PARTICIPATION AGREEMENT
AMONG
IDS LIFE INSURANCE COMPANY OF NEW YORK,
PIMCO VARIABLE INSURANCE TRUST,
AND
ALLIANZ GLOBAL INVESTORS DISTRIBUTORS LLC
THIS AGREEMENT, dated as of the 1st day of March, 2006, by and among IDS
Life Insurance Company of New York, (the "Company"), a New York life insurance
company, on its own behalf and on behalf of each segregated asset account of
the Company set forth on Schedule A hereto as may be amended from time to time
(each account hereinafter referred to as the "Account"), PIMCO Variable
Insurance Trust (the "Fund"), a Delaware statutory trust, and Allianz Global
Investors Distributors LLC (the "Underwriter"), a Delaware limited liability
company.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance and variable annuity
contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and
Underwriter ("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Fund are divided into
several series of shares, each designated a "Portfolio" and representing the
interest in a particular managed portfolio of securities and other assets;
WHEREAS, the Fund has obtained an order (PIMCO Variable Insurance Trust,
et al., Investment Company Act Rel. Nos. 22994 (Jan. 7, 1998)(Notice) and
23022 (Feb. 9, 1998)(Order) from the Securities and Exchange Commission (the
"SEC") granting Participating Insurance Companies and variable annuity and
variable life insurance separate accounts exemptions from the provisions of
sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940,
as amended, (the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, if and to the extent necessary to permit shares of the Fund to be
sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated life insurance companies (the
"Mixed and Shared Funding Exemptive Order");
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under
the Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, Pacific Investment Management Company LLC (the "Adviser"),
which serves as investment adviser to the Fund, is duly registered as an
investment adviser under the federal Investment Advisers Act of 1940, as
amended;
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by
the Account (the "Contracts"), and said Contracts are listed in Schedule A
hereto, as it may be amended from time to time by mutual written agreement;
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to
the aforesaid Contracts;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker dealer with the SEC under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed
in Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios") on behalf of the Account to fund the
aforesaid Contracts, and the Underwriter is authorized to sell such shares to
the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1 The Fund has granted to the Underwriter exclusive authority
to distribute the Fund's shares, and has agreed to instruct, and has so
instructed, the Underwriter to make available to the Company for purchase on
behalf of the Account Fund shares of those Designated Portfolios selected by
the Underwriter. Pursuant to such authority and instructions, and subject to
Article X hereof, the Underwriter agrees to make available to the Company for
purchase on behalf of the Account, shares of those Designated Portfolios
listed on Schedule A to this Agreement, such purchases to be effected at net
asset value in accordance with Section 1.3 of this Agreement. Notwithstanding
the foregoing, (i) Fund series (other than those listed on Schedule A) in
existence now or that may be established in the future will be made available
to the Company only as the Underwriter may so provide, and (ii) the Board of
Trustees of the Fund (the "Board") may suspend or terminate the offering of
Fund shares of any Designated Portfolio or class thereof, or liquidate any
Designated Portfolio or class thereof, if such action is required by law or by
regulatory authorities having jurisdiction or if, in the sole discretion of
the Board acting in good faith, suspension, termination or liquidation is
necessary in the best interests of the shareholders of such Designated
Portfolio. In the event that the Fund initiates (i) a reorganization of a Fund
as defined by Section 2 of the 1940 Act, or (ii) a change in the name of a
Fund or a Designated Portfolio, the Underwriter shall reimburse the Company
for the
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Company's internal and out-of-pocket costs associated with the aforementioned
actions. The Company agrees to use its best efforts to minimize any costs
incurred under this Section and shall provide the Underwriter with acceptable
documentation of any such costs incurred.
1.2 The Fund shall redeem, at the Company's request, any full or
fractional Designated Portfolio shares held by the Company on behalf of the
Account, such redemptions to be effected at net asset value in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the Company
shall not redeem Fund shares attributable to Contract owners except in the
circumstances permitted in Section 10.3 of this Agreement, and (ii) the Fund
may delay redemption of Fund shares of any Designated Portfolio to the extent
permitted by the 1940 Act, and any rules, regulations or orders thereunder.
1.3 Purchase and Redemption Procedures
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(a) The Fund hereby appoints the Company as an agent of
the Fund for the limited purpose of receiving purchase and redemption requests
on behalf of the Account (but not with respect to any Fund shares that may be
held in the general account of the Company) for shares of those Designated
Portfolios made available hereunder, based on allocations of amounts to the
Account or subaccounts thereof under the Contracts and other transactions
relating to the Contracts or the Account. Receipt and acceptance of any such
request (or relevant transactional information therefor) on any day the New
York Stock Exchange is open for trading and on which the Fund calculates its
net asset value pursuant to the rules of the SEC (a "Business Day") by the
Company as such limited agent of the Fund prior to the time that the Fund
ordinarily calculates its net asset value as described from time to time in
the Fund Prospectus (which as of the date of execution of this Agreement is
4:00 p.m. Eastern Time) shall constitute receipt and acceptance by the Fund on
that same Business Day (the "Trade Date"), provided that the Company uses its
best efforts to provide notice of such request to the Fund or its designated
agent by 9:00 a.m. Eastern Time, and in any event, provides such notice by
9:30 a.m. Eastern Time, on the next following Business Day.
