AMENDED AND RESTATED
PARTICIPATION AGREEMENT
AMONG
MFS VARIABLE INSURANCE TRUST,
AMERICAN CENTURION LIFE ASSURANCE COMPANY,
IDS LIFE INSURANCE COMPANY OF NEW YORK
AND
MASSACHUSETTS FINANCIAL SERVICES COMPANY
THIS AMENDED AND RESTATED AGREEMENT ("Agreement"), made and entered into
this 15th day of June, 2006 by and among the following parties:
o AMERICAN CENTURION LIFE ASSURANCE COMPANY ("American Centurion
Life"), organized under the laws of the State of Indiana, on its
own behalf and on behalf of each of its segregated asset accounts
named in Schedule A to this Agreement, as may be amended from time
to time (the "Accounts");
o IDS LIFE INSURANCE COMPANY OF NEW YORK ("IDS Life of New York"),
organized under the laws of the State of New York, on its own
behalf and on behalf of each of its segregated asset accounts
named in Schedule A to this Agreement, as may be amended from time
to time (the "Accounts");
each of American Enterprise Life and IDS Life hereinafter also referred to as
a "Company";
o MFS VARIABLE INSURANCE TRUST (the "Trust"), a Massachusetts
business trust; and,
o MASSACHUSETTS FINANCIAL SERVICES COMPANY ("MFS"), a Delaware
corporation.
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 of shares, each representing the interests in a particular
managed pool of securities and other assets;
WHEREAS, certain series of shares of the Trust are divided into two
separate share classes, an Initial Class and a Service Class, and the Trust on
behalf of the Service Class has adopted a Rule l2b-1 plan under the 1940 Act
pursuant to which the Service Class pays a distribution fee;
WHEREAS, the series of shares of the Trust (each, a "portfolio," and,
collectively, the Portfolios") and the classes of shares of those Portfolios
(the "Shares") offered by the Trust to the Company and the Accounts are set
forth on Schedule A attached hereto;
WHEREAS, MFS 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 "Policy" or, collectively, the
"Policies") 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 Policies 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, MFS Fund 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");
WHEREAS, Ameriprise Financial Services, Inc. is the underwriter of the
Policies issued by each company and 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, Riversource Distributors, Inc. will become the underwriter of
the Policies effective January 1, 2007, and 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, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase the Shares of the Portfolios as
specified in Schedule A attached hereto on behalf of the Accounts to fund the
Policies, and the Trust intends to sell such Shares to the Accounts at net
asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust,
MFS, and the Company agree as follows:
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ARTICLE A. AMENDMENT AND RESTATEMENT; FORM OF AGREEMENT
A.1. The Trust and MFS acknowledge the planned merger of American
Centurion Life with and into IDS Life of New York (the "Merger") and the
"intact transfer" (the "Transfer") of the Accounts of American Centurion
Life to IDS Life of New York by operation of law and incident to the
Merger, on December 31, 2006 at 10:59:59 p.m. Central Time (the
"Effective Time"), subject to all necessary regulatory approvals being
obtained in connection with the Merger and the Transfer, and the
re-naming of IDS Life of New York to RiverSource Life Insurance Co. of
New York simultaneously with the Merger. On and after the Effective
Time, all references in this Agreement and its Schedule to American
Centurion Life and IDS Life of New York shall mean and refer to
RiverSource Life Insurance Co. of New York. The Trust and MFS consent to
the transfer of the rights and obligations of American Centurion Life
under this Agreement to IDS Life of New York at the Effective Time of
the Merger.
A.2. This Agreement shall amend and supersede the following agreements
as of the date stated above among the Company named therein, the Trust
and MFS with respect to all investments by the Company named therein and
its Accounts prior to the date of this Agreement, as though identical
separate agreements had been executed by the parties hereto on the dates
as indicated below:
o Participation Agreement, dated February 28, 2003 by and
among American Centurion Life, the Trust and MFS, as amended
by the following documents: (a) Amendment to Participation
Agreement dated September 14, 2004; and (b) Amendment to
Participation Agreement dated December 7, 2005.
o Participation Agreement, dated September 29, 2003 by and
among IDS Life of New York, the Trust and MFS, as amended by
the following documents: (a) Amendment to Participation
Agreement dated June 29, 2001; (b) Amendment to
Participation Agreement dated November 7, 2002; and (c)
Amendment to Participation Agreement dated December 7, 2005.
A.3. Each party acknowledges that Riversource Distributors, Inc. will
become the underwriter of the Policies effective January 1, 2007.
Although the parties have executed this Agreement in this form for
administrative convenience, this Agreement shall constitute a separate
participation agreement with each Company until the Effective Time of the
Merger.
ARTICLE I. SALE OF TRUST SHARES
--------------------
1.1. The Trust agrees to sell to the Company those Shares which the
Accounts order (based on orders placed by Policy owners prior to the pricing
time set forth in the applicable Portfolio's prospectus, e.g. the close of
regular trading on the New York Stock Exchange, Inc.
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(the "NYSE") on that Business Day, as defined below) and which are available
for purchase by such Accounts, executing such orders 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 Policy owners and
receipt by such designee shall constitute receipt by the Trust; provide that
the Trust receives notice of such orders by 10:00 a.m. New York time on the
next following Business Day. "Business Day" shall mean any day on which the
NYSE is open for trading and on which the Trust calculates its net asset value
pursuant to the rules of the SEC. The Company will ensure that orders for
transactions in Shares by Policy owners comply with each Portfolio's
prospectus (including statement of additional information) restrictions with
respect to purchases, redemptions and exchanges. The Company will not engage
in, authorize, or facilitate market timing or late trading in Shares and will
take all reasonable steps necessary to identify and prevent market timing and
late trading in Shares by Policy owners.
