MANAGEMENT, SERVICE & MARKETING SUPPORT AGREEMENT
BY AND BETWEEN
RIVERSOURCE INVESTMENTS, LLC
RIVERSOURCE SERVICE CORPORATION
AND
RIVERSOURCE LIFE INSURANCE COMPANY
This Management, Service, and Marketing Support Agreement (the "Agreement") is
made and entered into as of January 1, 2007 by and between RiverSource
Investments, LLC ("RiverSource Investments"), a Minnesota limited liability
company, RiverSource Service Corporation ("RiverSource Service Corporation"),
a Minnesota corporation, and RiverSource Life Insurance Company ("RSLIC"), a
Minnesota corporation.
WHEREAS, RiverSource Variable Portfolio - Income Series, Inc.,
RiverSource Variable Portfolio - Investment Series, Inc., RiverSource Variable
Portfolio - Managed Series, Inc., RiverSource Variable Portfolio - Money
Market Series, Inc., and RiverSource Variable Portfolio - Partners Series Inc.
(each, a "Registrant") have contracted with (1) RiverSource Investments to
provide investment management and related services to each Fund or Funds
underlying the Registrant ("Funds") and (2) RiverSource Service Corporation to
provide transfer agency and shareholder services to contract owners and policy
holders of the variable contracts with sub-accounts investing in the Funds;
and
WHEREAS, RiverSource Variable Portfolio - Select Series, Inc., (a
"Registrant") has contracted with RiverSource Investments to provide
investment management related services to the Funds and transfer agency and
shareholder services to contract owners and policy holders of the variable
contracts with sub-accounts investing in the Funds; and
WHEREAS, the Funds are made available primarily as investment options
underlying variable annuity and variable life insurance contracts offered by
RSLIC and its subsidiaries; and
WHEREAS, RiverSource Service Corporation desires that RSLIC provide
certain services in connection with the servicing of contract owners and
policy holders who own Funds through the variable contracts offered by RSLIC;
and
WHEREAS, RiverSource Investments desires that RSLIC provide certain
services in connection with the servicing of contract owners and policy
holders who own Funds and further desires to pay from its own resources
financial support to RSLIC to help promote, and support the offer, sale, and
servicing of shares of the Funds offered through some or all of RSLIC's
variable contracts and, with respect to RiverSource Variable Portfolio -
Select Services, Inc., RiverSource Investments desires that RSLIC provide
certain services in connection with the
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servicing of contract owners and policy holders who own Funds through the
variable contracts offered by RSLIC; and
NOW THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
DUTIES OF RIVERSOURCE LIFE INSURANCE COMPANY
Section 1.01. With respect to transfer agency and shareholder servicing, RSLIC
will provide the following services:
(1) Sub-Account Transactions. Upon the request of a variable contract
owner or policy holder, purchases, redemptions, exchanges and
transfers of units representing interest in Fund shares ("units"),
other permissible legal action, with respect to units, shall be
processed in a timely fashion, in accordance with the terms of the
variable contract and related prospectus.
(2) Communication with Transfer Agent. RSLIC will process variable
contract and policy holder requests with respect to units and
communicate with the Transfer Agent net transactions in shares for
the Fund.
(3) Lost or Stolen Checks. RSLIC will replace lost or stolen checks
issued to variable contract owners and policy holders upon receipt
of proper notification.
(4) Valuation Adjustments (as-of-costs) to Unit Value. RSLIC will
calculate and process valuation adjustments for variable contract
owners and policy holders.
(5) Contract Owner List Maintenance. RSLIC shall maintain all variable
contract owner and policy holder accounts, which shall contain all
required tax, legally imposed and regulatory information; shall
prepare shareholder mailing lists; shall cause to be delivered all
required prospectuses, annual reports, semiannual reports,
statements of additional information (upon request), proxies and
other communications.
(6) Contract Owner Reporting; Statements and Confirmations. RSLIC
shall confirm each transaction either at the time of the
transaction or through periodic reports as may be legally
permitted.
(7) Compliance Controls and Support. RSLIC will provide adequate
oversight of applicable rules and regulations affecting the units
and the variable contracts.
Section 1.02. With respect to the promotion and support of the offer, sale,
and servicing of Fund shares, RSLIC will provide the following services:
(1) Provide general Fund management services including development,
pricing and marketing.
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(2) Permit marketing and/or educational personnel to meet with RSLIC's
registered representatives and/or other applicable personnel for
the purpose of informing and explaining the features and
characteristics of the Funds and the benefits and risks of
investments in the Funds.
(3) Permit marketing and educational materials regarding the Funds to
RSLIC's registered representatives and/or other applicable
personnel.
(4) Regularly include information about the Funds in internal sales
communications for RSLIC's registered representatives and/or other
applicable personnel.
(5) Assign registered representatives to each Fund shareholder account
in RSLIC's records and reassign such account should a registered
representative assigned to such account leave RSLIC's firm.