(b) The Company shall pay for shares of each Designated
Portfolio on the Business Day following the Trade Date. Payment for Designated
Portfolio shares shall be made in federal funds transmitted to the Fund or its
designated custodian by wire to be received by the Fund or its designated
custodian by 4:00 p.m. Eastern Time on the Business Day following the Trade
Date (which may be net of redemptions of shares). If federal funds are not
received on time, such funds will be invested, and Designated Portfolio shares
purchased thereby will be issued, as soon as practicable and the Company shall
promptly, upon the Fund's request, reimburse the Fund for any charges, costs,
fees, interest or other expenses incurred by the Fund in connection with any
advances to, or borrowing or overdrafts by, the Fund, or any similar expenses
incurred by the Fund, as a result of portfolio transactions effected by the
Fund based upon such purchase request. Upon receipt of federal funds by the
Fund or its custodian so wired, such funds shall cease to be the
responsibility of the Company and shall become the responsibility of the Fund.
(c) Payment for Designated Portfolio shares redeemed by
the Account or the Company shall be made in federal funds transmitted by wire
to the Company or any other
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designated person on the next Business Day after the Fund is properly notified
of the redemption order of such shares (which order shall be net of any
purchase orders) except that the Fund reserves the right to redeem Designated
Portfolio shares in assets other than cash and to delay payment of redemption
proceeds to the extent permitted under Section 22(e) of the 1940 Act and any
Rules thereunder, and in accordance with the procedures and policies of the
Fund as described in the then current prospectus and/or statement of
additional information ("SAI"). The Fund shall not bear any responsibility
whatsoever for the proper disbursement or crediting of redemption proceeds by
the Company; the Company alone shall be responsible for such action.
(d) Any purchase or redemption request for Designated
Portfolio shares held or to be held in the Company's general account shall be
effected at the net asset value per share next determined after the Fund's
receipt of such request, provided that, in the case of a purchase request,
payment for Fund shares so requested is received by the Fund in federal funds
prior to close of business for determination of such value, as defined from
time to time in the Fund Prospectus.
(e) The Company shall not redeem Fund shares attributable
to the Contracts (as opposed to Fund shares attributable to the Company's
assets held in the Account) except (i) as necessary to implement Contract
owner initiated or approved transactions, (ii) as required by state and/or
federal laws or regulations or judicial or other legal precedent of general
application (hereinafter referred to as a "Legally Required Redemption"),
(iii) upon 45 days prior written notice to the Fund and the Underwriter, as
permitted by an order of the SEC pursuant to Section 26(c) of the 1940 Act,
but only if a substitution of other securities for the shares of the
Designated Portfolios is consistent with the terms of the Contracts, or (iv)
as permitted under the terms of the Contracts. Upon request, the Company will
promptly furnish to the Fund reasonable assurance that any redemption pursuant
to clause (ii) above is a Legally Required Redemption. Furthermore, except in
cases where permitted under the terms of the Contracts, the Company shall not
prevent Contract owners from allocating payments to a Designated Portfolio
that was otherwise available under the Contracts without first giving the Fund
45 days notice of its intention to do so.
1.4 The Fund shall use its best efforts to make the net asset
value per share for each Designated Portfolio available to the Company by 7:00
p.m. Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio
is calculated, and shall calculate such net asset value in accordance with the
Fund's Prospectus. Neither the Fund, any Designated Portfolio, the
Underwriter, nor any of their affiliates shall be liable for any information
provided to the Company pursuant to this Agreement which information is based
on incorrect information supplied by the Company or any other Participating
Insurance Company to the Fund or the Underwriter.
1.5 The Fund shall furnish notice (by wire or telephone followed
by written confirmation) to the Company as soon as reasonably practicable of
any income dividends or capital gain distributions payable on any Designated
Portfolio shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable
on any Designated Portfolio shares in the form of additional shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the
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Account, to revoke this election and to receive all such dividends and capital
gain distributions in cash. The Fund shall notify the Company promptly of the
number of Designated Portfolio shares so issued as payment of such dividends
and distributions.
1.6 Any material error in the calculation of net asset value
("NAV"), dividends or capital gain information shall be reported to the
Company as soon as reasonably practicable after discovery. Any NAV error shall
be corrected in accordance with the Fund's then-current NAV error correction
policy.
1.7 Issuance and transfer of Fund shares shall be by book entry
only. Share certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Fund shares shall be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the
Account.
1.8 (a) The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's shares may be sold
to other insurance companies (subject to Section 1.8 hereof) and the cash
value of the Contracts may be invested in other investment companies, the
Company's non-utilized separate accounts and the Company's general account.
(b) The Company shall not, without prior notice to the
Fund (unless otherwise required by applicable law), take any action to operate
the Account as a management investment company under the 1940 Act.(c) The
Company shall not, without prior notice to the Fund (unless otherwise required
by applicable law), induce Contract owners to change or modify the Fund or
change the Fund's distributor or investment adviser.
(d) The Company shall not, without prior notice to the
Fund, induce Contract owners to vote on any matter submitted for consideration
by the shareholders of the Fund in a manner other than as recommended by the
Board of Trustees of the Fund.
1.9 The Company acknowledges that, pursuant to Form 24F-2, the
Fund is not required to pay fees to the SEC for registration of its shares
under the 1933 Act with respect to its shares issued to an Account that is a
unit investment trust that offers interests that are registered under the 1933
Act and on which a registration fee has been or will be paid to the SEC (a
"Registered Account"). The Company agrees to provide the Fund or its agent
each year within 60 days of the end of the Fund's fiscal year, or when
reasonably requested by the Fund, information as to the number of shares
purchased by a Registered Account and any other Account the interests of which
are not registered under the 0000 Xxx. The Company acknowledges that the Fund
intends to rely on the information so provided.
