PARTICIPATION AGREEMENT
AMONG
PIONEER VARIABLE CONTRACTS TRUST,
IDS LIFE INSURANCE COMPANY OF NEW YORK
PIONEER INVESTMENT MANAGEMENT, INC.
AND
PIONEER FUNDS DISTRIBUTOR, INC.
THIS AGREEMENT, made and entered into this August 13, 2001, by and
among PIONEER VARIABLE CONTRACTS TRUST, a Delaware business trust (the "Trust"),
IDS LIFE INSURANCE COMPANY OF NEW YORK, a New York life insurance company (the
"Company") on its own behalf and on behalf of each of the segregated asset
accounts of the Company set forth in Schedule A hereto, as may be amended from
time to time (the "Accounts"), PIONEER INVESTMENT MANAGEMENT, INC., a Delaware
corporation ("PIM") and Pioneer Funds Distributor, Inc. ("PFD"), a corporation
organized under the laws of The Commonwealth of Massachusetts.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and its shares are registered or will be registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into
several series and classes of shares, each series being designated a "Portfolio"
and representing an interest in a particular managed pool of securities and
other assets;
WHEREAS, the Trust is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and/or
variable annuity contracts to be offered by insurance companies, including IDS
Life Insurance Company of New York, which have entered into participation
agreements with the Trust (the "Participating Insurance Companies");
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission (the "SEC"), dated July 9, 1997 (File No. 812-10494) (the
"Mixed and Shared Funding Exemptive Order") granting Participating Insurance
Companies and variable annuity and variable life insurance separate accounts
exemptions from the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the
1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent
necessary to permit shares of the Trust to be sold to and held by variable
annuity and variable life insurance companies that may or may not be affiliated
with one another and qualified pension and retirement plans ("Qualified Plans");
WHEREAS, PIM is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
law, and is the Trust's investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or
variable life insurance contracts (individually, the "Contract" or,
collectively, the "Contracts") which, if required by applicable law, will be
registered under the 1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated
asset accounts, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the aforesaid variable
annuity and/or variable life insurance contracts that are allocated to the
Accounts (the Contracts and the Accounts covered by this Agreement, and each
corresponding Portfolio covered by this Agreement in which the Accounts invest,
is specified in Schedule A attached hereto as may be modified from time to
time);
WHEREAS, the Company has registered or will register the Accounts as
unit investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, the Portfolios offered by the Trust to the Company and the
Accounts are set forth on Schedule A attached hereto;
WHEREAS, Pioneer Funds Distributors, Inc. (the "Underwriter") is
registered as a broker-dealer with the Securities and Exchange Commission (the
"SEC") under the Securities Exchange Act of 1934, as amended (hereinafter the
"1934 Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") and is authorized to sell shares of the
Portfolios to unit investment trusts such as the Accounts;
WHEREAS, IDS Life Insurance Company of New York, the underwriter for
the individual variable annuity and the variable life policies, 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 shares in one or more of the
Portfolios specified in Schedule A attached hereto (the "Shares") on behalf of
the Accounts to fund the Contracts, and PFD intends to sell such Shares to the
Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust,
PIM, PFD and the Company agree as follows:
ARTICLE I. Sale of Trust Shares
1.1. PFD agrees to sell to the Company those Shares which the Accounts
order in accordance with the terms of this Agreement (based on orders
placed by Contract owners on that Business Day, as defined below) and
which are available for purchase by such Accounts. Each such order will
be executed on a daily basis at the net asset value next computed after
receipt by the Trust or its designee of the order for the Shares. For
purposes of this Section 1.1, the Company shall be the designee of the
Trust for receipt of such orders from Contract owners and receipt by
such designee shall constitute receipt by the Trust; provided that the
Trust or its designee receives written notice of such orders by the
time the Trust ordinarily calculates its net asset value as described
from time to time in the Trust's prospectus (which as of the date of
this Agreement is 4:00 p.m. New York time on such Business Day.
"Business Day" shall mean any day on which the New York Stock Exchange,
Inc. (the "NYSE") is open for trading and on which the Trust calculates
its net asset value pursuant to the rules of the SEC.
1.2. PFD agrees to make the Shares available for purchase at the
applicable net asset value per share by the Company and the Accounts on
those days on which the Trust calculates its net asset value in
accordance with the rules of the SEC. Notwithstanding the foregoing,
the Board of Trustees of the Trust (the "Board") may refuse to sell any
Shares to the Company and the Accounts,
or suspend or terminate the offering of the Shares to the Company and
the Accounts if such action is required by law or by regulatory
authorities having jurisdiction over PIM, PFD or the Trust or is, in
the sole discretion of the Board acting in good faith and in light of
its fiduciary duties under federal and any applicable state laws, in
the best interest of the Shareholders of such Portfolio.
1.3. The Trust and PFD will sell Trust shares only to Participating
Insurance Companies and Qualified Plans which have agreed to
participate in the Trust to fund their Separate Accounts and/or
Qualified Plans all in accordance with the requirement of Section
817(h) of the Internal Revenue Code, as amended (the "Code") and the
Treasury regulations thereunder. The Company will not resell the Shares
except to the Trust or its agents.
1.4. The Trust agrees, upon the Company's request, to redeem for cash,
any full or fractional Shares held by the Accounts (based on orders
placed by Contract owners on that Business Day). Each such redemption
request shall be executed on a daily basis at the net asset value next
computed after receipt by the Trust or its designee of the request for
redemption. For purposes of this Section 1.4, the Company shall be the
designee of the Trust for receipt of requests for redemption from
Contract owners and receipt by such designee shall constitute receipt
by the Trust; provided that the Trust or its designee receives written
notice of such request for redemption by the time the Trust ordinarily
calculates its net asset value as described from time to time in the
Trust's prospectus (which as of the date of this Agreement is 4:00 p.m.
New York time on such Business Day).
1.5. Each purchase, redemption and exchange order placed by the
Company shall be placed separately for each Portfolio and shall not be
netted with respect to any Portfolio. However, with respect to payment
of the purchase price by the Company and of redemption proceeds by the
Trust, the Company and the Trust shall net purchase and redemption
orders with respect to each Portfolio and shall transmit one net
payment for all of the Portfolios in accordance with Section 1.6
hereof.
1.6. In the event of net purchases, the Company shall notify the Trust
of such purchase order by 11:00 a.m. New York time on the next Business
Day after an order to purchase the Shares is made in accordance with
the provisions of Section 1.1. hereof. The Company's bank shall
initiate payment of such purchase order no later than 11:00 a.m. New
York time on the next Business Day after an order to purchase the
Shares is made in accordance with the provisions of Section 1.1 hereof.
