PARTICIPATION AGREEMENT
AMONG
FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK,
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS,
AND
OPPENHEIMERFUNDS, INC.
THIS AGREEMENT, dated as of the 1st day of May, 2003, by and among First
Security Benefit Life Insurance and Annuity Company of New York, (the
"Company"), a stock life insurance company organized under the laws of the State
of New York, on its own behalf and on behalf of each segregated asset account of
the Company set forth on Schedule A hereto, as may be amended from time to time
(each an "Account"), Xxxxxxxxxxx Variable Account Funds (the "Fund"), an
open-end management investment company organized under the laws of the State of
Massachusetts, and OppenheimerFunds, Inc. (the "Adviser"), a corporation
organized under the laws of the State of Colorado.
WHEREAS, the shares of beneficial interest/common stock of the Fund are
divided into several series of shares, each representing the interest in a
particular managed portfolio of securities and other assets (each a
"Portfolio"); and
WHEREAS, the Fund is registered as an open-end management investment company
under the Investment Company Act of 1940 (the "1940 Act") and shares of the
Portfolios are registered under the Securities Act of 1933, as amended (the
"1933 Act"); and
WHEREAS, the Adviser, which serves as investment adviser to the Fund, is duly
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended; and
WHEREAS, the Company has issued or will issue certain variable annuity
contracts supported wholly or partially by the Account (the "Contracts"), and
said Contracts are listed in Schedule A hereto, as it may be amended from time
to time by mutual written agreement; and
WHEREAS, the Account is duly established and maintained as a segregated asset
account, duly established by the Company, on the date shown for such Account on
Schedule A hereto, to set aside and invest assets attributable to the aforesaid
Contracts; and
WHEREAS, the Company intends to purchase shares in the Portfolios listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios"), on behalf of the Account to fund the
aforesaid Contracts;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. Subject to Article IX hereof, the Fund agrees to make available to the
Company for purchase on behalf of the Account, shares of the Designated
Portfolios, such purchases to be effected at net asset value in accordance with
Section 1.3 of this Agreement, increased by any initial sales charge, if the
Fund's prospectus then in effect imposes such a charge on such purchases.
Notwithstanding the foregoing, (i) the Portfolios (other than those listed on
Schedule A) in existence now or that may be established in the future will be
made available to the Company only as the Fund may so provide, and (ii) the
Board of Trustees of the Fund (the "Board") may refuse to sell shares of the
Designated Portfolio to any person, or suspend or terminate the offering of
shares of any Designated Portfolio or class thereof, 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, suspension or termination is
in the best interests of the shareholders of such Designated Portfolio. The Fund
may restrict or refuse investments through Accounts by market timers as
described in the Fund's then current prospectus. Further, it is acknowledged and
agreed that the availability of shares of the Fund shall be subject to the
Fund's then current prospectus and statement of additional information, federal
and state securities laws and applicable rules and regulations of the SEC and
the NASD.
1.2. The Fund shall redeem, at the Company's request, any full or fractional
Designated Portfolio shares held by the Company on behalf of the Account, such
redemptions to be effected at net asset value in accordance with Section 1.3 of
this Agreement. Notwithstanding the foregoing, the Fund may delay redemption of
Fund shares of any Designated Portfolio to the extent permitted by the 1940 Act,
and any rules, regulations or orders thereunder. In addition, the Fund may
redeem shares of any Designated Portfolio in kind to the extent permitted by
Rule 18f-1 of the 1940 Act and any rules thereunder. The Company agrees to
purchase and redeem the shares of each Designated Portfolio in accordance with
the provision of that Portfolio's then current prospectus and statement of
additional information.
1.3. Purchase and Redemption Procedures
(a) The Fund hereby appoints the Company as an agent of the Fund for the
limited purpose of receiving and accepting purchase and redemption requests on
behalf of the Account for shares of those Designated Portfolios made available
hereunder, based on allocations of amounts to the Account or subaccounts thereof
under the Contracts and other transactions relating to the Contracts or the
Account. Receipt and acceptance of any such request (or relevant transactional
information therefor) on any day the New York Stock Exchange is open for trading
and on which a Designated Portfolio calculates its net asset value (a "Business
Day") pursuant to the rules of the Securities and Exchange Commission ("SEC"),
by the Company as such limited agent of the Fund prior to the time that the Fund
ordinarily calculates its net asset value as described from time to time in the
Fund's prospectus shall constitute receipt and acceptance by the Designated
Portfolio on that same Business Day, provided that the Fund receives notice of
such request by 9:30 a.m. Eastern Time on the next following Business Day.
