AMENDED AND RESTATED
PARTICIPATION AGREEMENT
AMONG
PIONEER VARIABLE CONTRACTS TRUST
IDS LIFE INSURANCE COMPANY OF NEW YORK
AMERIPRISE FINANCIAL SERVICES, INC.
PIONEER INVESTMENT MANAGEMENT, INC.
AND
PIONEER FUNDS DISTRIBUTOR, INC.
THIS AMENDED AND RESTATED AGREEMENT ("Agreement"), is made and entered
into this 1st day of September, 2006 by and among PIONEER VARIABLE CONTRACTS
TRUST, a Delaware business trust (the "Trust"), IDS LIFE INSURANCE COMPANY OF
NEW YORK, a New York life insurance company (the "Company") on its own behalf
and on behalf of each of the segregated asset accounts of the Company set
forth in Schedule A hereto, as may be amended from time to time (the
"Accounts"), AMERIPRISE FINANCIAL SERVICES, INC., a Delaware corporation and
the principal underwriter of variable annuity contracts and variable life
insurance policies issued by the Company, PIONEER INVESTMENT MANAGEMENT, INC.,
a Delaware corporation ("PIM") and PIONEER FUNDS DISTRIBUTOR, INC. ("PFD"), a
corporation organized under the laws of The Commonwealth of Massachusetts.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and its shares are registered or will be registered under the Securities Act
of 1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into
several series and classes of shares, each series being designated a
"Portfolio" and representing an interest in a particular managed pool of
securities and other assets;
WHEREAS, the Trust is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts to be offered by insurance companies, including IDS
Life Insurance Company, which have entered into participation agreements with
the Trust (the "Participating Insurance Companies");
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission (the "SEC"), dated July 9, 1997 (File No. 812-10494) (the
"Mixed and Shared Funding Exemptive Order") granting Participating Insurance
Companies and variable annuity
and variable life insurance separate accounts exemptions from the provisions
of Sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act and Rules 6e-2(b)(15)
and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the
Trust to be sold to and held by variable annuity and variable life insurance
companies that may or may not be affiliated with one another and qualified
pension and retirement plans ("Qualified Plans"),
WHEREAS, PIM is duly-registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state
securities law, and is the Trust's investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or variable
life insurance contracts (individually, the "Contract" or, collectively, the
"Contracts") which, if required by applicable law, will be registered under
the 1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated
asset accounts, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the aforesaid variable
annuity and/or variable life insurance contracts that are allocated to the
Accounts (the Contracts and the Accounts covered by this Agreement, and each
corresponding Portfolio covered by this Agreement in which the Accounts
invest, is specified in Schedule A attached hereto as may be modified from
time to time);
WHEREAS, the Company has registered or will register the Accounts as
unit investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, the Portfolios offered by the Trust to the Company and the
Accounts are set forth on Schedule A attached hereto;
WHEREAS, Pioneer Funds Distributors, Inc. (the "Underwriter") is
registered as a broker-dealer with the Securities and Exchange Commission (the
"SEC") under the Securities Exchange Act of .1934, as amended (hereinafter the
"1934 Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") and is authorized to sell shares of the
Portfolios to unit investment trusts such as the Accounts;
WHEREAS, Ameriprise Financial Services, Inc., the underwriter for the
individual variable annuity and the variable life policies issued by the
Company, is registered as a broker-dealer with the SEC under the 1934 Act and
is a member in good standing of the NASD; and
WHEREAS, the Company will be renamed RiverSource Life Insurance Co. of
New York effective December 31, 2006 at 10:59:59 p.m. Central Time (the
"Effective Time"), and on and after the Effective Time all references in this
Agreement and its Schedules to the Company shall mean and refer to RiverSource
Life Insurance Co. of New York; and,
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios specified in Schedule A
2
attached hereto (the "Shares") on behalf of the Accounts to fund the
Contracts, and PFD intends to sell such Shares to the Accounts at net asset
value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust,
PIM, PFD and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
--------------------
1.1. PFD agrees to sell to the Company those Shares which the Accounts
order in accordance with the terms of this Agreement (based on orders placed
by Contract owners on that Business Day, as defined below) and which are
available for purchase by such Accounts. Each such order will be executed on a
daily basis at the net asset value next computed after receipt by the Trust or
its designee of the order for the Shares. For purposes of this Section 1.1.,
the Company shall be the designee of the Trust for receipt of such orders from
Contract owners and receipt by such designee shall constitute receipt by the
Trust, provided that the Trust or its designee receives written notice of such
orders by the time the Trust ordinarily calculates its net asset value as
described from time to time in the Trust's prospectus (which as of the date of
this Agreement is 4:00 p.m. New York time on such Business Day. "Business Day"
shall mean any day on which the New York Stock Exchange, Inc. (the "NYSE") is
open for trading and on which the Trust calculates its net asset value
pursuant to the rules of the SEC.
1.2. PFD agrees to make the Shares available for purchase at the
applicable net asset value per share by the Company and the Accounts on those
days on which the Trust calculates its net asset value in accordance with the
rules of the SEC. Notwithstanding the foregoing, the Board of Trustees of the
Trust (the "Board") may refuse to sell any Shares to the Company and the
Accounts, or suspend or terminate the offering of the Shares to the Company
and the Accounts if such action is required by law or by regulatory
authorities having jurisdiction over PIM, PFD or the Trust or is, in the sole
discretion of the Board acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, in the best interest of
the Shareholders of such Portfolio.
1.3. The Trust and PFD will sell Trust shares only to Participating
Insurance Companies and Qualified Plans which have agreed to participate in
the Trust to fund their Separate Accounts and/or Qualified Plans all in
accordance with the requirement of Section 817(h) of the Internal Revenue
Code, as amended (the "Code") and the Treasury regulations thereunder. The
Company will not resell the Shares except to the Trust or its agents.
1.4. The Trust agrees, upon the Company's request, to redeem for cash,
any full or fractional Shares held by the Accounts (based on orders placed by
Contract owners on that Business Day). Each such redemption request shall be
executed on a daily basis at the net asset value next computed after receipt
by the Trust or its designee of the request for redemption. For purposes of
this Section 1.4, the Company shall be the designee of the Trust for receipt
of requests for redemption from Contract owners and receipt by such designee
shall constitute receipt by the Trust; provided that the Trust or its designee
receives written notice of such request for redemption by the time the Trust
ordinarily calculates its net asset value as described from
3
time to time in the Trust's prospectus (which as of the date of this Agreement
is 4:00 p.m. New York time on such Business Day).
1.5. Each purchase, redemption and exchange order placed by the Company
shall be placed separately for each Portfolio and shall not be netted with
respect to any Portfolio. However, with respect to payment of the purchase
price by the Company and of redemption proceeds by the Trust, the Company and
the Trust shall net purchase and redemption orders with respect to each
Portfolio and shall transmit one net payment for all of the Portfolios in
accordance with Section 1.6 hereof.