1.2. The Trust agrees to make the Shares available indefinitely 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
pursuant to rules of the SEC and the Trust shall calculate such net asset
value on each day which the NYSE is open for trading. 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 if such action is required by law or by regulatory
authorities having jurisdiction 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, necessary in the best interest of the Shareholders
of such Portfolio.
1.3. The Trust and MFS agree that the Shares will be sold only to
insurance companies which have entered into participation agreements with the
Trust and MFS (the "Participating Insurance Companies") and their separate
accounts, qualified pension and retirement plans, MFS or its affiliates, and
any other person or plan permitted to hold shares of the Trust pursuant to
Treasury Regulation 1.817-5 without impairing the ability of the Company, on
behalf of its Accounts, to consider the Shares as constituting investments of
the separate accounts for the purpose of satisfying the diversification
requirements of Section 817(h). The Trust and MFS will not sell Trust shares
to any insurance company or separate account unless an agreement containing
provisions substantially the same as Articles III and VII of this Agreement is
in effect to govern such sales. The Company will not resell the Shares except
to the Trust or its agents.
1.4. The Trust agrees to redeem for cash or, to the extent permitted by
applicable law, in-kind, on the Company's request, any full or fractional
Shares held by the Accounts (based on orders placed by Policy owners prior to
the close of regular trading on the NYSE on that Business Day), executing such
requests 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 Policy owners and receipt by such designee
shall constitute receipt by the Trust; provided that the Trust receives notice
of such request for redemption by 9:00 a.m. New York time on the next
following Business Day.
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1.5. Purchase, redemption and exchange orders for each subaccount of the
Accounts that invest in each Portfolio shall be netted against each other, and
one net order per subaccount Portfolio shall be submitted by the Company to
the Trust or its designee. 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, exchange and redemption orders against each other with
respect to all Portfolios 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's bank shall initiate
the wire of payment of the Shares by 2:00 p.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. In the event of net redemptions, the
Trust's bank shall initiate the wire of payment of the redemption proceeds by
3:00 p.m. New York time on the next Business Day after an order to redeem the
shares is made in accordance with the provisions of Section 1.4. hereof. All
such payments 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) 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 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
for each Portfolio available to the Company on each Business Day as soon as
reasonably practical after the net asset value per share is calculated and
shall use its best efforts to make such net asset value per share available by
6:30 p.m. New York time. The Trust shall notify the Company as soon as
possible if it is determined that the net asset value per share will be
available after 6:30 p.m. New York time on any Business Day, and the Trust and
the Company will mutually agree upon a final deadline for timely receipt of
the net asset value on such Business Day. In the event that the Trust is
unable to meet the 6:30 p.m. time stated herein, it shall provide additional
time for the Company to place orders for the purchase and redemption of
Shares. Such additional time shall be equal to the additional time which the
Trust takes to make the net asset value available to the Company. If the Trust
provides materially incorrect share net asset value information, the Trust
shall make an adjustment to the number of shares purchased or redeemed for the
Accounts to reflect the correct net asset value per share. Any material error
in the calculation or reporting of net asset value per share, dividend or
capital gains information shall be reported promptly upon discovery to the
Company.
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1.10 The Company will cooperate with the Trust or its designee's requests in
taking steps to deter and detect short-term trading and other abusive
trading practices by any Policy owner in accordance with the following
provisions.
(a) AGREEMENT TO PROVIDE INFORMATION. To the extent Company is a financial
intermediary as defined in Rule 22c-2 of the 1940 Act, Company agrees to
provide the Trust or its designee, upon written request, the taxpayer
identification number ("TIN")(or in the case of non-X.X. Xxxxxx owners,
if the taxpayer identification number is unavailable, the International
Taxpayer Identification Number ("ITIN") or other government issued
identifier), if known, of any or all Policy owner(s) and the amount,
date and transaction type (purchase, redemption, transfer, or exchange)
of every purchase, redemption, transfer, or exchange of Shares held in a
Portfolio of the Trust through an Account maintained by Company during
the period covered by the request.
(1) PERIOD COVERED BY REQUEST. Requests must set forth a specific
period, not to exceed 90 days from the date of the request, for which
transaction information is sought. The Trust or its designee may request
transaction information older than 90 days from the date of the request
as it deems necessary to investigate compliance with policies
established by the Trust for the purpose of eliminating or reducing any
dilution of the value of the outstanding shares issued by the Trust.
(2) FORM AND TIMING OF RESPONSE. Company agrees to transmit the
requested information that is on Company's books and records to the
Trust or its designee promptly and in a secure manner, but in any event
not later than fourteen (14) business days, after receipt of a request.
If the requested information is not on Company's books and records but
on the books and records of an indirect intermediary, Company agrees to:
(i) use reasonable efforts to provide or arrange to provide to the Trust
or its designee the requested information regarding Policy owners who
hold an account with an indirect intermediary; or (ii) if directed by
the Trust or its designee, block further purchases of Trust Shares from
such indirect intermediary. In such instance, Company agrees to inform
the Trust or its designee whether Company plans to perform (i) or (ii).
Responses required by this paragraph must be communicated in writing and
in a format mutually agreed upon by the parties. To the extent
practicable, the format for any transaction information provided to the
Trust should be consistent with the NSCC Standardized Data Reporting
Format. For purposes of this provision, an "indirect intermediary" has
the same meaning as in Rule 22c-2 under the 1940 Act.