(6) List all Funds on RSLIC's product list and provide adequate
opportunities to provide information to RSLIC for its conducting
of due diligence on the Funds for their inclusion in any of
RSLIC's "approved" or "preferred" (or similar) lists of investment
vehicles.
(7) Permit participation in marketing and educational events for
RSLIC's registered representatives and/or other applicable
personnel regarding the Funds.
(8) Perform other marketing support, educational services and
activities and shareholder servicing activities, as determined by
RSLIC either in its sole discretion or in consultation with
RiverSource Investments.
Section 1.03. Ownership and Confidentiality of Records.
(1) The parties agree that all records prepared or maintained by them
relating to the services to be performed by them under the terms
of this Agreement are the property of the Funds and may be
inspected by the Funds or any person retained by the Funds at
reasonable times. The Funds and the parties agree to protect the
confidentiality of those records.
(2) Regulation S-P.
(a) In accordance with Regulation S-P of the Securities and
Exchange Commission, "Nonpublic Personal Information"
includes (i) all personally identifiable financial
information; (ii) any list, description, or other grouping
of consumers (and publicly available information pertaining
to them) that is derived using any personally identifiable
financial information that is not publicly available
information; and (iii) any information derived therefrom.
(b) The parties must not use or disclose Nonpublic Personal
Information for any purpose other than to carry out the
purpose for which Nonpublic Personal Information was
provided to them as set forth in this Agreement,
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and agree to cause the parties and their employees, agents,
representatives, or any other party to whom they may provide
access to or disclose Nonpublic Personal Information to
limit the use and disclosure of Nonpublic Personal
Information to that purpose.
(c) The parties agree to implement appropriate measures designed
to ensure the security and confidentiality of Nonpublic
Personal Information, to protect such information against
any anticipated threats or hazards to the security or
integrity of such information, and to protect against
unauthorized access to, or use of, Nonpublic Personal
Information that could result in substantial harm or
inconvenience to any contract owner; the parties further
agree to cause all their agents, representatives,
subcontractors, or any other party to whom they may provide
access to, or disclose, Nonpublic Personal Information to
implement appropriate measures designed to meet the
objectives set forth in this paragraph.
(d) With respect only to the provisions of this Section 1.03(2),
the parties agree to indemnify and hold harmless the Funds,
and any officer or director of the Funds, against losses,
claims, damages, expenses, or liabilities to which the
Funds, or any officer or director of the Funds, may become
subject as the result of (i) a material breach of the
provisions of this section of the Agreement or (ii) any acts
or omissions of the parties, or of any of their officers,
directors, employees, or agents, that are not substantially
in accordance with this Agreement, including, but not
limited to, any violation of any federal statute or
regulation. Notwithstanding the foregoing, no party will be
entitled to indemnification pursuant to this Section
1.03(2)(d) if such loss, claim, damage, expense, or
liability is due to the willful misfeasance, bad faith,
gross negligence, or reckless disregard of duty by the party
seeking indemnification.
Section 1.04. With respect to all duties and responsibilities of the parties
hereunder, each party may provide any or all such services directly, or it may
contract with one of its affiliates for the provision of such services, but in
such event, each party will remain responsible for the delivery of all
services in accordance with the terms of this Agreement.
Section 1.05. Each party will be responsible for maintaining all required
records, memoranda, instructions or authorizations relating to the services it
performs under this Agreement. Each party will provide copies of or access to
such records, memoranda, instructions or authorizations to the other party as
requested.
Section 1.06. Each party will furnish the other party, or its designated
affiliate, any information reasonably requested with respect to its services
performed or to be performed under this Agreement.
Section 1.07. Each party agrees to be responsible for the maintenance of an
adequate organization of competent persons to provide the services and perform
the functions mentioned herein.
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COMPENSATION FOR SERVICES.
Section 2.01. In consideration of the services provided by RSLIC, RiverSource
Investments and RiverSource Service Corporation agree to pay RSLIC a fee as
set forth in Schedule A.
Section 2.02. Fees are payable as soon as possible after the close of the
month, and in any event, will be paid not later than the last business day of
the month following the month for which services were provided.
MISCELLANEOUS
Section 3.01. It is understood and agreed that in furnishing the Funds with
the services as herein provided, neither RSLIC, or any officer, director or
agent thereof will be liable to the Funds or their creditors, RiverSource
Investments, RiverSource Service Corporation, or any officer, director or
agent thereof for errors of judgment or for anything except willful
misfeasance, bad faith or gross negligence in the performance of its duties,
or reckless disregard of its obligations and duties under the terms of this
Agreement. It is further understood and agreed that RSLIC may rely upon
information furnished to it reasonably believed to be accurate and reliable.
