Exhibit (8)(b)
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the 21st day of November, 1995,
between Annuity Investors Life Insurance Company ("Insurance Company"), a
life insurance company organized under the laws of the State of Ohio, and
DREYFUS LIFE AND ANNUITY INDEX FUND, INC. (d/b/a DREYFUS STOCK INDEX
FUND), a corporation organized under the laws of the State of Maryland
(the "Fund").
ARTICLE I
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Directors of the Fund having the
responsibility for management and control of the Fund.
1.3 "Business Day" shall mean any day for which the Fund calculates net
asset value per share as described in the Fund's Prospectus.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean a variable annuity contract that uses the
Fund as an underlying investment medium. Individuals who
participate under a group Contract are "Participants".
1.6 "Contractholder" shall mean any entity that is a party to a
Contract with a Participating Company.
1.7 "Disinterested Board Members" shall mean those members of the Board
that are not deemed to be "interested persons" of the Fund, as
defined by the Act.
1.8 "Dreyfus" shall mean The Dreyfus Corporation and its affiliates,
including Dreyfus Service Corporation.
1.9 "Participating Companies" shall mean any insurance company
(including Insurance Company), which offers variable annuity and/or
variable life insurance contracts to the public and which has
entered into an agreement with the Fund for the purpose of making
Fund shares available to serve as an underlying investment medium
for the aforesaid Contracts.
1.10 "Prospectus" shall mean the Fund's current prospectus and statement
of additional information, as most recently filed with the
Commission.
1.11 "Separate Account" shall mean Annuity Investors Variable Account A,
a separate account established by Insurance Company in accordance
with the laws of the State of Ohio.
1.12 "Software Program" shall mean the software program used by the Fund
for providing Fund and account balance information including net
asset value per share. Such Program may include the Lion System.
In situations where the Lion System or any other Software Program
used by the Fund is not available, such information may be provided
by telephone and confirmed by facsimiles. The Lion System shall be
provided to Insurance Company at no charge.
ARTICLE II
REPRESENTATIONS
2.1 Insurance Company represents and warrants that (a) it is an
insurance company duly organized and in good standing under
applicable law; (b) it has legally and validly established the
Separate Account pursuant to the laws of the State of Ohio for the
purpose of offering to the public certain individual and group
variable annuity contracts; (c) it has registered or will register
the Separate Account as a unit investment trust under the Act to
serve as the segregated investment account for the Contracts; and
(d) each Separate Account is eligible to invest in shares of the
Fund without such investment disqualifying the Fund as an
investment medium for insurance company separate accounts
supporting variable annuity contracts or variable life insurance
contracts.
2.2 Insurance Company represents and warrants that (a) the Contracts
will be described in a registration statement filed under the
Securities Act of 1933, as amended ("1933 Act"); (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 law requirements. Insurance Company agrees to inform the
Fund promptly of any investment restrictions imposed by state
insurance law and applicable to the Fund.
2.3 Insurance Company represents and warrants that the income, gains
and losses, whether or not realized, from assets allocated to the
Separate Account are, in accordance with the applicable Contracts,
to be credited to or charged against such Separate Account without
regard to other income, gains or losses from assets allocated to
any other accounts of Insurance Company. Insurance Company
represents and warrants that the assets of the Separate Account are
and will be kept separate from Insurance Company's General Account
and any other separate accounts Insurance Company may have, and
will not be charged with liabilities from any business that
Insurance Company may conduct or the liabilities of any companies
affiliated with Insurance Company.
2.4 Fund represents that it is registered with the Commission under the
Act as an open-end, non-diversified management investment company
and possesses, and shall maintain, all legal and regulatory
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licenses, approvals, consents and/or exemptions required for Fund
to operate and offer its shares as an underlying investment medium
for Participating Companies.
2.5 Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "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 Insurance
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.
2.6 Insurance Company represents and agrees that the Contracts are
currently, and at the time of issuance will be, treated as life
insurance policies or annuity contracts, whichever is appropriate,
under applicable provisions of the Code, and that it will make
every effort to maintain such treatment and that it will notify the
Fund and Dreyfus 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. Insurance Company
agrees that any prospectus offering a Contract that is a "modified
endowment contract," as that term is defined in Section 7702A of
the Code, will identify such Contract as a modified endowment
contract (or policy).
