PARTICIPATION AGREEMENT
AMONG
IDS LIFE INSURANCE COMPANY OF NEW YORK,
PIMCO VARIABLE INSURANCE TRUST,
AND
ALLIANZ GLOBAL INVESTORS DISTRIBUTORS LLC
THIS AGREEMENT, dated as of the 1st day of March, 2006, by and among IDS
Life Insurance Company of New York, (the "Company"), a New York life insurance
company, on its own behalf and on behalf of each segregated asset account of the
Company set forth on Schedule A hereto as may be amended from time to time (each
account hereinafter referred to as the "Account"), PIMCO Variable Insurance
Trust (the "Fund"), a Delaware statutory trust, and Allianz Global Investors
Distributors LLC (the "Underwriter"), a Delaware limited liability company.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance and variable annuity contracts (the
"Variable Insurance Products") to be offered by insurance companies which have
entered into participation agreements with the Fund and Underwriter
("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Fund are divided into
several series of shares, each designated a "Portfolio" and representing the
interest in a particular managed portfolio of securities and other assets;
WHEREAS, the Fund has obtained an order (PIMCO VARIABLE INSURANCE TRUST, ET
AL., Investment Company Act Rel. Nos. 22994 (Jan. 7, 1998)(Notice) and 23022
(Feb. 9, 1998)(Order) from the Securities and Exchange Commission (the "SEC")
granting Participating Insurance Companies and variable annuity and variable
life insurance separate accounts exemptions from the provisions of sections
9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, if and to
the extent necessary to permit shares of the Fund to be sold to and held by
variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies (the "Mixed and Shared
Funding Exemptive Order");
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, Pacific Investment Management Company LLC (the "Adviser"), which
serves as investment adviser to the Fund, is duly registered as an investment
adviser under the federal Investment Advisers Act of 1940, as amended;
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by the
Account (the "Contracts"), and said Contracts are listed in Schedule A hereto,
as it may be amended from time to time by mutual written agreement;
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to the
aforesaid Contracts;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker dealer with the SEC under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios") on behalf of the Account to fund the
aforesaid Contracts, and the Underwriter is authorized to sell such shares to
the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1 The Fund has granted to the Underwriter exclusive authority to
distribute the Fund's shares, and has agreed to instruct, and has so instructed,
the Underwriter to make available to the Company for purchase on behalf of the
Account Fund shares of those Designated Portfolios selected by the Underwriter.
Pursuant to such authority and instructions, and subject to Article X hereof,
the Underwriter agrees to make available to the Company for purchase on behalf
of the Account, shares of those Designated Portfolios listed on Schedule A to
this Agreement, such purchases to be effected at net asset value in accordance
with Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) Fund
series (other than those listed on Schedule A) in existence now or that may be
established in the future will be made available to the Company only as the
Underwriter may so provide, and (ii) the Board of Trustees of the Fund (the
"Board") may suspend or terminate the offering of Fund shares of any Designated
Portfolio or class thereof, or liquidate any Designated Portfolio or class
thereof, if such action is required by law or by regulatory authorities having
jurisdiction or if, in the sole discretion of the Board acting in good faith,
suspension, termination or liquidation is necessary in the best interests of the
shareholders of such Designated Portfolio. In the event that the Fund initiates
(i) a reorganization of a Fund as defined by Section 2 of the 1940 Act, or (ii)
a change in the name of a Fund or a Designated Portfolio, the Underwriter shall
reimburse the Company for the
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Company's 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 and shall provide the Underwriter with acceptable
documentation of any such costs incurred.
1.2 The Fund shall redeem, at the Company's request, any full or
fractional Designated Portfolio shares held by the Company on behalf of the
Account, such redemptions to be effected at net asset value in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the Company
shall not redeem Fund shares attributable to Contract owners except in the
circumstances permitted in Section 10.3 of this Agreement, and (ii) the Fund may
delay redemption of Fund shares of any Designated Portfolio to the extent
permitted by the 1940 Act, and any rules, regulations or orders thereunder.
1.3 PURCHASE AND REDEMPTION PROCEDURES
(a) The Fund hereby appoints the Company as an agent of the Fund
for the limited purpose of receiving purchase and redemption requests on behalf
of the Account (but not with respect to any Fund shares that may be held in the
general account of the Company) for shares of those Designated Portfolios made
available hereunder, based on allocations of amounts to the Account or
subaccounts thereof under the Contracts and other transactions relating to the
Contracts or the Account. Receipt and acceptance of any such request (or
relevant transactional information therefor) on any day the New York Stock
Exchange is open for trading and on which the Fund calculates its net asset
value pursuant to the rules of the SEC (a "Business Day") by the Company as such
limited agent of the Fund prior to the time that the Fund ordinarily calculates
its net asset value as described from time to time in the Fund Prospectus (which
as of the date of execution of this Agreement is 4:00 p.m. Eastern Time) shall
constitute receipt and acceptance by the Fund on that same Business Day (the
"Trade Date"), provided that the Company uses its best efforts to provide notice
of such request to the Fund or its designated agent by 9:00 a.m. Eastern Time,
and in any event, provides such notice by 9:30 a.m. Eastern Time, on the next
following Business Day.