1.6. In the event of net purchases, the Company shall notify the Trust
of such purchase order by 11:00 a.m. New York time on the next Business Day
after an order to purchase the Shares is made in accordance with the
provisions of Section 1.1. hereof. The Company's bank shall initiate payment
of such purchase order no later than 11:00 a.m. New York time on the next
Business Day after an order to purchase the Shares is made in accordance with
the provisions of Section 1.1. hereof. The Company shall transmit all such
payments in federal funds by wire. If payment in federal funds for any
purchase is not received or is received by the Trust after 11:00 a.m. on the
next Business Day, the Company shall promptly, upon the Trust's request,
reimburse the Trust for any charges, costs, fees, interest or other expenses
incurred by the Trust in connection with any advances to, or borrowings or
overdrafts by, the Trust, or any similar expenses (including the cost of and
any loss incurred by the Trust in unwinding any purchase of securities by the
Trust) incurred by the Trust as a result of portfolio transactions effected by
the Trust based upon such purchase request. In the event of net redemptions,
the Trust ordinarily shall transmit the proceeds of redemptions of Shares by
11:00 a.m. New York time on the next Business Day after a redemption order is
received in accordance with Section 1.4. hereof, although the Trust reserves
the right to postpone the date of Payment or satisfaction upon redemption
consistent with Section 22(e) of the 1940 Act and any rules promulgated
thereunder. Payments for net redemptions shall be in federal funds transmitted
by wire.
1.7. Issuance and transfer of the Shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts. The
Shares ordered from the Trust will be recorded in an appropriate title for the
Accounts or the appropriate subaccounts of the Accounts.
1.8. The Trust shall furnish same-day notice (by wire or telephone,
followed by written confirmation) no later than 7:00 p.m. New York time on the
ex-dividend date to the Company of any dividends or capital gain distributions
payable on the Shares. The Company hereby elects to receive all such dividends
and distributions as are payable on a Portfolio's Shares in additional Shares
of that Portfolio. The Company reserves the right to revoke this election and,
commencing 10 days after such revocation, to receive all such dividends and
distributions in cash. The Trust shall notify the Company of the number of
Shares so issued as payment of such dividends and distributions.
1.9. The Trust or its custodian shall make the net asset value per
share ("NAV") for each Portfolio available to the Company on each Business Day
as soon as reasonably practical after the NAV is calculated and shall use its
best efforts to make such NAV available by 6:00
4
p.m. New York time. The Trust or its custodian will notify the Company as soon
as possible if it is determined that the NAV will be available after 6:00 p.m.
New York time and the Trust (or its custodian) and the Company will mutually
agree upon a final deadline for timely receipt of the NAV on that Business
Day. In the event of an error in the computation of a Portfolio's NAV or any
dividend or capital gain distribution (each, a "pricing error"), PIM or the
Trust shall notify the Company as soon as possible after the discovery of the
error. Such notification may be verbal, but shall be confirmed promptly in
writing in accordance with Article XII of this Agreement. A pricing error
shall be corrected in accordance with the Trust's internal policies and
procedures. If an adjustment is necessary to correct a material error that
occurred through no fault of the Company and such adjustment has caused
Contract owners to receive less than the number of Shares or redemption
proceeds to which they are entitled, the number of Shares of the applicable
Account will be adjusted and the amount of any underpayments will be paid by
the Trust or PIM to the Company for crediting of such amounts to the Contract
owners' accounts. Upon notification by PIM of any overpayment due to a
material error, the Company shall promptly remit to the Trust or PIM, as
appropriate, any overpayment that has not been paid to Contract owner;
however, PIM acknowledges that the Company does not intend to seek additional
payments from any Contract owner who, because of a pricing error, may have
underpaid for units of interest credited to his/her account. The costs of
correcting such adjustments, including reasonable administrative costs, shall
be borne by the Trust or PIM unless the Company is at fault in which case such
costs shall be borne by the Company.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
-------------------------------------------------
2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Contracts will be issued, sold, and
distributed in compliance in all material respects with all applicable state
and federal laws, including without limitation the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the 1940 Act. The
Company further represents and warrants that it (i) is an insurance company
duly organized and in good standing under applicable law; (ii) has legally and
validly established, or will establish, each Account as a segregated asset
account under applicable law; (iii) has registered or, prior to any issuance
or sale of the Contracts, will register the Accounts as unit investment trusts
in accordance with the provisions of the 1940 Act (unless exempt therefrom) to
serve as segregated investment accounts for the Contracts, and (iv) will
maintain such registration for so long as any Contracts are outstanding. The
Company shall amend the registration statements under the 1933 Act for the
Contracts and the registration statements under the 1940 Act for the Accounts
from time to time as required in order to effect the continuous offering of
the Contracts or as may otherwise be required by applicable law. The Company
shall register and qualify the Contracts for sales in accordance with the
securities laws of the various states only if and to the extent deemed
necessary by the Company. At the time the Company is required to deliver the
Trust's prospectus or statement of additional information to a purchaser of
Shares in accordance with the requirements of federal or state securities
laws, the Company shall distribute to such Contract purchasers the then
current Trust prospectus, as supplemented.
5
2.2. The Company represents and warrants that the Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contract under applicable provisions of the Code, that it
will maintain such treatment and that it will notify the Trust or PIM
immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the
future.
2.3. The Company represents and warrants that Ameriprise Financial
Services, Inc., the underwriter for the individual variable annuity contracts
and the variable life policies, is a member in good standing of the NASD and
is a registered broker-dealer with the SEC. The Company represents and
warrants that the Company will sell and distribute such contracts and policies
in accordance in all material respects with all applicable state and federal
securities laws, including without limitation the 1933 Act, the 1934 Act, and
the 1940 Act and state insurance law suitability requirements.
2.4. The Trust represents and warrants that the Shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance in compliance with the laws of Delaware and that the Trust is and
shall remain registered under the 1940 Act. The Trust shall amend the
registration statement for its Shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
Shares. The Trust shall register and qualify the Shares for sale in accordance
with the laws of the various states only if and to the extent deemed necessary
by the Trust. The Trust, PIM and PFD agree that they will furnish the
information required by state insurance laws so that the Company can obtain
the authority needed to issue the Contracts in the various states.
2.5. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware. The Trust further represents
that it has adopted a pursuant to Rule l2b-1 under the 1940 Act and imposes an
asset-based charge to finance its distribution expenses with respect to the
Class II shares of certain of the Trust's Portfolios as permitted by
applicable law and regulation.
2.6. PFD represents and warrants that it is a member in good standing
of the NASD and is registered as a broker-dealer with the SEC. PFD represents
that it will sell and distribute the Shares in accordance in all material
respects with all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.7. PIM represents and warrants that it is and shall remain duly
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended.
2.8. No less frequently than annually, the Company shall submit to the
Board such reports, material or data as the Board may reasonably request so
that it may carry out fully the obligations imposed upon it by the conditions
contained in the Mixed and Shared Funding Exemptive Order pursuant to which
the SEC has granted exemptive relief to permit mixed and shared funding.
6
2.9. The Trust and PIM represent and warrant that all of their
respective officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Trust are, and shall
continue to be at all times, covered by one or more blanket fidelity bonds or
similar coverage for the benefit of the Trust in an amount not less than the
minimal coverage required by Rule l7g-1 under the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bonds shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Company represents and warrants that all of its
respective officers, employees, and other individuals or entities employed or
controlled by the Company dealing with the money and/or securities of the
Trust are, and shall continue to be at all times, covered by a blanket
fidelity bond or similar coverage as deemed appropriate by the Company. The
aforesaid bond shall include coverage for larceny and embezzlement and shall
be issued by a reputable bonding company. The Company agrees that any amounts
received under such bond relating to a claim arising under this Agreement will
be held by the Company for the benefit of the Trust. The company agrees to
make all reasonable efforts to maintain such bond and agrees to notify the
Trust and PIM in writing in the event such coverage terminates.
