See All of This Company's Exhibits
EX-99.(8)(16)
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c17681bexv99wx8yx16y.txt
COPY OF AMENDED AND RESTATED FUND PARTICIPATION AGREEMENT
Exhibit 99.8.16
AMENDED AND RESTATED
PARTICIPATION AGREEMENT
Among
VARIABLE INSURANCE PRODUCTS FUNDS,
FIDELITY DISTRIBUTORS CORPORATION
and
RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK
THIS AMENDED AND RESTATED AGREEMENT, made and entered into as of the 1st
day of January, 2007 by and among RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK,
(hereinafter the "Company" and through December 31, 2006 "IDS Life Insurance
Company of New York" and "American Centurion Life Assurance Company"), a New
York corporation, on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule A hereto as may be amended from
time to time (each such account hereinafter referred to as the "Account"); and
FIDELITY DISTRIBUTORS CORPORATION (hereinafter the "Underwriter"), a
Massachusetts corporation; and each of VARIABLE INSURANCE PRODUCTS FUND,
VARIABLE INSURANCE PRODUCTS FUND II, VARIABLE INSURANCE PRODUCTS FUND III and
VARIABLE INSURANCE PRODUCTS FUND IV, each an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (each referred to
hereinafter as the "Fund").
RECITALS
WHEREAS, each Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
(collectively, the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and the
Underwriter (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in each Fund is divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of which may be made
available under this Agreement, as may be amended from time to time by mutual
agreement of the parties hereto (each such series hereinafter referred to as a
"Portfolio"); and
WHEREAS, each Fund has obtained an order from the Securities and Exchange
Commission, dated October 15, 1985 (File No. 812-6102) or September 17, 1986
(File No. 812-6422),
granting Participating Insurance Companies and variable annuity and variable
life insurance separate accounts exemptions from the provisions of sections
9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b) (15) and 6e-3(T) (b) (15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (hereinafter the
"Shared Funding Exemptive Order"); and
WHEREAS, each Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the "Adviser") is duly
registered as an investment adviser under the federal Investment Advisers Act of
1940 and any applicable state securities law; and
WHEREAS, the variable life insurance and/or variable annuity products
identified on Schedule A hereto ("Contracts") have been or will be registered by
the Company under the 1933 Act, unless such Contracts are exempt from
registration thereunder; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to the aforesaid Contracts; and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act, unless such Account is exempt from
registration thereunder; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act of
1934, as amended, (hereinafter the "1934 Act"), and is a member in good standing
of the National Association of Securities Dealers, Inc. (hereinafter "NASD");
and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid Contracts and the Underwriter
is authorized to sell such shares to each Account at net asset value;
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AGREEMENT
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Underwriter and each Fund agree as follows:
ARTICLE A. AMENDMENT AND RESTATEMENT; FORM OF AGREEMENT
This agreement shall amend and supersede the following Agreements as of the
date stated above among the Funds, Distributor and Company with respect to all
investments by the Company or its separate accounts in each Fund 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.
1. Participation Agreement dated February 1, 2003 among American
Centurion Life Assurance Company, Fidelity Distributors Corporation
("Fidelity Distributors") and Variable Insurance Product Fund (I, II
or III)
2. Participation Agreement dated November 7, 2002 among IDS Life
Insurance Company of New York, Fidelity Distributors Corporation
("Fidelity Distributors") and Variable Insurance Product Fund (I, II
or III)
In addition, the parties hereby amend and restate their agreements herein.
Although the parties have executed this Agreement in the form of a Master
Participation Agreement for administrative convenience, this Agreement shall
create a separate participation agreement for each Fund, as though the Company
and the Distributor had executed a separate, identical form of participation
agreement with each Fund. No rights, responsibilities or liabilities of any Fund
shall be attributed to any other Fund.
ARTICLE I. SALE OF FUND SHARES
1.1. The Underwriter agrees to sell to the Company those shares of the Fund
which each Account orders, executing such orders on a daily basis at the
net asset value next computed after receipt by the Fund or its designee of
the order for the shares of the Fund. For purposes of this Section 1.1, the
Company shall be the designee of the Fund for receipt of such orders from
each Account and receipt by such designee shall constitute receipt by the
Fund; provided that the Fund receives notice of such order by 9:00 a.m.
Boston time on the next following Business Day. Beginning within three
months of the effective date of this Agreement, the Company agrees that all
order for the purchase and redemption of Fund shares on behalf of the
Accounts will be placed by the Company with the Funds or their transfer
agent by electronic transmission. "Business Day" shall mean any day on
which the New York Stock Exchange is open for trading and on which the Fund
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission.
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1.2. The Fund agrees to make its shares available indefinitely for purchase at
the applicable net asset value per share by the Company and its Accounts on
those days on which the Fund calculates its net asset value pursuant to
rules of the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the
New York Stock Exchange is open for trading. Notwithstanding the foregoing,
the Board of Trustees of the Fund (hereinafter the "Board") may refuse to
sell shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of
the Board acting in good faith and in light of their fiduciary duties under
federal and any applicable state laws, necessary in the best interests of
the shareholders of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund will be sold
only to Participating Insurance Companies and their separate accounts and
qualified pension and retirement plans within the meaning of Treasury
Regulation Section 1.817-5(f)(3)(iii) ("Qualified Plans"). No shares of any
Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares to any insurance
company, separate account or Qualified Plan unless an agreement containing
provisions substantially the same as Articles I, III, V, VII and Section
2.5 of Article II of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's request, any full or
fractional shares of the Fund held by the Company, executing such requests
on a daily basis at the net asset value next computed after receipt by the
Fund or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee
shall constitute receipt by the Fund; provided that the Fund receives
notice of such request for redemption on the next following Business Day.
1.6. The Company agrees that purchases and redemptions of Portfolio shares
offered by the then current prospectus of the Fund shall be made in
accordance with the provisions of such prospectus.
1.7. The Company shall pay for Fund shares on the next Business Day after an
order to purchase Fund shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire.
