AMENDED AND RESTATED
PARTICIPATION AGREEMENT
AMONG
PIONEER VARIABLE CONTRACTS TRUST
IDS LIFE INSURANCE COMPANY
PIONEER INVESTMENT MANAGEMENT, INC.
AND
PIONEER FUNDS DISTRIBUTOR, INC.
THIS AMENDED AND RESTATED AGREEMENT ("Agreement"), is made and entered
into this 1st day of September, 2006 by and among PIONEER VARIABLE CONTRACTS
TRUST, a Delaware business trust (the "Trust"), IDS LIFE INSURANCE COMPANY,
a Minnesota life insurance company (the "Company") on its own behalf and on
behalf of each of the segregated asset accounts of the Company set forth in
Schedule A hereto, as may be amended from time to time (the "Accounts"),
PIONEER INVESTMENT MANAGEMENT, INC., a Delaware corporation ("PIM") and
PIONEER FUNDS DISTRIBUTOR, INC. ("PFD"), a corporation organized under the
laws of The Commonwealth of Massachusetts.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940
Act"), and its shares are registered or will be registered under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into
several series and classes of shares, each series being designated a
"Portfolio" and representing an interest in a particular managed pool of
securities and other assets;
WHEREAS, the Trust is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts to be offered by insurance companies, including
IDS Life Insurance Company, which have entered into participation agreements
with the Trust (the "Participating Insurance Companies");
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission (the "SEC"), dated July 9, 1997 (File No. 812-10494)
(the "Mixed and Shared Funding Exemptive Order") 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 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Trust to be sold
to and held by variable annuity and
variable life insurance companies that may or may not be affiliated with one
another and qualified pension and retirement plans ("Qualified Plans"),
WHEREAS, PIM is duly-registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state
securities law, and is the Trust's investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or
variable life insurance contracts (individually, the "Contract" or,
collectively, the "Contracts") which, if required by applicable law, will be
registered under the 1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated
asset accounts, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the aforesaid
variable annuity and/or variable life insurance contracts that are allocated
to the Accounts (the Contracts and the Accounts covered by this Agreement,
and each corresponding Portfolio covered by this Agreement in which the
Accounts invest, is specified in Schedule A attached hereto as may be
modified from time to time);
WHEREAS, the Company has registered or will register the Accounts as
unit investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, the Portfolios offered by the Trust to the Company and the
Accounts are set forth on Schedule A attached hereto;
WHEREAS, Pioneer Funds Distributors, Inc. (the "Underwriter") is
registered as a broker-dealer with the Securities and Exchange Commission
(the "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. (the "NASD") and is
authorized to sell shares of the Portfolios to unit investment trusts such
as the Accounts;
WHEREAS, IDS Life Insurance Company, the underwriter for the
individual variable annuity and the variable life policies, is registered as
a broker-dealer with the SEC under the 1934 Act and is a member in good
standing of the NASD; and
WHEREAS, the Company will be renamed RiverSource Life Insurance
Company effective December 31, 2006 at 10:59:59 p.m. Central Time (the
"Effective Time"), and on and after the Effective Time all references in
this Agreement and its Schedules to the Company shall mean and refer to
RiverSource Life Insurance Company; and,
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios specified in Schedule A attached hereto (the "Shares") on behalf
of the Accounts to fund the Contracts, and PFD intends to sell such Shares
to the Accounts at net asset value;
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NOW, THEREFORE, in consideration of their mutual promises, the Trust,
PIM, PFD and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
--------------------
1.1. PFD agrees to sell to the Company those Shares which the Accounts
order in accordance with the terms of this Agreement (based on orders placed
by Contract owners on that Business Day, as defined below) and which are
available for purchase by such Accounts. Each such order will be executed on
a daily basis at the net asset value next computed after receipt by the
Trust or its designee of the order for the Shares. For purposes of this
Section 1.1., the Company shall be the designee of the Trust for receipt of
such orders from Contract owners and receipt by such designee shall
constitute receipt by the Trust, provided that the Trust or its designee
receives written notice of such orders by the time the Trust ordinarily
calculates its net asset value as described from time to time in the Trust's
prospectus (which as of the date of this Agreement is 4:00 p.m. New York
time on such Business Day. "Business Day" shall mean any day on which the
New York Stock Exchange, Inc. (the "NYSE") is open for trading and on which
the Trust calculates its net asset value pursuant to the rules of the SEC.
1.2. PFD agrees to make the Shares available for purchase at the
applicable net asset value per share by the Company and the Accounts on
those days on which the Trust calculates its net asset value in accordance
with the rules of the SEC. Notwithstanding the foregoing, the Board of
Trustees of the Trust (the "Board") may refuse to sell any Shares to the
Company and the Accounts, or suspend or terminate the offering of the Shares
to the Company and the Accounts if such action is required by law or by
regulatory authorities having jurisdiction over PIM, PFD or the Trust or is,
in the sole discretion of the Board acting in good faith and in light of its
fiduciary duties under federal and any applicable state laws, in the best
interest of the Shareholders of such Portfolio.
1.3. The Trust and PFD will sell Trust shares only to Participating
Insurance Companies and Qualified Plans which have agreed to participate in
the Trust to fund their Separate Accounts and/or Qualified Plans all in
accordance with the requirement of Section 817(h) of the Internal Revenue
Code, as amended (the "Code") and the Treasury regulations thereunder. The
Company will not resell the Shares except to the Trust or its agents.
1.4. The Trust agrees, upon the Company's request, to redeem for cash,
any full or fractional Shares held by the Accounts (based on orders placed
by Contract owners on that Business Day). Each such redemption request shall
be executed on a daily basis at the net asset value next computed after
receipt by the Trust or its designee of the request for redemption. For
purposes of this Section 1.4, the Company shall be the designee of the Trust
for receipt of requests for redemption from Contract owners and receipt by
such designee shall constitute receipt by the Trust; provided that the Trust
or its designee receives written notice of such request for redemption by
the time the Trust ordinarily calculates its net asset value as described
from time to time in the Trust's prospectus (which as of the date of this
Agreement is 4:00 p.m. New York time on such Business Day).
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1.5. Each purchase, redemption and exchange order placed by the
Company shall be placed separately for each Portfolio and shall not be
netted with respect to any Portfolio. However, with respect to payment of
the purchase price by the Company and of redemption proceeds by the Trust,
the Company and the Trust shall net purchase and redemption orders with
respect to each Portfolio and shall transmit one net payment for all of the
Portfolios in accordance with Section 1.6 hereof.
