AMENDED AND RESTATED
MASTER AGREEMENT
AMONG
X. XXXX PRICE INVESTMENT SERVICES, INC.,
X. XXXX PRICE ASSOCIATES, INC.,
AND
FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK
THIS AGREEMENT is made as of the 11th day of October, 1995, amended and
restated as of May 1, 1998, by and among X. XXXX PRICE INVESTMENT SERVICES, INC.
("INVESTMENT SERVICES"), X. XXXX PRICE ASSOCIATES, INC. ("PRICE ASSOCIATES"),
both Maryland corporations with principal offices at 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, and FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY
COMPANY OF NEW YORK ("SECURITY BENEFIT"), a New York insurance company with
principal offices at 00 Xxxx Xxx Xxx Xxxx, Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxx Xxxx
00000.
WITNESSETH:
WHEREAS, Security Benefit is a stock life insurance and
annuity company authorized to conduct an insurance business in the State of New
York;
WHEREAS, Security Benefit issues, among other things, variable insurance
products;
WHEREAS, Investment Services markets various investment products;
WHEREAS, Price Associates is the parent company of Investment Services;
WHEREAS, the parties are desirous of entering into a relationship whereby
Investment Services will market and distribute a variable annuity product to be
issued by Security Benefit;
WHEREAS, this Agreement is intended to serve as the framework for setting
forth certain rights, responsibilities and obligations of the parties;
WHEREAS, at or about the same time as entering into this Agreement, Security
Benefit will enter into a Distribution Agreement with Investment Services, a
Participation Agreement with Investment Services and the Funds, and an Insurance
Agency Agreement ("AGENCY AGREEMENT") with X. Xxxx Price Insurance Agency, Inc.
("AGENCY"); and
WHEREAS, this Agreement together with the Distribution Agreement, the
Participation Agreement, and the Agency Agreement are intended to serve as the
framework for setting forth the various rights, responsibilities and obligations
of the parties vis-a-vis one another with respect to the overall relationship;
NOW THEREFORE, it is agreed as follows:
ARTICLE 1
ADDITIONAL DEFINITIONS
1.1 AFFILIATE -- With respect to a party, any person controlling, controlled
by, or under common control with, such party, but shall not include a Fund or
Fund Series.
1.2 CONTRACTS -- The variable annuity products developed by the parties
in accordance with Article 2, which shall consist of the variable annuity
products identified on SCHEDULE 1 to this Agreement as of the Effective Date and
any class of variable insurance products that may be added to SCHEDULE 1 from
time to time in accordance with Article 2 of this Agreement. For this purpose
and under this Agreement generally, the phrase a "class of Contracts" shall mean
those Contracts: (i) issued by Security Benefit on the same contract form (but
allowing for state variations) with the same benefits, features and charges
distinguishing such class and reflected on the schedule pages included therein;
(ii) providing for investment in the same Subaccounts which in turn invest in
the same Funds; and (iii) covered by the same Registration Statement.
1.3 DISTRIBUTOR -- The same meaning as provided in the Distribution
Agreement.
1.4 EFFECTIVE DATE -- The date as of which this Agreement is executed.
1.5 FUND AND FUND SERIES -- An investment company or series thereof serving
as a funding medium for the Contracts or a class thereof, which shall include
those Funds and Fund Series named on SCHEDULE 2 to this Agreement as of the
Effective Date, and any other investment company or series thereof that may be
added to SCHEDULE 2 from time to time in accordance with Article 2 of this
Agreement.
1.6 GENERAL ACCOUNT -- The assets of Security Benefit other than those
allocated to a separate account.
1.7 ICA-40 -- The federal Investment Company Act of 1940, as amended.
1.8 INSURANCE COMMISSION -- The appropriate agency charged with
regulating insurance activities in New York State.
1.9 PROSPECTUS -- Unless the context otherwise requires, the prospectus and
statement of additional information, if any, included in a Registration
Statement or the definitive form thereof for any class of Contracts, including
any supplement thereto, as filed with the SEC under SA-33.
1.10 REGISTRATION STATEMENT -- Unless the context otherwise requires, a
registration statement or amendment thereto for a class of Contracts filed with
the SEC under SA-33.
1.11 RELATED AGREEMENT(S) -- The Distribution Agreement, the Participation
Agreement, and the Agency Agreement including the schedules to each, as such
Agreements and schedules may be amended from time to time.
1.12 SA-33 -- The Securities Act of 1933, as amended.
1.13 SEC -- The Securities and Exchange Commission.
1.14 SECURITIES COMMISSION -- The appropriate agency charged with regulating
securities activities in New York State, but not the SEC.
1.15 SEPARATE ACCOUNT -- Each separate account of Security Benefit
supporting a class of Contracts, which shall consist of the separate accounts
named or otherwise identified on SCHEDULE 3 to this Agreement as of the
Effective Date, and any other separate account of Security Benefit that may be
added to SCHEDULE 3 from time to time in accordance with Article 2 of this
Agreement.
1.16 SUBACCOUNT -- A sub-division of the Separate Account available under a
class of Contracts, which shall include those subaccounts named or otherwise
identified on SCHEDULE 3 to this Agreement as of the Effective Date, and any
other subaccount that may be added to SCHEDULE 3 from time to time in accordance
with Article 2 of this Agreement.
ARTICLE 2
PRODUCT DESIGN AND PRODUCT DEVELOPMENT
2.1 SCOPE. The parties intend that this Agreement shall govern certain
aspects of their relationship with respect to the development, administration
and offering of one or more classes of Contracts, to be marketed and distributed
by Investment Services or other Distributors and to be issued, underwritten and
administered by Security Benefit. Nothing contained in this Agreement creates
the relationship of employer-employee, joint venture, partnership or association
between Security Benefit on the one hand and Investment Services and Price
Associates on the other hand.
2.2 EXCLUSIVITY.
(a) Until May 1, 1999, neither Security Benefit, nor an Affiliate
thereof, shall commence, proceed with or finalize discussions or
negotiations with any mutual fund or brokerage complex, or any Affiliate
thereof, set forth on SCHEDULE 4 (the "SCHEDULE 4 COMPANIES") regarding the
development, registration or distribution of any variable annuity or
variable life insurance product without the prior written consent of
Investment Services. Until May 1, 1999, neither Investment Services nor any
Affiliate thereof shall commence, proceed with or finalize any discussions
or negotiations with any insurance company which is not Security Benefit or
an Affiliate thereof regarding the development, registration or distribution
in New York of any variable annuity product without the prior written
consent of Security Benefit. Until October 1, 2004, neither Investment
Services nor any Affiliate thereof shall commence, proceed with, or finalize
any discussion or negotiations with any insurance company which is not
Security Benefit or an Affiliate thereof regarding the development,
registration or distribution of any immediate variable annuity product
without the prior written consent of Security Benefit. Until October 1,
2003, neither Security Benefit, nor any Affiliate thereof, shall commence,
proceed with, or finalize negotiations or discussions with any of the
Schedule 4 Companies regarding the development, registration or distribution
of any immediate variable annuity product without the prior written consent
of Investment Services. In the event that, prior to May 1, 1999, Investment
Services determines to enter into an agreement for the development,
registration or distribution in New York of any variable life insurance
product for distribution by Investment Services, Investment Services will
consider Security Benefit, or an Affiliate thereof, for such product;
provided that Investment Services shall not be prohibited from entering into
such an agreement with any other party.
(b) Nothing in this Agreement shall prohibit:
(i) Funds managed by Price Associates or Xxxx Xxxxx-Xxxxxxx
International, Inc. ("XXXX XXXXX-XXXXXXX") or their
respective Affiliates from entering into agreements with
insurance companies other than Security Benefit to act as
investment vehicles for such companies' separate accounts; or
(ii) Price Associates, Xxxx Xxxxx-Xxxxxxx or their respective
Affiliates from providing investment advisory services to
insurance companies other than Security Benefit, as a
sub-adviser or otherwise, with respect to such companies'
variable insurance products; or
(iii) Security Benefit, or an Affiliate thereof, from entering into
a participation agreement with a fund established or operated
by a Schedule 4 Company, to act as a funding vehicle for a
variable insurance product established or operated by
Security Benefit, or an Affiliate thereof, provided that such
variable insurance product is marketed and/or distributed by
Security Benefit or an Affiliate thereof; or
(iv) Security Benefit, or an Affiliate thereof, from entering into
an agreement with a Schedule 4 Company for the provision of
investment advisory services to an underlying investment
vehicle of a variable insurance product established or
operated by Security Benefit or an Affiliate thereof,
provided that such variable insurance product is marketed
and/or distributed by Security Benefit, or an Affiliate
thereof.