2.7 Fund agrees that the Fund's assets shall be managed and invested in
a manner that complies with the requirements of Section 817(h) of
the Code.
2.8 Insurance Company agrees that the Fund shall be permitted (subject
to the other terms of this Agreement) to make Fund shares available
to other Participating Companies and contractholders.
2.9 Fund represents and warrants that any of its directors, officers,
employees, investment advisers, and other individuals/entities who
deal with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less
than that required by Rule 17g-1 under the Act. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
2.10 Insurance Company represents and warrants that all of its employees
and agents who deal with the money and/or securities of the Fund
are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage in an amount not less than the
coverage required to be maintained by the Fund. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
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2.11 Insurance Company agrees that Dreyfus shall be deemed a third party
beneficiary under this Agreement and may enforce any and all rights
conferred by virtue of this Agreement.
ARTICLE III
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide for
the investment of certain amounts in shares of the Fund.
3.2 Fund agrees to make its shares available for purchase at the then
applicable net asset value per share by the Separate Account on
each Business Day pursuant to rules of the Commission.
Notwithstanding the foregoing, the Fund may refuse to sell its
shares to any person, or suspend or terminate the offering of its
shares if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of
the Board, acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, necessary and
in the best interests of the Fund's shareholders.
3.3 Fund agrees that shares of the Fund will be sold only to
Participating Companies and their separate accounts and to the
general accounts of those Participating Companies and their
affiliates. No shares will be sold to the general public.
3.4 Fund shall use its best efforts to provide closing net asset value,
dividend and capital gain (loss) information on a per-share and
Fund basis to Insurance Company by 6:00 p.m. Eastern Time on each
Business Day. Any material errors in the calculation of net asset
value, dividend and capital gain (loss) information shall be
reported immediately upon discovery to Insurance Company. Non-
material errors will be corrected in the next Business Day's net
asset value per share.
3.5 At the end of each Business Day, Insurance Company will use the
information described in Sections 3.2 and 3.4 to calculate the
Separate Account unit values for the day. Using this unit value,
Insurance Company will process the day's Separate Account
transactions received by it by the close of trading on the floor of
the New York Stock Exchange (currently 4:00 p.m. Eastern time) to
determine the net dollar amount of Fund shares which will be
purchased or redeemed at that day's closing net asset value per
share. The net purchase or redemption orders will be transmitted
to the Fund by Insurance Company by 11:00 a.m. Eastern Time on the
Business Day next following Insurance Company's receipt of that
information.
3.6 Fund appoints Insurance Company as its agent for the limited
purpose of accepting orders for the purchase and redemption of Fund
shares for the Separate Account. Fund will execute orders at the
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applicable net asset value per share determined as of the close of
trading on the day of receipt of such orders by Insurance Company
acting as agent ("effective trade date"), provided that the Fund
receives notice of such orders by 11:00 a.m. Eastern Time on the
next following Business Day and, if such orders request the
purchase of Fund shares, the conditions specified in Section 3.8,
as applicable, are satisfied. A redemption or purchase request
that does not satisfy the conditions specified in this Section and
in Section 3.8, as applicable, will be effected at the net asset
value per share computed on the Business Day immediately preceding
the Business Day upon which such conditions have been satisfied in
accordance with the requirements of this Section and Section 3.8.
3.7 Insurance Company will use its best efforts to notify Fund in
advance of any unusually large purchase or redemption orders.
3.8 If Insurance Company's order requests the purchase of Fund shares,
Insurance Company will pay for such purchases by wiring Federal
Funds to Fund or its designated custodial account on the day the
order is transmitted. Insurance Company shall make all reasonable
efforts to transmit to the Fund payment in Federal Funds by 12:00
noon Eastern Time on the Business Day the Fund receives the notice
of the order pursuant to Section 3.5. Fund will execute such
orders at the applicable net asset value per share determined as of
the close of trading on the effective trade date if Fund receives
payment in Federal Funds by 12:00 midnight Eastern Time on the
Business Day the Fund receives the notice of the order pursuant to
Section 3.5. If payment in Federal Funds for any purchase is not
received or is received by the Fund after 12:00 noon Eastern Time
on such Business Day, Insurance Company shall promptly upon the
Fund's request, reimburse the Fund for any charges, costs, fees,
interest or other expenses incurred by the Fund in connection with
any advances to, or borrowings or overdrafts by, the Fund, or any
similar expenses incurred by the Fund, as a result of portfolio
transactions effected by the Fund based upon such purchase request.