2.10. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Code, that the Contracts are
currently at the time of issuance and, assuming the Trust meets the
requirements of Article VI, will be treated as annuity contracts under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Trust, PFD and PIM
immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the
future. In addition, the Company represents and warrants that each Account is
a "segregated asset account" and that interests in the Account are offered
exclusively through the purchase of or transfer into a "variable contract"
within the meaning of such terms under Section 817 of the Code and the
regulations thereunder. The Company will use every effort to continue to meet
such definitional requirements, and it will notify the Trust, PFD and PIM
immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the
future. The Company represents and warrants that it will not purchase Trust
shares with assets derived from tax-qualified retirement plans except,
indirectly, through Contracts purchased in connection with such plans.
2.11. The Company acknowledges the Trust has adopted policies and
procedures reasonably designed to prevent frequent or excessive purchases,
exchanges and redemptions of the shares of Portfolios in quantities great
enough to disrupt orderly management of the corresponding Portfolio's
investment portfolio. These policies are disclosed in the Trust's prospectus.
The Trust acknowledges that the Company, on behalf of its
Accounts, has adopted policies and procedures reasonably designed to detect
and deter frequent transfers of Contract value among the subaccounts of the
Accounts including those investing in Portfolios available as investment
options under the Contracts. These policies and procedures are described in
the current prospectuses of the Accounts through which the Contracts are
offered.
7
The Trust may consider the Company's policies and procedures
pertaining to frequent transfers of Contract value among the subaccounts of
the Account(s) including those investing in Portfolios when the Trust
periodically reviews or amends the Trust's disruptive trading policies and
procedures from time to time. The Trust may invite comment from and confer
with Company regarding any proposed policy and procedure of the Trust
pertaining to disruptive trading to determine prior to adopting such proposed
policy or procedure the Company's then-present ability to apply such proposed
policy or procedure to Contract owners who allocate Contract value to
subaccounts investing in Portfolios available under the Contracts, including
without limitation whether the Company can apply such proposed policy or
procedure without the need to modify its automated data processing systems or
to develop and staff manual systems to accommodate the implementation of the
Trust's proposed policy or procedure.
The Company will cooperate with the Trust's reasonable requests in
taking steps to deter and detect such transfers by any Contract owner. Subject
to applicable law and the terms of each Contract, the Company will provide
promptly upon request by the Issuer, directly or through its designee:
o the Taxpayer Identification Number of all Contract owners that
purchased, redeemed, transferred, or exchanged shares of a
Portfolio held under a Contract; and,
o the amount and dates of such Contract owners purchases,
redemptions, transfers and exchanges in subaccounts available
under the Contract which invest in shares of any Portfolio.
The Company will execute any instructions from the Trust, directly
or through its designee, to restrict or prohibit further purchases,
redemptions, transfers or exchanges in subaccounts available under the
Contract which invest in shares of any Portfolio by any Contract owner who has
been identified by the Trust, or its designee, as having engaged in
transactions that violate policies established by the Trust for the purpose of
eliminating or reducing any dilution of the value of the outstanding
securities of any Portfolio.
The parties shall negotiate in good faith such additional terms and conditions
regarding implementation of the foregoing obligations of the parties under
Rule 22c-2 as any party may wish to address, including without limitation,
reimbursement of expenses the Company incurs in order to provide such
information to the Trust or its designee and to execute any instructions from
the Trust or its designee to restrict or prohibit purchases, redemptions,
transfers or exchanges by any Contract owner in subaccounts available under a
Contract which invest in shares of any Portfolio. If the Company is required
under Rule 22c-2 under the 1940 Act to implement transaction procedures for
its Accounts in order to effectuate the Trust's procedures for preventing
disruptive trading in the shares of Portfolios, and such implementation will
require Company to modify its automated data processing systems or to develop
and staff manual systems to accommodate the Trust's requirements, the parties
shall in good faith negotiate a mutually agreed-upon implementation schedule.
8
2.12. The parties to this Agreement represent and warrant that each
party shall comply with all the applicable laws and regulations designed to
prevent money laundering including without limitation the International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001 (Title III of
the USA PATRIOT ACT), and if required by such laws or regulations will share
information with each other about individuals, entities, organizations and
countries suspected of possible terrorist or money laundering activities in
accordance with Section 314(b) of the USA PATRIOT ACT.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
---------------------------------------
3.1. At least annually, the Trust or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing only the Portfolios listed in Schedule A hereto) for the Shares as
the Company may reasonably request for distribution to existing Contract
owners whose Contracts are funded by such Shares. The Trust or its designee
shall provide the Company, at the Company's expense, with as many copies of
the current prospectus for the Shares as the Company may reasonably request
for distribution to prospective purchasers of Contracts. If requested by the
Company in lieu thereof, the Trust or its designee shall provide such
documentation (including a "camera ready" copy of the new prospectus as set in
type or, at the request of the Company, as a diskette in the form sent to the
financial printer) and other assistance as is reasonably necessary in order
for the parties hereto once each year (or more frequently if the prospectus
for the Shares is supplemented or amended) to have the prospectus for the
Shares printed together in one document with other prospectuses; the expenses
of such printing to be apportioned between (a) the Company and (b) the Trust
or its designee in proportion to the number of pages of the Shares'
prospectuses and the other prospectuses, taking account of other relevant
factors affecting the expense of printing, such as covers, columns, graphs and
charts; the Trust or its designee to bear the cost of printing the Trust's
prospectus portion of such document for distribution to owners of existing
Contracts funded by the Shares and the Company to bear the expenses of
printing the portion of such document relating to the other prospectuses;
provided, however, that the Company shall bear all printing expenses of such
combined documents where used for distribution to prospective purchasers or to
owners of existing Contracts not funded by the Shares. In the event that the
Company requests that the Trust or its designee provides the Trust's
prospectus in a "camera ready," diskette format or other mutually agreed upon
format, the Trust shall be responsible for providing the prospectus in the
format in which it or PIM is accustomed to formatting prospectuses and shall
bear the expense of providing the prospectus in such format (e.g., typesetting
expenses), and the Company shall bear the expense of adjusting or changing the
format to conform with any of its prospectuses, subject to PIM's approval
which shall not be unreasonably withheld.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or its
designee. The Trust or its designee, at its expense, shall print and provide
such statement of additional information to the Company (or a master of such
statement suitable for duplication by the Company) for distribution to any
owner of a Contract funded by the Shares. The Trust or its designee, at the
Company's expense, shall print and provide such statement to the Company (or a
master of such statement suitable for
9
duplication by the Company) for distribution to a prospective purchaser who
requests such statement or to an owner of a Contract not funded by the Shares.
3.3. The Trust or its designee shall provide the Company free of charge
copies, if and to the extent applicable to the Shares, reports to Shareholders
and other communications to Shareholders in such quantity as the Company shall
reasonably require for distribution to Contract owners.