2.3 PRODUCT DESIGN. The first class of Contracts shall contain the features
indicated in SCHEDULE 5 and Sections 2.5 and 2.6, provided that such features
are not inconsistent with the features described in the initial Registration
Statement filed with the SEC and declared effective on or prior to the Effective
Date and as provided in the Contract filed as an exhibit thereto. Security
Benefit and Investment Services shall consult in good faith with each other in
connection with the development of any subsequent class of Contract with respect
to the parameters set forth in Sections 2.5 and 2.6, and the desired features
and benefits for each class of Contracts. The features and benefits may include,
among others:
(a) minimum and maximum initial and subsequent premium payments and
premium payment plans;
(b) premium payment allocations, including limits thereon;
(c) transfers among Subaccounts, including transfers made in connection
with various asset rebalancing and dollar cost averaging programs,
and limits thereon and charges therefor;
(d) full and partial withdrawals, including limits and charges thereon;
(e) minimum guaranteed death benefits;
(f) annuity options and modes, including any such options or modes that
Security Benefit has available, and partial annuitization;
(g) overall limits on charges and expenses, and any limits on
allocations thereof to subaccounts;
(h) funding media underlying the Subaccounts; and
(i) availability of a General Account option and terms and conditions
thereof.
(j) a liquidity feature for the withdrawal of contract value; and
(k) a minimum guarantee to the level of annuity payments.
Security Benefit shall be responsible for creating one or more Contract
forms, as appropriate for the states or jurisdictions agreed upon for the
marketing of the Contracts.
2.4 GEOGRAPHIC SCOPE OF MARKETING. Unless otherwise agreed in writing,
Security Benefit shall use its best efforts to make the Contracts available for
issuance in the State of New York. Security Benefit, recognizing the business
needs of Investment Services, will use its best efforts, as appropriate, to make
the Contracts available as promptly as practicable in New York. It is understood
that Security Benefit will make all reasonable efforts to have the first class
of Contracts approved, filed or otherwise cleared in New York so that the
Contracts can be offered no later than the third quarter of 1995.
2.5 SPECIFIC PARAMETERS. The specific parameters to be reflected in the
first class of Contracts and to be considered in the development of any
subsequent class of Contracts include the following:
(A) PREMIUM TAX. Assessments of a premium tax against a Contract only
upon annuitization, surrender or death, and not against premium payments
when accepted by Security Benefit; except that Security Benefit may reserve
the right to deduct premium taxes at any time;
(B) RESERVATION OF RIGHTS. That any right to restrict, terminate, or
otherwise limit transfer, premium payment allocation, or partial withdrawal
privileges, or to impose charges therefor, to deduct premium tax
assessments, or to impose or increase other expenses or charges related to
such Contracts and reserved by Security Benefit may not be exercised without
the written consent of Investment Services and without first having made
appropriate modifications to applicable Contract forms, Registration
Statements and Prospectuses;
(C) ANNUITY OPTIONS. The annuity options available shall be similar in
kind and number to those offered by competitors and include any annuity
options that Security Benefit or its Affiliates have available, and any
change or amendment to the assumed interest rate used in connection with
such annuity options from that used in the first class of Contracts may be
made only with the written consent of Investment Services; and
(D) GENERAL ACCOUNT. The General Account option shall be designed and
offered in a manner that will qualify the interests therein for the
exclusion provided by Section 3(a)(8) of SA-33. The General Account option
shall offer rates of interest determined, under normal circumstances, in
accordance with Security Benefit's normal interest rate crediting procedures
set forth in SCHEDULE 6 to this Agreement. Security Benefit shall consult
with Investment Services in advance with respect to the General Account's
current interest rates to be declared, and the views of Investment Services
shall be reasonably considered in the establishment of such rates; provided
that the determination of the current rate to be credited shall be made by
Security Benefit. Security Benefit and Investment Services have determined
to use interest rate crediting procedures that maintain sufficient liquidity
in the General Account to allow exchanges from such Account to any
Subaccount pursuant to the dollar cost averaging and asset rebalancing
options. Security Benefit and Investment Services agree that in the event
that short-term rates fall to a level such that it is difficult to maintain
the contractually guaranteed minimum interest rate of three (3) percent that
must be credited on the General Account, the parties hereto shall in good
faith enter into discussions with a view to changing the interest rate
crediting procedures, or taking other steps to allow Security Benefit to
support the contractually guaranteed interest rate, which steps may include
requiring the dollar cost averaging from the General Account be implemented
over a minimum period of time in excess of the one-year period currently
required.
2.6 SECTION 403(B) PLANS. Security Benefit has informed Investment Services
of its profitability concerns if the Contracts are used to fund plans under
Section 403(b) of the Internal Revenue Code of 1986, as amended ("403(b)
Plans"). As a result, Security Benefit reserves the right to cease offering the
first class of Contracts in connection with 403(b) Plans and to create a
separate contract for 403(b) Plans with different specifications than those of
the Contracts. Security Benefit shall consult with Investment Services prior to
creating such separate contracts and take such action only after obtaining
Investment Services' written consent, which shall not be unreasonably withheld.
Once such separate contracts are available, Investment Services will no longer
offer the first class of Contracts to fund 403(b) Plans; provided, however, that
403(b) Plans to which the Contracts have been offered prior to the creation of
such separate contracts may continue to offer the Contracts. Security Benefit
shall assist Investment Services in understanding its approach to marketing,
administering and processing 403(b) Plans.
2.7 CHANGES IN OR RELATING TO A CONTRACT FORM. After the initial
Registration Statement for a class of Contracts has been declared effective by
the SEC, the parties from time to time may mutually agree upon a material change
in the terms and provisions of a Contract form(s) for such class or an amendment
or rider to such Contract form(s). Except to the extent necessary to comply with
applicable laws, rules, regulations or orders, or to accommodate the termination
of a Fund or Fund Series pursuant to a decision of that Fund's management,
Security Benefit shall not change unilaterally in any material respect the terms
and provisions of a Contract form for a class of Contracts, including, but not
limited to, a change in the variable information included in schedule pages
distinguishing such class of Contracts, or a change in the Separate Account or
Subaccounts thereof designated to support such Contract or any Fund or other
funding media underlying any Subaccount, or make any amendment or rider to such
Contract form whatsoever, without first obtaining Investment Services' written
consent thereto, which shall not be unreasonably withheld. Any such change
agreed upon or consented to in accordance with this Section shall be reflected
on the Schedules to this Agreement, to the extent appropriate, in accordance
with the provisions of Section 2.9.
2.8 CHANGES RELATING TO OUTSTANDING CONTRACTS OR RELATED SEPARATE ACCOUNTS,
SUBACCOUNTS AND FUNDS. After a Contract has been issued and is outstanding,
Security Benefit shall not make any material change unilaterally to such
Contract or the class of Contracts including such Contract or to the Separate
Account or Subaccounts supporting such Contract or class, including, but not
limited to, reinsuring such Contract or such class with another insurer,
transferring a Separate Account or Subaccount to another insurer, substituting a
Fund or Fund Series or terminating investment therein, or adding new funding
media, without first giving Investment Services the opportunity to review such
change and obtaining Investment Services' written consent thereto, which shall
not be unreasonably withheld, except to the extent necessary to comply with
applicable laws, rules, regulations or orders, or to accommodate the termination
of a Fund or Fund Series pursuant to a decision of that Fund's management.
Notwithstanding the above, Security Benefit will not substitute a Fund or Fund
Series or terminate investment therein without the consent of Investment
Services and Price Associates unless it is necessary for the best interests of
Contract owners in all states in which the Contracts are held, the continuation
of such option would cause undue risk to Security Benefit, and Investment
Services and Price Associates shall have received an opinion from counsel,
acceptable to them, that the substitution or termination is in the best
interests of Contract owners in all states in which the Contracts are held and
the continuation of such option would cause undue risk to Security Benefit. Any
such change implemented in accordance with this Section shall be reflected on
the Schedules to this Agreement, to the extent appropriate, in accordance with
the provisions of Section 2.9.
2.9 SCHEDULES. The Schedules as in effect on the Effective Date provide
particular information concerning the class of Contracts agreed upon as of such
Date. . When the parties agree upon the features and benefits of another class
of Contracts, the parties shall execute an additional Schedule 5 to this
Agreement which shall be the proposed specifications reflecting the minimum
requirements for such Contracts. When the parties agree upon any change to any
class of Contracts pursuant to Section 2.7 or 2.8, the Schedules may be amended
and updated and signed by parties to reflect such changes, to the extent
appropriate. The provisions of this Agreement shall be equally applicable to
each such added class of Contracts, Separate Account(s) and Subaccounts
supporting such Contracts and Funds and Fund Series, unless the context
otherwise requires. With respect to SCHEDULE 7, Security Benefit shall update
such Schedule promptly or otherwise notify Investment Services in writing of any
changes to such Schedule.
ARTICLE 3
REGISTRATION, DISTRIBUTION AND ADMINISTRATION
OF THE CONTRACTS
3.1 REGISTRATION, FILINGS AND APPROVALS RELATING TO THE CONTRACTS.
(a) Security Benefit shall be solely responsible for developing and
preparing all necessary Contract forms and related applications,
Registration Statements, Prospectuses and other documents in the usual form,
and for establishing the appropriate Separate Accounts and Subaccounts to
support the Contracts and invest in the designated Funds. Security Benefit
may establish more than one Separate Account for this purpose; however, no
variable insurance products other than the Contracts shall be issued through
a Separate Account, nor shall the Funds be made available to any other
variable insurance products issued by Security Benefit, if any, without
Investment Services' prior written consent. Each Separate Account shall be
established in accordance with applicable state law.
