FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the 1st day of February, 2004, between
First Security Benefit Life Insurance and Annuity Company of New York, a life
insurance company organized under the laws of the State of New York ("Insurance
Company"), Dreyfus Investment Portfolios and Dreyfus Variable Investment Fund
(each, individually, a "Fund", collectively, the "Funds.") and Dreyfus Service
Corporation, distributor of the Funds, a New York Corporation.
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 or Trustees, as the case may be,
of a Fund, which has the responsibility for management and control of the
Fund.
1.3 "Business Day" shall mean any day for which a Fund calculates net asset
value per Share (as defined below) 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 or variable life insurance
contract that uses any Participating Fund (as defined below) 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 (as defined below).
1.7 "Disinterested Board Members" shall mean those members of the Board of a
Fund 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 "Insurance Company's General Account(s)" shall mean the general account(s)
of Insurance Company and its affiliates that invest in Shares (as defined
below) of a Participating Fund.
1.10 "Participating Companies" shall mean any insurance company (including
Insurance Company) that offers variable annuity and/or variable life
insurance contracts to the public and that has entered into an agreement
with one or more of the Funds.
1.11 "Participating Fund" shall mean each Fund, including, as applicable, any
series thereof, specified in Exhibit A, as such Exhibit may be amended
from time to time by agreement of the parties hereto, the Shares (as
defined below) of which are available to serve as the underlying
investment medium for the aforesaid Contracts.
1.12 "Prospectus" shall mean the current prospectus and statement of additional
information of a Fund, relating to its Shares (as defined below), as most
recently filed with the Commission.
1.13 "Separate Account" shall mean each account specified in Exhibit B attached
hereto, each a separate account established by Insurance Company in
accordance with the laws of the State of New York, as such Exhibit may be
amended from time to time by agreement of the parties thereto.
1.14 "Shares" shall mean (i) each class of shares of a Participating Fund set
forth on Exhibit A next to the name of such Participating Fund, as such
Exhibit may be revised from time to time, or (ii) if no class of shares is
set forth on Exhibit A next to the name of such Participating Fund, the
shares of the Participating Fund.
1.15 "Software Program" shall mean the software program used by a 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 a Fund is not
available, such information may be provided by telephone. 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
insurance laws of the State of New York and the regulations thereunder for
the purpose of offering to the public certain individual and group
variable annuity and variable life insurance contracts; (c) it has
registered the Separate Account as a unit investment trust under the Act
to serve as the segregated investment account for the Contracts or the
Separate Account is properly exempt from registration under the Act; and
(d) the Separate Account is eligible to invest in Shares of each
Participating Fund without such investment disqualifying any Participating
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") or the Contracts are not registered under
the 1933 Act because they are properly exempt from such registration; (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 notify each Participating
Fund promptly of any investment restrictions imposed by state insurance
law and applicable to the Participating 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 Each Participating Fund represents and warrants that it is registered with
the Commission under the Act as an open-end, management investment company
and possesses, and shall maintain, all legal and regulatory licenses,
approvals, consents and/or exemptions under state and federal law required
for the Participating Fund to operate and offer its Shares as an
underlying investment medium for Participating Companies.
2.5 Each Participating Fund represents and warrants 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
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 warrants 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 maintain such treatment and that
it will notify each Participating 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 Each Participating Fund represents and warrants that it will invest its
assets in such a manner as to ensure that the Contracts will be treated as
annuity or life insurance contracts, whichever is appropriate, under the
Code and the regulations issued thereunder (or any successor provisions).
Without limiting the scope of the foregoing, each Participating Fund has
complied and will continue to comply with Section 817(h) of the Code and
Treasury Regulation §1.817-5, and any Treasury interpretations thereof,
relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts, and any amendments or other
modifications or successor provisions to such Section or Regulations. In
the event of a breach of this Section 2.7 by a Participating Fund, it will
take all reasonable steps (a) to notify the Insurance Company of such
breach and (b) to adequately diversify the Participating Fund so as to
achieve compliance within the grace period afforded by Regulation 1.817-5.