(3) LIMITATIONS ON USE OF INFORMATION. The Trust agrees that the
information provided to the Trust or its designee by the Company under
this Section 1.10 is subject to the confidentiality standards set forth
in Section 13.1 of this Agreement.
(b) AGREEMENT TO RESTRICT TRADING. Company agrees to execute written
instructions from the Trust or its designee to restrict or prohibit
further purchases or exchanges of Shares by a Policy owner that has been
identified by the Trust or its designee as having engaged
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in transactions of the Trust's Shares (directly or indirectly through
the Company's Account) that violate policies established by the Trust
for the purpose of eliminating or reducing any dilution of the value of
the outstanding Shares issued by the Trust.
(1) FORM OF INSTRUCTIONS. Instructions must include the TIN (or ITIN or
other government issued identifier) and the specific restriction(s) to
be executed. If the TIN (or ITIN or other government issued identifier)
is not known, the Trust or its designee will contact the Company and the
Company will again provide the Trust or its designee with the TIN (or
ITIN or other government issued identifier).
(2) TIMING OF RESPONSE. Company agrees to execute instructions as soon
as reasonably practicable, but not later than seven (7) business days
after Company's receipt of the instructions.
(3) CONFIRMATION BY COMPANY. Company must provide written confirmation
to the Trust or its designee that instructions have been executed.
Company agrees to provide confirmation as soon as reasonably
practicable, but not later than ten (10) business days after the
instructions have been executed.
(c) IDENTIFICATION OF INVESTMENT PROFESSIONAL OR SELLING FIRM. When the
Trust or its designee has given the Company a written instruction
pursuant to Section 1.10(b) to restrict or prohibit further purchases by
a Policy owner of the Trust's shares, the Trust or its designee may
request and the Company will provide the Trust or its designee with the
name or other identifier of any investment professional who is listed on
the Company's records as the agent of record for the restricted Policy
if the investment professional is employed by a broker dealer affiliate
of the Company. If the restricted Policy was sold by a broker dealer
firm unaffiliated with the Company, the Company will provide the Trust
or its designee with the name of the selling broker dealer firm.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
-------------------------------------------------
2.1. The Company represents and warrants that the Policies are or will
be registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Policies 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 is an insurance company duly
organized and in good standing under applicable law and that it has legally
and validly established each Account as a segregated asset account under
applicable law and has registered or, prior to any issuance or sale of the
Policies, 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 Policies, and that it will maintain
such registration for so long as any Policies are outstanding. The Company
shall amend the registration statements under the 1933 Act for the Policies
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 Policies
or as may otherwise be required by
7
applicable law. The Company shall register and qualify the Policies for sales
in accordance with the securities laws of the various states only if and to
the extent deemed necessary by the Company.
2.2. The Company represents and warrants that the Policies are currently
and at the time of issuance are intended to be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), that it will maintain such
treatment and that it will notify the Trust or MFS immediately upon having a
reasonable basis for believing that the Policies have ceased to be so treated
or that they might not be so treated in the future.
2.3. IDS Life of New York and American Centurion Life represent and
warrant that Ameriprise Financial Services, Inc., the underwriter for the
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
Riversource Distributors, Inc., an affiliate, is and shall remain registered
with the SEC as a broker-dealer, and is and shall remain a member in good
standing of the NASD when Riversource Distributors, Inc. becomes the
underwriter of the Policies on January 1, 2007 and for so long as it shall
continue to serve as the underwriter of the Policies. The Company represents
and warrants that the Company will sell and distribute the 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 0000 Xxx.
2.4. The Trust and MFS represent and warrant that the Shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the
Commonwealth of Massachusetts and all applicable federal and state securities
laws 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.
2.5. MFS represents and warrants that the Underwriter is and shall
remain a member in good standing of the NASD and is and shall remain
registered as a broker-dealer with the SEC. The Trust and MFS represent that
the Trust and the Underwriter 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.
2.6. The Trust represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act and any applicable
regulations thereunder.
2.7. MFS represents and warrants that it is and shall remain duly
registered under all applicable federal securities laws and that it shall
perform its obligations for the Trust in compliance in all material respects
with any applicable federal securities laws and with the securities laws of
the Commonwealth of Massachusetts. MFS represents and warrants that it is
8
not subject to state securities laws other than the securities laws of the
Commonwealth of Massachusetts and that it is exempt from registration as an
investment adviser under the securities laws of the Commonwealth of
Massachusetts.
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 exemptive application pursuant to which the SEC has granted
exemptive relief to permit mixed and shared funding (the "Mixed and Shared
Funding Exemptive Order").
2.9 Each party acknowledges that the Company's Accounts purchase and
sell shares of the Portfolios on an omnibus basis, and that neither the
Portfolios nor MFS has knowledge of the identity of Policy owners or their
Policy transactions which involve subaccounts investing in the Portfolios
except to the extent such information is obtained pursuant to Section 1.10 of
this Agreement. Each party represents and warrants that it has adopted and
implemented policies and procedures reasonably designed to comply with its
obligations under the U.S. Bank Secrecy Act of 1970, as amended (31 U.S.C. ss.
5311 et seq.), including without limitation, (i) any obligation to adopt and
implement an anti-money laundering program; (ii) any obligation to verify the
identity of its customers; and (iii) any obligation to report suspicious
activity. The Company further represents and warrants that it has undertaken
appropriate due diligence into the identity of Policy owners as necessary to
comply with the U.S. economic or trade sanctions administered by the Office of
Foreign Assets Control, U.S. Department of the Treasury.