Payment for shares redeemed by the Separate Account or the
Insurance Company shall be made in Federal Funds transmitted by
wire to the Insurance Company or any other designated person on the
next Business Day after the Fund is properly notified of the
redemption order of shares, except that the Fund reserves the right
to delay payment of redemption proceeds to the extent permitted
under Section 22(e) of the 0000 Xxx. The Fund shall not bear any
responsibility whatsoever for the proper disbursement or crediting
of redemption proceeds by the Insurance Company; the Insurance
Company alone shall be responsible for such action.
3.9 Fund has the obligation to ensure that Fund shares are registered
with applicable federal agencies at all times.
3.10 Fund will confirm each purchase or redemption order made by
Insurance Company. Transfer of Fund shares will be by book entry
only. No share certificates will be issued to Insurance Company.
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Insurance Company will record shares ordered from Fund in an
appropriate title for the corresponding account.
3.11 Fund shall credit Insurance Company with the appropriate number of
shares.
3.12 On each ex-dividend date of the Fund or, if not a Business Day, on
the first Business Day thereafter, Fund shall communicate to
Insurance Company the amount of dividend and capital gain, if any,
per share. All dividends and capital gains shall be automatically
reinvested in additional shares of the Fund at the net asset value
per share on the ex-dividend date. Fund shall, on the day after
the ex-dividend date or, if not a Business Day, on the first
Business Day thereafter, notify Insurance Company of the number of
shares so issued.
3.13 This Agreement does not cover the sale of any Fund shares to the
Insurance Company general account.
ARTICLE IV
STATEMENTS AND REPORTS
4.1 Fund shall provide monthly statements of account as of the end of
each month for all of Insurance Company's accounts by the fifteenth
(15th) Business Day of the following month.
4.2 Fund shall distribute to Insurance Company copies of the Fund's
Prospectuses, proxy materials, notices, periodic reports and other
printed materials (which the Fund customarily provides to its
shareholders) in quantities as Insurance Company may reasonably
request for distribution to each Contractholder and Participant.
4.3 Fund will provide to Insurance Company at least one complete copy
of all registration statements, Prospectuses, 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
Commission or other regulatory authorities.
4.4 Insurance Company will provide to the Fund at least one copy of all
registration statements, Prospectuses, 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 Contracts or the Separate
Account, contemporaneously with the filing of such document with
the Commission.
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ARTICLE V
EXPENSES
5.1 The charge to the Fund for all expenses and costs of the Fund,
including but not limited to management fees, administrative
expenses and legal and regulatory costs, will be made in the
determination of the Fund's daily net asset value per share so as
to accumulate to an annual charge at the rate set forth in the
Fund's Prospectus. Excluded from the expense limitation described
herein shall be brokerage commissions and transaction fees and
extraordinary expenses.
5.2 Except as provided in this Article V and, in particular in the next
sentence, Insurance Company shall not be required to pay directly
any expenses of the Fund or expenses relating to the distribution
of its shares. Insurance Company shall pay the following expenses
or costs:
a. Such amount of the production expenses of any Fund materials,
including the cost of printing the Fund's Prospectus, or
marketing materials for prospective Insurance Company
Contractholders and Participants as Dreyfus and Insurance
Company shall agree from time to time.
b. Distribution expenses of any Fund materials or marketing
materials for prospective Insurance Company Contractholders
and Participants.
c. Distribution expenses of Fund materials or marketing
materials for Insurance Company Contractholders and
Participants.
Except as provided herein, all other Fund expenses shall not be
borne by Insurance Company.