2.8 Insurance Company agrees that each Participating Fund shall be permitted
(subject to the other terms of this Agreement) to make its shares
available to other Participating Companies and Contractholders.
2.9 Each Participating Fund represents and warrants that any of its directors,
trustees, officers, employees, investment advisers, and other
individuals/entities who deal with the money and/or securities of the
Participating Fund are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the
Participating 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 each Participating
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 $5 million.
The aforesaid Bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company.
2.11 Each Participating Fund represents that it is lawfully organized and
validly existing under the laws of the State of Massachusetts or Maryland,
as applicable, and that it does and will comply in all material respects
with the 1940 Act
2.12 Dreyfus Service Corporation represents and warrants that it is registered
as a broker-dealer with the SEC and is a member in good standing with the
NASD
2.13 Insurance Company represents and warrants that it (a) has adopted policies
and procedures to monitor trading activity in the Participating Funds by
Contract owners and (b) is entitled (by disclosure in the prospectus) to
require that allocations to sub-accounts investing in the Participating
Funds made by or on behalf of Contract owners be made exclusively via
regular U.S. mail (i.e. submissions via facsimile, e-mail and the
Insurance Company's website are note permitted) if such allocations follow
a market timing strategy , and (c) will use reasonable efforts to identify
allocations following a market timing strategy and enforce the "U.S. mail
only" submission policy noted above upon a Participating Fund's or
Dreyfus' request.
ARTICLE III
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide for the
investment of certain amounts in Shares of each Participating Fund.
3.2 Each Participating Fund agrees to make its Shares available for purchase
at the then applicable net asset value per Share by Insurance Company and
the Separate Account on each Business Day pursuant to rules of the
Commission. Notwithstanding the foregoing, each Participating 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 its
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 Participating Fund's shareholders.
3.3 Each Participating Fund agrees that shares of the Participating Fund will
be sold only to (a) Participating Companies and their separate accounts or
(b) "qualified pension or retirement plans" as determined under Section
817(h)(4) of the Code. Except as otherwise set forth in this Section 3.3,
no shares of any Participating Fund will be sold to the general public.
3.4 Each Participating Fund shall use its best efforts to provide closing net
asset value, dividend and capital gain information on a per Share 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 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 unit values
of the Separate Account 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
the Shares of each Participating Fund that 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 each Participating Fund by
Insurance Company by 11:00 a.m. Eastern time on the Business Day next
following Insurance Company's receipt of that information. Subject to
Sections 3.6 and 3.8, all purchase and redemption orders for Insurance
Company's General Accounts shall be effected at the net asset value per
Share of each Participating Fund next calculated after receipt of the
order by the Participating Fund or its Transfer Agent.
3.6 Each Participating Fund appoints Insurance Company as its agent for the
limited purpose of accepting orders for the purchase and redemption of
Shares of the Participating Fund for the Separate Account. Each
Participating Fund will execute orders at the 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 Participating 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 Shares of the Participating Fund, the
conditions specified in Section 3.8, as applicable, are satisfied. A
redemption or purchase request that does not satisfy the conditions
specified above 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 next following Business Day upon which such conditions have
been satisfied in accordance with the requirements of this Section and
Section 3.8. Insurance Company represents and warrants that all orders
submitted by the Insurance Company for execution on the effective trade
date shall represent purchase or redemption orders received from
Contractholders prior to the close of trading on the New York Stock
Exchange on the effective trade date.
3.7 Insurance Company will make reasonable efforts to notify each applicable
Participating Fund in advance of any purchase or redemption order greater
than $1 million.