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 Policy owners
whose Policies 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 Policies. 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) or other medium agreed to by the parties and other
assistance as is reasonably necessary in order, once each year (or more
frequently if the prospectus for the Shares is supplemented or amended), to
have the prospectus for the Shares printed. If the prospectus for the Shares
is printed together with other prospectuses, such as the prospectuses for
other investment products under the Policies (the "Combined Prospectus"), the
Trust or its designee shall pay the expenses of such printing in proportion to
the number of pages of the Shares' prospectus in the Combined Prospectus,
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 Shares' prospectus portion of such Combined
Prospectus for distribution to owners of existing Policies funded by the
Shares; provided, however, that the Company shall bear all printing expenses
of any Trust prospectus where used for distribution to prospective purchasers
or to
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owners of existing Policies 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 or other format, the Trust shall be
responsible for providing the prospectus in the format in which it or MFS is
accustomed to formatting prospectuses and shall bear the expense of providing
the Prospectus in such format typesetting expenses), and the Company shall
bear the expense of adjusting or changing the format to conform with any of
its prospectuses.
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 Policy funded by the Shares. The Trust or its designee, at the
Company's expense, shall print and provide such statement to the Company (or a
master of such statement suitable for duplication by the Company) for
distribution to a prospective purchaser who requests such statement or to an
owner of a Policy 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, of the Trust's reports
to Shareholders and other communications to Shareholders in such quantity as
the Company shall reasonably require for distribution to Policy owners.
3.4. Notwithstanding the provisions of Sections 3.1, 3.2, and 3.3 above,
or of Article V below, the Company shall pay the expense of printing or
providing documents to the extent such cost is considered a distribution
expense. Distribution expenses would include by way of illustration, but are
not limited to, the printing of the Shares' prospectus or prospectuses for
distribution to prospective purchasers or to owners of existing Policies not
funded by such Shares.
3.5. The Trust hereby notifies the Company that it may be appropriate to
include in the prospectus pursuant to which a Policy 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) solicit voting instructions from Policy owners;
(b) vote the Shares in accordance with instructions received
from Policy 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 Policy 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
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action in connection with or oppose or interfere with the solicitation of
proxies for the Shares held for such Policy 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 MFS will notify the Company of any
changes of interpretations or amendments to the Mixed and Shared Funding
Exemptive Order.
3.7. 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 will bear, or arrange for others to bear, the Company's
internal and out-of-pocket costs associated with the aforementioned actions
(each an "Event") to the extent that such costs arise out of required
shareholder communications. The Trust or its designee shall also reimburse the
Company for such other non-shareholder communication costs the Company incurs
which are related to the Event as the Parties to this Agreement may agree in
writing in advance of the occurrence of each such Event, provided however, if
the Trust or its designee fails to provide thirty (30) days' advance notice of
such Event to the Company in order to negotiate such additional agreed upon
amounts ahead of the occurrence of the Event, then the Trust or its designee
shall negotiate such additional agreed upon amounts with the Company within
the thirty (30) days immediately following the occurrence of the Event and
shall complete the reimbursement to the Company of the agreed upon additional
amounts within sixty (60) days after the Event occurs. Company agrees to use
its best efforts to minimize any costs incurred and shall provide the Trust or
its designee with acceptable documentation of any such costs incurred within
six (6) months of incurring such costs.
ARTICLE IV. SALES MATERIAL AND INFORMATION
------------------------------
4.1. The Company shall furnish, or shall cause to be furnished, to the
Trust or its designee, each piece of sales literature or other promotional
material in which the Trust, MFS, any investment adviser to the Trust, or any
affiliate of MFS are named, at least three (3) Business Days prior to its use.
No such material shall be used if the Trust, MFS, or their respective
designees reasonably objects to such use within three (3) Business Days after
receipt of such material.
4.2. The Company shall not give any information or make any
representations or statement on behalf of the Trust, MFS, any other investment
adviser to the Trust, or any affiliate of MFS or concerning the Trust or any
other such entity in connection with the sale of the Policies other than the
information or representations 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 sales literature or other promotional material
approved by the Trust, MFS or their respective designees, except with the
permission of the Trust, MFS or their respective designees. The Trust, MFS 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
11
Trust, MFS or any of their affiliates which is intended for use only by
brokers or agents selling the Policies (i.e., information that is not intended
for distribution to Policy owners or prospective Policy owners) is so used,
and neither the Trust, MFS nor any of their affiliates shall be liable for any
losses, damages or expenses relating to the improper use of such broker only
materials.
4.3. The Trust or its designee 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 three (3) Business Days prior to its use. No such material shall be
used if the Company or its designee reasonably objects to such use within
three (3) Business Days after receipt of such material.
4.4. The Trust and MFS shall not give, and agree that the Underwriter
shall not give, any information or make any representations or statements on
behalf of the Company or concerning the Company, the Accounts, or the Policies
in connection with the sale of the Policies other than the information or
representations contained in a registration statement, prospectus, or
statement of additional information for the Policies, 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 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 MFS is an underwriter or distributor of the
Policies.
4.5. The Company and the Trust (or its designee in lieu of the Company
or the Trust, as appropriate) will each provide 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, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Policies,
or to the Trust or its Shares, prior to or contemporaneously with the filing
of such document with the SEC or other regulatory authorities. The Company and
the Trust shall also each promptly inform the other of the results of any
examination by the SEC (or other regulatory authorities) that relates to the
Policies, the Trust or its Shares, and the party that was the subject of the
examination shall provide the other party with a copy of relevant portions of
any "deficiency letter" or other correspondence or written report regarding
any such examination.