3.4. The Trust or PIM will provide the Company with as much notice as
is reasonably practicable of any proxy solicitation for any Portfolio, and of
any material change in the Trusts registration statement, particularly any
change resulting in change to the registration statement or prospectus or
statement of additional information for any Account. The Company, the Trust
and PIM will cooperate so as to enable the Trust or PIM to solicit proxies
from Contract owners or to make changes to the Trust's prospectus, statement
of additional information or registration statement, in an orderly manner. The
Company will provide to a proxy solicitation and tabulation firm selected by
the Trust or PIM a magnetic tape or other mutually agreed upon electronic
storage media the names, addresses and unit holdings of Contract owners as of
the record date set by the Trustees of the Trust. The Trust and PIM will make
reasonable efforts to attempt to have changes affecting Contract prospectuses
become effective simultaneously with the annual updates for such prospectuses.
3.5. The Trust hereby notifies the Company that it may be appropriate
to include in the prospectus pursuant to which a Contract is offered
disclosure regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
(a) provide for the solicitation of voting instructions from
Contract owners;
(b) vote the Shares in accordance with instructions received
from Contract owners; and
(c) vote the Shares for which no instructions have been received
in the same proportion as the Shares of such Portfolio for
which instructions have been received from Contract owners;
so long as and to the extent that the SEC continues to interpret the 1940 Act
to require pass through voting privileges for variable contract owners. The
Company will in no way recommend action in connection with or oppose or
interfere with the solicitation of proxies for the Shares held for such
Contract owners. The Company reserves the right to vote shares held in any
segregated asset account in its own right, to the extent permitted by law.
Participating Insurance Companies shall be responsible for assuring that each
of their separate accounts holding Shares calculates voting privileges in the
manner required by the Mixed and Shared Funding Exemptive Order. The Trust and
PIM will notify the Company of any changes of interpretations or amendments to
the Mixed and Shared Funding Exemptive Order.
10
3.7. The Trust will provide written instruction to all Participating
Insurance Companies including the Company each time the Trust amends or
supplements the Trust's current prospectus or statement of additional
information directing the Participating Insurance Companies including the
Company as to whether the amendment or supplement is to be provided (a)
immediately to Contract owners who have Contract value allocated to a
Portfolio or (b) is to be held and combined with another Trust or Contract
related mailing as permitted by applicable federal securities laws. The Trust
agrees that the instruction it gives the Company in each instance will be
identical to the instruction it provides other Participating Insurance
Companies.
3.8. In the event the Trust initiates (i) a reorganization as defined
by Section 2 of the 1940 Act, or (ii) changes the Trust's name or the name of
a Portfolio, the Trust or its designee will reimburse the Company's internal
and out-of-pocket costs associated with the aforementioned actions. Company
agrees to use its best efforts to minimize any costs incurred and shall
provide the Trust or its designee agent with acceptable documentation of any
such costs incurred.
ARTICLE IV. SALES MATERIAL AND INFORMATION
------------------------------
4.1. The Company shall furnish, or shall cause to be furnished, to PFD
or its designee, each piece of sales literature or other promotional material
in which the Trust, PIM, any other investment adviser to the Trust, or any
affiliate of PIM are named, at least ten (10) Business Days prior to its use.
No such material shall be used if PFD or its designee reasonably objects to
such use within five (5) Business Days after receipt of such material.
4.2. The Company shall not make any representation on behalf of the
Trust, PIM, any other investment adviser or subadviser to the Trust or any
affiliate of PIM and shall not give any information on behalf of the Trust,
PlM, any other investment adviser or subadviser to the Trust, or any affiliate
of PIM or concerning the Trust or any other such entity in connection with the
sale of the Contracts other than the information contained in the registration
statement, prospectus or statement of additional information for the Shares,
as such registration statement, prospectus and statement of additional
information may be amended or supplemented from time to time, or in reports or
proxy statements for the Trust, or in published reports for the Trust which
are in the public domain., or in sales literature or other promotional
material approved by the Trust, PIM, PFD or their respective designees, except
with the permission of the Trust, PIM or their respective designees. The
Trust, PIM, PFD or their respective designees each agrees to respond to any
request for approval on a prompt and timely basis. The Company shall adopt and
implement procedures reasonably designed to ensure that information concerning
the Trust, PIM, PFD or any of their affiliates which is intended for use only
by brokers or agents selling the Contracts (i.e., information that is not
intended for distribution to Contract owners or prospective Contract owners)
is so used, and neither the Trust, PIM, PFD nor any of their affiliates shall
be liable for any losses, damages or expenses relating to the improper use of
such broker only materials.
11
4.3. PFD shall furnish, or shall cause to be furnished, to the Company
or its designee, each piece of sales literature or other promotional material
in which the Company and/or the Accounts is named, at least ten (10) Business
Days prior to its use. No such material shall be used if the Company or its
designee reasonably objects to such use within five (5) Business Days after
receipt of such material.
4.4. The Trust, PIM and PFD shall not give any information or make any
representations on behalf of the Company or concerning the Company, the
Accounts, or the Contracts in connection with the sale of the Contracts other
than the information or representations contained in a registration statement,
prospectus, or statement of additional information for the Contracts, as such
registration statement, prospectus and statement of additional information may
be amended or supplemented from time to time, or in reports for the Accounts,
or in published reports for the Accounts which are in the public domain, or in
sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company. The Company or its
designee agrees to respond to any request for approval on a prompt and timely
basis. The parties hereto agree that this Section 4.4. is neither intended to
designate nor otherwise imply that PIM is an underwriter or distributor of the
Contracts.
4.5. The Company and the Trust shall provide, or shall cause to be
provided, to the other at least one complete copy of all registration
statements, prospectuses, statements of additional information, reports, proxy
statements, sales literature and other promotional materials, and all
amendments to any of the above, that relate to the Contracts, or to the Trust
or its Shares, prior to or contemporaneously with the filing of such document
with the SEC or other regulatory authorities.
4.6. For purpose of this Article IV and Article VIII, the phrase "sales
literature or other promotional material" includes but is not limited to
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone,
electronic messages or tape recording, videotape display, signs or billboards,
motion pictures, or other public media, including, for example, on-line
networks such as the Internet or other electronic media), and sales literature
(such as brochures, electronic messages, circulars, reprints or excerpts or
any other advertisement, sales literature, or published articles), distributed
or made generally available to customers or the public, educational or
training materials or communications distributed or made generally available
to some or all agents or employees, and shareholder reports, proxy materials
(including solicitations for voting instructions) and any other material
constituting sales literature or advertising under the NASD Conduct Rules, the
1933 Act or the 0000 Xxx.
4.7. At the request of any party to this Agreement, each other party
will make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records, data,
access to operating procedures that may be reasonably requested in connection
with compliance and regulatory requirements related to the Agreement or any
party's obligations under this Agreement.
12
4.8. Subject to the terms of Sections 4.1 and 4.2 of this Agreement,
the Trust (and its Portfolios), PIM and PFD each consents, in connection with
the marketing of the Contracts, to the Company's use of their names or other
identifying marks, including PIONEER INVESTMENTS(R) and Pioneer's sail logo,
in connection with the marketing of the Contracts. The Trust, PIM or PFD or
their affiliates may withdraw this authorization as to any particular use of
any such name or identifying xxxx at any time: (i) upon a reasonable
determination that such use would have a material adverse effect on its
reputation or marketing efforts or its affiliates or (ii) if any of the
Portfolios of the Trust cease to be available through the Company. Except as
set forth in the previous sentence, the Company will not cause or permit,
without prior written permission, the use, description or reference to a
Pioneer party's name, or to the relationship contemplated in this Agreement,
in any advertisement, or promotional materials or activities, including
without limitation, any advertisement or promotional materials published,
distributed, or made available, or any activity conducted through, the
Internet or any other electronic medium.