3.8 If Insurance Company's order requests the purchase of Shares of a
Participating Fund, Insurance Company will pay for such purchases by
wiring Federal Funds to the Participating Fund or its designated custodial
account on the day the order is transmitted. Insurance Company shall make
all reasonable efforts to transmit to the applicable Participating Fund
payment in Federal Funds by 12:00 noon Eastern time on the Business Day
the Participating Fund receives the notice of the order pursuant to
Section 3.5. Each applicable Participating 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 the Participating Fund receives
payment in Federal Funds by 12:00 midnight Eastern time on the Business
Day the Participating 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 a Participating Fund after 12:00 noon Eastern time on
such Business Day, Insurance Company shall promptly, upon each applicable
Participating Fund's request, reimburse the respective Participating Fund
for any charges, costs, fees, interest or other expenses incurred by the
Participating Fund in connection with any advances to, or borrowings or
overdrafts by, the Participating Fund, or any similar expenses incurred by
the Participating Fund, as a result of portfolio transactions effected by
the Participating Fund based upon such purchase request.
3.9 Payment for Participating Fund Shares redeemed by the Separate Account or
the Insurance Company shall be made by the applicable Fund in federal
funds transmitted by wire to the Insurance Company or any other designated
person in a timely manner in accordance with Section 22(e) of the 1940 Act
and any rules thereunder, and in accordance with the procedures and
policies of the applicable Fund as described in the then-current
prospectus. If Insurance Company's order requests the redemption of any
shares of a Participating Fund valued at or greater than $1 million, the
Participating Fund will wire such amount to Insurance Company within seven
days of the order
3.10 Each Participating Fund has the obligation to ensure that its Shares are
registered with applicable federal agencies at all times.
3.11 Each Participating Fund will confirm each purchase or redemption order
made by Insurance Company. Transfers of Shares of a Participating Fund
will be by book entry only. No share certificates will be issued to
Insurance Company. Insurance Company will record Shares ordered from a
Participating Fund in an appropriate title for the corresponding account.
3.12 Each Participating Fund shall credit Insurance Company with the
appropriate number of Shares.
3.13 On each ex-dividend date of a Participating Fund or, if not a Business
Day, on the first Business Day thereafter, each Participating Fund shall
communicate to Insurance Company the amount of dividend and capital gain,
if any, per Share. Insurance Company elects on behalf of the Separate
Account to receive all dividends and capital gains in the form of
additional Shares of the applicable Participating Fund at the net asset
value per Share on the ex-dividend date. Each Participating 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. Insurance Company reserves the right to revoke this election
and to receive dividends and capital gains in cash.
3.14 To the extent that a Separate Account is properly exempt from registration
under Act, at least once annually, at the request of a Participating Fund,
or its designee, Insurance Company will certify the amount of purchases
and redemptions of fund shares from such Separate Account for the
Participating Funds most recent fiscal year end.
ARTICLE IV
STATEMENTS AND REPORTS
4.1 Each Participating 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 Each Participating Fund shall distribute to Insurance Company copies of
the Participating Fund's Prospectuses, proxy materials, notices, periodic
reports and other printed materials (which the Participating Fund
customarily provides to the holders of its Shares) in quantities as
Insurance Company may reasonably request for distribution to each
Contractholder and Participant. Insurance Company may elect to print the
Participating Fund's prospectus and/or its statement of additional
information in combination with other fund companies' prospectuses and
statements of additional information, which are also offered in Insurance
Company's insurance product. At Insurance Company's request, the
Participating Fund will provide, in lieu of printed documents,
camera-ready copy or diskette of prospectuses, annual and semi-annual
reports for printing by the Insurance Company.
4.3 Each Participating 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 Participating Fund or its Shares (except
for such materials that are designed only for a class of shares of a
Participating Fund not offered to the Insurance Company pursuant to this
Agreement), promptly after the filing of such document with the Commission
or other regulatory authorities.
4.4 Insurance Company will provide to each Participating 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,
promptly after the filing of such document with the Commission.
4.5 Insurance Company will provide Participating Funds on a semi-annual basis,
or more frequently as reasonably requested by the Participating Funds,
with a current tabulation of the number of existing Variable Contract
owners of Insurance Company whose Variable Contract values are invested in
the Participating Funds. This tabulation will be sent to Participating
Funds in the form of a letter signed by a duly authorized officer of the
Insurance Company attesting to the accuracy of the information contained
in the letter.