1.6. In the event of net purchases, the Company shall notify the Trust
of such purchase order by 11:00 a.m. New York time on the next Business Day
after an order to purchase the Shares is made in accordance with the
provisions of Section 1.1. hereof. The Company's bank shall initiate payment
of such purchase order no later than 11:00 a.m. New York time on the next
Business Day after an order to purchase the Shares is made in accordance
with the provisions of Section 1.1. hereof. The Company shall transmit all
such payments in federal funds by wire. If payment in federal funds for any
purchase is not received or is received by the Trust after 11:00 a.m. on the
next Business Day, the Company shall promptly, upon the Trust's request,
reimburse the Trust for any charges, costs, fees, interest or other expenses
incurred by the Trust in connection with any advances to, or borrowings or
overdrafts by, the Trust, or any similar expenses (including the cost of and
any loss incurred by the Trust in unwinding any purchase of securities by
the Trust) incurred by the Trust as a result of portfolio transactions
effected by the Trust based upon such purchase request. In the event of net
redemptions, the Trust ordinarily shall transmit the proceeds of redemptions
of Shares by 11:00 a.m. New York time on the next Business Day after a
redemption order is received in accordance with Section 1.4. hereof,
although the Trust reserves the right to postpone the date of Payment or
satisfaction upon redemption consistent with Section 22(e) of the 1940 Act
and any rules promulgated thereunder. Payments for net redemptions shall be
in federal funds transmitted by wire.
1.7. Issuance and transfer of the Shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts. The
Shares ordered from the Trust will be recorded in an appropriate title for
the Accounts or the appropriate subaccounts of the Accounts.
1.8. The Trust shall furnish same-day notice (by wire or telephone,
followed by written confirmation) no later than 7:00 p.m. New York time on
the ex-dividend date to the Company of any dividends or capital gain
distributions payable on the Shares. The Company hereby elects to receive
all such dividends and distributions as are payable on a Portfolio's Shares
in additional Shares of that Portfolio. The Company reserves the right to
revoke this election and, commencing 10 days after such revocation, to
receive all such dividends and distributions in cash. The Trust shall notify
the Company of the number of Shares so issued as payment of such dividends
and distributions.
1.9. The Trust or its custodian shall make the net asset value per
share ("NAV") for each Portfolio available to the Company on each Business
Day as soon as reasonably practical after the NAV is calculated and shall
use its best efforts to make such NAV available by 6:00 p.m. New York time.
The Trust or its custodian will notify the Company as soon as possible if it
is determined that the NAV will be available after 6:00 p.m. New York time
and the Trust (or its custodian) and the Company will mutually agree upon a
final deadline for timely receipt of the
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NAV on that Business Day. In the event of an error in the computation of a
Portfolio's NAV or any dividend or capital gain distribution (each, a
"pricing error"), PIM or the Trust shall notify the Company as soon as
possible after the discovery of the error. Such notification may be verbal,
but shall be confirmed promptly in writing in accordance with Article XII of
this Agreement. A pricing error shall be corrected in accordance with the
Trust's internal policies and procedures. If an adjustment is necessary to
correct a material error that occurred through no fault of the Company and
such adjustment has caused Contract owners to receive less than the number
of Shares or redemption proceeds to which they are entitled, the number of
Shares of the applicable Account will be adjusted and the amount of any
underpayments will be paid by the Trust or PIM to the Company for crediting
of such amounts to the Contract owners' accounts. Upon notification by PIM
of any overpayment due to a material error, the Company shall promptly remit
to the Trust or PIM, as appropriate, any overpayment that has not been paid
to Contract owner; however, PIM acknowledges that the Company does not
intend to seek additional payments from any Contract owner who, because of a
pricing error, may have underpaid for units of interest credited to his/her
account. The costs of correcting such adjustments, including reasonable
administrative costs, shall be borne by the Trust or PIM unless the Company
is at fault in which case such costs shall be borne by the Company.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
-------------------------------------------------
2.1. The Company represents and warrants that the Contracts are or
will be registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Contracts will be issued, sold, and
distributed in compliance in all material respects with all applicable state
and federal laws, including without limitation the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the 1940 Act. The
Company further represents and warrants that it (i) is an insurance company
duly organized and in good standing under applicable law; (ii) has legally
and validly established, or will establish, each Account as a segregated
asset account under applicable law; (iii) has registered or, prior to any
issuance or sale of the Contracts, will register the Accounts as unit
investment trusts in accordance with the provisions of the 1940 Act (unless
exempt therefrom) to serve as segregated investment accounts for the
Contracts, and (iv) will maintain such registration for so long as any
Contracts are outstanding. The Company shall amend the registration
statements under the 1933 Act for the Contracts and the registration
statements under the 1940 Act for the Accounts from time to time as required
in order to effect the continuous offering of the Contracts or as may
otherwise be required by applicable law. The Company shall register and
qualify the Contracts for sales in accordance with the securities laws of
the various states only if and to the extent deemed necessary by the
Company. At the time the Company is required to deliver the Trust's
prospectus or statement of additional information to a purchaser of Shares
in accordance with the requirements of federal or state securities laws, the
Company shall distribute to such Contract purchasers the then current Trust
prospectus, as supplemented.
2.2. The Company represents and warrants that the Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contract under applicable provisions of the Code, that
it will maintain such treatment and that it will notify the Trust or
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PIM 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.
2.3. The Company represents and warrants that IDS Life Insurance
Company, the underwriter for the individual variable annuity contracts and
the variable life policies, is a member in good standing of the NASD and is
a registered broker-dealer with the SEC. The Company represents and warrants
that the Company will sell and distribute such contracts and policies in
accordance in all material respects with all applicable state and federal
securities laws, including without limitation the 1933 Act, the 1934 Act,
and the 1940 Act and state insurance law suitability requirements.
2.4. The Trust represents and warrants that the Shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized
for issuance in compliance with the laws of Delaware and that the Trust is
and shall remain registered under the 1940 Act. The Trust 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 Trust shall register and qualify the Shares for sale in
accordance with the laws of the various states only if and to the extent
deemed necessary by the Trust. The Trust, PIM and PFD agree that they will
furnish the information required by state insurance laws so that the Company
can obtain the authority needed to issue the Contracts in the various
states.
2.5. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware. The Trust further
represents that it has adopted a pursuant to Rule l2b-1 under the 1940 Act
and imposes an asset-based charge to finance its distribution expenses with
respect to the Class II shares of certain of the Trust's Portfolios as
permitted by applicable law and regulation.
2.6. PFD represents and warrants that it is a member in good standing
of the NASD and is registered as a broker-dealer with the SEC. PFD
represents that it will sell and distribute the Shares in accordance in all
material respects with all applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.7. PIM represents and warrants that it is and shall remain duly
registered as an investment adviser under the Investment Advisers Act of
1940, as amended.
2.8. No less frequently than annually, the Company shall submit to the
Board such reports, material or data as the Board may reasonably request so
that it may carry out fully the obligations imposed upon it by the
conditions contained in the Mixed and Shared Funding Exemptive Order
pursuant to which the SEC has granted exemptive relief to permit mixed and
shared funding.
2.9. The Trust and PIM represent and warrant that all of their
respective officers, employees, investment advisers, and other individuals
or entities dealing with the money and/or securities of the Trust are, and
shall continue to be at all times, covered by one or more blanket fidelity
bonds or similar coverage for the benefit of the Trust in an amount not less
than the
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minimal coverage required by Rule l7g-1 under the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bonds
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Company represents and warrants that all of
its respective officers, employees, and other individuals or entities
employed or controlled by the Company dealing with the money and/or
securities of the Trust are, and shall continue to be at all times, covered
by a blanket fidelity bond or similar coverage as deemed appropriate by the
Company. The aforesaid bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company. The Company
agrees that any amounts received under such bond relating to a claim arising
under this Agreement will be held by the Company for the benefit of the
Trust. The company agrees to make all reasonable efforts to maintain such
bond and agrees to notify the Trust and PIM in writing in the event such
coverage terminates.
