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PARTICIPATION AGREEMENT
By and Among
IDS LIFE INSURANCE COMPANY OF NEW YORK
And
TEMPLETON VARIABLE PRODUCTS SERIES FUND
And
FRANKLIN ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.
THIS AGREEMENT, made and entered into this 7th day of October, 1996 by and among
IDS Life Insurance Company of New York organized under the laws of the State of
New York (the "Company"), on its own behalf and on behalf of each separate
account of the Company named in Schedule 1 to this Agreement, as may be amended
from time to time (each account referred to as the "Account"), Templeton
Variable Products Series Fund an open-end management investment company and
business trust organized under the laws of the State of Massachusetts (the
"Fund") and Franklin ▇▇▇▇▇▇▇▇▇ Distributors, Inc. a corporation organized under
the laws of the State of California (the "Underwriter"), the Fund's principal
underwriter.
WHEREAS, the Fund engages in business as an open-end management investment
company and was established for the purpose of serving as the investment vehicle
for separate accounts established for variable life insurance contracts and
variable annuity contracts to be offered by insurance companies that have
entered into participation agreements substantially identical to this Agreement
(the "Participating Insurance Companies"); and
WHEREAS, beneficial interests in the Fund are divided into several series of
shares, each representing the interest in a particular managed portfolio of
securities and other assets (the "Portfolios"); and
WHEREAS, the Fund has received an order from the Securities & Exchange
Commission (the "SEC") granting Participating Insurance Companies and their
variable annuity separate accounts and variable life insurance separate accounts
relief 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, to the extent necessary to permit
shares of the Fund to be sold to and held by variable annuity separate accounts
and variable life insurance separate accounts of both affiliated and
unaffiliated Participating Insurance Companies and certain qualified pension and
retirement plans outside of the separate account context (the "Mixed and Shared
Funding Exemptive Order"). The parties to this Agreement agree that the
conditions or undertakings specified in the Mixed and Shared Funding Exemptive
Order and that may be imposed on the Company, the Fund and/or the Underwriter by
virtue of the receipt of such order by the SEC will be incorporated herein by
reference, and such parties agree to comply with such conditions and
undertakings to the extent applicable to each such party; and
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WHEREAS, the Fund is registered as an open-end management investment company
under the 1940 Act and its shares are registered under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Company has registered or will register certain variable annuity
contracts (the "Contracts") under the 1933 Act; and
WHEREAS, the Account is a duly organized, validly existing segregated asset
account, established by resolution of the Board of Directors of the Company
under the insurance laws of the State of New York, to set aside and invest
assets attributable to the Contracts; and
WHEREAS, the Company has registered the Account as a unit
investment trust under the 1940 Act; and
WHEREAS, the Underwriter 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 of the Portfolios named in Schedule 2, as
such schedule may be amended from time to time (the "Designated Portfolios") on
behalf of the Account to fund the Contracts, and the Fund is authorized to sell
such shares to unit investment trusts such as 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 and Redemption of Fund Shares
1.1. The Fund agrees to sell to the Company those shares of
the Designated Portfolios that each Account orders,
executing such orders on a daily basis at the net asset
value next computed after receipt and acceptance by the
Fund or its designee of the order for the shares of the
Fund, as established in accordance with the provisions
of the then-current prospectus of the Fund describing
purchase procedures on those days on which the Fund
calculates its net asset value pursuant to rules of the
SEC, and the Fund shall use reasonable efforts to
calculate such net asset value on each day on which the
New York Stock Exchange is open for trading. For
purposes of this Section 1.1, the Company will be the
designee of the Fund for receipt of such orders from
each Account and receipt by such designee will
constitute receipt by the Fund; provided that the Fund
receives notice of such order by 10:00 a.m. Eastern
Time on the next following business day. "Business
Day" will mean any day on which 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.
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1.2. The Company will pay for Fund shares on the next Business Day
after an order to purchase Fund shares is made in accordance
with Section 1.1 above. Payment will be in federal funds
transmitted by wire to the Fund.
1.3. The Fund agrees to make shares of the Designated
Portfolios available for purchase at the applicable net
asset value per share by Participating Insurance
Companies and their separate accounts on those days on
which the Fund calculates its Designated Portfolio net
asset value pursuant to rules of the SEC; provided,
however, that the Board of Trustees of the Fund (the
"Fund Board") 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
Board, acting in good faith and in light of its
fiduciary duties under federal and any applicable state
laws, necessary in the best interests of the
shareholders of such Portfolio.
1.4. The Fund agrees that shares of the Fund will be sold
only to Participating Insurance Companies and their
separate accounts, qualified pension and retirement
plans or such other persons as are permitted under
applicable provisions of the Internal Revenue Code of
1986, as amended, (the "Internal Revenue Code"), and
regulations promulgated thereunder, the sale to which
will not impair the tax treatment currently afforded
the Contracts. No shares of any Portfolio will be sold
to the general public. The Company agrees that it will
use Fund shares only for the purpose of funding the
Contracts through the Accounts listed on Schedule 1, as
amended from time to time.
1.5. The Fund will not sell Fund shares to any insurance
company or separate account unless an agreement
containing provisions substantially the same as
Articles I, III, and VII of this Agreement are in
effect to govern such sales. The Fund will make
available upon written request from the Company a list
of all other Participating Insurance Companies.