(b) Security Benefit shall be responsible for filing all such Contract
forms, applications, Registration Statements, Prospectuses, exemptive
applications relating to the Contract features, and other documents with the
SEC and applicable Securities Commissions.
(c) Security Benefit shall be responsible for filing all such Contract
forms, applications and other documents relating to the Contracts and/or the
Separate Accounts, as required or customary, with Insurance Commissions.
Security Benefit shall be responsible for one year from the effective date
of this Agreement for informing Investment Services of any states or
jurisdictions requiring the registration of a Fund or Fund Series with a
regulatory body of such state or jurisdiction.
(d) Security Benefit shall be responsible for filing amendments to such
Contract forms, applications, Registration Statements, Prospectuses and
other documents to the extent appropriate or required by applicable law.
3.2 REGISTRATIONS, FILINGS AND APPROVALS RELATING TO THE FUNDS
(a) Investment Services shall be responsible for establishing any Fund
or Fund Series selected as a funding medium for a class of Contracts, to the
extent such Fund or Fund Series is not otherwise established or maintained
by another person.
(b) With respect to each Fund or Fund Series for which Investment
Services is responsible pursuant to paragraph (a) hereof, Investment
Services shall be responsible for filing all initial registration
statements, applications, prospectuses and other documents for the Fund and
its shares with the SEC and Securities Commission, it being understood that,
once a Fund has been established and has begun to offer its shares to
investors, such Fund shall thereafter be responsible for its own operations
and compliance with applicable requirements.
3.3 DISTRIBUTION. The Contracts shall be distributed solely through
Investment Services, any Affiliate thereof, or a Distributor, pursuant to the
Distribution Agreement. Investment Services and its Affiliates shall develop,
implement and manage the marketing programs for the Contracts, including, but
not limited to, the operation of the Investment Services telesales center(s).
3.4 AGENT LICENSING.
(a) Licensing of insurance agents to solicit applications for the
Contracts shall be governed by the Agency Agreement.
(b) Security Benefit shall be responsible for compliance with applicable
insurance laws governing agent appointment of all persons including persons
associated with Investment Services or an Affiliate thereof, or a
Distributor, engaged in the sale or solicitation of the Contracts. Security
Benefit shall provide such persons with an Agent and Administration Manual
("MANUAL"), substantially in the form attached hereto as EXHIBIT A. Security
Benefit shall inform Investment Services of any applicable insurance rules
and regulations of which it becomes aware and which it has reason to believe
Investment Services is not aware.
3.5 CONTRACT AND SEPARATE ACCOUNT ADMINISTRATION
(a) Security Benefit shall be responsible for the insurance
underwriting, issuance, service, and administration of the Contracts and for
the administration of the Separate Accounts, including, without limitation,
maintenance of a toll-free telephone service center, such function to be
performed in all respects at a level commensurate with those standards
prevailing in the variable insurance industry. Security Benefit has
developed procedures for performing such underwriting, issuing, servicing
and administrative functions, which procedures are set forth in the Manual.
Security Benefit shall not materially amend or supplement the Manual or
adopt or implement any other administrative rules, procedures or systems
without first giving Investment Services an opportunity to review any such
material and obtaining Investment Services' written consent.
(b) Nothing in this Section 3.5 shall relieve Security Benefit of its
duty, or otherwise diminish such duty, to perform its obligations under this
Agreement, nor shall this Section relieve Security Benefit of its
liabilities, or otherwise diminish such liabilities, for its failure to
perform its obligations under this Agreement.
ARTICLE 4
COMPENSATION AND EXPENSES
4.1 COMPENSATION FOR SECURITY BENEFIT. Unless the parties otherwise agree in
writing, the sole source of compensation for Security Benefit for carrying out
its responsibilities and obligations assumed under this Agreement or the Related
Agreements shall be the revenues derived from the charges deducted in connection
with the Contracts.
4.2 COMPENSATION FOR INVESTMENT SERVICES Unless the parties otherwise agree
in writing, Investment Services shall receive no compensation for carrying out
its responsibilities and obligations assumed under this Agreement.
4.3 COMPENSATION FOR INVESTMENT ADVISORY SERVICES. Price Associates and/or
Xxxx Xxxxx-Xxxxxxx have executed investment management agreements with the Funds
specified on SCHEDULE 2 as of the Effective Date. Security Benefit, other than
as a shareholder, bears no responsibility in any respect for payment of
investment advisory services to the Funds.
4.4 COMPENSATION FOR AGENCY, INC. Agency, an affiliate of Investment
Services, shall enter into an Agency Agreement with Security Benefit and shall
receive the compensation provided for therein, if any, subject to any amendment
to such agreement mutually agreed to by the parties thereto.
4.5 COMPENSATION FOR THE DISTRIBUTORS. Investment Services may enter into
sales agreements with Distributors under the terms specified in the Distribution
Agreement. Investment Services and the Agency shall be solely responsible for
the payment of compensation to the Distributors, if any, for solicitation
activities relating to the Contracts.
4.6 SEEDING OF FUNDS AND FUND SERIES. Investment Services or an Affiliate
thereof shall be responsible for providing seed capital for any Fund or Fund
Series for whose establishment it is responsible under Section 3.2(a).
4.7 OTHER INVESTMENT VEHICLES OF SEPARATE ACCOUNTS OF SECURITY BENEFIT. In
the event that Security Benefit or an Affiliate thereof is seeking an
unaffiliated investment manager for any mutual funds serving as investment
vehicles for other separate accounts established and operated by Security
Benefit or such Affiliate, Security Benefit will consider the appointment of
Price Associates or Xxxx Xxxxx-Xxxxxxx, or an Affiliate of the foregoing, as a
sub-adviser for such funds, or, in the alternative, to enter into a
participation agreement with a fund managed by any of the foregoing; provided
that Security Benefit believes, in its sole discretion, that Price Associates or
Xxxx Xxxxx-Xxxxxxx meets the criteria and standards, including marketing
standards, that the Company employs for selecting investment managers for such
mutual funds, and provided further that Security Benefit shall not be prohibited
from providing such recommendation of, or entering into an agreement with, any
other party.
4.8 EXPENSES. Except as otherwise provided herein and in the Related
Agreements, or in SCHEDULE 7 to this Agreement, each party shall bear the
expenses it incurs in carrying out its responsibilities and obligations assumed
under this Agreement or the Related Agreements.
ARTICLE 5
ADDITIONAL RESPONSIBILITIES AND OBLIGATIONS
5.1 RESOURCES. Security Benefit and Investment Services shall each allocate
sufficient technical support, human resources and all other resources reasonably
necessary to carry out their respective responsibilities and obligations assumed
under this Agreement and the related Agreements in a timely manner.
5.2 DUE DILIGENCE. Each party shall provide the other parties access to such
of its records, officers and employees at reasonable times as is necessary to
enable the parties to fulfill their obligations under this Agreement and any
Related Agreements and applicable law.
5.3 EXCHANGES AND REPLACEMENTS.
(A) SECURITY BENEFIT. During the term of this Agreement and subject to
Sections 9.1 and 9.3 hereof, neither Security Benefit nor any of its
Affiliates shall knowingly induce or cause, or attempt to induce or cause,
directly or indirectly, any Contract owner to lapse, terminate, surrender,
exchange or cancel his or her Contract, or to cease or discontinue making
premium payments thereunder except where such act or attempt to cause a
lapse, termination, surrender, exchange or cancellation is in response to an
enactment of federal or state legislation, order or decision of any court or
regulatory body, administrative agency, or any other governmental
instrumentality, a change in circumstances which makes the Contracts or
insurance contracts of that type (E.G., annuity contracts or life insurance
policies) an unsuitable investment for existing Contract owners, or is in
response to any event or occurrence which results or is likely to result in
material adverse publicity pertaining to any party to this Agreement.
(B) INVESTMENT SERVICES. Unless the parties otherwise agree in writing,
during the term of this Agreement and subject to Sections 9.1 and 9.2
hereof, neither Investment Services nor any of its Affiliates shall execute
a program to induce or cause, or attempt to induce or cause, directly or
indirectly, all or substantially all Contract owners of a class of Contracts
to lapse, terminate, surrender, exchange or cancel their Contracts, or to
cease or discontinue making premium payments thereunder except where such
lapse, termination, surrender, exchange or cancellation is in response to an
enactment of federal or state legislation, order or decision of any court or
regulatory body, administrative agency, or any other governmental
instrumentality, a change in circumstances which makes the contracts or
insurance contracts of that type (E.G., annuity contracts of life insurance
policies) an unsuitable investment for existing Contract owners, is in
response to any event or occurrence which results or is likely to result in
material adverse publicity pertaining to any party to this Agreement, or is
in response to normal marketing activities or practices of Investment
Services or its Affiliates.
