Exhibit 99.8.20
AMENDED AND RESTATED
PARTICIPATION AGREEMENT
By and Among
RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK
And
XXXXXX VARIABLE TRUST
And
XXXXXX RETAIL MANAGEMENT LIMITED PARTNERSHIP
THIS AGREEMENT, made and entered into this 1st day of January, 2007, by and
among the following parties:
- RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK ("Company"), a New York
life insurance company, on its own behalf and on behalf of the
separate accounts set forth on Schedule 1 hereto as may be amended
from time to time by mutual consent (each such account referred to as
an "Account");
- XXXXXX VARIABLE TRUST, an open-end management investment company and
business trust organized under the laws of the Commonwealth of
Massachusetts (the "Trust"); and,
- XXXXXX RETAIL MANAGEMENT LIMITED PARTNERSHIP, a Massachusetts limited
partnership (the "Distributor").
WHEREAS, the Trust engages in business as an open-end management investment
company and was established for the purpose of serving as the investment vehicle
for separate accounts established for variable life insurance contracts and
variable annuity contracts to be offered by insurance companies that have
entered into participation agreements with the Trust and the Distributor (the
"Participating Insurance Companies"), and
WHEREAS, the beneficial interests in the Trust are divided into several series
of shares, each representing the interest in a particular managed portfolio of
securities and other assets (the "Portfolios"); and
WHEREAS, the Trust has received an order from the Securities and Exchange
Commission (the "SEC"), dated December 29, 2003 (Release No.19920) under the
Investment Company Act of 1940, as amended (the "1940 Act"), granting
Participating Insurance Companies and variable annuity separate accounts and
variable life insurance separate accounts relief 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 separate accounts and variable life
insurance separate accounts of the Participating Insurance Companies (the "Mixed
& Shared Funding Exemptive Order"). The parties to this Agreement agree that the
conditions or undertakings specified in the Mixed & Shared Funding Exemptive
Order and that may be imposed on the Company, the Trust and/or the Distributor
by virtue of the receipt of such order by the SEC will be incorporated herein by
reference, and such parties agree to comply with such conditions and
undertakings to the extent applicable to each such party; and
WHEREAS, the Trust is registered as an open-end management investment company
under the 1940 Act and its shares are registered under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Company has registered or will register certain variable annuity
contracts and variable life insurance contracts (the "Contracts") under the 1933
Act; and
WHEREAS, the Account is a duly organized, validly existing segregated asset
account, established by resolution of the Board of Directors of the Company
under the insurance laws of the State of New York, to set aside and invest
assets attributable to the Contracts; and
WHEREAS, the Company has registered the Account as a unit investment trust under
the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares of the Portfolios named in Schedule 2, as
such schedule may be amended from time to time (the "Designated Portfolios") on
behalf of the Account to fund the Contracts, and the Trust is authorized to sell
such shares to unit investment trusts such as the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Trust and the Distributor agree as follows:
ARTICLE A. AMENDMENT AND RESTATEMENT; FORM OF AGREEMENT
A.1. The Trust and the Distributor acknowledge the merger of American Centurion
Life Assurance Company ("American Centurion Life") with and into IDS Life
Insurance Company of New York ("IDS Life of New York") (the "Merger") and
the "intact transfer" (the "Transfer") of the Accounts of American
Centurion Life to IDS Life of New York by operation of law and incident to
the Merger, on December 31, 2006 and the re-naming of IDS Life of New York
to RiverSource Life Insurance Co. of New York simultaneously with the
Merger. On and after January 1, 2007, all references in this Agreement and
its Schedules to American Centurion Life and IDS Life of New York shall
mean and refer to RiverSource Life Insurance Co. of New York.
A.2. This Agreement shall amend and supersede the following agreements as of the
date stated above among the parties to this Agreement with respect to all
investments by each
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Company and its Accounts prior to the date of this Agreement, as though
identical separate agreements had been executed by the parties hereto on
the dates as indicated below:
(a) Participation Agreement dated April 30, 1997, by and among American
Centurion Life, the Trust and the Distributor, as amended by the
following documents: Amendment 1 to Participation Agreement, dated
October 14, 1998; Amendment 2 to Participation Agreement, dated
February 27, 2002; and Amendment 3 to Participation Agreement, dated
August 18, 2003.
(b) Participation Agreement dated October 7, 1996, by and among IDS Life
of New York, the Trust and the Distributor, as amended by the
following documents: Amendment 1 to Participation Agreement, dated
February 27, 2002; and Amendment 2 to Participation Agreement, dated
August 18, 2003.
ARTICLE I. SALE OF TRUST SHARES
1.1. The Distributor agrees, subject to the Trust's rights under Section 1.3 and
otherwise under terms of this Agreement, to sell to the Company those Trust
shares representing interests in the Designated Portfolios which each
Account orders, executing such orders on a daily basis at the net asset
value next computed after receipt and acceptance by the Trust or its
designee of the order for the shares of the Trust. For purposes of this
Section 1.1, the Company will be the designee of the Trust for receipt of
such orders from each Account and receipt by such designee will constitute
receipt by the Trust, provided that the Trust receives notice of such
orders by 9:30 a.m. Eastern Time on the next following Business Day.
"Business Day" will mean any day on which the New York Stock Exchange is
open for trading and on which the Trust calculates its net asset value
pursuant to the rules of the SEC.
1.2. The Company will pay for Trust shares on the next Business Day after an
order to purchase Trust shares is made in accordance with Section 1.1
above. Payment will be in federal funds transmitted by wire. The Company
will only purchase Trust shares to fund Contracts sold by the Company or by
broker-dealers affiliated with the Company.
1.3. The Trust agrees to make shares of the Designated Portfolios available
indefinitely, subject to Article X and the Trust's current prospectus, for
purchase at the applicable net asset value per share by Participating
Insurance Companies and their separate accounts on those days on which the
Trust calculates its Designated Portfolio net asset value pursuant to rules
of the SEC; provided, however, that the Trustees of the Trust (the
"Trustees") may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of shares of any Portfolio if such action
is required by law or by regulatory authorities having jurisdiction or is,
in the sole discretion of the Trustees, acting in good faith and in light
of their fiduciary duties under federal and any applicable state laws,
necessary or in the best interests of the shareholders of such Portfolio.
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1.4. The Trust and the Distributor agree that shares of the Trust will be sold
only to Participating Insurance Companies and their separate accounts. No
shares of any Portfolio will be sold to the general public.
1.5. Except as otherwise disclosed in the Trust's then current prospectus, the
Trust agrees to redeem for cash, upon the Company's request, any full or
fractional shares of the Trust held by the Company, executing such requests
on a daily basis at the net asset value next computed after receipt and
acceptance by the Trust or its agent of the request for redemption. For
purposes of this Section 1.5, the Company will be the designee of the Trust
for receipt of requests for redemption from each Account and receipt by
such designee will constitute receipt by the Trust; provided the Trust
receives notice of request for redemption by 9:30 a.m. Eastern Time on the
next following Business Day. Payment will be in federal funds transmitted
by wire to the Company's account as designated by the Company in writing
from time to time, on such next Business Day as the Trust receives notice
of the redemption order from the Company. If notification of redemption is
received after 9:30 a.m. Eastern Time on a Business Day, payment for
redeemed shares will be made on the next following Business Day. The Trust
reserves the right to delay payment of redemption proceeds, but in no event
may such payment be delayed longer than the period permitted under Section
22(e) of the 0000 Xxx. The Trust will not bear any responsibility
whatsoever for the proper disbursement or crediting of redemption proceeds;
the Company alone will be responsible for such action. In connection with
the foregoing and Section 1.1 above, the Company agrees to provide
information, at the Distributor's reasonable request, on its late trading
controls procedures, and the Company represents that it has controls and
procedures in place to prevent the acceptance of orders or requests for
redemption of shares of the Trust after the close of trading on the New
York Stock Exchange on a day for trades that will be based on the net asset
value determined as of the close of trading on the New York Stock Exchange
on such day.