(b) The Company shall pay for shares of each Designated
Portfolio on the Business Day following the Trade Date. Payment for Designated
Portfolio shares shall be made in federal funds transmitted to the Fund or its
designated custodian by wire to be received by the Fund or its designated
custodian by 4:00 p.m. Eastern Time on the Business Day following the Trade Date
(which may be net of redemptions of shares). If federal funds are not received
on time, such funds will be invested, and Designated Portfolio shares purchased
thereby will be issued, as soon as practicable and the Company shall promptly,
upon the Fund's request, reimburse the Fund for any charges, costs, fees,
interest or other expenses incurred by the Fund in connection with any advances
to, or borrowing or overdrafts by, the Fund, or any similar expenses incurred by
the Fund, as a result of portfolio transactions effected by the Fund based upon
such purchase request. Upon receipt of federal funds by the Fund or its
custodian so wired, such funds shall cease to be the responsibility of the
Company and shall become the responsibility of the Fund.
(c) Payment for Designated Portfolio shares redeemed by the
Account or the Company shall be made in federal funds transmitted by wire to the
Company or any other
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designated person on the next Business Day after the Fund is properly notified
of the redemption order of such shares (which order shall be net of any purchase
orders) except that the Fund reserves the right to redeem Designated Portfolio
shares in assets other than cash and to delay payment of redemption proceeds to
the extent permitted under Section 22(e) of the 1940 Act and any Rules
thereunder, and in accordance with the procedures and policies of the Fund as
described in the then current prospectus and/or statement of additional
information ("SAI"). The Fund shall not bear any responsibility whatsoever for
the proper disbursement or crediting of redemption proceeds by the Company; the
Company alone shall be responsible for such action.
(d) Any purchase or redemption request for Designated Portfolio
shares held or to be held in the Company's general account shall be effected at
the net asset value per share next determined after the Fund's receipt of such
request, provided that, in the case of a purchase request, payment for Fund
shares so requested is received by the Fund in federal funds prior to close of
business for determination of such value, as defined from time to time in the
Fund Prospectus.
(e) The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), (iii) upon 45 days
prior written notice to the Fund and the Underwriter, as permitted by an order
of the SEC pursuant to Section 26(c) of the 1940 Act, but only if a substitution
of other securities for the shares of the Designated Portfolios is consistent
with the terms of the Contracts, or (iv) as permitted under the terms of the
Contracts. Upon request, the Company will promptly furnish to the Fund
reasonable assurance that any redemption pursuant to clause (ii) above is a
Legally Required Redemption. Furthermore, except in cases where permitted under
the terms of the Contracts, the Company shall not prevent Contract owners from
allocating payments to a Designated Portfolio that was otherwise available under
the Contracts without first giving the Fund 45 days notice of its intention to
do so.
1.4 The Fund shall use its best efforts to make the net asset value
per share for each Designated Portfolio available to the Company by 7:00 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio is
calculated, and shall calculate such net asset value in accordance with the
Fund's Prospectus. Neither the Fund, any Designated Portfolio, the Underwriter,
nor any of their affiliates shall be liable for any information provided to the
Company pursuant to this Agreement which information is based on incorrect
information supplied by the Company or any other Participating Insurance Company
to the Fund or the Underwriter.
1.5 The Fund shall furnish notice (by wire or telephone followed
by written confirmation) to the Company as soon as reasonably practicable of
any income dividends or capital gain distributions payable on any Designated
Portfolio shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable
on any Designated Portfolio shares in the form of additional shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the
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Account, to revoke this election and to receive all such dividends and
capital gain distributions in cash. The Fund shall notify the Company
promptly of the number of Designated Portfolio shares so issued as payment of
such dividends and distributions.
1.6 Any material error in the calculation of net asset value ("NAV"),
dividends or capital gain information shall be reported to the Company as soon
as reasonably practicable after discovery. Any NAV error shall be corrected in
accordance with the Fund's then-current NAV error correction policy.
1.7 Issuance and transfer of Fund shares shall be by book entry only.
Share certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares shall be recorded in an appropriate ledger
for the Account or the appropriate subaccount of the Account.
1.8 (a) The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's shares may be sold
to other insurance companies (subject to Section 1.8 hereof) and the cash value
of the Contracts may be invested in other investment companies, the Company's
non-utilized separate accounts and the Company's general account.