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ARTICLE II. Representations and Warranties
------------------------------
2.1 The Fund represents and warrants that (i) the Fund is
lawfully organized and validly existing under the laws of the State of
Delaware, (ii) the Fund is and shall remain registered under the 1940 Act,
(iii) the Fund does and will comply in all material respects with the 1940
Act, (iv) Designated Portfolio shares sold pursuant to this Agreement are
registered under the 1933 Act (to the extent required by that Act) and are
duly authorized for issuance, (v) the Fund shall amend the registration
statement for the shares of the Designated Portfolios under the 1933 Act and
the 1940 Act from time to time as required in order to effect the continuous
offering of such shares, and (vi) the Board has elected for each Designated
Portfolio to be taxed as a Regulated Investment Company under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"). The Fund makes no
representations or warranties as to whether any aspect of the Designated
Portfolios' operations, including, but not limited to, investment policies,
fees and expenses, complies with the insurance laws and other applicable laws
of the various states.
2.2 The Underwriter represents and warrants that shares of the
Designated Portfolios (i) shall be offered and sold in compliance with
applicable state and federal securities laws, (ii) are offered and sold only
to Participating Insurance Companies and their separate accounts and to
persons or plans that communicate to the Fund that they qualify to purchase
shares of the Designated Portfolios under Section 817(h) of the Code and the
regulations thereunder without impairing the ability of the Account to
consider the portfolio investments of the Designated Portfolios as
constituting investments of the Account for the purpose of satisfying the
diversification requirements of Section 817(h) ("Qualified Persons"), and
(iii) are registered and qualified for sale in accordance with the laws of the
various states to the extent required by applicable law.
2.3 Subject to Company's representations and warranties in
Sections 2.5 and 2.6, the Fund represents and warrants that it will invest the
assets of each Designated Portfolio in such a manner as to ensure that the
Contracts will be treated as annuity or life insurance contracts, whichever is
appropriate, under the Code and the regulations issued thereunder (or any
successor provisions). Without limiting the scope of the foregoing, the Fund
represents and warrants that each Designated Portfolio has complied and will
continue to comply with Section 817(h) of the Code and Treasury Regulation
Section 1.817-5, and any Treasury interpretations thereof, relating to the
diversification requirements for variable annuity, endowment, or life
insurance contracts, and any amendments or other modifications or successor
provisions to such Section or Regulation. The Fund will make every reasonable
effort (a) to notify the Company immediately upon having a reasonable basis
for believing that a breach of this Section 2.3 has occurred, and (b) in the
event of such a breach, to adequately diversify the Designated Portfolio so as
to achieve compliance within the grace period afforded by Treasury Regulation
Section 1.817-5.
2.4 The Fund represents and warrants that each Designated
Portfolio is or will be qualified as a Regulated Investment Company under
Subchapter M of the Code, that the Fund will make every reasonable effort to
maintain such qualification (under Subchapter M or any successor or similar
provisions) and that the Fund will notify the Company immediately upon
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having a reasonable basis for believing that a Designated Portfolio has ceased
to so qualify or that it might not so qualify in the future.
2.5 The Company represents and warrants that the Contracts (a)
are, or prior to issuance will be, registered under the 1933 Act, or (b) are
not registered because they are properly exempt from registration under the
1933 Act or will be offered exclusively in transactions that are properly
exempt from registration under the 1933 Act. The Company also represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law, that it has legally and validly established the Account
prior to any issuance or sale thereof as a segregated asset account under New
York or other applicable state insurance laws, and that it (a) has registered
or, prior to any issuance or sale of the Contracts, will register the Account
as a unit investment trust in accordance with the provisions of the 1940 Act
to serve as a segregated investment account for the Contracts, or
alternatively (b) has not registered the Account in proper reliance upon an
exclusion from registration under the 1940 Act. The Company further represents
and warrants that (i) the Contracts will be issued and sold in compliance in
all material respects with all applicable federal securities and state
securities and insurance laws, (ii) the information provided pursuant to
Section 1.8 shall be accurate in all material respects; and (iii) it and the
Account are Qualified Persons. The Company shall register and qualify the
Contracts or interests therein as securities in accordance with the laws of
the various states only if and to the extent required by applicable law.
2.6 The Company represents and warrants that the Contracts are
currently, and at the time of issuance shall be, treated as life insurance or
annuity contracts, under applicable provisions of the Code, and that it will
make every reasonable effort to maintain such treatment, and that it will
notify the Fund and the Underwriter immediately upon having a reasonable basis
for believing the Contracts have ceased to be so treated or that they might
not be so treated in the future. In addition, the Company represents and
warrants that each of its Accounts is a "segregated asset account"; that
interests in the Accounts are offered exclusively through the purchase of a
Contract; and that each Contract is a "variable contract" within the meaning
of such terms under Section 817 of the Code and the regulations thereunder.
Company will use every reasonable effort to continue to meet such definitional
requirements, and it will notify the Fund and the Underwriter immediately upon
having a reasonable basis for believing that such requirements have ceased to
be met or that they might not be met in the future.
2.7 The Underwriter represents and warrants that it is a member
in good standing of the NASD and is registered as a broker-dealer with the
SEC. The Underwriter further represents that it will sell and distribute the
Fund shares in accordance with any applicable state and federal securities
laws.
2.8 The Fund and the Underwriter represent and warrant that all
of their trustees/directors, officers, employees, investment advisers, and
other individuals or entities dealing with the money and/or securities of the
Fund are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund in an amount not less
than the minimum coverage as required currently by Rule 17g-1 of the 1940 Act
or related provisions as may be promulgated from time to time. The aforesaid
bond shall include coverage for larceny and embezzlement and shall be issued
by a reputable bonding company.