1.6. The Fund agrees to redeem for cash, upon the Company's
request, any full or fractional shares of the Fund held
by the Company, executing such requests on a daily
basis at the net asset value next computed after
receipt and acceptance by the Fund or its agent of the
request for redemption. For purposes of this Section
1.6, the Company will be the designee of the Fund for
receipt of requests for redemption from each Account
and receipt by such designee will constitute receipt by
the Fund; provided the Fund receives notice of request
for redemption by 10:00 a.m. Eastern Time on the next
following Business Day. Payment will be in federal
funds transmitted by wire to the Company's account as
designated by the Company in writing from time to time,
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on the same Business Day the Fund receives notice of the
redemption order from the Company; provided the Fund receives
notice of redemption by 10:00 a.m. Eastern Time. If the Fund
receives notice of the redemption after 10:00 a.m. Eastern
Time, payment for the redeemed shares will be made on the next
following Business Day. The Fund reserves the right to delay
payment of redemption proceeds, but in no event may such
payment be delayed longer than the period permitted under
Section 22(e) of the ▇▇▇▇ ▇▇▇. The Fund will not bear any
responsibility whatsoever for the proper disbursement or
crediting of redemption proceeds; the Company alone will be
responsible for such action.
1.7. The Company agrees to purchase and redeem the shares of the
Designated Portfolios offered by the then current prospectus
of the Fund in accordance with the provisions of such
prospectus.
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 any Account. Purchase and redemption orders for
Fund shares will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9. The Fund will furnish same day notice (by wire or
telephone, followed by written confirmation) to the
Company of the declaration of any income, dividends or
capital gain distributions payable on each Designated
Portfolio's shares. The Company hereby elects to
receive all such dividends and distributions as are
payable on the Designated Portfolio shares in the form
of additional shares of that Designated Portfolio. The
Company reserves the right to revoke this election and
to receive all such dividends and distributions in
cash. The Fund will notify the Company of the number
of shares so issued as payment of such dividends and
distributions.
1.10. The Fund will make the net asset value per share for each
Designated Portfolio available to the Company on a daily basis
as soon as reasonably practical after the net asset value per
share is calculated and will use its best efforts to make such
net asset value per share available by 6:00 p.m. Eastern Time
each business day.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts
are or will be registered under the 1933 Act and that
the Contracts will be issued and sold in compliance
with all applicable federal and state laws, including
state insurance suitability requirements. The Company
further represents and warrants that it is an insurance
company duly organized and in good standing under
applicable law and that it has legally and validly
established each Account as a separate account under
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New York law and has registered 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, and that it will maintain such registration for so
long as any Contracts are outstanding. The Company will amend
the registration statement under the 1933 Act for the
Contracts and the registration statement under the 1940 Act
for the Account from time to time as required in order to
effect the continuous offering of the Contracts or as may
otherwise be required by applicable law. The Company will
register and qualify the Contracts for sale in accordance with
the securities laws of the various states only if and to the
extent deemed necessary by the Company.
2.2. The Company represents that the Contracts are currently
and at the time of issuance will be treated as annuity
contracts under applicable provisions of the Internal
Revenue Code, and that it will make every effort to
maintain such treatment and that it will notify the
Fund and the Underwriter immediately upon having a
reasonable basis for believing that the Contracts have
ceased to be so treated or that they might not be so
treated in the future.
2.3. The Company represents and warrants that it will not purchase
shares of the Designated Portfolios with assets derived from
tax-qualified retirement plans except, indirectly, through
Contracts purchased in connection with such plans.
2.4. The Fund represents and warrants that Fund shares of
the Designated Portfolios sold pursuant to this
Agreement will be registered under the 1933 Act and
duly authorized for issuance in accordance with
applicable law and that the Fund is and will remain
registered under the 1940 Act for as long as such
shares of the Designated Portfolios are sold. The Fund
will amend the registration statement for its shares
under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering
of its shares. The Fund will register and qualify the
shares of the Designated Portfolios for sale in
accordance with the laws of any state only if and to
the extent deemed advisable by the Fund.
2.5. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the
Internal Revenue Code, and that it will make every
effort to maintain such qualification (under Subchapter
M or any successor or similar provision) and that it
will notify the Company immediately upon having a
reasonable basis for believing that it has ceased to so
qualify or that it might not so qualify in the future.
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2.6. The Fund represents that its investment objectives,
policies and restrictions comply with applicable state
investment laws as they may apply to the Fund. The
Fund makes no representation as to whether any aspect
of its operations (including, but not limited to, fees
and expenses and investment policies, objectives and
restrictions) complies with the insurance laws and
regulations of any state. The Fund and the Underwriter
agree that they will furnish the information required
by state insurance laws so that the Company can obtain
the authority needed to issue the Contracts in any
applicable state.
2.7. The Fund currently does not intend to make any payments
to finance distribution expenses pursuant to Rule 12b-1
under the 1940 Act or otherwise, although it reserves
the right to make such payments in the future. To the
extent that it decides to finance distribution expenses
pursuant to Rule 12b-1, the Fund undertakes to have its
Fund Board, a majority of whom are not "interested"
persons of the Fund, formulate and approve any plan
under Rule 12b-1 to finance distribution expenses.
2.8. The Fund represents that it is lawfully organized and validly
existing under the laws of the State of Massachusetts and that
it does and will comply in all material respects with
applicable provisions of the ▇▇▇▇ ▇▇▇.
2.9. The Underwriter represents and warrants that it will
distribute the Fund shares of the Designated Portfolios in
accordance with all applicable federal and state securities
laws including, without limitation, the 1933 Act, the 1934 Act
and the ▇▇▇▇ ▇▇▇.