4.6. The Trust and MFS 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 Trust's registration statement, particularly any
change resulting in change to the registration statement or prospectus or
statement of additional information for any Account. The Trust and MFS will
cooperate with the Company so as to enable the Company to assist in the
solicitation of proxies from Policy owners or to make changes to its
prospectus, statement of additional information or registration statement, in
an orderly manner. The Trust and MFS will make reasonable efforts to attempt
to have changes affecting Policy prospectuses become effective simultaneously
with the annual updates for such prospectuses.
12
4.7. 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 or tape
recording, videotape display, signs or billboards, motion pictures, or other
public media e.g., online networks such as the internet or other electronic
messages), and sales literature (such as brochures, 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.
ARTICLE V. FEES AND EXPENSES
-----------------
5.1. The Trust shall pay no fee or other compensation to the Company
under this Agreement, and the Company shall pay no fee or other compensation
to the Trust, except that, to the extent the Trust or any Portfolio has
adopted and implemented a plan pursuant to Rule l2b-1 under the 1940 Act to
finance distribution and for Shareholder servicing expenses, then, subject to
obtaining any required exemptive orders or regulatory approvals, the Trust may
make payments to the Company or to the underwriter for the Policies in
accordance with such plan. Each party, however, shall, in accordance with the
allocation of expenses specified in Articles III and V hereof, 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.
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 IV
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 IV 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 Policies funded by the
Shares and any expenses permitted to be paid or assumed by the Trust pursuant
to a plan, if any, under Rule l2b-1 under the 1940 Act. The Trust shall not
bear any expenses of marketing the Policies.
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Policies and of
distributing the Trust's Shareholder reports to Policy owners. The Company
shall bear all expenses associated with the registration, qualification, and
filing of the Policies under applicable federal securities and state insurance
laws; the cost of preparing, printing and distributing the Policy prospectus
and statement of additional information; and the cost of preparing, printing
and distributing annual individual account statements for Policy owners as
required by state insurance laws.
13
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
---------------------------------------
6.1. The Trust and MFS represent and warrant that each Portfolio of the
Trust 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 MFS, they will take all reasonable steps to: (a)
notify the Company of such breach; and (b) adequately diversify the Trust so
as to achieve compliance within the grace period afforded by Treasury
Regulation 1.817.5.
6.2. The Trust and MFS 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), and will notify the Company immediately upon
having a reasonable basis for believing that they might not so qualify in the
future.
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
----------------------------
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for the
existence of any material irreconcilable conflict between the interests of the
variable annuity contract owners and the variable life insurance policy owners
of the Company and/or affiliated companies ("contract owners") investing in
the Trust. 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 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,
14
segregating the assets attributable to any appropriate group of contract
owners 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 Policies, unless
a majority of Policy owners materially adversely affected by the conflict have
voted to decline the offer to establish a new registered management investment
company.
7.3. A majority of the disinterested trustees of the Board shall
determine whether any proposed action by the Company adequately remedies any
material irreconcilable conflict. In the event that the Board determines that
any proposed action does not adequately remedy any material irreconcilable
conflict, the Company will withdraw from investment in the Trust each of the
Accounts designated by the disinterested trustees and terminate this Agreement
within six (6) months after the Board informs the Company in writing of the
foregoing determination; provided, however, that such withdrawal and
-----------------
termination shall be limited to the extent required to remedy any such
material irreconcilable conflict as determined by a majority of the
disinterested trustees of the Board. No charge or penalty will be imposed as a
result of such withdrawal.
7.4. 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 my be necessary
to comply with Rule 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted,
to the extent such rules are applicable; and (b) Sections 3.5, 3.6, 7.1, 7.2,
7.3 and 7.4 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, MFS, any
affiliates of MFS, and each of their respective directors/trustees, officers
and each person, if any, who controls the Trust or MFS 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 8.1) 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,
15
prospectus or statement of additional information for the.
Policies or contained in the Policies or sales literature or
other promotional material for the Policies (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 or MFS for use in the registration
statement, prospectus or statement of additional information
for the Policies or in the Policies or sales literature or
other promotional material (or any amendment or supplement)
or otherwise for use in connection with the sale of the
Policies or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional
material of the Trust not supplied by the Company or its
designee, or persons under its control 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 Policies or Shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement, prospectus, statement of additional information,
or sales literature or other promotional literature of the
Trust, or any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material
fact required to be 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 provide
the services and furnish the materials under the terms of
this Agreement;
as limited by and in accordance with the provisions of this Article
VIII.
16
8.2 INDEMNIFICATION BY THE TRUST
----------------------------
The Trust agrees to indemnify and hold harmless the Company and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act, and any directors, trustees, officers, partners, 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 famished to
the Trust, MFS, the Underwriter or their respective
designees by or on behalf of the Company for use in the
registration statement, prospectus or statement of
additional information for the Trust or in sales literature
or other promotional material for the Trust (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Policies or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional
material for the Policies not supplied by the Trust, MFS,
the Underwriter 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 or persons under its control, with respect to the sale
or distribution of the Policies 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 Policies, 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
17
omission was made in reliance upon information famished to
the Company by or on behalf of the Trust, MFS or the
Underwriter; 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 the Trust to provide the
services and furnish the materials under the term of the
Agreement;
as limited by and in accordance with the provisions of this Article
VIII.
8.3. In no event shall the Trust 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
Policy holder, with respect to any losses, claims, damages, liabilities or
expenses that arise out of or result from (i) a breach of any representation,
warranty, and/or covenant made by the Company hereunder or by any
Participating Insurance Company under an agreement containing substantially
similar representations, warranties and covenants; (ii) the failure by the
Company or any Participating Insurance Company to maintain its segregated
asset account (which invests in any Portfolio) as a legally and validly
established segregated asset account under applicable state law and as a duly
registered unit investment trust under the provisions of the 1940 Act (unless
exempt therefrom); or (iii) the failure by the Company or any Participating
Insurance Company to maintain its variable annuity and/or variable life
insurance contracts (with respect to which any Portfolio serves as an
underlying funding vehicle) as life insurance, endowment or annuity contracts
under applicable provisions of the Code.