(b) The Company shall not, without prior notice to the Fund
(unless otherwise required by applicable law), take any action to operate the
Account as a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the Fund
(unless otherwise required by applicable law), induce Contract owners to change
or modify the Fund or change the Fund's distributor or investment adviser.
(d) The Company shall not, without prior notice to the Fund,
induce Contract owners to vote on any matter submitted for consideration by the
shareholders of the Fund in a manner other than as recommended by the Board of
Trustees of the Fund.
1.9 The Company acknowledges that, pursuant to Form 24F-2, the Fund
is not required to pay fees to the SEC for registration of its shares under the
1933 Act with respect to its shares issued to an Account that is a unit
investment trust that offers interests that are registered under the 1933 Act
and on which a registration fee has been or will be paid to the SEC (a
"Registered Account"). The Company agrees to provide the Fund or its agent each
year within 60 days of the end of the Fund's fiscal year, or when reasonably
requested by the Fund, information as to the number of shares purchased by a
Registered Account and any other Account the interests of which are not
registered under the 0000 Xxx. The Company acknowledges that the Fund intends to
rely on the information so provided.
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ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Fund represents and warrants that (i) the Fund is lawfully
organized and validly existing under the laws of the State of Delaware, (ii) the
Fund is and shall remain registered under the 1940 Act, (iii) the Fund does and
will comply in all material respects with the 1940 Act, (iv) Designated
Portfolio shares sold pursuant to this Agreement are registered under the 1933
Act (to the extent required by that Act) and are duly authorized for issuance,
(v) the Fund shall amend the registration statement for the shares of the
Designated Portfolios under the 1933 Act and the 1940 Act from time to time as
required in order to effect the continuous offering of such shares, and (vi) the
Board has elected for each Designated Portfolio to be taxed as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). The Fund makes no representations or warranties as to
whether any aspect of the Designated Portfolios' operations, including, but not
limited to, investment policies, fees and expenses, complies with the insurance
laws and other applicable laws of the various states.
2.2 The Underwriter represents and warrants that shares of the
Designated Portfolios (i) shall be offered and sold in compliance with
applicable state and federal securities laws, (ii) are offered and sold only to
Participating Insurance Companies and their separate accounts and to persons or
plans that communicate to the Fund that they qualify to purchase shares of the
Designated Portfolios under Section 817(h) of the Code and the regulations
thereunder without impairing the ability of the Account to consider the
portfolio investments of the Designated Portfolios as constituting investments
of the Account for the purpose of satisfying the diversification requirements of
Section 817(h) ("Qualified Persons"), and (iii) are registered and qualified for
sale in accordance with the laws of the various states to the extent required by
applicable law.
2.3 Subject to Company's representations and warranties in Sections
2.5 and 2.6, the Fund represents and warrants that it will invest the assets of
each Designated Portfolio in such a manner as to ensure that the Contracts will
be treated as annuity or life insurance contracts, whichever is appropriate,
under the Code and the regulations issued thereunder (or any successor
provisions). Without limiting the scope of the foregoing, the Fund represents
and warrants that each Designated Portfolio has complied and will continue to
comply with Section 817(h) of the Code and Treasury Regulation Section 1.817-5,
and any Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts, and
any amendments or other modifications or successor provisions to such Section or
Regulation. The Fund will make every reasonable effort (a) to notify the Company
immediately upon having a reasonable basis for believing that a breach of this
Section 2.3 has occurred, and (b) in the event of such a breach, to adequately
diversify the Designated Portfolio so as to achieve compliance within the grace
period afforded by Treasury Regulation Section 1.817-5.
2.4 The Fund represents and warrants that each Designated Portfolio
is or will be qualified as a Regulated Investment Company under Subchapter M of
the Code, that the Fund will make every reasonable effort to maintain such
qualification (under Subchapter M or any successor or similar provisions) and
that the Fund will notify the Company immediately upon
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having a reasonable basis for believing that a Designated Portfolio has ceased
to so qualify or that it might not so qualify in the future.
2.5 The Company represents and warrants that the Contracts (a) are,
or prior to issuance will be, registered under the 1933 Act, or (b) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 1933 Act. The Company also represents and warrants that
it is an insurance company duly organized and in good standing under applicable
law, that it has legally and validly established the Account prior to any
issuance or sale thereof as a segregated asset account under New York or other
applicable state insurance laws, and that it (a) has registered or, prior to any
issuance or sale of the Contracts, will register 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, or alternatively (b) has not
registered the Account in proper reliance upon an exclusion from registration
under the 1940 Act. The Company further represents and warrants that (i) the
Contracts will be issued and sold in compliance in all material respects with
all applicable federal securities and state securities and insurance laws, (ii)
the information provided pursuant to Section 1.8 shall be accurate in all
material respects; and (iii) it and the Account are Qualified Persons. The
Company shall register and qualify the Contracts or interests therein as
securities in accordance with the laws of the various states only if and to the
extent required by applicable law.
