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Exhibit 8.7(a)
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the 27th day of April, 1999, between XXXXXX
INVESTORS LIFE INSURANCE COMPANY, a life insurance company organized under the
laws of the State of Illinois ("Insurance Company"), and THE DREYFUS SOCIALLY
RESPONSIBLE GROWTH FUND, INC. (the "Fund").
ARTICLE I
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Directors of the Fund, which has the
responsibility for management and control of the Fund.
1.3 "Business Day" shall mean any day for which the Fund calculates net asset
value per share as described in the Fund's Prospectus.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean a variable annuity or 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 the
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 "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 the Fund.
1.10 "Participating Fund" shall mean the Fund and any other funds in the Dreyfus
Family of Funds, 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 of which are available to serve as the
underlying investment medium for the aforesaid Contracts.
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1.11 "Prospectus" shall mean the current prospectus and statement of additional
information of the Fund, as most recently filed with the Commission.
1.12 "Separate Account" shall mean KILICO Variable Annuity Separate Account, a
separate account established by Insurance Company in accordance with the
laws of the State of Illinois.
1.13 "Software Program" shall mean the software program used by the Fund for
providing Fund and account balance information including net asset value
per share. Such Program may include the Lion System. In situations where
the Lion System or any other Software Program used by the Fund is not
available, such information may be provided by telephone. The Lion System
shall be provided to Insurance Company at no charge.
1.14 "Insurance Company's General Account(s)" shall mean the general account(s)
of Insurance Company and its affiliates that invest in the Fund.
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
Illinois Insurance Code for the purpose of offering to the public certain
individual and group variable annuity and 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; 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"); (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
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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 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 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 that it is currently qualified as a
regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), and that it will make every effort
to maintain such qualification (under Subchapter M or any successor or
similar provision) and that it will notify Insurance Company immediately
upon having a reasonable basis for believing that it has ceased to so
qualify or that it might not so qualify in the future.
2.6 Insurance Company represents and agrees that the Contracts are currently,
and at the time of issuance will be, treated as life insurance policies or
annuity contracts, whichever is appropriate, under applicable provisions of
the Code, and that it will make every effort to maintain such treatment and
that it will notify 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 its assets shall be
managed and invested in a manner that complies with the requirements of
Section 817(h) of the Code and the rules and regulations thereunder.
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
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the coverage required to be maintained by the Participating Fund. The
aforesaid Bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company.
2.11 Insurance Company agrees that Dreyfus shall be deemed a third party
beneficiary under this Agreement and may enforce any and all rights
conferred by virtue of this Agreement.
ARTICLE III
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide for the
investment of certain amounts in shares of 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 Participating Companies and their separate accounts. 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. If any Participating Fund provides materially
incorrect share net asset value information, Insurance Company shall be
entitled to an adjustment to the number of shares purchased or redeemed to
reflect the correct net asset value per share. Each party to this Agreement
shall have the right to rely on information or confirmations provided by
the other party (or by that party's designee), and shall not be liable in
the event that an error results from any incorrect information or
confirmations supplied by the other party (or by that party's designee). If
an error is made in reliance upon incorrect information or confirmations,
any amount required to make an account of a Contractholder whole shall be
borne by the party who provided the incorrect information or confirmation.
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
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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 each Participating Fund's shares 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
Participating Fund shares 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 Participating Fund shares, the conditions specified in Section
3.8, as applicable, are satisfied. A redemption or purchase request that
does not satisfy the conditions specified 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 its best efforts to notify each applicable
Participating Fund in advance of any purchase or redemption orders
exceeding $1 million.
3.8 If Insurance Company's order requests the purchase of a Participating
Fund's shares, 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
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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. If Insurance Company's order
requests the redemption of any Participating Fund's shares valued at or
greater than $1 million, the Participating Fund will wire such amount to
Insurance Company within seven days of the order.
3.9 Each Participating Fund has the obligation to ensure that its shares are
registered with applicable federal agencies at all times.
3.10 Each Participating Fund will confirm each purchase or redemption order made
by Insurance Company. Transfer of Participating Fund shares 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.
3.11 Each Participating Fund shall credit Insurance Company with the appropriate
number of shares.
3.12 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. All dividends and capital gains shall be automatically
reinvested in 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.