ARTICLE V
EXPENSES
5.1 The charge to each Participating Fund for all expenses and costs of the
Participating Fund, including but not limited to management fees, Rule
12b-1 fees, if any, administrative expenses and legal and regulatory
costs, will be included in the determination of the Participating Fund's
daily net asset value per Share.
5.2 Except as provided in Article IV and V, in particular in the next
sentence, Insurance Company shall not be required to pay directly any
expenses of any Participating Fund or expenses relating to the
distribution of its Shares. Insurance Company shall pay the following
expenses or costs:
a. Such amount of production expenses of any Participating Fund
materials, including the cost of printing a Participating 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. Expenses of distributing any Participating Fund materials or marketing
materials to prospective Insurance Company Contractholders and
Participants.
c. Expenses of distributing any Participating Fund materials or marketing
materials to Insurance Company Contractholders and Participants.
A Participating Fund's principal underwriter may pay Insurance Company, or
the broker-dealer acting as principal underwriter for the Insurance
Company's Contracts, for distribution and other services related to the
Shares of the Participating Fund pursuant to any distribution plan adopted
by the Participating Fund in accordance with Rule 12b-1 under the Act,
subject to the terms and conditions of an agreement between the
Participating Fund's principal underwriter and Insurance Company or the
principal underwriter for the Insurance Company's Contracts, as
applicable, related to such plan.
Except as provided herein, all other expenses of each Participating Fund
shall not be borne by Insurance Company.
5.3 The Participating Fund shall bear the expense of printing Participating
Fund prospectuses (regardless of whether such prospectuses are printed by
or on behalf of the Participating Fund or by the Insurance Company) and
annual and semi-annual reports delivered to existing Contractholders.
ARTICLE VI
EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of the order dated February 5, 1998
of the Commission under Section 6(c) of the Act with respect to Dreyfus
Investment Portfolios, and, in particular, has reviewed the conditions to
the relief set forth in the Notice. As set forth therein, if Dreyfus
Investment Portfolios is a Participating Fund, Insurance Company agrees,
as applicable, to report any potential or existing conflicts promptly to
the Board of Dreyfus Investment Portfolios, 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.
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 a Participating Fund, the Board shall give
prompt notice to all Participating Companies and any other Participating
Fund. 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
Participating Fund and reinvesting such assets in another
Participating Fund (if applicable) or a different investment medium,
or submitting the question of whether such segregation should be
implemented to a vote of all affected Contractholders; and/or
b. Establishing a new registered management investment company or managed
separate account.
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 a Participating Fund,
Insurance Company may be required, at the Board's election, to withdraw
the investments of the Separate Account in that Participating 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 any
Participating 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 any Participating 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 SHARES OF PARTICIPATING FUND
7.1 Each Participating Fund shall provide Insurance Company with copies, at no
cost to Insurance Company, of the Participating Fund's proxy materials,
reports to shareholders and other communications to shareholders (except
for such materials that are designed only for a class of shares of a
Participating Fund not offered to the Insurance Company pursuant to this
Agreement) in such quantity as Insurance Company shall reasonably require
for distributing to Contractholders or Participants. Each Participating
Fund shall provide Insurance Company as much advance notice as is
reasonably practical of the date of any shareholder meetings of a
Participating Fund and the record date thereof.
To the extent the SEC continues to interpret the 1940 Act to require
pass-through voting privileges with respect to the Contracts, or to the
extent otherwise required by law, Insurance Company shall:
a. solicit voting instructions from Contractholders or Participants on a
timely basis and in accordance with applicable law;
b. vote the Shares of the Participating Fund in accordance with
instructions received from Contractholders or Participants; and
c. vote the Shares of the Participating Fund for which no instructions
have been received in the same proportion as Shares of the
Participating Fund for which instructions have been received.
The Participating 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 Contractholders with respect to proxies related to such Fund,
consistent with applicable provisions of the 0000 Xxx.