2.10. The Underwriter represents and warrants that the adviser for
the Fund is and will remain duly registered under all
applicable federal and state securities laws and that it will
perform its obligations for the Fund in accordance in all
material respects with any applicable state and federal
securities laws.
2.11. The Fund represents and warrants that all of its
trustees, officers, employees, investment advisers, and
other individuals/entities having access to the funds
and/or securities of the Fund are and 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 minimal 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 includes coverage for larceny and embezzlement and
is issued by a reputable bonding company.
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ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Fund or the Underwriter will provide the Company,
at the Company's expense, with as many copies of the
current Fund prospectus for the Designated Portfolios,
annual report, semi-annual report and other shareholder
communications, including any amendments and
supplements to any of the foregoing, as the Company may
reasonably request for distribution, at the Company's
expense, to prospective contractowners and applicants.
The Fund or the Underwriter will provide the Company,
at the Fund's expense, with as many copies of said
documents as necessary for distribution, at the
Company's expense, to existing contractowners. The
Fund will provide the copies of said documents to the
Company or to its mailing agent. The Company will
distribute such documents to existing contractowners.
If requested by the Company in lieu thereof, the Fund
will provide such documentation, including a final copy
of such documents set in type or a computer diskette at
the Fund's expense, and other assistance as is
reasonably necessary in order for the Company at least
annually (or more frequently if the Fund prospectus is
amended more frequently) to have the Fund's prospectus
and the prospectuses of other mutual funds printed
together, in which case the Fund will pay its share of
reasonable expenses directly related to the required
disclosure of information concerning the Fund.
3.2. The Fund's prospectus will state that the statement of
additional information for the Fund is available from
the Company. The Fund will provide the Company, at the
Company's expense, with as many copies of the statement
of additional information as the Company may reasonably
request for distribution, at the Company's expense, to
prospective contractowners and applicants. The Fund
will provide, at the Fund's expense, as many copies of
said statement of additional information as necessary
for distribution, at the Fund's expense, to any
existing contractowner who requests such statement or
whenever state or federal law otherwise requires that
such statement be provided. The Fund will provide the
copies of said statement of additional information to
the Company or to its mailing agent. The Company will
distribute the statement of additional information as
requested or required and will ▇▇▇▇ the Fund for the
reasonable cost of such distribution.
3.3. The Fund, at its expense, will provide the Company or its
mailing agent with copies of its proxy material in such
quantity as the Company will reasonably require for
distribution to contractowners. The Company will distribute
this proxy material to contractowners at its expense.
PAGE 8
3.4. The Company assumes responsibility for ensuring that
current prospectuses, annual and semi-annual reports,
shareholder communications and proxy material are
delivered to contractowners in accordance with
applicable securities laws provided the Company
receives the required information and/or documentation
from the Fund within a reasonable time to allow for
compliance with such laws.
3.5. If and to the extent required by law the Company will:
(a) solicit voting instructions from contractowners;
(b) vote the shares of the Designated Portfolios held in
the Account in accordance with instructions received
from contractowners; and
(c) vote shares of the Designated Portfolios held in the Account
for which no timely instructions have been received, in the
same proportion as shares of such Designated Portfolio for
which instructions have been received from the Company's
contractowners;
so long as and to the extent that the SEC continues to
interpret the 1940 Act to require pass-through voting
privileges for variable contractowners. The Company reserves
the right to vote Fund shares held in any segregated asset
account in its own right, to the extent permitted by law.
Participating Insurance Companies will be responsible for
assuring that each of their separate accounts participating in
the Fund calculates voting privileges in a manner consistent
with all legal requirements, including the Mixed and Shared
Funding Exemptive Order.
3.6. The Fund will comply with all provisions of the 1940
Act requiring voting by shareholders, and in
particular, the Fund either will provide for annual
meetings (except insofar as the SEC may interpret
Section 16 of the 1940 Act not to require such
meetings) or, as the Fund currently intends, to comply
with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of
that Act) as well as with Sections 16(a) and, if and
when applicable, 16(b). 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 and with whatever rules the SEC
may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company will furnish, or will cause to be furnished, to
the Fund or the Underwriter, each piece of sales literature or
other promotional material in which the Fund, the Underwriter
or the adviser of the Fund is named, at least ten (10)
business days prior to
PAGE 9
its use. No such material will be used if the Fund or the
Underwriter reasonably objects to such use within five (5)
business days after receipt of such material.
4.2. The Company and its agents will not give any
information or make any representations or statements
on behalf of the Fund or concerning the Fund, the
Underwriter or the adviser for the Fund, in connection
with the sale of the Contracts other than the
information or representations contained in and
accurately derived from the registration statement,
prospectus or statement of additional information for
Fund shares, as such registration statement, prospectus
and statement of additional information may be amended
or supplemented from time to time, or in reports or
proxy statements for the Fund, or in published reports
for the Fund which are in the public domain or approved
by the Fund or the Underwriter for distribution, or in
sales literature or other material provided by the Fund
or by the Underwriter, except with permission of the
Fund or the Underwriter. The Fund and the Underwriter
agree to respond to any request for approval on a
prompt and timely basis. Nothing in this Section 4.2
will be construed as preventing the Company or its
employees or agents from giving advice on investment in
the Fund, subject to compliance with applicable state
and federal law.