For purpose of Section 2.10 and 2.11, upon receipt by the Fund of the
federal funds so wired, such funds shall cease to be the responsibility of
the Company and shall become the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
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1.9. The Fund shall furnish same day notice (by wire or telephone, followed by
written confirmation) to the Company of any income, dividends or capital
gain distributions payable on the Fund's shares. The Company hereby elects
to receive all such income dividends and capital gain distributions as are
payable on the Portfolio shares in additional shares of that Portfolio. The
Company reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall
notify the Company of the number of shares so issued as payment of such
dividends and distributions.
1.10. The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practical
after the net asset value per share is calculated (normally by 6:30 p.m.
Boston time) and shall use its best efforts to make such net asset value
per share available by 7 p.m. Boston time.
1.11. The parties agree that the Contracts are not intended to serve as vehicles
for frequent transfers among the Portfolios in response to short-term stock
market fluctuations.
(a) Accordingly, Company represents and warrants that:
(1) all purchase and redemption orders it provides under this Article
I shall result solely from Contract Owner transactions fully
received and recorded by Company before the time as of which each
applicable VIP Portfolio net asset value was calculated
(currently 4:00 p.m. e.s.t.);
(2) it will comply with its policies and procedures designed to
prevent excessive trading as approved by the Fund, or will comply
with the Fund's policies and procedures regarding excessive
trading as set forth in the Fund's prospectus, but in no event
shall this provision require the Company to breach any terms of
its existing Contracts;
(3) any annuity contract forms or variable life insurance policy
forms not in use at the time of execution of this Agreement, but
added to in the future via amendment of Schedule A hereto, will
contain language, as approved by the appropriate insurance
regulator, generally reserving to Company the right to impose
restrictions on transfers between the subaccounts in order to
deter market timing or other excessive or disruptive trading
activity. This language may include but not be limited to
restrictions on the number, dollar amount and frequency of
transfers and the amount of time which must elapse between
transfers.
(b) The Company agrees to provide the Fund, upon written request, the
taxpayer identification number ("TIN"), if known, of any or all
Contract Owner(s) of the account and the amount, date, and transaction
type (purchase, redemption, transfer, or exchange) of every purchase,
redemption, transfer, or exchange of Shares held through an account
maintained by the Company during the period
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covered by the request. Upon further request by the Fund, Intermediary
agrees to determine promptly whether any investment professionals are
associated with any Shareholder(s) account which has been identified
by the Fund as having violated policies established by the Fund
("Violating Investment Professionals"). Intermediary agrees to provide
the name or other identifier of any Violating Investment Professionals
that are affiliated with Intermediary or any affiliate of
Intermediary. With respect to any Violating Investment Professionals
that are not affiliated with Intermediary or any affiliate of
Intermediary ("Unaffiliated Violating Investment Professionals"),
Intermediary agrees to assist the Fund in obtaining such information.
Specifically, the Intermediary agrees:
(1) to provide the Fund with the name of the firm employing the
Unaffiliated Violating Investment Professionals;
(2) to request that the firm employing the Unaffiliated Violating
Investment Professionals provide the Fund with the name or other
identifier of the Unaffiliated Violating Investment
Professionals;
(3) to provide the Fund with the name and contact information for a
legal or compliance officer at the firm employing the
Unaffiliated Violating Investment Professionals, if such firm
fails to provide the Fund with the name or other identifier of
the Unaffiliated Violating Investment Professionals; and
(4) in accordance with the Funds' Prospectus and Section 1.2 of the
Agreement, to execute written instructions from the Fund to
restrict or prohibit further purchases or exchanges of Shares by
any Shareholder that is associated with any Unaffiliated
Violating Investment Professional.
(5) to use best efforts to inform the Fund upon request if the
Unaffiliated Violating Investment Professional was associated
with any Shareholder accounts that were previously identified by
the Fund as having violated policies established by the Fund.
(c) The Fund will request information pursuant to Section 1.11. (b). which
sets forth a specific period for which transaction information is
sought. The Fund may request transaction information it deems
necessary to investigate compliance with policies established by the
Fund for the purpose of eliminating or reducing any dilution of the
value of the outstanding shares issued by the Fund.
(d) The Company agrees to transmit the requested information that is on
its books and records to the Fund or its designee promptly, but in any
event not later than seven business days, after receipt of a request.
If the requested information is not on the Company's books and
records, the Company agrees to: (i) provide or arrange to provide to
the Fund the requested information from Contract Owners who hold an
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account with an indirect intermediary; or (ii) if directed by the Fund
in writing, block further purchases of Fund Shares from such indirect
intermediary. In such instance, the Company agrees to inform the Fund
whether it plans to perform (i) or (ii). Responses required by this
paragraph must be communicated in writing and in a format mutually
agreed upon by the parties. To the extent practicable, the format for
any transaction information provided to the Fund should be consistent
with the NSCC Standardized Data Reporting Format. For purposes of this
provision, an "indirect intermediary" has the same meaning as in SEC
Rule 22c-2 under the 1940 Act.
(e) The Fund agrees its use of the information received from the Company
under this Section 1.11 is limited to uses permitted under Section
12.2 of this Agreement.
(f) The Company agrees to execute written instructions from the Fund to
restrict or prohibit further purchases or exchanges of Shares by a
Contract Owner that has been identified by the Fund as having engaged
in transactions of the Fund's Shares (directly or indirectly through
the Company's account) that violate policies established by the Fund
for the purpose of eliminating or reducing any dilution of the value
of the outstanding Shares issued by the Fund, except that this
provision shall not require the Company to breach any terms of its
existing contracts with Contract owners.
(1) Instructions from the Fund will include the TIN, if known, of
each Contract Owner to be restricted and the specific
restriction(s) applicable to each Contract Owner to be executed
by the Company. If the TIN is not known, the instructions will
include an equivalent identifying number of the Contract Owner(s)
or account(s) or other agreed upon information to which the
instruction relates.
(2) The Company agrees to execute instructions as soon as reasonably
practicable, but not later than five business days after receipt
of the instructions by the Company.
(3) The Company must provide written confirmation to the Fund that
instructions have been executed. The Company agrees to provide
confirmation as soon as reasonably practicable, but not later
than ten business days after the instructions have been executed.
(g) For purposes of this Section 1.11 :
(1) The term "Fund" includes the Fund's principal underwriter and
transfer agent. The term not does include any "excepted funds" as
defined in SEC Rule 22c-2(b) under the 1940 Act.