ARTICLE VI
EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of the order dated December
23, 1987 of the Securities and Exchange Commission under Section
6(c) of the Act and, in particular, has reviewed the conditions to
the relief set forth in the related Notice. As set forth therein,
Insurance Company agrees to report any potential or existing
conflicts promptly to the Board, and in particular whenever
contract voting instructions are disregarded, and recognizes that
it will be responsible for assisting the Board in carrying out its
responsibilities under such application. Insurance Company agrees
to carry out such responsibilities with a view to the interests of
existing Contractholders.
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6.2 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists
with regard to Contractholder investments in the Fund, the Board
shall give prompt notice to all Participating Companies. If the
Board determines that Insurance Company is responsible for causing
or creating said conflict, Insurance Company shall at its sole cost
and expense, and to the extent reasonably practicable (as
determined by a majority of the Disinterested Board Members), take
such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may
include, but shall not be limited to:
a. Withdrawing the assets allocable to the Separate Account from
the Fund and reinvesting such assets in a different
investment medium, or submitting the question of whether such
segregation should be implemented to a vote or all affected
Contractholders; and/or
b. Establishing a new registered management investment company.
6.3 If a material irreconcilable conflict arises as a result of a
decision by Insurance Company to disregard Contractholder voting
instructions and said decision represents a minority position or
would preclude a majority vote by all Contractholders having an
interest in the Fund, Insurance Company may be required, at the
Board's election, to withdraw the Separate Account's investment in
the Fund.
6.4 For the purpose of this Article, a majority of the Disinterested
Board Members shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in no
event will the Fund be required to bear the expense of establishing
a new funding medium for any Contract. Insurance Company shall not
be required by this Article to establish a new funding medium for
any Contract if an offer to do so has been declined by vote of a
majority of the Contractholders materially adversely affected by
the irreconcilable material conflict.
6.5 No action by Insurance Company taken or omitted, and no action by
the Separate Account or the Fund taken or omitted as a result of
any act or failure to act by Insurance Company pursuant to this
Article VI shall relieve Insurance Company of its obligations
under, or otherwise affect the operation of, Article V.
ARTICLE VII
VOTING OF FUND SHARES
7.1 Fund shall provide Insurance Company with copies at no cost to
Insurance Company, of the Fund's proxy material, annual and semi-
annual reports to shareholders and other communications to
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shareholders in such quantity as Insurance Company shall reasonably
require for distributing to Contractholders or Participants.
Insurance Company shall:
a. solicit voting instructions from Contractholders or
Participants on a timely basis and in accordance with
applicable law;
b. vote Fund shares in accordance with instructions received
from Contractholders or Participants; and
c. vote Fund shares for which no instructions have been received
in the same proportion as Fund shares for which instructions
have been received.
Insurance Company agrees to be responsible for assuring that voting
Fund shares for the Separate Account is conducted in a manner
consistent with other Participating Companies.
7.2 Insurance Company agrees that it shall not, without the prior
written consent of the Fund and Dreyfus, solicit, induce or
encourage Contractholders to (a) change or supplement the Fund's
current investment adviser or (b) change, modify, substitute, add
to or delete the Fund from the current investment media for the
Contracts.
ARTICLE VIII
MARKETING AND REPRESENTATIONS
8.1 The Fund or its underwriter shall periodically furnish Insurance
Company with the following documents, in quantities as Insurance
Company may reasonably request:
a. Current Prospectus and any supplements thereto; and
b. other marketing materials.
Expenses for the production of such documents shall be borne by
Insurance Company in accordance with Section 5.2 of this Agreement.
8.2 Insurance Company shall designate certain persons or entities which
shall have the requisite licenses to solicit applications for the
sale of Contracts. No representation is made as to the number or
amount of Contracts that are to be sold by Insurance Company.
Insurance Company shall make reasonable efforts to market the
Contracts and shall comply with all applicable federal and state
laws in connection therewith.
8.3 Insurance Company shall furnish, or shall cause to be furnished, to
the Fund, each piece of sales literature or other promotional
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material in which the Fund, its investment adviser or the
administrator is named, at least fifteen Business Days prior to its
use. No such material shall be used unless the Fund approves such
material. Such approval (if given) must be in writing and shall be
presumed not given if not received within ten Business Days after
receipt of such material. The Fund shall use all reasonable
efforts to respond within ten days of receipt.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning
the Fund in connection with the sale of the Contracts other than
the information or representations contained in the registration
statement or Prospectus, as may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in
sales literature or other promotional material approved by the
Fund.
