JANUS ASPEN SERIES
FUND PARTICIPATION AGREEMENT
(Service Shares)
THIS AGREEMENT is made this 3rd day of April, 2007, between JANUS ASPEN
SERIES, an open-end management investment company organized as a Delaware
business trust (the "Trust"), Janus Distributors LLC (the "Distributor") and
First Security Benefit Life Insurance and Annuity Company of New York, a stock
life insurance company organized under the laws of the State of New York (the
"Company"), on its own behalf and on behalf of each segregated asset account of
the Company set forth on Schedule A, as may be supplemented from time to time
(the "Accounts").
W I T N E S S E T H:
WHEREAS, the Trust has registered with the Securities and Exchange
Commission as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the beneficial interest in
the Trust is divided into several series of shares, each series representing an
interest in a particular managed portfolio of securities and other assets (the
"Portfolios"); and
WHEREAS, the Trust has registered the offer and sale of a class of shares
designated the Service Shares ("Shares") of each of its Portfolios under the
Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Trust desires to act as an investment vehicle for separate
accounts established for variable life insurance policies and variable annuity
contracts to be offered by insurance companies that have entered into
participation agreements with the Trust (the "Participating Insurance
Companies"); and
WHEREAS, the Trust has received an order from the Securities and Exchange
Commission granting Participating Insurance Companies and their separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a) and 15(b)
of the 1940 Act, and Rules 6e-2(b)(l5) and 6e-3(T)(b)(15) thereunder, to the
extent necessary to permit shares of the Trust to be sold to and held by
variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans (the "Exemptive Order"); and
WHEREAS, the Company has registered or will register (unless registration
is not required under applicable law) certain variable life insurance policies
and/or variable annuity contracts under the 1933 Act (the "Contracts"); and
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WHEREAS, the Company has registered or will register each segregated asset
account as a unit investment trust under the 1940 Act (each, a "Registered
Account"), unless such registration is not required by applicable law, (each, an
"Unregistered Account" together with the Registered Accounts, the "Accounts");
WHEREAS, the Company desires to utilize the Shares of one or more
Portfolios as an investment vehicle of the Accounts;
WHEREAS, the initial Accounts, Contracts, and Designated Portfolios shall
be listed on Schedule A or Schedule B, as applicable, and the Company shall
notify the Trust in writing within 10 business days of any additions, deletions,
or other modifications to the Accounts, Contracts and Designated Portfolios set
forth on Schedule A or Schedule B;
NOW, THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE I
Sale of Trust Shares
1.1 The Trust shall make Shares of its Portfolios listed on Schedule B
available to the Accounts at the net asset value next computed after receipt of
such purchase order by the Trust (or its agent), as established in accordance
with the provisions of the then current prospectus of the Trust. A Portfolio in
which an Account invests shall become a "Designated Portfolio" hereunder as of
the date an Account first invests in such Portfolio. Shares of a particular
Designated Portfolio of the Trust shall be ordered in such quantities and at
such times as determined by the Company to be necessary to meet the requirements
of the Contracts. The Trustees of the Trust (the "Trustees") may refuse to sell
Shares of any Designated Portfolio to any person, or suspend or terminate the
offering of Shares of any Designated Portfolio if such action is required by law
or by regulatory authorities having jurisdiction or is, in the sole discretion
of the Trustees acting in good faith and in light of their fiduciary duties
under federal and any applicable state laws, necessary in the best interests of
the shareholders of such Designated Portfolio. With respect to payment of
purchase price by the Company and of redemption proceeds by the Trust, the
Company and the Trust shall remit gross purchase and sale orders with respect to
each Designated Portfolio and shall transmit one net payment per Designated
Portfolio in accordance with the provisions of this Article I.
1.2 The Trust will redeem any full or fractional Shares of any
Designated Portfolio when requested by the Company on behalf of an Account at
the net asset value next computed after receipt by the Trust (or its agent) of
the request for redemption, as established in accordance with the provisions of
the then current prospectus of the Trust. The Trust shall make payment for such
Shares in the manner established from time to time by the Trust, but in no event
shall payment be delayed for a greater period than is permitted by the 1940 Act.