The Company shall transmit all such payments in federal funds by wire.
If payment in federal funds for any purchase is not received or is
received by the Trust after 11:00 a.m. on the next Business Day, the
Company shall promptly, upon the Trust's request, reimburse the Trust
for any charges, costs, fees, interest or other expenses incurred by
the Trust in connection with any advances to, or borrowings or
overdrafts by, the Trust, or any similar expenses (including the cost
of and any loss incurred by the Trust in unwinding any purchase of
securities by the Trust) incurred by the Trust as a result of portfolio
transactions effected by the Trust based upon such purchase request. In
the event of net redemptions, the Trust ordinarily shall transmit the
proceeds of redemptions of Shares by 11:00 a.m. New York time on the
next Business Day after a redemption order is received in accordance
with Section 1.4. hereof, although the Trust reserves the right to
postpone the date of payment or satisfaction upon redemption consistent
with Section 22(e) of the 1940 Act and any rules promulgated
thereunder. Payments for net redemptions shall be in federal funds
transmitted by wire.
1.7. Issuance and transfer of the Shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts.
The Shares ordered from the Trust will be recorded in an appropriate
title for the Accounts or the appropriate subaccounts of the Accounts.
1.8. The Trust shall furnish same-day notice (by wire or telephone,
followed by written confirmation) no later than 7:00 p.m. New York time
on the ex-dividend date to the Company of any dividends or capital gain
distributions payable on the Shares. The Company hereby elects to
receive all such dividends and distributions as are payable on a
Portfolio's Shares in additional Shares of that Portfolio. The Company
reserves the right to revoke this election and, commencing 10 days
after such revocation, to receive all such dividends and distributions
in cash. The Trust shall notify the Company of the number of Shares so
issued as payment of such dividends and distributions.
1.9. The Trust or its custodian shall make the net asset value per
share ("NAV") for each Portfolio available to the Company on each
Business Day as soon as reasonably practical after the NAV is
calculated and shall use its best efforts to make such NAV available by
6:00 p.m. New York time. The Trust or its custodian will notify the
Company as soon as possible if it is determined that the NAV will be
available after 6:00 p.m. New York time and the Trust (or its
custodian) and the Company will mutually agree upon a final deadline
for timely receipt of the NAV on that Business Day. In the event of an
error in the computation of a Portfolio's NAV or any dividend or
capital gain distribution (each, a "pricing error"), PIM or the Trust
shall notify the Company as soon as possible after the discovery of the
error. Such notification may be verbal, but shall be confirmed promptly
in writing in accordance with Article XII of this Agreement. A pricing
error shall be corrected in accordance with the Trust's internal
policies and procedures. If an adjustment is necessary to correct a
material error that occurred through no fault of the Company and such
adjustment has caused Contract owners to receive less than the number
of Shares or redemption proceeds to which they are entitled, the number
of Shares of the applicable Account will be adjusted and the amount of
any underpayments will be paid by the Trust or PIM to the Company for
crediting of such amounts to the Contract owners' accounts. Upon
notification by PIM of any overpayment due to a material error, the
Company shall promptly remit to the Trust or PIM, as appropriate, any
overpayment that has not been paid to Contract owner; however, PIM
acknowledges that the Company does not intend to seek additional
payments form any Contract owner who, because of a pricing error, may
have underpaid for units of interest credited to his/her account. The
costs of correcting such adjustments, including reasonable
administrative costs, shall be borne by the Trust or PIM unless the
Company is at fault in which case such costs shall be borne by the
Company.
ARTICLE II. Certain Representations, Warranties and Covenants
2.1. The Company represents and warrants that the Contracts are or
will be registered under the 1933 Act or are exempt from or not
subject to registration thereunder, and that the Contracts will be
issued, sold, and distributed in compliance in all material respects
with all applicable state and federal laws, including without
limitation the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the 1940 Act. The Company further
represents and warrants that it (i) is an insurance company duly
organized and in good standing under applicable law; (ii) has legally
and validly established, or will establish, each Account as a
segregated asset account under applicable law; (iii) has registered
or, prior to any issuance or sale of the Contracts, will register the
Accounts as unit investment trusts in accordance with the provisions
of the 1940 Act (unless exempt therefrom) to serve as segregated
investment accounts for the Contracts, and (iv) will maintain such
registration for so long as any Contracts are outstanding. The Company
shall amend the registration statements under the 1933 Act for the
Contracts and the registration statements under the 1940 Act for the
Accounts from time to time as required in order to effect the
continuous offering of the Contracts or as may otherwise be required
by applicable law. The Company shall register and qualify the
Contracts for sales in accordance with the securities laws of the
various
states only if and to the extent deemed necessary by the Company. At
the time the Company is required to deliver the Trust's prospectus or
statement of additional information to a purchaser of Shares in
accordance with the requirements of federal or state securities laws,
the Company shall distribute to such Contract purchasers the then
current Trust prospectus, as supplemented.
2.2. The Company represents and warrants that the Contracts are
currently and at the time of issuance will be treated as life
insurance, endowment or annuity contract under applicable provisions of
the Code, that it will maintain such treatment and that it will notify
the Trust or PIM immediately upon having a reasonable basis for
believing that the Contracts have ceased to be so treated or that they
might not be so treated in the future.
2.3. The Company represents and warrants that IDS Life Insurance
Company of New York, the underwriter for the individual variable
annuity contracts and the variable life policies, is a member in good
standing of the NASD and is a registered broker-dealer with the SEC.
The Company represents and warrants that the Company will sell and
distribute such contracts and policies in accordance in all material
respects with all applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 1940
Act and state insurance law suitability requirements.
2.4. The Trust represents and warrants that the Shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance in compliance with the laws of Delaware and
that the Trust is and shall remain registered under the 1940 Act. The
Trust shall amend the registration statement for its Shares under the
1933 Act and the 1940 Act from time to time as required in order to
effect the continuous offering of its Shares. The Trust shall register
and qualify the Shares for sale in accordance with the laws of the
various states only if and to the extent deemed necessary by the
Trust. The Trust, PIM and PFD agree that they will furnish the
information required by state insurance laws so that the Company can
obtain the authority needed to issue the Contracts in the various
states.
2.5. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware. The Trust further
represents that it has adopted a pursuant to Rule 12b-1 under the 1940
Act and imposes an asset-based charge to finance its distribution
expenses with respect to the Class II shares of certain of the Trust's
Portfolios as permitted by applicable law and regulation.