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2.9 The Company represents and warrants that all of its
directors, officers, employees, and other individuals/entities employed or
controlled by the Company dealing with the money and/or securities of the
Account are covered by a blanket fidelity bond or similar coverage for the
benefit of the Account, in an amount not less than $5 million. The aforesaid
bond includes coverage for larceny and embezzlement and is issued by a
reputable bonding company. The Company agrees to hold for the benefit of the
Fund and to pay to the Fund any amounts lost from larceny, embezzlement or
other events covered by the aforesaid bond to the extent such amounts properly
belong to the Fund pursuant to the terms of this Agreement. The Company agrees
to make all reasonable efforts to see that this bond or another bond
containing these provisions is always in effect, and agrees to notify the Fund
and the Underwriter in the event that such coverage no longer applies.
2.10 The Company represents and warrants that it shall comply
with any applicable privacy and notice provisions of 15 U.S.C. Sections
6801-6827 and any applicable regulations promulgated thereunder (including but
not limited to 17 C.F.R. Part 248) as they may be amended.
2.11 Each party to this Agreement represents and warrants that it
shall comply with all the applicable laws and regulations designed to prevent
money laundering, including, without limitation the International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001 (Title III of
the USA PATRIOT ACT), and if required by such laws or regulations, will share
information with the other parties to this Agreement about individuals,
entities, organizations and countries suspected of possible terrorist or money
laundering activities in accordance with Section 314(b) of the USA PATRIOT
ACT.
2.12 The Company represents and warrants that all purchase and
redemption orders with respect to shares of the Designated Portfolios
submitted with respect to a Business Day in accordance with Article I will be
received in good order by the Company prior to the time as of which the net
asset value of the Designated Portfolios' shares is calculated on that
Business Day as disclosed in the Designated Portfolios' prospectuses, as they
may be amended from time to time, and will be processed by the Company in
compliance with Rule 22c-1 under the 1940 Act and regulatory interpretations
thereof. Furthermore, the Company will provide the Fund or its agent with
assurances regarding the compliance of its handling of orders with respect to
shares of the Designated Portfolios with the requirements of Rule 22c-1,
regulatory interpretations thereof.
2.13 (a) The Company acknowledges the Fund has adopted policies
and procedures reasonably designed to prevent frequent or excessive purchases,
exchanges and redemptions of the shares of Designated Portfolios, which
policies are summarized in the prospectuses of the Designated Portfolios.
(b) The Fund and the Underwriter acknowledge that the
Company, on behalf of its Accounts, has adopted policies and procedures
reasonably designed to detect and deter frequent transfers of Contract value
among the subaccounts of the Accounts including those investing in Designated
Portfolios available as investment options under the Contracts. These
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policies and procedures are described in the current prospectuses of the
Accounts through which the Contracts are offered.
(c) The Fund may consider the Company's policies and
procedures pertaining to frequent transfers of Contract value among the
subaccounts of the Account(s) including those investing in Designated
Portfolios when the Fund periodically reviews or amends the Fund's disruptive
trading policies and procedures from time to time. The Fund and the
Underwriter may, but are not required to, invite comment from and confer with
Company regarding any proposed policy and procedure of the Fund and the
Underwriter pertaining to disruptive trading to determine prior to adopting
such proposed policy or procedure the Company's then-present ability to apply
such proposed policy or procedure to Contract owners who allocate Contract
value to subaccounts investing in Designated Portfolios available under the
Contracts, including without limitation whether the Company can apply such
proposed policy or procedure without the need to modify its automated data
processing systems or to develop and staff manual systems to accommodate the
implementation of the Fund's proposed policy or procedure.
(d) The Company will cooperate with the Fund's and the
Underwriter's reasonable requests in taking steps to deter and detect such
transfers by any Contract owner. Subject to applicable law and the terms of
each Contract, the Company will furnish other information the Underwriter
reasonably requests regarding frequent transfers by Contract owners among the
subaccounts investing Designated Portfolios available under the Contracts. In
compliance with Rule 22c-2 under the 1940 Act, the Company hereby agrees to
(i) provide, promptly upon request by the Fund, directly or through its agent,
the taxpayer identification number of all Contract owners that purchased,
redeemed, transferred, or exchanged shares of Designated Portfolios held under
a Contract, and the amount and dates of such Contract owner's purchases,
redemptions, transfers, and exchanges involving such Designated Portfolios;
and (ii) execute any instructions from the Fund, directly or through its
agent, to restrict or prohibit further purchases or exchanges of shares of the
Designated Portfolios by a Contract owner who has been identified by the Fund,
directly or through its agent, as having engaged in transactions in Designated
Portfolio shares that violate the market timing or excessive trading policies
adopted by the Fund. Furthermore, the Company further agrees to either assess
any applicable redemption fees that the Fund has adopted to curtail frequent
trading, or communicate to the Fund or its agent any information necessary for
the Fund or its agent to assess such redemption fees directly against payment
of redemption proceeds. When the Company is required under Rule 22c-2 under
the 1940 Act to implement transaction procedures for its Accounts in order to
effectuate the Fund's procedures for preventing disruptive trading the shares
of Designated Portfolios, and such implementation will require the Company to
modify its automated data processing systems or to develop and staff manual
systems to accommodate the Fund's requirements, the parties shall in good
faith negotiate a mutually agreed upon implementation schedule.
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ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1 At the option of the Company, the Fund or the Underwriter as
they shall determine, will either: (a) provide the Company with as many copies
of the Fund's current prospectus, statement of additional information, annual
report, semi-annual report and other shareholder communications, including any
amendments or supplements to any of the foregoing, as the Company will
reasonably request; or (b) provide the Company with a camera-ready copy,
computer disk or other medium agreed to by the parties of such documents in a
form suitable for printing. The Fund or the Underwriter as they shall
determine will bear the cost of typesetting such documents. The Fund or the
Underwriter as they shall determine will bear the cost of printing and
distributing such documents to existing Contract owners who have Contract
value allocated to a Designated Portfolio and the Company will bear the cost
of printing and distributing such documents to prospective Contract owners and
applicants; provided, that the Fund will bear the costs of printing and
distributing proxy materials related to proxy votes initiated by the Fund, and
the Company shall bear the expenses of printing and distributing proxy
materials related to proxy votes initiated by the Company.
3.2 The Fund shall provide the Company with information
regarding the Fund's expenses, which information may include a table of fees
and related narrative disclosure for use in any prospectus or other
descriptive document relating to a Contract. The Company agrees that it will
use such information in the form provided. The Company shall provide prior
written notice of any proposed modification of such information, which notice
will describe in detail the manner in which the Company proposes to modify the
information, and agrees that it may not modify such information in any way
without the prior consent of the Fund.
3.3 The Fund, at its expense, or at the expense of its designee,
shall provide the Company with copies of its proxy material, reports to
shareholders, and other communications to shareholders in such quantity as the
Company shall reasonably require for distributing to Contract owners.
3.4 The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
portfolio for which instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act
to require pass-through voting privileges for variable contract owners or to
the extent otherwise required by law. The Company will vote Fund shares held
in any segregated asset account in the same proportion as Fund shares of such
portfolio for which voting instructions have been received from Contract
owners, to the extent permitted by law.
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3.5 Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in a Designated
Portfolio calculates voting privileges as required by the Shared Funding
Exemptive Order and consistent with any reasonable standards that the Fund may
adopt and provide in writing.
ARTICLE IV. Sales Material and Information
------------------------------
4.1 The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee, each piece of sales literature or other
promotional material that the Company develops and in which the Fund (or a
Designated Portfolio thereof) or the Adviser or the Underwriter is named. No
such material shall be used until approved by the Fund or its designee, and
the Fund will use its best efforts for it or its designee to review such sales
literature or promotional material within ten Business Days after receipt of
such material. The Fund or its designee reserves the right to reasonably
object to the continued use of any such sales literature or other promotional
material in which the Fund (or a Designated Portfolio thereof) or the Adviser
or the Underwriter is named, and no such material shall be used if the Fund or
its designee so object.
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser or the Underwriter in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or prospectus or SAI for the Fund shares, as such registration
statement and prospectus or SAI may be amended or supplemented from time to
time, or in reports or proxy statements for the Fund, or in sales literature
or other promotional material approved by the Fund or its designee or by the
Underwriter, except with the permission of the Fund or the Underwriter or the
designee of either.
4.3 The Fund and the Underwriter, or their designee, shall
furnish, or cause to be furnished, to the Company, each piece of sales
literature or other promotional material that it develops and in which the
Company, and/or its Account, is named. No such material shall be used until
approved by the Company, and the Company will use its best efforts to review
such sales literature or promotional material within ten Business Days after
receipt of such material. The Company reserves the right to reasonably object
to the continued use of any such sales literature or other promotional
material in which the Company and/or its Account is named, and no such
material shall be used if the Company so objects.
4.4 The Fund and the Underwriter shall not give any information
or make any representations on behalf of the Company or concerning the
Company, the Account, or the Contracts other than the information or
representations contained in a registration statement, prospectus (which shall
include an offering memorandum, if any, if the Contracts issued by the Company
or interests therein are not registered under the 1933 Act), or SAI for the
Contracts, as such registration statement, prospectus, or SAI may be amended
or supplemented from time to time, or in published reports for the Account
which are in the public domain or approved by the Company for distribution to
Contract owners, or in sales literature or other promotional material approved
by the Company or its designee, except with the permission of the Company.
11
4.5 The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, SAIs, reports, proxy
statements, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Fund or its shares, promptly after the filing of
such document(s) with the SEC or other regulatory authorities.
4.6 The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or
interests therein are not registered under the 1933 Act), SAIs, reports,
solicitations for voting instructions, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Contracts or the
Account, promptly after the filing of such document(s) with the SEC or other
regulatory authorities. The Company shall provide to the Fund and the
Underwriter any complaints received from the Contract owners pertaining to the
Fund or the Designated Portfolio.
4.7 For purposes of this Article IV, the phrase "sales
literature and other promotional materials" includes, but is not limited to,
any of the following that refer to the Fund or any affiliate of the Fund:
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures, or other
public media), sales literature (i.e., any written communication distributed
---
or made generally available to customers or the public, including brochures,
circulars, reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, and registration
statements, prospectuses, SAIs, shareholder reports, proxy materials, and any
other communications distributed or made generally available with regard to
the Fund.
ARTICLE V. Fees and Expenses
-----------------
5.1 Except as otherwise provided herein, no party to this
Agreement shall pay any fee or other compensation to any other party to this
Agreement. Except as otherwise provided herein, all expenses incident to
performance by a party under this Agreement shall be paid by such party.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with
applicable federal law and, if and to the extent deemed advisable by the Fund,
in accordance with applicable state laws prior to their sale. The Fund shall
bear the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type,
setting in type and printing the proxy materials and reports to shareholders
(including the costs of printing a prospectus that constitutes an annual
report), the preparation of all statements and notices required by any federal
or state law, and all taxes on the issuance or transfer of the Fund's shares.