2.10. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Code, that the Contracts are
currently at the time of issuance and, assuming the Trust meets the
requirements of Article VI, will be treated as annuity contracts under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Trust, PFD and PIM
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. In addition, the Company represents and warrants that each Account
is a "segregated asset account" and that interests in the Account are
offered exclusively through the purchase of or transfer into a "variable
contract" within the meaning of such terms under Section 817 of the Code and
the regulations thereunder. The Company will use every effort to continue to
meet such definitional requirements, and it will notify the Trust, PFD and
PIM immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the
future. The Company represents and warrants that it will not purchase Trust
shares with assets derived from tax-qualified retirement plans except,
indirectly, through Contracts purchased in connection with such plans.
2.11. The Company acknowledges the Trust has adopted policies and
procedures reasonably designed to prevent frequent or excessive purchases,
exchanges and redemptions of the shares of Portfolios in quantities great
enough to disrupt orderly management of the corresponding Portfolio's
investment portfolio. These policies are disclosed in the Trust's
prospectus.
The Trust acknowledges that the Company, on behalf of its
Accounts, has adopted policies and procedures reasonably designed to detect
and deter frequent transfers of Contract value among the subaccounts of the
Accounts including those investing in Portfolios available as investment
options under the Contracts. These policies and procedures are described in
the current prospectuses of the Accounts through which the Contracts are
offered.
The Trust may consider the Company's policies and procedures
pertaining to frequent transfers of Contract value among the subaccounts of
the Account(s) including those investing in Portfolios when the Trust
periodically reviews or amends the Trust's disruptive trading policies and
procedures from time to time. The Trust may invite comment from and confer
with Company regarding any proposed policy and procedure of the Trust
pertaining to
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disruptive trading to determine prior to adopting such proposed policy or
procedure the Company's then-present ability to apply such proposed policy
or procedure to Contract owners who allocate Contract value to subaccounts
investing in Portfolios available under the Contracts, including without
limitation whether the Company can apply such proposed policy or procedure
without the need to modify its automated data processing systems or to
develop and staff manual systems to accommodate the implementation of the
Trust's proposed policy or procedure.
The Company will cooperate with the Trust's reasonable requests in
taking steps to deter and detect such transfers by any Contract owner.
Subject to applicable law and the terms of each Contract, the Company will
provide promptly upon request by the Issuer, directly or through its
designee:
o the Taxpayer Identification Number of all Contract owners that
purchased, redeemed, transferred, or exchanged shares of a
Portfolio held under a Contract; and,
o the amount and dates of such Contract owners purchases,
redemptions, transfers and exchanges in subaccounts available
under the Contract which invest in shares of any Portfolio.
The Company will execute any instructions from the Trust,
directly or through its designee, to restrict or prohibit further purchases,
redemptions, transfers or exchanges in subaccounts available under the
Contract which invest in shares of any Portfolio by any Contract owner who
has been identified by the Trust, or its designee, as having engaged in
transactions that violate policies established by the Trust for the purpose
of eliminating or reducing any dilution of the value of the outstanding
securities of any Portfolio.
The parties shall negotiate in good faith such additional terms and
conditions regarding implementation of the foregoing obligations of the
parties under Rule 22c-2 as any party may wish to address, including without
limitation, reimbursement of expenses the Company incurs in order to provide
such information to the Trust or its designee and to execute any
instructions from the Trust or its designee to restrict or prohibit
purchases, redemptions, transfers or exchanges by any Contract owner in
subaccounts available under a Contract which invest in shares of any
Portfolio. If the Company is required under Rule 22c-2 under the 1940 Act to
implement transaction procedures for its Accounts in order to effectuate the
Trust's procedures for preventing disruptive trading in the shares of
Portfolios, and such implementation will require Company to modify its
automated data processing systems or to develop and staff manual systems to
accommodate the Trust's requirements, the parties shall in good faith
negotiate a mutually agreed-upon implementation schedule.
2.12. The parties to this Agreement represent and warrant that each
party shall comply with all the applicable laws and regulations designed to
prevent money laundering including without limitation the International
Money Laundering Abatement and Anti-Terrorist Financing Act of 2001 (Title
III of the USA PATRIOT ACT), and if required by such laws or regulations
will share information with each other about individuals, entities,
organizations and countries
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suspected of possible terrorist or money laundering activities in accordance
with Section 314(b) of the USA PATRIOT ACT.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
---------------------------------------
3.1. At least annually, the Trust or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing only the Portfolios listed in Schedule A hereto) for the Shares
as the Company may reasonably request for distribution to existing Contract
owners whose Contracts are funded by such Shares. The Trust or its designee
shall provide the Company, at the Company's expense, with as many copies of
the current prospectus for the Shares as the Company may reasonably request
for distribution to prospective purchasers of Contracts. If requested by the
Company in lieu thereof, the Trust or its designee shall provide such
documentation (including a "camera ready" copy of the new prospectus as set
in type or, at the request of the Company, as a diskette in the form sent to
the financial printer) and other assistance as is reasonably necessary in
order for the parties hereto once each year (or more frequently if the
prospectus for the Shares is supplemented or amended) to have the prospectus
for the Shares printed together in one document with other prospectuses; the
expenses of such printing to be apportioned between (a) the Company and (b)
the Trust or its designee in proportion to the number of pages of the
Shares' prospectuses and the other prospectuses, taking account of other
relevant factors affecting the expense of printing, such as covers, columns,
graphs and charts; the Trust or its designee to bear the cost of printing
the Trust's prospectus portion of such document for distribution to owners
of existing Contracts funded by the Shares and the Company to bear the
expenses of printing the portion of such document relating to the other
prospectuses; provided, however, that the Company shall bear all printing
expenses of such combined documents where used for distribution to
prospective purchasers or to owners of existing Contracts not funded by the
Shares. In the event that the Company requests that the Trust or its
designee provides the Trust's prospectus in a "camera ready," diskette
format or other mutually agreed upon format, the Trust shall be responsible
for providing the prospectus in the format in which it or PIM is accustomed
to formatting prospectuses and shall bear the expense of providing the
prospectus in such format (e.g., typesetting expenses), and the Company
shall bear the expense of adjusting or changing the format to conform with
any of its prospectuses, subject to PIM's approval which shall not be
unreasonably withheld.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or its
designee. The Trust or its designee, at its expense, shall print and provide
such statement of additional information to the Company (or a master of such
statement suitable for duplication by the Company) for distribution to any
owner of a Contract funded by the Shares. The Trust or its designee, at the
Company's expense, shall print and provide such statement to the Company (or
a master of such statement suitable for duplication by the Company) for
distribution to a prospective purchaser who requests such statement or to an
owner of a Contract not funded by the Shares.
3.3. The Trust or its designee shall provide the Company free of
charge copies, if and to the extent applicable to the Shares, reports to
Shareholders and other communications to
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Shareholders in such quantity as the Company shall reasonably require for
distribution to Contract owners.