(b) The Company shall pay for shares of each Designated Portfolio on the
same Business Day that it notifies the Fund of a purchase request for such
shares. Payment for Designated Portfolio shares shall be made in federal funds
transmitted to the Fund or other designated person by wire to be received by
2:00 p.m. Eastern Time on the Business Day the Fund is notified of the purchase
request for Designated Portfolio shares (unless the Fund determines and so
advises the Company that sufficient proceeds are available from redemption of
shares of other Designated Portfolios effected pursuant to redemption requests
tendered by the Company on behalf of the Account, or unless the Fund otherwise
determines and so advises the Company to delay the date of payment, to the
extent the Fund may do so under the 1940 Act). Upon receipt of federal funds so
wired, such funds shall cease to be the responsibility of the Company and shall
become the responsibility of the Fund.
(c) Payment for Designated Portfolio shares redeemed by the Account or
the Company shall be made by the Fund in federal funds transmitted by wire to
the Company or any other designated person by 2 p.m. Eastern Time on the same
Business Day the Fund is properly notified of the redemption order of such
shares (unless redemption proceeds are to be applied to the purchase of shares
of other Designated Portfolios in accordance with Section 1.3(b) of this
Agreement), except that the Fund reserves the right to delay payment of
redemption proceeds to the extent permitted under Section 22(e) of the 1940 Act
and any rules thereunder, and in accordance with the procedures and policies of
the Fund as described in the then-current prospectus.
1.4. The Fund shall use its best efforts to make the net asset value per
share for each Designated Portfolio available to the Company by 6:30 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio is
calculated, and shall calculate such net asset value in accordance with the
Fund's prospectus. If the Trust provides the Company with materially incorrect
share net asset value information through no fault of the Company, the Company
on behalf of the Account, shall be entitled to an adjustment to the number of
shares purchased or redeemed to reflect the correct share net asset value. Any
material error (determined in accordance with SEC guidelines) in the calculation
of the net asset value per share, dividend or capital gain information shall be
reported promptly to the Company upon discovery.
1.5. The Fund shall use its best efforts to furnish notice (by wire or
telephone followed by written confirmation) to the Company of any income
dividends or capital gain distributions payable on any Designated Portfolio
shares by the record date, but in no event later than 6:30 p.m. Eastern Time on
the ex-dividend date. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any Designated Portfolio shares in the form of additional shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the Account, to revoke this election by written notice to the Fund and
to receive all such dividends and capital gain distributions in cash. The Fund
shall notify the Company promptly of the number of Designated Portfolio shares
so issued as payment of such dividends and distributions.
1.6. Issuance and transfer of Fund shares shall be by book entry only. Share
certificates will not be issued to the Company or the Account. Purchase and
redemption orders for Fund shares shall be recorded in an appropriate ledger for
the Account or the appropriate subaccount of the Account.
1.7. (a) The parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's shares may be sold to other
insurance companies and the cash value of the Contracts may be invested in other
investment companies.
(b) The Company shall not, without prior notice to the Adviser (unless
otherwise required by applicable law), take any action to operate the Account as
a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the Fund, induce
Contract owners to vote on any matter submitted for consideration by the
shareholders of the Fund in a manner other than as recommended by the Board.
1.8. The parties may agree, in lieu of the procedures set forth above in this
Article 1, to place and settle trades for Fund shares through a clearing
corporation. In the event that such a clearing corporation is used, the parties
agree to abide by the rules of the clearing corporation.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts (a) are, or prior
to issuance will be, registered under the 1933 Act, or (b) are not registered
because they are properly exempt from registration under the 1933 Act or will be
offered exclusively in transactions that are properly exempt from registration
under the 1933 Act. The Company further represents and warrants that the
Contracts will be issued, offered and sold in compliance in all material
respects with all applicable federal securities and state securities and
insurance laws and regulations and National Association of Securities Dealers,
Inc. ("NASD") conduct rules. The Company further represents and warrants that it
is an insurance company duly organized and in good standing under applicable
law, that it has legally and validly established the Account as a segregated
asset account under New York insurance laws, and that it (a) has registered or,
prior to any issuance or sale of the Contracts, will register the Account as a
unit investment trust in accordance with the provisions of the 1940 Act to serve
as a segregated investment account for the Contracts and that it will maintain
such registration for so long as any Contracts are outstanding or until
registration is no longer required under federal securities laws, or
alternatively (b) has not registered the Account in proper reliance upon an
exclusion from registration under the 0000 Xxx.