7.2 Insurance Company agrees that it shall not, without the prior written
consent of each applicable Participating Fund and Dreyfus, solicit, induce
or encourage Contractholders to (a) change or supplement the Participating
Fund's current investment adviser or (b) change, modify, substitute, add
to or delete from the current investment media for the Contracts.
ARTICLE VIII
MARKETING AND REPRESENTATIONS
8.1 Each Participating Fund or its principal underwriter shall periodically
furnish Insurance Company with the following documents relating to the
Shares of the Participating Fund, 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 the
parties in accordance with Article 5 of this Agreement.
8.2 Insurance Company shall designate certain persons or entities that 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 each
applicable Participating Fund or its designee, each piece of sales
literature or other promotional material in which the Participating Fund,
its investment adviser or the administrator is named, at least ten
Business Days prior to its use. No such material shall be used unless the
Participating Fund or its designee approves such material in writing.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of a Participating Fund or
concerning a Participating Fund in connection with the sale of the
Contracts other than the information or representations contained in the
registration statement or Prospectus of, as may be amended or supplemented
from time to time, or in reports or proxy statements for, the applicable
Participating Fund, or in sales literature or other promotional material
approved by the applicable Participating Fund.
8.5 Each Participating Fund shall furnish, or shall cause to be furnished, to
Insurance Company, each piece of the Participating Fund's sales literature
or other promotional material in which Insurance Company or the Separate
Account is named, at least ten Business Days prior to its use. No such
material shall be used unless Insurance Company approves such material.
8.6 Each Participating Fund shall not, in connection with the sale of Shares
of the Participating Fund, 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
approved by Insurance Company for distribution to Contractholders or
Participants, or in sales literature or other promotional material
approved by Insurance Company in writing.
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 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 each Participating
Fund, Dreyfus, each respective Participating Fund's investment adviser and
sub-investment adviser (if applicable), each respective Participating
Fund's distributor, and their respective affiliates, and each of their
directors, trustees, officers, employees, agents and each person, if any,
who controls or is under common control 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 (with the written consent of the
Insurance Company) 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 thereof)
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in written
information furnished by or on behalf of Insurance Company to the
Participating Fund or its designee specifically for use in the
registration statement or Prospectus or sales literature or
advertisements of the respective Participating Fund 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 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 Insurance
Company by or on behalf of the Participating Fund or Dreyfus 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;
(iii) arise out of or as a result of wrongful conduct, statements or
representations (other than statements or representations contained
in the Prospectus and sales literature or advertisements of the
respective Participating Fund not supplied by the Insurance
Company) of Insurance Company, its agents or persons under its
control with respect to the sale and distribution of Contracts for
which the Shares of the respective Participating Fund are an
underlying investment or the Shares of a Participating Fund;
(iv) arise out of or result from any material breach of any
representation and/or warranty made by Insurance Company in this
Agreement or arise out of Insurance Company's incorrect calculation
and/or untimely reporting of net purchase or redemption orders
provided that such incorrect calculation and/or untimely reporting
is not attributable to an incorrect and/or untimely NAV calculation
provided by or on behalf of a Participating Fund; 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) (ii) and (iii)
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 to Insurance Company by or on behalf of the respective
Participating Fund specifically for use therein. This indemnity
agreement will be in addition to any liability which Insurance
Company may otherwise have.
9.2 Each Participating Fund severally 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) (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 sales literature or advertisements
of the respective Participating Fund; (ii) arise out of or are based upon
the omission or alleged omission to state in the registration statement or
Prospectus or sales literature or advertisements of the respective
Participating Fund any material fact required to be stated therein or
necessary to make the statements therein not misleading; or (iii) 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 respective Participating Fund; and the respective
Participating 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 respective Participating 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
respective Participating Fund by Insurance Company specifically for use
therein. This indemnity agreement will be in addition to any liability
which the respective Participating Fund may otherwise have.
9.3 Each Participating Fund severally 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 respective Participating Fund's (i) incorrect calculation of
the daily net asset value, dividend rate or capital gain distribution
rate; (ii) incorrect reporting of the daily net asset value, dividend rate
or capital gain distribution rate; and (iii) untimely reporting of the net
asset value, dividend rate or capital gain distribution rate; provided
that the respective Participating 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.