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1.3 For the purposes of Sections 1.1 and 1.2, the Trust hereby appoints
the Company as its agent for the limited purpose of receiving and accepting
purchase and redemption orders resulting from investment in and payments under
the Contracts. Receipt by the Company shall constitute receipt by the Trust
provided that i) such orders are received by the Company in good order prior to
the time the net asset value of each Designated Portfolio is priced in
accordance with its prospectus and ii) the Trust receives notice of such orders
by 9:00 a.m. Eastern Time on the next following Business Day. "Business Day"
shall mean any day on which the New York Stock Exchange is open for trading and
on which the Trust calculates its net asset value pursuant to the rules of the
Securities and Exchange Commission.
1.4 Purchase orders that are transmitted to the Trust in accordance with
Section 1.3 shall be paid for no later than 3:00pm Eastern Time on the same
Business Day that the Trust receives notice of the order. Payment for Designated
Portfolio shares redeemed by the Account or the Company shall be made by the
Trust no later than 4:00 p.m. Eastern Time on the next Business Day that the
Trust is properly notified of the redemption order of such shares (unless
redemption proceeds are to be applied to the purchase of shares of other
Designated Portfolios), except that the Trust reserves the right to delay
payment of redemption proceeds to the extent permitted under Section 22(e) of
the 1940 Act and any rules thereunder, and in accordance with the procedures and
policies of the Trust's Shares as described in the then-current prospectus.
Payments shall be made in federal funds transmitted by wire.
1.5 Issuance and transfer of the Trust's Shares will be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Shares ordered from the Trust will be recorded in the appropriate title for each
Account or the appropriate subaccount of each Account.
1.6 The Trust shall furnish prompt notice to the Company of any income
dividends or capital gain distributions payable on the Trust's Shares and it
shall use its commercially reasonable best efforts to provide such notice no
later than 7:30 p.m. Eastern Time on the ex-dividend date. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on a Designated Portfolio's Shares in additional Shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the Accounts, to revoke this election and to receive all such
dividends and capital gain distributions in cash. The Trust shall notify the
Company of the number of Shares so issued as payment of such dividends and
distributions.
1.7 The Trust shall use its commercially reasonable best efforts to make
the net asset value per Share for each Designated Portfolio available to the
Company by 6:30 p.m. Eastern Time each Business Day, and in any event as soon as
reasonably practical after the net asset value per Share is calculated. If the
Trust provides the Company with materially incorrect share net asset value
information, the Trust shall make an adjustment to the number of shares
purchased or redeemed for the Accounts to reflect the correct net asset value
per share. The Trust shall make the determination as to whether an error in net
asset value has occurred and is a material error in accordance with its own
internal policies, which shall be consistent with SEC materiality guidelines.
Any material error in the calculation or reporting of net asset value per share,
dividend or capital gains information shall be
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reported promptly upon discovery to the Company. In the event that any such
material error is the result of the gross negligence of the Trust, or its
designated agent for calculating the net asset value, any reasonable costs for
reprocessing values for each affected underlying Contract owner account, using
the least costly method of correction, shall be at the Distributor's expense.
1.8 The Trust agrees that its Shares will be sold only to Participating
Insurance Companies and their separate accounts and to certain qualified pension
and retirement plans to the extent permitted by the Exemptive Order. No Shares
of any Designated Portfolio will be sold directly to the general public. The
Company agrees that Trust Shares will be used only for the purposes of funding
the Contracts and Accounts listed in Schedule A, as supplemented from time to
time.
1.9 The Trust agrees that all Participating Insurance Companies shall
have the obligations and responsibilities regarding pass-through voting and
conflicts of interest corresponding to those contained in Section 2.8 and
Article IV of this Agreement.
1.10 All orders accepted by the Company shall be subject to the terms of
the then current prospectus of each Designated Portfolio, including without
limitation, policies regarding minimum account sizes, market timing and
excessive trading. The Company shall use its best efforts, and shall reasonably
cooperate with, the Trust to enforce stated prospectus policies regarding
transactions in Shares, particularly those related to market timing. The Company
acknowledges that orders accepted by it in violation of the Trust's stated
policies may be subsequently revoked or cancelled by the Trust and that the
Trust shall not be responsible for any losses incurred by the Company or
Contract or Account as a result of such cancellation. The Trust or its agent
shall notify the Company of such cancellation prior to 12:00 p.m. Eastern Time
on the next following Business Day after any such cancellation.