1.6. The Company agrees to purchase and redeem the shares of the Designated
Portfolios offered by the then current prospectus of the Trust in
accordance with the provisions of such prospectus. The Company will provide
the Trust with such information about the sales and redemptions of shares
as the Trust may reasonably request.
1.7. Issuance and transfer of the Trust's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account.
Purchase and redemption orders for Trust shares will be recorded in an
appropriate title for each Account or the appropriate subaccount of each
Account.
1.8. The Distributor will furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of the declaration of any
income, dividends or capital gain distributions payable on each Designated
Portfolio's shares. The Company hereby elects to receive all such dividends
and distributions as are payable on the Designated Portfolio shares in the
form of additional shares of that Designated Portfolio. The Company
reserves the right to revoke this election and to receive all such
dividends and distributions in cash. The Distributor will notify the
Company of the number of shares so issued as payment of such dividends and
distributions.
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1.9. The Distributor will make the net asset value per share for each Designated
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the Trust calculates its net asset value per share and each
of the Trust and Distributor will use its best efforts to make such net
asset value per share available by 6:30 p.m., Eastern Time, but other than
with respect to events outside the control of the Trust, in no event later
than 7:00 p.m., Eastern Time, each Business Day.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act and that the Contracts will be issued and
sold in compliance with all applicable federal and state laws, including
state insurance suitability requirements. The Company further represents
and warrants that it is an insurance company duly organized and in good
standing under applicable law and that it has legally and validly
established each Account as a separate account under applicable state law
and has registered the Account as a unit investment trust in accordance
with the provisions of the 1940 Act to serve as a segregated investment
account for the Contracts, and that it will maintain such registration for
so long as any Contracts are outstanding. The Company will amend the
registration statement under the 1933 Act for the Contracts and the
registration statement under the 1940 Act for the Account 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 will register
and qualify the Contracts for sale in accordance with the securities laws
of the various states only if and to the extent deemed necessary by the
Company.
2.2. The Company represents that the Contracts are currently and at the time of
issuance will be treated as annuity or life insurance contracts under
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), and that it will make every effort to maintain
such treatment and that it will notify the Trust and the Distributor
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 it will not purchase shares of the
Designated Portfolios with assets derived from tax-qualified retirement
plans except, indirectly, through Contracts purchased in connection with
such plans.
2.4. The Company agrees that it will notify the Trust and the Distributor if the
Company adds an aggressive growth fund with similar objectives to the Trust
as an investment option under the Contracts sixty (60) days prior to the
effective date of such addition.
2.5. The Trust represents and warrants that Trust shares sold pursuant to this
Agreement will be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law and that the Trust is and will
remain registered under the 1940 Act for as long as such shares of the
Trust are sold. The Trust will 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 will
register and qualify the
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shares for sale in accordance with the laws of the various states only if
and to the extent deemed advisable by the Trust or the based solely on the
sale of Trust shares to the Company.
2.6. The Trust represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code, and
that it will make every effort to maintain such qualification (under
Subchapter M or any successor or similar provision) and that it will notify
the Company immediately upon having a reasonable basis for believing that
it has ceased to so qualify or that it might not so qualify in the future.
2.7. The Trust represents that its investment objectives, policies and
restrictions comply with applicable state securities laws as they may apply
to the Trust. The Trust makes no representation as to whether any aspect of
its operations (including, but not limited to, fees and expenses and
investment policies, objectives and restrictions) complies with the
insurance laws and regulations of any state. The Trust and the Distributor
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.
2.8. The Trust represents that it is lawfully organized and validly existing
under the laws of the Commonwealth of Massachusetts and that it does and
will comply in all material respects with applicable provisions of the 0000
Xxx.
2.9. The Distributor represents and warrants that it is and will remain duly
registered under all applicable federal and state securities laws and that
it will perform its obligations for the Trust in accordance in all material
respects with any applicable state and federal securities laws.
2.10. The parties to this Agreement represent and warrant that they shall comply
with all the applicable laws and regulations designed to prevent money
laundering including without limitation the International Money Laundering
Abatement and Anti-Terrorist Financing Act of 2001 (Title III of the USA
PATRIOT ACT), and if required by such laws or regulations will share
information with each other about individuals, entities, organizations and
countries suspected of possible terrorist or money laundering activities in
accordance with Section 314(b) of the USA PATRIOT ACT.
2.11. The Company acknowledges that the Trust has adopted policies and
procedures intended to discourage excessive short-term trading as disclosed
in the Trust's prospectus as it may be amended from time to time. The Trust
acknowledges that the Company has adopted policies and procedures intended
to discourage excessive short-term trading as disclosed in the Account's
prospectus as it may be amended from time to time. Subject to applicable
law and the terms of each Contract, the Company will cooperate with the
Trust or its designee's requests in taking steps to deter and detect
short-term trading and other abusive trading practices by any Contact
owner.
Notwithstanding the foregoing, the Company will comply with the following
provisions in accordance with Rule 22c-2 of the 1940 Act ("Rule 22c-2"):
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(a) AGREEMENT TO PROVIDE INFORMATION. Company agrees to provide the Trust,
Xxxxxx Fiduciary Trust Company ("PFTC") and/or Distributor, upon written
request from any of them, the taxpayer identification number ("TIN")(or in
the case of non-U.S. Contract owners, if the taxpayer identification number
is unavailable, the International Taxpayer Identification Number ("ITIN")
or other government-issued identifier) of any or all Contract owner(s) and
the amount, date and transaction type (purchase, redemption, transfer, or
exchange), for each Contract owner, of every purchase, redemption,
transfer, or exchange of shares held in a Portfolio of the Trust through an
Account maintained by Company during the period covered by the request. The
foregoing information shall be collectively referred to herein as the
"Contract owner Information." Unless otherwise specifically requested by
the Trust, PFTC and/or Distributor, Company shall only be required to
provide information relating to Contract owner-Initiated Transfer Purchases
or Contract owner-Initiated Transfer Redemptions.
(1) PERIOD COVERED BY REQUEST. Requests must set forth a specific period,
not to exceed 90 days from the date of the request, for which Contract
owner Information is sought. Notwithstanding the foregoing, the Trust, PFTC
and/or the Distributor may request Contract owner Information older than 90
days from the date of the request as it deems necessary or desirable to
investigate compliance with policies established from time to time by the
Trust for the purpose of eliminating or reducing any dilution of the value
of the outstanding shares issued by the Trust.
(2) FORM AND TIMING OF RESPONSE. Company agrees to transmit the requested
Contract owner Information that is on Company's books and records to the
Trust, PFTC and/or Distributor in a secure manner, within ten (10) Business
Days after receipt of a request. If requested by the Trust, PFTC and/or
Distributor, Company agrees to use best efforts to determine promptly
whether any specific person about whom the Trust and/or Distributor has
received Contract owner Information is itself a financial intermediary (an
"indirect intermediary," within the meaning of Rule 22c-2). If such person
is determined to be an indirect intermediary, then, upon further request of
the Trust, PFTC and/or Distributor, Company shall promptly do either of the
following: (i) provide (or arrange to have provided) to the Trust, PFTC
and/or Distributor the Contract owner Information regarding Contract owners
who hold an account with an indirect intermediary; or (ii) restrict or
prohibit further purchases of Trust shares from such indirect intermediary.