2.6. PFD represents and warrants that it is a member in good standing
of the NASD and is registered as a broker-dealer with the SEC. PFD
represents that it will sell and distribute the Shares in accordance in
all material respects with all applicable state and federal securities
laws, including without limitation the 1933 Act, the 1934 Act, and the
0000 Xxx.
2.7. PIM represents and warrants that it is and shall remain duly
registered as an investment adviser under the Investment Advisers Act
of 1940, as amended.
2.8. No less frequently than annually, the Company shall submit to
the Board such reports, material or data as the Board may reasonably
request so that it may carry out fully the obligations imposed upon it
by the conditions contained in the Mixed and Shared Funding Exemptive
Order pursuant to which the SEC has granted exemptive relief to permit
mixed and shared funding.
2.9. The Trust and PIM represent and warrant that all of their
respective officers, employees, investment advisers, and other
individuals or entities dealing with the money and/or securities of the
Trust are, and shall continue to be at all times, covered by one or
more blanket fidelity bonds or similar coverage for the benefit of the
Trust in an amount not less than the minimal coverage
required by Rule 17g-1 under the 1940 Act or related provisions as may
be promulgated from time to time. The aforesaid bonds shall include
coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Company represents and warrants that all
of its respective officers, employees, and other individuals or
entities employed or controlled by the Company dealing with the money
and/or securities of the Trust are, and shall continue to be at all
times, covered by a blanket fidelity bond or similar coverage as deemed
appropriate by the Company. The aforesaid bond shall include coverage
for larceny and embezzlement and shall be issued by a reputable bonding
company. The Company agrees that any amounts received under such bond
relating to a claim arising under this Agreement will be held by the
Company for the benefit of the Trust. The company agrees to make all
reasonable efforts to maintain such bond and agrees to notify the Trust
and PIM in writing in the event such coverage terminates.
2.10. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Code, that the Contracts are
currently at the time of issuance and, assuming the Trust meets the
requirements of Article VI, will be treated as annuity contracts under
applicable provisions of the Code, and that it will make every effort
to maintain such treatment and that it will notify the Trust, PFD and
PIM immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so
treated in the future. In addition, the Company represents and warrants
that each Account is a "segregated asset account" and that interests in
the Account are offered exclusively through the purchase of or transfer
into a "variable contract" within the meaning of such terms under
Section 817 of the Code and the regulations thereunder. The Company
will use every effort to continue to meet such definitional
requirements, and it will notify the Trust, PFD and PIM immediately
upon having a reasonable basis for believing that such requirements
have ceased to be met or that they might not be met in the future. The
Company represents and warrants that it will not purchase Trust shares
with assets derived from tax-qualified retirement plans except,
indirectly, through Contracts purchased in connection with such plans.
ARTICLE III. Prospectus and Proxy Statements; Voting
3.1. At least annually, the Trust or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing only the Portfolios listed in Schedule A hereto) for the
Shares as the Company may reasonably request for distribution to
existing Contract owners whose Contracts are funded by such Shares. The
Trust or its designee shall provide the Company, at the Company's
expense, with as many copies of the current prospectus for the Shares
as the Company may reasonably request for distribution to prospective
purchasers of Contracts. If requested by the Company in lieu thereof,
the Trust or its designee shall provide such documentation (including a
"camera ready" copy of the new prospectus as set in type or, at the
request of the Company, as a diskette in the form sent to the financial
printer) and other assistance as is reasonably necessary in order for
the parties hereto once each year (or more frequently if the prospectus
for the Shares is supplemented or amended) to have the prospectus for
the Shares printed together in one document with other prospectuses;
the expenses of such printing to be apportioned between (a) the Company
and (b) the Trust or its designee in proportion to the number of pages
of the Shares' prospectuses and the other prospectuses, taking account
of other relevant factors affecting the expense of printing, such as
covers, columns, graphs and charts; the Trust or its designee to bear
the cost of printing the Trust's prospectus portion of such document
for distribution to owners of existing Contracts funded by the Shares
and the Company to bear the expenses of printing the portion of such
document relating to the other prospectuses; provided, however, that
the Company shall bear all printing expenses of such combined documents
where used for distribution to prospective purchasers or to owners of
existing Contracts not funded by the Shares. In the event that the
Company requests that the Trust or its designee provides the Trust's
prospectus
in a "camera ready," diskette format or other mutually agreed upon
format, the Trust shall be responsible for providing the prospectus in
the format in which it or PIM is accustomed to formatting prospectuses
and shall bear the expense of providing the prospectus in such format
(e.g., typesetting expenses), and the Company shall bear the expense of
adjusting or changing the format to conform with any of its
prospectuses, subject to PIM's approval which shall not be unreasonably
withheld.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or
its designee. The Trust or its designee, at its expense, shall print
and provide such statement of additional information to the Company (or
a master of such statement suitable for duplication by the Company) for
distribution to any owner of a Contract funded by the Shares. The Trust
or its designee, at the Company's expense, shall print and provide such
statement to the Company (or a master of such statement suitable for
duplication by the Company) for distribution to a prospective purchaser
who requests such statement or to an owner of a Contract not funded by
the Shares.
3.3. The Trust or its designee shall provide the Company free of
charge copies, if and to the extent applicable to the Shares, reports
to Shareholders and other communications to Shareholders in such
quantity as the Company shall reasonably require for distribution to
Contract owners.
3.4 The Trust or PIM will provide the Company with as much notice as
is reasonably practicable of any proxy solicitation for any Portfolio,
and of any material change in the 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 Company, the Trust and PIM will cooperate so as to enable
the Trust or PIM to solicit proxies from Contract owners or to make
changes to the Trust's prospectus, statement of additional information
or registration statement, in an orderly manner. The Company will
provide to a proxy solicitation and tabulation firm selected by the
Trust or PIM a magnetic tape or other mutually agreed upon electronic
storage media the names, addresses and unit holdings of Contract owners
as of the record date set by the Trustees of the Trust. The Trust and
PIM will make reasonable efforts to attempt to have changes affecting
Contract prospectuses become effective simultaneously with the annual
updates for such prospectuses.
3.5. The Trust hereby notifies the Company that it may be appropriate
to include in the prospectus pursuant to which a Contract is offered
disclosure regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
(a) provide for the solicitation of voting instructions from
Contract owners;
(b) vote the Shares in accordance with instructions received
from Contract owners; and
(c) vote the Shares for which no instructions have been received
in the same proportion as the Shares of such Portfolio for
which instructions have been received from Contract owners;
so long as and to the extent that the SEC continues to interpret the
1940 Act to require pass through voting privileges for variable
contract owners. The Company will in no way recommend action in
connection with or oppose or interfere with the solicitation of proxies
for the Shares held for such Contract owners. The Company reserves the
right to vote shares held in any segregated asset
account in its own right, to the extent permitted by law. Participating
Insurance Companies shall be responsible for assuring that each of
their separate accounts holding Shares calculates voting privileges in
the manner required by the Mixed and Shared Funding Exemptive Order.