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 its shareholders) in quantities as Insurance
Company may reasonably request for distribution to each Contractholder and
Participant. Each Participating Fund will use its reasonable best efforts
to deliver or cause to be delivered such materials to Insurance Company at
least 10 days prior to Insurance Company's distribution thereof to
Contractholders and Participants. If such materials are not delivered to
Insurance Company within such time period and, as a result thereof,
Insurance Company incurs additional costs in connection with such
distribution, the relevant Participating Fund(s) will review such
additional costs with Insurance Company
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and may agree, in the sole discretion of Participating Fund(s), to bear
some or all of such additional costs.
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,
contemporaneously with the filing of such document with the Commission or
other regulatory authorities. In addition, at the request of Insurance
Company, each Participating Fund will provide to Insurance Company
electronic versions of the documents referenced in this Section 4.3 in one
of the following formats: ASCII (XXXXX), TXT (Text File),WPD or DOC (Word
or WordPerfect Document) or RFT (Rich Text).
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,
contemporaneously with the filing of such document with the Commission.
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,
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 this Article V and, 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 the 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. Distribution expenses of any Participating Fund materials or marketing
materials for prospective Insurance Company Contractholders and
Participants.
c. Distribution expenses of any Participating Fund materials or marketing
materials for Insurance Company Contractholders and Participants.
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Except as provided herein, all other expenses of each Participating Fund
shall not be borne by Insurance Company. Each Participating Fund agrees to
reimburse Insurance Company for any costs incurred by Insurance Company
related to the printing, mailing or tabulation of any proxy initiated by
the Participating Fund, its investment adviser or its distributor.
ARTICLE VI
EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of the order dated February 5, 1998
of the Securities and Exchange Commission under Section 6(c) of the Act
with respect to the Fund and, in particular, has reviewed the conditions to
the relief set forth in the related Notice. As set forth therein, if the
Fund is a Participating Fund, Insurance Company agrees, as applicable, to
report any potential or existing conflicts promptly to the Fund's Board
and, in particular, whenever contract voting instructions are disregarded,
and recognizes that it will be responsible for assisting the Board in
carrying out its responsibilities under such application. Insurance Company
agrees to carry out such responsibilities with a view to the interests of
existing Contractholders.
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.
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
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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 OF PARTICIPATING FUND SHARES
7.1 Each Participating Fund shall provide Insurance Company with copies, at no
cost to Insurance Company, of the Participating Fund's proxy material,
reports to shareholders and other communications to shareholders in such
quantity as Insurance Company shall reasonably require for distributing to
Contractholders or Participants.
Insurance Company shall:
(a) solicit voting instructions from Contractholders or Participants on a
timely basis and in accordance with applicable law;
(b) vote the Participating Fund shares in accordance with instructions
received from Contractholders or Participants;
(c) vote the Participating Fund shares for which no instructions have been
received in the same proportion as Participating Fund shares for which
instructions have been received; and
(d) reserve the right to disregard voting instructions from
Contractholders or Participants to the extent permitted by Rule 6e-2
or Rule 6c-3(T) under the Act or applicable state insurance laws.
Insurance Company agrees at all times to vote its General Account shares in
the same proportion as the Participating Fund shares for which instructions
have been received from Contractholders or Participants. Insurance Company
further agrees to be responsible for assuring that voting the Participating
Fund shares for the Separate Account is conducted in a manner consistent
with other Participating Companies.
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ARTICLE VIII
MARKETING AND REPRESENTATIONS
8.1 Each Participating Fund or its underwriter shall periodically furnish
Insurance Company with the following documents, in quantities as Insurance
Company may reasonably request:
a. Current Prospectus and any supplements thereto; and
b. Other marketing materials.
Expenses for the production of such documents shall be borne by Insurance
Company in accordance with Section 5.2 of this Agreement.
8.2 Insurance Company shall designate certain persons or entities 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 fifteen
Business Days prior to its use. No such material shall be used unless the
Participating Fund or its designee approves such material. Such approval
(if given) must be in writing and shall be presumed not given if not
received within ten Business Days after receipt of such material. Each
applicable Participating Fund or its designee, as the case may be, shall
use all reasonable efforts to respond within ten days of receipt.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of 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 fifteen Business Days prior to its use. No such
material shall be used unless Insurance Company approves such material.
Such approval (if given) must be in writing and shall be presumed
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not given if not received within ten Business Days after receipt of such
material. Insurance Company shall use all reasonable efforts to respond
within ten days of receipt.
