Exhibit 99.8.22
FUND PARTICIPATION AGREEMENT
AMONG
RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK
XXXXXX ADVISORS TRUST
COLUMBIA XXXXXX ASSET MANAGEMENT, L.P.
AND
COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
APRIL 2, 2007
TABLE OF CONTENTS
ARTICLE I. Sale and Redemption of Fund Shares......................... 2
ARTICLE II. Representations and Warranties............................. 5
ARTICLE III. Prospectuses and Proxy Statements; Voting.................. 11
ARTICLE IV. Sales Material and Information............................. 12
ARTICLE V. Fees and Expenses.......................................... 13
ARTICLE VI. Diversification and Qualification.......................... 14
ARTICLE VII. Potential Conflicts and Compliance With Mixed
and Shared Funding Exemptive Order......................... 15
ARTICLE VIII. Indemnification............................................ 17
ARTICLE IX. Applicable Law............................................. 20
ARTICLE X. Termination................................................ 21
ARTICLE XI. Notices.................................................... 23
ARTICLE XII. Miscellaneous.............................................. 23
SCHEDULE A ................................................................ 28
SCHEDULE B ................................................................ 30
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of this 2nd day of April, 2007, by
and among the following parties:
- RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK (the "Company"), organized
under the laws of the State of New York on its own behalf and on
behalf of each of its separate accounts named in Schedule A to this
Agreement, as may be amended from time to time (each account referred
to as an "Account");
- XXXXXX ADVISORS TRUST (the "Fund"), an open-end management investment
company organized under the laws of the Commonwealth of Massachusetts;
- COLUMBIA XXXXXX ASSET MANAGEMENT, L.P. (the "Adviser"), a Delaware
limited partnership; and
- COLUMBIA MANAGEMENT DISTRIBUTORS, INC. (the "Distributor"), a
Massachusetts corporation.
WHEREAS, American Centurion Life Assurance Company merged with and into IDS
Life Insurance Company of New York (followed by an "intact transfer" of the
Accounts of American Centurion Life Assurance Company to IDS Life Insurance
Company of New York by operation of law and incident to a merger that occurred
on December 31, 2006) and IDS Life Insurance Company of New York was renamed
RiverSource Life Insurance Co. of New York simultaneously with the merger; and
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 policies and/or variable annuity
contracts (collectively, the "Variable Insurance Products") to be offered by
insurance companies that have entered into participation agreements similar to
this Agreement (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several series
of shares, each designated a "portfolio" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Fund is able to rely on an order from the Securities and
Exchange Commission (hereinafter 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, (hereinafter 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 Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of life insurance companies that may
or may not be affiliated with one another
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and qualified pension and retirement plans ("Qualified Plans") (hereinafter the
"Mixed and Shared Funding Exemptive Order"); and
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 (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Distributor is duly registered as a broker-dealer 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, the Company issues certain variable life insurance policies and/or
variable annuity contracts supported wholly or partially by the Accounts (the
"Contracts"). The Contracts are listed on Schedule A attached hereto and
incorporated herein by reference, as such schedule may be amended from time to
time by mutual written agreement of the parties; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company under applicable state insurance laws to set aside and invest assets
attributable to the Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the portfolios listed on
Schedule A attached hereto and incorporated herein by reference, as such
schedule may be amended from time to time by mutual written agreement of the
parties (the "Portfolios"), on behalf of the Accounts to fund the Contracts, and
the Distributor is authorized to sell such shares to unit investment trusts such
as the Accounts at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company also intends to continue to purchase shares in other
open-end investment companies or series thereof not affiliated with the Fund
(the "Unaffiliated Funds") on behalf of the Accounts to fund the Contracts.
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale and Redemption of Fund Shares
1.1 The Distributor agrees to sell to the Company those shares of the
Portfolios which the Account orders, executing such orders on each Business Day
at the net asset value next computed after receipt by the Fund or its designee
of the order for the shares of the Portfolios, subject to the terms and
conditions set forth in the Fund's then-current prospectus. For purposes of this
Section 1.1, the Company shall be the designee of the Fund for receipt of such
orders and receipt by such designee shall constitute receipt by the Fund,
provided that the Fund receives notice of any such order by 10:00 a.m. Eastern
time on the next following Business Day.
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"Business Day" shall mean any day on which the New York Stock Exchange is open
for trading and on which a Portfolio calculates its net asset value pursuant to
the rules of the SEC.
1.2 The Fund agrees to make shares of the Portfolios available for purchase
at the applicable net asset value per share by the Company and the Accounts on
those days on which the Fund calculates its Portfolios' net asset value pursuant
to rules of the SEC, and the Fund shall calculate such net asset value on each
day on which the New York Stock Exchange is open for trading. Notwithstanding
the foregoing, the Fund may refuse to sell shares of any Portfolio to any
person, or suspend or terminate the offering of shares of any Portfolio if such
action is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Fund acting in good faith, necessary or
appropriate in the best interests of the shareholders of such Portfolio. All
orders received by the Company shall be subject to the terms of the then current
prospectus of the Fund. The Company acknowledges that orders received by it in
violation of the Fund's stated policies may be subsequently revoked or cancelled
by the Fund and that the Fund shall not be responsible for any losses incurred
by the Company or the Contract owner as a result of such cancellation. In
addition, the Company acknowledges that the Fund has the right to refuse any
purchase order for the reasons stated in the current prospectus of the Fund.
1.3 The Fund will not sell shares of the Portfolios to any other
Participating Insurance Company separate account unless an agreement containing
provisions the substance of which are the same as Sections 2.1, 2.2 (except with
respect to designation of applicable law), 3.6, 3.7, 3.8 and Article VII of this
Agreement is in effect to govern such sales.
1.4 The Fund agrees to redeem for cash, on the Company's request, any full
or fractional shares of the Portfolios held by the Company, executing such
requests on each Business Day at the net asset value next computed after receipt
by the Fund or its designee of the request for redemption. For purposes of this
Section 1.4, the Company shall be the designee of the Fund for receipt of
requests for redemption and receipt by such designee shall constitute receipt by
the Fund, provided that the Fund receives notice of any such request for
redemption by 10:00 a.m. Eastern time on the next following Business Day.
1.5 The parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's shares may be sold to other
Participating Insurance Companies (subject to Section 1.3) and the cash value of
the Contracts may be invested in other investment companies, the Company's
registered or unregistered modified guaranteed annuity accounts and the
Company's fixed account.
1.6 The Company shall pay for Fund shares by 3:00 p.m. Eastern time on the
next Business Day after an order to purchase Fund shares is received in
accordance with the provisions of Section 1.1 hereof. Payment shall be in
federal funds transmitted by wire and/or by a credit for any shares redeemed the
same day as the purchase.