2.2. The Company represents and warrants that the contracts are currently and
at the time of issuance will be treated as life insurance or annuity contracts
under applicable provisions of the Code and the regulations thereunder, and that
it will make every effort to maintain such treatment and that it will notify the
Fund and the Adviser immediately upon having a reasonable basis for believing
that the Contracts have ceased to be so treated or that they might not be so
treated in the future. In addition, the Company represents and warrants that the
Accounts are "segregated asset accounts" and that interests in the Accounts are
offered exclusively through the purchase of or transfer into a "variable
contract" within the meaning of such terms under Section 817 of the Code and the
regulations thereunder (and any amendments or other modifications to such
section or such regulations and any revenue rulings, revenue procedures, notices
or other published announcements of the Internal Revenue Service interpreting
these provisions). The Company shall continue to meet such definitional
requirements, and it will notify the Fund and the Adviser immediately upon
having a reasonable basis for believing that such requirements have ceased to be
met or that they might not be met in the future. The Company represents and
warrants that it will not purchase Fund shares with assets derived from
tax-qualified retirement plans except indirectly, through Contracts purchased in
connection with such plans.
2.3. If the Contracts purchase shares of a series and class of the Fund that
have adopted a plan under Rule 12b-1 under the 1940 Act to finance distribution
expenses (a "12b-1 Plan"), the Company agrees to provide the Trustees with any
information as may be reasonably necessary for the Trustees to review the Fund's
12b-1 Plan or Plans.
2.4. The Fund represents and warrants that Designated Portfolio shares sold
pursuant to this Agreement shall be registered under the 1933 Act, shall be duly
authorized for issuance and sold in compliance with applicable state and federal
securities laws and that the Fund is and shall remain registered under the 0000
Xxx. The Fund shall amend the registration statement for its shares under the
1933 Act and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Fund shall register and qualify the
shares for sale in accordance with the laws of the various states only if and to
the extent deemed advisable by the Fund.
2.5. 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 the 1940 Act.
2.6. The Adviser represents and warrants that it is registered as an
investment adviser with the SEC.
2.7. The Fund and the Adviser represent and warrant that all of their
trustees/directors, officers, employees, and other individuals or entities
dealing with the money and/or securities of the Fund are and shall continue to
be at all times covered by a blanket fidelity bond or similar coverage for the
benefit of the Fund in an amount not less than the minimum coverage as required
currently by Rule 17g-1 of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
2.8. The Company represents and warrants that all of its directors, officers,
employees, and other individuals/entities employed or controlled by the Company
dealing with the money and/or securities of the Account are covered by a blanket
fidelity bond or similar coverage for the benefit of the Account, in an amount
not less than $10 million. To the extent that the Fund or Adviser has suffered a
loss as a result of conduct on the part of the Company or its employees,
offices, directors or agents, the Company agrees that any amount received under
such bond in connection with claims that derive from arrangements described in
this Agreement will be paid by the Company for the benefit of the Fund. The
Company agrees to make all reasonable efforts to see that this bond or another
bond containing these provisions is always in effect, and agrees to notify the
Fund and the Adviser in the event that such coverage no longer applies. The
aforesaid bond includes coverage for larceny and embezzlement and is issued by a
reputable bonding company.
2.9. The Fund will not sell shares of the Designated Portfolio(s) to any
other participating insurance company separate account unless an agreement
containing a provision similar in substance to Section 2.2 of this Agreement is
in effect to govern such sales, it being understood that this provision shall
apply prospectively to participation agreements that the Fund enters into on or
after the date hereof.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Fund shall provide the Company with as many printed copies of the
current prospectus, current Statement of Additional Information ("SAI"),
supplements, proxy statements, and annual or semi-annual reports of each
Designated Portfolio (for distribution to Contract owners with value allocated
to such Designated Portfolios) as the Company may reasonably request to deliver
to existing Contract owners. If requested by the Company in lieu thereof, the
Fund shall provide such documents (including a "camera-ready" copy of such
documents as set in type, a diskette in the form sent to the financial printer,
or an electronic copy of the documents in a format suitable for posting on the
Company's website, all as the Company may reasonably request) and such other
assistance as is reasonably necessary in order for the Company to have
prospectuses, SAIs, supplements and annual or semi-annual reports for the
Contracts and the Fund printed together in a single document or posted on the
Company's web-site or printed individually by the Company if it so chooses. The
Adviser shall be permitted to review and approve the typeset form of the Fund's
Prospectus prior to such printing. The expenses associated with printing and
providing such documentation shall be as set forth in Article V.
3.2. The Fund's prospectus shall state that the current SAI for the Fund is
available.
3.3. The Fund shall provide the Company with information regarding the Fund's
expenses, which information may include a table of fees and related narrative
disclosure for use in any prospectus or other descriptive document relating to a
Contract. The Company agrees that it will use such information substantially in
the form provided. The Company shall provide prior written notice of any
proposed modification of such information, which notice will describe the manner
in which the Company proposes to modify the information, and agrees that it may
not modify such information in any way without the prior consent of the Fund,
which consent shall not be unreasonably withheld.
3.4. The Fund will pay or cause to be paid the expenses associated with text
composition, printing, mailing, distributing, and tabulation of proxy statements
and voting instruction solicitation materials to Contract owners with respect to
proxies related to the Fund, consistent with applicable provisions of the 1940
Act.