The Trust and PIM will notify the Company of any changes of
interpretations or amendments to the Mixed and Shared Funding Exemptive
Order.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to
PFD or its designee, each piece of sales literature or other
promotional material in which the Trust, PIM, any other investment
adviser to the Trust, or any affiliate of PIM are named, at least ten
(10) Business Days prior to its use. No such material shall be used if
PFD or its designee reasonably objects to such use within five (5)
Business Days after receipt of such material.
4.2. The Company shall not make any representation on behalf of the
Trust, PIM, any other investment adviser or subadviser to the Trust or
any affiliate of PIM and shall not give any information on behalf of
the Trust, PIM, any other investment adviser or subadviser to the
Trust, or any affiliate of PIM or concerning the Trust or any other
such entity in connection with the sale of the Contracts other than the
information contained in the registration statement, prospectus or
statement of additional information for the Shares, as such
registration statement, prospectus and statement of additional
information may be amended or supplemented from time to time, or in
reports or proxy statements for the Trust, or in published reports for
the Trust which are in the public domain, or in sales literature or
other promotional material approved by the Trust, PIM, PFD or their
respective designees, except with the permission of the Trust, PIM or
their respective designees. The Trust, PIM, PFD or their respective
designees each agrees to respond to any request for approval on a
prompt and timely basis. The Company shall adopt and implement
procedures reasonably designed to ensure that information concerning
the Trust, PIM, PFD or any of their affiliates which is intended for
use only by brokers or agents selling the Contracts (i.e., information
that is not intended for distribution to Contract owners or prospective
Contract owners) is so used, and neither the Trust, PIM, PFD nor any of
their affiliates shall be liable for any losses, damages or expenses
relating to the improper use of such broker only materials.
4.3. PFD shall furnish, or shall cause to be furnished, to the
Company or its designee, each piece of sales literature or other
promotional material in which the Company and/or the Accounts is
named, at least ten (10) Business Days prior to its use. No such
material shall be used if the Company or its designee reasonably
objects to such use within five (5) Business Days after receipt of
such material.
4.4. The Trust, PIM and PFD shall not give any information or make
any representations on behalf of the Company or concerning the Company,
the Accounts, or the Contracts in connection with the sale of the
Contracts other than the information or representations contained in a
registration statement, prospectus, or statement of additional
information for the Contracts, as such registration statement,
prospectus and statement of additional information may be amended or
supplemented from time to time, or in reports for the Accounts, or in
published reports for the Accounts which are in the public domain, or
in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company. The
Company or its designee agrees to respond to any request for approval
on a prompt and timely basis. The parties hereto agree that this
Section 4.4. is neither intended to designate nor otherwise imply that
PIM is an underwriter or distributor of the Contracts.
4.5. The Company and the Trust shall provide, or shall cause to be
provided, to the other at least one complete copy of all registration
statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional
materials, and all amendments to any of the above, that relate to the
Contracts, or to the Trust or its Shares, prior to or contemporaneously
with the filing of such document with the SEC or other regulatory
authorities.
4.6. For purpose of this Article IV and Article VIII, the phrase
"sales literature or other promotional material" includes but is not
limited to advertisements (such as material published, or designed for
use in, a newspaper, magazine, or other periodical, radio, television,
telephone, electronic messages or tape recording, videotape display,
signs or billboards, motion pictures, or other public media,
including, for example, on-line networks such as the Internet or other
electronic media), and sales literature (such as brochures, electronic
messages, circulars, reprints or excerpts or any other advertisement,
sales literature, or published articles), distributed or made
generally available to customers or the public, educational or
training materials or communications distributed or made generally
available to some or all agents or employees, and shareholder reports,
proxy materials (including solicitations for voting instructions) and
any other material constituting sales literature or advertising under
the NASDR Conduct Rules, the 1933 Act or the 0000 Xxx.
4.7. At the request of any party to this Agreement, each other party
will make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records,
data, access to operating procedures that may be reasonably requested
in connection with compliance and regulatory requirements related to
the Agreement or any party's obligations under this Agreement.
4.8. Subject to the terms of Sections 4.1 and 4.2 of this Agreement,
the Trust (and its Portfolios), PIM and PFD each consents, in
connection with the marketing of the Contracts, to the Company's use of
their names or other identifying marks, including Pioneer
Investments(R) and Pioneer's sail logo, in connection with the
marketing of the Contracts. The Trust, PIM or PFD or their affiliates
may withdraw this authorization as to any particular use of any such
name or identifying xxxx at any time: (i) upon a reasonable
determination that such use would have a material adverse effect on its
reputation or marketing efforts or its affiliates or (ii) if any of the
Portfolios of the Trust cease to be available through the Company.
Except as set forth in the previous sentence, the Company will not
cause or permit, without prior written permission, the use, description
or reference to a Pioneer party's name, or to the relationship
contemplated in this Agreement, in any advertisement, or promotional
materials or activities, including without limitation, any
advertisement or promotional materials published, distributed, or made
available, or any activity conducted through, the Internet or any other
electronic medium.
4.9. PIM will be responsible for calculating the performance
information for the Trust. PIM and the Trust agree to provide the
Company with Trust performance information on a timely basis to enable
the Company to calculate performance information for the Contracts in
accordance with applicable state and federal law. The Company will be
responsible for calculating the performance information for the
Contracts. The Company agrees to provide the Trust with Contract
performance information on a timely basis to enable the Trust to
disclose performance information for the Contracts in accordance with
applicable state and federal law.
ARTICLE V. Fees and Expenses
5.1. Neither the Trust, PIM nor PFD shall pay any fee or other
compensation to the Company under this Agreement, other than pursuant
to Schedule B attached hereto, and the Company shall pay no fee or
other compensation to the Trust, PIM or PFD under this Agreement.
Notwithstanding the foregoing, the parties hereto will bear certain
expenses under the provisions of this Agreement and shall reimburse
other parties for expenses initially paid by one party but allocated to
another party. In addition, nothing herein shall prevent the parties
hereto from otherwise agreeing to perform, and arranging for
appropriate compensation for, other services relating to the Trust
and/or to the Accounts pursuant to this Agreement.