1.7 The Fund shall pay and transmit the proceeds of redemptions of Fund
shares by 11:00 a.m. Eastern Time on the next Business Day after a redemption
order is received in accordance with Section 1.4 hereof; provided, however, that
the Fund may delay payment in
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extraordinary circumstances to the extent permitted under Section 22(e) of the
1940 Act. Payment shall be in federal funds transmitted by wire and/or a credit
for any shares purchased the same day as the redemption.
Each party has the right to rely on information or confirmations provided
by the other party (or by an affiliate of the other party), and shall not be
liable in the event that an error is a result of any misinformation supplied by
the other party, or its affiliate thereof.
1.8 Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts. Shares
purchased from the Fund will be recorded in an appropriate title for the
relevant Account or the relevant sub-account of an Account.
1.9 The Fund shall furnish same day notice (by electronic communication or
telephone, followed by electronic confirmation) to the Company of any income,
dividends or capital gain distributions payable on a Portfolio's shares. The
Company hereby elects to receive all such income dividends and capital gain
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 to
receive all such income dividends and capital gain distributions in cash. The
Fund shall notify the Company by the end of the next following Business Day of
the number of shares so issued as payment of such dividends and distributions.
1.10 The Fund shall make the net asset value per share for each Portfolio
available to the Company on each Business Day as soon as reasonably practicable
after the net asset value per share is calculated and shall use its best efforts
to make such net asset value per share available by 6:00 p.m. Eastern time. In
the event of an error in the computation of a Portfolio's net asset value per
share ("NAV") or any dividend or capital gain distribution (each, a "pricing
error"), the Adviser or the Fund shall notify the Company as soon as possible
after discovery of the error. Such notification may be oral, but shall be
confirmed promptly in writing. A pricing error shall be corrected as follows:
(a) if the pricing error results in a difference between the erroneous NAV and
the correct NAV of less than $0.01 per share, then no corrective action need be
taken; (b) if the pricing error results in a difference between the erroneous
NAV and the correct NAV equal to or greater than $0.01 per share, but less than
1/2 of 1% of the Portfolio's NAV at the time of the error, then the Adviser
shall reimburse the Portfolio for any loss, after taking into consideration any
positive effect of such error; however, no adjustments to Contract owner
accounts need be made; and (c) if the pricing error results in a difference
between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1%
of the Portfolio's NAV at the time of the error, then the Adviser shall
reimburse the Portfolio for any loss (without taking into consideration any
positive effect of such error) and shall reimburse the Company for the costs of
adjustments made to correct Contract owner accounts. Upon notification by the
Adviser of any overpayment due to a material error, the Company shall promptly
remit to the Adviser any overpayment that has not been paid to Contract owners.
In no event shall the Company be liable to Contract owners for any such
adjustments or underpayment amounts. Only a pricing error within categories (b)
or (c) above shall be deemed to be "materially incorrect" or constitute a
"material error" for purposes of this Agreement. The standards set forth in this
Section 1.10 are based on the parties' understanding of the views expressed by
the
4
staff of the SEC as of the date of this Agreement. In the event the views of the
SEC staff are later modified or superseded by SEC or judicial interpretation,
the parties shall amend the foregoing provisions of this Agreement to comport
with the appropriate applicable standards, on terms mutually satisfactory to all
parties.
1.11 The parties agree to mutually cooperate with respect to any state
insurance law restriction or requirement applicable to the Fund's investments;
provided, however, that the Fund reserves the right not to implement
restrictions or take other actions required by state insurance law if the Fund
or the Adviser determines that the implementation of the restriction or other
action is not in the best interest of Fund shareholders.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that: (a) the securities issued by
the Accounts under the Contracts are or will be registered under the 1933 Act,
or are not so registered in proper reliance upon an exemption from such
registration requirements (in the event the Company or Account relies upon an
exemption from such registration requirements, the Company undertakes to
promptly so notify the Fund); (b) the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws;
and (c) the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements.
2.2. The Company represents and warrants that: (a) it is an insurance
company duly organized and in good standing under applicable law; (b) it, or a
wholly-owned subsidiary insurance company, has legally and validly established
each Account prior to any issuance or sale of units thereof as a segregated
asset account under applicable state insurance law; and (c) it has registered
each 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 and will
maintain such registration for so long as any Contracts are outstanding as
required by applicable law or, alternatively, the Company has not registered one
or more Accounts in proper reliance upon an exclusion from such registration
requirements.
2.3. The Fund represents and warrants that: (a) the Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act; (b) the Fund
shares sold pursuant to this Agreement shall be duly authorized for issuance and
sold in compliance with all applicable state and federal securities laws
including without limitation the 1933 Act, the 1934 Act, and the 1940 Act; (c)
the Fund is and shall remain registered under the 1940 Act; and (d) the Fund
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.
2.4. The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although it may
make such payments in the future subject to applicable law and after providing
notice to the Company.
2.5. The Fund represents and warrants that it shall register and qualify
the shares for sale in accordance with the laws of the various states if and to
the extent required by applicable law.
5
2.6. The Fund represents and warrants that it is lawfully organized and
validly existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act.
2.7. The Fund makes no representations as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states.
2.8. The Adviser represents and warrants that it is and shall remain duly
registered under all applicable federal and state securities laws and that it
shall perform its obligations for the Fund in compliance in all material
respects with any applicable state and federal securities laws.
2.9. The Distributor represents and warrants that it is and shall remain
duly registered as a broker-dealer under all applicable federal and state
securities laws and is a member in good standing with the NASD, and that it
shall perform its obligations for the Fund in compliance in all material
respects with the laws of any applicable state and federal securities laws.
2.10. The Fund and the Adviser 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 Fund 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 Fund 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.
2.11. The Fund and the Adviser represent and warrant that they will provide
the Company with as much advance notice as is reasonably practicable of any
material change affecting the Portfolios (including, but not limited to, any
material change in the registration statement or prospectus affecting the
Portfolios) and any proxy solicitation affecting the Portfolios and consult with
the Company in order to implement any such change in an orderly manner,
recognizing the expenses of changes and attempting to minimize such expense by
implementing them in conjunction with regular annual updates of the prospectus
for the Contracts where reasonably practicable.
2.12. The Company represents and warrants, for purposes other than
diversification under Section 817 of the Internal Revenue Code of 1986 as
amended (the "Code"), that the Contracts are currently and at the time of
issuance will be treated as annuity contracts or life insurance policies under
applicable provisions of the Code, and that it will make every effort to
maintain such treatment and that it will notify the Fund, the Distributor and
the Adviser 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 each Account are offered
exclusively through the purchase of or transfers 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
6
notify the Fund, the Distributor and the Adviser 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 Fund shares with assets derived from tax-qualified
retirement plans except, indirectly, through Contracts purchased in connection
with such plans.
2.13. The Company represents and warrants that it will comply with all
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, to share with the Fund, the Distributor
and the Adviser information about the individuals, entities, organizations and
countries suspected of possible terrorist or money laundering activities in
accordance with Section 314(b) of the USA PATRIOT ACT.