4.3. The Fund or the Underwriter will furnish, or will cause
to be furnished, to the Company or its designee, each
piece of sales literature or other promotional material
in which the Company or its Account is named, at least
ten (10) business days prior to its use. No such
material will be used if the Company reasonably objects
to such use within five (5) business days after receipt
of such material.
4.4. The Fund and the Underwriter will not give any
information or make any representations or statements
on behalf of the Company or concerning the Company,
each Account, or the Contracts other than the
information or representations contained in and
accurately derived from a registration statement,
prospectus or statement of additional information for
the Contracts, as such registration statement,
prospectus and statement of additional information may
be amended or supplemented from time to time, or in
published reports for each Account or the Contracts
which are in the public domain or approved by the
Company for distribution to contractowners, or in sales
literature or other material provided by the Company,
except with permission of the Company. The Company
agrees to respond to any request for approval on a
prompt and timely basis.
PAGE 10
4.5. The Fund will provide to the Company at least one
complete copy of all registration statements,
prospectuses, statements of additional information,
reports, proxy statements, sales literature and other
promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to
any of the above, that relate to the Fund or its
shares, contemporaneously with the filing of such
document with the SEC or the NASD.
4.6. The Company will provide to the Fund at least one
complete copy of all registration statements,
prospectuses, statements of additional information,
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 each Account,
contemporaneously with the filing of such document with
the SEC or the NASD.
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but
is not limited to, advertisements (such as material
published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television,
telephone or tape recording, videotape display, signs
or billboards, motion pictures, or other public media,
(e.g., on-line networks such as the Internet or other
----
electronic messages), 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, registration
statements, prospectuses, statements of additional
information, shareholder reports, and proxy materials
and any other material constituting sales literature or
advertising under the NASD rules, the 1933 Act or the
▇▇▇▇ ▇▇▇.
4.8. The Company agrees and acknowledges that the
Underwriter (or its affiliates) is the sole owner of
the name and ▇▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇" and that all use
of any designation comprised in whole or part of such
name or ▇▇▇▇ under this Agreement shall inure to the
benefit of the Underwriter. Except as provided in
Section 4.1, the Company shall not use any such name or
▇▇▇▇ on its own behalf or on behalf of the Accounts or
Contracts in any registration statement, advertisement,
sales literature or other materials relating to the
Accounts or Contracts without the prior written consent
of the Underwriter. Upon termination of this Agreement
for any reason, the Company shall cease all use of any
such name or ▇▇▇▇ as soon as reasonably practicable.
PAGE 11
ARTICLE V. Fees and Expenses
5.1. The Fund will pay no fee or other compensation to the
Company under this Agreement, except: (a) if the Fund
or any Designated Portfolio adopts and implements a
plan pursuant to Rule 12b-1 under the 1940 Act to
finance distribution expenses, then, subject to
obtaining any required exemptive orders or other
regulatory approvals, the Fund may make payments to the
Company if and in such amounts agreed to by the Fund in
writing; and (b) the Fund may pay fees to the Company
for services provided to contractowners that are not
primarily intended to result in the sale of shares of
the Designated Portfolio or of underlying contracts.
5.2. All expenses incident to performance by the Fund of
this Agreement will be paid by the Fund to the extent
permitted by law. All shares of the Designated
Portfolios will be duly authorized for issuance and
registered in accordance with applicable federal law
and, to the extent deemed advisable by the Fund, in
accordance with applicable state law, prior to sale.
The Fund will bear the expenses for the cost of
registration and qualification of the Fund's shares;
preparation and filing of the Fund's prospectus,
statement of additional information and registration
statement, proxy materials and reports; setting in type
and printing the Fund's prospectus; setting in type and
printing proxy materials and reports to contractowners
(including the costs of printing a Fund prospectus that
constitutes an annual report); the preparation of all
statements and notices required by any federal or state
law; all taxes on the issuance or transfer of the
Fund's shares; any expenses permitted to be paid or
assumed by the Fund pursuant to a plan, if any, under
Rule 12b-1 under the 1940 Act; and all other
typesetting, printing and distribution expenses set
forth in Article III of this Agreement.
ARTICLE VI. Diversification
6.1. The Fund will at all times invest money from the
Contracts in such a manner as to ensure that the
Contracts will be treated as variable annuity contracts
under the Internal Revenue Code and the regulations
issued thereunder. Without limiting the scope of the
foregoing, the Fund will comply with Section 817(h) of
the Internal Revenue Code and Treasury Regulation
1.817-5, as amended from time to time, relating to the
diversification requirements for variable annuity,
endowment, or life insurance contracts and any
amendments or other modifications to such Section or
Regulation. In the event of a breach of this Article
VI by the Fund, it will take all reasonable steps: (a)
to notify the Company of such breach; and (b) to
adequately diversify the Fund so as to achieve
compliance within the grace period afforded by Treasury
Regulation 1.817-5.
PAGE 12
ARTICLE VII. Potential Conflicts
7.1. The Fund Board will monitor the Fund for the existence
of any irreconcilable material conflict among the
interests of the contractowners 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 are being managed; (e) a
difference in voting instructions given by
Participating Insurance Companies or by variable
annuity and variable life insurance contractowners; or
(f) a decision by an insurer to disregard the voting
instructions of contractowners. The Fund Board will
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 Fund Board. The
Company agrees to assist the Fund Board in carrying out
its responsibilities, as delineated in the Mixed and
Shared Funding Exemptive Order, by providing the Fund
Board with all information reasonably necessary for the
Fund Board to consider any issues raised. This
includes, but is not limited to, an obligation by the
Company to inform the Fund Board whenever contractowner
voting instructions are to be disregarded. The Fund
Board will record in its minutes, or other appropriate
records, all reports received by it and all action with
regard to a conflict.