3.5. In the event a meeting of shareholders of the Fund (or any Designated
Portfolio) is called by the Trustees, the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Portfolio(s) shares held in the Account in accordance with
instructions received from Contract owners;
(iii) vote the Portfolio(s) shares held in the Account for which no
instructions have been received, in the same proportion as Portfolio(s) shares
for which instructions have been received from Contract owners, so long as and
to the extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for variable contract owners; and
(iv) take responsibility for assuring that the Accounts calculate voting
privileges in a manner consistent with other Participating Insurance Companies.
The Fund and Adviser agree to assist the Company and the other Participating
Insurance Companies in carrying out this responsibility.
3.6. The Fund and the Adviser shall provide the Company with as much notice
as is reasonably possible under the circumstances of any prospectus stickers or
supplements for a Designated Portfolio.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material
that the Company develops or otherwise uses which is not provided by the Funds
and in which the Fund (or a Designated Portfolio thereof) or the Adviser is
named. No such material shall be used until approved by the Fund or its
designee, and the Fund will use its best efforts for it or its designee to
review such sales literature or promotional material within seven (7) Business
Days after receipt of such material. The Fund or its designee reserves the right
to reasonably object to the continued use of previously approved sales
literature or other promotional material in which the Fund (or a Designated
Portfolio thereof) or the Adviser is named, and no such material shall be used
if the Fund or its designee so objects.
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund or the Adviser in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus or SAI for
the Fund shares, as such registration statement and prospectus or SAI may be
amended or supplemented from time to time, or in reports or proxy statements for
the Fund, or in sales literature or other promotional material approved by the
Fund or its designee, except with the permission of the Fund.
4.3. The Fund and the Adviser, or their designee, shall furnish, or cause to
be furnished, to the Company, each piece of sales literature or other
promotional material that it develops or otherwise uses which is not provided by
the Company and in which the Company, and/or the Account, is named. No such
material shall be used until approved by the Company, and the Company will use
its best efforts to review such sales literature or promotional material within
ten (10) Business Days after receipt of such material. The Company reserves the
right to reasonably object to the continued use of previously approved sales
literature or other promotional material in which the Company and/or its Account
is named, and no such material shall be used if the Company so objects.
4.4. The Fund shall not give any information or make any representations on
behalf of the Company or concerning the Company, the Account, or the Contracts
other than the information or representations contained in a registration
statement, prospectus (which shall include an offering memorandum, if any, if
the Contracts issued by the Company or interests therein are not registered
under the 1933 Act), or SAI for the Contracts, as such registration statement,
prospectus, or SAI may be amended or supplemented from time to time, or in
published reports for the Account which are in the public domain or approved by
the Company for distribution to Contract owners, or in sales literature or other
promotional material approved by the Company, except with the permission of the
Company.
4.5. The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, SAIs, reports, proxy statements, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, , that
relate to the Designated Portfolios or their shares, promptly after the filing
of such document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Contracts or the Account, promptly after the filing of
such document(s) with the SEC or other regulatory authorities. The Company shall
provide to the Fund and the Adviser any complaints received from the Contract
owners pertaining to the Fund or a Designated Portfolio.
4.7. The Fund will provide the Company with as much notice as is reasonably
practicable of any proxy solicitation for any Designated Portfolio, and of any
material change in the Fund's registration statement, particularly any change
resulting in a change to the registration statement or prospectus for any
Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
ARTICLE V. Fees and Expenses
5.1 The Fund and Adviser shall pay no fee or other compensation to the
Company under this Agreement. Nothing herein shall prevent the parties hereto
from otherwise agreeing to perform, and arranging for appropriate compensation
for, other services relating to the Fund and/or to the Accounts.
All expenses incident to performance by each party of its respective
duties under this Agreement shall be paid by that party. The Fund shall see to
it that all its shares are registered and authorized for issuance in accordance
with applicable federal law and, if and to the extent deemed advisable by the
Fund, in accordance with applicable state laws prior to their sale. The Fund
shall bear the expenses for the cost of registration and qualification of the
Fund's shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials, costs of tabulating Fund shares voted
in response to a solicitation of proxies by the Fund and reports to shareholders
(including the costs of printing a prospectus that constitutes an annual
report), the preparation of all statements and notices required by any federal
or state law, and all taxes on the issuance or transfer of the Fund's shares.
The Fund shall bear the expenses of distributing the Fund's proxy materials and
reports to existing Contract owners. With respect to any prospectuses for the
Designated Portfolio that are printed in combination with any one or more
Contract prospectus (the "Prospectus Booklet"), the costs of printing Prospectus
Booklets for distribution to existing Contract owners shall be prorated to the
Fund based on (a) the ratio of the number of pages of the prospectuses included
for the Portfolio in the Prospectus Booklets to the number of pages in the
Prospectus Booklet as a whole, provided, however, that the Company shall bear
all printing expenses of such combined documents where used for distribution to
prospective purchasers or to owners of existing Contracts not funded by the
Designated Portfolios.