4.9. PLM will be responsible for calculating the performance
information for the Trust. PIM and the Trust agree to provide the Company with
Trust performance information on a timely basis to enable the Company to
calculate performance information for the Contracts in accordance with
applicable state and federal law. The Company will be responsible for
calculating the performance information for the Contracts. The Company agrees
to provide the Trust with Contract performance information on a timely basis
to enable the Trust to disclose performance information for the Contracts in
accordance with applicable state and federal law.
ARTICLE V. FEES AND EXPENSES
-----------------
5.1. Neither the Trust, PLM nor PFD shall pay any fee or other
compensation to the Company under this Agreement, other than pursuant to
Schedule B attached hereto, and the Company shall pay no fee or other
compensation to the Trust, PIM or PFD under this Agreement. Notwithstanding
the foregoing, the parties hereto will bear certain expenses under the
provisions of this Agreement and shall reimburse other parties for expenses
initially paid by one party but allocated to another party. In addition,
nothing herein shall prevent the parties hereto from otherwise agreeing to
perform, and arranging for appropriate compensation for, other services
relating to the Trust and/or to the Accounts pursuant to this Agreement.
5.2. The Trust or its designee shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable federal and
state laws, including preparation and filing of the Trust's registration
statement, and payment of filing fees and registration fees; preparation and
filing of the Trust's proxy materials and reports to Shareholders; setting in
type and printing its prospectus and statement of additional information (to
the extent provided by and as determined in accordance with Article III
above); setting in type and printing the proxy materials and reports to
Shareholders (to the extent provided by and as determined in accordance with
Article III above); the preparation of all statements and notices required of
the Trust by any federal or state law with respect to its Shares; all taxes on
the issuance or transfer of the Shares; and the costs of distributing the
Trust's prospectuses and proxy materials to owners of Contracts funded by the
Shares and any expenses permitted to be paid or assumed by the Trust pursuant
to
13
a plan, if any, under Rule 12b-1 under the 1940 Act. The Trust shall not bear
any expenses of marketing the Contracts.
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Contracts and
of distributing the Trust's Shareholder reports to Contract owners. The
Company shall bear all expenses associated with the registration,
qualification, and filing of the Contracts under applicable federal securities
and state insurance laws; the cost of preparing, printing and distributing the
Contract prospectus and statement of additional information; and the cost of
preparing, printing and distributing annual individual account statements for
Contract owners as required by state insurance laws.
5.4. The Company agrees to provide certain administrative services,
specified in Schedule B attached hereto, in connection with the arrangements
contemplated by this Agreement. The parties intend that the services referred
to in the Section 5.4. be recordkeeping, shareholder communication, and other
transaction facilitation and processing, and related administrative services
and are not the services of an underwriter or principal underwriter of the
Trust and the Company is not an underwriter for Shares within the meaning of
the 1933 Act.
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
---------------------------------------
6.1. The Trust and PIM represent and warrant that each Portfolio of the
Trust in which an Account invests will meet the diversification requirements
of Section 817(h)(1) of the Code and Treas. Reg. 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life
insurance contracts, as they may be amended from time to time (and any revenue
rulings, revenue procedures, notices, and other published announcements of the
Internal Revenue Service interpreting these sections), as if those
requirements applied directly to each such Portfolio. In the event of a breach
of this representation and warranty by the Trust and/or PM1, they will take
all reasonable steps:
(a) to notify the Company of such breach; and
(b) to adequately diversify the Trust so as to achieve
compliance within the grace period afforded by Treas. Reg.
1.817-5.
6.2. The Trust and PIM represent that each Portfolio will elect to be
qualified as a Regulated Investment Company under Subchapter M of the Code and
that they will maintain such qualification (under Subchapter M or any
successor or similar provision).
6.3. No Shares of the Trust will be sold directly to the general
public.
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
----------------------------
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for the
existence of any material irreconcilable conflict between the interests of the
variable annuity contract owners and the variable life
14
insurance policy owners of the Company and/or affiliated companies ("contract
owners") investing in the Trust. A material irreconcilable conflict may arise
for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretive letter, or any similar action by insurance,
tax or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments
of any Portfolio are being managed; (e) a difference in voting instructions
given by variable annuity contract and variable life insurance contract owners
or by contract owners of different Participating Insurance Companies; or (f) a
decision by a Participating Insurance Company to disregard the voting
instructions of contract owners. The Board shall have the sole authority to
determine if a material irreconcilable conflict exists, and such determination
shall be binding on the Company only if approved in the form of a resolution
by a majority of the Board, or a majority of the disinterested trustees of the
Board. The Board will give prompt notice of any such determination to the
Company.
7.2. The Company agrees that it will be responsible for assisting the
Board in carrying out its responsibilities under the conditions set forth in
the Trust's exemptive application pursuant to which the SEC has granted the
Mixed and Shared Funding Exemptive Order by providing the Board, as it may
reasonably request, with all information necessary for the Board to consider
any issues raised and agrees that it will be responsible for promptly
reporting any potential or existing conflicts of which it is aware to the
Board including, but not limited to, an obligation by the Company to inform
the Board whenever contract owner voting instructions are disregarded. The
Company also agrees that, if a material irreconcilable conflict arises, it
will at its own cost remedy such conflict up to and including (a) withdrawing
the assets allocable to some or all of the Accounts (or subaccounts of the
Accounts) from the Trust or any Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to) another Portfolio
of the Trust, or submitting to a vote of all affected contract owners whether
to withdraw assets from the Trust or any Portfolio and reinvesting such assets
in a different investment medium and, as appropriate, segregating the assets
attributable to any appropriate group of contract owners (e.g., annuity
contract owners, life insurance owners or variable contract owners of one or
more Participating Insurance Companies) that votes in favor of such
segregation, or offering to any of the affected contract owners the option of
segregating the assets attributable to their contracts or policies, and (b)
establishing a new registered management investment company and segregating
the assets underlying the Contracts, unless a majority of Contract owners
materially adversely affected by the conflict have voted to decline the offer
to establish a new registered management investment company.
7.3. A majority of the disinterested trustees of the Board shall
determine whether any proposed action by the Company adequately remedies any
material irreconcilable conflict. In the event that the Board determines that
any proposed action does not adequately remedy any material irreconcilable
conflict, the Company will withdraw from investment in the Trust each of the
Accounts designated by the disinterested trustees and terminate this Agreement
within six (6) months after the Board informs the Company in writing of the
foregoing determination; provided, however, that such withdrawal and
termination shall be limited to the extent required
15
to remedy any such material irreconcilable conflict as determined by a
majority of the disinterested trustees of the Board.
7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Trust's election, to withdraw the Account's
investment in the Trust and terminate this Agreement; provided, .however, that
such withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
Trust's independent trustees. No charge or penalty will be imposed as a result
of such withdrawal. Any such withdrawal and termination must take place within
six (6) months after the Trust gives written notice that this provision is
being implemented, and until the end of that six-month period PFD and the
Trust shall continue to accept and implement orders by the Company for the
purchase and redemption of shares of the Trust.
7.5. If material irreconcilable conflict arises because of particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
Account's investment in the Trust and terminate this Agreement within six (6)
months after the Trust's Board informs the Company in writing that it has
determined that such decision has created a material irreconcilable conflict;
provided, however, that such withdrawal and termination shall be limited to
the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested members of the Trust's Board.