3.4. The Trust or PIM will provide the Company with as much notice as
is reasonably practicable of any proxy solicitation for any Portfolio, and
of any material change in the Trusts registration statement, particularly
any change resulting in change to the registration statement or prospectus
or statement of additional information for any Account. The Company, the
Trust and PIM will cooperate so as to enable the Trust or PIM to solicit
proxies from Contract owners or to make changes to the Trust's prospectus,
statement of additional information or registration statement, in an orderly
manner. The Company will provide to a proxy solicitation and tabulation firm
selected by the Trust or PIM a magnetic tape or other mutually agreed upon
electronic storage media the names, addresses and unit holdings of Contract
owners as of the record date set by the Trustees of the Trust. The Trust and
PIM will make reasonable efforts to attempt to have changes affecting
Contract prospectuses become effective simultaneously with the annual
updates for such prospectuses.
3.5. The Trust hereby notifies the Company that it may be appropriate
to include in the prospectus pursuant to which a Contract is offered
disclosure regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
(a) provide for the solicitation of voting instructions from
Contract owners;
(b) vote the Shares in accordance with instructions received
from Contract owners; and
(c) vote the Shares for which no instructions have been
received in the same proportion as the Shares of such
Portfolio for which instructions have been received from
Contract owners;
so long as and to the extent that the SEC continues to interpret the 1940
Act to require pass through voting privileges for variable contract owners.
The Company will in no way recommend action in connection with or oppose or
interfere with the solicitation of proxies for the Shares held for such
Contract owners. The Company reserves the right to vote 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 holding Shares calculates voting privileges
in the manner required by the Mixed and Shared Funding Exemptive Order. The
Trust and PIM will notify the Company of any changes of interpretations or
amendments to the Mixed and Shared Funding Exemptive Order.
3.7. The Trust will provide written instruction to all Participating
Insurance Companies including the Company each time the Trust amends or
supplements the Trust's current prospectus or statement of additional
information directing the Participating Insurance Companies including the
Company as to whether the amendment or supplement is to be provided
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(a) immediately to Contract owners who have Contract value allocated to a
Portfolio or (b) is to be held and combined with another Trust or Contract
related mailing as permitted by applicable federal securities laws. The
Trust agrees that the instruction it gives the Company in each instance will
be identical to the instruction it provides other Participating Insurance
Companies.
3.8. In the event the Trust initiates (i) a reorganization as defined
by Section 2 of the 1940 Act, or (ii) changes the Trust's name or the name
of a Portfolio, the Trust or its designee will reimburse the Company's
internal and out-of-pocket costs associated with the aforementioned actions.
Company agrees to use its best efforts to minimize any costs incurred and
shall provide the Trust or its designee agent with acceptable documentation
of any such costs incurred.
ARTICLE IV. SALES MATERIAL AND INFORMATION
------------------------------
4.1. The Company shall furnish, or shall cause to be furnished, to PFD
or its designee, each piece of sales literature or other promotional
material in which the Trust, PIM, any other investment adviser to the Trust,
or any affiliate of PIM are named, at least ten (10) Business Days prior to
its use. No such material shall be used if PFD or its designee reasonably
objects to such use within five (5) Business Days after receipt of such
material.
4.2. The Company shall not make any representation on behalf of the
Trust, PIM, any other investment adviser or subadviser to the Trust or any
affiliate of PIM and shall not give any information on behalf of the Trust,
PlM, any other investment adviser or subadviser to the Trust, or any
affiliate of PIM or concerning the Trust or any other such entity in
connection with the sale of the Contracts other than the information
contained in the registration statement, prospectus or statement of
additional information for the Shares, as such registration statement,
prospectus and statement of additional information may be amended or
supplemented from time to time, or in reports or proxy statements for the
Trust, or in published reports for the Trust which are in the public
domain., or in sales literature or other promotional material approved by
the Trust, PIM, PFD or their respective designees, except with the
permission of the Trust, PIM or their respective designees. The Trust, PIM,
PFD or their respective designees each agrees to respond to any request for
approval on a prompt and timely basis. The Company shall adopt and implement
procedures reasonably designed to ensure that information concerning the
Trust, PIM, PFD or any of their affiliates which is intended for use only by
brokers or agents selling the Contracts (i.e., information that is not
intended for distribution to Contract owners or prospective Contract owners)
is so used, and neither the Trust, PIM, PFD nor any of their affiliates
shall be liable for any losses, damages or expenses relating to the improper
use of such broker only materials.
4.3. PFD 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 the Accounts is named, at least ten
(10) Business Days prior to its use. No such material shall be used if the
Company or its designee reasonably objects to such use within five (5)
Business Days after receipt of such material.
11
4.4. The Trust, PIM and PFD shall not give any information or make any
representations on behalf of the Company or concerning the Company, the
Accounts, or the Contracts in connection with the sale of the Contracts
other than the information or representations contained in a registration
statement, prospectus, or statement of additional information for the
Contracts, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time, or
in reports for the Accounts, or in published reports for the Accounts which
are in the public domain, or in sales literature or other promotional
material approved by the Company or its designee, except with the permission
of the Company. The Company or its designee agrees to respond to any request
for approval on a prompt and timely basis. The parties hereto agree that
this Section 4.4. is neither intended to designate nor otherwise imply that
PIM is an underwriter or distributor of the Contracts.
4.5. The Company and the Trust shall provide, or shall cause to be
provided, to the other at least one complete copy of all registration
statements, prospectuses, statements of additional information, reports,
proxy statements, sales literature and other promotional materials, and all
amendments to any of the above, that relate to the Contracts, or to the
Trust or its Shares, prior to or contemporaneously with the filing of such
document with the SEC or other regulatory authorities.
4.6. For purpose of this Article IV and Article VIII, the phrase
"sales literature or other promotional material" includes but is not limited
to advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone,
electronic messages or tape recording, videotape display, signs or
billboards, motion pictures, or other public media, including, for example,
on-line networks such as the Internet or other electronic media), and sales
literature (such as brochures, electronic messages, circulars, reprints or
excerpts or any other advertisement, sales literature, or published
articles), distributed or made generally available to customers or the
public, educational or training materials or communications distributed or
made generally available to some or all agents or employees, and shareholder
reports, proxy materials (including solicitations for voting instructions)
and any other material constituting sales literature or advertising under
the NASD Conduct Rules, the 1933 Act or the 0000 Xxx.
4.7. At the request of any party to this Agreement, each other party
will make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records, data,
access to operating procedures that may be reasonably requested in
connection with compliance and regulatory requirements related to the
Agreement or any party's obligations under this Agreement.