2.6 The Company represents and warrants that the Contracts are
currently, and at the time of issuance shall be, treated as life insurance or
annuity contracts, under applicable provisions of the Code, and that it will
make every reasonable effort to maintain such treatment, and that it will notify
the Fund and the Underwriter immediately upon having a reasonable basis for
believing 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 of its Accounts is a "segregated asset account"; that interests in the
Accounts are offered exclusively through the purchase of a Contract; and that
each Contract is a "variable contract" within the meaning of such terms under
Section 817 of the Code and the regulations thereunder. Company will use every
reasonable effort to continue to meet such definitional requirements, and it
will notify the Fund and the Underwriter 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.
2.7 The Underwriter represents and warrants that it is a member in
good standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with any applicable state and federal securities laws.
2.8 The Fund and the Underwriter represent and warrant that all of
their trustees/directors, officers, employees, investment advisers, and other
individuals or entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimum coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
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2.9 The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Account are covered
by a blanket fidelity bond or similar coverage for the benefit of the Account,
in an amount not less than $5 million. The aforesaid bond includes coverage for
larceny and embezzlement and is issued by a reputable bonding company. The
Company agrees to hold for the benefit of the Fund and to pay to the Fund any
amounts lost from larceny, embezzlement or other events covered by the aforesaid
bond to the extent such amounts properly belong to the Fund pursuant to the
terms of this Agreement. The Company agrees to make all reasonable efforts to
see that this bond or another bond containing these provisions is always in
effect, and agrees to notify the Fund and the Underwriter in the event that such
coverage no longer applies.
2.10 The Company represents and warrants that it shall comply with any
applicable privacy and notice provisions of 15 U.S.C. Sections 6801-6827 and any
applicable regulations promulgated thereunder (including but not limited to 17
C.F.R. Part 248) as they may be amended.
2.11 Each party to this Agreement represents and warrants that it
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 the other parties to this Agreement 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.
2.12 The Company represents and warrants that all purchase and
redemption orders with respect to shares of the Designated Portfolios submitted
with respect to a Business Day in accordance with Article I will be received in
good order by the Company prior to the time as of which the net asset value of
the Designated Portfolios' shares is calculated on that Business Day as
disclosed in the Designated Portfolios' prospectuses, as they may be amended
from time to time, and will be processed by the Company in compliance with Rule
22c-1 under the 1940 Act and regulatory interpretations thereof. Furthermore,
the Company will provide the Fund or its agent with assurances regarding the
compliance of its handling of orders with respect to shares of the Designated
Portfolios with the requirements of Rule 22c-1, regulatory interpretations
thereof.
2.13 (a) The Company acknowledges the Fund has adopted policies and
procedures reasonably designed to prevent frequent or excessive purchases,
exchanges and redemptions of the shares of Designated Portfolios, which policies
are summarized in the prospectuses of the Designated Portfolios.
(b) The Fund and the Underwriter acknowledge 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 Designated Portfolios
available as investment options under the Contracts. These
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policies and procedures are described in the current prospectuses of the
Accounts through which the Contracts are offered.
(c) The Fund 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 Designated Portfolios when the Fund
periodically reviews or amends the Fund's disruptive trading policies and
procedures from time to time. The Fund and the Underwriter may, but are not
required to, invite comment from and confer with Company regarding any proposed
policy and procedure of the Fund and the Underwriter pertaining to 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
Designated 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 Fund's
proposed policy or procedure.
(d) The Company will cooperate with the Fund's and the
Underwriter'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 furnish other information the Underwriter reasonably
requests regarding frequent transfers by Contract owners among the subaccounts
investing Designated Portfolios available under the Contracts. In compliance
with Rule 22c-2 under the 1940 Act, the Company hereby agrees to (i) provide,
promptly upon request by the Fund, directly or through its agent, the taxpayer
identification number of all Contract owners that purchased, redeemed,
transferred, or exchanged shares of Designated Portfolios held under a Contract,
and the amount and dates of such Contract owner's purchases, redemptions,
transfers, and exchanges involving such Designated Portfolios; and (ii) execute
any instructions from the Fund, directly or through its agent, to restrict or
prohibit further purchases or exchanges of shares of the Designated Portfolios
by a Contract owner who has been identified by the Fund, directly or through its
agent, as having engaged in transactions in Designated Portfolio shares that
violate the market timing or excessive trading policies adopted by the Fund.
Furthermore, the Company further agrees to either assess any applicable
redemption fees that the Fund has adopted to curtail frequent trading, or
communicate to the Fund or its agent any information necessary for the Fund or
its agent to assess such redemption fees directly against payment of redemption
proceeds. When the Company is required under Rule 22c-2 under the 1940 Act to
implement transaction procedures for its Accounts in order to effectuate the
Fund's procedures for preventing disruptive trading the shares of Designated
Portfolios, and such implementation will require the Company to modify its
automated data processing systems or to develop and staff manual systems to
accommodate the Fund's requirements, the parties shall in good faith negotiate a
mutually agreed upon implementation schedule.