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(2) The term "Shares" means the interests of Shareholders
corresponding to the redeemable securities of record issued by
the Fund under the 1940 Act that are held by the Company on
behalf of its Accounts.
(3) The term "Contract Owner" means the holder of interests under a
Contract.
(4) The term "written" includes electronic writings and facsimile
transmissions.
1.12. (a) Company agrees to comply with its obligations under applicable
anti-money laundering ("AML") laws, rules and regulations, including
but not limited to its obligations under the United States Bank
Secrecy Act of 1970, as amended (by the USA PATRIOT Act of 2001 and
other laws), and the rules, regulations and official guidance issued
thereunder (collectively, the "BSA").
(b) The Company agrees to undertake inquiry and due diligence regarding
the customers to whom the Company offers and/or sells Portfolio shares
or on whose behalf the Company purchases Portfolio shares and that the
inquiry and due diligence is reasonably designed to determine that the
Company is not prohibited from dealing with any such customer by (i)
any sanction administered by the Office of Foreign Assets Control
("OFAC") of the U.S. Department of the Treasury (collectively, the
"Sanctions"); or (ii) any of the Special Measures.
(c) The Company hereby represents, covenants and warrants to the Fund and
the Underwriter that:
(1) None of the Company's employees who are authorized in connection
with their employment to transact business with the Fund or
Underwriter in accounts in the Company's name, in any nominee
name maintained for the Company, or for which the Company serves
as financial institution of record are designated or targeted
under any of the Sanctions or Special Measures and that no
transactions placed in any such accounts by any of the Company's
authorized employees will contravene any of the Sanctions or
Special Measures;
(2) As the Sanctions or Special Measures are updated, the Company
shall periodically review them to confirm that none of the
Company's employees that are authorized to transact business with
the Fund or Underwriter are designated or targeted under any of
the Sanctions or Special Measures; and
(3) The Company, including any of the Company's affiliates, does not
maintain offices in any country or territory to which any of the
Sanctions or Special Measures prohibit the export of services or
other dealings.
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(d) The Company agrees to notify the Fund and the Underwriter or the
Portfolios' transfer agent promptly when and if it learns that
the establishment or maintenance of any account holding, or
transaction in or relationship with a holder of, Portfolio shares
pursuant to this Agreement violates or appears to violate any of
the Sanctions or Special Measures.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act or are exempt from registration thereunder;
that the Contracts will be issued and sold in compliance in all material
respects with all applicable Federal and State laws and that the sale of
the Contracts shall comply in all material respects with state insurance
suitability requirements. The Company further represents and warrants that
it is an insurance company duly organized and in good standing under
applicable law and that it has legally and validly established each Account
prior to any issuance or sale thereof as a segregated asset account under
Section 4240 of the N.Y. Ins. Law and that each Account is either
registered or exempt from registration as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts.
2.2. The Fund represents and warrants that Fund shares sold pursuant to this
Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of New York and
all applicable federal and state securities laws and that the Fund is and
shall remain registered under the 1940 Act. The Fund shall amend the
Registration Statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of
its shares. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund or the Underwriter.
2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986,
as amended, (the "Code") and that it will make every effort to maintain
such qualification (under Subchapter M or any successor or similar
provision) and that it will notify the Company immediately upon having a
reasonable basis for believing that it has ceased to so qualify or that it
might not so qualify in the future.
2.4. The Company represents that the Contracts are currently treated as
endowment, life insurance or annuity insurance contracts, under applicable
provisions of the Code and that it will make every effort to maintain such
treatment and that it will notify the Fund and the Underwriter immediately
upon having a reasonable basis for believing that the Contracts have ceased
to be so treated or that they might not be so treated in the future.
2.5. (a) With respect to Initial Class shares, the Fund currently does not
intend to make any payments to finance distribution expenses pursuant
to Rule 12b-1 under the
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1940 Act or otherwise, although it may make such payments in the
future. The Fund has adopted a "no fee" or "defensive" Rule 12b-1 Plan
under which it makes no payments for distribution expenses. To the
extent that it decides to finance distribution expenses pursuant to
Rule 12b-1, the Fund undertakes to have a board of trustees, a
majority of whom are not interested persons of the Fund, formulate and
approve any plan under Rule 12b-1 to finance distribution expenses.
(b) With respect to Service Class shares and Service Class 2 shares, the
Fund has adopted Rule 12b-1 Plans under which it makes payments to
finance distribution expenses. The Fund represents and warrants that
it has a board of trustees, a majority of whom are not interested
persons of the Fund, which has formulated and approved each of its
Rule 12b-1 Plans to finance distribution expenses of the Fund and that
any changes to the Fund's Rule 12b-1 Plans will be approved by a
similarly constituted board of trustees.
2.6. The Fund makes no representation as to whether any aspect of its operations
(including, but not limited to, fees and expenses and investment policies)
complies with the insurance laws or regulations of the various states
except that the Fund represents that the Fund's investment policies, fees
and expenses are and shall at all times remain in compliance with the laws
of the State of New York and the Fund and the Underwriter represent that
their respective operations are and shall at all times remain in material
compliance with the laws of the State of New York to the extent required to
perform this Agreement.
2.7. The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund
shares in accordance with the laws of the Commonwealth of Massachusetts and
all applicable state and federal securities laws, including without
limitation the 1933 Act, the 1934 Act, and the 1940 Act.
2.8. The Fund represents that it is lawfully organized and validly existing
under the laws of the Commonwealth of Massachusetts and that it does and
will comply in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the Adviser is and shall
remain duly registered in all material respects under all applicable
federal and state securities laws and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with the
laws of the Commonwealth of Massachusetts and any applicable state and
federal securities laws.
2.10. The Fund and Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund
are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund in an amount not less
than the minimal coverage as required currently by Rule 17g-(1) of the 1940
Act or related
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provisions as may be promulgated from time to time. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be issued by
a reputable bonding company.