5.2. The Company shall bear the expenses incident to (including the costs of
printing) sales literature and other promotional material that the Company
develops and in which the Fund (or a Designated Portfolio thereof) is named.
ARTICLE VI. Qualification
6.1 The Adviser represents and warrants that each Designated Portfolio is or
will be qualified as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code,") and
that each Designated Portfolio will maintain such qualification (under
Subchapter M or any successor or similar provisions) and that the Adviser will
notify the Company immediately upon having a reasonable basis for believing that
any Designated Portfolio has ceased to so qualify or that a Designated Portfolio
might not so qualify in the future.
6.2 The Adviser represents and warrants that each Designated Portfolio will
comply and will maintain each Designated Portfolio's compliance with the
diversification requirements set forth in Section 817(h) of the Internal Revenue
Code (or any successor or similar provisions and Section 1.817-5(b) of the
regulations under the Code (or any successor or similar provisions) or will take
all reasonable steps to meet the diversification requirements within the grace
period afforded by Section 1.817-5 of the regulations under the Code. The
Adviser will notify the Company immediately upon having a reasonable basis for
believing that a Designated Portfolio has ceased to so comply or that a
Designated Portfolio might not comply in the future.
ARTICLE VII. Potential Conflicts
7.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the Contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
a Designated Portfolio are managed; (e) a difference in voting instructions
given by participating insurance companies or by variable annuity contract and
variable life insurance contract owners; or (f) a decision by an insurer to
disregard the voting instructions of Contract owners. The Board shall promptly
inform the Company if it determines that an irreconcilable material conflict
exists and the implications thereof.
7.2 The Company has reviewed a copy of the Mixed and Shared Funding Exemptive
Order, and in particular, has reviewed the conditions to the requested relief
set forth therein. The Company agrees to be bound by the responsibilities of a
participating insurance company as set forth in the Mixed and Shared Funding
Exemptive Order, including without limitation the requirement that the Company
report any potential or existing conflicts of which it is aware to the Board.
The Company will assist the Board in carrying out its responsibilities in
monitoring such conflicts under the Mixed and Shared Funding Exemptive Order, by
providing the Board in a timely manner with all information reasonably necessary
for the Board to consider any issues raised. This includes, but is not limited
to, an obligation by the Company to inform the Board whenever Contract owner
voting instructions are disregarded and by confirming in writing, at the Fund's
request, that the Company is unaware of any such potential or existing material
irreconcilable conflicts.
7.3 If it is determined by a majority of the Board, or a majority of its
disinterested Trustees, that a material irreconcilable conflict exists, the
Company shall, at its expenses and to the extent reasonably practicable, (as
determined by a majority of the disinterested Trustees), take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict, up to and
including: (1) withdrawing the assets allocable to some or all of the Accounts
from the Fund or any Designated Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to) another Portfolio or
Fund, or submitting the question whether such segregation should be implemented
to a vote of all affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity contract owners, life insurance
contract owners, or variable contract owners of one or more Participating
Insurance Companies) that vote in favor of such segregation, or offering to the
affected Contract owners the option of making such a change; and (2)
establishing a new registered management investment company or managed separate
accounts. The Company's obligations under this Section 7.3 shall not depend on
whether other affected Participating Insurance Companies fulfill a similar
obligation.
7.4 If a material irreconcilable conflict arises because of a decision by the
Company to disregard Contract owner voting instructions and that decision could
conflict with the majority of Contact owner instructions, the Company may be
required, at the Fund's election, to withdraw the Accounts' investment in the
Fund and terminate this Agreement; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of disinterested members of
the Board. Any such withdrawal and termination must take place within six (6)
months after the Fund gives written notice that this provision is being
implemented, and until the end of the six month period the Fund shall continue
to accept and implement orders by the Company for the purchase and redemption of
shares of the Fund.
7.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the Accounts'
investment in the Fund and terminate this Agreement within six months after the
Board informs the Company in writing that it has determined that such decision
has created an irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing six month
period, the Fund shall continue to accept and implement orders by the Company
for the purchase and redemption of shares of the Fund, subject to applicable
regulatory limitation.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of
the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Fund be required to establish a new funding medium for the Contracts.
