Rule 22c-2 Shareholder Information Agreement
This Rule 22c-2 Shareholder Information Agreement ("Agreement") is entered into
as of April 16, 2007, by and between Rydex Distributors, Inc. ("Fund Agent"),
the principal underwriter and distributor of the Rydex Family of Funds (the
"Funds") and Valley Forge Life Insurance Company (as successor by merger to
Sage Life Assurance of America, Inc.)("Intermediary"), with an effective date
of October 16, 2007.
Recitals
WHEREAS, Fund Agent is entering into this Agreement as agent and on behalf of
certain of the Funds, including any separate series or portfolios thereof,
whether existing at the date of this Agreement or established subsequent hereto;
WHEREAS, Prior to the effective date of this Agreement, the Fund and the
Intermediary agree that any request made to the Intermediary by the Fund for
Shareholder transaction information, and the Intermediary's response to such
request, shall be governed by whatever practices the Fund and the Intermediary
had utilized in the absence of a formal agreement, if any, to govern such
request;
WHEREAS, the Intermediary issues certain variable life insurance and variable
annuity contracts (the "Contracts") that are supported by The Sage Variable Life
Account A and The Sage Variable Annuity Account A (the "Separate Accounts");
WHEREAS, the Separate Accounts have been established by the Intermediary to
invest assets attributable to the Contracts in shares of the Funds;
WHEREAS, the Intermediary purchases and redeems Shares of the Funds on behalf of
the Separate Accounts to fund the Contracts in accordance with Shareholder
directions and the terms of the Contracts;
WHEREAS, Rule 22c-2 (the "Rule") under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), requires the Funds or Fund Agent, as
principal underwriter and distributor of the Funds, to enter into a written
shareholder information agreement with each financial intermediary (as defined
by the Rule) of the Funds;
WHEREAS, Funds has identified Intermediary as a financial intermediary of the
Funds; and
WHEREAS, this Agreement sets forth the terms and conditions for information
sharing for the Fund Agent, Funds, and Intermediary in accordance with the Rule.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, which
consideration is full and complete, the Fund Agent and the Intermediary hereby
agree as follows:
Shareholder Information
1. Agreement to Provide Information. Intermediary agrees to provide the Fund or
its designee, upon written request from the Fund, the taxpayer identification
number ("TIN"), the Individual/International Taxpayer Identification
Number ("ITIN")*, or other government-issued identifier ("GII"), and the
Contract owner number or participant account number associated with the
Shareholder, if known, of any or all Shareholder(s) of the account(s), 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 Intermediary during the period covered by the request.
Unless otherwise specifically requested by the Fund, the Intermediary shall only
be required to provide information relating to Shareholder-Initiated Transfer
Purchases or Shareholder-Initiated Transfer Redemptions.
1.1 Period Covered by Request. Requests must set forth a specific
period for which transaction information is sought, which will not
exceed 90 calendar days of transaction information. The Fund or its
designee will not request transaction information older than 90
calendar days from the date of the request unless the Fund deems it
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.
1.1(a) Timing of Requests. Fund requests for Shareholder
information shall be made no more frequently than quarterly
except as the Fund 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.
1.2 Form and Timing of Response. (a) Intermediary agrees to provide,
promptly upon the request of the Fund or its designee, the requested
information specified in Section 1 above. If requested by the Fund or
its designee, Intermediary agrees to use its best efforts to determine
promptly whether any specific person about whom it has received the
identification and transaction information specified in Section 1 above
is itself a financial intermediary ("Indirect Intermediary") and, upon
further request of the Fund or its designee, promptly either (i)
provide (or arrange to have provided to the Fund or its designee) the
information set forth in Section 1 above for those Shareholders who
hold an account with an Indirect Intermediary or (ii) restrict or
prohibit the Indirect Intermediary from purchasing, in nominee name on
behalf of other persons, securities issued by the Fund. In such
instance, Intermediary agrees to inform the Fund or its designee
whether Intermediary plans to perform (i) or (ii).
(b) Responses required by this paragraph must be communicated in
writing and in a format mutually agreed upon by the Fund and
Intermediary; and
(c) To the extent practicable, the format for any transaction
information provided to the Fund or its designee should be consistent
with the NSCC Standardized Data Reporting Format. For purposes of this
provision, an "Indirect Intermediary" has the same meaning as in the
Rule.