8.5 Fund shall furnish, or shall cause to be furnished, to Insurance
Company, each piece of the Fund's sales literature or other
promotional material in which Insurance Company or the Separate
Account is named, at least fifteen Business Days prior to its use.
No such material shall be used unless Insurance Company approves
such material. Such approval (if given) must be in writing and
shall be presumed not given if not received within ten Business
Days after receipt of such material. Insurance Company shall use
all reasonable efforts to respond within ten days of receipt.
8.6 Fund shall not, in connection with the sale of Fund shares, give
any information or make any representations on behalf of Insurance
Company or concerning Insurance Company, the Separate Account, or
the Contracts other than the information or representations
contained in a registration statement or prospectus for the
Contracts, as may be amended or supplemented from time to time, or
in published reports for the Separate Account which are in the
public domain or approved by Insurance Company for distribution to
Contractholders or Participants, or in sales literature or other
promotional material approved by Insurance Company.
8.7 For purposes of this Agreement, the phrase "sales literature or
other promotional material" or words of similar import include,
without limitation, advertisements (such as material published, or
designed for use, in a newspaper, magazine or other periodical,
radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures or other public media), sales
literature (such as any written communication distributed or made
generally available to customers or the public, including
brochures, circulars, research reports, market letters, form
letters, seminar texts, or 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
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information, shareholder reports and proxy materials, and any other
material constituting sales literature or advertising under
National Association of Securities Dealers, Inc. rules, the Act or
the 1933 Act.
ARTICLE IX
INDEMNIFICATION
9.1 Insurance Company agrees to indemnify and hold harmless the Fund,
Dreyfus, the sub-investment adviser of the Fund, and their
affiliates, and each of their directors, trustees, officers,
employees, agents and each person, if any, who controls or is
associated with any of the foregoing entities or persons within the
meaning of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of Section 9.1), against any and all losses, claims,
damages or liabilities joint or several (including any
investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action,
suit or proceeding or any claim asserted) for which the Indemnified
Parties may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect to thereof) (i) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in information furnished by Insurance Company for use in
the registration statement or Prospectus or sales literature or
advertisements of the Fund or with respect to the Separate Account
or Contracts, 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; (ii) arise out of or as a result of conduct, statements
or representations (other than statements or representations
contained in the Prospectus and sales literature or advertisements
of the Fund) of Insurance Company or its agents, with respect to
the sale and distribution of Contracts for which Fund shares are an
underlying investment; (iii) arise out of the wrongful conduct of
Insurance Company or persons under its control with respect to the
sale or distribution of the Contracts or Fund shares; (iv) arise
out of Insurance Company's incorrect calculation and/or untimely
reporting of net purchase or redemption orders; or (v) arise out of
any breach by Insurance Company of a material term of this
Agreement or as a result of any failure by Insurance Company to
provide the services and furnish the materials or to make any
payments provided for in this Agreement. Insurance Company will
reimburse any Indemnified Party in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that with respect to clauses (i) and (ii) above
Insurance Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or omission or alleged omission
made in such registration statement, prospectus, sales literature,
or advertisement in conformity with written information furnished
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to Insurance Company by the Fund specifically for use therein.
This indemnity agreement will be in addition to any liability which
Insurance Company may otherwise have.
9.2 The Fund agrees to indemnify and hold harmless Insurance Company
and each of its directors, officers, employees, agents and each
person, if any, who controls Insurance Company within the meaning
of the 1933 Act against any losses, claims, damages or liabilities
to which Insurance Company or any such director, officer, employee,
agent or controlling person may become subject, under the 1933 Act
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (1) 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 sales literature or advertisements of the Fund; (2) arise out of
or are based upon the omission to state in the registration
statement or Prospectus or sales literature or advertisements of
the Fund any material fact required to be stated therein or
necessary to make the statements therein not misleading; or (3)
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 sales literature or advertisements with
respect to the Separate Account or the Contracts and such
statements were based on information provided to Insurance Company
by the Fund; and the Fund will reimburse any legal or other
expenses reasonably incurred by Insurance Company or any such
director, officer, employee, agent or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Fund will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in such Registration
Statement, Prospectus, sales literature or advertisements in
conformity with written information furnished to the Fund by
Insurance Company specifically for use therein. This indemnity
agreement will be in addition to any liability which the Fund may
otherwise have.