4.8. Subject to the terms of Sections 4.1 and 4.2 of this Agreement,
the Trust (and its Portfolios), PIM and PFD each consents, in connection
with the marketing of the Contracts, to the Company's use of their names or
other identifying marks, including PIONEER INVESTMENTS(R) and Pioneer's sail
logo, in connection with the marketing of the Contracts. The Trust, PIM or
PFD or their affiliates may withdraw this authorization as to any particular
use of any such name or identifying xxxx at any time: (i) upon a reasonable
determination that such
12
use would have a material adverse effect on its reputation or marketing
efforts or its affiliates or (ii) if any of the Portfolios of the Trust
cease to be available through the Company. Except as set forth in the
previous sentence, the Company will not cause or permit, without prior
written permission, the use, description or reference to a Pioneer party's
name, or to the relationship contemplated in this Agreement, in any
advertisement, or promotional materials or activities, including without
limitation, any advertisement or promotional materials published,
distributed, or made available, or any activity conducted through, the
Internet or any other electronic medium.
4.9. PLM will be responsible for calculating the performance
information for the Trust. PIM and the Trust agree to provide the Company
with Trust performance information on a timely basis to enable the Company
to calculate performance information for the Contracts in accordance with
applicable state and federal law. The Company will be responsible for
calculating the performance information for the Contracts. The Company
agrees to provide the Trust with Contract performance information on a
timely basis to enable the Trust to disclose performance information for the
Contracts in accordance with applicable state and federal law.
ARTICLE V. FEES AND EXPENSES
-----------------
5.1. Neither the Trust, PLM nor PFD shall pay any fee or other
compensation to the Company under this Agreement, other than pursuant to
Schedule B attached hereto, and the Company shall pay no fee or other
compensation to the Trust, PIM or PFD under this Agreement. Notwithstanding
the foregoing, the parties hereto will bear certain expenses under the
provisions of this Agreement and shall reimburse other parties for expenses
initially paid by one party but allocated to another party. In addition,
nothing herein shall prevent the parties hereto from otherwise agreeing to
perform, and arranging for appropriate compensation for, other services
relating to the Trust and/or to the Accounts pursuant to this Agreement.
5.2. The Trust or its designee shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable federal
and state laws, including preparation and filing of the Trust's registration
statement, and payment of filing fees and registration fees; preparation and
filing of the Trust's proxy materials and reports to Shareholders; setting
in type and printing its prospectus and statement of additional information
(to the extent provided by and as determined in accordance with Article III
above); setting in type and printing the proxy materials and reports to
Shareholders (to the extent provided by and as determined in accordance with
Article III above); the preparation of all statements and notices required
of the Trust by any federal or state law with respect to its Shares; all
taxes on the issuance or transfer of the Shares; and the costs of
distributing the Trust's prospectuses and proxy materials to owners of
Contracts funded by the Shares and any expenses permitted to be paid or
assumed by the Trust pursuant to a plan, if any, under Rule 12b-1 under the
1940 Act. The Trust shall not bear any expenses of marketing the Contracts.
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Contracts and
of distributing the Trust's Shareholder reports to Contract owners. The
Company shall bear all expenses associated with
13
the registration, qualification, and filing of the Contracts under
applicable federal securities and state insurance laws; the cost of
preparing, printing and distributing the Contract prospectus and statement
of additional information; and the cost of preparing, printing and
distributing annual individual account statements for Contract owners as
required by state insurance laws.
5.4. The Company agrees to provide certain administrative services,
specified in Schedule B attached hereto, in connection with the arrangements
contemplated by this Agreement. The parties intend that the services
referred to in the Section 5.4. be recordkeeping, shareholder communication,
and other transaction facilitation and processing, and related
administrative services and are not the services of an underwriter or
principal underwriter of the Trust and the Company is not an underwriter for
Shares within the meaning of the 1933 Act.
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
---------------------------------------
6.1. The Trust and PIM represent and warrant that each Portfolio of
the Trust in which an Account invests will meet the diversification
requirements of Section 817(h)(1) of the Code and Treas. Reg. 1.817-5,
relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts, as they may be amended from time to
time (and any revenue rulings, revenue procedures, notices, and other
published announcements of the Internal Revenue Service interpreting these
sections), as if those requirements applied directly to each such Portfolio.
In the event of a breach of this representation and warranty by the Trust
and/or PM1, they will take all reasonable steps:
(a) to notify the Company of such breach; and
(b) to adequately diversify the Trust so as to achieve
compliance within the grace period afforded by Treas. Reg.
1.817-5.
6.2. The Trust and PIM represent that each Portfolio will elect to be
qualified as a Regulated Investment Company under Subchapter M of the Code
and that they will maintain such qualification (under Subchapter M or any
successor or similar provision).
6.3. No Shares of the Trust will be sold directly to the general
public.
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
----------------------------
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for the
existence of any material irreconcilable conflict between the interests of
the variable annuity contract owners and the variable life insurance policy
owners of the Company and/or affiliated companies ("contract owners")
investing in the Trust. A material irreconcilable 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 interpretive letter, or any similar action by
insurance, tax or securities regulatory authorities; (c) an administrative
or judicial decision in any relevant proceeding; (d)
14
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 by contract owners of different
Participating Insurance Companies; or (f) a decision by a Participating
Insurance Company to disregard the voting instructions of contract owners.
The Board shall have the sole authority to determine if a material
irreconcilable conflict exists, and such determination shall be binding on
the Company only if approved in the form of a resolution by a majority of
the Board, or a majority of the disinterested trustees of the Board. The
Board will give prompt notice of any such determination to the Company.
7.2. The Company agrees that it will be responsible for assisting the
Board in carrying out its responsibilities under the conditions set forth in
the Trust's exemptive application pursuant to which the SEC has granted the
Mixed and Shared Funding Exemptive Order by providing the Board, as it may
reasonably request, with all information necessary for the Board to consider
any issues raised and agrees that it will be responsible for promptly
reporting any potential or existing conflicts of which it is aware to the
Board including, but not limited to, an obligation by the Company to inform
the Board whenever contract owner voting instructions are disregarded. The
Company also agrees that, if a material irreconcilable conflict arises, it
will at its own cost remedy such conflict up to and including (a)
withdrawing the assets allocable to some or all of the Accounts (or
subaccounts of the Accounts) from the Trust or any Portfolio and reinvesting
such assets in a different investment medium, including (but not limited to)
another Portfolio of the Trust, or submitting to a vote of all affected
contract owners whether to withdraw assets from the Trust or any Portfolio
and reinvesting such assets in a different investment medium and, as
appropriate, segregating the assets attributable to any appropriate group of
contract owners (e.g., annuity contract owners, life insurance owners or
variable contract owners of one or more Participating Insurance Companies)
that votes in favor of such segregation, or offering to any of the affected
contract owners the option of segregating the assets attributable to their
contracts or policies, and (b) establishing a new registered management
investment company and segregating the assets underlying the Contracts,
unless a majority of Contract owners materially adversely affected by the
conflict have voted to decline the offer to establish a new registered
management investment company.
7.3. A majority of the disinterested trustees of the Board shall
determine whether any proposed action by the Company adequately remedies any
material irreconcilable conflict. In the event that the Board determines
that any proposed action does not adequately remedy any material
irreconcilable conflict, the Company will withdraw from investment in the
Trust each of the Accounts designated by the disinterested trustees 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 to
remedy any such material irreconcilable conflict as determined by a majority
of the disinterested trustees of the Board.