In such instance, Company agrees to inform the Trust, PFTC and/or
Distributor whether Company plans to perform (i) or (ii). Responses
required by this paragraph must be communicated in writing and in a format
mutually agreed upon by the parties. To the extent practicable, the format
for any Contract owner Information provided to the Trust, PFTC and/or
Distributor should be consistent with the NSCC Standardized Data Reporting
Format.
(3) LIMITATIONS ON USE OF INFORMATION. PFTC and the Distributor agree that
the information provided to the Trust and/or Distributor by the Company
under this Section 2.11 is subject to the confidentiality standards set
forth in Section 12.2 of this Agreement.
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(b) AGREEMENT TO RESTRICT TRADING. Company agrees to execute written
instructions from the Trust, PFTC and/or Distributor to restrict or
prohibit further purchases or exchanges of shares by a Contract owner that
has been identified by the Trust, PFTC and/or the Distributor as having
engaged in transactions of the Trust's shares (directly or indirectly
through the Company's Account) that violate policies established by the
Trust for the purpose of eliminating or reducing any dilution of the value
of the outstanding shares issued by the Trust. Unless otherwise directed by
the Trust, PFTC and/or Distributor, any such restrictions or prohibitions
shall apply only to Contract owner-Initiated Transfer Purchases or Contract
owner-Initiated Transfer Redemptions that are effected directly or
indirectly through Company.
(1) FORM OF INSTRUCTIONS. Instructions must include the TIN (or ITIN or
other government-issued identifier) furnished by the Company under Section
2.11 (a) above and the specific restriction(s) to be executed. If the TIN
(or ITIN or other government issued identifier) is not known to PFTC or the
Distributor, the PFTC or the Distributor will contact Company and Company
will again provide the TIN (or ITIN or other government-issued identifier).
The instructions shall, to the extent possible, provide a brief written
explanation specifying how the Contract owner(s) trading activity violated
the Trust's market timing or other abusive trading policies that Company
may provide to the Contract owner(s). In the event that any such
instructions would require Company to breach the redemption terms of a
Contract, then parties shall cooperate in good faith with one another to
determine if there is a practical and effective alternative that would not
involve Intermediary in any such breach and would be in accordance with
Rule 22c-2. If no such alternative satisfies Trust, PFTC and/or
Distributor, the Company shall execute the original restriction
instructions delivered in accordance with this section.
(2) TIMING OF RESPONSE. Company agrees to promptly execute instructions
from the Trust, PFTC and/or the Distributor to restrict or prohibit
trading.
(3) CONFIRMATION BY COMPANY. Company must provide written confirmation to
the Trust and/or Distributor that instructions have been executed. Company
agrees to provide confirmation as soon as reasonably practicable, but not
later than ten (10) business days after the instructions have been
executed.
(c) IDENTIFICATION OF INVESTMENT PROFESSIONAL OR SELLING FIRM. When the Trust,
PFTC and/or the Distributor has given the Company a written instruction
pursuant to Section 2.11(b) to restrict or prohibit further purchases by a
Contract owner of the Trust's shares, the Trust, PFTC and/or the
Distributor may request and the Company will provide the Trust, PFTC and/or
the Distributor with the name or other identifier of any investment
professional who is listed on the Company's records as the agent of record
for the restricted Contract if the investment professional is employed by a
broker dealer affiliate of the Company. If the restricted Contract was sold
by a broker dealer firm unaffiliated
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with the Company, the Company will provide the Trust, PFTC and/or the
Distributor with the name of the selling broker dealer firm.
(d) For purposes of this Section 2.11.: (a) the term "promptly" means as soon
as reasonably practicable, but not later than five Business Days after
Company receives instructions or a request from the Trust, PFTC and/or the
Distributor; (b) the term "Contract owner-Initiated Transfer Purchase"
means a transaction that is initiated or directed by a Contract owner that
results in a transfer of assets within a Contract to a Fund, but does not
include transactions that are executed: (i) automatically pursuant to a
contractual or systematic program or enrollment such as a transfer of
assets within a Contract to a Fund as a result of "dollar cost averaging"
programs, insurance company 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) allocation of assets to a Fund through a Contract as a result
of payments such as loan repayments, scheduled contributions, retirement
plan salary reduction contributions or planned premium payments to the
Contract; or (v) prearranged transfers at the conclusion of a required free
look period; and (c) the term "Contract owner-Initiated Transfer
Redemption" means a transaction that is initiated or directed by a Contract
owner that results in a transfer of assets within a Contract out of a Fund,
but does not include transactions that are executed: (i) automatically
pursuant to a contractual or systematic program or enrollment such as
transfer of assets within a Contract out of a Fund as a result of annuity
payouts, loans, systematic withdrawal programs, insurance company approved
asset allocation programs and automatic rebalancing programs; (ii) as a
result of any deduction of charges or fees under a Contract; (iii) within a
Contract out of a Fund as a result of scheduled withdrawals or surrenders
from a Contract; or (iv) as a result of payment of a death benefit from a
Contract.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Trust will provide such documentation, including a final copy of a
current prospectus set in type or a computer diskette or other electronic
transmission at the Trust's expense, and other assistance as is reasonably
necessary, at least annually, or more frequently if the Trust's prospectus
is amended more frequently. The Company will bear the expense of printing
and distributing prospectuses. The Trust will provide such documentation to
the Company in a timely manner so that the Company can print and distribute
the prospectuses within the time required by applicable law.
In the event that the Trust initiates (i) a reorganization as defined by
Section 2 of the 1940 Act of the Trust or a Portfolio, or (ii) a change in
the name of the Trust or a Portfolio then Distributor shall reimburse the
Company for its reasonable internal and out-of-pocket costs associated with
the aforementioned actions. The Company agrees to use its best efforts to
minimize any costs incurred under this Section 3.1 and shall provide the
Distributor with acceptable documentation of any such costs incurred
3.2. The Trust's prospectus will state that the statement of additional
information (the "Statement") for the Trust is available from the
Distributor or its designee (or in the
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Trust's discretion, the Prospectus shall state that such Statement is
available from the Trust). The Trust will provide the Company, at the
Trust's expense, with as many copies of the Statement as the Company may
reasonably request for distribution, at the Company's expense, to
prospective Contract owners and applicants. The Trust will provide, at the
Trust's expense, as many copies of said statement of additional information
as necessary for distribution, at the Trust's expense, to any existing
Contract owner who requests such statement or whenever state or federal law
otherwise require that such statement be provided. The Trust will provide
the copies of said statement of additional information to the Company or to
its mailing agent in a timely manner so that the Company can distribute the
statement of additional information within the time required by applicable
law. The Company will distribute the statement of additional information as
requested or required and will xxxx the Trust for the reasonable cost of
such distribution.