The Company shall not be required by Section 7.3 to establish a new funding
medium for the Contracts if an offer to do so has been declined by vote of a
majority of Contract owners materially adversely affected by the irreconcilable
material conflict. In the event that the Board determines that any proposed
action does not adequately remedy any irreconcilable material conflict, then the
Company will withdraw the particular Accounts' investment in the Fund and
terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
ARTICLE VIII. Indemnification
8.1 Indemnification by the Company
8.1(a). The Company agrees to indemnify and hold harmless each of the
Fund and the Adviser and each of its trustees/directors and officers, and each
person, if any, who controls the Fund or Adviser within the meaning of Section
15 of the 1933 Act or who is under common control with the Fund or the Adviser
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities (or actions in respect thereof) or
settlements:
(i) arise out of or are based upon any untrue statement or alleged
untrue statements of any material fact contained in the registration
statement, prospectus (which shall include a written description of a
Contract that is not registered under the 1933 Act), or SAI for the
Contracts or contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Company by or on behalf of the Fund or the Adviser for use in the
registration statement, prospectus or SAI for the Contracts or in the
Contracts or sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or Fund
shares, or
(ii) arise out of or as a result of statements or representations
by or on behalf of the Company (other than statements or representations
contained in the registration statement, prospectus, SAI, or sales
literature of the Fund not supplied by the Company or persons under its
control) or wrongful conduct of the Company or its agents or persons
under the Company's authorization or control, with respect to the sale
or distribution of the Contracts or Fund shares, or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus,
SAI, or sales literature of the Fund or any amendment thereof or
supplement thereto or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Fund by or on behalf
of the Company; or
(iv) arise as a result of any material failure by the Company to
provide the services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Company;
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of its obligations or duties under this Agreement.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the party named in the action. After notice from the Company to such party of
the Company's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Company will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares or the Contracts or the operation of the
Fund.
8.2 Indemnification by the Adviser
8.2(a). The Adviser agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Adviser) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities (or actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus or SAI or sales literature of the Fund (or any
amendment or supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement
or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Adviser or Fund
by or on behalf of the Company for use in the registration statement,
prospectus or SAI for the Fund or in sales literature (or any amendment
or supplement) or otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
by or on behalf of the Fund or the Adviser (other than statements or
representations contained in the registration statement, prospectus, SAI
or sales literature for the Contracts not supplied by the Fund or the
Adviser) or wrongful conduct of the Adviser or the Fund with respect to
the sale or distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement, prospectus,
SAI or sales literature covering the Contracts, or any amendment thereof
or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information furnished to
the Company by or on behalf of the Adviser or the Fund; or
(iv) arise as a result of any failure by the Fund or the Adviser to
provide the services and furnish the materials under the terms of this
Agreement (including a failure of the Fund, whether unintentional or in
good faith or otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this Agreement);
or
(v) arise out of or result from any material breach of any
representation and/or warranty made by or on behalf of the Adviser or
the Fund in this Agreement or arise out of or result from any other
material breach of this Agreement by or on behalf of the Adviser or the
Fund;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.
8.2(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel reasonably satisfactory to the party
named in the action. After notice from the Adviser to such party of the
Adviser's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Adviser will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.2(d). The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
8.3. Indemnification by the Fund
8.3(a). The Fund agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities (or actions in respect thereof) or settlements, are related
to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification and other qualification
requirements specified in Article VI of this Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by or on behalf of the Fund in this
Agreement or arise out of or result from any other material breach of
this Agreement by or on behalf of the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof. The parties acknowledge that the Fund's indemnification
obligations under this Section 8.3 are subject to applicable law. The Company
agrees that, in the event an obligation to indemnify exists pursuant to Section
8.3 as well as Section 8.2 hereof, it will seek satisfaction under the
indemnification provisions of Section 8.2 before seeking indemnification under
this Section 8.3.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel reasonably satisfactory to the party
named in the action. After notice from the Fund to such party of the Fund's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the Fund will
not be liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Company agrees promptly to notify the Fund of the
commencement of any litigation or proceeding against it or any of its respective
officers or directors in connection with the Agreement, the issuance or sale of
the Contracts, the operation of the Account, or the sale or acquisition of
shares of the Fund.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of New York, without regard
to the conflict of laws provisions thereof.