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ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1 At the option of the Company, the Fund or the Underwriter as they
shall determine, will either: (a) provide the Company with as many copies of the
Fund's current prospectus, statement of additional information, annual report,
semi-annual report and other shareholder communications, including any
amendments or supplements to any of the foregoing, as the Company will
reasonably request; or (b) provide the Company with a camera-ready copy,
computer disk or other medium agreed to by the parties of such documents in a
form suitable for printing. The Fund or the Underwriter as they shall determine
will bear the cost of typesetting such documents. The Fund or the Underwriter as
they shall determine will bear the cost of printing and distributing such
documents to existing Contract owners who have Contract value allocated to a
Designated Portfolio and the Company will bear the cost of printing and
distributing such documents to prospective Contract owners and applicants;
provided, that the Fund will bear the costs of printing and distributing proxy
materials related to proxy votes initiated by the Fund, and the Company shall
bear the expenses of printing and distributing proxy materials related to proxy
votes initiated by the Company.
3.2 The Fund shall provide the Company with information regarding the
Fund's expenses, which information may include a table of fees and related
narrative disclosure for use in any prospectus or other descriptive document
relating to a Contract. The Company agrees that it will use such information in
the form provided. The Company shall provide prior written notice of any
proposed modification of such information, which notice will describe in detail
the manner in which the Company proposes to modify the information, and agrees
that it may not modify such information in any way without the prior consent of
the Fund.
3.3 The Fund, at its expense, or at the expense of its designee,
shall provide the Company with copies of its proxy material, reports to
shareholders, and other communications to shareholders in such quantity as the
Company shall reasonably require for distributing to Contract owners.
3.4 The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
portfolio for which instructions have been received,
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 or to the
extent otherwise required by law. The Company will vote Fund shares held in any
segregated asset account in the same proportion as Fund shares of such portfolio
for which voting instructions have been received from Contract owners, to the
extent permitted by law.
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3.5 Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in a Designated
Portfolio calculates voting privileges as required by the Shared Funding
Exemptive Order and consistent with any reasonable standards that the Fund may
adopt and provide in writing.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material that the Company develops and in which the Fund (or a Designated
Portfolio thereof) or the Adviser or the Underwriter is named. No such material
shall be used until approved by the Fund or its designee, and the Fund will use
its best efforts for it or its designee to review such sales literature or
promotional material within ten Business Days after receipt of such material.
The Fund or its designee reserves the right to reasonably object to the
continued use of any such sales literature or other promotional material in
which the Fund (or a Designated Portfolio thereof) or the Adviser or the
Underwriter is named, and no such material shall be used if the Fund or its
designee so object.
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser or the Underwriter in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or prospectus or SAI for the Fund shares, as such registration
statement and prospectus or SAI may be amended or supplemented from time to
time, or in reports or proxy statements for the Fund, or in sales literature or
other promotional material approved by the Fund or its designee or by the
Underwriter, except with the permission of the Fund or the Underwriter or the
designee of either.
4.3 The Fund and the Underwriter, or their designee, shall furnish,
or cause to be furnished, to the Company, each piece of sales literature or
other promotional material that it develops and in which the Company, and/or its
Account, is named. No such material shall be used until approved by the Company,
and the Company will use its best efforts to review such sales literature or
promotional material within ten Business Days after receipt of such material.
The Company reserves the right to reasonably object to the continued use of any
such sales literature or other promotional material in which the Company and/or
its Account is named, and no such material shall be used if the Company so
objects.
4.4 The Fund and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company, the
Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), or SAI for the Contracts, as
such registration statement, prospectus, or SAI may be amended or supplemented
from time to time, or in published reports for the Account which are in the
public domain or approved by the Company for distribution to Contract owners, or
in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
11
4.5 The Fund will provide to the Company at least one complete copy
of all registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Fund or its shares, promptly after the filing of such document(s)
with the SEC or other regulatory authorities.
4.6 The Company will provide to the Fund at least one complete copy
of all registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, 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 the Account, promptly after the filing of
such document(s) with the SEC or other regulatory authorities. The Company shall
provide to the Fund and the Underwriter any complaints received from the
Contract owners pertaining to the Fund or the Designated Portfolio.
4.7 For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (I.E., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available with regard to the Fund.
ARTICLE V. FEES AND EXPENSES
5.1 Except as otherwise provided herein, no party to this Agreement
shall pay any fee or other compensation to any other party to this Agreement.
Except as otherwise provided herein, all expenses incident to performance by a
party under this Agreement shall be paid by such party.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
and all taxes on the issuance or transfer of the Fund's shares.