5.2. The Trust or its designee shall bear the expenses for the cost
of registration and qualification of the Shares under all applicable
federal and state laws, including preparation and filing of the Trust's
registration statement, and payment of filing fees and registration
fees; preparation and filing of the Trust's proxy materials and reports
to Shareholders; setting in type and printing its prospectus and
statement of additional information (to the extent provided by and as
determined in accordance with Article III above); setting in type and
printing the proxy materials and reports to Shareholders (to the extent
provided by and as determined in accordance with Article III above);
the preparation of all statements and notices required of the Trust by
any federal or state law with respect to its Shares; all taxes on the
issuance or transfer of the Shares; and the costs of distributing the
Trust's prospectuses and proxy materials to owners of Contracts funded
by the Shares and any expenses permitted to be paid or assumed by the
Trust pursuant to a plan, if any, under Rule 12b-1 under the 1940 Act.
The Trust shall not bear any expenses of marketing the Contracts.
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the
Contracts and of distributing the Trust's Shareholder reports to
Contract owners. The Company shall bear all expenses associated with
the registration, qualification, and filing of the Contracts under
applicable federal securities and state insurance laws; the cost of
preparing, printing and distributing the Contract prospectus and
statement of additional information; and the cost of preparing,
printing and distributing annual individual account statements for
Contract owners as required by state insurance laws.
5.4. The Company agrees to provide certain administrative services,
specified in Schedule B attached hereto, in connection with the
arrangements contemplated by this Agreement. The parties intend that
the services referred to in the Section 5.4 be recordkeeping,
shareholder communication, and other transaction facilitation and
processing, and related administrative serves services and are not the
services of an underwriter or principal underwriter of the Trust and
the Company is not an underwriter for Shares within the meaning of the
1933 Act.
ARTICLE VI. Diversification and Related Limitations
6.1. The Trust and PIM represent and warrant that each Portfolio of
the Trust in which an Account invests will meet the diversification
requirements of Section 817(h)(1) of the Code and Treas. Reg. 1.817-5,
relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts, as they may be amended from
time to time (and any revenue rulings, revenue procedures, notices, and
other published announcements of the Internal Revenue Service
interpreting these sections), as if those requirements applied directly
to each such Portfolio. In the event of a breach of this representation
and warranty by the Trust and/or PIM, they will take all reasonable
steps:
(a) to notify the Company of such breach; and
(b) to adequately diversify the Trust so as to achieve
compliance within the grace period afforded by Treas. Reg.
1.817-5.
6.2. The Trust and PIM represent that each Portfolio will elect to be
qualified as a Regulated Investment Company under Subchapter M of the
Code and that they will maintain such qualification (under Subchapter M
or any successor or similar provision).
6.3. No Shares of the Trust will be sold directly to the general
public.
ARTICLE VII. Potential Material Conflicts
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for
the existence of any material irreconcilable conflict between the
interests of the variable annuity contract owners and the variable life
insurance policy owners of the Company and/or affiliated companies
("contract owners") investing in the Trust. A material irreconcilable
conflict may arise for a variety of reasons, including: (a) an action
by any state insurance regulatory authority; (b) a change in applicable
federal or state insurance, tax, or securities laws or regulations, or
a public ruling, private letter ruling, no-action or interpretive
letter, or any similar action by insurance, tax or securities
regulatory authorities; (c) an administrative or judicial decision in
any relevant proceeding; (d) the manner in which the investments of any
Portfolio are being managed; (e) a difference in voting instructions
given by variable annuity contract and variable life insurance contract
owners or by contract owners of different Participating Insurance
Companies; or (f) a decision by a Participating Insurance Company to
disregard the voting instructions of contract owners. The Board shall
have the sole authority to determine if a material irreconcilable
conflict exists, and such determination shall be binding on the Company
only if approved in the form of a resolution by a majority of the
Board, or a majority of the disinterested trustees of the Board. The
Board will give prompt notice of any such determination to the Company.
7.2. The Company agrees that it will be responsible for assisting the
Board in carrying out its responsibilities under the conditions set
forth in the Trust's exemptive application pursuant to which the SEC
has granted the Mixed and Shared Funding Exemptive Order by providing
the Board, as it may reasonably request, with all information necessary
for the Board to consider any issues raised and agrees that it will be
responsible for promptly reporting any potential or existing conflicts
of which it is aware to the Board including, but not limited to, an
obligation by the Company to inform the Board whenever contract owner
voting instructions are disregarded. The Company also agrees that, if a
material irreconcilable conflict arises, it will at its own cost remedy
such conflict up to and including (a) withdrawing the assets allocable
to some or all of the Accounts (or subaccounts of the Accounts) from
the Trust or any Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Portfolio of
the Trust, or submitting to a vote of all affected contract owners
whether to withdraw assets from the Trust or any Portfolio and
reinvesting such assets in a different investment medium and, as
appropriate, segregating the assets attributable to any appropriate
group of contract owners (e.g., annuity contract owners, life insurance
owners or variable contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or
offering to any of the affected contract owners the option of
segregating the assets attributable to their contracts or policies, and
(b) establishing a new registered management investment company and
segregating the assets underlying the Contracts, unless a majority of
Contract owners materially adversely affected by the conflict have
voted to decline the offer to establish a new registered management
investment company.
7.3. A majority of the disinterested trustees of the Board shall
determine whether any proposed action by the Company adequately
remedies any material irreconcilable conflict. In the event that the
Board determines that any proposed action does not adequately remedy
any material irreconcilable conflict, the Company will withdraw from
investment in the Trust each of the Accounts designated by the
disinterested trustees and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination
shall be limited to the extent required to remedy any such material
irreconcilable conflict as determined by a majority of the
disinterested trustees of the Board.
7.4 If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract owner voting
instructions and that decision represents a minority position or would
preclude a majority vote, the Company may be required, at the Trust's
election, to withdraw the Account's investment in the Trust and
terminate this Agreement; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the
Trust's independent trustees. No charge or penalty will be imposed as
a result of such withdrawal. Any such withdrawal and termination must
take place within six (6) months after the Trust gives written notice
that this provision is being implemented, and until the end of that
six-month period PFD and the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of
shares of the Trust.