2.11. The Company represents and warrants that all of its directors, officers,
employees, investment advisers, and other individuals/entities dealing with
the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund, and that said bond is
issued by a reputable bonding company, includes coverage for larceny and
embezzlement, and is in an amount not less than $5 million. The Company
agrees to make all reasonable efforts to see that this bond or another bond
containing these provisions is always in effect, and agrees to notify the
Fund and the Underwriter in the event that such coverage no longer applies.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Underwriter shall provide the Company with as many printed copies of
the Fund's current prospectus and Statement of Additional Information as
the Company may reasonably request. If requested by the Company in lieu
thereof, the Fund shall provide camera-ready film containing the Fund's
prospectus and Statement of Additional Information, and such other
assistance as is reasonably necessary in order for the Company once each
year (or more frequently if the prospectus and/or Statement of Additional
Information for the Fund is amended during the year) to have the
prospectus, private offering memorandum or other disclosure document
("Disclosure Document") for the Contracts and the Fund's prospectus printed
together in one document, and to have the Statement of Additional
Information for the Fund and the Statement of Additional Information for
the Contracts printed together in one document. Alternatively, the Company
may print the Fund's prospectus and/or its Statement of Additional
Information in combination with other fund companies' prospectuses and
statements of additional information. Except as provided in the following
three sentences, all expenses of printing and distributing Fund
prospectuses and Statements of Additional Information shall be the expense
of the Company. For prospectuses and Statements of Additional Information
provided by the Company to its existing owners of Contracts in order to
update disclosure annually as required by the 1933 Act and/or the 1940 Act,
the cost of printing shall be borne by the Fund. If the Company chooses to
receive camera-ready film in lieu of receiving printed copies of the Fund's
prospectus, the Fund will reimburse the Company in an amount equal to the
product of A and B where A is the number of such prospectuses distributed
to owners of the Contracts, and B is the Fund's per unit cost of
typesetting and printing the Fund's prospectus. The same procedures shall
be followed with respect to the Fund's Statement of Additional Information.
The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the
Fund's expenses do not include the cost of printing any prospectuses or
Statements of Additional Information other than those actually distributed
to existing owners of the Contracts.
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3.2. The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter or the Company
(or in the Fund's discretion, the Prospectus shall state that such
Statement is available from the Fund).
3.3. The Fund, at its expense, shall provide the Company with copies of its
proxy statements, reports to shareholders, and other communications (except
for prospectuses and Statements of Additional Information, which are
covered in Section 3.1) to shareholders in such quantity as the Company
shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote the Fund shares in accordance with instructions received from
Contract owners; and
(c) vote Fund shares for which no instructions have been received in a
particular separate account in the same proportion as Fund shares of
such portfolio for which instructions have been received in that
separate account,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting
privileges for variable contract owners. The Company reserves the right to
vote Fund shares held in any segregated asset account in its own right, to
the extent permitted by law. Participating Insurance Companies shall be
responsible for assuring that each of their separate accounts participating
in the Fund calculates voting privileges in a manner consistent with the
standards set forth on Schedule B attached hereto and incorporated herein
by this reference, which standards will also be provided to the other
Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the 1940 Act requiring voting
by shareholders, and in particular the Fund will either provide for annual
meetings or 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 in accordance with the Securities and Exchange Commission's
interpretation of the requirements of Section 16(a) with respect to
periodic elections of trustees and with whatever rules the Commission may
promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund or
its designee, each piece of sales literature or other promotional material
in which the Fund or its investment adviser or the Underwriter is named, at
least fifteen Business Days prior to its
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use. No such material shall be used if the Fund or its designee reasonably
objects to such use within fifteen Business Days after receipt of such
material.
4.2. The Company shall 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 the Contracts other than the information or representations
contained in the registration statement or prospectus for the Fund shares,
as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the
Fund, or in sales literature or other promotional material approved by the
Fund or its designee or by the Underwriter, except with the permission of
the Fund or the Underwriter or the designee of either.
4.3. The Fund, Underwriter, or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature
or other promotional material in which the Company and/or its separate
account(s), is named at least fifteen Business Days prior to its use. No
such material shall be used if the Company or its designee reasonably
objects to such use within fifteen Business Days after receipt of such
material.
4.4. The Fund and the Underwriter shall not give any information or make any
representations on behalf of the Company or concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or Disclosure Document for the
Contracts, as such registration statement or Disclosure Document may be
amended or supplemented from time to time, or in published reports for each
Account which are in the public domain or approved by the Company for
distribution to Contract owners, or in sales literature or other
promotional material approved by the Company or its designee, except with
the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Fund or
its shares, contemporaneously with the filing of such document with the
Securities and Exchange Commission or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of all
registration statements, Disclosure Documents, Statements of Additional
Information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no action letters, and all amendments to any of the above,
that relate to the Contracts or each Account, contemporaneously with the
filing of such document with the SEC or other regulatory authorities or, if
a Contract and its associated Account are exempt from registration, at the
time such documents are first published.
4.7. For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, any of the following
that refer to the Fund or any affiliate
13
of the Fund: 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), 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, and registration statements,
Disclosure Documents, Statements of Additional Information, shareholder
reports, and proxy materials.
ARTICLE V. FEES AND EXPENSES
5.1. The Fund and Underwriter shall pay no fee or other compensation to the
Company under this agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the
Underwriter in writing and such payments will be made out of existing fees
otherwise payable to the Underwriter, past profits of the Underwriter or
other resources available to the Underwriter. No such payments shall be
made directly by the Fund.
5.2. All expenses incident to performance by the Fund under this Agreement shall
be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall
bear the expenses for the cost of registration and qualification of the
Fund's shares, preparation and filing of the Fund's prospectus and
registration statement, proxy materials and reports, setting the prospectus
in type, setting in type and printing the proxy materials and reports to
shareholders (including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and notices required
by any federal or state law, and all taxes on the issuance or transfer of
the Fund's shares.
5.3. The Company shall bear the expenses of distributing the Fund's prospectus
and reports to owners of Contracts issued by the Company. The Fund shall
bear the costs of soliciting Fund proxies from Contract owners, including
the costs of mailing proxy materials and tabulating proxy voting
instructions, not to exceed the costs charged by any service provider
engaged by the Fund for this purpose. The Fund and the Underwriter shall
not be responsible for the costs of any proxy solicitations other than
proxies sponsored by the Fund.