9.4 Dreyfus Service Corporation agrees to indemnify and hold harmless the
Insurance Company and each of its directors and officers and each person,
if any, who controls the Insurance Company within the meaning of Section
15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 9.4) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent
of Dreyfus Service Corporation) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any
statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or Prospectus or sales literature of the Participating
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 Dreyfus Service Corporation or
Participating Fund by or on behalf of the Insurance Company for use
in the registration statement or Prospectus the Participating Fund
or in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or
Participating Fund shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration
statement or Prospectus or sales literature for the Contracts not
supplied by the Participating Fund, Dreyfus Service Corporation or
persons under their control) or wrongful conduct of the
Participating Fund or Dreyfus Service Corporation or persons under
their authorization or control, with respect to the distribution of
the Participating Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement or Prospectus
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 in writing by or on behalf of
the Participating Fund or Dreyfus Service Corporation; or
(iv) arise as a result of any failure by the Funds or Dreyfus Service
Corporation to provide the services and furnish the materials under
the terms of this Agreement (including a failure of the
Participating Fund, whether unintentional or in good faith or
otherwise, to comply with the requirements specified in Section 2.5
or 2.7 of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by Dreyfus Service Corporation
or the Funds in this Agreement or arise out of or result from any
other material breach of this Agreement by Dreyfus Service
Corporation or the Funds
9.5 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 reasonably 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.
No party shall be liable under this Article 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.
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.
10.2 This Agreement shall terminate without penalty:
a. As to any Participating Fund, at the option of Insurance Company or
the Participating Fund at any time from the date hereof upon 180 days'
notice, unless a shorter time is agreed to by the respective
Participating Fund and Insurance Company;
b. As to any Participating Fund, at the option of Insurance Company, if
Shares of that Participating 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;
c. As to a Participating Fund, at the option of Insurance Company, upon
the institution of formal proceedings against that Participating 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 that Participating Fund's ability to meet and
perform the Participating 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. As to a Participating Fund, at the option of each Participating 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 Participating 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 such
Participating Fund with said termination to be effective upon receipt
of notice;
e. As to a Participating Fund, at the option of that Participating Fund,
if the Participating 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 that
Participating Fund or Dreyfus, such Participating 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 Participating 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;
f. As to a Participating Fund or Dreyfus, at the option of Insurance
Company, if Insurance Company shall determine, in its sole judgment
reasonably exercised in good faith that the Participating Fund or
Dreyfus, as applicable, 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 operations of Insurance Company or its Separate Account,
the Insurance Company shall notify the Participating Fund or Dreyfus,
as applicable, in writing of such determination and its intent to
terminate this Agreement, and after considering the actions taken by
the Participating Fund and any other changes in circumstances since
the giving of such notice, such determination of Insurance Company
shall continue to apply to the sixtieth (60th) day following the
giving of such notice, which sixtieth day shall be the effective date
of termination;
g. As to a Participating Fund, upon termination of the Investment
Advisory Agreement between that Participating Fund and Dreyfus or its
successors unless Insurance Company specifically approves the
selection of a new Participating Fund investment adviser. Such
Participating Fund shall promptly furnish notice of such termination
to Insurance Company;
h. As to a Participating Fund, at the option of the Insurance Company in
the event that Shares of the Participating Fund 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. Such
termination to be effective upon Participating Fund's receipt of
notice from the Insurance Company;
i. At the option of a Participating Fund upon a determination by its
Board in good faith that it is no longer advisable and in the best
interests of shareholders of that Participating Fund to continue to
operate pursuant to this Agreement. Termination pursuant to this
Subsection (i) shall be effective upon notice by such Participating
Fund to Insurance Company of such termination;
j. At the option of a Participating Fund if the Contracts cease to
qualify as annuity contracts or life insurance policies, as
applicable, under the Code, or if such Participating Fund reasonably
believes that the Contracts may fail to so qualify;
k. At the option of any party to this Agreement, upon another party's
breach of any material provision of this Agreement;
l. At the option of a Participating Fund, if the Contracts are not
registered, issued or sold in accordance with applicable federal
and/or state law; or
m. Upon assignment of this Agreement, unless made with the written
consent of every other non-assigning party.