(C) COMPLIANCE. Insurer shall be responsible for obtaining from owners
of the Contracts any replacement forms required by the insurance laws of
various states. Insurer will notify Investment services promptly of any
material changes in the required replacement forms. Insurer will maintain in
accordance with the recordkeeping requirements of the New York Insurance
Department any replacement forms received in connection with the Contracts.
5.4 SERVICE AND QUALITY STANDARDS. Security Benefit and Investment Services
have agreed to implement certain additional service and quality standards as set
forth in EXHIBIT B, which may be amended from time to time.
ARTICLE 6
PROPRIETARY MATTERS
6.1 TRADEMARKS
(A) X. XXXX PRICE LICENSED MARKS. Investment Services is a wholly owned
subsidiary of Price Associates, which acts as the investment adviser to a
number of registered investment companies (such investment companies,
Investment Services, Xxxx Xxxxx-Xxxxxxx and Price Associates being referred
to herein as the "X. Xxxx Price Family"). Investment Services acts as
principal underwriter for each registered investment company in the X. Xxxx
Price Family, including X. Xxxx Price Equity Series, Inc., X. Xxxx Price
International Series, Inc. and X. Xxxx Price Fixed Income Series, Inc., the
underlying investment media for the Contracts. Entities in the X. Xxxx Price
Family own all right, title and interest in and to the names, trademarks and
service marks "X. Xxxx Price," "Invest with Confidence," "Tele Access," "X.
Xxxx Price Variable Annuity Analyzer," "Variable Annuity Analyzer," and the
"Bighorn Sheep" logo in the style shown in EXHIBIT C attached hereto, and
any other names, trademarks, service marks or logos later specified by
Investment Services or Price Associates (the "X. XXXX PRICE LICENSED MARKS"
or the "LICENSOR'S LICENSED MARKS"). Entities within the X. Xxxx Price
Family use the X. Xxxx Price licensed marks pursuant to various agreements
with one another. Investment Services and Price Associates hereby grant to
Security Benefit a non-exclusive license to use the X. Xxxx Price licensed
marks in connection with its performance of the services contemplated under
this Agreement and the Related Agreements, subject to the terms and
conditions set forth in paragraph (c) hereof.
(B) SECURITY BENEFIT LICENSED MARKS. Security Benefit or its Affiliates
are the owners of all right, title and interest in and to the name,
trademark and service xxxx "Security Benefit" used in connection with the
sale and promotion of financial and insurance products and any other names,
trademarks, service marks or logos later specified by Security Benefit (the
"SECURITY BENEFIT LICENSED MARKS" or the "LICENSOR'S LICENSED MARKS").
Security Benefit hereby grants to Investment Services, Price Associates and
their Affiliates a non-exclusive license to use the Security Benefit
licensed marks in connection with their performance of the services
contemplated by this Agreement and the Related Agreements, subject to the
terms and conditions set forth in paragraph (c) hereof.
(C) TERMS AND CONDITIONS
(I) TERM. The grant of license by Investment Services and Security
Benefit (each, a "LICENSOR") to the other and Affiliates thereof (the
"LICENSEES") shall terminate automatically when the Contracts shall
cease to be outstanding or invested in a Fund or Fund Series or sooner
upon termination by the licensor, unless otherwise agreed in writing by
the parties. Upon automatic termination, every licensee shall cease to
use a licensor's licensed marks. Upon Investment Services' termination
of the grant of license, Security Benefit shall immediately cease to
issue new annuity contracts or life insurance contracts or service
existing Contracts under any of the Investment Services licensed marks,
and shall likewise cease any activity which suggests that it has any
right under any of the Investment Services licensed marks or that it has
any association with Investment Services or an Affiliate thereof in
connection with any such contracts. Similarly, upon Security Benefit's
termination of the grant of license, Investment Services shall
immediately cease to distribute new annuity contracts or life insurance
contracts or promotional, sales or advertising material relating to any
such contract under the Security Benefit licensed marks and shall
likewise cease any activity which suggests that it has any right under
the Security Benefit licensed marks or that it has any association with
Security Benefit or an Affiliate thereof in connection with any such
contracts.
(II) PRE-RELEASE APPROVAL OF TRADEMARK-BEARING MATERIALS. In
addition to any pre-release approvals that may be required under a
Related Agreement or a participation agreement, a licensee shall obtain
the prior written approval of the licensor for the public release by
such licensee of any materials bearing the licensor's licensed marks.
Such material shall include, but not be limited to, samples of each
Contract form and application, form correspondence with Contract owners,
Contract owner reports and any other materials that bear any of the
licensor's licensed marks.
(III) RECALL. During the term of this grant of license, a licensor
may request that a licensee submit samples of any materials bearing any
of the licensor's licensed marks which were previously approved by the
licensor but, due to changed circumstances, the licensor may wish to
reconsider, or which were not previously approved in the manner set
forth above. If, on reconsideration or on initial review, respectively,
any such samples fail to meet with the written approval of the licensor,
then the licensee shall immediately cease distributing such disapproved
materials. The licensee shall obtain the prior written approval of the
licensor for the use of any new materials developed to replace the
disapproved materials, in the manner set forth above.
(IV) ACKNOWLEDGEMENT OF OWNERSHIP. Each licensee hereunder: (1)
acknowledges and stipulates that the licensor's licensed marks are valid
and enforceable trademarks and/or service marks; and that such licensee
does not own the licensor's licensed marks and claims no rights therein
other than as a licensee under this Agreement; (2) agrees never to
contend otherwise in legal proceedings or in other circumstances; and
(3) acknowledges and agrees that the use of the licensor's licensed
marks pursuant to this grant of license shall inure to the benefit of
the licensor.
6.2 OWNERSHIP OF PROPRIETARY INFORMATION; CONFIDENTIALITY.
(A) INFORMATION AND PROSPECTS. The names, addresses and other
information relating to prospects or leads for the Contracts acquired by
Investment Services or its Affiliates or its agents or representatives in
connection with marketing activities shall be the exclusive property of, and
shall be exclusively owned by, Investment Services or its Affiliates, as the
case may be. The records created and maintained by Security Benefit, or by
any subcontractor on behalf of such Company, that pertain to Contract owners
and the servicing and administration of the Contracts shall be the exclusive
property of, and shall be exclusively owned by, Security Benefit. However,
to the extent that any information may come to the attention of Security
Benefit or any Affiliate thereof, or be entered into the records created or
maintained by or on behalf of such Company or an Affiliate thereof, as a
result of its relationship with Investment Services or an Affiliate thereof
and not from an independent source, such information shall be kept
confidential and shall not be used by Security Benefit or its Affiliates, or
their respective agents or employees for any purpose, including but not
limited to any marketing purpose, except in connection with the performance
of its duties and responsibilities hereunder or under a Related Agreement or
under the Contracts. In no event shall the names and addresses of such
customers and prospective customers be furnished by Security Benefit or its
Affiliate, or any agent or subcontractor thereof, to any other company or
person (except as required by law or regulation and then only upon prior
written notice to Investment Services).
(B) CONFIDENTIALITY. Each party to this Agreement shall keep
confidential the terms and provisions of this Agreement (except as otherwise
required by law or regulation), the parties' respective methods of doing
business, the names, addresses and other personal information relating to
customers or prospective customers for the Contracts, the names, addresses
and other personal information relating to Contract owners, and any other
information proprietary to any party to this Agreement, and shall not
reproduce, disseminate or otherwise publish the same to any person not a
party to this Agreement, without the prior written approval of the other
parties to this Agreement (except as required by law or regulation and then
only upon prior written notice to the other party).
(C) RETURN OF INFORMATION. Upon a party's written request to another
party, such other party shall return to the requesting party any information
or materials of a proprietary nature obtained by or on behalf of such other
party in the course of the performance of this Agreement or any Related
Agreement.
(D) OWNERSHIP OF CONTRACT, FORMS AND OTHER MATERIALS. Any Contract
forms, riders or materials developed or used by Security Benefit in
connection with the relationship between Security Benefit, Investment
Services, and Price Associates under this Agreement and the Related
Agreements shall remain the exclusive property of Security Benefit.
(E) GENERAL. The intent of this Section 6.2 is that no party or any
Affiliate thereof shall utilize, or permit to be utilized, its knowledge of
any other party or of any Affiliate thereof which is derived as a result of
the relationship created through the funding and sale of the Contracts or
the solicitation of sales of any product or service, except to the extent
necessary by the terms of this Agreement or to further the purposes of this
Agreement, or except as expressly permitted with the written consent of the
other parties. This Section 6.2 shall remain operative and in full force and
effect regardless of the termination of this Agreement, and shall survive
any such termination.
6.3 PUBLIC ANNOUNCEMENTS. To the extent reasonably feasible, the parties
shall confer with one another prior to the issuance of any reports, statements
or releases pertaining to this Agreement, the Contracts and the transactions
contemplated hereby, except that a party will in any event have the right to
issue any such reports, statements or releases if upon advice of its counsel
such issuance is required in order to comply with the requirements of any
applicable federal, state or local laws and regulations.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 ORGANIZATION AND GOOD STANDING. Each party hereto represents that it is
a corporation duly organized, validly existing and in good standing under the
laws of that jurisdiction set forth on page one of this Agreement; has all
requisite corporate power to carry on its businesses as it is now being
conducted and is qualified to do business in each jurisdiction in which it is
required to be so qualified; and is in good standing in each jurisdiction in
which such qualification is necessary under applicable law.