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 Trust's election, to withdraw the
Account's investment in the Trust and terminate this Agreement; provided,
15
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 Trust's independent trustees. No charge or
penalty will be imposed as a result of such withdrawal. Any such withdrawal
and termination must take place within six (6) months after the Trust gives
written notice that this provision is being implemented, and until the end
of that six-month period PFD and the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of shares of
the Trust.
7.5. If material irreconcilable conflict arises because of particular
state insurance regulator's decision applicable to the Company conflicts
with the majority of other state regulators, then the Company will withdraw
the Account's investment in the Trust and terminate this Agreement within
six (6) months after the Trust's Board informs the Company in writing that
it has determined that such decision has created a material irreconcilable
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
Trust's Board. Until the end of the foregoing six (6) month period, the
Trust and PFD shall continue to accept and implement orders by the Company
for the purchase and redemption of shares of the Trust.
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 material irreconcilable
conflict, but in no event will the Trust be required to establish a new
funding medium for the Contracts. The Company shall not be required by
Section 7.2 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 affected
by the material irreconcilable conflict in the event that the Board
determines that any proposed action does not adequately remedy any material
irreconcilable conflict, then the Company will withdraw the Account's
investment in the Trust 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 independent trustees.
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 1940 Act or the rules promulgated thereunder with respect to mixed or
shared funding (as defined in the Mixed and Shared Funding Exemptive Order)
on terms and conditions materially different from those contained in the
Mixed and Shared Funding Exemptive Order, then (a) the Trust and/or the
Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with Rule 6e-2 and 6e-3(T), as amended, and Rule
6e-3, as adopted, to the extent such rules are applicable; and (b) Sections
3.5,3.6, 7.1, 7.2, 7.3 and 7.7 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.
16
ARTICLE VIII. INDEMNIFICATION
---------------
8.1. Indemnification by the Company
------------------------------
The Company agrees to indemnify and hold harmless the Trust, PIM, PFD,
any affiliates of PIM, and each of their respective directors, trustees,
officers and each person, if any, who controls the Trust or PIM within the
meaning of Section 15 of the 1933 Act, and any agents or employees of the
foregoing (each an "Indemnified Party," or 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 expenses (including reasonable counsel
fees) to which any Indemnified Party 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:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement, prospectus or statement of
additional information for the Contracts or contained in
the Contracts or sales literature or other promotional
material 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 reasonable
reliance upon and in conformity with information furnished
to the Company or its designee by or on behalf of the
Trust, PIM or PFD for use in the registration statement,
prospectus or statement of additional information for the
Contracts or in the Contracts or sales literature or other
promotional material (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Shares; or
(b) arise out of or as a result of statements or
representations not supplied by the Company or its
designee, or persons under its control (other than
statements or representations contained in the Trust's
registration statement, Prospectus, statement of
additional information or in sales literature or other
promotional material of the Trust and on which the Company
has reasonably relied) or wrongful conduct of the Company
or persons under its control, with respect to the sale or
distribution of the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement, prospectus, statement of additional
information, or sales literature or other promotional
literature of the Trust, or any amendment thereof or
supplement thereto, or the omission or alleged omission to
state therein a material fact required to be
17
stated therein or necessary to make the statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished
to the Trust by or on behalf of the Company; or
(d) 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; or
(e) arise as a result of any failure by the Company to perform
any of its obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.2. INDEMNIFICATION BY PIM AND PFD
------------------------------
PIM and PFD agree to indemnify and hold harmless the Company and each
of its directors, trustees and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act, and
any directors, trustees, officers, agents or employees of the foregoing
(each an "Indemnified Party," or 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 Trust) or expenses (including reasonable counsel fees) to which any
Indemnified Party 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:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement, prospectus, statement of
additional information or sales literature or other
promotional material of the Trust (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 statement 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 reasonable reliance upon and in
conformity with information furnished to the Trust, PIM,
PFD or their respective designees by or on behalf of the
Company for use in the registration statement, prospectus
or statement of additional information for the Trust or in
sales literature or other promotional material for the
Trust (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or
Shares; or
(b) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Contract's registration statement,
prospectus, statement of additional information or in
sales
18
literature or other promotional material for the
Contracts not supplied by the Trust, PIN, PFD or any of
their respective designees or persons under their
respective control and on which any such entity has
reasonably relied) or wrongful conduct of the Trust, PIM,
PFD or persons under their control, with respect to the
sale or distribution of the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement, prospectus, statement of additional
information, or sales literature or other promotional
literature of the Accounts or relating to 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
information furnished to the Company by or on behalf of
the Trust, PIM or PFD; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement (including a failure, whether unintentional or
in good faith or otherwise, to comply with the
diversification requirements specified in Article VI of
this Agreement) or arise out of or result from any other
material breach of this Agreement by the Trust; or
(e) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset
value per share or dividend or capital gain distribution
rate; or
(f) arise as a result of any failure by PIM or PFD to perform
any of their respective obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.3. In no event shall the Trust, PIM or PFD be liable under the
indemnification provisions contained in this Agreement to any individual or
entity, including without limitation, the Company, or any Participating
Insurance Company or any Contract owner, with respect to any losses, claims,
damages, liabilities or expenses that arise out of or result from (i) a
breach of any representation, warranty, and/or covenant made by the Company
hereunder or by any Participating Insurance Company under an agreement
containing substantially similar representations, warranties and covenants;
(ii) the failure by the Company or any Participating Insurance Company to
maintain its segregated asset account (which invests in any Portfolio) as a
legally and validly established segregated asset account under applicable
state law and as a duly registered unit investment trust under the
provisions of the 1940 Act (unless exempt therefrom); or (iii) the failure
by the Company or any Participating Insurance Company to maintain its
variable annuity and/or variable life insurance contracts (with respect to
which any Portfolio
19
serves as an underlying funding vehicle) as life insurance, endowment
or annuity contracts under applicable provisions of the Code.
8.4. Neither the Company, the Trust, PIM nor PFD shall be liable under
the indemnification provisions contained in this Agreement with respect to
any losses, claims, damages, liabilities or expenses to which an Indemnified
Party would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, willful misconduct, 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.
8.5. Promptly after receipt by an Indemnified Party under this Section
8.5. of notice of commencement of any action, such Indemnified Party will,
if a claim in respect thereof is to be made against the indemnifying party
under this section, notify the indemnifying party of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any Indemnified Party
otherwise than under this section. In case any such action is brought
against any Indemnified Party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, assume the defense thereof,
with counsel satisfactory to such Indemnified Party. After notice from the
indemnifying party of its intention to assume the defense of an action, the
Indemnified Party shall bear the expenses of any additional counsel obtained
by it, and the indemnifying party shall not be liable to such Indemnified
Party under this section for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof
other than reasonable costs of investigation.
8.6. A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this Article
VIII. The indemnification provisions contained in this Article VIII shall
survive any termination of this Agreement.