2.14. The Fund, the Distributor and the Adviser represent and warrant that
each of them will comply with all 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, to share with the
Company information about the individuals, entities, organizations and countries
suspected of possible terrorist or money laundering activities in accordance
with Section 314(b) of the USA PATRIOT ACT.
2.15. The Company represents and warrants that it is currently in
compliance, and will remain in compliance, with all applicable laws, rules and
regulations relating to consumer privacy, including, but not limited to,
Regulation S-P.
2.16. The Company represents and warrants that it has adopted, and will at
all times during the term of this Agreement maintain, reasonable and appropriate
procedures ("Late Trading Procedures") reasonably designed to ensure that any
and all orders relating to the purchase, sale or exchange of Fund shares
communicated to the Fund to be treated in accordance with Article I of this
Agreement as having been received on a Business Day, have been received by the
Valuation Time on such Business Day and were not modified after the Valuation
Time, and that all orders received from Contract owners but not rescinded by the
Valuation Time were communicated to the Fund or its agent as received for that
Business Day. "Valuation Time" shall mean the time as of which the Fund
calculates net asset value for the shares of the Portfolios on the relevant
Business Day. The Company represents and warrants that it has adopted and
implemented controls reasonably designed to ensure that all orders received by
the Company after the close of the New York Stock Exchange on a particular
Business Day will not be aggregated with orders received by the Company before
the close of the New York Stock Exchange on such Business Day.
2.17. Each transmission of orders by the Company shall constitute a
representation by the Company that such orders are accurate and complete and
relate to orders received by the Company by the Valuation Time on the Business
Day for which the order is to be priced and that such transmission includes all
orders relating to Fund shares received from Contract owners but not rescinded
by the Valuation Time. The Company agrees to provide its Late Trading
7
Procedures to the Fund or its designee for inspection and review at the
Company's offices during normal business hours. In addition, the Company agrees
to provide the Fund or its designee such certifications and representations
regarding the Late Trading Procedures as the Fund or its designee may reasonably
request. The Company will promptly notify the Fund in writing of any material
change to the Late Trading Procedures.
2.18. (a) The Company acknowledges that the Fund has adopted policies
designed to prevent frequent purchases and redemptions of any Portfolio shares
in quantities great enough to disrupt orderly management of the corresponding
Fund's investment portfolio. These policies are disclosed in the Fund's
prospectus(es). The Fund and Distributor agree to give Company prompt written
notice of material changes to the Fund's disruptive trading policies and
procedures (and revisions thereto). The Fund and Distributor acknowledge that
the Company, on behalf of its Account(s), has adopted policies reasonably
designed to detect and deter frequent transfers of Contract value among the
subaccounts of the Account(s) including those investing in Portfolio shares
which are available as investment options under the Contracts (such policies and
procedures "Frequent Trading Policies"). The Frequent Trading Policies are
described in the current prospectuses of the Account(s) through which the
Contracts are offered. The Company agrees to provide the Frequent Trading
Policies to the Fund or its designee for inspection and review at the Company's
offices during normal business hours. In addition, the Company agrees to provide
the Fund or its designee such certifications and representations regarding its
Frequent Trading Policies as the Fund or its designee may reasonably request.
The Company will promptly notify the Fund in writing of any material change to
the Frequent Trading Policies.
(b) In recognition of the requirements contained in Rule 22c-2 under the
1940 Act, the Company will provide the Fund or its designee promptly upon
written request, the taxpayer identification number ("TIN"), if known, the
Individual/International Taxpayer Identification Number ("ITIN"), or other
government-issued identifier ("GII") of any or all Shareholder(s) of the account
and the amount, date, and transaction type (purchase, redemption, transfer, or
exchange) of every purchase, redemption, transfer, or exchange of shares held
through an account maintained by the Company during the period covered by the
request. Unless otherwise specifically requested by the Fund, the Company shall
only be required to provide information relating to Shareholder-Initiated
Transfer Purchases or Shareholder-Initiated Transfer Redemptions.
(i) Requests must set forth a specific period, not to exceed ninety
(90) days from the date of the request, for which transaction information is
sought. The Fund may request transaction information older than ninety (90) days
from the date of the request as it deems necessary to investigate compliance
with policies established by the Fund for the purpose of eliminating or reducing
any dilution of the value of the outstanding shares issued by the Fund.
(ii) The Company agrees to transmit the requested information that is
on its books and records to the Fund or its designee promptly, but in any event
not later than ten (10) business days, after receipt of a request. If the
requested information is not on the Company's books and records, the Company
agrees to: (i) provide or arrange to provide to the Fund the requested
information from Shareholders who hold an account with an indirect intermediary;
or (ii) if directed by the Fund, block further purchases of Fund shares from
such indirect
8
intermediary. In such instance, the Company agrees to inform the Fund whether it
plans to perform (i) or (ii). Responses required by this paragraph must be
communicated in writing and in a format mutually agreed upon by the parties. To
the extent practicable, the format for any transaction information provided to
the Fund should be consistent with the NSCC Standardized Data Reporting Format.
For purposes of this provision, an "indirect intermediary" has the same meaning
as in SEC Rule 22c-2 under the 1940 Act.
(iii) The Fund and its designees (including Columbia Management
Services, Inc., the Fund's transfer agent and designee pursuant to this Section
2.18) agree that the use of the information received from the Company shall be
in accordance with the confidentiality provisions contained in Section 12.1 of
this Agreement.
(iv) When the Fund has given the Company a written instruction
pursuant to Section 2.18(c) below, the Fund may request and the Company will
provide the Fund with the name or other identifier of any investment
professional who is listed on the Company's records as the agent of record for
the restricted Shareholder if the investment professional is employed by a
broker dealer affiliate of the Company. If the restricted Shareholder's Contract
was sold by a broker dealer firm not affiliated with the Company, the Company
will provide the Fund with the name of the selling broker dealer firm.
(c) In further recognition of the requirements contained in Rule 22c-2 of
the 1940 Act, the Company agrees to execute written instructions from the Fund
to restrict or prohibit further purchases or exchanges of shares by a
Shareholder that has been identified by the Fund as having engaged in
transactions of the Fund's shares (directly or indirectly through the Company's
account) that violate policies established by the Fund for the purpose of
eliminating or reducing any dilution of the value of the outstanding shares
issued by the Fund. Unless otherwise directed by the Fund, any such restrictions
or prohibitions shall only apply to Shareholder-Initiated Transfer Purchases or
Shareholder-Initiated Transfer Redemptions that are affected directly or
indirectly through the Company.