7.2 AUTHORIZATION. Each party hereto represents that the execution and
delivery of this Agreement and the consummation of the transactions contemplated
herein have been duly authorized by all necessary corporate action by such
party, and when so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with its terms.
7.3 NO CONFLICTS. Each party hereto represents that the consummation of the
transactions contemplated herein, and the fulfillment of the terms of this
Agreement, shall not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or bylaws of such party, or any indenture,
agreement, mortgage, deed of trust, or other instrument to which such party is a
party or by which it is bound, or violate any law, or, to the best of such
party's knowledge, any order, rule or regulation applicable to such party of any
court or of any federal or state regulatory body, administrative agency or any
other governmental instrumentality having jurisdiction over such party or any of
its properties.
7.4 ADMINISTRATIVE SYSTEM. Security Benefit represents and warrants to
Investment Services and Price Associates that it has implemented the
administrative systems and procedures necessary to issue, underwrite for
insurance purposes, service and administer the Contracts and administer the
Separate Accounts in accordance with the terms and provisions of this Agreement.
ARTICLE 8
INDEMNIFICATION AND REMEDIES
8.1 INDEMNIFICATION
(A) INDEMNIFICATION BY SECURITY BENEFIT. In addition to any
indemnification liability Security Benefit may have under any of the Related
Agreements or otherwise, Security Benefit shall indemnify and hold harmless
Investment Services, Price Associates, and their Affiliates and any officer,
director, employee or agent of any of the foregoing, against any and all
losses, liabilities, damages, claims or expenses, joint or several
(including the reasonable costs of settling a claim, investigating or
defending any alleged loss, liability, damage, claim or expense and
reasonable legal counsel fees incurred in connection therewith), to which
Investment Services, Price Associates and/or any such person may become
subject under any statute or regulation, at common law or otherwise, insofar
as such losses, liabilities, damages, claims or expenses result because of a
material breach by Security Benefit of any provision of this Agreement or
which proximately result from any acts or omission of Security Benefit or
Security Benefits's officers, directors, employees, agents (which for these
purposes shall not include an Underwriter Representative or Distributor
Representative as those terms are defined in the Distribution Agreement) or
subcontractors that are not in accordance with this Agreement, including but
not limited to any violation of any federal or state statute or regulation.
Notwithstanding the above, no person shall be entitled to indemnification
pursuant to this Section 8.1(a) if such loss, liability, damage, claim or
expense is due to the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty by the person seeking indemnification.
(B) INDEMNIFICATION BY INVESTMENT SERVICES. In addition to any
indemnification liability Investment Services may have under any of the
Related Agreements, Investment Services shall indemnify and hold harmless
Security Benefit and any Affiliate and any officer, director, employee or
agent of any of the foregoing, against any and all losses, liabilities,
damages, claims or expenses, joint or several (including the reasonable
costs of settling a claim, investigating or defending any alleged loss,
liability, damage, claim or expense and reasonable legal counsel fees
incurred in connection therewith), to which Security Benefit and/or any such
person may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, liabilities, damages, claims or expenses
result because of a material breach by Investment Services of any provision
of this Agreement, or which proximately result from any acts or omission of
Investment Services's officers, directors, employees, agents or
subcontractors that are not in accordance with this Agreement, including but
not limited to any violation of any federal or state statute or regulation.
Notwithstanding the above, no person shall be entitled to indemnification
pursuant to this Section 8.1(b) if such loss, liability, damage, claim or
expense is due to the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty by the person seeking indemnification.
(C) INDEMNIFICATION BY PRICE ASSOCIATES. Price Associates shall
indemnify and hold harmless Security Benefit and any Affiliate and any
officer, director, employee or agent of any of the foregoing, against any
and all losses, liabilities, damages, claims or expenses, joint or several
(including the reasonable costs of settling a claim, investigating or
defending any alleged loss, liability, damage, claim or expense and
reasonable legal counsel fees incurred in connection therewith), to which
Security Benefit and/or any such person may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses,
liabilities, damages, claims or expenses result because of the material
breach by Price Associates of any provision of this Agreement, including but
not limited to any violation of any federal or state statute or regulation.
Further, Price Associates shall indemnify Security Benefit under this
Agreement and the Related Agreements to the extent that its Affiliates are
unable to fulfill their indemnification obligations under this Agreement or
any Related Agreements. Notwithstanding the above, no person shall be
entitled to indemnification pursuant to this Section 8.1(c) if such loss,
liability, damage, claim or expense is due to the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty by the person seeking
indemnification.
(D) GENERAL. After receipt by a party entitled to indemnification
("indemnified party") under this Section 8.1 of notice of the commencement
of any action, if a claim in respect thereof is to be made against any
person obligated to provide indemnification under this Section 8.1
("indemnifying party"), such indemnified party will notify the indemnifying
party in writing of the commencement thereof within a reasonable time after
the summons or other first written notification giving information of the
nature of the claim shall have been served upon the indemnified party;
provided that the failure to so notify the indemnifying party shall not
relieve the indemnifying party from any liability under this Section 8.1
except to the extent that the indemnifying party shall have been prejudiced
as a result of the failure or delay in giving such notice. The indemnifying
party shall be entitled to participate, at its own expense, in the defense,
or, if the indemnifying party so elects, to assume the defense of any suit
brought to enforce any such claim, but, if the indemnifying party elects to
assume the defense, such defense shall be conducted by legal counsel chosen
by the indemnifying party and satisfactory to the indemnified party, to its
Affiliates and any officer, director, employee or agent of any of the
foregoing, in the suit. In the event that the indemnifying party elects to
assume the defense of any such suit and retain such legal counsel, the
indemnified party, its Affiliates and any officer, director, employee or
agent of any of the foregoing in the suit, shall bear the fees and expenses
of any additional legal counsel retained by them. If the indemnifying party
does not elect to assume the defense of any such suit, the indemnifying
party will reimburse the indemnified party, such Affiliates, officers,
directors, employees or agents in such suit for the reasonable fees and
expenses of any legal counsel retained by them.
(E) SUCCESSORS. A successor by law of Investment Services, Price
Associates, or Security Benefit, as the case may be, shall be entitled to
the benefits of the indemnification provisions contained in this Section
8.1.
8.2 RIGHTS, REMEDIES, ETC. ARE CUMULATIVE. The rights, remedies and
obligations contained in this Agreement are cumulative and are in addition to
any and all rights, remedies and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws. Failure of a party
to insist upon strict compliance with any of the conditions of this Agreement
shall not be construed as a waiver of any of the conditions, but the same shall
remain in full force and effect. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.
8.3 INTERPRETATION, JURISDICTION, ETC. This Agreement, together with the
Related Agreements, constitutes the whole agreement between the parties hereto
with respect to the subject matter hereof, and supersedes all prior oral or
written understandings, agreements or negotiations between the parties with
respect to such subject matter. No prior writings by or between the parties with
respect to the subject matter hereof shall be used by a party in connection with
the interpretation of any provision of this Agreement. This Agreement shall be
construed and its provisions interpreted under and in accordance with the
internal laws of the state of Maryland without giving effect to principles of
conflict of laws. This Section 8.3 shall not be construed to deny Security
Benefit, or an Affiliate thereof, of any rights to which it is entitled as an
owner of shares of the Fund.
8.4 SEVERABILITY. This is a severable Agreement. In the event that any
provision of this Agreement would require a party to take action prohibited by
applicable federal or state law or prohibit a party from taking action required
by applicable federal or state law, then it is the intention of the parties
hereto that such provision shall be enforced only to the extent permitted under
the law, and, in any event, that all other provisions of this Agreement shall
remain valid and duly enforceable as if the provision at issue had never been a
part hereof.
ARTICLE 9
TERM AND TERMINATION
9.1 TERMINATION. This Agreement shall terminate of its own accord when all
Contracts issued pursuant to this Agreement and the Related Agreements are no
longer outstanding and no owner, annuitant, or beneficiary thereof is receiving
any annuity benefits from Security Benefit, or after five years from the
Effective Date may be terminated by any party upon six months written notice to
the other parties. Upon termination of this Agreement, Articles 3, 6 and 8 shall
nevertheless survive and continue in full force and effect.