12
5.3 The Fund or the Underwriter as they shall determine shall bear
the expenses of printing and distributing the Fund's prospectus and reports to
owners of Contracts issued by the Company, while the Company shall bear the
expenses of printing and distributing the Fund's prospectus to prospective
Contract owners and applicants. The Fund shall bear the expenses of printing and
distributing proxy materials related to proxy votes initiated by the Fund, and
the Company shall bear the expenses of printing and distributing proxy materials
related to proxy votes initiated by the Company.
ARTICLE VI. POTENTIAL CONFLICTS
6.1 The parties to this Agreement agree that the conditions or
undertakings required by the Mixed and Shared Funding Exemptive Order that may
be imposed on the Company, the Fund and/or the Underwriter by virtue of such
order by the SEC: (i) shall apply only upon the sale of shares of the Designated
Portfolios to variable life insurance separate accounts (and then only to the
extent required under the 1940 Act); (ii) will be incorporated herein by
reference; and (iii) such parties agree to comply with such conditions and
undertakings to the extent applicable to each such party notwithstanding any
provision of this Agreement to the contrary.
6.2 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 parties to this Agreement shall take such
steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such rules are applicable; and (b) Sections
3.5 and 3.6 of this Agreement shall continue in effect only to the extent that
terms and conditions substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
ARTICLE VII. INDEMNIFICATION
7.1 INDEMNIFICATION BY THE COMPANY
7.1(a). The Company agrees to indemnify and hold harmless the
Fund and the Underwriter and each of its trustees/directors and officers, and
each person, if any, who controls the Fund or Underwriter within the meaning of
Section 15 of the 1933 Act or who is under common control with the Underwriter
(collectively, the "Indemnified Parties" for purposes of this Section 7.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statements of any material fact contained
in the registration statement, prospectus (which shall
include a written description of
13
a Contract that is not registered under the 1933 Act), or
SAI for the Contracts or contained in the Contracts or
sales literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of
the Fund for use in the registration statement,
prospectus or SAI 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 Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI,
or sales literature of the Fund not supplied by the
Company or persons under its control) or wrongful conduct
of the Company or its agents or persons under the
Company's authorization or control, with respect to the
sale or distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI, or sales literature of the
Fund or any amendment thereof or supplement thereto or
the omission or alleged omission to state therein a
material fact required to be stated therein or necessary
to make the statements therein not misleading if such a
statement or omission was made in reliance upon
information furnished to the Fund by or on behalf of the
Company; or
(iv) arise as a result of any material failure by the Company
to provide the services and furnish the materials under
the terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply
with the qualification requirements specified in Section
2.6 of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Company;
as limited by and in accordance with the provisions of Sections 7.1(b) and
7.1(c) hereof.
14
7.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of its obligations or
duties under this Agreement.
7.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
7.1(d). The Indemnified Parties will promptly notify the Company
of the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund shares or the Contracts or the operation
of the Fund.
7.2 INDEMNIFICATION BY THE UNDERWRITER
7.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained
in the registration statement or prospectus or SAI or
sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this
15
agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon
and in conformity with information furnished to the
Underwriter or Fund by or on behalf of the Company for
use in the registration statement, prospectus or SAI for
the Fund or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI
or sales literature for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful
conduct of the Fund or Underwriter or persons under their
control, with respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI or sales literature covering
the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or
on behalf of the Fund or the Underwriter; or
(iv) arise as a result of any failure by the Fund or the
Underwriter to provide the services and furnish the
materials under the terms of this Agreement (including a
failure of the Fund, whether unintentional or in good
faith or otherwise, to comply with the diversification
and other qualification requirements specified in
Sections 2.3 and 2.4 of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter;
as limited by and in accordance with the provisions of Sections 7.2(b) and
7.2(c) hereof.
7.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties
16
or by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Company or the Account, whichever is
applicable.
7.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Underwriter to such party of the
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Underwriter will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
The Company agrees promptly to notify the Underwriter of
the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Contracts
or the operation of the Account.
7.3 INDEMNIFICATION BY THE FUND
7.3(a). The Fund agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.3)
against any and all losses, claims, expenses, damages, liabilities (including
amounts paid in settlement with the written consent of the Fund) or litigation
(including legal and other expenses) to which the Indemnified Parties may be
required to pay or may become subject under any statute or regulation, at common
law or otherwise, insofar as such losses, claims, expenses, damages, liabilities
or expenses (or actions in respect thereof) or settlements, are related to the
operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide
the services and furnish the materials under the terms of
this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply
with the diversification and other qualification
requirements specified in Section 2.3 and 2.4 of this
Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this
Agreement or arise out of
17
or result from any other material breach of this
Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 7.3(b) and
7.3(c) hereof. The parties acknowledge that the Fund's indemnification
obligations under this Section 7.3 are subject to applicable law.