8.6 Each Participating Fund shall not, in connection with the sale of
Participating Fund shares, give any information or make any representations
on behalf of Insurance Company or concerning Insurance Company, the
Separate Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus for the
Contracts, as may be amended or supplemented from time to time, or in
published reports for the Separate Account that are in the public domain or
approved by Insurance Company for distribution to Contractholders or
Participants, or in sales literature or other promotional material approved
by Insurance Company.
8.7 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for
use, in a newspaper, magazine or other periodical, radio, television,
telephone or tape recording, videotape display, signs or billboards, motion
pictures or other public media), sales literature (such as any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters,
form letters, seminar texts, or reprints or excerpts of any other
advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, registration statements,
prospectuses, statements of additional 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 associated with any of the foregoing entities or persons
within the meaning of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of Section 9.1), against any and all losses, claims, damages
or liabilities joint or several (including any investigative, legal and
other expenses reasonably incurred in connection with, and any amounts paid
in settlement of, any action, suit or proceeding or any claim asserted) for
which the Indemnified Parties may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect to thereof) (i) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in information furnished by Insurance Company for use in the registration
statement or Prospectus or sales literature or advertisements of the
respective Participating Fund or with respect to the Separate Account or
Contracts, or arise out of or are based upon the omission or the alleged
omission to state therein a
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material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) arise out of or as a result of
conduct, statements or representations (other than statements or
representations contained in the Prospectus and sales literature or
advertisements of the respective Participating Fund) of Insurance Company
or its agents, with respect to the sale and distribution of Contracts for
which the respective Participating Fund's shares are an underlying
investment; (iii) arise out of the wrongful conduct of Insurance Company or
persons under its control with respect to the sale or distribution of the
Contracts or the respective Participating Fund's shares; (iv) arise out of
Insurance Company's incorrect calculation and/or untimely reporting of net
purchase or redemption orders; or (v) arise out of any breach by Insurance
Company of a material term of this Agreement or as a result of any failure
by Insurance Company to provide the services and furnish the materials or
to make any payments provided for in this Agreement. Insurance Company will
reimburse any Indemnified Party in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that with respect to clauses (i) and (ii) above Insurance Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue
statement or omission or alleged omission made in such registration
statement, prospectus, sales literature, or advertisement in conformity
with written information furnished to Insurance Company by 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) (1) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement or Prospectus or sales literature or advertisements of the
respective Participating Fund; (2) arise out of or are based upon the
omission to state in the registration statement or Prospectus or sales
literature or advertisements of the respective Participating Fund any
material fact required to be stated therein or necessary to make the
statements therein not misleading; (3) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in the registration statement or Prospectus or sales literature or
advertisements with respect to the Separate Account or the Contracts and
such statements were based on information provided to Insurance Company by
the respective Participating Fund; or (4) arise out of or are based upon
the respective Participating Fund's failure to comply with the requirements
set forth in Subchapter M of the Code or Section 817(h) of the Code and the
rules and regulations thereunder. 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
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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 (1) incorrect calculation of the
daily net asset value, dividend rate or capital gain distribution rate; (2)
incorrect reporting of the daily net asset value, dividend rate or capital
gain distribution rate; and (3) 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 Promptly after receipt by an indemnified party under this Article of notice
of the commencement of any action, such indemnified party will, if a claim
in respect thereof is to be made against the indemnifying party under this
Article, notify the indemnifying party of the commencement thereof. The
omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability under this Article IX, except to the
extent that the omission results in a failure of actual notice to the
indemnifying party and such indemnifying party is damaged solely as a
result of the failure to give such notice. In case any such action is
brought against any indemnified party, and it notified the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate therein and, to the extent that it may wish, assume the
defense thereof, with counsel satisfactory to such indemnified party, and
to the extent that the indemnifying party has given notice to such effect
to the indemnified party and is performing its obligations under this
Article, the indemnifying party shall not be liable for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof, other than reasonable costs of investigation.
Notwithstanding the foregoing, in any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its
written consent.
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A successor by law of the parties to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article IX. The
provisions of this Article IX shall survive termination of this Agreement.
9.5 Insurance Company shall indemnify and hold each respective Participating
Fund, Dreyfus and sub-investment adviser of the Participating Fund harmless
against any tax liability incurred by the Participating Fund under Section
851 of the Code arising from purchases or redemptions by Insurance
Company's General Accounts or the account of its affiliates.