9.2 CHANGES RELATING TO SECURITY BENEFIT. Upon the occurrence of any of the
following events, Investment Services shall have the right, in its sole
discretion, to make arrangements for an exchange of all or a portion of the
Contracts then outstanding, into insurance contracts issued by another insurance
carrier mutually acceptable to the parties, and, upon being notified of
Investment Services' exercise of such right, Security Benefit shall cooperate in
effecting transactions entitled by such exchange in an expeditious manner, it
being understood that Security Benefit may structure the exchange as a
reinsurance or similar transaction, and that Security Benefit shall be entitled
to reasonable compensation from such insurance carrier in connection with such
transaction:
(a) Security Benefit shall have become insolvent or its surplus shall
have become impaired as such terms are defined under applicable
insurance law of Security Benefit's state of domicile;
(b) the A.M. Best & Co. rating of Security Benefit is not "A" (or if
such rating organization changes its rating system after the
Effective Date, an equivalent rating) or better;
(c) the Standard & Poor's claims paying ability rating of Security
Benefit is not "A-" (or if such rating organization changes its
rating system after the Effective Date, an equivalent rating) or
better;
(d) Investment Services determines that Security Benefit is in material
breach of any provision of this Agreement or of any Related
Agreement, unless such breach has been cured within ten (10) days
after receipt of notice of such breach;
(e) in Investment Services' good faith judgment, there is an event,
occurrence or circumstance (including the enactment of federal or
state legislation, court decision, a change in circumstances which
makes the Contracts or insurance contracts of that type (E.G.,
annuity contracts or life insurance policies) an unsuitable
investment for prospective customers of Investment Services, or any
event, occurrence or circumstance which results or is likely to
result in material adverse publicity to any party to this Agreement
or an Affiliate thereof) which substantially and materially
undermines the distribution or servicing of the Contracts or the
reputation and goodwill of any party to this Agreement;
(f) an assignment or transfer of this Agreement by Security Benefit that
does not comply with the provisions of Section 9.4 of this
Agreement;
9.3 CHANGES RELATING TO INVESTMENT SERVICES. Security Benefit shall have the
right, in its sole discretion, to make changes in the Contracts, including
causing a substitution of a Fund or Fund Series, upon the occurrence or
determination of any of the following events:
(a) Investment Services, Price Associates, or an Affiliate thereof files
a voluntary petition in bankruptcy or for reorganization or shall be
the subject of an involuntary petition in bankruptcy for liquidation
or reorganization;
(b) Investment Services, Price Associates, or an Affiliate thereof has a
receiver, liquidator or trustee appointed over its affairs;
(c) Security Benefit determines that Investment Services or Price
Associates is in material breach of any provision of this Agreement
or of any Related Agreement, unless such breach is cured with ten
(10) days after receipt of notice of such breach;
(d) an assignment or transfer of this Agreement by Investment Services
or Price Associates that does not comply with the provisions of
Section 9.4 of this Agreement; or
(e) in Security Benefit's good faith judgment, there is an event,
occurrence or circumstance (including the enactment of federal or
state legislation, court decision, a change in circumstances which
makes the Contracts or insurance contracts of that type (E.G.,
annuity contracts or life insurance policies) an unsuitable
investment for prospective customers of Security Benefit, or any
event, occurrence or circumstance which results or is likely to
result in material adverse publicity to any party to this Agreement
or an Affiliate thereof) which substantially and materially
undermines the distribution or servicing of the Contracts or the
reputation and goodwill of any party to this Agreement.
9.4 ASSIGNMENT AND TRANSFER. This Agreement may not be assigned or
transferred by any party without the prior written consent of the other party
hereto.
ARTICLE 10
GENERAL PROVISIONS
10.1 NOTICE, CONSENT AND REQUEST. Any notice, consent or request required or
permitted to be given by a party to any other party shall be deemed sufficient
if sent by facsimile transmission followed by Federal Express or other overnight
carrier, or if sent by registered or certified mail, postage prepaid, addressed
by the party giving notice to the other party at the following addresses (or at
such other address for a party as shall be specified by like notice);
if to Security Benefit, to:
First Security Benefit Life Insurance and Annuity
Company of New York
Attn: Xxx Xxxx
00 Xxxx Xxx Xxx Xxxx, Xxxxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
copy to:
Security Benefit Life Insurance Company
Attn: Xxx X. Xxx, Esq.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
if to Investment Services, to:
X. Xxxx Price Investment Services, Inc.
Attn: Xxxxx X. Xxxxxxx, Esq.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
if to Price Associates, to:
X. Xxxx Price Associates, Inc.
Attn: Xxxxx X. Xxxxxxx, Esq.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
10.2 CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
10.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which taken together shall be deemed to be one and the
same instrument.
10.4 AMENDMENT. No provisions of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought.
IN WITNESS WHEREOF, the parties hereto have each duly executed this
Agreement as of the day and year first above written.
FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK
By its authorized officer
BY:
---------------------------------
Xxxxx X. Xxxxx
Title: SECRETARY
Date: MAY 1, 1998
X. XXXX PRICE INVESTMENT SERVICES, INC.
By its authorized officer
BY:
--------------------------------
Xxxxxxx X. Xxxxxx
Title: VICE PRESIDENT
Date: MAY 1, 1998
X. XXXX PRICE ASSOCIATES, INC.
By its authorized officer
BY:
-------------------------------
Xxxxxx X. Xxxxx
Title: VICE PRESIDENT
Date: MAY 1, 1998
SCHEDULE 1
CLASSES OF CONTRACTS
SUPPORTED BY SEPARATE ACCOUNTS
LISTED ON SCHEDULE 3
Effective as of the Effective Date, the following classes of Contracts are
subject to the Agreement:
--------------------------------------------------------------------------------
Policy SEC 1933 Act Name of Annuity
Marketing Registration Supporting or Life
Name Number Account
--------------------------------------------------------------------------------
X. Xxxx Price
No-Load 33-83240 X. Xxxx Price Annuity
Variable Annuity Variable Account
of Security Benefit
--------------------------------------------------------------------------------
Effective as of May 1, 1998, the following classes of Contracts are hereby added
to this Schedule 1 and made subject to the Agreement:
--------------------------------------------------------------------------------
Policy SEC 1933 Act Name of Annuity
Marketing Registration Supporting or Life
Name Number Account
--------------------------------------------------------------------------------
X. Xxxx Price
No-Load Immediate 33-83240 X. Xxxx Price Annuity
Variable Annuity Variable Account
of Security Benefit
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, Investment Services, Price Associates, and Security
Benefit hereby amend this Schedule 1 in accordance with Article II of the
Agreement.
XXXXX X. XXXXX XXXXXXX X. XXXXXX
---------------------- -------------------------
Security Benefit Investment Services
XXXXXX X. XXXXX
----------------------
Price Associates
SCHEDULE 2
FUNDS AVAILABLE UNDER
EACH CLASS OF CONTRACTS
Effective as of the Effective Date and January 2, 1997, the following Funds are
available under the Contracts:
--------------------------------------------------------------------------------
Contracts Marketing Name Fund Fund Series
--------------------------------------------------------------------------------
X. Xxxx Price No-Load X. Xxxx Price Equity Income Portfolio
Variable Annuity Equity Series, Inc. New America Growth Portfolio
X. Xxxx Price Personal
Strategy Balanced Portfolio
X. Xxxx Price Mid-Cap Growth
Portfolio
--------------------------------------------------------------------------------
X. Xxxx Price International Stock Portfolio
International
Series, Inc.
--------------------------------------------------------------------------------
X. Xxxx Price Limited-Term Bond Portfolio
Fixed Income X. Xxxx Price Prime
Series,Inc. Reserve Portfolio
--------------------------------------------------------------------------------
Effective as of May 1, 1998, this Schedule 2 is hereby amended to reflect the
following changes in Fund or Fund Series available under the Contracts:
--------------------------------------------------------------------------------
Contracts Marketing Name Fund Fund Series
--------------------------------------------------------------------------------
X. Xxxx Price No-Load X. Xxxx Price Equity Income Portfolio
Immediate Variable Equity Series, Inc. New America Growth Portfolio
Annuity X. Xxxx Price Personal
Strategy Balanced Portfolio
X. Xxxx Price Mid-Cap Growth
Portfolio
--------------------------------------------------------------------------------
X. Xxxx Price International Stock Portfolio
International
Series, Inc.
--------------------------------------------------------------------------------
X. Xxxx Price Limited-Term Bond Portfolio
Fixed Income X. Xxxx Price Prime
Series,Inc. Reserve Portfolio
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, Investment Services, Price Associates and Security Benefit
hereby amend this Schedule 2 in accordance with Article II of the Agreement.
XXXXX X. XXXXX XXXXXXX X. XXXXXX
---------------------- -------------------------
Security Benefit Investment Services
XXXXXX X. XXXXX
----------------------
Price Associates
SCHEDULE 3
SEPARATE ACCOUNTS OF THE SECURITY BENEFIT
COMPANIES SUPPORTING THE CONTRACTS
Effective as of the Effective Date, the following separate account and
subaccounts are subject to the Agreement:
--------------------------------------------------------------------------------
Name of Separate Date Established SEC 1940 Act Type of Product
Account and by Board of Directors Registration Supported by
Subaccounts of the Company Number Account
--------------------------------------------------------------------------------
X. Xxxx Price November 11, 1994 811-8726 Variable Annuity
Variable Annuity
Account of
Security Benefit
* Equity Income
Subaccount
* International
Stock
Subaccount
* Limited-Term
Bond
Subaccount
* New America
Growth
Subaccount
* Personal
Strategy
Balanced
Subaccount
--------------------------------------------------------------------------------
Effective as of January 2, 1997, the following separate accounts and/or
subaccounts are hereby added to this Schedule 3 and made subject to the
Agreement:
--------------------------------------------------------------------------------
Name of Separate Date Established SEC 1940 Act Type of Product
Account and by Board of Directors Registration Supported by
Subaccounts of the Company Number Account
--------------------------------------------------------------------------------
Prime Reserve Not applicable 811-8726 Variable Annuity
Subaccount
Mid-Cap Growth
Subaccount
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, Security Benefit, Investment Services, and Price Associates
hereby amend this Schedule 3 in accordance with Article II of the Agreement.