7.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or the Account, whichever is applicable.
7.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
7.3(d). The Company and the Underwriter agree promptly to notify
the Fund of the commencement of any litigation or proceeding against it or any
of its respective officers or directors in connection with the Agreement, the
issuance or sale of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Fund.
ARTICLE VIII. APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of California.
8.2 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, any Mixed and Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed in accordance
therewith. If, in the future, the Mixed and Shared Funding Exemptive Order
should no longer be necessary under applicable law, then Article VI shall no
longer apply.
18
ARTICLE IX. TERMINATION
9.1 This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, for any reason with respect to
some or all Designated Portfolios, by three (3) months advance written notice
delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and
the Underwriter based upon the Company's determination that shares of the Fund
are not reasonably available to meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund and
the Underwriter 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 the Company; or
(d) termination by the Fund or Underwriter in the event that
formal administrative proceedings are instituted against the Company by the
NASD, the SEC, the Insurance Commissioner or like official of any state or any
other regulatory body regarding the Company's duties under this Agreement or
related to the sale of the Contracts, the operation of any Account, or the
purchase of the Fund's shares; provided, however, that the Fund or Underwriter
determines in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon the ability
of the Company to perform its obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Fund or Underwriter by the
NASD, the SEC, or any state securities or insurance department or any other
regulatory body; provided, however, that the Company determines in its sole
judgment exercised in good faith, that any such administrative proceedings will
have a material adverse effect upon the ability of the Fund or Underwriter to
perform its obligations under this Agreement; or
(f) termination by the Company by written notice to the Fund and
the Underwriter with respect to any Designated Portfolio in the event that such
Portfolio ceases to qualify as a Regulated Investment Company under Subchapter M
or fails to comply with the Section 817(h) diversification requirements
specified in Section 2.4 hereof, or if the Company reasonably believes that such
Portfolio may fail to so qualify or comply; or
(g) termination by the Fund or Underwriter by written notice to
the Company in the event that the Contracts fail to meet the qualifications
specified in Section 2.6 hereof; or
(h) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or the Underwriter
respectively, shall
19
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
(i) termination by the Company by written notice to the Fund and
the Underwriter, if the Company shall determine, in its sole judgment exercised
in good faith, that the Fund, Adviser, or the Underwriter has suffered a
material adverse change in its business, operations, financial condition or
prospects since the date of this Agreement or is the subject of material adverse
publicity; or
(j) termination by the Fund or the Underwriter by written notice
to the Company, if the Company gives the Fund and the Underwriter the written
notice specified in Section 1.7(a)(ii) hereof and at the time such notice was
given there was no notice of termination outstanding under any other provision
of this Agreement; provided, however, any termination under this Section 9.1(j)
shall be effective forty-five days after the notice specified in Section
1.7(a)(ii) was given; or
(k) termination by the Company upon any substitution of the
shares of another investment company or series thereof for shares of a
Designated Portfolio of the Fund in accordance with the terms of the Contracts,
provided that the Company has given at least 45 days prior written notice to the
Fund and Underwriter of the date of substitution; or
(l) termination by the Fund if the Board has decided to (i)
refuse to sell shares of any Designated Portfolio to the Company and/or any of
its Accounts; (ii) suspend or terminate the offering of shares of any Designated
Portfolio; or (iii) dissolve, reorganize, liquidate, merge or sell all assets of
the Fund or any Designated Portfolio, subject to the provisions of Section 1.1;
or
(m) termination by any party in the event that the Fund's Board
of Trustees determines that a material irreconcilable conflict exists as
provided in Article VI.
9.2 (a) Notwithstanding any termination of this Agreement, and
except as provided in Section 9.2(b), the Fund and the Underwriter shall, at the
option of the Company, continue, until the one year anniversary from the date of
termination, and from year to year thereafter if deemed appropriate by the Fund
and the Underwriter, to make available additional shares of the Designated
Portfolios 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, based on
instructions from the owners of the Existing Contracts, the Accounts shall be
permitted to reallocate investments in the Designated Portfolios of the Fund and
redeem investments in the Designated Portfolios, and shall be permitted to
invest in the Designated Portfolios in the event that owners of the Existing
Contracts make additional premium payments under the Existing Contracts.
The Company agrees, promptly after any termination of this
Agreement, to take all steps necessary to redeem the investment of the Accounts
in the Designated Portfolios within one year from the date of termination of the
Agreement as provided
20
in Article IX. Such steps shall include, but not be limited to, filing an
application for and using best efforts to obtain an order pursuant to Section
26(c) of the 1940 Act to permit the substitution of other securities for the
shares of the Designated Portfolios. The Fund may, in its discretion, permit the
Accounts to continue to invest in the Designated Portfolios beyond such one year
anniversary for an additional year beginning on the first annual anniversary of
the date of termination, and from year to year thereafter; provided that the
Fund agrees in writing to permit the Accounts to continue to invest in the
Designated Portfolios at the beginning of any such year.