(i) Instructions must include the TIN, ITIN or GII and the specific
restriction(s) to be executed, including how long the restriction(s) is (are) to
remain in place. If the TIN, ITIN, or GII associated with the Shareholder is not
known, the Fund or its designee will contact the Company and the Company will
again provide the Fund or its designee with the TIN, ITIN or GII. Upon request
by the Company, the Fund will provide a brief written explanation specifying how
the Shareholder's trading activity violated the affected Funds' market timing or
other abusive trading policies that the Company may provide to the Shareholder.
(ii) The Company agrees to execute instructions as soon as reasonably
practicable, but not later than five (5) Business Days after receipt of the
instructions by the Company.
(iii) The Company must provide written confirmation to the Fund that
instructions have been executed. The Company agrees to provide confirmation as
soon as reasonably practicable, but not later than ten (10) Business Days after
the instructions have been executed.
9
(d) For purposes of this Section 2.18:
(i) The term "Fund" includes the Adviser, and Columbia Management
Services, Inc., but does not include any "excepted funds" as defined in SEC Rule
22c-2(b) under the 1940 Act.
(ii) The term "Shareholder" means the holder of interests under a
Contract.
(iii) The term "Shareholder-Initiated Transfer Purchase" means a
transaction that is initiated or directed by a Shareholder that results in a
transfer of assets within a Contract to a Fund, but does not include
transactions that are executed: (i) automatically pursuant to a contractual or
systematic program or enrollment such as transfer of assets within a Contract to
a Fund as a result of "dollar cost averaging" programs, insurance company
approved asset allocation programs, or automatic rebalancing programs; (ii)
pursuant to a Contract death benefit; (iii) one-time step-up in Contract value
pursuant to a Contract death benefit; (iv) allocation of assets to a Fund
through a Contract as a result of payments such as loan repayments, scheduled
contributions, retirement plan salary reduction contributions, or planned
premium payments to the Contract; or (v) prearranged transfers at the conclusion
of a required free look period.
(iv) The term "Shareholder-Initiated Transfer Redemption" means a
transaction that is initiated or directed by a Shareholder that results in a
transfer of assets within a Contract out of a Fund, but does not include
transactions that are executed: (i) automatically pursuant to a contractual or
systematic program or enrollments such as transfers of assets within a Contract
out of a Fund as a result of annuity payouts, loans, systematic withdrawal
programs, insurance company approved asset allocation programs and automatic
rebalancing programs; (ii) as a result of any deduction of charges or fees under
a Contract; (iii) within a Contract out of a Fund as a result of scheduled
withdrawals or surrenders from a Contract; or (iv) as a result of payment of a
death benefit from a Contract.
2.19 The Company agrees to provide the Fund or its designee with reasonable
assurance that it has implemented effective compliance policies and procedures
administered by qualified personnel as required by and in accordance with any
and all applicable laws, rules and regulations. The Company acknowledges: (a)
that it has adopted and implemented written compliance policies and procedures
reasonably designed to prevent the Company from violating the Federal Securities
Laws (as defined in Rule 38a-1) in its provision of services to the Fund
pursuant to this Agreement; and (b) that it will provide the Fund or its
designee reasonable access (i) to the Chief Compliance Officer of the Account,
who will confer as needed with the Fund or its designee regarding the written
compliance policies and procedures of the Accounts (including the Frequent
Trading Policies), and (ii) such written policies and procedures for inspection
and review at the Company's offices during normal business hours.
2.20 Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or board action, as applicable, by
such party and when so executed and
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delivered this Agreement will be the valid and binding obligation of such party
enforceable in accordance with its terms.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. At least annually, the Adviser or Distributor shall provide the
Company with as many copies of the Fund's current prospectus as the Company may
reasonably request, with expenses to be borne in accordance with Schedule B
hereof. If requested by the Company in lieu thereof, the Adviser, Distributor or
Fund shall provide such documentation (including an electronic version of the
current prospectus) and other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus for the Fund is
amended) to have the prospectus for the Contracts and the prospectus for the
Fund printed together in one document.
3.2. If applicable state or federal laws or regulations require that the
Statement of Additional Information ("SAI") for the Fund be distributed to all
Contract owners, then the Fund, Distributor and/or the Adviser shall provide the
Company with copies of the Fund's SAI in such quantities, with expenses to be
borne in accordance with Schedule B hereof, as the Company may reasonably
require to permit timely distribution thereof to Contract owners. The Adviser,
Distributor and/or the Fund shall also provide an SAI to any Contract owner or
prospective owner who requests such SAI from the Fund.
3.3. The Fund, Distributor and/or Adviser shall provide the Company with
copies of the Fund's proxy materials, reports to shareholders and other
communications to shareholders in such quantity, with expenses to be borne in
accordance with Schedule B hereof, as the Company may reasonably require to
permit timely distribution thereof to Contract owners. The Fund will provide
written instructions to the Company each time the Fund furnishes an amendment or
supplement to the Fund's current prospectus or SAI directing the Company as to
whether the amendment or supplement is to be provided (a) immediately to
existing Contract owners who have Contract value allocated to the Fund or (b) is
to be held and combined with another Fund or Contract related mailing as
permitted by applicable federal securities laws. The Fund agrees that the
instruction it gives to the Company in each instance will be substantively
identical to instructions provided to other Participating Insurance Companies.
Absent written instructions from the Fund directing otherwise, amendments and
supplements to the Fund's current prospectus or SAI may be held and combined
with another Fund or Contract related mailing as permitted by applicable federal
securities laws.
3.4. It is understood and agreed that, except with respect to information
regarding the Company provided in writing by that party, the Company shall not
be responsible for the content of the prospectus or SAI for the Fund. It is also
understood and agreed that, except with respect to information regarding the
Fund, the Distributor, the Adviser or the Portfolios provided in writing by the
Fund, the Distributor or the Adviser, neither the Fund, the Distributor nor
Adviser are responsible for the content of the prospectus or SAI for the
Contracts.
3.5 In the event that the Fund initiates (a) a reorganization of a
Portfolio as defined by Section 2 of the 1940 Act, or (ii) a change in the name
of a Portfolio or the Fund, the Fund, the
11
Distributor or the Adviser as they may among themselves determine, shall
reimburse the Company for the Company's verifiable 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 Fund, the
Distributor and the Adviser with acceptable documentation of any such costs
incurred.
3.6. If and to the extent required by law the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote the Portfolio shares held in the Accounts in accordance with
instructions received from Contract owners;
(c) vote Portfolio shares held in the Accounts for which no
instructions have been received in the same proportion as Portfolio shares 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; and
(d) vote Portfolio shares held in its general account or otherwise in
the same proportion as Portfolio shares 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 such voting by the insurance
company. The Company reserves the right to vote Fund shares in its own right, to
the extent permitted by law.
3.7. The Company shall be responsible for assuring that each of its
separate accounts holding shares of a Portfolio calculates voting privileges as
directed by the Fund and agreed to by the Company and the Fund. The Fund agrees
to promptly notify the Company of any changes of interpretations or amendments
of the Mixed and Shared Funding Exemptive Order.