3.3. The Trust, at its expense, will provide the Company or its mailing agent
with copies of its proxy material, if any, reports to shareholders and
other communications to shareholders in such quantity as the Company will
reasonably require and in a timely manner so that the Company can
distribute these documents within the time required by applicable law. The
Trust will provide the Company, at its reasonable request, the proxy
material, reports and other communications through an electronic
transmission. The Company will distribute this proxy material, reports and
other communications to existing Contract owners. The Company will xxxx the
Trust for the "reasonable" costs of printing and distribution of the
reports or other communications. For purposes of this Section 3.3
"reasonable" costs shall be based on the costs of printing incurred by the
Trust to print the reports. The distribution of proxy material shall be at
the Company's expense.
3.4. If and to the extent required by law and the Mixed & Shared Funding
Exemptive Order, the Company will:
(a) solicit voting instructions from Contract owners;
(b) vote the shares of the Designated Portfolios held in the Account in
accordance with instructions received from Contract owners; and
(c) vote shares of the Designated Portfolios held in the Account for which
no timely instructions have been received, in the same proportion as
shares of such Designated Portfolio for which instructions have been
received from the Company's Contract owners;
so long as and to the extent that the SEC continues to interpret the 1940
Act and the Mixed & Shared Funding Exemptive Order to require pass-through
voting privileges for variable Contract Owners. The Company reserves the
right to vote Trust shares held in any segregated asset account in its own
right, to the extent permitted by law and the Mixed & Shared Funding
Exemptive Order. The Company will be responsible for assuring that each
Account participating in the Trust calculates voting privileges in a
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manner consistent with all legal requirements, including the Mixed & Shared
Funding Exemptive Order.
The Trust will comply with, all provisions of the 1940 Act requiring voting
by shareholders, and in particular, the Trust either will provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the
1940 Act not to require such meetings) or, as the Trust currently intends,
to comply with Section 16(c) of the 1940 Act (although the Trust is not one
of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Trust will
act in accordance with the SEC's interpretation of the requirements of
Section 16(a) with respect to periodic elections of Trustees and with
whatever rules the SEC may promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company will furnish, or will cause to be furnished, to the
Distributor, each piece of sales literature or other promotional material
in which the Trust, its investment adviser or the Distributor is named, at
least ten (10) Business Days prior to its use. No such material will be
used if the Trust or the Distributor reasonably objects to such use within
five (5) Business Days after receipt of such material.
4.2. The Company will not give any information or make any representations or
statements on behalf of the Trust or concerning the Trust in connection
with the sale of the Contracts other than the information or
representations contained in the registration statement, prospectus or
statement of additional information for Trust 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 approved by the Trust or the Distributor for
distribution, or in sales literature or other material provided by the
Trust or by the Distributor, except with written permission of the Trust or
the Distributor. The Trust and the Distributor agree to respond to any
request for approval on a prompt and timely basis. Nothing in this Section
4.2 will be construed as preventing the Company or its employees or agents
from giving advice on investment in the Trust.
4.3. The Trust or the Distributor will furnish, or will cause to be furnished,
to the Company or its designee, each piece of sales literature or other
promotional material in which the Company or its Account is named, at least
ten (10) Business Days prior to its use. No such material will be used if
the Company reasonably objects to such use within five (5) Business Days
after receipt of such material.
4.4. The Trust and the Distributor will not give any information or make any
representations or statements on behalf of the Company or concerning the
Company, each Account, or the Contracts other than the information or
representations contained in a registration statement, 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 published reports for each
Account or
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the Contracts which are in the public domain or approved by the Company for
distribution to Contract owners, or in sales literature or other material
provided by the Company, except with permission of the Company. The Company
agrees to respond to any request for approval on a prompt and timely basis.
4.5. The Trust will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional
information, reports, proxy statements, sales literature and other
promotional materials naming the Company or the Account, and all amendments
to any of the above, that relate to the Trust or its shares, promptly
following the filing of such document with the SEC or the NASD.
4.6. The Company will provide to the Trust at least one complete copy of all
registration statements, prospectuses, statements of additional
information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no action letters, and all amendments to any of the above,
that relate to the Contracts or each Account, promptly following the filing
of such document with the SEC or the NASD.
4.7. For purposes of this Article IV, 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 or tape recording, videotape
display, signs or billboards, motion pictures, or other public media,
(e.g., on-line networks such as the Internet or other electronic messages),
sales literature (i.e., any written communication distributed or made
generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other
communications distributed or made generally available to some or all
agents or employees and any other material constituting sales literature or
advertising under the NASD rules, the 1933 Act or the 0000 Xxx.
4.8. The Trust and the Distributor hereby consent to the Company's use of the
names "Xxxxxx", "Xxxxxx Variable Trust', and "PVT", in connection with
marketing the Contracts, subject to the terms of Sections 4.1 and 4.2 of
this Agreement. Such consent will terminate with the termination of this
Agreement.
ARTICLE V. SERVICE FEES, FEES AND EXPENSES
5.1. The Trust and the Distributor will pay no fee or other compensation to the
Company under this Agreement, except those service fees ("Service Fees")
set forth on Schedule 2 hereto and which are subject to (i) the terms set
forth on Schedule 2 and (ii) the limitations contained in each Designated
Portfolio's distribution plan adopted pursuant to Rule 12b-1 under the 1940
Act to finance distribution expenses.
5.2. All expenses incident to performance by each party of its respective duties
under this Agreement will be paid by that party. The Trust will bear the
expenses for the cost of
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registration and qualification of the Trust's shares; preparation and
filing of the Trust's prospectus, statement of additional information and
registration statement, proxy materials and reports; setting the Trust's
prospectus in type; setting in type and printing proxy materials and
reports to Contract owners the preparation of all statements and notices
required by any federal or state law; all taxes on the issuance or transfer
of the Trust's shares; 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; and
all other expenses set forth in Article III of this Agreement.
5.3. The Company will bear all expenses incident to the performance of its
obligations under this Agreement. The Company will bear those expenses of:
(a) printing and distributing the Trust's prospectus to existing and
prospective Contract owners; and (b) distributing the Trust's proxy
materials to Contract owners as set forth in Article III of this Agreement.
ARTICLE VI. DIVERSIFICATION
6.1. The Trust will use best efforts to comply with Section 817(h) of the
Internal Revenue Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life
insurance contracts. In the event of a breach of this Article VI by the
Trust, it 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 Treasury Regulation 1.817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Trustees will monitor the Trust for the existence of any irreconcilable
material conflict among the interests of the Contract owners of all
separate accounts investing in the Trust. An irreconcilable material
conflict may arise for a variety of reasons, including (a) an action by any
state insurance regulatory authority; (b) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public
ruling, private letter ruling, no-action or interpretive letter, or any
similar action by insurance, tax, or securities regulatory authorities; (c)
an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of any Portfolio are being managed; (e) a
difference in voting instructions given by Participating Insurance
Companies or by variable annuity and variable life insurance Contract
owners; or (f) a decision by an insurer to disregard the voting
instructions of Contract owners. The Trustees will promptly inform the
Company if it determines that an irreconcilable material conflict exists
and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which it is
aware to the Trustees. The Company agrees to assist the Trustees in
carrying out their responsibilities, as delineated in the Mixed & Shared
Funding Exemptive Order, by providing the Trustees with all information
reasonably necessary for them to consider any issues raised. This includes,
but is not limited to, an obligation by the Company to inform the Trustees
whenever Contract owner voting instructions are to be disregarded.