9.3 The Fund shall indemnify and hold Insurance Company harmless
against any and all liability, loss, damages, costs or expenses
which Insurance Company may incur, suffer or be required to pay due
to the Fund's (1) incorrect calculation of the daily net asset
value, dividend rate or capital gain (loss) distribution rate; (2)
incorrect reporting of the daily net asset value, dividend rate or
capital gain (loss) distribution rate; and (3) untimely reporting
of the net asset value, dividend rate or capital gain (loss)
distribution rate; provided that the Fund shall have no obligation
to indemnify and hold harmless Insurance Company if the incorrect
calculation or incorrect or untimely reporting was the result of
incorrect information furnished by Insurance Company or information
furnished untimely by Insurance Company or otherwise as a result of
or relating to a breach of this Agreement by Insurance Company.
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9.4 Promptly after receipt by an indemnified party under this Article
of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Article, notify the indemnifying
party of the commencement thereof. The omission to so notify the
indemnifying party will not relieve the indemnifying party from any
liability under this Article IX, except to the extent that the
omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of
the failure to give such notice. In case any such action is
brought against any indemnified party, and it notified the
indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent
that it may wish, assume the defense thereof, with counsel
satisfactory to such indemnified party, and to the extent that the
indemnifying party has given notice to such effect to the
indemnified party and is performing its obligations under this
Article, the indemnifying party shall not be liable for any legal
or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof, other than reasonable costs
of investigation. Notwithstanding the foregoing, in any such
proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) 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 shall not be liable for any
settlement of any proceeding effected without its written consent.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article IX. The provisions of this Article IX shall survive
termination of this Agreement.
9.5 Insurance Company shall indemnify and hold the Fund, Dreyfus and
any sub-investment adviser harmless against any tax liability
incurred by the Fund under Section 851 of the Code arising from
purchases or redemptions by Insurance Company's General Accounts or
the account of its affiliates.
ARTICLE X
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the
provisions herein.
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10.2 This Agreement shall terminate without penalty:
a. At the option of Insurance Company or the Fund at any time
from the date hereof upon 180 days' notice, unless a shorter
time is agreed to by the parties;
b. At the option of Insurance Company, if shares of the Fund are
not reasonably available to meet the requirements of the
Contracts as determined by Insurance Company. Prompt notice
of election to terminate shall be furnished by Insurance
Company, said termination to be effective ten days after
receipt of notice unless the Fund makes available a
sufficient number of shares to meet the requirements of the
Contracts within said ten-day period;
c. At the option of Insurance Company, upon the institution of
formal proceedings against the Fund by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in Insurance Company's reasonable
judgment, materially impair the Fund's ability to meet and
perform the Fund's obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by
Insurance Company with said termination to be effective upon
receipt of notice;
d. At the option of the Fund, upon the institution of formal
proceedings against Insurance Company by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in the Fund's reasonable judgment,
materially impair Insurance Company's ability to meet and
perform Insurance Company's obligations and duties hereunder.