(b) In the event (i) the Agreement is terminated pursuant to
Sections 10.1(g) or 10.1(m), at the option of the Fund or the Underwriter; or
(ii) the one year anniversary of the termination of the Agreement is reached or,
after waiver as provided in Section 9.2(a), such subsequent anniversary is
reached (each of (i) and (ii) referred to as a "triggering event" and the date
of termination as provided in (i) or the date of such anniversary as provided in
(ii) referred to as the "request date"), the parties agree that such triggering
event shall be considered as a request for immediate redemption of shares of the
Designated Portfolios held by the Accounts, received by the Fund and its agents
as of the request date, and the Fund agrees to process such redemption request
in accordance with the 1940 Act and the regulations thereunder and the Fund's
registration statement.
(c) The parties agree that this Section 9.2 shall not apply to
any terminations under Article VI and the effect of such Article VI terminations
shall be governed by Article VI of this Agreement. The parties further agree
that, to the extent that all or a portion of the assets of the Accounts continue
to be invested in the Fund or any Designated Portfolio of the Fund, Articles I,
II, VI, VII and VIII will remain in effect after termination.
9.3 Notwithstanding any termination of this Agreement, each party's
obligation under Article VII to indemnify the other parties shall survive.
ARTICLE X. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund: PIMCO Variable Insurance Trust
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
If to the Company: IDS Life Insurance Company of New York
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Executive Vice President - Annuities
With a copy to: Ameriprise Financial Services, Inc.
00000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
21
Attention: Xxxx Xxxxxxx, Vice President and Group
Counsel
If to Underwriter: Allianz Global Investors Distributors LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
ARTICLE XI. MISCELLANEOUS
11.1 All persons dealing with the Fund must look solely to the
property of the Fund, and in the case of a series company, the respective
Designated Portfolios listed on Schedule A hereto as though each such Designated
Portfolio had separately contracted with the Company and the Underwriter for the
enforcement of any claims against the Fund. The parties agree that neither the
Board, officers, agents or shareholders of the Fund assume any personal
liability or responsibility for obligations entered into by or on behalf of the
Fund.
11.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information has come into the
public domain.
11.3 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.
11.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
11.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the New York Department of Commerce Commissioner with any
information or reports in connection with services provided under this Agreement
which such Commissioner may request in order to ascertain whether the variable
annuity operations of the Company are being conducted in a manner consistent
with applicable law or regulations.
22
11.7 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.
11.8 This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto.
11.9 The Company shall furnish, or shall cause to be furnished, to
the Fund or its designee copies of any registration statement (without exhibits)
and financial reports of the Company filed with the Securities and Exchange
Commission as soon as practicable after the filing thereof.
11.10 This Agreement may be modified or amended, and the terms of this
Agreement may be waived, only in writing with the consent of all parties.
23
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 below.
IDS LIFE INSURANCE COMPANY OF Attest:
NEW YORK
By: By:
---------------------------------- ----------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxx
Title: Vice President - Annuities Title: Assistant Secretary
Date:
PIMCO VARIABLE INSURANCE TRUST
By its authorized officer
By:
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Name:
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Title:
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Date:
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ALLIANZ GLOBAL INVESTORS
DISTRIBUTORS LLC
By its authorized officer
By:
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Name:
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Title:
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Date:
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24
SCHEDULE A
PIMCO VARIABLE INSURANCE TRUST PORTFOLIOS:
All Asset Portfolio - Advisor Class Shares
SEGREGATED ASSET ACCOUNTS:
IDS Life of New York Variable Annuity Account, Established April 17, 1996
CONTRACTS:
RiverSource(SM) Retirement Advisor Select Plus(R) Variable Annuity; Contract
Form Number 139035A.
RiverSource(SM) Retirement Advisor Select(SM) Variable Annuity; Contract Form
Numbers 139035, 139036, 13907 and 13908.
RiverSource(SM) Retirement Advisor Advantage Plus(R) Variable Annuity; Contract
Form Number 31053A.
RiverSource(SM) Retirement Advisor Advantage(SM) Variable Annuity, Contract Form
Numbers 31053, 31054, 31055-SEP, 31056-XXX.
RiverSource(SM) Retirement Advisor Variable Annuity(R), Contract Form Numbers
31053, 31054, 31055-SEP, 31056-XXX.
RiverSource(SM) Retirement Advisor 4 Advantage; Contract Form Number __________.
RiverSource(SM) Retirement Advisor 4 Select; Contract Form Number _____________.
RiverSource(SM) Retirement Advisor Access; Contract Form Number _______________.