8.4. Neither the Company nor the Trust 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
18
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, at its own expense
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, unless: (a) the indemnifying party and the Indemnified
Party will have mutually agreed to the retention of such counsel; or (b) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the Indemnified Party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The indemnifying party will not be
liable for any settlement of any proceeding effected without its written
consent but if settled with such consent or if there is a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the Indemnified
Party from and against any loss or liability by reason of such settlement or
judgment.
8.6. Each of the parties 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 the Agreement, the issuance or sale of the
Policies, the operation of the Accounts, or the sale or acquisition of Shares.
8.7. 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.
8.8. Except as expressly stated herein, as between the parties, in no
event will any party to this Agreement be responsible to any other party for
any incidental, indirect, consequential, punitive or exemplary damages of any
kind arising from this Agreement, including without limitation, lost revenues,
loss of profits or loss of business.
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 and the terms hereof shall be interpreted and construed in accordance
therewith.
19
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS
----------------------------
The Trust, MFS, 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 Policies, the operation of the Accounts, or the purchase of
the Shares.
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 ninety (90) days' advance
written notice to the other parties or, if later, upon
receipt of any required exemptive relief or orders from the
SEC unless otherwise agreed in a separate written agreement
by the parties; 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 Policies or are not "appropriate funding
vehicles" for the Policies, 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
Policy 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 or MFS 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 Policies, the operation of the Accounts, or the
purchase of the Shares provided that MFS or the Trust
determine in its sole judgment, exercised in good faith,
that any such proceeding would have a material adverse
effect on the Company's ability to perform its obligations
under this Agreement; or
(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 Trust's or MFS' duties under
this Agreement or related to the sale of the Shares provided
that the Company determines in its sole judgment, exercised
in
20
good faith, that any such proceeding would have a material
adverse effect on the Trust's ability to perform its
obligations under this Agreement; or
(e) at the option of the Company, the Trust or MFS upon receipt
of any necessary regulatory approvals and/or the vote of the
Policy 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 Policies 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) termination by either the Trust or MFS by written notice to
the Company, if either one or both of the Trust or MFS
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) termination by the Company by written notice to the Trust
and MFS, if the Company shall determine, in its sole
judgment exercised in good faith, that the Trust or MFS 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
party's material breach of any provision of this Agreement;
or
(i) upon assignment of this Agreement, unless made with the
written consent of the parties hereto.
11.2. The notice shall specify the Portfolio or Portfolios, Policies
and, if applicable, 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 Policy owner initiated
transactions, or as required by state insurance laws or regulations, the
Company shall not redeem the Shares attributable to the Policies (as opposed
to the Shares attributable to the Company's assets held in the Accounts), and
the Company shall not prevent Policy owners from allocating payments to a
Portfolio that was otherwise available under the Policies, until thirty (30)
days after the Company shall have notified the Trust of its intention to do
so.
21
11.5. Notwithstanding any termination of this Agreement, the Trust and
MFS shall, at the option of the Company, continue to make available additional
shares of the Portfolios pursuant to the terms and conditions of this
Agreement, for all Policies in effect on the effective date of termination of
this Agreement (the "Existing Policies"), except as otherwise provided under
Article VII of this Agreement. Specifically, without limitation, the owners of
the Existing Policies shall be permitted to transfer or reallocate investment
under the Policies, redeem investments in any Portfolio and/or invest in the
Trust upon the making of additional purchase payments under the Existing
Policies. As long as shares of the Portfolios are held under Existing Policies
in accordance with this Section 11.5, the provisions of this Agreement will
survive the termination of this Agreement with respect to those Existing
Policies.
ARTICLE XII. NOTICES
-------
Any notice shall be sufficiently given when sent by registered or
certified mail, overnight courier or facsimile (or any other method agreed to
by the parties) 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:
MFS Variable Insurance Trust
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Assistant Secretary
If to the Company:
American Centurion Life Assurance Company
IDS Life Insurance Company of New York
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Vice President
Facsimile No: (000) 000-0000
With a copy to:
Riversource Distributors, Inc.
50607 Ameriprise Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: President
Facsimile No.: (000) 000-0000
22
If to MFS:
Massachusetts Financial Services Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: General Counsel
ARTICLE XIII. MISCELLANEOUS
-------------
13.1. Subject to the requirement of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Policies and all information reasonably
identified as confidential in writing by any other 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 names and
addresses and other confidential information without the express written
consent of the affected party until such time as it may come into the public
domain. The Company, the Trust and MFS agree to take all necessary steps to
comply with applicable regulations protecting the privacy of consumer and
customer financial information (as defined in such regulations). To the extent
the Trust or MFS or agents of either provide the Company with any nonpublic
personal information (as defined in such regulations) to perform services or
functions on behalf of the Trust or MFS, the Company agrees (i) not to
disclose or use any such information for any purpose other than to carry out
the purposes for which the Trust, MFS or their agents disclosed the
information or as permitted by law in the ordinary course of business to carry
out those purposes; and (ii) to contractually require all its agents,
representatives, or any other party to whom the Company may provide access to
or disclose nonpublic personal information to limit the use and disclosure of
nonpublic personal information to that purpose. To the extent the Company or
its agents provide the Trust, MFS or their agents with any nonpublic personal
information (as defined in such regulations) to perform services or functions
on the Company's behalf , the Trust, MFS and their agents agree (i) not to
disclose or use any such information for any purpose other than to carry out
the purposes for which the Company disclosed the information or as permitted
by law in the ordinary course of business to carry out those purposes; and
(ii) to contractually require all their agents, representatives, or any other
party to whom the Trust, MFS or their agents may provide access to or disclose
nonpublic personal information to limit the use and disclosure of nonpublic
personal information to that purpose. The Company, the Trust and MFS agree to
adopt policies and procedures that address administrative, technical and
physical safeguards for the protection of customer records and information.