12
5.3 The Fund or the Underwriter as they shall determine shall
bear the expenses of printing and distributing the Fund's prospectus and
reports to owners of Contracts issued by the Company, while the Company shall
bear the expenses of printing and distributing the Fund's prospectus to
prospective Contract owners and applicants. The Fund shall bear the expenses
of printing and distributing proxy materials related to proxy votes initiated
by the Fund, and the Company shall bear the expenses of printing and
distributing proxy materials related to proxy votes initiated by the Company.
ARTICLE VI. Potential Conflicts
-------------------
6.1 The parties to this Agreement agree that the conditions or
undertakings required by the Mixed and Shared Funding Exemptive Order that may
be imposed on the Company, the Fund and/or the Underwriter by virtue of such
order by the SEC: (i) shall apply only upon the sale of shares of the
Designated Portfolios to variable life insurance separate accounts (and then
only to the extent required under the 1940 Act); (ii) will be incorporated
herein by reference; and (iii) such parties agree to comply with such
conditions and undertakings to the extent applicable to each such party
notwithstanding any provision of this Agreement to the contrary.
6.2 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any
provision of the 1940 Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive
Order) on terms and conditions materially different from those contained in
the Mixed and Shared Funding Exemptive Order, then (a) the parties to this
Agreement shall take such steps as may be necessary to comply with Rules 6e-2
and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules
are applicable; and (b) Sections 3.5 and 3.6 of this Agreement shall continue
in effect only to the extent that terms and conditions substantially identical
to such Sections are contained in such Rule(s) as so amended or adopted.
ARTICLE VII. Indemnification
---------------
7.1 Indemnification By the Company
------------------------------
7.1(a). The Company agrees to indemnify and hold harmless
the Fund and the Underwriter and each of its trustees/directors and officers,
and each person, if any, who controls the Fund or Underwriter within the
meaning of Section 15 of the 1933 Act or who is under common control with the
Underwriter (collectively, the "Indemnified Parties" for purposes of this
Section 7.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statements of any material fact
contained in the registration statement, prospectus
(which shall include a written description of
13
a Contract that is not registered under the 1933 Act),
or SAI for the Contracts or contained in the Contracts
or sales literature for the Contracts (or any
amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or
such alleged statement or omission was made in
reliance upon and in conformity with information
furnished to the Company by or on behalf of the Fund
for use in the registration statement, prospectus or
SAI for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus, SAI, or sales literature of the
Fund not supplied by the Company or persons under its
control) or wrongful conduct of the Company or its
agents or persons under the Company's authorization or
control, with respect to the sale or distribution of
the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, SAI, or sales
literature of the Fund or any amendment thereof or
supplement thereto or the omission or alleged omission
to state therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading if such a statement or omission was
made in reliance upon information furnished to the
Fund by or on behalf of the Company; or
(iv) arise as a result of any material failure by the
Company to provide the services and furnish the
materials under the terms of this Agreement (including
a failure, whether unintentional or in good faith or
otherwise, to comply with the qualification
requirements specified in Section 2.6 of this
Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in
this Agreement or arise out of or result from any
other material breach of this Agreement by the
Company;
as limited by and in accordance with the provisions of Sections 7.1(b) and
7.1(c) hereof.
14
7.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of its obligations or
duties under this Agreement.
7.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Company in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against an Indemnified Party, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Company to such party of the Company's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Company will not be liable to such party under
this Agreement for any legal or other expenses subsequently incurred by such
party independently in connection with the defense thereof other than
reasonable costs of investigation.
7.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund shares or the Contracts or
the operation of the Fund.
7.2 Indemnification by the Underwriter
----------------------------------
7.2(a). The Underwriter agrees to indemnify and hold
harmless the Company and each of its directors and officers and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions
in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact
contained in the registration statement or prospectus
or SAI or sales literature of the Fund (or any
amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
15
agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or
such alleged statement or omission was made in
reliance upon and in conformity with information
furnished to the Underwriter or Fund by or on behalf
of the Company for use in the registration statement,
prospectus or SAI for the Fund or in sales literature
(or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Fund
shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus, SAI or sales literature for the
Contracts not supplied by the Underwriter or persons
under its control) or wrongful conduct of the Fund or
Underwriter or persons under their control, with
respect to the sale or distribution of the Contracts
or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
registration statement, prospectus, SAI or sales
literature covering the Contracts, or any amendment
thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Company by or on behalf
of the Fund or the Underwriter; or
(iv) arise as a result of any failure by the Fund or the
Underwriter to provide the services and furnish the
materials under the terms of this Agreement (including
a failure of the Fund, whether unintentional or in
good faith or otherwise, to comply with the
diversification and other qualification requirements
specified in Sections 2.3 and 2.4 of this Agreement);
or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter
in this Agreement or arise out of or result from any
other material breach of this Agreement by the
Underwriter;
as limited by and in accordance with the provisions of Sections 7.2(b) and
7.2(c) hereof.
7.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties
16
or by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Company or the Account, whichever is
applicable.
7.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Underwriter in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but failure to
notify the Underwriter of any such claim shall not relieve the Underwriter
from any liability which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified Party,
the Underwriter will be entitled to participate, at its own expense, in the
defense thereof. The Underwriter also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from the Underwriter to such party of the Underwriter's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Underwriter will
not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
The Company agrees promptly to notify the Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Contracts
or the operation of the Account.