XXXXX X. XXXXX XXXXXXX X. XXXXXX
---------------------- -------------------------
Security Benefit Investment Services
XXXXXX X. XXXXX
----------------------
Price Associates
SCHEDULE 4
BROKERAGE FIRMS AND MUTUAL FUNDS SPONSORS
American Century
Dreyfus
Fidelity
First Trust
Harbor Capital
Xxxxx Security
Invesco
Xxxx Xxxxx
Xxxxx
Xxxxxxxxx & Xxxxxx
Xxxxxx
Xxxxxxx
Xxxxxxxx
Strong
Vanguard
SCHEDULE 5
CONTRACT SPECIFICATIONS
IN WITNESS WHEREOF, Investment Services, Price Associates and Security
Benefit hereby approve the attached Contract Specifications in accordance with
Article 2 of the Agreement.
XXXXX X. XXXXX XXXXXXX X. XXXXXX
---------------------- -------------------------
Security Benefit Investment Services
XXXXXX X. XXXXX
----------------------
Price Associates
SCHEDULE 6
INTEREST RATE CREDITING PROCEDURES
Security Benefit's and Investment Services' assumptions are based
fundamentally on the premise that the fixed account would not likely be viewed
as a long term investment vehicle, but rather as a temporary holding portfolio
during market swings or to take advantage of dollar cost averaging investment
techniques. Accordingly, Security Benefit assumed only 10% of all contributions
made to the Annuity would be allocated to the fixed account. Other assumptions
were made as to how long the assets would stay in the fixed account and the rate
of new sales. The overall conclusion from the tests suggests that investments
made for the fixed account should be in bonds with durations of two to three
years to match the estimated net asset flows.
Another significant issue discussed was the anticipated asset size of the
fixed account. With current sales projections for 1995, 1996, and 1997, and only
10% assumed to be invested in the fixed account, it is not deemed to be
practical for Security Benefit to segregate a portfolio of this size.
However, if a segregated portfolio is not maintained by Security Benefit,
the methodology of establishing the monthly crediting rate becomes an issue. In
discussing this matter with Investment Services, Security Benefit concluded that
an acceptable approach in setting the periodic rate would be to start with the
yield on 2 1/2 year duration Treasury notes [(2 yr. T-Note + 3 yr. T-Note)/2],
add 60 basis points for anticipated credit spread and then deduct an agreed upon
pricing spread of 145 basis points. The resulting rate will be compared to
direct market competitor rates and one year CD's and may be adjusted. Security
Benefit believes that once the fixed account reaches approximately $200 million,
it will then consider actually segregating a portfolio if it is deemed
beneficial to the contract.
After a period of one year, Security Benefit and Investment Services will
revisit the scenario testing based upon actual experience. Security Benefit and
Investment Services will revisit the scenario testing sooner if market
conditions warrant. Such experience will then be used to adjust asset movement
assumptions if necessary.
SCHEDULE 7
OTHER EXPENSES
(1) Security Benefit shall pay the costs of printing and mailing the
Separate Account Financial Statement; provided, however, that Security
Benefit may make reasonable inquiry regarding the feasibility of
including such Financial Statement in any mailing to all Contract
owners made by Investment Services, and Investment Services may
determine in its sole judgment to include such Separate Account
Financial Statement in such mailing with no charge to Security Benefit
for mailing expenses unless the parties otherwise agree; and
(2) Security Benefit shall pay to Investment Services by each February 28,
the estimated cost of printing and mailing the Annual Statement of
Account to Contract owners based upon the number of Contract owners and
the cost of preparing Security Benefit's normal statement; provided,
however, that Investment Services shall be responsible for printing and
mailing such Annual Statement of Account to Contract owners.
EXHIBIT A
AGENT AND ADMINISTRATION MANUAL
1 X. Xxxx Price and Security Benefit Relationship
* Who is SBG?
* Who is X. Xxxx Price?
* SBG and TRP Relationship
2 What is an Annuity?
* Annuity Basics
* Fixed and Variable Annuities
* Immediate vs. Deferred Annuities
* Accumulation and Annuitization Period
* Single and Periodic Premiums
3 General Provisions of the Contracts
* Free Look Period/Exchanges
* Dollar Cost Averaging/Asset Rebalancing
* Purchase Payments
* Ownership, Annuitant, and Beneficiary
4 Investment Options
* New America Growth
* International Stock and Equity Income
* Personal Strategy Balanced
* Limited Term Bond
* Fixed Interest Account
5 Benefits
* Death Benefit Amount and Distribution
* Periodic Withdrawal
* Systematic Withdrawal
6 Annuity Payout Options
* Dates
* Life Option (1)
* Life Annuity with Periodic Certain (2)
* Unity Refund Annuity (3)/Joint and Survivor Annuity (4)
* Payments for Fixed Period (5)/Payments for Fixed Amount (6)
* Age Recalculation
7 Screens
* User Identification/Client/Alpha Screen
* Values Information/Fixed Interest Account/ACT
* Services/Contract Names and Addresses/Transaction History
* Purchases/Exchanges/Notes
* Forms/DMS/Escheatment
8 Miscellaneous
* Confirmations/Statements of Accounts
* Application Check List
* Letters
* Checks
* Addresses and Writing Instructions
* Processing Questions
9 Administrative Procedures
* Document Handling Procedures
* New Application Procedure-CC Batch Entry Procedures
* New Application Procedure-AA
* Application Approval List
* 1035 Exchanges and Procedures
* DMS Indexing-Records Management
10 Administrative Screen Procedures
* Inquiry
* New Business
* Financial
* Service
* Communications
* Screen Navigation
EXHIBIT B
SERVICE AND QUALITY STANDARDS
Investment Services and Security Benefit both recognize the importance of
providing accurate and timely service to Variable Annuity Contract owners. The
parties, therefore, agree to measure and monitor performance to service
standards and processing quality, and to report results to each on a quarterly
basis. Investment Services and Security Benefit will meet on an annual basis to
review service levels and if necessary, establish an action plan for improving
performance levels.
1. SALES/NEW CONTRACTS
Security Benefit will:
1. Incoming calls from Investment Services representatives -- Security
Benefit will have a group of representatives adequate in number to
answer incoming calls from Investment Services representatives between
the hours of 9 a.m. - 6 p.m. EST each day the New York Stock Exchange
is open. If Security Benefit representatives are unavailable, the
Investment Services representative will leave a message. The Investment
Services representative should be called back within four hours,
provided that calls received by Security Benefit after 2 p.m. EST may
be returned within the first hour of the next business day. As needed,
Security Benefit representatives will be available for conference calls
with Investment Services representatives and potential Contract owners
for complex issues.
2. Contract Establishment -- New contracts will be established on the day
of application receipt, unless the application is not in good order.
Security Benefit will notify Investment Services weekly with the number
of applications being held (number of days and reason) for further
information from the applicant. The contract and welcome letter will be
issued within 2 days of contract establishment.
3. Confirmation Statements -- Security Benefit will send the Contract
owners a confirmation statement the business day after the contract is
established. For one-time transaction events (does not include
automatic transactions), Security Benefit will send the confirmation
the next business day.
4. Security Benefit will provide a weekly status report (see attached
example #1) for Investment Services.
Investment Services will:
1. Sales Calls -- Investment Services will answer all telephone sales
inquiries within the following timeframes:
* 80% of the calls will be answered within 10-20 seconds
* The abandonment rate will not exceed 5%
* If assistance from an Investment Services Representative is
necessary, and a message is taken, the call will be returned the
same day, or if the message was received late in the day, the
following business morning.
2. Fulfillment Kit -- Investment Services will mail the fulfillment kit
the business day after receiving the fulfillment request.
2. ADMINISTRATION AND OPERATION SERVICE STANDARDS
Security Benefit will:
1. Written Transaction Requests -- Security Benefit will process written
requests for transactions on the day of receipt (if a business day).
Investment Services is to be notified of the quantity of requests held
for further information from the contractholder.
2. Contract Maintenance Requests -- Security Benefit will process
contractholder maintenance (i.e., services options) requests and
Investment Services generated requests within two(2) business days of
receipt.