3.8. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders. Further, the Fund will act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of directors or trustees and with whatever rules the SEC may
promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, a copy of each piece of sales literature or other promotional
material that the Company develops or proposes to use and in which the Fund (or
Portfolio thereof), the Adviser or the Distributor is named in connection with
the Contracts, at least ten (10) Business Days prior to its use. No such
material shall be used if the Fund objects to such use within five (5) Business
Days after receipt of such material.
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Fund in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement, including the prospectus or SAI for the Fund shares, as the same may
be amended or supplemented from time to time, or in
12
sales literature or other promotional material approved by the Fund, Distributor
or Adviser, except with the permission of the Fund, Distributor or Adviser.
4.3. The Fund, the Adviser or the Distributor shall furnish, or shall cause
to be furnished, to the Company, a copy of each piece of sales literature or
other promotional material in which the Company and/or its Accounts are named at
least ten (10) Business Days prior to its use. No such material shall be used if
the Company objects to such use within five (5) Business Days after receipt of
such material.
4.4. The Fund, the Distributor and the Adviser shall not give any
information or make any representations on behalf of the Company or concerning
the Company, the Accounts, or the Contracts other than the information or
representations contained in a registration statement, including the prospectus
or SAI for the Contracts, as the same may be amended or supplemented from time
to time, or in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.
4.5. For purposes of Articles IV and VIII, the phrase "sales literature and
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media; e.g.,
on-line networks such as the Internet or other electronic media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
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 shareholder reports, and proxy
materials (including solicitations for voting instructions) and any other
material constituting sales literature or advertising under the NASD rules, the
1933 Act or the 0000 Xxx.
4.6. At the request of any party to this Agreement, each other party will
make available to the other party's independent auditors and/or representatives
of the appropriate regulatory agencies, all records, data and access to
operating procedures that may be reasonably requested in connection with
compliance and regulatory requirements related to this Agreement or any party's
obligations under this Agreement.
ARTICLE V. Fees and Expenses
5.1. The Fund, the Distributor and the Adviser shall pay no fee or other
compensation to the Company under this Agreement, and the Company shall pay no
fee or other compensation to the Fund, the Distributor or Adviser under this
Agreement; provided, however, (a) the parties will bear their own expenses as
reflected in Schedule B and other provisions of this Agreement, (b) the parties
may enter into other agreements relating to the Company's investment in the
Fund, including services agreements and (c) each party shall in accordance with
the allocation of expenses reflected in Schedule B and other provisions of this
Agreement promptly reimburse other parties for expenses initially paid by one
party but allocated to another party.
13
ARTICLE VI. Diversification and Qualification
6.1. The Fund, Distributor and Adviser represent and warrant that the Fund
and each Portfolio thereof will at all times comply with Section 817(h) of the
Code and Treasury Regulation ss.1.817-5, as amended from time to time, 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 Regulations.
The Fund, the Distributor or the Adviser shall, upon request, provide to the
Company a quarterly written diversification report, which shall show the results
of the quarterly Section 817(h) diversification test and include a certification
as to whether each Portfolio complies with the Section 817(h) diversification
requirement.
6.2. The Fund, the Distributor and the Adviser agree that shares of the
Portfolios will be sold only to Participating Insurance Companies and their
separate accounts and to Qualified Plans. No shares of any Portfolio of the Fund
will be sold to the general public. However, it is understood by the Company
that the Fund may sell shares of any Portfolio to any person eligible to invest
in that Portfolio in accordance with applicable provisions of Section 817(h)
under the Code and the regulations thereunder and the terms of the Mixed and
Shared Funding Exemptive Order.
6.3. The Fund, the Distributor and the Adviser represent and warrant that
the Fund and each Portfolio is currently qualified as a Regulated Investment
Company under Subchapter M of the Code, and that each Portfolio will maintain
such qualification (under Subchapter M or any successor or similar provisions)
as long as this Agreement is in effect.
6.4 The Fund, the Distributor or the Adviser will notify the Company
immediately upon having a reasonable basis for believing that the Fund or any
Portfolio has ceased to comply with the aforesaid Section 817(h) diversification
or Subchapter M qualification requirements.
6.5 Without in any way limiting the effect of Sections 8.2, 8.3 and 8.4
hereof and without in any way limiting or restricting any other remedies
available to the Company, the Adviser or the Distributor will pay all costs
associated with or arising out of any failure, or any anticipated or reasonably
foreseeable failure, of the Fund or any Portfolio to comply with Section 6.1,
6.2 or 6.3 hereof, including all costs associated with reasonable and
appropriate corrections or responses to any such failure; such costs may
include, but are not limited to, the costs involved in creating, organizing, and
registering a new investment company as a funding medium for the Contract and/or
costs of obtaining whatever regulatory authorizations are required to substitute
shares of another investment company for those of the failed Portfolio
(including but not limited to an order pursuant to Section 26(c) of the 0000
Xxx.
6.6. The Company agrees that if the Internal Revenue Service ("IRS")
asserts in writing in connection with any governmental audit or review of the
Company (or, to the Company's knowledge, of any Contract owner) that any
Portfolio has failed to comply with the diversification requirements of Section
817(h) of the Code or the Company otherwise becomes aware of any facts that
could give rise to any claim against the Fund, Distributor or Adviser as a
14
result of such a failure or alleged failure, the Company shall promptly notify
the Fund, the Distributor and the Adviser or such assertion or potential claim.
ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding
Exemptive Order
7.1. The Board of Trustees of the Fund (the "Board") will monitor the Fund
for the existence of any material irreconcilable conflict between the interests
of the Contract owners of all separate accounts investing in the Fund. An
irreconcilable material 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 interpretative 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 is 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 promptly inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Mixed and Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Board whenever Contract owner voting instructions
are to be disregarded. Such responsibilities shall be carried out by the Company
with a view only to the interests of its Contract owners.
7.3. If it is determined by a majority of the Board, or a majority of its
directors who are not interested persons of the Fund, the Distributor, the
Adviser or any subadviser to any of the Portfolios (the "Independent
Directors"), that a material irreconcilable conflict exists, the Company and
other Participating Insurance Companies shall, at their expense and to the
extent reasonably practicable (as determined by a majority of the Independent
Directors), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (1) withdrawing the
assets allocable to some or all of the separate accounts from the Fund or any
Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio, or submitting the question
whether such segregation should be implemented to a vote of all affected
Contract owners and, as appropriate, segregating the assets of any appropriate
group (i.e., annuity contract owners, life insurance contract owners, or
variable contract owners of one or more Participating Insurance Companies) that
votes in favor of such segregation, or offering to the affected contract owners
the option of making such a change; and (2) establishing a new registered
management investment company or managed separate account.