Section 3.02. It is understood and agreed that in furnishing the Funds with
the services as herein provided, neither RiverSource Investments, RiverSource
Service Corporation, or any officer, director or agent thereof will be liable
to the Funds or their creditors, RSLIC, or any officer, director or agent
thereof for errors of judgment or for anything except willful misfeasance, bad
faith or gross negligence in the performance of its duties, or reckless
disregard of its obligations and duties under the terms of this Agreement. It
is further understood and agreed that RiverSource Investments and RiverSource
Service Corporation may rely upon information furnished to it reasonably
believed to be accurate and reliable.
Section 3.03. This Agreement will extend to and will not be binding on the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement will not be assignable without the written
consent of the other party.
Section 3.04. This Agreement will be governed by the laws of the State of
Minnesota.
TERMINATION AND AMENDMENT
Section 4.01. This Agreement may be amended or modified by a written agreement
executed by both parties.
Section 4.02. This Agreement will remain in effect from year to year until
terminated. Either party will have the right to terminate this Agreement upon
60 days' written notice to the other party.
ARBITRATION
Section 5.01. Any unresolved dispute under this Agreement between RiverSource
Investments and RiverSource Service Corporation, and RSLIC shall be decided by
binding arbitration. The arbitration shall be conducted by a sole arbitrator
selected by unanimous agreement of the
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concerned parties hereto as the case may be, or if unanimous agreement cannot
be reached then by drawing lots. Decisions of the arbitrator shall be final
and there shall be no appeal from the arbitrator's decisions. The arbitration
shall be conducted in accordance with the rules of the American Arbitration
Association unless the concerned parties decide otherwise in which case the
latter decisions will apply as to the applicable rules for arbitration. The
place of arbitration will be Minneapolis, USA.
IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement.
RIVERSOURCE INVESTMENTS, LLC RIVERSOURCE LIFE INSURANCE COMPANY
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------ --------------------------
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President Title: President
RIVERSOURCE SERVICE CORPORATION
By: /s/ X. Xxxxxxx-Strong
------------------------
Name: Xxxxxxxx Xxxxxxx-Strong
Title: President
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SCHEDULE A
I. For each Fund except Variable Portfolio Core Equity Fund, a series of
RiverSource Variable Portfolio - Select Series, Inc. ("VP Core Equity
Fund"), the fee for services provided with respect to transfer agency
and shareholder servicing shall be equal to 0.06% (6 basis points). In
addition, to the extent RSLIC incurs any out-of-pocket expenses related
to the Funds, as set forth below, RSLIC shall be reimbursed by the
RiverSource Service Corporation monthly for the following out-of-pocket
expenses (for each Fund except VP Core Equity Fund):
o typesetting, printing, paper, envelopes, postage and return
postage for proxy soliciting material, and proxy tabulation costs
o printing, paper, envelopes and postage for records of account,
purchase confirmations, exchange confirmations and exchange
prospectuses, redemption confirmations, redemption checks, and any
other communication required to be sent to shareholders
o typesetting, printing, paper, envelopes and postage for
prospectuses, annual and semiannual reports, statements of
additional information, supplements for prospectuses and
statements of additional information and other required mailings
to shareholders
o other expenses incurred at the request or with the consent of the
Fund
II. For all services provided by RSLIC with respect to management related
services (if any) and for marketing and servicing support with respect
to Funds and, with respect to VP Core Equity Fund, transfer agency and
shareholder servicing hereunder, RiverSource Investments will pay a fee
to RSLIC. The fee will be calculated as follows:
(a) The rate, to be used prospectively, will be calculated as soon as
possible after year end. The rate will be calculated as follows,
using actual data from the previous year:
(1) Calculate the average daily net asset balance of the Funds;
(2) Determine the total compensation paid to the investment
manager by the Funds;
(3) Divide the total of the fees determined under (a)(2) of this
Schedule A by the average daily Fund balances determined
under (a)(1) of this Schedule A to arrive at the effective
investment manager fee in basis points;
(4) Determine the total investment management costs incurred by
RiverSource Investments for these Funds;
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(5) Take the result under (a)(4) of this Schedule A times 1.17,
where ".17" represents a reasonable profit margin as
determined by discussions with external consultants and
consideration of internal hurdle rates;
(6) Divide the result determined under (a)(5) of this Schedule A
by the average daily Fund balances determined under (a)(1)
of this Schedule A to derive the total basis points of
investment management expense;
(7) Subtract the total basis points investment management
expense determined under (a)(6) of this Schedule A from the
effective investment manager fee in total basis points
determined under (a)(3) of this Schedule A.
If the Rate as calculated above is negative, the parties
agree that it will be applied as if it were zero.
(b) The fee transferred from RiverSource Investments to RSLIC each
month will be calculated as follows:
(1) At the end of each month, use the average daily net asset
balance of the Funds during the month just ended;
(2) Take the rate calculated in (a) of this Schedule A times the
average daily net assets;
(3) Divide the result by 12 to get the monthly fee to transfer
from RiverSource Investments to RSLIC.
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