ARTICLE VI. DIVERSIFICATION
4.1. The Fund will at all times invest money from the Contracts in such a manner
as to ensure that the Contracts will be treated as variable contracts under
the Code and the regulations issued thereunder. Without limiting the scope
of the foregoing, the Fund will at all times
14
comply with Section 817(h) of the Code and Treasury Regulation 1.817-5,
relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts and any amendments or other
modifications to such Section or Regulations. In the event of a breach of
this Article VI by the Fund, it will take all reasonable steps (a) to
notify Company of such breach and (b) to adequately diversify the Fund so
as to achieve compliance within the grace period afforded by Regulation
1.817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material
conflict may arise for a variety of reasons, including: (a) an action by
any state insurance regulatory authority; (b) a change in applicable
federal or state insurance, tax, or securities laws or regulations, or a
public ruling, private letter ruling, no-action or interpretative letter,
or any similar action by insurance, tax, or securities regulatory
authorities; (c) an administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of any Portfolio are
being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance contract owners; or (f) a
decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that
an irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which it is
aware to the Board. The Company will assist the Board in carrying out its
responsibilities 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 Board whenever contract owner voting instructions
are disregarded.
7.3. If it is determined by a majority of the Board, or a majority of its
disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense
and to the extent reasonably practicable (as determined by a majority of
the disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts
from the Fund or any Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Portfolio of the
Fund, or submitting the question whether such segregation should be
implemented to a vote of all affected Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity contract
owners, life insurance contract owners, or variable contract owners of one
or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected contract owners the option of
making such a change; and (2), establishing a new registered management
investment company or managed separate account.
15
7.4. If a material irreconcilable conflict arises because of a decision by the
Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect
to such Account; provided, however that such withdrawal and termination
shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board. Any such withdrawal and termination must take place
within six (6) months after the Fund gives written notice that this
provision is being implemented, and until the end of that six month period
the Underwriter and Fund shall continue to accept and implement orders by
the Company for the purchase (and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the
Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing six
month period, the Underwriter and Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares
of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of
the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no
event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a
new funding medium for the Contracts if an offer to do so has been declined
by vote of a majority of Contract owners materially adversely affected by
the irreconcilable material conflict. In the event that the Board
determines that any proposed action does not adequately remedy any
irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Fund and terminate this Agreement within six
(6) months after the Board informs the Company in writing of the foregoing
determination, provided, however, that such withdrawal and termination
shall be limited to the extent required by any such material irreconcilable
conflict as determined by a majority of the disinterested members of the
Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the Act
or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive
Order, then (a) the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
16
rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and
7.5 of this Agreement shall continue in effect only to the extent that
terms and conditions substantially identical to such Sections are contained
in such Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the Fund and each
trustee of the Board and officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section
8.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Company) or litigation (including 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, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of, or
investment in, the Fund's shares or the Contracts and:
(1) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
Disclosure Documents for the Contracts or contained in the
Contracts or sales literature 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, 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 the Company by or on behalf of the Fund
for use in any Disclosure Document relating to the Contracts or
in the Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of
the Contracts or Fund shares; or
(2) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature of the
Fund not supplied by the Company, or persons under its control)
or wrongful conduct of the Company or persons under its control,
with respect to the sale or distribution of the Contracts or Fund
Shares; or
(3) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement,
prospectus, or sales literature of the Fund or any amendment
thereof or supplement thereto or the omission or alleged omission
to state therein a material fact required to be stated
17
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 by
or on behalf of the Company; or
(4) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this
Agreement; or
(5) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company,
as limited by and in accordance with the provisions of Sections 8.1(b)
and 8.1(c) hereof.
(b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise
from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations
or duties under this Agreement or to the Fund, whichever is
applicable.
(c) The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal
process giving information of the nature of the claim 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 the Company of any such claim shall not relieve
the Company from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of
this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to
participate, at its own expense, in the defense of such action. The
Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice
from the Company to such party of the Company's election to assume the
defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company
will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
(d) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund Shares or the
Contracts or the operation of the Fund.
18
8.2. Indemnification by the Underwriter
(a) The Underwriter agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section
8.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Underwriter) or litigation (including legal and other expenses) to
which the Indemnified Parties may become subject under any statute, at
common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of, or investment in, the
Fund's shares or the Contracts and:
(1) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the
Fund (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, 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 the Underwriter
or Fund by or on behalf of the Company for use in the
registration statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Fund shares; or
(2) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus or sales literature for the
Contracts not supplied by the Underwriter or persons under its
control) or wrongful conduct of the Fund, Adviser or Underwriter
or persons under their control, with respect to the sale or
distribution of the Contracts or Fund shares; or
(3) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a Disclosure Document or sales
literature covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance
upon and in conformity with information furnished to the Company
by or on behalf of the Fund; or
(4) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a
19
failure, whether unintentional or in good faith or otherwise, to
comply with the diversification requirements specified in Article
VI of this Agreement); or
(5) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter;
as limited by and in accordance with the provisions of Sections 8.2(b)
and 8.2(c) hereof.
(b) The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by
reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to each Company or the
Account, whichever is applicable.
(c) The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless such Indemnified Party shall have notified the Underwriter in
writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim 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 the Underwriter of any such claim shall
not relieve the Underwriter from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Underwriter
will be entitled to participate, at its own expense, in the defense
thereof. The Underwriter also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action.
After notice from the Underwriter to such party of the Underwriter's
election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other
than reasonable costs of investigation.
(d) The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the
Contracts or the operation of each Account.
20
8.3. Indemnification By the Fund
(a) The Fund agrees to indemnify and hold harmless the Company, and each
of its directors and officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section
8.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Fund) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements result from
the gross negligence, bad faith or willful misconduct of the Board or
any member thereof, are related to the operations of the Fund and:
(1) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure to comply with the diversification
requirements specified in Article VI of this Agreement);or
(2) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b)
and 8.3(c) hereof.
(b) The Fund shall not be liable under this indemnification provision with
respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise
from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations
and duties under this Agreement or to the Company, the Fund, the
Underwriter or each Account, whichever is applicable.
(c) The Fund shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim 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 the Fund of any such claim shall not relieve the Fund from
any liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against
the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be
entitled to assume
21
the defense thereof, with counsel satisfactory to the party named in
the action. After notice from the Fund to such party of the Fund's
election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it,
and the Fund will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
(d) The Company and the Underwriter agree promptly to notify the Fund of
the commencement of any litigation or proceedings against it or any of
its respective officers or directors in connection with this
Agreement, the issuance or sale of the Contracts, with respect to the
operation of either Account, or the sale or acquisition of shares of
the Fund.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and
1940 acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited
to, the Shared Funding Exemptive Order) and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall continue in full force and effect until the first to
occur of:
(a) termination by any party for any reason by sixty (60) days advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio based upon the Company's
determination that shares of such Portfolio are not reasonably
available to meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event any of the
Portfolio's shares are not registered, issued or sold in accordance
with applicable state and/or federal law or such law precludes the use
of such shares as the underlying investment media of the Contracts
issued or to be issued by the Company; or
(d) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio ceases to qualify as a
22
Regulated Investment Company under Subchapter M of the Code or under
any successor or similar provision, or if the Company reasonably
believes that the Fund may fail to so qualify; or
(e) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio fails to meet the diversification requirements specified in
Article VI hereof; or
(f) termination by either the Fund or the Underwriter by written notice to
the Company, if either one or both of the Fund or the Underwriter
respectively, shall determine, in their sole judgment exercised in
good faith, that the Company and/or its affiliated companies has
suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or
is the subject of material adverse publicity; or
(g) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that either the Fund or the Underwriter has
suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or
is the subject of material adverse publicity; or
10.2. Notwithstanding any termination of this Agreement, the Fund and the
Underwriter shall at the option of the Company, continue to make available
additional shares of the Fund pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing Contracts
shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of
additional purchase payments under the Existing Contracts. The parties
agree that this Section 10.2 shall not apply to any terminations under
Article VII and the effect of such Article VII terminations shall be
governed by Article VII of this Agreement.
10.3. The provisions of Articles II (Representations and Warranties), VIII
(Indemnification), IX (Applicable Law) and XII (Miscellaneous) shall
survive termination of this Agreement. In addition, all other applicable
provisions of this Agreement shall survive termination as long as shares of
the Fund are held on behalf of Contract owners in accordance with section
10.2, except that the Fund and Underwriter shall have no further obligation
to make Fund shares available in Contracts issued after termination.
10.4. The Company shall not redeem Fund shares attributable to the Contracts (as
opposed to Fund shares attributable to the Company's assets held in the
Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act.
Upon
23
request, the Company will promptly furnish to the Fund and the Underwriter
the opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the
Contracts, the Company shall not prevent Contract Owners from allocating
payments to a Portfolio that was otherwise available under the Contracts
without first giving the Fund or the Underwriter 90 days notice of its
intention to do so.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
If to the Company:
RiverSource Life Insurance Co. of New York
1765 Ameriprise Financial Center
Minneapolis, Minnesota 55474
Attention: Vice President
If to the Underwriter:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
ARTICLE XII. MISCELLANEOUS
12.1. All persons dealing with the Fund must look solely to the property of the
Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
12.2. Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names, addresses and TINs
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted
by this Agreement, shall not disclose, disseminate or utilize such names
and addresses and other confidential information until such time as it
24
may come into the public domain without the express written consent of the
affected party.
In addition, each Fund and the Underwriter shall not, directly or
indirectly, disclose or use any nonpublic personal information, including
but not limited to TINs, regarding the consumers or customers of the
Company (as defined in Rule 3(g) and 3(j), respectively, of Regulation S-P
of the Securities and Exchange Commission) ("Confidential Information"),
other than to carry out the functions contemplated by this Agreement. The
foregoing obligation of confidentiality shall not extend to any portion of
the Confidential Information that is, or becomes, generally available to
the general public from: (a) federal, State or local governmental records,
(b) widely distributed media, or (c) disclosures to the general public that
are required to be made by federal, State or local law.
12.3. The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4. This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
12.5. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby. Notwithstanding the generality of the foregoing, each
party hereto further agrees to furnish the California Insurance
Commissioner with any information or reports in connection with services
provided under this Agreement which such Commissioner may request in order
to ascertain whether the insurance operations of the Company are being
conducted in a manner consistent with the California Insurance Regulations
and any other applicable law or regulations.
12.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Underwriter may assign this Agreement
or any rights or obligations hereunder to any affiliate of or company under
common control with the Underwriter, if such assignee is duly licensed and
registered to perform the obligations of the Underwriter under this
25
Agreement. The Company shall promptly notify the Fund and the Underwriter
of any change in control of the Company.
12.9. The Company shall furnish, or shall cause to be furnished, to the Fund or
its designee copies of the following reports:
(a) the Company's annual statement (prepared under statutory accounting
principles) and annual report (prepared under generally accepted
accounting principles ("GAAP"), if any), as soon as practical and in
any event within 90 days after the end of each fiscal year;
(b) the Company's quarterly statements (statutory) (and GAAP, if any), as
soon as practical and in any event within 45 days after the end of
each quarterly period:
(c) any financial statement, proxy statement, notice or report of the
Company sent to stockholders and/or policyholders, as soon as
practical after the delivery thereof to stockholders;
(d) any registration statement (without exhibits) and financial reports of
the Company filed with the Securities and Exchange Commission or any
state insurance regulator, as soon as practical after the filing
thereof;
(e) any other report submitted to the Company by independent accountants
in connection with any annual, interim or special audit made by them
of the books of the Company, as soon as practical after the receipt
thereof.
(the remainder of this page intentionally left blank)
26
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative.
RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK
By: /s/ Patrick H. Carey III
-------------------------------------
Name: Patrick H. Carey III
Its: Vice President
ATTEST:
By: /s/ Betsy Hannum
-------------------------------------
Name: Betsy Hannum
Its: Assistant Secretary
VARIABLE INSURANCE PRODUCTS FUND,
VARIABLE INSURANCE PRODUCTS FUND II
VARIABLE INSURANCE PRODUCTS FUND III, and
VARIABLE INSURANCE PRODUCTS FUND IV
By: /s/ Kimberley Monasteno
-------------------------------------
Name: Kimberley Monasteno
Their: Treasurer
FIDELITY DISTRIBUTORS CORPORATION
By: /s/ Bill Loehning
-------------------------------------
Name: Bill Loehning
Its: Executive Vice President
27
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Separate Account Name;
Date Established by Board of Directors Contract Form No. Product Name
------------------------------------------- -------------------------- ---------------------------------------
RIVERSOURCE OF NEW YORK VARIABLE ANNUITY 273954-NY, 273954-NYDPFCC, RiverSource Flex Choice Select(SM)
ACCOUNT 2 (prior to January 1, 2007: ACL 273954-NYDPFCL Variable Annuity
Variable Annuity Account 2), established
October 12, 1995. 272250, 272551, 272252 and RiverSource Innovations(SM) Variable
272253 Annuity
272877-NY RiverSource Innovations(SM) Select
Variable Annuity
273640-NY RiverSource Endeavor Select Variable
Annuity
RIVERSOURCE OF NEW YORK VARIABLE ANNUITY 31053, 31054, 31055-SEP, RiverSource Retirement Advisor Variable
ACCOUNT (prior to January 1, 2007: IDS Life 31056-IRA Annuity(R)
of New York Variable Annuity Account),
established April 17, 1996.
31053, 31054, 31055-SEP, RiverSource Retirement Advisor
31056-IRA Advantage(SM) Variable Annuity
139035, 139036, 139037 and RiverSource Retirement Advisor Select
139038 Variable Annuity
31053A RiverSource Retirement Advisor
Advantage(SM) Plus Variable Annuity
139035A RiverSource Retirement Advisor Select(SM)
Plus Variable Annuity
139482 RiverSource Retirement Advisor 4
Advantage(SM) Variable Annuity
139483 RiverSource Retirement Advisor 4
Select(SM) Variable Annuity
139484 RiverSource Retirement Advisor Access(SM)
Variable Annuity
RIVERSOURCE OF NEW YORK ACCOUNT 8 (prior to 30060 RiverSource Variable Universal Life
January 1, 2007: IDS Life of New York Insurance(SM)
Account 8), established September 12, 1985.
30061 RiverSource Variable Universal Life
III(SM)
30090 RiverSource Variable Second-To-Die Life
Insurance(SM)
39090C RiverSource Succession Select(SM)
Variable Life Insurance
39061 RiverSource Variable Universal Life III
39061C RiverSouce Variable Universal Life IV
and RiverSource Variable Universal Life
IV- Estate Series
1
SCHEDULE B
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Fund by the Underwriter, the Fund and the
Company. The defined terms herein shall have the meanings assigned in the
Participation Agreement except that the term "Company" shall also include the
department or third party assigned by the Insurance Company to perform the steps
delineated below.
1. The number of proxy proposals is given to the Company by the Underwriter as
early as possible before the date set by the Fund for the shareholder
meeting to facilitate the establishment of tabulation procedures. At this
time the Underwriter will inform the Company of the Record, Mailing and
Meeting dates. This will be done verbally approximately two months before
meeting.
2. Promptly after the Record Date, the Company will perform a "tape run", or
other activity, which will generate the names, addresses and number of
units which are attributed to each contractowner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in the
number of Customers to Fidelity, as soon as possible, but no later than two
weeks after the Record Date.
3. The Fund's Annual Report no longer needs to be sent to each Customer by the
Company either before or together with the Customers' receipt of a proxy
statement. Underwriter will provide the last Annual Report to the Company
pursuant to the terms of Section 3.3 of the Agreement to which this
Schedule relates.
4. The text and format for the Voting Instruction Cards ("Cards" or "Card") is
provided to the Company by the Fund. The Company, at its expense, shall
produce and personalize the Voting Instruction Cards. The Legal Department
of the Underwriter or its affiliate ("Fidelity Legal") must approve the
Card before it is printed. Allow approximately 2-4 business days for
printing information on the Cards. Information commonly found on the Cards
includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and verification of
votes (already on Cards as printed by the Fund)
2
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
5. During this time, Fidelity Legal will develop, produce, and the Fund will
pay for the Notice of Proxy and the Proxy Statement (one document). Printed
and folded notices and statements will be sent to Company for insertion
into envelopes (envelopes and return envelopes are provided and paid for by
the Insurance Company). Contents of envelope sent to Customers by Company
will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a small,
single sheet of paper that requests Customers to vote as quickly
as possible and that their vote is important. One copy will be
supplied by the Fund.) e. cover letter - optional, supplied by
Company and reviewed and approved in advance by Fidelity Legal.
6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews and
approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to Fidelity Legal.
7. Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the Company
as the shareowner. (A 5-week period is recommended.) Solicitation time
is calculated as calendar days from (but not including) the meeting,
counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An often
used procedure is to sort Cards on arrival by proposal into vote categories
of all yes, no, or mixed replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not been
required by Fidelity in the past.
9. Signatures on Card checked against legal name on account registration which
was printed on the Card.
Note: For example, if the account registration is under "Bertram C. Jones,
Trustee," then that is the exact legal name to be printed on the Card and
is the signature needed on the Card.
3
10. If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter, a new
Card and return envelope. The mutilated or illegible Card is disregarded
and considered to be not received for purposes of vote tabulation. Any
Cards that have "kicked out" (e.g. mutilated, illegible) of the procedure
are "hand verified," i.e., examined as to why they did not complete the
system. Any questions on those Cards are usually remedied individually.
11. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Fund receives the tabulations stated
in terms of a percentage and the number of shares.) Fidelity Legal must
review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Company to Fidelity
Legal on the morning of the meeting not later than 10:00 a.m. Boston time.
Fidelity Legal may request an earlier deadline if required to calculate the
vote in time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
Fidelity Legal will provide a standard form for each Certification.
15. The Company will be required to box and archive the Cards received from the
Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, Fidelity Legal
will be permitted reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
4
SUB-LICENSE AGREEMENT
Agreement effective as of this 1st day of January, 2007, by and between
Fidelity Distributors Corporation (hereinafter called "Fidelity"), a corporation
organized and existing under the laws of the Commonwealth of Massachusetts, with
a principal place of business at 82 Devonshire Street, Boston, Massachusetts,
and RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK (hereinafter called "Company"), a
company organized and existing under the laws of the State of New York, with a
principal place of business at Albany, New York.
WHEREAS, FMR Corp., a Massachusetts corporation, the parent company of
Fidelity, is the owner of the trademark and the tradename "FIDELITY INVESTMENTS"
and is the owner of a trademark in a pyramid design (hereinafter, collectively
the "Fidelity Trademarks"), a copy of each of which is attached hereto as
Exhibit "A"; and
WHEREAS, FMR Corp. has granted a license to Fidelity (the "Master License
Agreement") to sub-license the Fidelity Trademarks to third parties for their
use in connection with Promotional Materials as hereinafter defined; and
WHEREAS, Company is desirous of using the Fidelity Trademarks in connection
with distribution of "sales literature and other promotional material" with
information, including the Fidelity Trademarks, printed in said material (such
material hereinafter called the Promotional Material). For the purpose of this
Agreement, "sales literature and other promotional material" shall have the same
meaning as in the certain Participation Agreement dated as of the 1st day of
January, 2007, among Fidelity, Company and the Variable Insurance Products Funds
(hereinafter "Participation Agreement"); and
WHEREAS, Fidelity is desirous of having the Fidelity Trademarks used in
connection with the Promotional Material.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy whereof is hereby acknowledged,
and of the mutual promises hereinafter set forth, the parties hereby agree as
follows:
1. Fidelity hereby grants to Company a non-exclusive, non-transferable
license to use the Fidelity Trademarks in connection with the promotional
distribution of the Promotional Material and Company accepts said license,
subject to the terms and conditions set forth herein.
2. Company acknowledges that FMR Corp. is the owner of all right, title and
interest in the Fidelity Trademarks and agrees that it will do nothing
inconsistent with the ownership of the Fidelity Trademarks by FMR Corp., and
that it will not, now or hereinafter, contest any registration or application
for registration of the Fidelity Trademarks by FMR Corp., nor will it, now or
hereafter, aid anyone in contesting any registration or application for
registration of the Fidelity Trademarks by FMR Corp.
5
3. Company agrees to use the Fidelity Trademarks only in the form and
manner approved by Fidelity and not to use any other trademark, service mark or
registered trademark in combination with any of the Fidelity Trademarks without
approval by Fidelity.
4. Company agrees that it will place all necessary and proper notices and
legends in order to protect the interests of FMR Corp. and Fidelity therein
pertaining to the Fidelity Trademarks on the Promotional Material including, but
not limited to, symbols indicating trademarks, service marks and registered
trademarks. Company will place such symbols and legends on the Promotional
Material as requested by Fidelity or FMR Corp. upon receipt of notice of same
from Fidelity or FMR Corp.
5. Company agrees that the nature and quality of all of the Promotional
Material distributed by Company bearing the Fidelity Trademarks shall conform to
standards set by, and be under the control of, Fidelity.
6. Company agrees to cooperate with Fidelity in facilitating Fidelity's
control of the use of the Fidelity Trademarks and of the quality of the
Promotional Material to permit reasonable inspection of samples of same by
Fidelity and to supply Fidelity with reasonable quantities of samples of the
Promotional Material upon request.
7. Company shall comply with all applicable laws and regulations and obtain
any and all licenses or other necessary permits pertaining to the distribution
of said Promotional Material.
8. Company agrees to notify Fidelity of any unauthorized use of the
Fidelity Trademarks by others promptly as it comes to the attention of Company.
Fidelity or FMR Corp. shall have the sole right and discretion to commence
actions or other proceedings for infringement, unfair competition or the like
involving the Fidelity Trademarks and Company shall cooperate in any such
proceedings if so requested by Fidelity or FMR Corp.
9. This agreement shall continue in force until terminated by Fidelity.
This agreement shall automatically terminate upon termination of the Master
License Agreement. In addition, Fidelity shall have the right to terminate this
agreement at any time upon notice to Company, with or without cause. Upon any
such termination, Company agrees to cease immediately all use of the Fidelity
Trademarks and shall destroy, at Company's expense, any and all materials in its
possession bearing the Fidelity Trademarks, and agrees that all rights in the
Fidelity Trademarks and in the goodwill connected therewith shall remain the
property of FMR Corp. Unless so terminated by Fidelity, or extended by written
agreement of the parties, this agreement shall expire on the termination of that
certain Participation Agreement.
10. Company shall indemnify Fidelity and FMR Corp. and hold each of them
harmless from and against any loss, damage, liability, cost or expense of any
nature whatsoever, including without limitation, reasonable attorneys' fees and
all court costs, arising out of use of the Fidelity Trademarks by Company.
11. In consideration for the promotion and advertising of Fidelity as a
result of the distribution by Company of the Promotional Material, Company shall
not pay any monies as a royalty to Fidelity for this license.
6
12. This agreement is not intended in any manner to modify the terms and
conditions of the Participation Agreement. In the event of any conflict between
the terms and conditions herein and thereof, the terms and conditions of the
Participation Agreement shall control.
13. This agreement shall be interpreted according to the laws of the
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereunto set their hands and seals, and
hereby execute this agreement, as of the date first above written.
FIDELITY DISTRIBUTORS CORPORATION
By: /s/ Bill Loehning
------------------------------------
Name: Bill Loehning
Title: Executive Vice President
RIVERSOURCE LIFE INSURANCE CO. OF NEW
YORK
By: /s/ Patrick H. Carey III
------------------------------------
Name: Patrick H. Carey III
Title: Vice President
7
EXHIBIT A
Int. Cl.: 36
Prior U.S. Cls.: 101 and 102
Reg. No. 1,481,040
United States Patent and Trademark Office Registered Mar. 15, 1988
SERVICE MARK
PRINCIPAL REGISTER
(FIDELITY INVESTMENTS LOGO)
FMR CORP. (MASSACHUSETTS CORPORATION) FIRST USE 2-22-1984; IN COMMERCE
82 DEVONSHIRE STREET 2-22-1984.
BOSTON, MA 02109, ASSIGNEE OF
FIDELITY DISTRIBUTORS CORPORATION NO CLAIM IS MADE TO THE EXCLUSIVE RIGHT
(MASSACHUSETTS CORPORATION) BOSTON, TO USE "INVESTMENTS", APART FROM
MA 02109 THE MARK AS SHOWN.
FOR: MUTUAL FUND AND STOCK BROKERAGE SER. NO. 641,707, FILED 1-28-1987
SERVICES, IN CLASS 36 (U.S. CLS. 101
AND 102) RUSS HERMAN, EXAMINING ATTORNEY
8