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7.3. If it is determined by a majority of the Trustees, or a majority of the
disinterested Trustees, that an irreconcilable material conflict exists,
the Company and the relevant Participating Insurance Companies will, at
their expense and to the extent reasonably practicable (as determined by a
majority of the disinterested Trustees), take whatever steps are necessary
to remedy or eliminate the irreconcilable material conflict, up to and
including: (a) withdrawing the assets allocable to some or all 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 the question whether such segregation
should be implemented to a vote of all affected Contract owners and, as
appropriate, segregating the assets of any appropriate group (i.e.,
variable annuity Contract owners or variable life insurance Contract owners
of one or more Participating Insurance Companies) that votes in favor of
such segregation, or offering to the affected Contract owners the option of
making such a change; and (b) establishing a new registered management
investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision by the
Company to disregard Contract owner voting instructions, and such disregard
of voting instructions could conflict with the majority of Contract owner
voting instructions, and the Company's judgment represents a minority
position that would preclude a majority vote, the Company may be required,
at the Trust's election, to withdraw the affected subaccount of the
Account's investment in the Trust and terminate this Agreement with respect
to such subaccount; provided, however, that such withdrawal and termination
will be limited to the extent required by the foregoing irreconcilable
material conflict as determined by a majority of the disinterested
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 to the Company that this
provision is being implemented. Until the end of such six-month period the
Distributor and Trust will, to the extent permitted by law and any
exemptive relief previously granted to the Trust, continue to accept and
implement orders by the Company for the purchase (and redemption) of shares
of the Trust.
7.5. If a material irreconcilable conflict arises because of a particular state
insurance regulator's decision applicable to the Company to disregard
Contract owner voting instructions, and that decision represents a minority
position that would preclude a majority vote, then the Company may be
required, at the Trust's direction, to withdraw the affected subaccount of
the Account's investment in the Trust and terminate this Agreement with
respect to such subaccount; provided, however, that such withdrawal and
termination will be limited to the extent required by the foregoing
irreconcilable material conflict as determined by a majority of the
disinterested 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 written notice to the Company that this
provision is implemented. Until the end of such six-month period the
Distributor and Trust will, to the extent permitted by law and any
exemptive relief previously granted to the Trust, continue to accept and
implement orders by the Company for the purchase (and redemption) of shares
of the Trust.
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7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of
the disinterested Trustees will determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event
will the Trust be required to establish a new funding medium for the
Contracts. The Company will not be required 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 irreconcilable material
conflict.
7.7. If the Trustees determine, in accordance with the terms and conditions of
the Mixed & Shared Funding Exemptive Order that a material irreconcilable
conflict exists on account of the Company's actions or the Company's
failure to act in accordance with its obligations under the Mixed & Shared
Funding Exemptive Order, then it shall be the Company's obligation to take
remedial action and to bear the costs of such remedial action which shall
be carried out with a view only to the interests of Contract owners.
7.8. The Company will at least annually submit to the Trustees such reports,
materials or data as the Trustees may reasonably request so that they may
fully carry out the duties imposed upon them as delineated in the Mixed &
Shared Funding Exemptive Order, and said reports, materials and data will
be submitted more frequently if deemed appropriate by the Trustees.
7.9. 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 & Shared Funding Exemptive Order) on terms
and conditions materially different from those contained in the Mixed &
Shared Funding Exemptive Order, then: (a) the Trust and/or the
Participating Insurance Companies, as appropriate, will take such steps as
may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such rules are applicable; and (b)
Sections 3.4, 3.5, 7.1 , 7.2, 7.3, 7.4, and 7.5 of this Agreement will
continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as
so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the Trust, each of
the Trustees, the Distributor, and each person, if any, who controls
or is associated with the Trust or the Distributor within the meaning
of such terms under the federal securities laws and any director,
trustee, officer, partner, employee or agent of the foregoing
(collectively, the "Indemnified Parties" for purposes of this Section
8.1) against any and all losses, claims, expenses, damages,
liabilities (including amounts paid in settlement with the written
consent of the Company which consent may not be unreasonably withheld)
or litigation (including reasonable legal and other expenses) to which
the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar
15
as such losses, claims, damages, liabilities or expenses (or actions
in respect thereof) or settlements:
(1) arise out of or are based upon any untrue statements or alleged
untrue statements 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
or necessary to make such statements not misleading in light of
the circumstances in which they were made; provided that this
agreement to indemnify will not apply as to any Indemnified Party
if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the
Distributor or the Trust for use in the registration statement,
prospectus or statement of additional information for the
Contracts or in the Contracts or sales literature (or any
amendment or supplement) or otherwise for use in connection with
the sale of the Contracts or Trust shares; or
(2) arise out of or as a result of statements or representations by
or on behalf of the Company (other than statements or
representations contained in the Trust's registration statement,
prospectus, statement of additional information or sales
literature or other promotional material of the Trust (or any
amendment or supplement) not supplied by the Company or persons
under control of the Company), or wrongful conduct of the Company
or persons under its control, with respect to the sale or
distribution of the Contracts or Trust shares; or
(3) arise out of any untrue statement or alleged untrue statement of
a material fact contained in the Trust's registration statement,
prospectus, statement of additional information or sales
literature or other promotional material of the Trust (or
amendment or supplement thereto) or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make such statements not misleading in
light of the circumstances in which they were made, if such a
statement or omission was made in reliance upon and in conformity
with information furnished to the Trust or the Distributor by or
on behalf of the Company or persons under its control; or
(4) arise out of 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 by the Company of this
Agreement;
16
(5) except to the extent provided in Sections 8.1 (b) and 8.4 hereof.
This indemnification will be in addition to any liability that
the Company otherwise may have.
(b) No party will be entitled to indemnification under Section 8.1(a) if
the loss, claim, damage, liability or litigation for which
indemnification is sought is due to the willful misfeasance, bad
faith, or gross negligence in the performance of such party's duties
under this Agreement, or by reason of such party's reckless disregard
of its obligations or duties under this Agreement by such party.
(c) An Indemnified Party promptly will notify the Company of the
commencement of any litigation, proceedings, complaints or actions by
regulatory authorities against him, her or it in connection with the
issuance or sale of the Trust shares or the Contracts or the operation
of the Trust.
8.2. Indemnification By The Distributor
(a) The Distributor agrees to indemnify and hold harmless the Company and
each person, if any, who controls or is associated with the Company
within the meaning of such terms under the federal securities laws and
any director, trustee, officer, partner, employee or agent of the
foregoing (collectively, the "Indemnified Parties" for purposes of
this Section 8.2) against any and all losses, claims, expenses,
damages, liabilities (including amounts paid in settlement with the
written consent of the Distributor which consent may not be
unreasonably withheld) or litigation (including reasonable legal and
other expenses) to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements;
(1) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the 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 or necessary to
make such statements not misleading in light of the circumstances
in which they were made; provided that this agreement to
indemnify will not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information
furnished to the Distributor or Trust by or on behalf of the
Company for use in the sales literature of the Trust (or any
amendment or supplement thereto) or otherwise for use in
connection with the sale of the Contracts or Trust shares; or
(2) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Contracts or in the Contract or Trust registration statements,
prospectuses or statements of additional
17
information or sales literature or other promotional material for
the Contracts or the Trust (or any amendment or supplement
thereto) not supplied by the Distributor or the Trust or persons
under the control of the Distributor or the Trust respectively)
or wrongful conduct of the Distributor or persons under the
control of the Distributor, with respect to the sale or
distribution of the Contracts or Trust shares; or
(3) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, statement of additional information or sales
literature or other promotional material covering the Contracts
(or any amendment or supplement thereto), or the omission or
alleged omission to state therein a material fact required to be
stated or necessary to make such statement or statements not
misleading in light of the circumstances in which they were made,
if such statement or omission was made in reliance upon and in
conformity with information furnished to the Company by or on
behalf of the Distributor or persons under the control of the
Distributor; or
(4) arise out of or result from any material breach of any
representation and/or warranty made by the Distributor in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Distributor (including a failure,
whether unintentional or in good faith or otherwise, to comply
with the diversification requirements and procedures related
thereto specified in Article VI of this Agreement); or
(5) arise out of or result from a failure to supply timely and
accurate net asset value information related to the Trust, as
contemplated by Article I, which such failure is the result of
gross negligence or willful misconduct of the Distributor or its
affiliates (it being agreed that neither the Distributor or such
affiliates assume responsibility for the timing or accuracy of
prices supplied by independent third parties, such as pricing
services and market makers);
except to the extent provided in Sections 8.2(b) and 8.4 hereof.