7.3 Indemnification By the Fund
---------------------------
7.3(a). The Fund agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.3)
against any and all losses, claims, expenses, damages, liabilities (including
amounts paid in settlement with the written consent of the Fund) or litigation
(including legal and other expenses) to which the Indemnified Parties may be
required to pay or may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, expenses, damages,
liabilities or expenses (or actions in respect thereof) or settlements, are
related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials under
the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise,
to comply with the diversification and other
qualification requirements specified in Section 2.3
and 2.4 of this Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in
this Agreement or arise out of
17
or result from any other material breach of this
Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 7.3(b) and
7.3(c) hereof. The parties acknowledge that the Fund's indemnification
obligations under this Section 7.3 are subject to applicable law.
7.3(b). The Fund shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Company, the Fund, the Underwriter or
the Account, whichever is applicable.
7.3(c). The Fund shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the Fund
in writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to
notify the Fund of any such claim shall not relieve the Fund from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the Fund will
be entitled to participate, at its own expense, in the defense thereof. The
Fund also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Fund to
such party of the Fund's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Fund will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation.
7.3(d). The Company and the Underwriter agree promptly to
notify the Fund of the commencement of any litigation or proceeding against it
or any of its respective officers or directors in connection with the
Agreement, the issuance or sale of the Contracts, the operation of the
Account, or the sale or acquisition of shares of the Fund.
ARTICLE VIII. Applicable Law
--------------
8.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of California.
8.2 This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, any Mixed and
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith. If, in the future, the Mixed and Shared
Funding Exemptive Order should no longer be necessary under applicable law,
then Article VI shall no longer apply.
18
ARTICLE IX. Termination
-----------
9.1 This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party, for any reason with respect
to some or all Designated Portfolios, by three (3) months advance written
notice delivered to the other parties; or
(b) termination by the Company by written notice to the
Fund and the Underwriter based upon the Company's determination that shares of
the Fund are not reasonably available to meet the requirements of the
Contracts; or
(c) termination by the Company by written notice to the
Fund and the Underwriter in the event any of the Designated Portfolio's shares
are not registered, issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by the Company; or
(d) termination by the Fund or Underwriter in the event
that formal administrative proceedings are instituted against the Company by
the NASD, the SEC, the Insurance Commissioner or like official of any state or
any other regulatory body regarding the Company's duties under this Agreement
or related to the sale of the Contracts, the operation of any Account, or the
purchase of the Fund's shares; provided, however, that the Fund or Underwriter
determines in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon the
ability of the Company to perform its obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Fund or Underwriter by
the NASD, the SEC, or any state securities or insurance department or any
other regulatory body; provided, however, that the Company determines in its
sole judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability of the Fund
or Underwriter to perform its obligations under this Agreement; or
(f) termination by the Company by written notice to the
Fund and the Underwriter with respect to any Designated Portfolio in the event
that such Portfolio ceases to qualify as a Regulated Investment Company under
Subchapter M or fails to comply with the Section 817(h) diversification
requirements specified in Section 2.4 hereof, or if the Company reasonably
believes that such Portfolio may fail to so qualify or comply; or
(g) termination by the Fund or Underwriter by written
notice to the Company in the event that the Contracts fail to meet the
qualifications specified in Section 2.6 hereof; or
(h) termination by either the Fund or the Underwriter by
written notice to the Company, if either one or both of the Fund or the
Underwriter respectively, shall
19
determine, in their sole judgment exercised in good faith, that the Company
has suffered a material adverse change in its business, operations, financial
condition, or prospects since the date of this Agreement or is the subject of
material adverse publicity; or
(i) termination by the Company by written notice to the
Fund and the Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that the Fund, Adviser, or the Underwriter has
suffered a material adverse change in its business, operations, financial
condition or prospects since the date of this Agreement or is the subject of
material adverse publicity; or
(j) termination by the Fund or the Underwriter by written
notice to the Company, if the Company gives the Fund and the Underwriter the
written notice specified in Section 1.7(a)(ii) hereof and at the time such
notice was given there was no notice of termination outstanding under any
other provision of this Agreement; provided, however, any termination under
this Section 9.1(j) shall be effective forty-five days after the notice
specified in Section 1.7(a)(ii) was given; or
(k) termination by the Company upon any substitution of
the shares of another investment company or series thereof for shares of a
Designated Portfolio of the Fund in accordance with the terms of the
Contracts, provided that the Company has given at least 45 days prior written
notice to the Fund and Underwriter of the date of substitution; or
(l) termination by the Fund if the Board has decided to
(i) refuse to sell shares of any Designated Portfolio to the Company and/or
any of its Accounts; (ii) suspend or terminate the offering of shares of any
Designated Portfolio; or (iii) dissolve, reorganize, liquidate, merge or sell
all assets of the Fund or any Designated Portfolio, subject to the provisions
of Section 1.1; or
(m) termination by any party in the event that the Fund's
Board of Trustees determines that a material irreconcilable conflict exists as
provided in Article VI.
9.2 (a) Notwithstanding any termination of this Agreement, and
except as provided in Section 9.2(b), the Fund and the Underwriter shall, at
the option of the Company, continue, until the one year anniversary from the
date of termination, and from year to year thereafter if deemed appropriate by
the Fund and the Underwriter, to make available additional shares of the
Designated Portfolios pursuant to the terms and conditions of this Agreement,
for all Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
based on instructions from the owners of the Existing Contracts, the Accounts
shall be permitted to reallocate investments in the Designated Portfolios of
the Fund and redeem investments in the Designated Portfolios, and shall be
permitted to invest in the Designated Portfolios in the event that owners of
the Existing Contracts make additional premium payments under the Existing
Contracts.
