RULE 22C-2 SHAREHOLDER INFORMATION AGREEMENT (the "Agreement")
This Agreement is entered into as of April 16, 2007 by and between MFS Fund
Distributors, Inc. ("MFD") 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.
WHEREAS, MFD is the principal underwriter for the MFS funds;
WHEREAS, Prior to the effective date of this Agreement, MFD and the Intermediary
agree that any request made to the Intermediary on behalf of an MFS Fund for
Shareholder transaction information, and the Intermediary's response to such
request, shall be governed by whatever practices the MFS Funds' agent(s) 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, among other mutual funds, the
MFS Funds;
WHEREAS, the Intermediary purchases and redeems Shares of the MFS 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 under the Investment Company Act of 1940 ("Rule 22c-2")
effectively requires the MFS Funds, MFD or the MFS Funds' transfer agent to
enter into a shareholder information agreement with each financial intermediary,
as defined by Rule 22c-2 if that financial intermediary submits purchase or
redemption orders directly to a Fund, its principal underwriter or transfer
agent, or a registered clearing agency;
WHEREAS, MFD has identified Intermediary as such a financial intermediary of the
MFS Funds; and
WHEREAS, this Agreement sets forth the terms and conditions for information
sharing for the MFS Funds in accordance with Rule 22c-2.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, which
consideration is full and complete, MFD and Intermediary hereby agree as
follows:
A. Definitions. For purposes of this paragraph:
(1) The term "Fund" includes MFD and/ or the MFS Funds. The term does not
include any "excepted funds" as defined in Rule 22c-2(b).(1)
(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 of 1940 that are held by Intermediary.
(3) The term "Shareholder" means the holder of an interest in a Contract issued
by the Intermediary, or a participant in an employee benefit plan with a
beneficial interest in a Contract.
(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 the 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 the 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 Contract living benefit;
(v) allocation of assets to the 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.
(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 the 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 the 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 the 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.
(6) The term "written" includes electronic writings and facsimile transmissions.
B. (1) Agreement to Provide Information. Intermediary agrees to provide the Fund
or its designee, upon written request, the taxpayer identification number
("TIN"), the Individual/International Taxpayer Identification Number
("ITIN")(2), 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, 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 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.
(2) Period Covered by Request. Requests must set forth a specific period for
which transaction information is sought, which will generally not exceed ninety
(90) calendar days of transaction information. The Fund or its designee will not
request transaction information older than twelve (12) months 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.
(3) 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.
(4) Form and Timing of Response. Intermediary agrees to provide, promptly upon
request of the Fund or its designee the requested information specified in
section B.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 B.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 B.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).
Responses required by this paragraph must be communicated in writing and in a
format mutually agreed upon by Fund and Intermediary. 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 Rule 22c-2.
(5) Limitations on Use of Information. MFD agrees that the Fund and its designee
will not use the information received pursuant to this Agreement for any purpose
other than as necessary to comply with the provisions of Rule 22c-2 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.
C. (1) Agreement to Restrict Trading. Intermediary agrees to execute written
instruction 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
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) Form of Instructions. Instructions 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 restriction(s) is (are) to remain in place. If
the TIN, ITIN, GII or the specific individual Contract owner number or
participant account number associated with the Shareholder 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, MFD 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 holder that violated the Fund's policies relating
to eliminating or reducing any dilution of the value of the Fund's outstanding
Shares.
(3) Timing of Response. Intermediary agrees to execute instructions as soon as
reasonably practicable, but not later five business days after Intermediary's
receipt of the instructions.
(4) Confirmation by Intermediary. Intermediary must provide written confirmation
to the Fund or its designee 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.
D. Construction of the Agreement; Fund Participation Agreements. 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 conflict with the terms of a Participation
Agreement, the terms of this Agreement shall control.
E. Termination. This Agreement will terminate upon the termination of the
Participation Agreements.
F. 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 third party
claim or action brought against Intermediary as a result of any unauthorized
disclosure of a Shareholder's TIN, ITIN, or GII or the specific individual
Contract owner number or participant account number associated with the
Shareholder provided to the Fund or its designee in response to a request for
Shareholder information pursuant to the terms of this Agreement.
G. Force Majeure. Provided that each party has implemented and maintains a
business continuity plan that is reasonably designed to enable it to meet its
existing obligations to customers and address its existing relationships with
other broker-dealers and counterparties, such party is 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.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as
of the date first above written.
MFS FUND DISTRIBUTORS, INC.
By: _______________________________________ Date: _______________________
Name: Xxxxx X. Xxxxxx Title: President
VALLEY FORGE LIFE INSURANCE COMPANY
By:________________________________________ Date: _______________________
Name:_____________________________________ Title: _______________________
(1) As defined in SEC Rule 22c-2(b), the term "excepted fund" means any: (1)
money market fund; (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.
(2) 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 from the Social Security Administration . SEC Rule 22c-2
inadvertently refers to the ITIN as the International Taxpayer Identification
Number.