7.5. If material irreconcilable conflict arises because of particular
state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company
will withdraw the Account's investment in the Trust and terminate this
Agreement within six (6) months after the Trust's Board informs the
Company in writing that it has determined that such decision has
created a material irreconcilable conflict; provided, however, that
such withdrawal and termination shall be limited to the extent required
by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Trust's Board. Until the
end of the foregoing six (6) month period, the Trust and PFD shall
continue to accept and implement orders by the Company for the purchase
and redemption of shares of the Trust.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine
whether any proposed action adequately remedies any material
irreconcilable conflict, but in no event will the Trust be required to
establish a new funding medium for the Contracts. The Company shall not
be required by Section 7.2 to establish a new funding medium for the
contracts if an offer to do so has been declined by vote of a majority
of Contract owners affected by the material irreconcilable conflict. In
the event that the Board determines that any proposed action does not
adequately remedy any material irreconcilable conflict, then the
Company will withdraw the Account's investment in the Trust and
terminate this Agreement within six (6) months after the Board informs
the Company in writing of the foregoing determination; provided,
however, that such withdrawal and termination shall be limited to the
extent required by any such material irreconcilable conflict as
determined by a majority of the independent trustees.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from
any provision of the 1940 Act or the rules promulgated thereunder
with respect to mixed or shared funding (as defined in the Mixed and
Shared Funding Exemptive Order) on terms and conditions materially
different from those contained in the Mixed and Shared Funding
Exemptive Order, then (a) the Trust and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to
comply with Rule 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as
adopted, to the extent such rules are applicable; and (b) Sections 3.5,
3.6, 7.1, 7.2, 7.3 and 7.7 of this Agreement shall continue in effect
only to the extent that terms and conditions substantially identical to
such Sections are contained in such Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
The Company agrees to indemnify and hold harmless the Trust,
PIM, PFD, any affiliates of PIM, and each of their respective
directors, trustees, officers and each person, if any, who controls the
Trust or PIM within the meaning of Section 15 of the 1933 Act, and any
agents or employees of the foregoing (each an "Indemnified Party," or
collectively, the "Indemnified Parties" for purposes of this Section
8.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Company) or expenses (including reasonable counsel fees) to which any
Indemnified Party may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement, prospectus or statement of
additional information for the Contracts or contained in the
Contracts or sales literature or other promotional material
for the Contracts (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reasonable reliance upon
and in conformity with information furnished to the Company
or its designee by or on behalf of the Trust, PIM or PFD for
use in the registration statement, prospectus or statement
of additional information for the Contracts or in the
Contracts or sales literature or other promotional material
(or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Shares; or
(b) arise out of or as a result of statements or representations
not supplied by the Company or its designee, or persons
under its control (other than statements or representations
contained in the Trust's registration statement, prospectus,
statement of additional information or in sales literature
or other promotional material of the Trust and on which the
Company has reasonably relied) or wrongful conduct of the
Company or persons under its control, with respect to the
sale or distribution of the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement, prospectus, statement of additional information,
or sales literature or other promotional literature of the
Trust, or any
amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to
the Trust by or on behalf of the Company; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company; or
(e) arise as a result of any failure by the Company to perform
any of its obligations under this Agreement;
as limited by and in accordance with the provisions of this Article
VIII.
8.2. Indemnification by PIM and PFD
PIM and PFD agree to indemnify and hold harmless the Company
and each of its directors, trustees and officers and each person, if
any, who controls the Company within the meaning of Section 15 of the
1933 Act, and any directors, trustees, officers, agents or employees of
the foregoing (each an "Indemnified Party," or collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Trust) or expenses
(including reasonable counsel fees) to which any Indemnified Party may
become subject under any statute, at common law or otherwise, insofar
as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement, prospectus, statement of
additional information or sales literature or other
promotional material of the Trust (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement therein not misleading,
provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reasonable
reliance upon and in conformity with information furnished
to the Trust, PIM, PFD or their respective designees by or
on behalf of the Company for use in the registration
statement, prospectus or statement of additional information
for the Trust or in sales literature or other promotional
material for the Trust (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Contract's registration statement, prospectus, statement of
additional information or in sales literature or other
promotional material for the Contracts not supplied by the
Trust, PIM, PFD or any of their respective designees or
persons under their respective control and on which any such
entity has reasonably relied) or wrongful conduct of the
Trust, PIM, PFD or persons under their control, with respect
to the sale or distribution of the Contracts or Shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement, prospectus, statement of additional information,
or sales literature or other promotional literature of the
Accounts or relating to the Contracts, or any amendment
thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to
the Company by or on behalf of the Trust, PIM or PFD; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement) or
arise out of or result from any other material breach of
this Agreement by the Trust; or
(e) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset
value per share or dividend or capital gain distribution
rate; or
(f) arise as a result of any failure by PIM or PFD to perform
any of their respective obligations under this Agreement;
as limited by and in accordance with the provisions of this Article
VIII.
8.3. In no event shall the Trust, PIM or PFD be liable under the
indemnification provisions contained in this Agreement to any
individual or entity, including without limitation, the Company, or any
Participating Insurance Company or any Contract owner, with respect to
any losses, claims, damages, liabilities or expenses that arise out of
or result from (i) a breach of any representation, warranty, and/or
covenant made by the Company hereunder or by any Participating
Insurance Company under an agreement containing substantially similar
representations, warranties and covenants; (ii) the failure by the
Company or any Participating Insurance Company to maintain its
segregated asset account (which invests in any Portfolio) as a legally
and validly established segregated asset account under applicable state
law and as a duly registered unit investment trust under the provisions
of the 1940 Act (unless exempt therefrom); or (iii) the failure by the
Company or any Participating Insurance Company to maintain its variable
annuity and/or variable life insurance contracts (with respect to which
any Portfolio serves as an underlying funding vehicle) as life
insurance, endowment or annuity contracts under applicable provisions
of the Code.
8.4. Neither the Company, the Trust, PIM nor PFD shall be liable
under the indemnification provisions contained in this Agreement with
respect to any losses, claims, damages, liabilities or expenses to
which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, willful misconduct, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations
and duties under this Agreement.
8.5. Promptly after receipt by an Indemnified Party under this
Section 8.5. of notice of commencement of any action, such Indemnified
Party will, if a claim in respect thereof is to be made against the
indemnifying party under this section, notify the indemnifying party of
the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any Indemnified Party otherwise than under this section. In
case any such action is brought against any Indemnified Party, and it
notified the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume the
defense thereof, with counsel satisfactory to such Indemnified Party.
After notice from the indemnifying party of its intention to assume the
defense of an action, the Indemnified Party shall bear the expenses of
any additional counsel obtained by it, and the indemnifying party shall
not be liable to such Indemnified Party under this section for any
legal or other expenses subsequently incurred by such Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation.
8.6. A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article VIII. The indemnification provisions contained in this Article
VIII shall survive any termination of this Agreement.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, the
Mixed and Shared Funding Exemptive Order) and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE X. Notice of Formal Proceedings or litigation
The Trust, PIM, PFD and the Company agree that each such party
shall promptly notify the other parties to this Agreement, in writing,
of the institution of any formal proceedings brought against such party
or its designees by the NASD, the SEC, or any insurance department or
any other regulatory body regarding such party's duties under this
Agreement or related to the sale of the Contracts, the operation of the
Accounts, or the purchase of the Shares. Each of the parties further
agrees promptly to notify the other parties of the commencement of any
litigation or proceeding against it or any of its respective officers,
directors, trustees, employees or 1933 Act control persons in
connection with this Agreement, the issuance or sale of the Contracts,
the operation of the Accounts, or the sale or acquisition of Shares.