9.2. This Agreement shall be subject to the provisions of the 1933 and 1940
Acts as well as the Exchange Act of 1934, and the rules and regulations and
rulings thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant, and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X. Termination
10.1 This Agreement shall continue in full force and effect until the first
to occur of:
(a) termination by any party, for any reason with respect to some or
all Designated Portfolios, by six (6) months advance written notice
delivered to the other parties; or
(b) termination by the Company by written notice to the other parties
based upon the Company's reasonable, good faith determination that
shares of the Designated Portfolio are not reasonably available to
meet the requirements of the Contracts. Prompt notice of the
election to terminate for such cause and an explanation of such
cause shall be furnished by the Company; or
(c) termination by the Company by written notice to the other parties
in the event any of the Designated Portfolio's shares are not
registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such shares as
the underlying investment media of the Contracts issued or to be
issued by the Company; or
(d) termination by the Fund or Adviser in the event that formal
administrative proceedings are instituted against the Company (or
its affiliates) by the National Association of Securities Dealers,
Inc. (the "NASD"), the SEC, the Insurance Commissioner, state
securities department or like official of any state or any other
regulatory body that the Fund or Adviser determines in its sole
judgment exercised in good faith will have a material adverse
effect upon the ability of the Company to perform its obligations
under this Agreement; or
(e) termination by the Company in the event that formal administrative
proceedings are instituted against the Fund or Adviser (or any of
their respective controlled affiliates) by the SEC or any state
securities department or any other regulatory body that the Company
determines in its sole judgment exercised in good faith will have a
material adverse effect upon the ability of the Fund or Adviser to
perform its obligations under this Agreement; or
(f) termination by the Company by written notice to the other parties
in the event that any Designated Portfolio ceases to qualify as a
regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, or if the Company reasonably believes that
any such Portfolio may fail to so qualify or comply; or
(g) termination by the Company by written notice to the Fund and the
Adviser in the event that any Designated Portfolio fails to meet
the diversification requirements specified in Article VI hereof ,
or if the Company, in good faith, reasonably believes that any
Designated Portfolio may feel to meet such diversification
requirements; or
(h) termination by either the Fund or the Adviser by written notice to
the other parties, if either one or both the Fund and the Adviser,
respectively, shall determine, in their sole judgment exercised in
good faith, that the Company has suffered a material adverse change
in its business, operations, financial condition, or prospects
since the date of this Agreement or is the subject of material
adverse publicity; or
(i) termination by the Company by written notice to the other parties,
if the Company shall determine, in its sole judgment exercised in
good faith, that the Fund or the Adviser has suffered a material
adverse change in its business, operations, financial condition or
prospects since the date of this Agreement or is the subject of
material adverse publicity; or
(j) termination as provided in Article VII; or
(k) termination by the Company or the Fund upon a determination by a
majority of the Board, or a majority of the disinterested Board
members, that an irreconcilable material conflict exists among the
interests of (i) all Contract owners of variable insurance products
of all separate accounts; or (ii) the interests of Participating
Insurance Company investing in the Fund as delineated in Article
VII of this Agreement; or
(l) termination by any party to this Agreement, upon another party's
failure to cure a material breach of any provision of this
Agreement within thirty days after written notice thereof; or
(m) termination by the Fund in the event any of the Contracts are not
issued or sold in accordance with applicable requirements of
federal and/or state securities law.
(n) termination by the Company or the Fund upon receipt of any
necessary regulatory approvals or the vote of the Contract owners
having an interest in the Account to substitute the shares of
another investment company or series thereof for shares of a
Designated Portfolio of the Fund in accordance with the terms of
the Contracts. The Company will give at least 45 days prior written
notice to the Fund and Adviser of the date of any proposed vote or
other action taken to replace the Fund's shares.
10.2 Notwithstanding any termination of this Agreement, the Fund and the
Adviser shall, at the option of the Company, continue to make available
additional shares of the Fund for up to six months following termination,
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"), unless the Company seeks an order pursuant
to Section 26(b) of the 1940 Act to permit the substitution of other securities
for the shares of the Designated Portfolios, provided that the Fund and/or
Portfolio has not been terminated or otherwise closed by the Fund's Board to
current investors and investments. Specifically, for up to six months following
termination of this Agreement, the owners of the Existing Contracts may be
permitted to reallocate investments in the Fund, redeem investments in the Fund
and/or invest in the Fund upon the making of additional purchase payments under
the Existing Contracts (subject to any such election by the Company). Neither
this, nor any other provision in the agreement, will interfere with the Board's
ability to take action it determines in good faith it is required to take under
the 1940 Act and/or state law.
10.3. Notwithstanding any termination of this Agreement, each party's
obligation under Article VIII to indemnify the other parties shall survive.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Company: First Security Benefit Life Insurance
And Annuity Company of New York
Attention General Counsel
One Security Benefit Place
Topeka, Kansas 66636 - 0001
If to the Fund: Xxxxxxxxxxx Variable Account Funds
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
With a copy to:
Myer, Swanson, Xxxxx & Wolf, P.C.
0000 Xxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
If to Adviser: OppenheimerFunds, Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
ARTICLE XII. Miscellaneous
12.1 All persons dealing with the Fund must look solely to the property of
the respective Designated Portfolios listed on Schedule A hereto as though each
such Designated Portfolio had separately contracted with the Company and the
Adviser for the enforcement of any claims against the Fund. The parties agree
that neither the Board, officers, agents or shareholders of the Fund assume any
personal liability or responsibility for obligations entered into by or on
behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory authority,
the Fund and the Adviser shall treat as confidential the names and addresses of
the owners of the Contracts. Each party shall treat as confidential all
information reasonably identified as confidential in writing by any other party
hereto and, except as permitted by this Agreement and by Title V, Subtitle A of
the Xxxxx-Xxxxx-Xxxxxx Act and by regulations adopted thereunder by regulators
having jurisdiction over the parties hereto, shall not disclose, disseminate or
utilize such information without the express written consent of the affected
party until such time as such information has come into the public domain.