7.3. If it is determined by a majority of the Fund Board, or
a majority of its disinterested directors, that an
irreconcilable material conflict exists, the Company
and other Participating Insurance Companies will, at
their expense and to the extent reasonably practicable
(as determined by a majority of the disinterested
directors), take whatever steps are necessary to remedy
or eliminate the irreconcilable material conflict, up
to and including: (a) withdrawing the assets allocable
to some or all of the Accounts from the Fund or any
Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to)
another Portfolio of the Fund, or submitting the
question whether such segregation should be implemented
to a
PAGE 13
vote of all affected contractowners and, as appropriate,
segregating the assets of any appropriate group (i.e.,
variable annuity contractowners or variable life insurance
contractowners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or
offering to the affected contractowners the option of making
such a change; and (b) 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 contractowner
voting instructions, and such disregard of voting
instructions could conflict with the majority of
contractowner voting instructions, and the Company's
judgment represents a minority position or would
preclude a majority vote, the Company may be required,
at the Fund's election, to withdraw the affected
subaccount of the Account's investment in the Fund and
terminate this Agreement with respect to such
subaccount; provided, however, that such withdrawal and
termination will be limited to the extent required by
the foregoing irreconcilable material conflict as
determined by a majority of the disinterested directors
of the Fund Board. No charge or penalty will be
imposed as a result of such withdrawal. Any such
withdrawal and termination must take place within six
(6) months after the Fund gives written notice to the
Company that this provision is being implemented.
Until the end of such six-month period the Underwriter
and Fund will, to the extent permitted by law and any
exemptive relief previously granted to the Fund,
continue to accept and implement orders by the Company
for the purchase (and redemption) of shares of the
Fund.
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 insurance regulators, then the Company
will withdraw the affected subaccount of the Account's
investment in the Fund and terminate this Agreement
with respect to such subaccount; provided, however,
that such withdrawal and termination will be limited to
the extent required by the foregoing irreconcilable
material conflict as determined by a majority of the
disinterested directors of the Fund Board. No charge
or penalty will be imposed as a result of such
withdrawal. Any such withdrawal and termination must
take place within six (6) months after the Fund gives
written notice to the Company that this provision is
being implemented. Until the end of such six-month
period the Advisor and Fund will, to the extent
permitted by law and any exemptive relief previously
granted to the Fund, continue to accept and implement
orders by the Company for the purchase (and redemption)
of shares of the Fund.
PAGE 14
7.6. For purposes of Sections 7.3 through 7.6 of this
Agreement, a majority of the disinterested members of
the Fund Board will 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 will 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 contractowners affected by the irreconcilable
material conflict.
7.7. The Company will at least annually submit to the Fund
Board such reports, materials or data as the Fund Board
may reasonably request so that the Fund Board may fully
carry out the duties imposed upon it as delineated in
the Mixed and Shared Funding Exemptive Order, and said
reports, materials and data will be submitted more
frequently if deemed appropriate by the Fund Board.
7.8. 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, will 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, 3.6, 7.1, 7.2, 7.3,
7.4, and 7.5 of this Agreement will continue in effect
only to the extent that terms and conditions
substantially identical to such Sections are contained
in such Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the
Fund, the Underwriter, and each person, if any, who
controls or is associated with the Fund or the
Underwriter within the meaning of such terms under the
federal securities laws and any director, trustee,
officer, partner, employee or agent of the foregoing
(collectively, the "Indemnified Parties" for purposes
of this Section 8.1) against any and all losses,
claims, expenses, damages, 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, regulation, at
common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements:
PAGE 15
(1) arise out of or are based upon any untrue
statements or alleged untrue statements of any
material fact contained in the registration
statement, prospectus or statement of additional
information for the Contracts or contained in the
Contracts or sales literature or other promotional
material for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged
omission to state therein a material fact required
to be stated or necessary to make such statements
not misleading in light of the circumstances in
which they were made; provided that this agreement
to indemnify will 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 Underwriter
or the Fund for use in the registration statement,
prospectus or statement of additional information
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
(2) arise out of or as a result of statements or
representations by or on behalf of the Company
(other than statements or representations
contained in the Fund registration statement,
prospectus, statement of additional information or
sales literature or other promotional material of
the Fund (or any amendment or supplement) 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
(3) arise out of any untrue statement or alleged
untrue statement of a material fact contained in
the Fund registration statement, prospectus,
statement of additional information or sales
literature or other promotional material of the
Fund (or amendment or supplement) or the omission
or alleged omission to state therein a material
fact required to be stated therein or necessary to
make such statements not misleading in light of
the circumstances in which they were made, if such
a statement or omission was made in reliance upon
and in conformity with information furnished to
the Fund by or on behalf of the Company or persons
under its control; or
(4) 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
PAGE 16
(5) arise out of 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 by the Company of this
Agreement;
except to the extent provided in Sections 8.1(b) and
8.4 hereof. This indemnification will be in addition to
any liability that the Company otherwise may have.
(b) No party will be entitled to indemnification under
Section 8.1(a) if such loss, claim, damage, liability
or litigation is due to the willful misfeasance, bad
faith, or gross negligence in the performance of such
party's duties under this Agreement, or by reason of
such party's reckless disregard of its obligations or
duties under this Agreement by the party seeking
indemnification.