Until the end of the foregoing six (6) month period, the Trust and PFD shall
continue to accept and implement orders by the Company for the purchase and
redemption of shares of the Trust.
7.6. For purposes of Sections 7.3. through 7.6. of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any material irreconcilable conflict, but
in no event will the Trust be required to establish a new funding medium for
the Contracts. The Company shall not be required by Section 7.2 to establish a
new funding medium for the contracts if an offer to do so has been declined by
vote of a majority of Contract owners affected by the material irreconcilable
conflict in the event that the Board determines that any proposed action does
not adequately remedy any material irreconcilable conflict, then the Company
will withdraw the Account's investment in the Trust and terminate this
Agreement within six (6) months after the Board informs the Company in writing
of the foregoing determination; provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the independent
trustees.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms
and conditions materially different from those contained in the Mixed and
Shared Funding Exemptive Order, then (a) the Trust and/or the Participating
Insurance Companies, as appropriate, shall take such steps as may be necessary
to comply with
16
Rule 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent
such rules are applicable; and (b) Sections 3.5,3.6, 7.1, 7.2, 7.3 and 7.7 of
this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
---------------
8.1. INDEMNIFICATION BY THE COMPANY
------------------------------
The Company agrees to indemnify and hold harmless the Trust, PIM, PFD,
any affiliates of PIM, and each of their respective directors, trustees,
officers and each person, if any, who controls the Trust or PIM within the
meaning of Section 15 of the 1933 Act, and any agents or employees of the
foregoing (each an "Indemnified Party," or collectively, the "Indemnified
Parties" for purposes of this Section 8.1) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Company) or expenses (including reasonable counsel fees) to
which any Indemnified Party may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement, prospectus or statement of
additional information for the Contracts or contained in the
Contracts or sales literature or other promotional material
for the Contracts (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reasonable reliance upon
and in conformity with information furnished to the Company
or its designee by or on behalf of the Trust, PIM or PFD for
use in the registration statement, prospectus or statement
of additional information for the Contracts or in the
Contracts or sales literature or other promotional material
(or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Shares; or
(b) arise out of or as a result of statements or representations
not supplied by the Company or its designee, or persons
under its control (other than statements or representations
contained in the Trust's registration statement, Prospectus,
statement of additional information or in sales literature
or other promotional material of the Trust and on which the
Company has reasonably relied) or wrongful conduct of the
Company or persons under its control, with respect to the
sale or distribution of the Contracts or Shares; or
17
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement, prospectus, statement of additional information,
or sales literature or other promotional literature of the
Trust, or any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Trust by or on behalf of the Company; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company; or
(e) arise as a result of any failure by the Company to perform
any of its obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.2. INDEMNIFICATION BY PIM AND PFD
------------------------------
PIM and PFD agree to indemnify and hold harmless the Company and each of
its directors, trustees and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act, and any directors,
trustees, officers, agents or employees of the foregoing (each an "Indemnified
Party," or collectively, the "Indemnified Parties" for purposes of this
Section 8.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Trust)
or expenses (including reasonable counsel fees) to which any Indemnified Party
may become subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement, prospectus, statement of
additional information or sales literature or other
promotional material of the Trust (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement therein not misleading,
provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reasonable
reliance upon and in conformity with information furnished
to the Trust, PIM, PFD or their respective designees by or
on behalf of the Company for use in the registration
statement, prospectus or statement of additional information
for the Trust or in sales literature or other promotional
material for the Trust (or any amendment or
18
supplement) or otherwise for use in connection with the sale
of the Contracts or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Contract's registration statement, prospectus, statement of
additional information or in sales literature or other
promotional material for the Contracts not supplied by the
Trust, PIN, PFD or any of their respective designees or
persons under their respective control and on which any such
entity has reasonably relied) or wrongful conduct of the
Trust, PIM, PFD or persons under their control, with respect
to the sale or distribution of the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement, prospectus, statement of additional information,
or sales literature or other promotional literature of the
Accounts or relating to the Contracts, or any amendment
thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to
the Company by or on behalf of the Trust, PIM or PFD; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement) or
arise out of or result from any other material breach of
this Agreement by the Trust; or
(e) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset
value per share or dividend or capital gain distribution
rate; or
(f) arise as a result of any failure by PIM or PFD to perform
any of their respective obligations under this Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.3. In no event shall the Trust, PIM or PFD be liable under the
indemnification provisions contained in this Agreement to any individual or
entity, including without limitation, the Company, or any Participating
Insurance Company or any Contract owner, with respect to any losses, claims,
damages, liabilities or expenses that arise out of or result from (i) a breach
of any representation, warranty, and/or covenant made by the Company hereunder
or by any Participating Insurance Company under an agreement containing
substantially similar
19
representations, warranties and covenants; (ii) the failure by the Company or
any Participating Insurance Company to maintain its segregated asset account
(which invests in any Portfolio) as a legally and validly established
segregated asset account under applicable state law and as a duly registered
unit investment trust under the provisions of the 1940 Act (unless exempt
therefrom); or (iii) the failure by the Company or any Participating Insurance
Company to maintain its variable annuity and/or variable life insurance
contracts (with respect to which any Portfolio serves as an underlying funding
vehicle) as life insurance, endowment or annuity contracts under applicable
provisions of the Code.
8.4. Neither the Company, the Trust, PIM nor PFD shall be liable under
the indemnification provisions contained in this Agreement with respect to any
losses, claims, damages, liabilities or expenses to which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party's willful
misfeasance, willful misconduct, or gross negligence in the performance of
such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement.
8.5. Promptly after receipt by an Indemnified Party under this Section
8.5. of notice of commencement of any action, such Indemnified Party will, if
a claim in respect thereof is to be made against the indemnifying party under
this section, notify the indemnifying party of the commencement thereof, but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any Indemnified Party otherwise than under this
section. In case any such action is brought against any Indemnified Party, and
it notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, assume the defense thereof, with counsel satisfactory to
such Indemnified Party. After notice from the indemnifying party of its
intention to assume the defense of an action, the Indemnified Party shall bear
the expenses of any additional counsel obtained by it, and the indemnifying
party shall not be liable to such Indemnified Party under this section for any
legal or other expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation.
8.6. A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this Article
VIII. The indemnification provisions contained in this Article VIII shall
survive any termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
--------------
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
SEC may grant (including, but not limited to, the Mixed and Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.
20
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS OR LITIGATION
------------------------------------------
The Trust, PIM, PFD and the Company agree that each such party shall
promptly notify the other parties to this Agreement, in writing, of the
institution of any formal proceedings brought against such party or its
designees by the NASD, the SEC, or any insurance department or any other
regulatory body regarding such party's duties under this Agreement or related
to the sale of the Contracts, the operation of the Accounts, or the purchase
of the Shares. Each of the parties further agrees promptly to notify the other
parties of the commencement of any litigation or proceeding against it or any
of its respective officers, directors, trustees, employees or 1933 Act control
persons in connection with this Agreement, the issuance or sale of the
Contracts, the operation of the Accounts, or the sale or acquisition of
Shares. The indemnification provisions contained in this Article X shall
survive any termination of. this Agreement.