(b) No party will be entitled to indemnification under Section 8.2(a) if
the loss, claim, damage, liability or litigation for which
indemnification is sought is due to the willful misfeasance, bad
faith, or gross negligence in the performance of such party's duties
under this Agreement, or by reason of such party's reckless disregard
of its obligations or duties under this Agreement by such party.
(c) The Indemnified Parties will promptly notify the Distributor and the
Trust of the commencement of any litigation, proceedings, complaints
or actions by regulatory authorities against them in connection with
the issuance or sale of the Contracts or the operation of the Account.
18
8.3. Indemnification By the Trust
(a) The Trust agrees to indemnify and hold harmless the Company and each
person, if any, who controls or is associated with the Company within
the meaning of such terms under the federal securities laws and any
director, trustee, officer, partner, employee or agent of the
foregoing (collectively, the "Indemnified Parties" for purposes of
this Section 8.3) against any and all losses, claims, expenses,
damages, liabilities (including amounts paid in settlement with the
written consent of the Trust which consent may not be unreasonably
withheld) or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties may become subject under
any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements, are related to the operations of the
Trust and:
(1) arise out of or 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 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 statements therein not
misleading in light of the circumstances in which they were made,
provided that this agreement to indemnify shall not apply as to
any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Distributor or Trust
by or on behalf of the Company for use in the registration
statement, prospectus, or statement of additional information for
the Trust (or any amendment or supplement thereto) or otherwise
for use in connection with the sale of the Contracts or Trust
shares; or
(2) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Trust; except to the extent
provided in Sections 8.3(b) and 8.4 hereof.
(b) No party will be entitled to indemnification under Section 8.3(a) if
the loss, claim, damage, liability or litigation for which
indemnification is sought is due to the willful misfeasance, bad
faith, or gross negligence in the performance of such party's duties
under this Agreement, or by reason of such party's reckless disregard
of its obligations and duties under this Agreement by such party.
(c) The Indemnified Parties will promptly notify the Trust of the
commencement of any litigation, proceedings, complaints or actions by
regulatory authorities against them in connection with the issuance or
sale of the Contracts or the operation of the Account.
19
8.4. Indemnification Procedure
Any person obligated to provide indemnification under this Article VIII
("Indemnifying Party" for the purpose of this Section 8.4) will not be
liable under the indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to indemnification under
this Article VIII ("Indemnified Party for the purpose of this Section 8.4)
unless such Indemnified Party will have notified the Indemnifying Party in
writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim will have been served
upon such Indemnified Party (or after such party will have received notice
of such service on any designated agent), but failure to notify the
Indemnifying Party of any such claim will not relieve the Indemnifying
Party from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of the
indemnification provision of this Article VIII, except to the extent that
the failure to notify results in the failure of actual notice to the
Indemnifying Party and such Indemnifying Party is damaged solely as a
result of failure to give such notice. In case any such action is brought
against the Indemnified Party, the Indemnifying Party will be entitled to
participate, at its own expense, in the defense thereof. The Indemnifying
Party also will be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
Indemnifying Party to the Indemnified Party of the Indemnifying Party's
election to assume the defense thereof, the Indemnified Party will bear the
fees and expenses of any additional counsel retained by it, and the
Indemnifying Party will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation, unless: (a) the Indemnifying Party and the
Indemnified Party will have mutually agreed to the retention of such
counsel; or (b) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the Indemnified
Party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
The Indemnifying Party will not be liable for any settlement of any
proceeding effected without its written consent (such consent may not be
unreasonably withheld) but if settled with such consent or if there is a
final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any loss or liability by
reason of such settlement or judgment. A successor by law of the parties to
this Agreement will be entitled to the benefits of the indemnification
contained in this Article VIII. The indemnification provisions contained in
this Article VIII will survive any termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement will be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Minnesota.
9.2. This Agreement will be subject to the provisions of the 1933 Act, the 1934
Act and the 1940 Act, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
SEC may grant (including,
20
but not limited to, the Mixed & Shared Funding Exemptive Order) and the
terms hereof will be interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement will terminate:
(a) at the option of any party, with or without cause, with respect to
some or all of the Designated Portfolios, upon six (6) month's advance
written notice 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 among the parties; or
(b) at the option of the Company, upon receipt of the Company's written
notice by the Trust or the Distributor, with respect to any Designated
Portfolio if shares of the Designated Portfolio are not reasonably
available to meet the requirements of the Contracts as determined in
good faith by the Company; or
(c) at the option of the Company, upon receipt of the Company's written
notice by the Trust or the Distributor, with respect to any Designated
Portfolio in the event any of the Designated Portfolio's shares are
not registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such shares as the
underlying investment media of the Contracts issued or to be issued by
Company; or
(d) at the option of the Trust or the Distributor, upon receipt of the
Trust's or the Distributor's written notice by the Company, upon
institution of formal proceedings against the Company by the NASD, the
SEC, the insurance commission of any state or any other regulatory
body, provided that the Trust or the Distributor determines in its
sole judgment, exercised in good faith, that any such proceeding would
have a material adverse effect on the Company's ability to perform its
obligations under this Agreement; or
(e) at the option of the Company, upon receipt of the Company's written
notice by the Trust or the Distributor, upon institution of formal
proceedings against the Trust or the Distributor by the NASD, the SEC,
or any state securities or insurance department or any other
regulatory body, provided that the Company determines in its sole
judgment, exercised in good faith, that any such proceeding would have
a material adverse effect on the Trust's or the Distributors ability
to perform its obligations under this Agreement; or
(f) at the option of the Company, upon receipt of the Company's written
notice by the Trust or the Distributor, if the Trust ceases to qualify
as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code, or under any successor or similar provision, or if the
Company reasonably and in good faith believes that the Trust may fail
to so qualify; or
21
(g) at the option of the Company, upon receipt of the Company's written
notice by the Trust or the Distributor, with respect to any Designated
Portfolio if the Trust fails to meet the diversification requirements
specified in Article VI hereof or if the Company reasonably and in
good faith believes the Trust may fail to meet such requirements; or
(h) at the option of any party to this Agreement, upon written notice to
the other party(ies), upon another party's material breach of any
provision of this Agreement; or
(i) at the option of the Company, if the Company determines in its sole
judgment exercised in good faith, that either the Trust or the
Distributor has suffered a material adverse change in its business,
operations or financial condition since the date of this Agreement or
is the subject of material adverse publicity which is likely to have a
material adverse impact upon the business and operations of the
Company, such termination to be effective sixty (60) days' after
receipt by the other parties of written notice of the election to
terminate; or
(j) at the option of the Trust or the Distributor, if the Trust or
Distributor respectively, determines in its sole judgment exercised in
good faith, that the Company has suffered a material adverse change in
its business, operations or financial condition since the date of this
Agreement or is the subject of material adverse publicity which is
likely to have a material adverse impact upon the business and
operations of the Trust or the Distributor, such termination to be
effective sixty (60) days' after receipt by the other parties of
written notice of the election to terminate; or
(k) at the option of the Company or the Trust upon receipt of any
necessary regulatory approvals and/or the vote of the Contract owners
having an interest in the Account (or any subaccount) to substitute
the shares of another investment company for the corresponding
Designated Portfolio shares of the Trust in accordance with the terms
of the Contracts for which those Designated Portfolio shares had been
selected to serve as the underlying investment media. The Company will
give sixty (60) days' prior written notice to the Trust of the date of
any proposed vote or other action taken to replace the Trust's shares;
or
(l) at the option of the Company or the Trust upon a determination by a
majority of the Trustees, or a majority of the disinterested members,
that an irreconcilable material conflict exists as set forth in
Article VII of this Agreement; or
(m) at the option of the Trust in the event any of the Contracts are not
issued or sold in accordance with applicable federal and/or state law.