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
SEC may grant (including, but not limited to, the Mixed and Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS OR LITIGATION
------------------------------------------
The Trust, PIM, PFD and the Company agree that each such party shall
promptly notify the other parties to this Agreement, in writing, of the
institution of any formal proceedings brought against such party or its
designees by the NASD, the SEC, or any insurance department or any other
regulatory body regarding such party's duties under this Agreement or
related to the
20
sale of the Contracts, the operation of the Accounts, or the
purchase of the Shares. Each of the parties further agrees promptly to
notify the other parties of the commencement of any litigation or proceeding
against it or any of its respective officers, directors, trustees, employees
or 1933 Act control persons in connection with this Agreement, the issuance
or sale of the Contracts, the operation of the Accounts, or the sale or
acquisition of Shares. The indemnification provisions contained in this
Article X shall survive any termination of this Agreement.
ARTICLE XI. TERMINATION
-----------
11.1. This Agreement shall terminate with respect to the Accounts, or
one, some, or all Portfolios:
(a) at the option of any party upon sixty (60) days' advance
written notice delivered to the other parties or, if
later, upon receipt of any required exemptive relief or
orders from the SEC, unless otherwise agreed in a separate
written agreement by the parties; provided, however, that
such notice shall not be given earlier than six (6) months
following the date of this Agreement; or
(b) at the option of the Company to the extent that the Shares
of Portfolios are not reasonably available to meet the
requirements of the Contracts or are not "appropriate
funding vehicles" for the Contracts, as reasonably
determined by the Company. Without limiting the generality
of the foregoing, the Shares of a Portfolio would not be
"appropriate funding vehicles" if, for example, such
Shares did not meet the diversification or other
requirements referred to in Article VI hereof, or if the
Company would be permitted to disregard Contract owner
voting instructions pursuant to Rule 6e-2 or 6e-3(T) under
the 1940 Act. Prompt notice of the election to terminate
for such cause and an explanation of such cause shall be
furnished to the Trust by the Company; or
(c) at the option of the Trust, PIM or PFD upon institution of
formal proceedings against the Company by the NASD, the
SEC, or any insurance department or any other regulatory
body regarding the Company's duties under this Agreement
or related to the sale of the Contracts, the operation of
the Accounts, or the purchase of the Shares; provided that
the party terminating this Agreement under this provision
shall give notice of such termination to the other
parties' to this Agreement; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust by the NASD, the SEC, or any
state securities or insurance department or any other
regulatory body regarding the duties of the Trust, PIM or
PFD under this Agreement or related to the sale of the
Shares; provided that the party terminating this Agreement
under this
21
provision shall give notice of such termination to the
other parties to this Agreement; or
(e) at the option of the Company, the Trust, PIM or PFD upon
receipt of any necessary regulatory approvals and/or the
vote of the Contract owners having an interest in the
Accounts (or any subaccounts) to substitute the shares of
another investment company for the corresponding Portfolio
Shares in accordance with the terms of the Contracts for
which those Portfolio Shares had been selected to serve as
the underlying investment media. The Company will give
thirty (30) days' prior written notice to the Trust of the
date of any proposed vote or other action taken to replace
the Shares; or
(f) at the option of the Trust PIM or PFD by written notice to
the Company, if any one or all of the Trust, PIM or PFD
respectively, shall determine, in their sole judgment
exercised in good faith, that the Company 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) at the option of the Company by written notice to the
Trust, PIM or PFD, if the Company shall determine, in its
sole judgment exercised in good faith, that the Trust, PIM
or PFD has suffered a material adverse change in this
business, operations, financial condition or prospects
since the date of this Agreement or is the subject of
material adverse publicity; or
(h) at the option of any party to this Agreement, upon another
unaffiliated party's material breach of any provision of
or representation contained in this.
11.2. The notice shall specify the Portfolio or Portfolios, Contracts
and, if applicable, the Accounts (or subaccounts of the Accounts) as to
which the Agreement is to be terminated.
11.3. It is understood and agreed that the right of any party hereto
to terminate this Agreement pursuant to Section 11.1 (a) may be exercised
for cause or for no cause.
11.4. Except as necessary to implement Contract owner initiated
transactions, or as required by state insurance laws or regulations, the
Company shall not redeem the Shares attributable to the Contracts (as
opposed to the Shares attributable to the Company's assets held in the
Accounts), and the Company shall not prevent Contract owners from allocating
payments to a Portfolio that was otherwise available under the Contracts,
until thirty (30) days after the Company shall have notified the Trust of
its intention to do so.
11.5. Notwithstanding any termination of this Agreement, the Trust and
PFD shall, at the option of the Company and if consistent with Article VII ,
continue to make available
22
additional shares of the Portfolios pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the effective date of
termination of this Agreement (the "Existing Contracts"), except as
otherwise provided under Article VII of this Agreement; provided, however,
that in the event of a termination pursuant to Section 11.1.(c), (f) or (h),
the Trust, PIM and PFD shall at their option have the right to terminate
immediately all sales of Shares to the Company. Specifically, without
limitation, the owners of the Existing Contracts shall be permitted to
transfer or reallocate investment under the Contracts, redeem investments in
any Portfolio and/or invest in the Trust upon the making of additional
purchase payments under the Existing Contracts.
11.6. Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify the other parties shall survive
and not be affected by any termination of this Agreement. In addition, with
respect to Existing Contracts, all provisions of this Agreement shall also
survive and not be affected by any termination of this Agreement.
ARTICLE XII. NOTICES
-------
Any notice shall be sufficiently given when sent by registered or
certified mail, overnight courier or facsimile 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 Trust:
PIONEER VARIABLE CONTRACTS TRUST
x/x Xxxx xxx Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Secretary
If to the Company:
IDS LIFE INSURANCE COMPANY
Attn: Vice President
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
With a copy to:
IDS LIFE INSURANCE COMPANY
Attn: Vice President and Group Counsel
00000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
23
If to PIM:
PIONEER INVESTMENT MANAGEMENT, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxx, Senior Counsel
If to PFD:
PIONEER FUNDS DISTRIBUTOR, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx, Senior Vice President
ARTICLE XIII. MISCELLANEOUS
13.1. Subject to the requirement of legal process and regulatory
authority, each party hereto shall treat as confidential all information
reasonably identified as confidential in writing by any party hereto and,
except as permitted by this Agreement or as otherwise required by applicable
law or regulation, shall not disclose, disseminate or utilize such other
confidential information without the express written consent of the affected
party until such time as it may come into the public domain. Notwithstanding
anything to the contrary in this Agreement, in addition to and not in lieu
of other provisions in this Agreement:
(a) "Confidential Information": includes without limitation
all information regarding the customers of the Company,
the Trust, PIM, PFD or any of their subsidiaries,
affiliates or licensees; or the accounts, account numbers,
names, addresses, social security numbers or any other
personal identifier of such customers; or any information
derived therefrom.
(b) Neither the Company, the Trust, PIM or PFD may disclose
Confidential Information for any purpose other than to
carry out the purpose for which Confidential Information
was provided to the Company, the Trust, PIM or PFD as set
forth in this Agreement; and the Company, the Trust, PIM
and PFD agree to cause their employees, agents and
representatives, or any other party to whom the Company,
the Trust, PIM or PFD may provide access to or disclose
Confidential Information to limit the use and disclosure
of Confidential Information to that purpose.