1.3 Limitations on Use of Information. With respect to all information
about any Shareholders, including, but not limited to names, addresses,
telephone numbers, account numbers, customer lists and demographic
financial and transactional information provided by the Intermediary to
the Fund or its designee and/or to which the Fund or its designee have
access at any time pursuant to this Agreement (the "Customer
Information"), the Fund agrees as follows:
(a) All Customer Information shall be deemed by Fund and its
designee as confidential and proprietary to Intermediary;
(b) Fund and its designee shall keep all Customer Information
secure and confidential;
(c) Fund and its designee shall not use the Customer Information
for any purpose other than as necessary to comply with the
provisions of the Rule or to fulfill other regulatory or legal
requirements subject to the privacy provisions of Title V of
the Xxxxx-Xxxxx-Xxxxxx Act (Public Law 106-102) and comparable
state laws; and
(d) Fund or its designee shall promptly notify Intermediary of any
unauthorized access to or disclosure of Customer Information.
2. Agreement to Restrict Trading. Intermediary agrees to execute
written instructions from the Fund or its designee to restrict
or prohibit further purchases or exchanges of Shares by a
Shareholder that has been identified by the Fund or its
designee as having engaged in transactions of the Fund's
Shares (directly or indirectly through the Intermediary's
account) that violate market timing or frequent trading
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. Unless otherwise
directed by the Fund, any such restrictions or prohibitions
shall only apply to Shareholder-Initiated Transfer Purchases
or Shareholder-Initiated Transfer Redemptions that are
effected directly or indirectly through Intermediary.
Instructions must be received by Intermediary at the following
address, or such other address that Intermediary may
communicate to Fund or its designee, in writing from time to
time, including, if applicable, an e-mail and/or facsimile
telephone number:
Valley Forge Life Insurance Company
Attn: Xxxxxx Xxxxx
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Xxxxxx_Xxxxx@xxxxxxx.xxx
(000) 000-0000
2.1 Form of Instructions. Instructions to restrict or prohibit trading
must include the TIN, ITIN, or GII and the specific
individual Contract owner number or participant account number
associated with the Shareholder, if known, and the specific
restriction(s) to be executed, including how long the restrictions(s)
is (are) to remain in place. If the TIN, ITIN, or GII or the
specific individual Contract owner number or participant account number
associated with the Shareholders is not known, the instructions must
include an equivalent identifying number of the Shareholder(s) or
account(s) or other agreed upon information to which the instruction
relates. Upon request of the Intermediary, Fund agrees to provide
(through the Fund or its designee) to the Intermediary, along with any
written instructions to prohibit further purchases or exchanges of
Shares by Shareholder, information regarding those trades of the
Contract owner that violated the Fund's policies relating to
eliminating or reducing any dilution of the value of the Fund's
outstanding Shares.
2.2 Timing of Response. Intermediary agrees to execute instruction from
the Fund or its designee to restrict or prohibit trading as soon as
reasonably practicable, but not later than ten business days after
receipt of the instructions by the Intermediary.
2.3 Confirmation by Intermediary. Intermediary must provide written
confirmation to the Fund that instructions have been executed.
Intermediary agrees to provide confirmation as soon as reasonably
practicable, but not later than ten business days after the
instructions have been executed.
3. Construction of the Agreement; Fund Participation Agreements; Termination.
The Fund and Intermediary have entered into one or more Fund participation
agreements ("Participation Agreements") between or among them for the purchase
and redemption of Shares of the Fund by the Intermediary in connection with the
Contracts. This Agreement amends those Participation Agreements. To the extent
the terms of this Agreement directly conflict with the terms of a Participation
Agreement, the terms of this Agreement shall control. This Agreement will
terminate upon the termination of the Participation Agreements.
4. Indemnification. The Fund agrees to indemnify and hold harmless Intermediary
from any and all liability, claim, loss, demand, damages, costs and expenses
(including reasonable attorney's fees) arising in connection with a third party
claim or action brought against Intermediary as a result of any incorrect
identification by the Fund of a Shareholder whose purchases or exchanges of
Shares must be restricted by the Intermediary or any authorized disclosure of a
Shareholder's TIN, ITIN, or GII or the specific individual Contract
owner number or participant account number associated with the Shareholder or
any Customer Information provided to the Fund or its designee in response to a
request for Shareholder information pursuant to the terms of this Agreement.
5. Reimbursement. Fund agrees to reimburse Intermediary for reasonable costs
associated with complying with written requests for data that has already been
requested by Fund or its designee in any one year period and data requested by
Fund or its designee that is older than ninety (90) days from the date of
request.
6. Force Majeure. Fund, Fund's designee, and Intermediary are excused from
performance and shall not be liable for any delay in performance or
non-performance, in whole or in part, caused by the occurrence of any event or
contingency beyond the control of Fund, Fund's designee, and Intermediary
including, but not limited to, work stoppages, fires, civil disobedience, riots,
rebellions, natural disasters, acts of God, and acts of war or terrorism. The
party who has been so affected shall promptly give written notice to the other
party and shall use its best efforts to resume performance. Upon receipt of such
notice, all obligations under this Agreement shall be immediately suspended for
the duration of such Force Majeure Event.
7. Dispute Resolution. Fund and Intermediary hereby mutually agree to use their
best efforts to seek an amicable solution to any controversy or dispute
regarding the subject matter hereof. Any unresolved controversy, claim or
dispute shall be submitted to binding arbitration in accordance with the
Commercial Rules of the American Arbitration Association and judgment upon any
such award may be entered in any court having jurisdiction thereof. Arbitration
shall be conducted by a single arbitrator who shall have the authority to grant
any and all appropriate relief, including, but not limited to, granting
injunctive relief or demanding specific performance. The arbitrator may make an
initial determination of the location of the arbitration or whether proceedings
may ensue based entirely upon documentary evidence. Unless otherwise mutually
agreed in writing by Fund and Intermediary, said determination by the arbitrator
shall become final and binding 3 days after the arbitrator's ruling. Arbitration
costs and expenses shall be borne equally by Fund and Intermediary. Each party
hereby agrees to waive and suspend enforcement of any and all rights pursuant to
this and all related agreements during the pendency of such arbitration
proceedings.
8. Definitions. For purposes of this Agreement:
8.1 The term "Fund" shall mean the Fund Agent and the Funds. The term
not does include any "excepted funds" as defined in SEC Rule 22c-2(b)
under the Investment Company Act. Excepted fund means any: (1) money
market funds; (2) fund that issues securities that are listed on a
national exchange; and (3) fund that affirmatively permits short-term
trading of its securities, if its prospectus clearly and prominently
discloses that the fund permits short-term trading of its securities
and that such trading may result in additional costs for the fund.
8.2 The term "Shares" means the interests of Shareholders corresponding
to the redeemable securities of record issued by the Fund under the
Investment Company Act that are held by the Intermediary.
8.3 The term "Shareholder" means the owner of interests in a Contract
issued by the Intermediary, or a participant in an employee benefit
plan with a beneficial interest in a Contract.
8.4. The term "Shareholder-Initiated Transfer Purchase" means a
transaction that is initiated or directed by a Shareholder that results
in a transfer of assets within a Contract to a Fund, but does not
include transactions that are executed: (i) automatically pursuant to a
contractual or systematic program or enrollment such as transfer of
assets within a Contract to a Fund as a result of "dollar cost
averaging" programs, Intermediary-approved asset allocation programs or
automatic rebalancing programs; (ii) pursuant to a Contract death
benefit; (iii) one-time step-up in Contract value pursuant to a
Contract death benefit; (iv) step-ups in Contract value pursuant to a
Contact living benefit; (v) allocation of assets to a Fund through a
Contract as a result of payments such as loan repayments, scheduled
contributions, retirement plan salary reduction contributions, or
planned premium payments to the Contract; or (vi) pre-arranged
transfers at the conclusion of a required free look period.
8.5 The term "Shareholder-Initiated Transfer Redemption" means a
transaction that is initiated or directed by a Shareholder that results
in a transfer of assets within a Contract out of a Fund, but does not
include transactions that are executed: (i) automatically pursuant to a
contractual or systematic program or enrollments such as transfers of
assets within a Contract out of a Fund as a result of annuity payouts,
loans, systematic withdrawal programs, Intermediary-approved asset
allocation programs and automatic rebalancing programs; (ii) as a
result of any deduction of charges or fees under a Contract; (iii)
within a Contract out of a Fund as a result of scheduled withdrawals or
surrenders from a Contract; or (iv) as a result of payment of a death
benefit from a Contract.
8.6 The term "promptly" as used in Section 1.2 shall mean as soon as
practicable but in no event later than 10 business days from the
Intermediary's receipt of the request for information from the Fund or
its designee.
8.7 The term "written" includes electronic writings and facsimile
transmissions.
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, this Agreement has been executed as of the date set forth
above.
RYDEX DISTRIBUTORS, INC.
[OBJECT OMITTED]][GRAPHIC OMITTED]
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By: Xxxxx Xxxxxxxxx
Title: Sr. Vice President
VALLEY FORGE LIVE INSURANCE COMPANY
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By:
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Title: ]
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* According to the IRS' website, the ITIN refers to the Individual
Taxpayer Identification number, which is a nine-digit number that always begins
with the number 9 and has a 7 or 8 in the fourth digit, example 9XX-7X-XXXX. The
IRS issues ITINs to individuals who are required to have a U.S. taxpayer
identification number but who do not have, and are not eligible to obtain a
Social Security Number (SSN) from the Social Security Administration (SSA). The
Rule inadvertently refers to the ITIN as the International Taxpayer
Identification Number.