Termination will be effective immediately upon such occurrence without
notice; or
22
(n) with respect to any Designated Portfolio, upon sixty (60) days'
advance written notice from the Distributor to the Company, upon a
decision by the Distributor or the Trust to cease offering shares of
the Designated Portfolio for sale; or
(o) at the option of the Distributor or the Trust, upon sixty (60) days'
prior written notice to the Company, if the Company delivers the
notice contemplated by Section 2.4.
10.2. Notice Requirement
(a) No termination of this Agreement will be effective unless and until
the party terminating this Agreement gives prior written notice to all
other parties of its intent to terminate, which notice will set forth
the basis for the termination. Such prior written notice shall be
given in advance of the effective date of termination as required by
this Article X.
(b) In the event that any termination of this Agreement is based upon the
provisions of Article VII, such prior written notice will be given in
advance of the effective date of termination as required by such
provisions.
10.3. Effect of Termination
Notwithstanding any termination of this Agreement, the Trust and the
Distributor will, at the option of the Company, continue to make available
additional shares of the Trust pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing Contracts will
be permitted to reallocate investments in the Portfolios (as in effect on
such date), redeem investments in the Portfolios and/or invest in the
Portfolios upon the making of additional purchase payments under the
Existing Contracts to the same extent as if this Agreement had not
terminated. The parties agree that this Section 10.3 will not apply to any
terminations under Article VII and the effect of such Article VII
terminations will be governed by Article VII of this Agreement.
10.4 Surviving Provisions
Notwithstanding any termination of this Agreement, each party's obligations
under Article VIII to indemnify other parties will survive and not be
affected by any termination of this Agreement. In addition, with respect to
Existing Contracts, all provisions of this Agreement also will survive and
not be affected by any termination of this Agreement.
ARTICLE XI. NOTICES
11.1. Any notice will be deemed duly given when sent by registered or certified
mail to the other party at the address of such party set forth below or at
such other address as such party may from time to time specify in writing
to the other parties.
23
If to the Company:
RiverSource Life Insurance Co. of New York
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Vice President
With a simultaneous copy to:
RiverSource Distributors, Inc.
00000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Chief Counsel
If to the Trust:
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Mr. Xxxxxxx Xxxxxx
If to the Distributor:
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
With a copy to:
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
ARTICLE XII. MISCELLANEOUS
12.1. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of the Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the
obligations of or arising out of this instrument, including without
limitation Article VII, are not binding upon any of the Trustees or
shareholders individually but binding only upon the assets and property of
the Trust.
12.2. Notwithstanding anything to the contrary contained in this Agreement, in
addition to and not in lieu of other provisions in this Agreement:
24
a. "Confidential Information" includes but is not limited to all
proprietary and confidential information of the Company and its
subsidiaries, affiliates and licensees (collectively the "Protected
Parties" for purposes of this Section 12.2), including without
limitation all information regarding the customers of the Protected
Parties; or the accounts, account numbers, names, addresses, social
security numbers or any other personal identifier of such customers;
or any information derived therefrom.
b. The Distributor and the Trust may not use or disclose Confidential
Information for any purpose other than to carry out the purpose for
which Confidential Information was provided to the Distributor and/or
the Trust as set forth in the Agreement; and the Distributor and the
Trust agree to cause all their employees, agents and representatives,
or any other party to whom the Distributor and/or the Trust may
provide access to or disclose Confidential Information to limit the
use and disclosure of Confidential Information to that purpose.
c. The Distributor and the Trust acknowledge that all computer programs
and procedures or other information developed or used by the Protected
Parties or any of their employees or agents in connection with the
Company's performance of its duties under this Agreement are the
valuable property of the Protected Parties.
d. The Distributor and the Trust have taken appropriate measures designed
to ensure the security and confidentiality of Confidential
Information; the Distributor and the Trust further agree to use
reasonable efforts to cause all their agents, representatives or
subcontractors of, or any other party to whom the Distributor and/or
the Trust may provide access to or disclose Confidential Information
to agree to implement appropriate measures designed to meet the
objectives set forth in this Section 12.2.
e. The Distributor and the Trust acknowledge that any breach of the
agreements in this Section 12.2 could result in immediate and
irreparable harm to the Protected Parties for which there would be no
adequate remedy at law and agree that in the event of such a breach,
the Protected Parties will be entitled to equitable relief by way of
temporary and permanent injunctions, as well as such other relief as
any court of competent jurisdiction deems appropriate.
f. This Section 12.2 shall survive termination of this Agreement.
12.3. The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4. This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
25
12.5. If any provision of this Agreement will be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Agreement will
not be affected thereby.
12.6. This Agreement will not be assigned by any party hereto without the prior
written consent of all the parties.
12.7. Each party to this Agreement will cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and will permit each other and
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. The Trust agrees that the Company will
have the right to inspect, audit and copy all records pertaining to the
performance of services under this Agreement pursuant to the requirements
of any state insurance department.
12.8. Each party represents that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate or board action, as applicable, by
such party and when so executed and delivered this Agreement will be the
valid and binding obligation of such party enforceable in accordance with
its terms.
12.9. The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts, the
Accounts or the Designated Portfolios of the Trust or other applicable
terms of this Agreement.
12.10. Notwithstanding any other provision of this Agreement, the obligations of
the Trust and the Distributor are several and, without limiting in any way
the generality of the foregoing, neither such party shall have any
liability for any action or failure to act by the other party, or any
person acting on such other party's behalf.
26
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed hereto as of the date first stated above.
RIVERSOURCE LIFE INSURANCE CO.
OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxx III
------------------------------------
Name: Xxxxxxx X. Xxxxx III
Title: Vice President
ATTEST:
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Secretary
SEAL XXXXXX VARIABLE TRUST
By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
----------------------------------
Title: Fund Treasurer
---------------------------------
SEAL XXXXXX RETAIL MANAGEMENT LIMITED
PARTNERSHIP
By: /s/ Xxxx Comeeny
------------------------------------
Name: Xxxx Comeeny
----------------------------------
Title: CEO
---------------------------------
27
SCHEDULE 1
PARTICIPATION AGREEMENT
By and Among
RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK
And
XXXXXX VARIABLE TRUST
And
XXXXXX RETAIL MANAGEMENT LIMITED PARTNERSHIP
The following separate accounts of RiverSource Life Insurance Co. of New York
are permitted in accordance with the provisions of this Agreement to invest in
Designated Portfolios of the Trust shown in Schedule 2:
1. RiverSource of New York Variable Annuity Account 2 (prior to January 1,
2007: ACL Variable Annuity Account 2), established October 12, 1995.