The indemnification provisions contained in this Article X shall
survive any termination of this Agreement.
ARTICLE XI. Termination
11.1. This Agreement shall terminate with respect to the Accounts, or
one, some, or all Portfolios:
(a) at the option of any party upon sixty (60) days' advance
written notice delivered to the other parties or, if later,
upon receipt of any required exemptive relief or orders from
the SEC, unless otherwise agreed in a separate written
agreement by the parties; provided, however, that such
notice shall not be given earlier than six (6) months
following the date of this Agreement; or
(b) at the option of the Company to the extent that the Shares
of Portfolios are not reasonably available to meet the
requirements of the Contracts or are not
"appropriate funding vehicles" for the Contracts, as
reasonably determined by the Company. Without limiting the
generality of the foregoing, the Shares of a Portfolio would
not be "appropriate funding vehicles" if, for example, such
Shares did not meet the diversification or other
requirements referred to in Article VI hereof; or if the
Company would be permitted to disregard Contract owner
voting instructions pursuant to Rule 6e-2 or 6e-3(T) under
the 1940 Act. Prompt notice of the election to terminate for
such cause and an explanation of such cause shall be
furnished to the Trust by the Company; or
(c) at the option of the Trust, PIM or PFD upon institution of
formal proceedings against the Company by the NASD, the SEC,
or any insurance department or any other regulatory body
regarding the Company's duties under this Agreement or
related to the sale of the Contracts, the operation of the
Accounts, or the purchase of the Shares; provided that the
party terminating this Agreement under this provision shall
give notice of such termination to the other parties to this
Agreement; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust by the NASD, the SEC, or any
state securities or insurance department or any other
regulatory body regarding the duties of the Trust, PIM or
PFD under this Agreement or related to the sale of the
Shares; provided that the party terminating this Agreement
under this provision shall give notice of such termination
to the other parties to this Agreement; or
(e) at the option of the Company, the Trust, PIM or PFD upon
receipt of any necessary regulatory approvals and/or the
vote of the Contract owners having an interest in the
Accounts (or any subaccounts) to substitute the shares of
another investment company for the corresponding Portfolio
Shares in accordance with the terms of the Contracts for
which those Portfolio Shares had been selected to serve as
the underlying investment media. The Company will give
thirty (30) days' prior written notice to the Trust of the
Date of any proposed vote or other action taken to replace
the Shares; or
(f) at the option of the Trust, PIM or PFD by written notice to
the Company, if any one or all of the Trust, PIM or PFD
respectively, shall determine, in their sole judgment
exercised in good faith, that the Company has suffered a
material adverse change in its business, operations,
financial condition, or prospects since the date of this
Agreement or is the subject of material adverse publicity;
or
(g) at the option of the Company by written notice to the Trust,
PIM or PFD, if the Company shall determine, in its sole
judgment exercised in good faith, that the Trust, PIM or PFD
has suffered a material adverse change in this business,
operations, financial condition or prospects since the date
of this its Agreement or is the subject of material adverse
publicity; or
(h) at the option of any party to this Agreement, upon another
unaffiliated party's material breach of any provision of or
representation contained in this.
11.2. The notice shall specify the Portfolio or Portfolios, Contracts
and, if applicable, the Accounts (or subaccounts of the Accounts) as to
which the Agreement is to be terminated.
11.3. It is understood and agreed that the right of any party hereto
to terminate this Agreement pursuant to Section 11.1(a) may be
exercised for cause or for no cause.
11.4. Except as necessary to implement Contract owner initiated
transactions, or as required by state insurance laws or regulations,
the Company shall not redeem the Shares attributable to the Contracts
(as opposed to the Shares attributable to the Company's assets held in
the Accounts), and the Company shall not prevent Contract owners from
allocating payments to a Portfolio that was otherwise available under
the Contracts, until thirty (30) days after the Company shall have
notified the Trust of its intention to do so.
11.5. Notwithstanding any termination of this Agreement, the Trust and
PFD shall, at the option of the Company and if consistent with Section
7, continue to make available additional shares of the Portfolios
pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this
Agreement (the "Existing Contracts"), except as otherwise provided
under Article VII of this Agreement; provided, however, that in the
event of a termination pursuant to Section 11.1. (c), (f) or (h), the
Trust, PIM and PFD shall at their option have the right to terminate
immediately all sales of Shares to the Company. Specifically, without
limitation, the owners of the Existing Contracts shall be permitted to
transfer or reallocate investment under the Contracts, redeem
investments in any Portfolio and/or invest in the Trust upon the making
of additional purchase payments under the Existing Contracts.
11.6 Notwithstanding any termination of this Agreement, each party's
obligations under Article VIII to indemnify the other parties shall
survive and not be affected by any termination of this Agreement. In
addition, with respect to Existing Contracts, all provisions of this
Agreement shall also survive and not be affected by any termination of
this Agreement
ARTICLE XII. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail, overnight courier or facsimile to the other party at the address
of such party set forth below or at such other address as such party may from
time to time specify in writing to the other party.
If to the Trust:
Pioneer Variable Contracts Trust
x/x Xxxx xxx Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Secretary
If to the Company:
IDS Life Insurance Company of New York
Attn: Vice President, Annuities
1675 AXP Financial Center
Xxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
With a copy to:
IDS Life Insurance Company of New York
Attn: Counsel
50607 AXP Financial Center
Xxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
If to PIM:
Pioneer Investment Management, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxx, Senior Counsel
If to PFD:
Pioneer Funds Distributor, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx, Senior Vice President
ARTICLE XIII. Miscellaneous
13.1. Subject to the requirement of legal process and regulatory
authority, each party hereto shall treat as confidential all
information reasonably identified as confidential in writing
by any party hereto and, except as permitted by this Agreement
or as otherwise required by applicable law or regulation,
shall not disclose, disseminate or utilize such other
confidential information without the express written consent
of the affected party until such time as it may come into the
public domain. Notwithstanding anything to the contrary in
this Agreement, in addition to and not in lieu of other
provisions in this Agreement:
(a) "Confidential Information: includes without limitation all
information regarding the customers of the Company, the
Trust, PIM, PFD or any of their subsidiaries, affiliates or
licensees; or the accounts, account numbers, names,
addresses, social security numbers or any other personal
identifier of such customers; or any information derived
therefrom.