ARTICLE XI. TERMINATION
-----------
11.1. This Agreement shall terminate with respect to the Accounts, or
one, some, or all Portfolios:
(a) at the option of any party upon sixty (60) days' advance
written notice delivered to the other parties or, if later,
upon receipt of any required exemptive relief or orders from
the SEC, unless otherwise agreed in a separate written
agreement by the parties; provided, however, that such
notice shall not be given earlier than six (6) months
following the date of this Agreement; or
(b) at the option of the Company to the extent that the Shares
of Portfolios are not reasonably available to meet the
requirements of the Contracts or are not "appropriate
funding vehicles" for the Contracts, as reasonably
determined by the Company. Without limiting the generality
of the foregoing, the Shares of a Portfolio would not be
"appropriate funding vehicles" if, for example, such Shares
did not meet the diversification or other requirements
referred to in Article VI hereof, or if the Company would be
permitted to disregard Contract owner voting instructions
pursuant to Rule 6e-2 or 6e-3(T) under the 1940 Act. Prompt
notice of the election to terminate for such cause and an
explanation of such cause shall be furnished to the Trust by
the Company; or
(c) at the option of the Trust, PIM or PFD upon institution of
formal proceedings against the Company by the NASD, the SEC,
or any insurance department or any other regulatory body
regarding the Company's duties under this Agreement or
related to the sale of the Contracts, the operation of the
Accounts, or the purchase of the Shares; provided that the
party terminating this Agreement under this provision shall
give notice of such termination to the other parties' to
this Agreement; or
21
(d) at the option of the Company upon institution of formal
proceedings against the Trust by the NASD, the SEC, or any
state securities or insurance department or any other
regulatory body regarding the duties of the Trust, PIM or
PFD under this Agreement or related to the sale of the
Shares; provided that the party terminating this Agreement
under this provision shall give notice of such termination
to the other parties to this Agreement; or
(e) at the option of the Company, the Trust, PIM or PFD upon
receipt of any necessary regulatory approvals and/or the
vote of the Contract owners having an interest in the
Accounts (or any subaccounts) to substitute the shares of
another investment company for the corresponding Portfolio
Shares in accordance with the terms of the Contracts for
which those Portfolio Shares had been selected to serve as
the underlying investment media. The Company will give
thirty (30) days' prior written notice to the Trust of the
date of any proposed vote or other action taken to replace
the Shares; or
(f) at the option of the Trust PIM or PFD by written notice to
the Company, if any one or all of the Trust, PIM or PFD
respectively, shall determine, in their sole judgment
exercised in good faith, that the Company has suffered a
material adverse change in its business, operations,
financial condition, or prospects since the date of this
Agreement or is the subject of material adverse publicity;
or
(g) at the option of the Company by written notice to the Trust,
PIM or PFD, if the Company shall determine, in its sole
judgment exercised in good faith, that the Trust, PIM or PFD
has suffered a material adverse change in this business,
operations, financial condition or prospects since the date
of this Agreement or is the subject of material adverse
publicity; or
(h) at the option of any party to this Agreement, upon another
unaffiliated party's material breach of any provision of or
representation contained in this.
11.2. The notice shall specify the Portfolio or Portfolios, Contracts
and, if applicable, the Accounts (or subaccounts of the Accounts) as to which
the Agreement is to be terminated.
11.3. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 11.1 (a) may be exercised for
cause or for no cause.
11.4. Except as necessary to implement Contract owner initiated
transactions, or as required by state insurance laws or regulations, the
Company shall not redeem the Shares attributable to the Contracts (as opposed
to the Shares attributable to the Company's assets held in the Accounts), and
the Company shall not prevent Contract owners from allocating payments
22
to a Portfolio that was otherwise available under the Contracts, until thirty
(30) days after the Company shall have notified the Trust of its intention to
do so.
11.5. Notwithstanding any termination of this Agreement, the Trust and
PFD shall, at the option of the Company and if consistent with Article VII,
continue to make available additional shares of the Portfolios pursuant to the
terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (the "Existing Contracts"),
except as otherwise provided under Article VII of this Agreement; provided,
however, that in the event of a termination pursuant to Section 11.1.(c), (f)
or (h), the Trust, PIM and PFD shall at their option have the right to
terminate immediately all sales of Shares to the Company. Specifically,
without limitation, the owners of the Existing Contracts shall be permitted to
transfer or reallocate investment under the Contracts, redeem investments in
any Portfolio and/or invest in the Trust upon the making of additional
purchase payments under the Existing Contracts.
11.6. Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify the other parties shall survive
and not be affected by any termination of this Agreement. In addition, with
respect to Existing Contracts, all provisions of this Agreement shall also
survive and not be affected by any termination of this Agreement
ARTICLE XII. NOTICES
-------
Any notice shall be sufficiently given when sent by registered or
certified mail, overnight courier or facsimile to the other party at the
address of such party set forth below or at such other address as such party
may from time to time specify in writing to the other party.
If to the Trust:
PIONEER VARIABLE CONTRACTS TRUST
x/x Xxxx xxx Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Secretary
If to the Company:
IDS LIFE INSURANCE COMPANY OF NEW YORK
Attn: Vice President
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
23
With a copy to:
IDS LIFE INSURANCE COMPANY OF NEW YORK
Attn: Vice President and Group Counsel
00000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
If to PIM:
PIONEER INVESTMENT MANAGEMENT, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxx, Senior Counsel
If to PFD:
PIONEER FUNDS DISTRIBUTOR, INC.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx, Senior Vice President
ARTICLE XIII. MISCELLANEOUS
-------------
13.1. Subject to the requirement of legal process and regulatory
authority, each party hereto shall treat as confidential all information
reasonably identified as confidential in writing by any party hereto and,
except as permitted by this Agreement or as otherwise required by applicable
law or regulation, shall not disclose, disseminate or utilize such other
confidential information without the express written consent of the affected
party until such time as it may come into the public domain. Notwithstanding
anything to the contrary in this Agreement, in addition to and not in lieu of
other provisions in this Agreement:
(a) "Confidential Information": includes without limitation all
information regarding the customers of the Company, the
Trust, PIM, PFD or any of their subsidiaries, affiliates or
licensees; or the accounts, account numbers, names,
addresses, social security numbers or any other personal
identifier of such customers; or any information derived
therefrom.
(b) Neither the Company, the Trust, PIM or PFD may disclose
Confidential Information for any purpose other than to carry
out the purpose for which Confidential Information was
provided to the Company, the Trust, PIM or PFD as set forth
in this Agreement; and the Company, the Trust, PIM and PFD
agree to cause their employees, agents and representatives,
or any other party to whom the Company, the Trust, PIM or
PFD may provide
24
access to or disclose Confidential Information to limit the
use and disclosure of Confidential Information to that
purpose.
(c) The Company, the Trust, PIM and PFD agree to implement
appropriate measures designed to ensure the security and
confidentiality of Confidential Information, to protect such
information against any anticipated threats or hazards to
the security and integrity of such information, and to
protect against unauthorized access to, or use of,
Confidential Information that could result in substantial
harm or inconvenience to any of the customers of the Company
or any of its subsidiaries, affiliates or licensees; the
Company, the Trust, PIM and PFD further agree to cause all
their respective agents, representatives or subcontractors,
or any other party to whom they provide access to or
disclose Confidential Information, to implement appropriate
measures to meet the objectives set forth in this Section
13.1.
13.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.4. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
13.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
13.6. Each party hereto shall cooperate with each other party in
connection with inquiries by appropriate governmental authorities (including
without limitation the SEC, the NASD, and state insurance regulators) and
shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions; contemplated hereby.