(c) The Indemnified Parties promptly will notify the Company of
the commencement of any litigation, proceedings, complaints or
actions by regulatory authorities against them in connection
with the issuance or sale of the Fund shares or the Contracts
or the operation of the Fund.
8.2. Indemnification By The Underwriter
(a) The Underwriter agrees to indemnify and hold harmless
the Company and each person, if any, who controls or is
associated with the Company within the meaning of such
terms under the federal securities laws and any
director, trustee, officer, partner, employee or agent
of the foregoing (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 Underwriter) or litigation (including
reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or
settlements:
(1) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the registration
statement, prospectus or statement of additional
information for the Fund or sales literature or
other promotional material 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 or necessary to make
such statements not misleading in light of the
circumstances in which they were made; provided
that this agreement to indemnify will not apply as
PAGE 17
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 statement of additional information for
the Fund or in sales literature of the Fund (or any
amendment or supplement thereto) or otherwise for use
in connection with the sale of the Contracts or Fund
shares; or
(2) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Contracts or in
the Contract or Fund registration statements,
prospectuses or statements of additional
information or sales literature or other
promotional material for the Contracts or of the
Fund (or any amendment or supplement) not supplied
by the Underwriter or the Fund or persons under
the control of the Underwriter or the Fund
respectively) or wrongful conduct of the
Underwriter or the Fund or persons under the
control of the Underwriter or the Fund
respectively, with respect to the sale or
distribution of the Contracts or Fund shares; or
(3) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, statement of
additional information or sales literature or
other promotional material covering the Contracts
(or any amendment or supplement thereto), or the
omission or alleged omission to state therein a
material fact required to be stated or necessary
to make such statement or statements not
misleading in light of the circumstances in which
they were made, if such statement or omission was
made in reliance upon and in conformity with
information furnished to the Company by or on
behalf of the Underwriter or the Fund or persons
under the control of the Underwriter or the Fund;
or
(4) 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, whether
unintentional or in good faith or otherwise, to
comply with the diversification requirements and
procedures related thereto specified in Article VI
of this Agreement); or
PAGE 18
(5) arise out of or result from any material breach of
any representation and/or warranty made by the
Underwriter or the Fund in this Agreement, or
arise out of or result from any other material
breach of this Agreement by the Underwriter or the
Fund;
except to the extent provided in Sections 8.2(b)
and 8.4 hereof.
(b) No party will be entitled to indemnification under
Section 8.2(a) if such loss, claim, damage, liability
or litigation is due to the willful misfeasance, bad
faith, or gross negligence in the performance of such
party's duties under this Agreement, or by reason of
such party's reckless disregard of its obligations or
duties under this Agreement by the party seeking
indemnification.
(c) The Indemnified Parties will promptly notify the Underwriter
and the Fund of the commencement of any litigation,
proceedings, complaints or actions by regulatory authorities
against them in connection with the issuance or sale of the
Contracts or the operation of the Account.
8.3. Indemnification By the Fund
(a) The Fund agrees to indemnify and hold harmless the
Company and each person, if any, who controls or is
associated with the Company within the meaning of such
terms under the federal securities laws and any
director, trustee, officer, partner, employee or agent
of the foregoing (collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any
and all losses, claims, expenses, damages, liabilities
(including amounts paid in settlement with the written
consent of the Fund) or litigation (including
reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or
settlements, are related to the operations of the Fund
and:
(1) 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
Article VI); or
(2) 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 or result
from any other material breach of this Agreement
by the Fund; or
PAGE 19
(3) arise out of or result from the incorrect or
untimely calculation or reporting of the daily net
asset value per share or dividend or capital gain
distribution rate;
except to the extent provided in Sections 8.3(b)
and 8.4 hereof.
(b) No party will be entitled to indemnification under
Section 8.3(a) if such loss, claim, damage, liability
or litigation is due to the willful misfeasance, bad
faith, or gross negligence in the performance of such
party's duties under this Agreement, or by reason of
such party's reckless disregard of its obligations and
duties under this Agreement by the party seeking
indemnification.
(c) The Indemnified Parties will promptly notify the Fund of the
commencement of any litigation, proceedings, complaints or
actions by regulatory authorities against them in connection
with the issuance or sale of the Contracts or the operation of
the Account.
(d) It is understood and expressly stipulated that neither the
holders of shares of the Fund nor any Fund Board member,
officer, agent or employee of the Fund shall be personally
liable hereunder, nor shall any resort be had to other private
property for the satisfaction of any claim or obligation
hereunder, but the Fund only shall be liable.