The Company agrees, promptly after any termination of
this Agreement, to take all steps necessary to redeem the investment of the
Accounts in the Designated Portfolios within one year from the date of
termination of the Agreement as provided
20
in Article IX. Such steps shall include, but not be limited to, filing an
application for and using best efforts to obtain an order pursuant to Section
26(c) of the 1940 Act to permit the substitution of other securities for the
shares of the Designated Portfolios. The Fund may, in its discretion, permit
the Accounts to continue to invest in the Designated Portfolios beyond such
one year anniversary for an additional year beginning on the first annual
anniversary of the date of termination, and from year to year thereafter;
provided that the Fund agrees in writing to permit the Accounts to continue to
invest in the Designated Portfolios at the beginning of any such year.
(b) In the event (i) the Agreement is terminated pursuant
to Sections 10.1(g) or 10.1(m), at the option of the Fund or the Underwriter;
or (ii) the one year anniversary of the termination of the Agreement is
reached or, after waiver as provided in Section 9.2(a), such subsequent
anniversary is reached (each of (i) and (ii) referred to as a "triggering
event" and the date of termination as provided in (i) or the date of such
anniversary as provided in (ii) referred to as the "request date"), the
parties agree that such triggering event shall be considered as a request for
immediate redemption of shares of the Designated Portfolios held by the
Accounts, received by the Fund and its agents as of the request date, and the
Fund agrees to process such redemption request in accordance with the 1940 Act
and the regulations thereunder and the Fund's registration statement.
(c) The parties agree that this Section 9.2 shall not
apply to any terminations under Article VI and the effect of such Article VI
terminations shall be governed by Article VI of this Agreement. The parties
further agree that, to the extent that all or a portion of the assets of the
Accounts continue to be invested in the Fund or any Designated Portfolio of
the Fund, Articles I, II, VI, VII and VIII will remain in effect after
termination.
9.3 Notwithstanding any termination of this Agreement, each
party's obligation under Article VII to indemnify the other parties shall
survive.
ARTICLE X. Notices
-------
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund: PIMCO Variable Insurance Trust
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
If to the Company: IDS Life Insurance Company of New York
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Executive Vice President - Annuities
With a copy to: Ameriprise Financial Services, Inc.
00000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx, Vice President and
Group Counsel
21
If to Underwriter: Allianz Global Investors Distributors LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
ARTICLE XI. Miscellaneous
-------------
11.1 All persons dealing with the Fund must look solely to the
property of the Fund, and in the case of a series company, the respective
Designated Portfolios listed on Schedule A hereto as though each such
Designated Portfolio had separately contracted with the Company and the
Underwriter for the enforcement of any claims against the Fund. The parties
agree that neither the Board, officers, agents or shareholders of the Fund
assume any personal liability or responsibility for obligations entered into
by or on behalf of the Fund.
11.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information without the express
written consent of the affected party until such time as such information has
come into the public domain.
11.3 The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
11.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
11.6 Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the
SEC, the NASD, and state insurance regulators) and shall permit such
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby. Notwithstanding the generality of the foregoing, each
party hereto further agrees to furnish the New York Department of Commerce
Commissioner with any information or reports in connection with services
provided under this Agreement which such Commissioner may request in order to
ascertain whether the variable annuity operations of the Company are being
conducted in a manner consistent with applicable law or regulations.
22
11.7 The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies,
and obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
11.8 This Agreement or any of the rights and obligations
hereunder may not be assigned by any party without the prior written consent
of all parties hereto.
11.9 The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee copies of any registration statement (without
exhibits) and financial reports of the Company filed with the Securities and
Exchange Commission as soon as practicable after the filing thereof.
11.10 This Agreement may be modified or amended, and the terms of
this Agreement may be waived, only in writing with the consent of all parties.
23
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
IDS LIFE INSURANCE COMPANY OF NEW YORK Attest:
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
----------------------------------- ----------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxx
Title: Vice President - Annuities Title: Assistant Secretary
Date:
PIMCO VARIABLE INSURANCE TRUST
By its authorized officer
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------
Title: Senior Vice President
---------------------------
Date: 3-9-06
----------------------------
ALLIANZ GLOBAL INVESTORS
DISTRIBUTORS LLC
By its authorized officer
By: /s/ E. Xxxxx Xxxxx, Jr.
------------------------------
Name: E. Xxxxx Xxxxx, Jr.
----------------------------
Title: Managing Director and CEO
---------------------------
Date: 3/13/06
----------------------------
24
SCHEDULE A
PIMCO VARIABLE INSURANCE TRUST PORTFOLIOS:
All Asset Portfolio - Advisor Class Shares
SEGREGATED ASSET ACCOUNTS:
IDS Life of New York Variable Annuity Account, Established April 17, 1996
CONTRACTS:
RiverSource(SM) Retirement Advisor Select Plus(R) Variable Annuity; Contract
Form Number 139035A.
RiverSource(SM) Retirement Advisor Select (SM) Variable Annuity; Contract Form
Numbers 139035, 139036, 13907 and 13908.
RiverSource(SM) Retirement Advisor Advantage Plus(R) Variable Annuity;
Contract Form Number 31053A.
RiverSource(SM) Retirement Advisor Advantage(SM) Variable Annuity, Contract
Form Numbers 31053, 31054, 31055-SEP, 31056-XXX.
RiverSource(SM) Retirement Advisor Variable Annuity(R), Contract Form Numbers
31053, 31054, 31055-SEP, 31056-XXX.
RiverSource(SM) Retirement Advisor 4 Advantage; Contract Form Number ________.
RiverSource(SM) Retirement Advisor 4 Select; Contract Form Number ___________.
RiverSource(SM) Retirement Advisor Access; Contract Form Number _____________.