13.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
13.8. A copy of the Trust's Certificate of Trust is on file with the
Secretary of State of Delaware. The Company acknowledges that the obligations
of or arising out of this instrument are not binding upon any of the Trust's
trustees, officers, employees, agents or shareholders individually, but are
binding solely upon the assets and property of the Trust in accordance with
its proportionate interest hereunder. The Company further acknowledges that
the assets and liabilities of each Portfolio are separate and distinct and
that the obligations of or arising out of
25
this instrument are binding solely upon the assets or property of the
Portfolio on whose behalf the Trust has executed this instrument. The Company
also agrees that the obligations of each Portfolio hereunder shall be several
and not joint, in accordance with its proportionate interest hereunder, and
the Company agrees not to proceed against any Portfolio for the obligations of
another Portfolio.
13.9. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum
jointly selected by the relevant parties (but if applicable law requires some
other forum, then, such other forum) in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
13.10. This Agreement of any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
13.11. The Trust, PIM and PFD agree that the obligations assumed by the
Company shall be limited in any case to the Company and its assets and neither
the Trust, PIM nor PFD shall seek satisfaction of any such obligation from the
shareholders of Company, the directors, officers, employees or agents of the
Company, or any of them.
13.12. No provision of the Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or indemnifications, as
between PIM and the Trust and PFD and the Trust.
13.13. This Agreement, including any Schedules hereto, may be amended
only by a written instrument executed by each party hereto.
26
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified above.
Attest: IDS LIFE INSURANCE COMPANY
AMERIPRISE FINANCIAL SERVICES, INC.
By: /s/ Xxxxx Xxxxxx By their authorized officer,
----------------------
Name: Xxxxx Xxxxxx
Title: Assistant Secretary
of each company By: /s/ Xxx X. Xxxxx
--------------------------------------------
Name: Xxx X. Xxxxx
Title: Vice President of each company
Date: 8/23/06
--------------------------------------------
PIONEER VARIABLE CONTRACTS TRUST, ON BEHALF OF
THE PORTFOLIOS
By its authorized officer and not individually,
By: /s/ Xxxxxxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
-------------------------------------------
Title: Assistant Secretary
------------------------------------------
Date: 9/12/06
-------------------------------------------
PIONEER INVESTMENT MANAGEMENT, INC.
By its authorized officer,
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
-------------------------------------------
Title: SVP, CFO and Treasurer
------------------------------------------
Date: 9/21/2006
-------------------------------------------
PIONEER FUNDS DISTRIBUTOR, INC.
By its authorized officer,
By: /s/ Xxxxx Xxxxxx
---------------------------------------------
Name: Xxxxx Xxxxxx
-------------------------------------------
Title: President PFD
------------------------------------------
Date: 9/25/06
-------------------------------------------
SCHEDULE A
ACCOUNTS, CONTRACTS AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
AS OF SEPTEMBER 1, 2006
-------------------------------------------------------------------------------------------------------------------
NAME OF SEPARATE ACCOUNT CONTRACTS FUNDED BY PORTFOLIOS AND CLASS OF
AND DATE ESTABLISHED BY SEPARATE ACCOUNT SHARES APPLICABLE TO
BOARD OF DIRECTORS CONTRACTS
-------------------------------------------------------------------------------------------------------------------
IDS Life of New York Variable Annuity
Account(formerly IDS Life of New York RiverSource Retirement Advisor Pioneer Equity Income VCT Portfolio
Flexible Portfolio Annuity Account) Advantage(SM) Variable Annuity - Class II Shares
established April 17, 1996.
Pioneer Europe VCT Portfolio -
RiverSource Retirement Advisor Class II Shares (subject to
Effective January 1, 2007 this Account Select(SM) Variable Annuity shareholder approval, Pioneer
will be called: RiverSource of New International Value VCT
York Variable Annuity Account Portfolio--Class II shares, effective
December 5, 2006).
-------------------------------------------------------------------------------------------------------------------
IDS Life of New York Account 8, Pioneer Equity Income VCT Portfolio
established September 12, 1985 RiverSource Variable Universal Life - Class II Shares
IV
Effective January 1, 2007 this account
will be called: RiverSource of New RiverSource Variable Universal Life Pioneer Europe VCT Portfolio- Class
York Account 8 IV--Estate Series II Shares (subject to shareholder
approval, Pioneer International
RiverSource Succession Select(SM) Value VCT Portfolio--Class II shares,
Variable Life Insurance effective December 5, 2006).
-------------------------------------------------------------------------------------------------------------------
SCHEDULE B
1. Administrative Service
----------------------
Administrative services to Contract owners and participants shall be the
responsibility of the Company and shall not be the responsibility of the Trust
or PFD. The Company will provide properly registered and licensed personnel
and any systems needed for all Contract owners servicing and support for both
fund and annuity information and questions, including:
MAINTENANCE OF BOOKS AND RECORDS FOR INDIVIDUAL POLICYHOLDER ACCOUNTS
o Record issuance of shares
o Record transfers (via net purchase orders)
o Reconciliation and balancing of the separate account at the
fund level in the general ledger, at various banks and
within systems interface.
COMMUNICATION WITH THE TRUST AND/OR PIM OR ITS AFFILIATES
Purchase Orders
o Determination of net amount available for investment
by the Trust
o Deposit of receipts at the Trust's custodian
(generally by wire transfer)
o Notification of the custodian of the estimated amount
required to pay dividend or distribution
Redemption Orders
o Determination of net amount required for redemptions
by the Trust
o Notification of the custodian and Trust of cash
required to meet payments
o Cost of share redemptions
Daily pricing of the shares of the Trust held in individual
policyholder accounts
PROCESSING DISTRIBUTIONS FROM THE TRUST FOR INDIVIDUAL POLICYHOLDER ACCOUNTS
o Process ordinary dividends and capital gains
o Reinvest the Trust's distributions
REPORTS
o Periodic information reporting to the Trust and its
Board
PROXY SOLICITATIONS
o Assistance with proxy solicitations, specifically with
respect to soliciting voting instructions from
Contract owners
TRUST-RELATED CONTRACT OWNER SERVICES
o Financial consultant's advice to Contract owners with
respect to Trust inquiries (not including information
about performance or related to sales)
o Communications to Contract owners regarding Trust and
subaccount performance
OTHER ADMINISTRATIVE SUPPORT
o Providing other administrative support for the Trust
as mutually agreed between the Company and the Trust
or PIM
o Relieving the Trust of other usual or incidental
administrative services provided to individual
Contract owners
2. Administrative Service Fees
---------------------------
For the administrative services set forth above, PIM or any of its
affiliates shall pay an administrative services fee as set forth in a letter
of understanding dated August 13, 2001 between PIM and the Company, which is
incorporated herein by reference and is a part of this Agreement.
3. l2b-1 Distribution Related Fees (Class II Shares Only)
------------------------------------------------------
In accordance with the Portfolios' plans pursuant to Rule l2b-1 under
the Investment Company Act of 1940, PFD will make payments to the Company at
an annual rate of 0.25% of the average net assets invested in the Class II
shares of the Portfolios through the Accounts in each calendar quarter. PFD
will make such payments to the Company within thirty (30) days after the end
of each calendar quarter. Each payment will be accompanied by a statement
showing the calculation of the fee payable to the Company for the quarter and
such other supporting data as may be reasonably requested by the Company.