8.4. Indemnification Procedure
Any person obligated to provide indemnification under
this Article VIII ("Indemnifying Party" for the purpose
of this Section 8.4) will not be liable under the
indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to
indemnification under this Article VIII ("Indemnified
Party" for the purpose of this Section 8.4) unless such
Indemnified Party will have notified the Indemnifying
Party in writing within a reasonable time after the
summons or other first legal process giving information
of the nature of the claim will have been served upon
such Indemnified Party (or after such party will have
received notice of such service on any designated
agent), but failure to notify the Indemnifying Party of
any such claim will not relieve the Indemnifying Party
from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise
than on account of the indemnification provision of
this Article VIII, except to the extent that the
failure to notify results in the failure of actual
notice to the Indemnifying Party and such Indemnifying
Party is damaged solely as a result of failure to give
such notice. In case any such action is brought
PAGE 20
against the Indemnified Party, the Indemnifying Party
will be entitled to participate, at its own expense, in
the defense thereof. The Indemnifying Party also will
be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After
notice from the Indemnifying Party to the Indemnified
Party of the Indemnifying Party's election to assume
the defense thereof, the Indemnified Party will bear
the fees and expenses of any additional counsel
retained by it, and the Indemnifying Party 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, unless:
(a) the Indemnifying Party and the Indemnified Party
will have mutually agreed to the retention of such
counsel; or (b) the named parties to any such
proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party
and representation of both parties by the same counsel
would be inappropriate due to actual or potential
differing interests between them. The Indemnifying
Party will not be liable for any settlement of any
proceeding effected without its written consent but if
settled with such consent or if there is a final
judgment for the plaintiff, the Indemnifying Party
agrees to indemnify the Indemnified Party from and
against any loss or liability by reason of such
settlement or judgment. A successor by law of the
parties to this Agreement will be entitled to the
benefits of the indemnification contained in this
Article VIII. The indemnification provisions contained
in this Article VIII will survive any termination of
this Agreement.
ARTICLE IX. Applicable Law
9.1. This Agreement will be construed and the provisions
hereof interpreted under and in accordance with the
laws of the State of Minnesota.
9.2. This Agreement will be subject to the provisions of the
1933 Act, the 1934 Act and the 1940 Act, and the rules
and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations
as the SEC may grant (including, but not limited to,
the Mixed and Shared Funding Exemptive Order) and the
terms hereof will be interpreted and construed in
accordance therewith.
PAGE 21
ARTICLE X. Termination
10.1. This Agreement will terminate:
(a) at the option of any party, with or without cause, with
respect to some or all of the Designated Portfolios, upon
sixty (60) days advance written notice to the other parties
or, if later, upon receipt of any required exemptive relief or
orders from the SEC, unless otherwise agreed in a separate
written agreement among the parties; or
(b) at the option of the Company, upon receipt of the Company's
written notice by the other parties, with respect to any
Designated Portfolio if shares of the Designated Portfolio are
not reasonably available to meet the requirements of the
Contracts as determined in good faith by the Company; or
(c) at the option of the Company, upon receipt of the
Company's written notice by the other parties, with
respect to any Designated Portfolio 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 Company; or
(d) at the option of the Fund, upon receipt of the Fund's
written notice by the other parties, upon institution
of formal proceedings against the Company by the NASD,
the SEC, the insurance commission 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 administration of the Contracts, the
operation of the Account, or the purchase of the Fund
shares, provided that the Fund determines in its sole
judgment, exercised in good faith, that any such
proceeding would have a material adverse effect on the
Company's ability to perform its obligations under this
Agreement; or
(e) at the option of the Company, upon receipt of the
Company's written notice by the other parties, upon
institution of formal proceedings against the Fund or
the Underwriter by the NASD, the SEC, or any state
securities or insurance department or any other
regulatory body, regarding the Fund's or the
Underwriter's duties under this Agreement or related to
the sale of Fund shares or the administration of the
Fund, provided that the Company determines in its sole
judgment, exercised in good faith, that any such
proceeding would have a material adverse effect on the
Fund's or the Underwriter's ability to perform its
obligations under this Agreement; or
PAGE 22
(f) at the option of the Company, upon receipt of the Company's
written notice by the other parties, if the Fund ceases to
qualify as a Regulated Investment Company under Subchapter M
of the Internal Revenue Code, or under any successor or
similar provision, or if the Company reasonably and in good
faith believes that the Fund may fail to so qualify; or
(g) at the option of the Company, upon receipt of the Company's
written notice by the other parties, with respect to any
Designated Portfolio if the Fund fails to meet the
diversification requirements specified in Article VI hereof or
if the Company reasonably and in good faith believes the Fund
may fail to meet such requirements; or
(h) at the option of any party to this Agreement, upon written
notice to the other parties, upon another party's material
breach of any provision of this Agreement; or
(i) at the option of the Company, if the Company determines in its
sole judgment exercised in good faith, that either the Fund or
the Underwriter has suffered a material adverse change in its
business, operations or financial condition since the date of
this Agreement or
PAGE 23
is the subject of material adverse publicity which is likely
to have a material adverse impact upon the business and
operations of the Company, such termination to be effective
sixty (60) days' after receipt by the other parties of written
notice of the election to terminate; or
(j) at the option of the Fund or the Underwriter, if the
Fund or Underwriter respectively, determines in its
sole judgment exercised in good faith, that the Company
has suffered a material adverse change in its business,
operations or financial condition since the date of
this Agreement or is the subject of material adverse
publicity which is likely to have a material adverse
impact upon the business and operations of the Fund or
the Underwriter, such termination to be effective sixty
(60) days' after receipt by the other parties of
written notice of the election to terminate; or
(k) at the option of the Company or the Fund upon receipt
of any necessary regulatory approvals and/or the vote
of the contractowners having an interest in the Account
(or any subaccount) to substitute the shares of another
investment company for the corresponding Designated
Portfolio shares of the Fund in accordance with the
terms of the Contracts for which those Designated
Portfolio shares had been selected to serve as the
underlying investment media. The Company will give
sixty (60) days' prior written notice to the Fund of
the date of any proposed vote or other action taken to
replace the Fund's shares; or
(l) at the option of the Company or the Fund upon a
determination by a majority of the Fund Board, or a
majority of the disinterested Fund Board members, that
an irreconcilable material conflict exists among the
interests of: (1) all contractowners of variable
insurance products of all separate accounts; or (2) the
interests of the Participating Insurance Companies
investing in the Fund as set forth in Article VII of
this Agreement; or
(m) at the option of the Fund in the event any of the Contracts
are not issued or sold in accordance with applicable federal
and/or state law. Termination will be effective immediately
upon such occurrence without notice.