The parties acknowledge that any breach of the agreements in this Section 13.1
would result in immediate and irreparable harm for which there would be no
adequate remedy at law and agree that in the event of such a breach, the
injured party would be entitled to equitable relief by way of temporary and
permanent injunctions, as well as such other relief as any court of competent
jurisdiction deems appropriate.
23
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 will
permit each other and such authorities reasonable access to its books and
records in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
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 Declaration of Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts. The Company
acknowledges that the obligations of or arising out of this instrument are not
binding upon any of the Trust's trustees, officers, employees, agents or
shareholders individually, but are binding solely upon the assets and property
of the Trust in accordance with its proportionate interest hereunder. The
Company further acknowledges that the assets and liabilities of each Portfolio
are separate and distinct and that the obligations of or arising out of this
instrument are binding solely upon the assets or property of the Portfolio on
whose behalf the Trust has executed this instrument. The Company also agrees
that the obligations of each Portfolio hereunder shall be several and not
joint, in accordance with its proportionate interest hereunder, and the
Company agrees not to proceed against any Portfolio for the obligations of
another Portfolio.
13.9. The Company shall not use any designation comprised in whole or in
part of the names or marks "Massachusetts Financial Services Company," "MFS
Investment Management" or "MFS" or any other trademark relating to MFS without
the prior written consent of MFS, in which case the Company nay use such
designation in accordance with consent given. Upon termination of this
Agreement for any reason, each party shall cease all use of any such name or
xxxx of the other parties as soon as reasonably practicable.
24
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: AMERICAN CENTURION LIFE ASSURANCE COMPANY
IDS LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Secretary of each Company By: /s/ Xxxxxxx X. Xxxxx III
----------------------------
Name: Xxxxxxx X. Xxxxx III
Title: Vice President of each Company
MFS VARIABLE INSURANCE TRUST, ON BEHALF OF
THE PORTFOLIOS
By its authorized officer and not individually,
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Secretary
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By its authorized officer,
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
25
June 15, 2006
SCHEDULE A
ACCOUNTS, POLICIES AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
-------------------------------------------------------------------------------------------------------------
AMERICAN CENTURION LIFE ASSURANCE COMPANY
-------------------------------------------------------------------------------------------------------------
Name of Separate Policies Funded by Share Class (Initial or Portfolios Applicable to
Account and Date Separate Account Service Class) Policies
Established by Board of
Directors
-------------------------------------------------------------------------------------------------------------
ACL VARIABLE RiverSource Service Class MFS(R) New Discovery
ANNUITY ACCOUNT 2, AccessChoice(SM) Select Series
OCTOBER 12, 1995 Variable Annuity
(effective January 1, MFS(R) Total Return
2007: RiverSource of Series
New York Variable
Annuity Account 2) MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
ACL VARIABLE RiverSource Endeavor(SM) Service Class MFS(R) New Discovery
ANNUITY ACCOUNT 2, Select Variable Annuity Series
OCTOBER 12, 1995
(effective January 1, MFS(R) Total Return
2007: RiverSource of Series
New York Variable
Annuity Account 2) MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
ACL VARIABLE RiverSource Service Class MFS(R) Investors Growth
ANNUITY ACCOUNT 2, FlexChoice(SM) Select Stock Series
OCTOBER 12, 1995 Variable Annuity
(effective January 1, MFS(R) New Discovery
2007: RiverSource of Series
New York Variable
Annuity Account 2) MFS(R) Total Return
Series
MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
ACL VARIABLE RiverSource Service Class MFS(R) Investors Growth
ANNUITY ACCOUNT 2, Innovations(R) Select Stock Series
OCTOBER 12, 1995 Variable Annuity
(effective January 1, MFS(R) New Discovery
2007: RiverSource of Series
New York Variable
Annuity Account 2) MFS(R) Total Return
Series
MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
26
-------------------------------------------------------------------------------------------------------------
AMERICAN CENTURION LIFE ASSURANCE COMPANY
-------------------------------------------------------------------------------------------------------------
Name of Separate Policies Funded by Share Class (Initial or Portfolios Applicable to
Account and Date Separate Account Service Class) Policies
Established by Board of
Directors
-------------------------------------------------------------------------------------------------------------
ACL VARIABLE RiverSource Service Class MFS(R) Investors Growth
ANNUITY ACCOUNT 2, Innovations(SM) Variable Stock Series
OCTOBER 12, 1995 Annuity
(effective January 1, MFS(R) New Discovery
2007: RiverSource of Series
New York Variable
Annuity Account 2) MFS(R) Total Return
Series
MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK
-------------------------------------------------------------------------------------------------------------
Name of Separate Policies Funded by Share Class (Initial or Portfolios Applicable to
Account and Date Separate Account Service Class) Policies
Established by Board of
Directors
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Retirement Service Class MFS(R) Investors Growth
VARIABLE ANNUITY Advisor 4 Advantage Stock Series
ACCOUNT, APRIL 17,
1996 (effective January MFS(R) Total Return
1, 2007: RiverSource of Series
New York Variable