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 shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the New York Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable insurance
operations of the Company are being conducted in a manner consistent with the
New York insurance laws and regulations and any other applicable law or
regulations.
12.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies, and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.8 This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties hereto.
Notwithstanding the foregoing or anything to the contrary set forth in this
Agreement, the Adviser may transfer or assign its rights, duties and obligations
hereunder or interest herein to any entity owned, directly or indirectly, by
Xxxxxxxxxxx Acquisition Corp. (the Adviser's parent corporation) or to a
successor in interest pursuant to a merger, reorganization, stock sale, asset
sale or other transaction, without the consent of the Company, as long as (i)
that assignee agrees to assume all the obligations imposed on the Adviser by the
Agreement, and (ii) the Fund consents to that assignment.
12.9. The Company and the Adviser each understand and agree that the
obligations of the Fund under this Agreement are not binding upon any Trustee or
shareholder of the Fund personally, but bind only the Fund with respect to the
Designated Portfolio(s) and the Designated Portfolio(s)' property; The Company
and the Adviser each represent that it has notice of the provisions of the
Declaration of Trust of the Fund disclaiming Trustee and shareholder liability
for acts or obligations of the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative.
First Security Benefit Life Insurance
And Annuity Company of New York By its authorized officer
By: XXXXXX XXXX, XX.
---------------------------------
Title: Vice President
---------------------------------
Date: April 30, 2003
---------------------------------
Xxxxxxxxxxx Variable Account Funds By its authorized officer
By: XXXXX XXXXXXX
---------------------------------
Title: Assistant Secretary
---------------------------------
Date: May 1, 2003
---------------------------------
OppenheimerFunds, Inc. By its authorized officer
By: XXXXX XXXXXXX
---------------------------------
Title: Vice President and Senior Counsel
---------------------------------
Date: May 1, 2003
---------------------------------
May 1, 2003
SCHEDULE A
ACCOUNT(S) CONTRACT(S) DESIGNATED PORTFOLIO(S)
Variable Annuity Account B SecureDesigns Xxxxxxxxxxx Main Street Small
Variable Annuity Cap Fund/VA-Service Class
AMENDMENT NUMBER 1
TO MAY 1, 2003 PARTICIPATION AGREEMENT BETWEEN
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK,
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS AND OPPENHEIMERFUNDS, INC.
WHEREAS, First Security Benefit Life Insurance and Annuity Company of New
York (the "Company"), Xxxxxxxxxxx Variable Account Funds (the "Fund") and
OppenheimerFunds, Inc. (the "Adviser") are parties to a Participation Agreement
dated May 1, 2003 (the "Agreement"); and
WHEREAS, terms of the Agreement contemplate that Accounts and Contracts of
the Company that are eligible to purchase Designated Portfolios of the Fund may
be changed from time to time by amending Schedule A to the Agreement; and
WHEREAS, the parties wish to add certain Accounts and Contracts to the
Agreement by deleting the existing Schedule A and replacing it with the Schedule
A below; and
SCHEDULE A
================================================================================
ACCOUNT(S) CONTRACT(S) DESIGNATED PORTFOLIO(S)
--------------------------------------------------------------------------------
Variable Account B AdvanceDesigns Xxxxxxxxxxx Main Street Small
Variable Annuity Cap Fund/VA-Service Class
Variable Account C SecureDesigns Xxxxxxxxxxx Main Street Small
Variable Annuity Cap Fund/VA-Service Class
================================================================================
WHEREAS, capitalized terms used but not defined herein, shall have the
meaning given them in the Agreement; and
WHEREAS, all other terms of the Agreement shall remain in full force and
effect;
NOW, THEREFORE, the parties agree to replace in its entirety the existing
Schedule A to the Agreement with the Schedule A above.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
Number 1 to the Agreement to be executed in its name and on its behalf by its
duly authorized representative effective October 12, 2004.
FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK XXXXXXXXXXX VARIABLE ACCOUNT FUNDS
By: XXXXXX XXXX, XX. By: XXXX XXX
---------------------------------- ---------------------------
Name: Xxxxxx Xxxx, Xx. Name: Xxxx Xxx
---------------------------------- ---------------------------
Title: Vice President and Chief
Marketing Officer Title: Assistant Secretary
---------------------------------- ---------------------------
XXXXXXXXXXX FUNDS, INC.
By: XXXXXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