10.2. Notice Requirement
(a) No termination of this Agreement will 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 will set forth the basis for the termination.
PAGE 24
(b) In the event that any termination of this Agreement is based
upon the provisions of Article VII, such prior written notice
will be given in advance of the effective date of termination
as required by such provisions.
10.3. Effect of Termination
Notwithstanding any termination of this Agreement, the
Fund and the Underwriter will, 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 will be permitted to reallocate
investments in the Portfolios (as in effect on such
date), redeem investments in the Portfolios and/or
invest in the Portfolios upon the making of additional
purchase payments under the Existing Contracts. The
parties agree that this Section 10.3 will not apply to
any terminations under Article VII and the effect of
such Article VII terminations will 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 will survive and not be affected by any
termination of this Agreement. In addition, with
respect to Existing Contracts, all provisions of this
Agreement also will survive and not be affected by any
termination of this Agreement.
ARTICLE XI. Notices
11.1 Any notice will be deemed duly 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:
IDS Life Insurance Company of New York
c/o American Express Financial Advisors Inc.
IDS Tower 10
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
PAGE 25
With a simultaneous copy to:
IDS Life Insurance Company of New York
c/o American Express Financial Advisors Inc.
IDS Tower 10
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Counsel
If to the Fund or the Underwriter:
Templeton Variable Products Series Fund
or Franklin ▇▇▇▇▇▇▇▇▇ Distributors, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Associate Counsel
ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against
the Fund as neither the directors, trustees, officers,
partners, employees, agents or shareholders assume any
personal liability for obligations entered into on behalf of
the Fund.
12.2. The Fund and the Underwriter acknowledge that the
identities of the customers of the Company or any of
its affiliates (collectively the "Protected Parties"
for purposes of this Section 12.2), information
maintained regarding those customers, and all computer
programs and procedures or other information developed
or used by the Protected Parties or any of their
employees or agents in connection with the Company's
performance of its duties under this Agreement are the
valuable property of the Protected Parties. The Fund
and the Underwriter agree that if they come into
possession of any list or compilation of the identities
of or other information about the Protected Parties'
customers, or any other information or property of the
Protected Parties, other than such information as may
be independently developed or compiled by the Fund or
the Underwriter from information supplied to them by
the Protected Parties' customers who also maintain
accounts directly with the Fund or the Underwriter, the
Fund and the Underwriter will hold such information or
property in confidence and refrain from using,
disclosing or distributing any of such information or
other property except: (a) with the Company's prior
written consent; or (b) as required by law or judicial
process. The Fund and the Underwriter acknowledge that
any breach of the agreements in this Section 12.2 would
result in immediate and irreparable harm to the
Protected Parties for which there would be no adequate
remedy at law and agree that in the event of such a
breach, the Protected Parties will be entitled to
PAGE 26
equitable relief by way of temporary and permanent
injunctions, as well as such other relief as any court of
competent jurisdiction deems appropriate.
12.3. 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.
12.4. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together will
constitute one and the same instrument.
12.5. If any provision of this Agreement will be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement will not be affected thereby.
12.6. This Agreement will not be assigned by any party hereto
without the prior written consent of all the parties.
12.7. Each party to this Agreement will cooperate with each
other party and all appropriate governmental
authorities (including without limitation the SEC, the
NASD and state insurance regulators) and will permit
each other and such authorities reasonable access to
its books and records in connection with any
investigation or inquiry relating to this Agreement or
the transactions contemplated hereby. The Fund agrees
that the Company will have the right to inspect, audit
and copy all records pertaining to the performance of
services under this Agreement pursuant to the
requirements of any state insurance department.
12.8. 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
delivered this Agreement will be the valid and binding
obligation of such party enforceable in accordance with
its terms.
12.9. The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating
to the Contracts, the Accounts or the Designated Portfolios of
the Fund or other applicable terms of this Agreement.
PAGE 27
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and 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
SEAL By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board and President
ATTEST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Counsel
TEMPLETON VARIABLE PRODUCTS SERIES FUND
SEAL By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
FRANKLIN ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.
SEAL By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
PAGE 28
Schedule 1
PARTICIPATION AGREEMENT
By and Among
IDS LIFE INSURANCE COMPANY OF NEW YORK
And
TEMPLETON VARIABLE PRODUCTS SERIES FUND
And
FRANKLIN ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.
The following separate accounts of IDS Life Insurance Company of New York are
permitted in accordance with the provisions of this Agreement to invest in
Designated Portfolios of the Fund shown in Schedule 2:
IDS Life of New York Flexible Portfolio Annuity
Account,
established April 17, 1996
_____________, 1996
PAGE 29
Schedule 2
PARTICIPATION AGREEMENT
By and Among
IDS LIFE INSURANCE COMPANY OF NEW YORK
And
TEMPLETON VARIABLE PRODUCTS SERIES FUND
And
FRANKLIN ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.
The Separate Account(s) shown on Schedule 1 may invest in the following
Designated Portfolios of the Templeton Variable Products
Series Fund:
▇▇▇▇▇▇▇▇▇ Developing Markets Fund
October 7, 1996