In addition, the Company acknowledges that the Trust has the right to
refuse any purchase orders for any reason, particularly if the Trust determines
that a Designated Portfolio would be unable to invest the money effectively in
accordance with its investment policies or would otherwise be adversely affected
due to the size of the transaction, frequency of trading by the account or other
factors.
1.11 Company certifies that it is following all relevant rules and
regulations, as well as internal policies and procedures, regarding "forward
pricing" and the handling of mutual fund orders on a timely basis, As evidence
of its compliance, Company shall:
(i) permit Trust or its agent to audit its operations, as
well as any books and records preserved in connection with its provision
of services under this Agreement; or
(ii) provide annual certification to Trust that it is
following all relevant rules, regulations, and internal policies and
procedures regarding "forward pricing" and the handling of mutual fund
orders on a timely basis.
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ARTICLE II
Obligations of the Parties
2.1 The Trust shall prepare and be responsible for filing with the
Securities and Exchange Commission and any state regulators requiring such
filing all shareholder reports, notices, proxy materials (or similar materials
such as voting instruction solicitation materials), prospectuses and statements
of additional information of the Trust. The Trust shall bear the costs of
registration and qualification of its shares, preparation and filing of the
documents listed in this Section 2.1 and all taxes to which an issuer is subject
on the issuance and transfer of its shares.
2.2 (a) The Trust shall provide the Company with a camera ready copy
of the Trust's Shares' current prospectus, statement of additional information,
annual report, semi-annual report and other shareholder communications,
including any amendments or supplements to any of the foregoing, in a
form suitable for printing by the Company.
2.3 (a) The Trust or its investment adviser shall bear the costs of
printing the Trust's prospectus and shareholder reports for Contract owners of
policies for which the Trust is serving as an investment vehicle, The Company
shall bear the costs of distributing such prospectuses and reports to Contract
owners and for printing and distributing such prospectuses and reports for
applicants for policies. The Company shal1 be responsible for printing and
distributing statements of additional information and other shareholder
communications to policy owners and applicants. The Company assumes sole
responsibility for ensuring that such materials are delivered to Contract owners
in accordance with applicable federal and state securities laws.
(b) The Trust will pay or cause to be paid the expenses associated
with printing, mailing, distributing, solicitation and tabulation of proxy
materials to Contract owners with respect to proxies related to the Trust of the
Designated Portfolio, consistent with applicable provisions of the 1940 Act.
(c) If the Company elects to include any materials provided by the
Trust, specifically prospectuses, SAIs, shareholder reports and proxy materials,
on its web site or in any other computer or electronic format, the Company
assumes sole responsibility for maintaining such materials in the form provided
by the Trust and for promptly replacing such materials with all updates provided
by the Trust.
2.4 (a) The Company agrees and acknowledges that the Trust's adviser,
Janus Capital Management LLC or its affiliates ("Janus Capital") is the sole
owner of the name and ▇▇▇▇ "▇▇▇▇▇" and that all use of any designation comprised
in whole or part of Janus (a "▇▇▇▇▇ ▇▇▇▇") under this Agreement shall inure to
the benefit of Janus Capital. Except as provided in Section 2.5, the Company
shall not use any ▇▇▇▇▇ ▇▇▇▇ on its own behalf or on behalf of the Accounts or
Contracts in any registration statement, advertisement, sales literature or
other materials relating to the Accounts or Contracts without the prior written
consent of Janus Capital. All references contained in this Agreement
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to "the name or ▇▇▇▇ '▇▇▇▇▇'" shall include but not be limited to the Janus
logo, the website ▇▇▇.▇▇▇▇▇.▇▇▇ and any and all electronic links relating to
such website. The Company will make no use of the name or ▇▇▇▇ "▇▇▇▇▇" except as
expressly provided in this Agreement or expressly authorized by Janus Capital in
writing. All goodwill associated with the name and ▇▇▇▇ "▇▇▇▇▇" shall inure to
the benefit of Janus Capital or its affiliates. Except as otherwise provided in
Article 6, upon termination of this Agreement for any reason, the Company shall
cease any and all use of any ▇▇▇▇▇ ