser will use its best efforts to qualify and to
maintain qualification of each Portfolio as a regulated investment company
("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), and the Adviser or Distributor will notify Insurer immediately
upon having a reasonable basis for believing that a Portfolio has ceased to
so qualify or that it might not so qualify in the future.
(b) Insurer represents that it believes, in good faith, that the
Contracts will be treated as annuity or life insurance contracts under
applicable provisions of the Code and that it will make every effort to
maintain such treatment Insurer will notify the Fund and Distributor
immediately upon having a reasonable basis for believing that any of the
Contracts have ceased to be so treated or that they might not be so treated
in the future.
(c) The Fund will use its best efforts to comply and to maintain
each Portfolio's compliance with the diversification requirements set forth
in Section 817(h) of the Code and Section 1.817-5(b) of the regulations
under the Code, and the Fund, Adviser or Distributor will notify Insurer
immediately upon having a reasonable basis for believing that a Portfolio
has ceased to so comply or that a Portfolio might not so comply in the
future.
11
(d) Insurer represents that it believes, in good faith, that the
Separate Account is a "segregated asset account" and that interests in the
Separate Account are offered exclusively through the purchase of or transfer
into a "variable contact" within the meaning of such terms under Section
817(h) of the Code and the regulations thereunder. Insurer will make every
effort to continue to meet such definitional requirements, and it will
notify the Fund and Distributor immediately upon having a reasonable basis
for believing that such requirements have ceased to be met or that they
might not be met in the future.
(e) The Adviser will manage the Fund as a RIC in compliance with
Subchapter M of the Code and will use its best efforts to manage to be in
compliance with Section 817(h) of the Code and regulations thereunder. The
Fund has adopted and will maintain procedures for ensuring that the Fund is
managed in compliance with Subchapter M and Section 817(h) and regulations
thereunder.
(f) Should the Distributor or Adviser become aware of a failure of
Fund, or any of its Portfolios, to be in compliance with Subchapter M of the
Code or Section 817(h) of the Code and regulations thereunder, they
represent and agree that they will immediately notify Insurer of such in
writing.
4.2 Insurance and Certain Other Laws.
--------------------------------
(a) The Adviser will use its best efforts to cause the Fund to
comply with any applicable state insurance laws or regulations, to the
extent specifically requested in writing by Insurer. If it cannot comply, it
will so notify Insurer in writing. The Adviser agrees that it will or will
cause the Fund to furnish the information required by state insurance laws
so that the Insurer can obtain the authority needed to issue the Contracts
in the various states.
12
(b) Insurer represents and warrants that (i) it is an insurance
company duly organized, validly existing and in good standing under
applicable state xxxxxx has full corporate power, authority and legal right
to execute, deliver and perform its duties and comply with its obligations
under this Agreement, (ii) it has legally and validly established and
maintains the Separate Account as a segregated asset account under
applicable state law, and (iii) the Contracts comply in all material
respects with all other applicable federal and state laws and regulations.
(c) Contracts Distributor represents and warrants that Contracts
Distributor is a business corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware and has full
corporate power, authority and legal right to execute, deliver, and perform
its duties and comply with its obligations under this Agreement.
(d) Distributor represents and warrants that it is a business
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has full corporate power, authority and
legal right to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.
(e) Distributor represents and warrants that the Fund is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Maryland and has full power, authority, and legal right
to execute, deliver, and perform its duties and comply with its obligations
under this Agreement.
(f) Adviser represents and warrants that it is a limited
partnership, duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full power, authority, and legal right
to execute, deliver, and perform its duties and comply with its obligations
under this Agreement.
4.3 Securities Laws.
---------------
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(a) Insurer represents and warrants that (i) interests in the
Separate Account pursuant to the Contacts will be registered under the 1933
Act to the extent required by the 1933 Act and the Contracts will be duly
authorized for issuance and sold in compliance with applicable law, (ii) the
Separate Account is or will be registered and will remain registered under
the 1940 Act to the extent required by the 1940 Act, (iii) the Separate
Account does and will comply in all material respects with the requirements
of the 1940 Act and the rules thereunder, (iv) the Separate Account's 1933
Act registration statement relating to the Contracts, together with any
amendments thereto, will, at all times comply in all material respects with
the requirements of the 1933 Act and the rules thereunder, and (v) the
Separate Account Prospectus will at all times comply in all material
respects with the requirements of the 1933 Act and the rules thereunder.
(b) The Adviser and Distributor represent and warrant that (i) Fund
shares sold pursuant to this Agreement will be registered under the 1933 Act
to the extent required by the 1933 Act and duly authorized for issuance and
sold in compliance with Maryland law, (ii) the Fund is and will remain
registered under the 1940 Act to the extent required by the 1940 Act, (iii)
the Fund will amend the registration statement for its shares under the 1933
Act and itself under the 1940 Act from time to time as required in order to
effect the continuous offering of its shares, (iv) the Fund does and will
comply in all material respects with the requirements of the 1940 Act and
the rules thereunder, (v) the Fund's 1933 Act registration statement,
together with any amendments thereto, will at all times comply in all
material respects with the requirements of the 1933 Act and rules
thereunder, and (vi) the Fund Prospectus will at all times comply in all
material respects with the requirements of the 1933 Act and the rules
thereunder.
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(c) The Fund will register and qualify its shares for sale in
accordance with the laws of any state or other jurisdiction only if and to
the extent reasonably deemed advisable by the Fund, Insurer or any other
life insurance company utilizing the Fund.
(d) Distributor and Contracts Distributor each represents and
warrants that it is and will remain registered as a broker-dealer with the
SEC under the Securities Exchange Act of 1934, as amended, and is and will
remain a member in good standing of the National Association of Securities
Dealers Inc. (the "NASD").
4.4 Notice of Certain Proceedings and Other Circumstances.
-----------------------------------------------------
(a) Distributor or the Fund shall immediately notify Insurer of (i)
the issuance by any court or regulatory body of any stop order, cease and
desist order, or other similar order with respect to the Fund's registration
statement under the 1933 Act or the Fund Prospectus, (ii) any request by the
SEC for any amendment to such registration statement or Fund Prospectus,
(iii) the initiation of any proceedings for that purpose or for any other
purpose relating to the registration or offering of the Fund's shares, or
(iv) any other action or circumstances that may prevent the lawful offer or
sale of Fund shares in any state or jurisdiction, including, without
limitation, any circumstances in which (1) the Fund's shares are not
registered and, in all material respects, issued and sold in accordance with
applicable state and federal law or (2) such law precludes the use of such
shares as an underlying investment medium of the Contracts issued or to be
issued by Insurer. Distributor and the Fund 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) Insurer and Contracts Distributor shall immediately notify the
Fund of (i) the issuance by any court or regulatory body of any stop order,
cease and desist order or similar
15
order with respect to the separate Account's registration statement under
the 1933 Act relating to the Contracts or the Separate Account Prospectus,
(ii) any request by the SEC for any amendment to such registration statement
or Separate Account Prospectus, (iii) the initiation of any proceedings for
that purpose or for any other purpose relating to the registration or
offering of the Separate Account interests pursuant to the Contracts, or
(iv) any other action or circumstances that may prevent the lawful offer or
sale of said interests in any state or jurisdiction, including, without
limitation, any circumstances in which said interests are not registered
and, in all material respects, issued and sold in accordance with applicable
state and federal law. Insurer and Contracts Distributor 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.
4.5 Insurer to Provide Documents.
----------------------------
Upon request Insurer will provide the Fund and the Distributor one
complete copy of SEC registration statements, Separate Account Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
applications for exemptions, requests for no-action letters, and amendments
to any of the above, that materially relate to the Separate Account or the
Contracts, contemporaneously with the filing of such document with the SEC
or other regulatory authorities.
4.6 Fund to Provide Documents.
-------------------------
Upon request, the Fund will provide to Insurer one complete copy of SEC
registration statements, Fund Prospectuses, reports, any preliminary and
final proxy material, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that materially relate to
the Fund or its shares, contemporaneously with the filing of such document
16
with the SEC or other regulatory authorities.
4.7 Market Timing.
-------------
Insurer acknowledges that the Fund's Board of Directors has adopted
policies and procedures reasonably designed to detect and deter frequent
purchases and redemptions of Portfolio shares or excessive or short-term
trading that might disadvantage owners investing in Portfolios of the Fund
on a long term basis through the Contracts and other variable contracts
issued by insurers not affiliated with Insurer. These policies and
procedures are described in the Fund's registration statement. Adviser and
Distributor acknowledge that Insurer, on behalf of its Separate Account(s),
has adopted policies and procedures reasonably designed to detect and deter
frequent transfers of contract value among the subaccounts of the Separate
Account(s) including those investing in Portfolios of the Fund which are
available as investment options under the Contracts. These policies and
procedures are described in the registration statements of the Separate
Account(s) through which the Contracts are offered.
The Insurer will cooperate with the Fund's, the Adviser's and the
Distributor's reasonable requests in taking steps to deter and detect such
transfers by Contract owners. Subject to applicable law and the terms of
each Contract, the Insurer will furnish other information the Fund, directly
or through its agent, reasonably requests regarding frequent transfers by
Contract owners among the subaccounts investing Portfolios of the Fund which
are available under the Contracts. In addition, in compliance with Rule
22c-2 under the 1940 Act, the Insurer hereby agrees to (i) provide, promptly
upon request by Fund, directly or through its agent, the taxpayer
identification number of all Contract owners that purchased, redeemed,
transferred, or exchanged shares of Portfolios of the Fund held under a
Contract, and the amount and dates of such Contract owner's purchases,
redemptions, transfers, and exchanges involving such Portfolios; and (ii)
17
execute any instructions from the Fund, directly or through its agent, to
restrict or prohibit further purchases or exchanges of shares of the
Portfolios by a Contract owner who has been identified by the Fund, directly
or through its agent, as having engaged in transactions in Portfolio shares
that violate the policies adopted by the Fund for the purpose of eliminating
or reducing any dilution of the value of the outstanding shares of the
Portfolio. If the requested information is not on the Insurer's books and
records, the Insurer agrees to use reasonable efforts to: (i) provide or
arrange to provide to the Fund, directly or through its agent, the requested
information regarding Contract owners who hold an account with an indirect
intermediary; or (ii) if directed by the Fund, directly or through its
agent, block further purchases of shares of the Portfolios from such
indirect intermediary. For purposes of the preceding sentence "indirect
intermediary" has the same meaning as in Rule 22c-2 under the 1940 Act. The
Insurer further agrees to either assess any applicable redemption fee that
the Fund has adopted to curtail frequent trading, or communicate to the Fund
or its agent any information necessary for the Fund or its agent to assess
such redemption fees directly against payment of redemption proceeds. 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.
4.8 Compliance with USA Patriot Act.
-------------------------------
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
18
suspected of possible terrorist or money laundering activities in accordance
with Section 314(b) of the USA PATRIOT ACT.
Section 5. Mixed and Shared Funding
-----------------------------------
5.1 General.
-------
The Fund has obtained an order exempting it from certain provisions of
the 1940 Act and rules thereunder so that the Fund is available for
investment by certain other entities, including, without limitation,
separate accounts funding variable life insurance policies and separate
accounts of insurance companies ("Participating Insurance Companies")
unaffiliated with Insurer ("Mixed and Shared Funding Order"). The Parties
recognize that the SEC has imposed terms and conditions for such orders that
are substantially identical to many of the provisions of this Section 5.
5.2 Disinterested Directors.
-----------------------
The Fund agrees that the Fund's Board of Directors (the "Board of
Directors") shall at all times consist of directors a majority of whom (the
"Disinterested Directors") are not interested persons of Adviser or
Distributor within the meaning of Section 2(a)(19) of the 1940 Act.
5.3 Monitoring for Material Irreconcilable Conflicts.
------------------------------------------------
The Fund agrees that its Board of Directors will monitor for the
existence of any material irreconcilable conflict between the interests of
the participants in all separate accounts of life insurance companies
utilizing the Fund, including the Separate Account. Insurer agrees to inform
the Board of Directors of the Fund of the existence of or any potential for
any such material irreconcilable conflict of which it is aware. The concept
of a "material irreconcilable conflict" is not defined by the 1940 Act or
the rules thereunder, but the Parties recognize that such a conflict may
arise for a variety of reasons, including, without limitation:
19
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax
or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant
proceeding;
(d) the manner in which the investments of any Portfolio are being
managed;
(e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract participants or by
participants of different life insurance companies utilizing the Fund, or
(f) a decision by a life insurance company utilizing the Fund to
disregard the voting instructions of participants.
Insurer will assist the Board of Directors in carrying out its
responsibilities by providing the Board of Directors with all information
reasonably necessary for the Board of Directors to consider any issue
raised, including information as to a decision by Insurer to disregard
voting instructions of Participants. The Board of Directors will record in
its minutes, or other appropriate records, all reports received by it and
all action with regard to a material irreconcilable conflict.
5.4 Conflict Remedies.
-----------------
(a) It is agreed that if it is determined by a majority of the
members of the Board of Directors or a majority of the Disinterested Directors
that a material irreconcilable conflict exists, Insurer and the other life
insurance companies utilizing the Fund will, at their own expense and to the
extent reasonably practicable (as determined by a majority of the
20
Disinterested Directors), take whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, which steps may include, but
are not limited to:
(i) withdrawing the assets allocable to some or all
of the separate accounts (or the subaccounts of
the separate accounts) from the Fund or any
Portfolio and reinvesting such assets in a
different investment medium, including another
Portfolio of the Fund, or submitting the question
whether such segregation should be implemented to
a vote of all affected participants and, as
appropriate, segregating the assets of any
particular group (e.g., annuity contract owners
or participants, life insurance contract owners
or all contract owners and participants of one or
more life insurance companies utilizing the Fund)
that votes in favor of such segregation, or
offering to the affected contract owners or
participants the option of making such a change;
and
(ii) establishing a new registered investment company
of the type defined as a "Management Company" in
Section 4(3) of the 1940 Act or a new separate
account that is operated as a Management Company.
(b) If the material irreconcilable conflict arises because of
Insurer's decision to disregard Participant voting instructions and that
decision could conflict with the majority of Participant voting instructions
and represents a minority position or would preclude a majority vote,
Insurer may be required, at the Fund's election, to withdraw the Separate
Account's (or sub-account's) investment in the Fund provided, however, that
such withdrawal and termination
21
will be limited to the extent required by the foregoing irreconcilable
material conflict as determined by a majority of the disinterested directors
of the Board of Directors. No charge or penalty will be imposed as a result
of such withdrawal. Any such withdrawal must take place within six months
after the Fund gives notice to Insurer that this provision is being
implemented, and until the end of such six-month period, Distributor and the
Fund shall continue to accept and implement orders by Insurer for the
purchase and redemption of shares of the Fund.
(c) If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to Insurer
conflicts with the majority of other state regulators, then Insurer will
withdraw the Separate Account's (or sub-account's) investment in the Fund
within six months after the Fund's Board of Directors informs Insurer that
it has determined that such decision has created a material irreconcilable
conflict, provided that such withdrawal will be limited to the extent
required by the irreconcilable material conflict as determined by a majority
of the disinterested directors of the Fund Board. No charge or penalty will
be imposed as a result of such withdrawal. Until the end of such six-month
period, Distributor and Fund shall continue to accept and implement orders
by Insurer for the purchase and redemption of shares of the Fund.
(d) Insurer agrees that any remedial action taken by it in
resolving any material irreconcilable conflict will be carried out at its
expense and with a view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors
will determine whether or not any proposed action adequately remedies any
material irreconcilable conflict. In no event, however, will the Fund or
Distributor be required to establish a new funding medium for any Contracts.
Insurer will not be required by the terms hereof to establish a
22
new funding medium for any Contracts if an offer to do so has been declined by
vote of a majority of Participants materially adversely affected by the
material irreconcilable conflict.
5.5 Notice to Insurer.
-----------------
The Fund will promptly make known in writing to Insurer the Board of
Directors' determination of the existence of a material irreconcilable
conflict, a description of the facts that give rise to such conflict and the
implications of such conflict.
5.6 Information Requested by Board of Directors.
-------------------------------------------
Insurer and the Fund will at least annually submit to the Board of
Directors of the Fund such reports, materials or data as the Board of
Directors may reasonably request so that the Board of Directors may fully
carry out the obligations imposed upon it by the provisions hereof, and said
reports, materials and data will be submitted at any reasonable time deemed
appropriate by the Board of Directors. All reports received by the Board of
Directors of potential or existing conflicts, and all Board of Directors
actions with regard to determining the existence of a conflict, notifying
life insurance companies utilizing the Fund of a conflict and determining
whether any proposed action adequately remedies a conflict, will be properly
recorded in the minutes of the Board of Directors or other appropriate
records, and such minutes or other records will be made available to the SEC
upon request.
5.7 Compliance with SEC Rules.
-------------------------
If, at any time during which the Fund is serving as an investment medium
for variable life insurance policies, 1940 Act Rules 6e-3(T) or, if
applicable, 6e-2 are amended or Rule 6e-3 is adopted to provide exemptive
relief with respect to mixed and shared funding, the Parties agree that they
will comply with the terms and conditions thereof and that the terms of this
Section 5 shall be deemed modified if and only to the extent required in order
also to comply with the
23
terms and conditions of such exemptive relief that is afforded by any of
said rules that are applicable.
Section 6. Termination
----------------------
6.1 Events of Termination.
---------------------
Subject to Section 6.4 below, this Agreement will terminate as to a
Portfolio:
(a) at the option of Insurer or Distributor upon at least sixty
days' advance written notice to the other Parties, or if later, upon the
receipt of any required exemptive relief or orders from the SEC, unless
otherwise agreed in a separate written agreement among the Parties; or
(b) at the option of the Fund upon (i) at least sixty days' advance
written notice to the other Parties, and (ii) approval by (1) a majority of
the disinterested Directors upon a finding that a continuation of this
Contract is contrary to the best interests of the Fund, or (2) a majority
vote of the shares of the affected Portfolio in the corresponding Division
of the Separate Account (pursuant to the procedures set forth in Section 11
of this Agreement for voting Trust shares in accordance with Participant
instructions); or
(c) at the option of the Fund, upon receipt of the written notice
to the other Parties by the Fund, upon institution of formal proceedings
against Insurer or Contracts Distributor by the NASD, the SEC, any state
insurance regulator or any other regulatory body regarding Insurer's
obligations under this Agreement or related to the sale of the Contracts,
the operation of the Separate Account, or the purchase of the Fund shares,
if, in each case, the Fund reasonably determines in good faith that such
proceedings, or the facts on which such proceedings would be based, have a
material likelihood of imposing material adverse consequences on the
Portfolio to be terminated; or
24
(d) at the option of Insurer, upon receipt of the written notice to
the other Parties by the Insurer, upon institution of formal proceedings
against the Fund, Adviser, or Distributor by the NASD, the SEC, or any state
insurance regulator or any other regulatory body regarding the Fund's,
Adviser's or Distributor's obligations under this Agreement or related to
the operation or management of the Fund or the purchase of Fund shares, if,
in each case, Insurer reasonably determines that such proceedings, or the
facts on which such proceedings would be based, have a material likelihood
of imposing material adverse consequences on Insurer, Contracts Distributor
or the Division corresponding to the Portfolio to be terminated; or
(e) at the option of any Party, upon receipt of the written notice
to the other Parties, in the event that (i) the Portfolio's shares are not
registered and, in all material respects, issued and sold in accordance with
any applicable state and federal law or (ii) such law precludes the use of
such shares as an underlying investment medium of the Contracts issued or to
be issued by Insurer; or
(f) upon termination of the corresponding Division's investment in
the Portfolio pursuant to Section 5 hereof; or
(g) at the option of Insurer, upon receipt of the written notice to
the other Parties by the Insurer, if the Portfolio ceases to qualify as a
RIC under Subchapter M of the Code or under successor or similar provisions;
or
(h) at the option of Insurer, upon receipt of the written notice to the
other Parties by the Insurer, if the Portfolio fails to comply with Section
817(h) of the Code or with successor or similar provisions; or
25
(i) at the option of Insurer, upon receipt of the written notice to
the other Parties by the Insurer, if Insurer reasonably believes that any
change in a Fund's investment adviser or investment practices will
materially increase the risks incurred by Insurer.
6.2 Funds to Remain Available.
-------------------------
Except (i) as necessary to implement Participant-initiated
transactions, (ii) as required by state insurance laws or regulations, (iii)
as required pursuant to Section 5 of this Agreement or (iv) with respect to
any Portfolio as to which this Agreement has terminated, Insurer shall not
(1) redeem Fund shares attributable to the Contracts, or (2) prevent
Participants from allocating payments to or transferring amounts from a
Portfolio that was otherwise available under the Contracts, until, in either
case, 60 calendar days after Insurer shall have notified the Fund or
Distributor of its intention to do so.
6.3 Survival of Warranties and Indemnifications.
-------------------------------------------
All warranties and indemnifications will survive the termination of
this Agreement.
6.4 Continuance of Agreement for Certain Purposes.
---------------------------------------------
Notwithstanding any termination of this Agreement, the Distributor shall
continue to make available shares of the Portfolios pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (the "Existing Contracts"), except as
otherwise provided under Section 5 of this Agreement. Specifically, and
without limitation, the Distributor shall facilitate the sale and purchase of
shares of the Portfolios as necessary in order to process premium payments,
surrenders and other withdrawals, and transfers or reallocations of values
under Existing Contracts.
Section 7. Parties to Cooperate Respecting Termination
------------------------------------------------------
26
The other Parties hereto agree to cooperate with and give reasonable
assistance to Insurer in taking all necessary and appropriate steps for the
purpose of ensuring that the Separate Account owns no shares of a Portfolio
after the Final Termination Date with respect thereto.
Section 8. Assignment
---------------------
This Agreement may not be assigned by any Party, except with the
written consent of each other Party.
Section 9. Class B Distribution Payments
----------------------------------------
From time to time during the term of this Agreement the Distributor may
make payments to the Insurer pursuant to a distribution plan adopted by the
Fund with respect to the Class B shares of the Portfolios pursuant to Rule
12b-1 under the 1940 Act (the "Rule 12b-1 Plan") in consideration of the
Insurer's furnishing distribution services relating to the Class B shares of
the Portfolios and providing administrative, accounting and other services,
including personal service and/or the maintenance of Participant accounts,
with respect to such shares. The Distributor has no obligation to make any
such payments, and the Insurer waives any such payment, until the
Distributor receives monies therefor from the Fund. Any such payments made
pursuant to this Section 9 shall be subject to the following terms and
conditions:
(a) Any such payments shall be in such amounts as the Distributor
may from time to time advise the Insurer in writing but in any event not in
excess of the amounts permitted by the Rule l2b-l Plan. Such payments may
include a service fee in the amount of .25 of 1% per annum of the average
daily net assets of the Fund attributable to the Class B shares of a
Portfolio held by clients of the Insurer. Any such service fee shall be paid
solely for personal service and/or the maintenance of Participant accounts.
27
(b) The provisions of this Section 9 relate to a plan adopted by
the Fund pursuant to Rule 12b-1. In accordance with Rule 12b-1, any person
authorized to direct the disposition of monies paid or payable by the Fund
pursuant to this Section 9 shall provide the Funds Board of Directors, and
the Directors shall review, at least quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
(c) The provisions of this Section 9 shall remain in effect for not
more than a year and thereafter for successive annual periods only so long
as such continuance is specifically approved at least annually in conformity
with Rule 12b-1 and the 1940 Act. The provisions of this Section 9 shall
automatically terminate in the event of the assignment (as defined by the
0000 Xxx) of this Agreement, in the event the Rule l2b-1 Plan terminates or
is not continued. In addition, the provisions of this Section 9 may be
terminated at any time, without penalty, by either the Distributor or the
Insurer with respect to any Portfolio on not more than 60 days' nor less
than 30 days' written notice delivered or mailed by registered mail, postage
prepaid, to the other Party. Notwithstanding termination of this Section 9
or termination of this Agreement, provided that the Rule 12b-1 Plan or any
such similar plan remain in effect, the provisions of this Section 9 shall
remain in effect with regard to Existing Contracts and the Insurer shall
continue to receive payments therefore.
Section 10. Notices
-------------------
Notices and communications required or permitted by Section 2 hereof
will be given by means mutually acceptable to the Parties concerned. Each
other notice or communication required or permitted by this Agreement will
be given to the following persons at the following addresses by registered,
certified or overnight mail and facsimile numbers, or such other persons,
28
addresses or facsimile numbers as the Party receiving such notices or
communications may subsequently direct in writing:
Insurer
American Enterprise Life Insurance Company
IDS Life Insurance Company
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx X. Xxxxx III, Vice President
FAX: (000) 000-0000
Contracts Distributor
Ameriprise Financial Services, Inc.
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Vice President
FAX: (000) 000-0000
If to Insurer or Contracts Distributor, a copy
to:
Ameriprise Financial Services, Inc.
50607 Ameriprise Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Vice President and Group Counsel
AllianceBernstein Investments, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
FAX: (000) 000-0000
AllianceBernstein L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
FAX: (000) 000-0000
Section 11. Voting Procedures
-----------------------------
Subject to the cost allocation procedures set forth in Section 3
hereof, Insurer will provide such information regarding Participants so that
Distributor can distribute all proxy material
29
furnished by the Fund to Participant. Insurer will vote Fund shares in
accordance with instructions received from Participants. Insurer will vote
Fund shares that are (i) not attributable to Participants or (ii)
attributable to Participants, but for which no instructions have been
received, in the same proportion as Fund shares for which said instructions
have been received from Participants. Insurer agrees that it will disregard
Participant voting instructions only to the extent it would be permitted to
do so pursuant to Rule 6e-3 (T)(b)(15)(iii) under the 1940 Act if the
Contracts were variable life insurance policies subject to that rule. Other
Participating Life Insurance Companies utilizing the Fund will be
responsible for calculating voting privileges in a manner consistent with
that of Insurer, as prescribed by this Section 11.
The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular, the Fund either will provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the
1940 Act not to require such meetings) or, as the Fund currently intends, to
comply with Section 16(c) of the 1940 Act (although the Fund is not one of
the trusts described in Section 16(c) of that Act) as well as with Sections
16(a) and, if and when applicable, 16(b). Further, the Fund will act is
accordance with the SEC's interpretation of the requirements of Section
16(a) with respect to periodic elections of directors and with whatever
rules the SEC may promulgate with respect thereto.
Section 12. Foreign Tax Credits
-------------------------------
The Adviser agrees to consult in advance with Insurer concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to
pass through the benefit of any foreign tax credits to the Fund's
shareholders.
30
Section 13. Indemnification
---------------------------
13.1 Indemnification of Fund, Distributor and Adviser by Insurer.
-----------------------------------------------------------
(a) Except to the extent provided in Sections 13.1(b) and 13.1(c),
below, Insurer agrees to indemnify and hold harmless the Fund, Distributor
and Adviser and each person, if any, who controls the Fund, Distributor or
Adviser within the meaning of Section 15 of the 1933 Act, and each of their
directors and officers, (collectively, the "Indemnified Parties" for
purposes of this Section 13.1) against any and all losses, claims, expenses,
damages, liabilities (including amounts paid in settlement with the written
consent of Insurer) or actions in respect thereof (including, to the extent
reasonable, legal and other expenses), to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages, liabilities or actions:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the Separate Account's
1933 Act registration statement, the Separate
Account Prospectus, the Contracts or, to the
extent prepared by Insurer or Contracts
Distributor, sales literature or advertising for
the Contracts (or any amendment or supplement to
any of the foregoing), or arise out of or are
based upon the omission or the alleged omission
to state therein a material fact required to be
stated therein or necessary to make the
statements therein not misleading in light of the
circumstances in which they were made; provided
that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or
omission or such alleged
31
statement or omission was made in reliance upon
and in conformity with information furnished to
Insurer or Contracts Distributor by or on behalf
of the Fund, Distributor or Adviser for use in
the Separate Account's 1933 Act registration
statement, the Separate Account Prospectus, the
Contracts, or sales literature or advertising (or
any amendment or supplement to any of the
foregoing); or
(ii) arise out of or as a result of any other
statements or representations (other than
statements or representations contained in the
Fund's 1933 Act registration statement Fund
Prospectus, sales literature or advertising of
the Fund, or any amendment or supplement to any
of the foregoing, not supplied for use therein by
or on behalf of Insurer or Contracts Distributor)
or the negligent illegal or fraudulent conduct of
Insurer or Contracts Distributor or persons under
their control (including, without limitation,
their employees and "Associated Persons," as that
term is defined in paragraph (m) of Article I of
the NASD's By-Laws), in connection with the sale
or distribution of the Contracts or Fund shares;
or
(iii) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the Fund's 1933 Act
registration statement, Fund Prospectus, sales
literature or advertising of the Fund, or any
amendment or supplement to any of the foregoing,
or the omission or alleged omission to state
therein a
32
material fact required to be stated therein or
necessary to make the statements therein not
misleading if such a statement or omission was
made in reliance upon and in conformity with
information furnished to the Fund, Adviser or
Distributor by or on behalf of Insurer or
Contracts Distributor for use in the Fund's 1933
Act registration statement, Fund Prospectus,
sales literature or advertising of the Fund, or
any amendment or supplement to any of the
foregoing; or
(iv) arise as a result of any failure by Insurer or
Contracts Distributor to perform the obligations,
provide the services and furnish the materials
required of them under the terms of this
Agreement.
(b) Insurer shall not be liable under this Section 13.1 with
respect to any losses, claims, expenses, damages, liabilities or actions to
which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of that Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to
Distributor or to the Fund.
(c) Insurer shall not be liable under this Section 13.1 with
respect to any action against an Indemnified Party unless the Fund,
Distributor or Adviser shall have notified Insurer in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the action shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify
Insurer of any such action shall not relieve Insurer from any liability
which it may have to the Indemnified Party against whom such action is
brought otherwise than on
33
account of this Section 13.1, except to the extent that the failure to
notify results in the failure of actual notice to Insurer and Insurer is
damaged solely as a result of the failure to give such notice. In case any
such action is brought against an Indemnified Party, Insurer shall be
entitled to participate, at its own expense, in the defense of such action.
Insurer also shall be entitled to assume the defense thereof with counsel
approved by the Indemnified Party named in the action, which approval shall
not be unreasonably withheld. After notice from Insurer to such Indemnified
Party of Insurer's election to assume the defense thereof, the Indemnified
Party will cooperate fully with Insurer and shall bear the fees and expenses
of any additional counsel retained by it, and Insurer will not be liable to
such Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection
with the defense thereof, other than reasonable costs of investigation.
13.2 Indemnification of Insurer and Contracts Distributor by Adviser.
---------------------------------------------------------------
(a) Except to the extent provided in Sections 13.2(d) and 13.2(e),
below, Adviser agrees to indemnify and hold harmless Insurer and Contracts
Distributor and each person, if any, who controls Insurer or Contracts
Distributor within the meaning of Section 15 of the 1933 Act, and each of
their directors and officers, (collectively, the "Indemnified Parties" for
purposes of this Section 13.2) against any and all losses, claims, expenses,
damages, liabilities (including amounts paid in settlement with the written
consent of Adviser) or actions in respect thereof (including, to the extent
reasonable, legal and other expenses) to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages, liabilities or actions:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the Fund's 1933
34
Act registration statement, Fund Prospectus,
sales literature or advertising of the Fund or,
to the extent not prepared by Insurer or
Contracts Distributor, sales literature or
advertising for the Contracts (or any amendment
or supplement to any of the foregoing), or arise
out of or are based upon the omission or the
alleged omission to state therein a material fact
required to be stated therein or necessary to
make the statements therein not misleading in
light of the circumstances in which they were
made; provided that this agreement to indemnify
shall not apply as to any Indemnified Party if
such statement or omission or such alleged
statement or omission was made in reliance upon
and in conformity with information furnished to
Distributor, Adviser or the Fund by or on behalf
of Insurer or Contracts Distributor for use in
the Fund's 1933 Act registration statement, Fund
Prospectus, or in sales literature or advertising
(or any amendment or supplement to any of the
foregoing); or
(ii) arise out of or as a result of any other
statements or representations (other than
statements or representations contained in the
Separate Account's 1933 Act registration
statement, Separate Account Prospectus, sales
literature or advertising for the Contracts, or
any amendment or supplement to any of the
foregoing, not supplied for use therein by or on
behalf of Distributor, Adviser, or the Fund) or
the negligent, illegal or fraudulent conduct of
the Fund, Distributor,
35
Adviser or persons under their control
(including, without limitation, their employees
and Associated Persons), in connection with the
sale or distribution of the Contracts or Fund
shares; or
(iii) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the Separate Account's
1933 Art registration statement, Separate Account
Prospectus, sales literature or advertising
covering the Contracts, or any amendment or
supplement to any of the foregoing, or the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading in light of the circumstances in which
they were made, if such statement or omission was
made in reliance upon and in conformity with
information furnished to Insurer or Contracts
Distributor by or on behalf of the Fund,
Distributor or Adviser for use in the Separate
Account's 1933 Act registration statement,
Separate Account Prospectus, sales literature or
advertising covering the Contracts, or any
amendment or supplement to any of the foregoing;
or
(iv) arise as a result of any failure by the Fund,
Adviser or Distributor or persons under their
respective control or subject to their
authorization to perform the obligations, provide
the services and furnish the materials required
of them under the terms of this Agreement
including, but not limited to, a failure, whether
36
unintentional in good faith or otherwise, any
material error 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 13.2(a)(iv) as an
"error"); provided, however, that the foregoing
will not apply where such error is the result of
incorrect information supplied by or on behalf of
the Insurer to the Fund or the Adviser, and will
be limited to (1) reasonable administrative costs
necessary to correct such error, and (2) amounts
which the Insurer has paid out of its own
resources to make Contract owners whole as a
result of such error; or
(v) arise out of or result from any material breach
of any representation and/or any warranty made by
the Adviser or the Fund in this Agreement, or
arise out of or result from any other material
breach of this Agreement by the Adviser or the
Fund or persons under their respective control or
subject to their authorization.
(b) Except to the extent provided in Sections 13.2(d) and 13.2(e)
hereof, Adviser agrees to indemnify and hold harmless the Indemnified
Parties from and against any and all losses, claims, expenses, damages,
liabilities (including amounts paid in settlement thereof with, except as
set forth in Section 13.2(c) below, the written consent of Adviser) or
actions in respect thereof (including, to the extent reasonable, legal and
other expenses) to which the Indemnified Parties may become subject directly
or indirectly under any statute, regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages, liabilities or actions
directly or indirectly result from or arise out of the failure of any
Portfolio to operate as a
37
regulated investment company in compliance with (i) Subchapter M of the Code
and regulations thereunder and (ii) Section 817(h) of the Code and
regulations thereunder (except to the extent that such failure is caused by
Insurer), including, without limitation, any income taxes and related
penalties, rescission charges, liability under state law to Contract owners
or Participants asserting liability against Insurer or Contracts Distributor
pursuant to the Contracts, the costs of any ruling and closing agreement or
other settlement with the Internal Revenue Service, and the cost of any
substitution by Insurer of shares of another investment company or portfolio
for those of any adversely affected Portfolio as a funding medium for the
Separate Account that Insurer deems necessary or appropriate as a result of
the noncompliance.
(c) The written consent of Adviser referred to in Section 13.2(b)
above shall not be required with respect to amounts paid in connection with
any ruling and closing agreement or other settlement with the Internal
Revenue Service.
(d) Adviser shall not be liable under this Section 13.2 with
respect to any losses, claims, expenses, damages, liabilities or actions to
which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of such Indemnified Party's
reckless disregard of its obligations and duties under this Agreement or to
Insurer, Contracts Distributor or the Separate Account.
(e) Adviser shall not be liable under this Section 13.2 with
respect to any action against an Indemnified Party unless Insurer or
Contracts Distributor shall have notified Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the action shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent),
38
but failure to notify Adviser of any such action shall not relieve Adviser
from any liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this Section 13.2. In
case any such action is brought against an Indemnified Party, Adviser will
be entitled to participate, at its own expense, in the defense of such
action. Adviser also shall be entitled to assume the defense thereof (which
shall include, without limitation, the conduct of any ruling request and
closing agreement or other settlement proceeding with the Internal Revenue
Service), with counsel approved by the Indemnified Party named in the
action, which approval shall not be unreasonably withheld. After notice from
Adviser to such Indemnified Party of Adviser's election to assume the
defense thereof, the Indemnified Party will cooperate fully with Adviser and
shall bear the fees and expenses of any additional counsel retained by it
and Adviser will not be liable to such Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof,
other than reasonable costs of investigation.
13.3 Effect of Notice.
----------------
Any notice given by the indemnifying Party to an Indemnified Party
referred to in Section 13.1(c) or 13.2(e) above of participation in or control
of any action by the indemnifying Party will in no event be deemed to be an
admission by the indemnifying Party of liability, culpability or
responsibility, and the indemnifying Party will remain free to contest
liability with respect to the claim among the Parties or otherwise.
Section 14. Limitation of Liability
-----------------------------------
Except as previously stated herein, as between the Parties, in no event
will any Party to this Agreement be responsible to any other Party for any
incidental, indirect, consequential,
39
punitive or exemplary damages of any Fund arising from this Agreement,
including, without limitation, lost revenues, loss of profits or loss of
business.
Section 15. Arbitration
-----------------------
Any controversy of claim arising or relating to this Agreement, or the
breach thereof, will be settled by arbitration administered by the American
Arbitration Association in accordance with its Commercial Arbitration Rules
and Title 9 of the U.S. Code. Judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The
number of arbitrators will be three, one of whom will be appointed by the
Insurer or an affiliate, one of whom will be appointed by the Fund and/or the
Adviser or an affiliate; and the third of whom will be selected by mutual
agreement, if possible, within 30 days of the selection of the second
arbitrator and thereafter by the administering authority. The arbitrators will
have no authority to award punitive damages or any other damages not measured
by the prevailing Party's actual damages, and may not, in any event, make any
ruling, finding or award that does not conform to the terms and conditions of
this Agreement. Any Party may make an application to the arbitrators seeking
injunctive relief to maintain the status quo until such time as the
arbitration award is rendered or the controversy is otherwise resolved. Any
Party may apply to any court having jurisdiction hereof and seek injunctive
relief in order to maintain the status quo until such time as the arbitration
award is rendered or the controversy is otherwise resolved.
Section 16. Confidentiality
---------------------------
Notwithstanding anything to the contrary contained in this Agreement, in
addition to and not in lieu of other provisions in this Agreement:
(a) "Confidential Information" includes but is not limited to all
proprietary and confidential information of the Contracts Distributor, Insurer
and their subsidiaries, affiliates
40
and licensees (collectively the "Protected Parties" for purposes of this
Section 16), including without limitation all information regarding the
customers of the Protected Parties; or the accounts, account numbers, names,
addresses, social security numbers or any other personal identifier of such
customers; or any information derived therefrom.
(b) Neither the Distributor nor the Adviser may use or disclose
Confidential Information for any purpose other than to carry out the purpose
for which Confidential Information was provided to Distributor and/or
Adviser as set forth in the Agreement; and the Distributor and the Adviser
agree to cause all their employees, agents and representatives, or any other
Party to whom the Distributor and/or the Adviser may provide access to or
disclose Confidential Information to limit the use and disclosure of
Confidential Information to that purpose.
(c) The Distributor and the Adviser acknowledge 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
Insurer's performance of its duties under this Agreement are the valuable
property of the Protected Parties.
(d) The Distributor and the Adviser agree to implement appropriate
measures designed to ensure the security and confidentiality of Confidential
Information, to protect such information against any anticipated threats or
hazards to the security or integrity of such information, and to protect
against unauthorized access to, or use of, Confidential Information that
could result in substantial harm or inconvenience to any customer of the
Protected Parties; the Distributor and the Adviser further agree to cause
all their agents, representatives or subcontractors of, or any other Party
to whom the Distributor and/or the Adviser may provide
41
access to or disclose Confidential Information to implement appropriate
measures designed to meet the objectives set forth in this Section 16.
(e) The Distributor and the Adviser acknowledge that any breach of
the agreements in this Section 16 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 16
will survive any termination of this Agreement.
Section 17. Applicable Law
--------------------------
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with New York law, without regard for that state's
principles of conflict of laws.
Section 18. Execution in Counterparts
-------------------------------------
This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
Section 19. Severability
------------------------
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 20. Rights Cumulative
-----------------------------
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, that the Parties are entitled to under
federal and state laws.
42
Section 21. Restrictions on Sales of Fund Shares
------------------------------------------------
Insurer agrees that the Fund will be permitted (subject to the other
terms of this Agreement) to make its shares available to separate accounts of
other life insurance companies.
Section 22. Headings
--------------------
The Table of Contents and headings used in this Agreement are for
purposes of reference only and shall not limit or define the meaning of the
provisions of this Agreement.
43
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers signing below.
ATTEST: AMERICAN ENTERPRISE LIFE
INSURANCE COMPANY
IDS LIFE INSURANCE COMPANY
AMERIPRISE FINANCIAL SERVICES,
INC.
By: /s/ Xxxxx Xxxxxx
-------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Secretary
of each company
By: /s/ Xxx X. Xxxxx
-------------------------
Name: Xxx X. Xxxxx III
Title: Vice President of each company
ALLIANCEBERNSTEIN L.P.
By: /s/ Xxxx X. Xxxxx
-------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
ALLIANCEBERNSTEIN INVESTMENTS, INC.
By: /s/ Xxxxxxx Xxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxx
Title: Senior Vice President
44
EXHIBIT A
---------
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
FUNDS - CLASS B SHARES OF:
--------------------------
AllianceBernstein Variable Products Series Funds, Inc.,
Global Technology Portfolio
AllianceBernstein Variable Products Series Funds, Inc.,
Growth and Income Portfolio
AllianceBernstein Variable Products Series Funds, Inc.,
International Value Portfolio
AllianceBernstein Variable Products Series Funds, Inc.,
Large Cap Growth Portfolio
AllianceBernstein Variable Products Series Funds, Inc.,
Total Return Portfolio
AllianceBernstein Variable Products Series Funds, Inc.,
U.S. Government/High Grade Securities Portfolio
COMBINATION FIXED AND VARIABLE ANNUITY CONTRACTS:
-------------------------------------------------
CONTRACT NAME SEC REGISTRATION NUMBER
-------------------------------------------------------------------------------
RiverSource Signature(SM) Variable Annuity............................333-74865
RiverSource Signature(SM) One Variable Annuity........................333-85567
RiverSource Innovations(SM) Classic Variable Annuity..................333-92297
RiverSource Signature(SM) Select Variable Annuity.....................333-74865
RiverSource Signature One Select Variable Annuity.....................333-85567
RiverSource Innovations(SM) Select Variable Annuity...................333-92297
RiverSource FlexChoice(SM) Select Variable Annuity....................333-73958
RiverSource Innovations(SM) Classic Select Variable Annuity...........333-92297
Xxxxx Fargo Advantage(R) Select Variable Annuity......................333-92297
Xxxxx Fargo Advantage(R) Builder Select Variable Annuity..............333-85567
Xxxxx Fargo Advantage Choice(SM) Select Variable Annuity..............333-73958
RiverSource New Solutions(SM) Variable Annuity........................333-92297
RiverSource Innovations(SM) Variable Annuity..........................333-73958
RiverSource AccessChoice Select(SM) Variable Annuity..................333-92297
RiverSource Endeavor Select(SM) Variable Annuity......................333-10105
Evergreen New Solutions Variable Annuity..............................333-92297
Evergreen New Solutions Select Variable Annuity.......................333-92297
Evergreen Pathways(SM) Select Variable Annuity........................333-73958
Evergreen Pathways(SM) Variable Annuity...............................333-92297
COMBINATION FIXED AND VARIABLE LIFE INSURANCE POLICIES:
-------------------------------------------------------
RiverSource(SM) Signature(SM) Variable Universal Life.................333-84121
45
IDS LIFE INSURANCE COMPANY
FUNDS - CLASS B SHARES OF:
--------------------------
AllianceBernstein Variable Product Series Fund, Inc.,
Global Technology Portfolio
AllianceBernstein Variable Product Series Fund, Inc.,
Growth and Income Portfolio
AllianceBernstein Variable Product Series Fund, Inc.,
International Value Portfolio
COMBINATION FIXED AND VARIABLE ANNUITY CONTRACTS:
-------------------------------------------------
CONTRACT NAME SEC REGISTRATION NUMBER
-------------------------------------------------------------------------------
RiverSource Retirement Advisor 4 Advantage Variable Annuity...........333-79311
RiverSource Retirement Advisor 4 Select Variable Annuity .............333-79311
RiverSource Retirement Advisor 4 Access Variable Annuity .............333-79311
RiverSource Retirement Advisor Advantage Plus(SM) Variable Annuity....333-79311
RiverSource Retirement Advisor Select Plus(SM) Variable Annuity.......333-79311
RiverSource Retirement Advisor Advantage(SM) Variable Annuity.........333-79311
RiverSource Retirement Advisor Advantage(SM) Variable Annuity - Band..333-79311
RiverSource Retirement Advisor Select(SM) Variable Annuity............333-79311
IDS Life Flexible Annuity...............................................33-4173
IDS Employee Benefit Annuity...........................................33-52518
IDS Life Variable Retirement Annuity....................................2-73114
IDS Life Combination Retirement Annuity.................................2-73114
COMBINATION FIXED AND VARIABLE LIFE INSURANCE POLICIES:
-------------------------------------------------------
RiverSource Single Premium Variable Life..............................333-83456
RiverSource Variable Universal Life IV................................333-69777
RiverSource Variable Universal Life IV - Estate Series................333-69777
46