3. Correspondence -- If Security Benefit rejects a Contract owner
transaction request, Security Benefit will send a letter to the
Contract owner by the next business day. If a maintenance request is
rejected, Security Benefit will send a letter to the Contract owner by
the next business day. If Security Benefit rejects an Investment
Services generated transaction or maintenance request, Security Benefit
will notify the Investment Services representative on the day of
receipt of the request for Investment Services action. All non-system
generated correspondence will be noted on the Security Benefit Software
in the Notes screen of the Contract owner's records.
4. Adjustment Requests -- If a contract's records require adjustment,
Investment Services will notify Security Benefit in writing. Adjustment
requests will be processed by Security Benefit on the day of receipt if
received by 1:00 pm EST (after 1:00 p.m. EST will be completed by end
of next business day). Security Benefit will notify Investment Services
of any outstanding adjustment requests weekly . Security Benefit to
provide monthly summary of adjustments processed.
5. Regulatory Changes -- Security Benefit will take timely action to
comply with legislation and/or regulations which result in changes to
the administration of the Variable Annuity Plan.
Investment Services will:
1. Service Calls - Investment Services will answer all telephone service
calls within the following timeframes:
* 80% of the calls will be answered within 20 seconds
* The abandonment rate will not exceed 5%
* If assistance from an Investment Services Representative is
necessary, and a message is taken, the call will be returned the
same day, or if the message was received late in the day, the
following business morning.
2. All financial transactions received via telephone in good order by 4:00
p.m. EST will be processed the same day.
3. All maintenance will be processed within two (2) business days
following receipt. Research requests will be completed within 3
business days. If not completed by the third day, the request will be
forwarded to an Investment Services Supervisor for follow-up with
Security Benefit.
4. Correspondence -- Any correspondence requests handled by Investment
Services will be answered within 3 business days of the requests.
Investment Services will note the correspondence on the Security
Benefit Software in the Notes screen of the contractholder's records.
3. QUALITY TARGET GOALS
Both Security Benefit and Investment Services will maintain the following
quality target goals:
FUNCTION GOAL (%)
Contract Set-up 98
Correspondence Rating Accuracy 98
Contract Maintenance Accuracy 98
Financial Transactions 99
EXHIBIT C
BIGHORN SHEEP LOGO
SCHEDULE 2
FUNDS AVAILABLE UNDER
EACH CLASS OF CONTRACTS
Effective as of the Effective Date and January 2, 1997, the following Funds are
available under the Contracts:
========================================================================================
Contracts Marketing
Name Fund Fund Series
======================================================================================
X. Xxxx Price No-Load X. Xxxx Price Equity X. Xxxx Price Equity Income
Variable Annuity Series, Inc. Portfolio
X. Xxxx Price New America
Growth Portfolio
X. Xxxx Price Personal Strategy
Balanced Portfolio
X. Xxxx Price Mid-Cap
Growth Portfolio
---------------------------------------------------------------------------------------
X. Xxxx Price International X. Xxxx Price International
Series, Inc. Stock Portfolio
---------------------------------------------------------------------------------------
X. Xxxx Price Fixed Income X. Xxxx Price Limited-Term
Series, Inc. Bond Portfolio
X. Xxxx Price Prime Reserve
Portfolio
=======================================================================================
Effective as of May 1, 1998, this Schedule 2 is hereby amended to reflect the
following changes in Fund or Fund Series available under the Contracts:
=======================================================================================
Contracts Marketing
Name Fund Fund Series
=======================================================================================
X. Xxxx Price No-Load X. Xxxx Price Equity X. Xxxx Price Equity Income
Immediate Variable Series, Inc. Portfolio
Annuity X. Xxxx Price New America
Growth Portfolio
X. Xxxx Price Personal
Strategy Balanced Portfolio
X. Xxxx Price Mid-Cap
Growth Portfolio
---------------------------------------------------------------------------------------
X. Xxxx Price International X. Xxxx Price International
Series, Inc. Stock Portfolio
---------------------------------------------------------------------------------------
X. Xxxx Price Fixed Income X. Xxxx Price Limited Term
Series, Inc. Bond Portfolio
X. Xxxx Price Prime Reserve
Portfolio
=======================================================================================
Effective as of February 1, 2001, this Schedule 2 is hereby amended to reflect
the following changes in Fund or Fund Series available under the Contracts:
=======================================================================================
Contracts Marketing
Name Fund Fund Series
=======================================================================================
X. Xxxx Price No-Load X. Xxxx Price Equity X. Xxxx Price Equity Income
Variable Annuity Series, Inc. Portfolio
X. Xxxx Price New America
Growth Portfolio
X. Xxxx Price Personal Strategy
Balanced Portfolio
X. Xxxx Price Mid-Cap Growth
Portfolio
X. Xxxx Price Blue Chip Growth
Portfolio
X. Xxxx Price Health Sciences
Portfolio
X. Xxxx Price Equity Index
Portfolio
---------------------------------------------------------------------------------------
X. Xxxx Price International X. Xxxx Price International
Series, Inc. Stock Portfolio
=======================================================================================
X. Xxxx Price Fixed Income X. Xxxx Price Limited-Term
Series, Inc. Bond Portfolio
X. Xxxx Price Prime Reserve
Portfolio
=======================================================================================
X. Xxxx Price No-Load X. Xxxx Price Equity X. Xxxx Price Equity Income
Immediate Variable Series, Inc. Portfolio
Annuity X. Xxxx Price New America
Growth Portfolio
X. Xxxx Price Personal Strategy
Balanced Portfolio
X. Xxxx Price Mid-Cap
Growth Portfolio
X. Xxxx Price Blue Chip
Growth Portfolio
X. Xxxx Price Health
Sciences Portfolio
X. Xxxx Price Equity
Index Portfolio
---------------------------------------------------------------------------------------
X. Xxxx Price International X. Xxxx Price International
Series, Inc. Stock Portfolio
---------------------------------------------------------------------------------------
X. Xxxx Price Fixed Income X. Xxxx Price Limited-Term
Series, Inc. Bond Portfolio
X. Xxxx Price Prime Reserve
Portfolio
=======================================================================================
IN WITNESS WHEREOF, the parties hereby amend this Schedule 2 in accordance with
Article II of the Agreement.
SECURITY BENEFIT LIFE INSURANCE AND
ANNUITY COMPANY OF NEW YORK
By its authorized officer
By: XXXXX X. XXXXX
---------------------------------------
Title: Secretary
Date: March 14, 2001
X. XXXX PRICE INVESTMENT SERVICES, INC.
By its authorized officer
By: XXXXXXX XXXXXX
---------------------------------------
Title: Vice President
Date: March 23, 2001
X. XXXX PRICE ASSOCIATES, INC.
By its authorized officer
By: XXXXXXX XXXXXX
---------------------------------------
Title: Vice President
Date: March 23, 2001
SCHEDULE 3
SEPARATE ACCOUNTS OF THE SECURITY BENEFIT
COMPANIES SUPPORTING THE CONTRACTS
Effective as of the Effective Date, the following separate account and
subaccounts are subject to the Agreement:
=================================================================================
Name of Separate Date Established by SEC 1940 Act Type of Product
Account and Board of Directors Registration Supported by
Subaccounts of the Company Number Account
=================================================================================
X. Xxxx Price Variable November 11, 1994 811-8726 Variable Annuity
Annuity Account of
Security Benefit
Equity Income
Subaccount
International Stock
Subaccount
Limited-Term Bond
Subaccount
New America Growth
Subaccount
Personal Strategy
Balanced Subaccount
================================================================================
Effective as of January 2, 1997, the following separate accounts and/or
subaccounts are hereby added to this Schedule 3 and made subject to the
Agreement:
=================================================================================
Name of Separate Date Established by SEC 1940 Act Type of Product
Account and Board of Directors Registration Supported by
Subaccounts of the Company Number Account
=================================================================================
Prime Reserve Not applicable 811-8726 Variable Annuity
Subaccount
Mid-Cap Growth
Subaccount
================================================================================
Effective as of February 1, 2001, the following separate accounts and/or
subaccounts are hereby added to this Schedule 3 and made subject to the
Agreement:
=================================================================================
Name of Separate Date Established by SEC 1940 Act Type of Product
Account and Board of Directors Registration Supported by
Subaccounts of the Company Number Account
=================================================================================
Blue Chip Growth Not applicable 811-8726 Variable Annuity
Subaccount
Health Sciences
Subaccount
Equity Index
Subaccount
================================================================================
IN WITNESS WHEREOF, the parties hereby amend this Schedule 3 in accordance with
Article II of the Agreement.
SECURITY BENEFIT LIFE INSURANCE AND
ANNUITY COMPANY OF NEW YORK
By its authorized officer
By: XXXXX X. XXXXX
---------------------------------------
Title: Secretary
Date: March 14, 2001
X. XXXX PRICE INVESTMENT SERVICES, INC.
By its authorized officer
By: XXXXXXX XXXXXX
---------------------------------------
Title: Vice President
Date: March 23, 2001
X. XXXX PRICE ASSOCIATES, INC.
By its authorized officer
By: XXXXXXX XXXXXX
---------------------------------------
Title: Vice President
Date: March 23, 2001