ARTICLE X
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall continue
in force until terminated in accordance with the provisions herein.
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 unless the Participating Fund makes available a sufficient
number of shares to meet the requirements of the Contracts within said
ten-day period;
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.
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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, at the option of Insurance Company, if the
Insurance Company shall determine, in its sole judgment reasonably
exercised in good faith, that the Participating Fund 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 Insurance Company,
Insurance Company shall notify the Participating Fund 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 on 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, in the event that Participating Fund's
shares are not registered, issued or sold in accordance with
applicable federal law, or such law precludes the use of such shares
as the underlying investment medium of Contracts issued or to be
issued by Insurance Company. Termination shall be effective
immediately as to that Participating Fund only upon such occurrence
without notice;
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.
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Termination pursuant to this Subsection (h) 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.
Any such termination pursuant to Section 10.2a, 10.2d, 10.2e, 10.2g or
10.2l 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 by Insurance Company
pursuant to Section 10.2 hereof, each Participating Fund and Dreyfus may,
at the option of Insurance Company, continue to make available additional
shares of that Participating Fund for as long as 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").
Notwithstanding any termination of this Agreement by a Participating Fund
pursuant to Section 10.2 hereof, the Participating Fund and Dreyfus may, at
the option of the Participating Fund, continue to make available additional
shares of the Participating Fund for as long as the Participating Fund
desires pursuant to the terms and conditions of this Agreement as provided
below for Existing Contracts. Specifically, without limitation, if
Insurance Company or a Participating Fund, as the case may be, so elects to
make additional Participating Fund shares available, the owners of the
Existing Contracts or Insurance Company, whichever shall have legal
authority to do so, shall be permitted to reallocate investments in that
Participating Fund, redeem investments in that Participating Fund and/or
invest in that Participating Fund upon the making of additional purchase
payments under the Existing Contracts. In the event of a termination of
this Agreement by Insurance Company pursuant to Section 10.2 hereof,
Insurance Company, as promptly as is practicable under the circumstances,
shall notify the Participating Fund and Dreyfus whether Insurance Company
desires to continue to make the Participating Fund's shares available after
such termination. In the event of a termination of this Agreement by a
Participating Fund pursuant to Section 10.2 hereof, such Participating Fund
and Dreyfus, as promptly as is practicable under the circumstances, shall
notify Insurance Company whether Dreyfus and that Participating Fund desire
to continue to make that Participating Fund's shares available after such
termination. If such Participating Fund shares continue to be made
available after any such termination, the provisions of this Agreement
shall
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remain in effect and thereafter either of that Participating Fund or
Insurance Company may terminate this Agreement as to that Participating
Fund, as so continued pursuant to this Section 10.3, upon prior written
notice to the other party, such notice to be for a period that is
reasonable under the circumstances but, if given by the Participating Fund,
need not be for more than six months.
10.3 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 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: Xxxxxx Investors Life Insurance Company
0 Xxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attn: General Counsel
Participating Funds: [Name of Fund]
c/o Premier Mutual Fund Services, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Vice President and Assistant Secretary
with copies to: [Name of Fund]
c/o The Dreyfus Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Xxxxxx X. Xxxxxx, Esq.
and
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00
Xxxxxxx & Xxxxxxx & Xxxxx XXX
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.
MISCELLANEOUS XIII
13.1 Subject to the requirements of legal process and regulatory authority, each
party hereto shall treat as confidential the names and addresses of the
owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted
by this Agreement, shall not disclose, disseminate or utilize such names
and addresses and other confidential information without the express
written consent of the affected party until such time as such information
may come into the public domain. Without limiting the foregoing, no party
hereto shall disclose any information that another party has designated as
proprietary.
13.2 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.
LAW XIV
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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be duly executed and attested as of the date first above written.
XXXXXX INVESTORS LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxx, Xx.
------------------------------------
Its: Vice President
-----------------------------------
Attest: /s/ Xxxxx X. Xxxx
---------------------
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH
FUND, INC.
By: /s/ Xxxxxxxxx Xxxxxx
------------------------------------
Its: Assistant Treasurer, Vice
-----------------------------------
President & Assistant Secretary
-----------------------------------
Attest:
---------------------
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EXHIBIT A
LIST OF PARTICIPATING FUNDS
The Dreyfus Socially Responsible Growth Fund, Inc.
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