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
15
or would preclude a majority vote, the Company may be required, at the Fund's
election, to withdraw the Account's investment in the Fund 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 Independent Directors. Any such withdrawal
and termination must take place within six (6) months after the Fund gives
written notice that this provision is being implemented, and until the end of
that six-month period the Adviser, the Distributor and the Fund shall continue
to accept and implement orders by the Company for the purchase (and redemption)
of shares of the Fund, subject to the terms of the Fund's then-current
prospectus.
7.5. If a material irreconcilable conflict arises because a 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 Fund and terminate this Agreement within six months
after the Board informs the Company in writing that it has determined that such
decision has created an irreconcilable material 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 Independent Directors. Until the end of the foregoing six-month period, the
Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund, subject to the terms of the
Fund's then-current prospectus.
7.6. For purposes of Sections 7.3 through 7.5 of this Agreement, a majority
of the Independent Directors shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Fund be required to establish a new funding medium for the Contracts. The
Company shall not be required by Section 7.3 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 irreconcilable material conflict. In the
event that the Board determines that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Fund 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 Directors.
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 Fund and/or the Participating Insurance
Companies, as appropriate, 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 3.6, 3.7, 3.8, 7.1, 7.2, 7.3,
7.4, and 7.5 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.
16
ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the Fund, the
Distributor and the Adviser and each of their respective officers and directors
or trustees and each person, if any, who controls the Fund, Distributor or
Adviser within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, expenses, damages and liabilities (including amounts paid in
settlement with the written consent of the Company) or litigation (including
reasonable 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, expenses, damages or liabilities (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement or prospectus or SAI covering 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 reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of the Fund for use in the registration statement or
prospectus for the Contracts or in the Contracts or sales literature
or other promotional material (or any amendment or supplement to any
of the foregoing) 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 or sales literature or other
promotional material of the Fund not supplied by the Company or
persons under its control) or wrongful conduct of the Company or
persons under its 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 or other promotional material 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 in writing to the Fund by or on behalf of the
Company; or
17
(iv) arise as a result of any failure by the Company to provide
the services and furnish the materials under the terms 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, including without limitation Section 2.12
and Section 6.4 hereof,
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, 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 or duties under this
Agreement.
(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, except to the extent that the Company
has been prejudiced by such failure to give notice. In case any such action is
brought against the Indemnified Parties, 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.
(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 share of the Portfolios or the operation of the Fund.
8.2. Indemnification by the Adviser
(a) The Adviser agrees to indemnify and hold harmless the Company and
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 8.2) against any and all losses, claims,
expenses, damages, liabilities (including amounts paid in settlement with the
written consent of the Adviser) or litigation (including reasonable 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
18
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of the Portfolios or the Contracts and:
(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 or
other promotional material of the Fund prepared by the Fund, the
Distributor or the Adviser (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 in writing to the Adviser, the
Distributor or the 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 other promotional material (or any amendment or
supplement to any of the foregoing) or otherwise for use in connection
with the sale of the Contracts or the Portfolios; 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 or other
promotional material for the Contracts not supplied by the Adviser or
persons under its control) or wrongful conduct of the Fund, the
Distributor or the Adviser or persons under their control, with
respect to the sale or distribution of the Contracts or Portfolios; 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 or other promotional material
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 in writing to
the Company by or on behalf of the Adviser, the Distributor or the
Fund; or
(iv) arise as a result of any failure by the Fund, the
Distributor or the Adviser 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
Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, the Distributor or
the Adviser in this Agreement or arise out of or result from any other
material breach of this Agreement by the Adviser, the Distributor or
the Fund; or
19
(vi) arise out of or result from the incorrect or untimely
calculation or reporting by the Fund, the Distributor, the Adviser or
any service provider of the foregoing Parties of the daily net asset
value per share (subject to Section 1.10 of this Agreement) or
dividend or capital gain distribution rate;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof. This indemnification is in addition to and apart from the
responsibilities and obligations of the Adviser specified in Article VI hereof.
(b) The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, 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 or duties under this
Agreement.
(c) The Adviser 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 Adviser 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 Adviser of any
such claim shall not relieve the Adviser 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, except to the extent that the Adviser
has been prejudiced by such failure to give notice. In case any such action is
brought against the Indemnified Parties, the Adviser will be entitled to
participate, at its own expense, in the defense thereof. The Adviser also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Adviser to such party of the
Adviser'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
Adviser 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.
(d) The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceeding 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.
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, without regard to conflict of laws provisions.
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
20
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, with respect to
some or all Portfolios, upon sixty (60) days advance written notice delivered to
the other parties; or
(b) at the option of the Company by written notice to the other
parties with respect to any Portfolio based upon the Company's determination
that shares of such Portfolio are not reasonably available to meet the
requirements of the Contracts; or
(c) at the option of the Company by written notice to the other
parties with respect to any Portfolio in the event any of the 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) at the option of the Fund, Distributor or Adviser 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 shares, if, in each case, the Fund, Distributor or Adviser,
as the case may be, reasonably 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) at the option of the Company in the event that formal
administrative proceedings are instituted against the Fund, the Distributor or
the Adviser by the NASD, the SEC, or any state securities or insurance
department or any other regulatory body, if the Company reasonably 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,
the Distributor or the Adviser to perform their obligations under this
Agreement; or
(f) at the option of the Company by written notice to the Fund with
respect to any Portfolio if the Company reasonably believes that the Portfolio
will fail to meet the Section 817(h) diversification requirements or Subchapter
M qualifications specified in Article VI hereof; or
(g) at the option of any non-defaulting party hereto in the event of a
material breach of this Agreement by any party hereto (the "defaulting party")
other than as described in Section 10.1(a)-(h); provided, that the
non-defaulting party gives written notice thereof to the defaulting party, with
copies of such notice to all other non-defaulting parties, and if such breach
shall not have been remedied within thirty (30) days after such written notice
is given, then the
21
non-defaulting party giving such written notice may terminate this Agreement by
giving thirty (30) days written notice of termination to the defaulting party;
or
(h) at any time upon written agreement of all parties to this
Agreement.
10.2. Notice Requirement
No termination of this Agreement shall be effective unless and until the
party terminating this Agreement gives prior written notice to all other parties
of its intent to terminate, which notice shall set forth the basis for the
termination. Furthermore,
(a) in the event any termination is based upon the provisions of
Article VII, or the provisions of Section 10.1(a) of this Agreement, the prior
written notice shall be given in advance of the effective date of termination as
required by those provisions unless such notice period is shortened by mutual
written agreement of the parties;
(b) in the event any termination is based upon the provisions of
Section 10.1(d), 10.1(e) or 10.1(g) of this Agreement, the prior written notice
shall be given at least sixty (60) days before the effective date of
termination; and
(c) in the event any termination is based upon the provisions of
Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in
advance of the effective date of termination, which date shall be determined by
the party sending the notice.