2. RiverSource of New York Account 8 (prior to January 1, 2007: IDS Life of
New York Account 8), established September 12, 1985.
3. RiverSource of New York Variable Annuity Account (prior to January 1,
2007: IDS Life of New York Variable Annuity Account, previously IDS Life of
New York Flexible Portfolio Annuity Account), established April 17, 1996.
28
SCHEDULE 2
PARTICIPATION AGREEMENT
By and Among
RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK
And
XXXXXX VARIABLE TRUST
And
XXXXXX RETAIL MANAGEMENT LIMITED PARTNERSHIP
1. CONTRACTS AND DESIGNATED PORTFOLIOS.
The RiverSource of New York Variable Annuity Account 2 described in Schedule 1
may invest in the following Designated Portfolios of the Xxxxxx Variable Trust:
CONTRACT(S) DESIGNATED PORTFOLIOS
---------- ---------------------
ACL Personal Portfolio(SM) Variable Annuity Xxxxxx VT Diversified Income Fund--Class IA Shares
Xxxxxx VT Growth and Income Fund--Class IA Shares
Xxxxxx VT High Yield Fund--Class IA Shares
Xxxxxx VT New Opportunities Fund--Class IA Shares
ACL Personal Portfolio Plus Variable Annuity Xxxxxx VT Diversified Income Fund--Class IB Shares
Xxxxxx VT Growth and Income Fund--Class IB Shares
Xxxxxx VT High Yield Fund--Class IB Shares
Xxxxxx VT Voyager Fund--Class IB Shares
29
RiverSource Innovations(SM) Variable Annuity Xxxxxx VT Growth and Income Fund--Class IB Shares
Xxxxxx VT International Equity Fund--Class IB Shares
Xxxxxx VT Research Fund--Class IB Shares
Xxxxxx VT Vista Fund--Class IB Shares
RiverSource Innovations Select Variable Annuity Xxxxxx VT Health Sciences Fund--Class IB Shares
Xxxxxx VT International Equity Fund--Class IB Shares
Xxxxxx VT Small Cap Value Fund--Class IB Shares
Xxxxxx VT Vista Fund--Class IB Shares
RiverSource Endeavor Select Variable Annuity Xxxxxx VT Health Sciences Fund--Class IB Shares
Xxxxxx VT International Equity Fund--Class IB Shares
Xxxxxx VT Small Cap Value Fund--Class IB Shares
Xxxxxx VT Vista Fund--Class IB Shares
00
Xxx XxxxxXxxxxx xx Xxx Xxxx Variable Annuity Account described in Schedule 1 may
invest in the following Designated Portfolios of the Xxxxxx Variable Trust:
CONTRACT(S) DESIGNATED PORTFOLIOS
----------- ---------------------
IDS Life of New York Flexible Portfolio Annuity Xxxxxx VT New Opportunities Fund--Class IA Shares
RiverSource Retirement Advisor Variable Annuity Xxxxxx VT International New Opportunities Fund--Class IB Shares
RiverSource Retirement Advisor Variable Xxxxxx VT Vista Fund--Class IB Shares
Annuity--Band 3
RiverSource Retirement Advisor Advantage(SM) Xxxxxx VT Vista Fund--Class IB Shares
Variable Annuity
Xxxxxx VT International Equity Fund--Class IB Shares
RiverSource Retirement Advisor Advantage(SM)
Variable Annuity--Band 3 Xxxxxx VT Health Sciences Fund--Class IB Shares
RiverSource Retirement Advisor Select(SM)
Variable Annuity
RiverSource Retirement Advisor Advantage
Plus(SM) Variable Annuity
RiverSource Retirement Advisor Select Plus(SM)
Variable Annuity
31
The RiverSource of New York Account 8 described in Schedule 1 may invest in the
following Designated Portfolios of the Xxxxxx Variable Trust:
CONTRACTS DESIGNATED PORTFOLIOS
--------- ---------------------
RiverSource Variable Second-To-Die Life Xxxxxx VT High Yield Fund--Class IB Shares
Insurance(SM)
Xxxxxx VT International New Opportunities Fund--Class IB Shares
RiverSource Variable Universal Life
Insurance(SM) Xxxxxx VT Vista Fund--Class IB Shares
RiverSource Variable Universal Life Insurance Xxxxxx VT New Opportunities Fund--Class IA Shares
III(SM)
RiverSource Succession Select Variable Life Xxxxxx VT Vista Fund--Class IB Shares
Insurance(SM)
RiverSource Variable Universal Life IV Xxxxxx VT International Equity Fund--Class IB Shares
RiverSource Variable Universal Life IV--Estate Xxxxxx VT Health Sciences Fund--Class IB Shares
Series
2. SERVICE FUNDS. With respect to any investment in Class IB Shares of the
Designated Portfolios:
a) Provided the Company complies with its obligations under the
Agreement, the Distributor will pay the Company a service fee (the
"Service Fee") on shares of the Designated Portfolios held in the
Account at the rate of 0.25% per annum.
b) The Company understands and agrees that all Service Fee payments are
subject to the limitations contained in each Designated Portfolio's
Distribution Plan, which may be varied or discontinued at any time,
and understands and agrees that it will cease to receive such Service
Fee Payments with respect to Designated Portfolio if the Designated
Portfolio ceases to pay fees to the Distributor pursuant to its
Distribution Plan.
c) The Company's failure to provide the services described in Section
2(e) below or otherwise to comply with the terms of the Agreement with
render it ineligible to receive Service Fees.
d) Except as described in Sections 2(b) and 2(c) above, the Distributor
will pay the Company the Service Fees unless it is not permissible to
continue such Service Fee arrangement under applicable laws, rules or
regulations. The Service Fee arrangement may be terminated: (A) in
writing by either party upon sixty (60)
32
days' advance written notice to the other party; or (B) if the
Agreement is terminated, however, the Service Fee will continue to be
due and payable with respect to shares of the Designated Portfolios
attributable to Contracts in effect on the effective date of
termination of the Service Fee arrangement.
e) The Company will provide the following services to Contract owners who
allocate purchase payments to subaccounts of the Account investing in
the Designated Portfolios:
i) Maintain regular contact with Contract owners and assist in
answering inquiries concerning the Designated Portfolios;
ii) Assist in printing and/or distributing shareholder reports,
prospectuses, service literature and sales literature or other
promotional materials provided by the Distributor;
iii) Assist the Distributor and its affiliates in the establishment
and maintenance of Contract owner and shareholder accounts and
records;
iv) Assist Contract owners in effecting administrative changes, such
as exchanging into or out of the subaccounts of the Account
investing in shares of the Designated Portfolios;
v) Assist in processing purchase and redemption transactions; and
vi) Provide any other information or services as the Contract owners
of the Distributor may reasonably request.
f) The Company's compliance with the service requirement set forth above will
be evaluated from time to time by the Distributor's monitoring of
redemption levels of Designated Portfolio shares held in the Account and by
such other methods as the Distributor deems appropriate.
33