n. termination by the Insurance Company by written notice to the Funds
and Dreyfus in the event that a Participating Fund ceases to qualify
as a Regulated Investment Company under Subchapter M or fails to
comply with the Section 817(h) diversification requirements specified
in Section 2.5 and 2.7 hereof, or if the Insurance Company reasonably
believes that such Participating Fund may fail to so qualify or comply
o. termination by the Insurance Company upon any substitution of the
shares of another investment company or series thereof for shares of a
Participating Fund in accordance with the terms of the Contracts,
provided that the Insurance Company has given at least 45 days prior
written notice to the Participating Fund and Dreyfus of the date of
substitution
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, each Participating Fund and Dreyfus shall, at the option of the
Insurance Company, continue to make available additional Shares of that
Participating Fund for as long as the Insurance Company 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, the
owners of the Existing Contracts may be permitted to reallocate
investments in the Participating Fund, redeem investments in the
Participating Fund and/or invest in the Participating Fund upon the making
of additional purchase payments under the Existing Contracts (subject to
any such election by the Insurance Company).
10.4 Termination of this Agreement as to any one Participating Fund shall not
be deemed a termination as to any other Participating Fund unless
Insurance Company or such other Participating Fund, as the case may be,
terminates this Agreement as to such other Participating Fund in
accordance with this Article X.
ARTICLE XI
AMENDMENTS
11.1 Any other changes in the terms of this Agreement, except for the addition
or deletion of any Participating Fund or class of Shares of a
Participating Fund as specified in Exhibit A, shall be made by agreement
in writing between Insurance Company and each respective Participating
Fund.
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: First Security Benefit Life Insurance
and Annuity Company of New York
Attention Chief Administrative Officer
00 Xxxx Xxx Xxx Xxxx, 0xx Xxxxx
Xxxxx Xxxxxx, XX 00000
with copies to: Security Benefit Life Insurance Company
Attention General Counsel
One Security Benefit Place
Topeka, Kansas 66636-0001
Participating Funds: Name of Fund
c/o The Dreyfus Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
with copies to: Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
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 each 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, trustee,
officer or shareholder of the Fund individually. It is agreed that the
obligations of the Funds are several and not joint, that no Fund shall be
liable for any amount owing by another Fund and that the Funds have
executed one instrument for convenience only.
ARTICLE XIV
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.
ARTICLE XV
FOREIGN TAX CREDITS
15.1 Each Participating Fund agrees to consult in advance with Insurance
Company concerning any decision to elect or not to pass through the
benefit of any foreign tax credits to the Participating Fund's
shareholders pursuant to Section 853 of the Code.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be duly
executed and attested as of the date first above written.
FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK
By: XXX XXXX
----------------------------------
Its: Vice President
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Attest:
------------------------
DREYFUS INVESTMENT PORTFOLIOS
By: XXXXXXX XXXXXXXXX
----------------------------------
Its: Associate General Counsel
----------------------------------
Attest:
------------------------
DREYFUS VARIABLE INVESTMENT FUND
By: XXXXXXX XXXXXXXXX
----------------------------------
Its: Associate General Counsel
----------------------------------
Attest:
------------------------
DREYFUS SERVICE CORPORATION
By: XXXXXXX XXXXXXX
----------------------------------
Its: Chief Financial Officer
----------------------------------
Attest:
------------------------
EXHIBIT A
LIST OF PARTICIPATING FUNDS
FUND NAME SHARE CLASS
--------- -----------
Dreyfus Investment Portfolios - Technology Growth Portfolio Services Shares
Dreyfus Variable Investment Fund -
International Value Portfolio Service Shares
EXHIBIT B
SEPARATE ACCOUNTS
Variable Annuity Account B