10.3. Effect of Termination
Notwithstanding any termination of this Agreement, other than as a result
of a failure by either the Fund or the Company to meet Section 817(h) of the
Code diversification requirements, the Fund, the Distributor and the Adviser
shall, at the option of the Company, continue to make available additional
shares of the Fund 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, without
limitation, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Fund, redeem investments in the Fund and/or invest
in the Fund upon the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.3 shall not apply to any
terminations under Article VII and the effect of such Article VII terminations
shall be governed by Article VII of this Agreement.
10.4. Surviving Provisions
Notwithstanding any termination of this Agreement, each party's obligations
under Article VIII to indemnify 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.
22
ARTICLE XI. 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 parties.
If to the Company:
RiverSource Life Insurance Co. of New York
0000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Vice President
If to the Fund:
Xxxxxx Advisors Trust
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Secretary
If to the Adviser:
Columbia Xxxxxx Asset Management, L.P.
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Secretary
If to the Distributor:
Columbia Management Distributors, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Secretary
ARTICLE XII. Miscellaneous
12.1. Notwithstanding anything to the contrary contained in this Agreement,
in addition and not in lieu of other provisions in this Agreement:
(a) "Confidential Information" includes, but is not limited to all
proprietary and confidential information of the Company and its subsidiaries,
affiliates and licensees (collectively, the "Protected Parties") for purposes of
this Section 12.1), including without limitation all information regarding the
customers of the Protected Parties, or the accounts,
23
account numbers, names, addresses, social security numbers or any other personal
identifier of such customers, or any information derived therefrom.
(b) Neither the Fund, the Adviser, nor the Distributor may use or
disclose Confidential Information for any purpose other than to carry out the
purpose for which Confidential Information was provided to the Fund, the Adviser
or the Distributor (or by the Fund, the Adviser or the Distributor to any
service providers thereof) as set forth in this Agreement; and the Fund, the
Adviser and the Distributor agree to require that all of their employees, agents
and representatives, or any party to whom the Fund, the Adviser or the
Distributor may provide access to or disclose Confidential Information to limit
the use and disclosure of Confidential Information to that purpose.
(c) The Company may not use or disclose any information that the Fund,
the Adviser or the Distributor may designate from time to time as proprietary.
Such designation will be made in writing to the Company. Likewise, to the extent
not otherwise covered in this Section 12.1, neither the Fund, the Advisor nor
the Distributor may use or disclose any information that the Company may
designate from time to time as proprietary. Such designation will be made in
writing to the Fund.
(d) The Fund, the Adviser and the Distributor agree to implement
appropriate measures designed to ensure the security and confidentiality of
Confidential Information and any other information designated as proprietary
pursuant to Section 12.1(c), to protect such information against any anticipated
threats or hazards to the security or integrity of such information, and to
protect against unauthorized access to, or use of, Confidential Information and
any other information designated as proprietary pursuant to Section 12.1(c) that
could result in substantial harm or inconvenience to any customer or Protected
Parties; the Fund, the Adviser and the Distributor further agree to cause all
their agents, representatives or subcontractors of, or any other party to whom
the Fund, the Adviser or the Distributor may provide access to or disclose
Confidential Information and any other information designated as proprietary
pursuant to Section 12.1(c) to implement appropriate measures designed to meet
the obligations set forth in this Section 12.1. The Company agrees to implement
appropriate measures designed to ensure the security and confidentiality of
information designated by the Fund, the Advisor or the Distributor as
proprietary in accordance with Section 12.1(c).
(e) The Company, the Fund, the Adviser and the Distributor acknowledge
that any breach of the agreements in this Section 12.1 would result in immediate
and irreparable harm to the Protected Parties or alternatively to the Fund, the
Adviser or the Distributor, for which there would be no adequate remedy at law
and agree that in the event of such a breach, the Protected Parties or
alternatively the Fund, the Adviser or the Distributor, will be entitled to
equitable relief by way of temporary and permanent injunctions, as well as such
other relief as any court of competent jurisdiction deems appropriate.
12.2. 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.
24
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.4. 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.
12.5. 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.
12.6. 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. The number of arbitrators will be three, one of whom will be appointed
by the Company or an affiliate, one of whom will be appointed by the Fund and/or
the Adviser or an affiliate, and the third of whom will be selected by mutual
agreement, if possible, within 30 days of the selection of the second arbitrator
and thereafter by the administering authority. The place of arbitration will be
New York, NY. The arbitrators will have no authority to award punitive damages
or any other damages not measured by the prevailing party's actual damages, and
may not, in any event, make any ruling, finding or award that does not conform
to the terms and conditions of this Agreement. Any party may make an application
to the arbitrators seeking injunctive relief to maintain the status quo until
such time as the arbitration award is rendered or the controversy is otherwise
resolved. Any party may apply to any court having jurisdiction hereof and seek
injunctive relief in order to maintain the status quo until such time as the
arbitration award is rendered or the controversy is otherwise resolved.
12.7. 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.
12.8. 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.
12.9. The Company agrees that the obligations assumed by the Fund,
Distributor and the Adviser pursuant to this Agreement shall be limited in any
case to the Fund, Distributor and Adviser and their respective assets and the
Company shall not seek satisfaction of any such obligation from the shareholders
of the Fund, Distributor or the Adviser, the Directors, officers, employees or
agents of the Fund, Distributor or Adviser, or any of them.
12.10. The Fund, the Distributor and the Adviser agree that the obligations
assumed by the Company pursuant to this Agreement shall be limited in any case
to the Company and its assets and neither the Fund, Distributor nor Adviser
shall seek satisfaction of any such obligation
25
from the shareholders of the Company, the directors, officers, employees or
agents of the Company, or any of them.
12.11. No provision of this Agreement may be deemed or construed to modify
or supersede any contractual rights, duties, or indemnifications, as between the
Adviser and the Fund, and the Distributor and the Fund.
12.12 The parties to this Agreement may amend this Agreement in writing
from time to time to reflect changes in or relating to the Contracts, the
Portfolios available under the Contracts and other terms of this Agreement.
12.13 A copy of the Agreement and Declaration of Trust of the Fund is on
file with the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this Agreement is executed on behalf of the Fund by an officer
of the Fund in his or her capacity as an officer of the Fund and not
individually and that the obligations of or arising out of this Agreement are
not binding upon any of the trustees, officers or shareholders individually but
are binding only upon the assets and property of the Fund. Furthermore, notice
is given that the assets and liabilities of each series of the Fund is separate
and distinct and that the obligations of or arising out of this Agreement with
respect to the series of the Fund are several and not joint, and to the extent
not otherwise reasonably allocated among such series by the trustees of the
Fund, shall be deemed to have been allocated in accordance with the relative net
assets of such series, and Company agrees not to proceed against any series for
the obligations of another series.