Prompt notice of election to terminate shall be furnished by
the Fund with said termination to be effective upon receipt
of notice;
e. At the option of the Fund, if the Fund shall determine, in
its sole judgment reasonably exercised in good faith, that
Insurance Company has suffered a material adverse change in
its business or financial condition or is the subject of
material adverse publicity and such material adverse change
or material adverse publicity is likely to have a material
adverse impact upon the business and operation of the Fund or
Dreyfus, the Fund shall notify Insurance Company in writing
of such determination and its intent to terminate this
Agreement, and after considering the actions taken by
Insurance Company and any other changes in circumstances
since the giving of such notice, such determination of the
Fund shall continue to apply on the sixtieth (60th) day
following the giving of such notice, which sixtieth day shall
be the effective date of termination;
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f. Upon termination of the Investment Advisory Agreement between
the Fund and Dreyfus or its successors unless Insurance
Company specifically approves the selection of a new Fund
investment adviser. The Fund shall promptly furnish notice
of such termination to Insurance Company;
g. In the event the Fund's shares are not registered, issued or
sold in accordance with applicable federal law, or such law
precludes the use of such shares as the underlying investment
medium of Contracts issued or to be issued by Insurance
Company. Termination shall be effective immediately upon
such occurrence without notice;
h. At the option of the Fund upon a determination by the Board
in good faith that it is no longer advisable and in the best
interests of shareholders for the Fund to continue to operate
pursuant to this Agreement. Termination pursuant to this
Subsection (h) shall be effective upon notice by the Fund to
Insurance Company of such termination;
i. At the option of the Fund if the Contracts cease to qualify
as annuity contracts or life insurance policies, as
applicable, under the Code, or if the Fund reasonably
believes that the Contracts may fail to so qualify;
j. At the option of either party to this Agreement, upon the
breach by a party of any material provision of this
Agreement, which breach has not been cured to the reasonable
satisfaction of the other party within 10 days after written
notice of such breach is delivered to such other party;
k. At the option of the Fund, if the Contracts are not
registered, issued or sold in accordance with applicable
federal and/or state law; or
l. Upon assignment of this Agreement, unless made with the
written consent of the non-assigning party.
Any such termination pursuant to Section 10.2a, 10.2d, 10.2e, 10.2f
or 10.2k herein shall not affect the operation of Article V of this
Agreement. Any termination of this Agreement shall not affect the
operation of Article IX of this Agreement.
10.3 Notwithstanding any termination of this Agreement pursuant to
Section 10.2 hereof, the Fund and Dreyfus may, at the option of the
Fund, continue to make available additional Series shares for so
long as the Fund desires pursuant to the terms and conditions of
this Agreement as provided below, for all Contracts in effect on
the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without
limitation, if the Fund or Dreyfus so elects to make additional
Series shares available, the owners of the Existing Contracts or
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Insurance Company, whichever shall have legal authority to do so,
shall be permitted to reallocate investments in the Series, redeem
investments in the Fund and/or invest in the Fund upon the making
of additional purchase payments under the Existing Contracts, if
permitted by the terms of the Existing Contracts. In the event of
a termination of this Agreement pursuant to Section 10.2 hereof,
the Fund and Dreyfus, as promptly as is practicable under the
circumstances, shall notify Insurance Company whether Dreyfus and
the Fund will continue to make Series shares available after such
termination. If Series shares continue to be made available after
such termination, the provisions of this Agreement shall remain in
effect and thereafter either the Fund or Insurance Company may
terminate the Agreement, as so continued pursuant to this Section
10.3, upon prior written notice to the other party, such notice to
be for a period that is reasonable under the circumstances but, if
given by the Fund, need not be for more than six months.
ARTICLE XI
AMENDMENTS
11.1 Any other changes in the terms of this Agreement shall be made by
agreement in writing between Insurance Company and Fund.
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ARTICLE XII
NOTICE
12.1 Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate parties at the
following addresses:
Insurance Company: Annuity Investors Life Insurance Company
00xx Xxxxx, Xxxxxxxx Xxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Fund: Dreyfus Stock Index Fund
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
with copies to: Stroock & Stroock & Xxxxx
0 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx X. Xxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Notice shall be deemed to be given on the date of receipt by the addresses
as evidenced by the return receipt.
ARTICLE XIII
MISCELLANEOUS
13.1 This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of
the Fund. The obligations of this Agreement shall only be binding
upon the assets and property of the Fund and shall not be binding
upon any director, officer or shareholder of the Fund individually.
ARTICLE IV
LAW
14.1 This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles
of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
duly executed and attested as of the date first above written.
ANNUITY INVESTORS LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxxx
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------------------------------------
Its: Senior Vice President
-----------------------------------
Attest: /s/ Xxxxxxx X. McManue
----------------------
Senior Vice President
DREYFUS LIFE AND ANNUITY INDEX FUND, INC.
(d/b/a DREYFUS STOCK INDEX FUND)
By: /s/ [Illegible]
-------------------------------------
Its: Vice President
------------------------------------
Attest: /s/ [Illegible]
----------------
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