Annuity Account) MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Retirement Service Class MFS(R) Investors Growth
VARIABLE ANNUITY Advisor 4 Select Stock Series
ACCOUNT, APRIL 17,
1996 (effective January MFS(R) Total Return
1, 2007: RiverSource of Series
New York Variable
Annuity Account) MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
27
-------------------------------------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK
-------------------------------------------------------------------------------------------------------------
Name of Separate Policies Funded by Share Class (Initial or Portfolios Applicable to
Account and Date Separate Account Service Class) Policies
Established by Board of
Directors
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Retirement Service Class MFS(R) Investors Growth
VARIABLE ANNUITY Advisor 4 Access Stock Series
ACCOUNT, APRIL 17,
1996 (effective January MFS(R) Total Return
1, 2007: RiverSource of Series
New York Variable
Annuity Account) MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Retirement Service Class MFS(R) Investors Growth
VARIABLE ANNUITY Advisor Variable Stock Series
ACCOUNT, APRIL 17, Annuity(R)
1996 (effective January MFS(R) New Discovery
1, 2007: RiverSource of Series
New York Variable
Annuity Account) MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Retirement Service Class MFS(R) Investors Growth
VARIABLE ANNUITY Advisor Variable Stock Series
ACCOUNT, APRIL 17, Annuity(R) - Band 3
1996 (effective January MFS(R) New Discovery
1, 2007: RiverSource of Series
New York Variable
Annuity Account) MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Retirement Service Class MFS(R) Investors Growth
VARIABLE ANNUITY Advisor Advantage(R) Stock Series
ACCOUNT, APRIL 17, Variable Annuity
1996 (effective January MFS(R) New Discovery
1, 2007: RiverSource of Series
New York Variable
Annuity Account) MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Retirement Service Class MFS(R) Investors Growth
VARIABLE ANNUITY Advisor Advantage(R) Stock Series
ACCOUNT, APRIL 17, Variable Annuity -
1996 (effective January Band 3 MFS(R) New Discovery
1, 2007: RiverSource of Series
New York Variable
Annuity Account) MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
28
-------------------------------------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK
-------------------------------------------------------------------------------------------------------------
Name of Separate Policies Funded by Share Class (Initial or Portfolios Applicable to
Account and Date Separate Account Service Class) Policies
Established by Board of
Directors
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Retirement Service Class MFS(R) Investors Growth
VARIABLE ANNUITY Advisor Advantage Stock Series
ACCOUNT, APRIL 17, Plus(SM) Variable Annuity
1996 (effective January MFS(R) New Discovery
1, 2007: RiverSource of Series
New York Variable
Annuity Account) MFS(R) Total Return
Series
MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Retirement Service Class MFS(R) Investors Growth
VARIABLE ANNUITY Advisor Select(R) Stock Series
ACCOUNT, APRIL 17, Variable Annuity
1996 (effective January MFS(R) New Discovery
1, 2007: RiverSource of Series
New York Variable
Annuity Account) MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Retirement Service Class MFS(R) Investors Growth
VARIABLE ANNUITY Advisor Select Plus(SM) Stock Series
ACCOUNT, APRIL 17, Variable Annuity
1996 (effective January MFS(R) New Discovery
1, 2007: RiverSource of Series
New York Variable
Annuity Account) MFS(R) Total Return
Series
MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource(R) Single Service Class MFS(R) Investors Growth
ACCOUNT 8, SEPTEMBER Premium Variable Life Stock Series
12, 1985 (effective
January 1, 2007: MFS(R) New Discovery
RiverSource of New Series
York Account 8)
MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Variable Service Class MFS(R) Investors Growth
ACCOUNT 8, SEPTEMBER Universal Life Stock Series
12, 1985 (effective Insurance(SM)
January 1, 2007: MFS(R) New Discovery
RiverSource of New Series
York Account 8)
-------------------------------------------------------------------------------------------------------------
29
-------------------------------------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK
-------------------------------------------------------------------------------------------------------------
Name of Separate Policies Funded by Share Class (Initial or Portfolios Applicable to
Account and Date Separate Account Service Class) Policies
Established by Board of
Directors
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Variable Service Class MFS(R) Investors Growth
ACCOUNT 8, SEPTEMBER Universal Life III(SM) Stock Series
12, 1985 (effective
January 1, 2007: MFS(R) New Discovery
RiverSource of New Series
York Account 8)
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource(R) Variable Service Class MFS(R) Investors Growth
ACCOUNT 8, SEPTEMBER Universal Life IV(SM) Stock Series
12, 1985 (effective
January 1, 2007: MFS(R) New Discovery
RiverSource of New Series
York Account 8)
MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource(R) Variable Service Class MFS(R) Investors Growth
ACCOUNT 8, SEPTEMBER Universal Life IV - Stock Series
12, 1985 (effective Estate Series
January 1, 2007: MFS(R) New Discovery
RiverSource of New Series
York Account 8)
MFS(R) Utilities Series
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource(R) Variable Service Class MFS(R) Investors Growth
ACCOUNT 8, SEPTEMBER Second-To-Die Life Stock Series
12, 1985 (effective Insurance(SM)
January 1, 2007: MFS(R) New Discovery
RiverSource of New Series
York Account 8)
-------------------------------------------------------------------------------------------------------------
IDS LIFE OF NEW YORK RiverSource Succession Service Class MFS(R) Investors Growth
ACCOUNT 8, SEPTEMBER Select(SM) Variable Life Stock Series
12, 1985 (effective Insurance
January 1, 2007: MFS(R) New Discovery
RiverSource of New Series
York Account 8)
-------------------------------------------------------------------------------------------------------------
30