26
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
RIVERSOURCE LIFE INSURANCE CO. OF NEW Attest:
YORK
By: /s/ Xxxxxxx X. Xxxxx III By: /s/ Xxxxx Xxxxxx
--------------------------------- ------------------------------------
Name: Xxxxxxx X. Xxxxx III Name: Xxxxx Xxxxxx
Title: Vice President Title: Assistant Secretary
XXXXXX ADVISORS TRUST
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President, Treasurer and
Secretary
COLUMBIA XXXXXX ASSET MANAGEMENT, L.P.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title:
COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
By: /s/ Xxxxxxx X. Xxx
---------------------------------
Name:
Title: President
27
SCHEDULE A
RiverSource Life Insurance Co. of New York
Account, Contract, Fund and Portfolios
SEPARATE ACCOUNT NAME; DATE
ESTABLISHED BY BOARD OF CONTRACT FORM
DIRECTORS NO. CONTRACT NAME FUND PORTFOLIOS
----------------------------- ----------------- ----------------------- ------------------- --------------------------
RIVERSOURCE XX XXX XXXX 000000-XX RiverSource Xxxxxx Advisors International Small Cap;
VARIABLE ANNUITY ACCOUNT 2 Innovations (SM) Trust U.S. Smaller Companies
(prior to January 1, 2007: Select Variable
ACL Variable Annuity Annuity
Account 2), established
October 12, 1995.
273640-NY RiverSource Endeavor Xxxxxx Advisors International Small Cap;
Select Variable Trust U.S. Smaller Companies
Annuity
SEPARATE ACCOUNT NAME; DATE
ESTABLISHED BY BOARD OF CONTRACT FORM
DIRECTORS NO. CONTRACT NAME FUND PORTFOLIOS
----------------------------- ----------------- ----------------------- ------------------- --------------------------
RIVERSOURCE XX XXX XXXX 00000 RiverSource Variable Xxxxxx Advisors International Small Cap;
ACCOUNT 8 Universal Life Trust U.S. Smaller Companies
(prior to January 1, 2007: Insurance(SM)
IDS Life of New York
Account 8), established
September 12, 1985.
30061 RiverSource Variable Xxxxxx Advisors International Small Cap;
Universal Life II Trust U.S. Smaller Companies
30090 RiverSource Variable Xxxxxx Advisors International Small Cap;
Second-To-Die Life Trust U.S. Smaller Companies
Insurance(SM)
39090C RiverSource Xxxxxx Advisors International Small Cap;
Succession Select(SM) Trust U.S. Smaller Companies
Variable Life
Insurance
39061 RiverSource Variable Xxxxxx Advisors International Small Cap;
Universal Life II Trust U.S. Smaller Companies
RiverSource Variable
Universal Life IV and
RiverSource Variable
Universal Life
IV--Estate Series
SEPARATE ACCOUNT NAME; DATE
ESTABLISHED BY BOARD OF CONTRACT FORM
DIRECTORS NO. CONTRACT NAME FUND PORTFOLIOS
----------------------------- ----------------- ----------------------- ------------------- --------------------------
XXXXXXXXXXX XX XXX XXXX 00000, 31054, RiverSource Xxxxxx Advisors International Small Cap;
VARIABLE ANNUITY ACCOUNT 31055-SEP, Retirement Advisor Trust U.S. Smaller Companies
(prior to January 1, 2007: 31056-XXX Variable Annuity(R) and
IDS Life of New York RiverSource
Variable Annuity Account), Retirement Advisor
established April 17, 1996. Variable
Annuity--BAND 3
31053, 31054, RiverSource Xxxxxx Advisors International Small Cap;
31055-SEP, Retirement Advisor Trust U.S. Smaller Companies
31056-XXX Advantage(SM) Variable
Annuity
139035, 139036, RiverSource Xxxxxx Advisors International Small Cap;
139037 and Retirement Advisor Trust U.S. Smaller Companies
139038 Select Variable
Annuity
31053A RiverSource Xxxxxx Advisors International Small Cap;
Retirement Advisor Trust U.S. Smaller Companies
Advantage(SM) Plus
Variable Annuity
139035A RiverSource Xxxxxx Advisors International Small Cap;
Retirement Advisor Trust U.S. Smaller Companies
Select(SM) Plus
Variable Annuity
139482 RiverSource Xxxxxx Advisors International Small Cap;
Retirement Advisor 4 Trust U.S. Smaller Companies
Advantage(SM)
Variable Annuity
139483 RiverSource Xxxxxx Advisors International Small Cap;
Retirement Advisor 4 Trust U.S. Smaller Companies
Select(SM) Variable
Annuity
139484 RiverSource International Small Cap;
Retirement Advisor U.S. Smaller Companies
Access(SM) Variable
Annuity
31053A RiverSource Xxxxxx Advisors International Small Cap;
Retirement Advisor Trust U.S. Smaller Companies
Advantage(SM) Plus
Variable Annuity
SCHEDULE B
EXPENSES
The Fund and/or the Distributor and/or Adviser, and the Company will
coordinate the functions and pay the costs of the completing these functions
based upon an allocation of costs in the tables below. Costs shall be allocated
to reflect the Fund's share of the total costs determined according to the
number of pages of the Fund's respective portions of the documents.
PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
ITEM FUNCTION COORDINATION EXPENSE
------------------------------ --------------------------- --------------------------- ---------------------------
Mutual Fund Prospectus Electronic copy of Company Current - Fund
combined prospectuses Prospective - Company
made available
Distribution (including Company Fund
postage) to Current
Clients
Distribution (including Company Company
postage) to Prospective
Clients
Product Prospectus Printing and Distribution Company Company
for Current and
Prospective Clients
Mutual Fund Prospectus Electronic copy, if Fund, Distributor or Fund, Distributor or
Update & Distribution Required by Fund, Adviser Adviser
Distributor or Adviser
If Required by Company Company (Fund, Company
Distributor or Adviser to
provide Company with
document in PDF format)
Product Prospectus Update & If Required by Fund, Company Fund, Distributor or
Distribution Distributor or Adviser Adviser
If Required by Company Company Company
PARTY RESPONSIBLE FOR PARTY RESPONSIBLE FOR
ITEM FUNCTION COORDINATION EXPENSE
------------------------------ --------------------------- --------------------------- ---------------------------
Mutual Fund SAI Printing Fund, Distributor or Fund, Distributor or
Adviser Adviser
Distribution (including Party who receives the Party who receives the
postage) request request
Product SAI Printing Company Company
Distribution Company Company
Proxy Material for Mutual Electronic copy of proxy Fund, Distributor or Fund, Distributor or
Fund if required by Law Adviser Adviser
Distribution (including Company Fund, Distributor or
labor) if proxy required Adviser
by Law
Printing & distribution Company Company
if required by Company
Mutual Fund Annual & Electronic copy made Fund, Distributor or Fund, Distributor or
Semi-Annual Report available Adviser Adviser
Distribution Company Fund, Distributor or
Adviser
Operations of the Accounts Federal registration of Company Company
units of separate account
(24f-2 fees)