(c) The Company, the Trust, PIM and PFD agree to implement
appropriate measures designed to ensure the security and
confidentiality of Confidential Information, to protect
such information against any anticipated threats or
hazards to the security and integrity of such information,
and to protect against unauthorized access to, or use of,
Confidential Information that could result in substantial
harm or
24
inconvenience to any of the customers of the
Company or any of its subsidiaries, affiliates or
licensees; the Company, the Trust, PIM and PFD further
agree to cause all their respective agents,
representatives or subcontractors, or any other party to
whom they provide access to or disclose Confidential
Information, to implement appropriate measures to meet the
objectives set forth in this Section 13.1.
13.2. 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.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.4. 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.
13.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
13.6. Each party hereto shall cooperate with each other party in
connection with inquiries by 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.
13.7. 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.
13.8. A copy of the Trust's Certificate of Trust is on file with the
Secretary of State of Delaware. The Company acknowledges that the
obligations of or arising out of this instrument are not binding upon any of
the Trust's trustees, officers, employees, agents or shareholders
individually, but are binding solely upon the assets and property of the
Trust in accordance with its proportionate interest hereunder. The Company
further acknowledges that the assets and liabilities of each Portfolio are
separate and distinct and that the obligations of or arising out of this
instrument are binding solely upon the assets or property of the Portfolio
on whose behalf the Trust has executed this instrument. The Company also
agrees that the obligations of each Portfolio hereunder shall be several and
not joint, in accordance with its proportionate interest hereunder, and the
Company agrees not to proceed against any Portfolio for the obligations of
another Portfolio.
13.9. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum
jointly selected by the relevant parties (but if applicable law requires
some other forum, then, such other forum) in accordance with the
25
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.
13.10. This Agreement of any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto.
13.11. The Trust, PIM and PFD agree that the obligations assumed by
the Company shall be limited in any case to the Company and its assets and
neither the Trust, PIM nor PFD shall seek satisfaction of any such
obligation from the shareholders of Company, the directors, officers,
employees or agents of the Company, or any of them.
13.12. No provision of the Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or indemnifications, as
between PIM and the Trust and PFD and the Trust.
13.13. This Agreement, including any Schedules hereto, may be amended
only by a written instrument executed by each party hereto.
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 and its seal to be hereunder affixed hereto as of
the date specified above.
Attest: IDS LIFE INSURANCE COMPANY
By its authorized officer,
By: /s/ Xxxxx Xxxxxx By: /s/ Xxx X. Xxxxx
------------------------------- -------------------------------
Name: Xxxxx Xxxxxx Name: Xxx X. Xxxxx
Title: Assistant Secretary Title: Vice President
Date: August 23, 2006
---------------
PIONEER VARIABLE CONTRACTS
TRUST, ON BEHALF OF THE PORTFOLIOS
By its authorized officer and not
individually,
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Assistant Secretary
Date: September 12, 2006
PIONEER INVESTMENT MANAGEMENT, INC.
By its authorized officer,
By: /s/ Xxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Senior Counsel
Date: September 21, 2006
PIONEER FUNDS DISTRIBUTOR, INC.
By its authorized officer,
By: /s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
Title: President, PFD
Date: September 25, 2006
27
SCHEDULE A
ACCOUNTS, CONTRACTS AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
AS OF SEPTEMBER 1, 2006
---------------------------------------------------------------------------------------------
NAME OF SEPARATE ACCOUNT CONTRACTS FUNDED BY PORTFOLIOS AND CLASS OF
AND DATE ESTABLISHED BY SEPARATE ACCOUNT SHARES APPLICABLE TO
BOARD OF DIRECTORS CONTRACTS
---------------------------------------------------------------------------------------------
IDS Life Variable Account 10, RiverSource Retirement Pioneer Equity Income VCT
established August 23, 1995 Advisor Advantage(SM) Portfolio - Class II Shares
Variable Annuity
RiverSource Retirement Pioneer Europe VCT X
Annuity Select(SM) Variable Annuity Class II Shares
Annuity
---------------------------------------------------------------------------------------------
IDS Life Variable Life RiverSource Single Premium
Separate Account, established Variable Life
October 16, 1985
RiverSource Variable Pioneer Equity Income VCT
Universal Life IV Portfolio - Class II Shares
RiverSource Variable Pioneer Europe VCT
Universal Life IV--Platinum Portfolio- Class II Shares
RiverSource Variable
Universal Life IV--Estate
Series
---------------------------------------------------------------------------------------------
SCHEDULE B
1. Administrative Service
----------------------
Administrative services to Contract owners and participants shall be
the responsibility of the Company and shall not be the responsibility of the
Trust or PFD. The Company will provide properly registered and licensed
personnel and any systems needed for all Contract owners servicing and
support for both fund and annuity information and questions, including:
MAINTENANCE OF BOOKS AND RECORDS FOR INDIVIDUAL POLICYHOLDER ACCOUNTS
o Record issuance of shares
o Record transfers (via net purchase orders)
o Reconciliation and balancing of the separate account at
the fund level in the general ledger, at various banks and
within systems interface.
COMMUNICATION WITH THE TRUST AND/OR PIM OR ITS AFFILIATES
Purchase Orders
o Determination of net amount available for investment by
the Trust
o Deposit of receipts at the Trust's custodian (generally
by wire transfer)
o Notification of the custodian of the estimated amount
required to pay dividend or distribution
Redemption Orders
o Determination of net amount required for redemptions by
the Trust
o Notification of the custodian and Trust of cash required
to meet payments
o Cost of share redemptions
Daily pricing of the shares of the Trust held in individual
policyholder accounts
PROCESSING DISTRIBUTIONS FROM THE TRUST FOR
INDIVIDUAL POLICYHOLDER ACCOUNTS
o Process ordinary dividends and capital gains
o Reinvest the Trust's distributions
REPORTS
o Periodic information reporting to the Trust and its Board
PROXY SOLICITATIONS
o Assistance with proxy solicitations, specifically with
respect to soliciting voting instructions from Contract
owners
TRUST-RELATED CONTRACT OWNER SERVICES
o Financial consultant's advice to Contract owners with
respect to Trust inquiries (not including information
about performance or related to sales)
o Communications to Contract owners regarding Trust and
subaccount performance
OTHER ADMINISTRATIVE SUPPORT
o Providing other administrative support for the Trust as
mutually agreed between the Company and the Trust or PIM
o Relieving the Trust of other usual or incidental
administrative services provided to individual Contract
owners
2. Administrative Service Fees
---------------------------
For the administrative services set forth above, PIM or any of its
affiliates shall pay an administrative services fee as set forth in a letter
of understanding dated August 13, 2001 between PIM and the Company, which is
incorporated herein by reference and is a part of this Agreement.
3. l2b-1 Distribution Related Fees (Class II Shares Only)
------------------------------------------------------
In accordance with the Portfolios' plans pursuant to Rule l2b-1 under
the Investment Company Act of 1940, PFD will make payments to the Company at
an annual rate of 0.25% of the average net assets invested in the Class II
shares of the Portfolios through the Accounts in each calendar quarter. PFD
will make such payments to the Company within thirty (30) days after the end
of each calendar quarter. Each payment will be accompanied by a statement
showing the calculation of the fee payable to the Company for the quarter
and such other supporting data as may be reasonably requested by the
Company.