(b) Neither the Company, the Trust, PIM or PFD may disclose
Confidential Information for any purpose other than to carry
out the purpose for which Confidential Information was
provided to the Company, the Trust, PIM or PFD as set forth
in this Agreement; and the Company, the Trust, PIM and PFD
agree to cause their employees, agents and representatives,
or any other party to whom the Company, the Trust, PIM or
PFD may provide access to or disclose Confidential
Information to limit the use and disclosure of Confidential
Information to that purpose.
(c) The Company, the Trust, PIM and PFD agree to implement
appropriate measures designed to ensure the security and
confidentiality of Confidential Information, to protect such
information against any anticipated threats or hazards to
the security
and integrity of such information, and to protect against
unauthorized access to, or use of, Confidential Information
that could result in substantial harm or inconvenience to
any of the customers of the Company or any of its
subsidiaries, affiliates or licensees; the Company, the
Trust, PIM and PFD further agree to cause all their
respective agents, representatives or subcontractors, or any
other party to whom they provide access to or disclose
Confidential Information, to implement appropriate measures
to meet the objectives set forth in this Section 13.1.
13.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the
same instrument.
13.4. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
13.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
13.6. Each party hereto shall cooperate with each other party in
connection with inquiries by appropriate governmental authorities
(including without limitation the SEC, the NASD, and state insurance
regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
13.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled
to under state and federal laws.
13.8. A copy of the Trust's Certificate of Trust is on file with the
Secretary of State of Delaware. The Company acknowledges that the
obligations of or arising out of this instrument are not binding upon
any of the Trust's trustees, officers, employees, agents or
shareholders individually, but are binding solely upon the assets and
property of the Trust in accordance with its proportionate interest
hereunder. The Company further acknowledges that the assets and
liabilities of each Portfolio are separate and distinct and that the
obligations of or arising out of this instrument are binding solely
upon the assets or property of the Portfolio on whose behalf the Trust
has executed this instrument. The Company also agrees that the
obligations of each Portfolio hereunder shall be several and not joint,
in accordance with its proportionate interest hereunder, and the
Company agrees not to proceed against any Portfolio for the obligations
of another Portfolio.
13.9. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a
forum jointly selected by the relevant parties (but if applicable law
requires some other forum, then, such other forum) in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.
13.10. This Agreement of any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of
all parties hereto.
13.11. The Trust, PIM and PFD agree that the obligations assumed by the
Company shall be limited in any case to the Company and its assets and
neither the Trust, PIM nor PFD shall seek satisfaction of any such
obligation from the shareholders of Company, the directors, officers,
employees or agents of the Company, or any of them.
13.12. No provision of the Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or
indemnifications, as between PIM and the Trust and PFD and the Trust.
13.13. This Agreement, including any Schedules hereto, may be amended
only by a written instrument executed by each party hereto.
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.
IDS LIFE INSURANCE COMPANY OF NEW YORK
By its authorized officer,
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Xxxxxxx X. Xxxxxxxx
President
Date:
Attest:
By: /s/ Xxxx Xxxxx Xxxxxxx
----------------------
Xxxx Xxxxx Xxxxxxx
Assistant Secretary
PIONEER VARIABLE CONTRACTS TRUST,
on behalf of the Portfolios
By its authorized officer and not
individually,
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Secretary
Date:
PIONEER INVESTMENT MANAGEMENT, INC.
By its authorized officer,
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Chief Executive Officer
Date:
SCHEDULE A
ACCOUNDS, CONTRACTS AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
As of August 13, 2001
=================================== ========================================= =======================================
Name of Separate Portfolios and
Account and Date Contracts Funded Class of Shares
Established by Board of Directors by Separate Account Applicable to Contracts
=================================== ========================================= =======================================
Variable Annuity
IDS Life of New York Variable American Express Retirement Advisor Pioneer Equity-Income VCT Portfolio -
Annuity Account (formerly IDS Life Advantage(SM) Variable Annuity (New York) Class II Shares
of New York Flexible Portfolio
Annuity Account), established Pioneer Europe VCT Portfolio - Class II
April 17, 1996 Shares
Variable Life
----------------------------------- ----------------------------------------- ---------------------------------------
SCHEDULE B
1. Administrative Services
Administrative services to Contract owners and participants shall be
the responsibility of the Company and shall not be the responsibility of the
Trust or PFD. The Company will provide properly registered and licensed
personnel and any systems needed for all Contract owners servicing and support -
for both fund and annuity information and questions, including:
Maintenance of Books and Records for Individual Policyholder Accounts
o Record issuance of shares
o Record transfers (via net purchase orders)
o Reconciliation and balancing of the separate account at the fund level
in the general ledger, at various banks and within systems interface
Communication with the Trust and/or PIM or its affiliates
o Purchase Orders
>> Determination of net amount available for investment by the Trust
>> Deposit of receipts at the Trust's custodian (generally by wire
transfer)
>> Notification of the custodian of the estimated amount required to pay
dividend or distribution
o Redemption Orders
>> Determination of net amount required for redemptions by the Trust
>> Notification of the custodian and Trust of cash required to meet
payments
>> Cost of share redemptions
o Daily pricing of the shares of the Trust held in individual policyholder
accounts
Processing Distributions from the Trust for Individual Policyholder Accounts
o Process ordinary dividends and capital gains
o Reinvest the Trust's distributions
Reports
o Periodic information reporting to the Trust and its Board
Proxy Solicitations
o Assistance with proxy solicitations, specifically with respect to
soliciting voting instructions from Contract owners
Trust-Related Contract Owner Services
o Financial consultant's advice to Contract owners with respect to Trust
inquiries (not including information about performance or related to
sales)
o Communications to Contract owners regarding Trust and subaccount
performance
Other Administrative Support
o Providing other administrative support for the Trust as mutually agreed
between the Company and the Trust or PIM
o Relieving the Trust of other usual or incidental administrative services
provided to individual Contract owners
2. Administrative Service Fees
For the administrative services set forth above, PIM or any of its
affiliates shall pay an administrative services fee as set forth in a letter of
understanding dated August 13, 2001 between PIM and the Company, which is
incorporated herein by reference and is a part of this Agreement.
3. 12b-1 Distribution Related Fees (Class II Shares Only)
In accordance with the Portfolios' plans pursuant to Rule 12b-1 under
the Investment Company Act of 1940, PFD will make payments to the Company at an
annual rate of 0.25% of the average net assets invested in the Class II shares
of the Portfolios through the Accounts in each calendar quarter. PFD will make
such payments to the Company within thirty (30) days after the end of each
calendar quarter. Each payment will be accompanied by a statement showing the
calculation of the fee payable to the Company for the quarter and such other
supporting data as may be reasonably requested by the Company.
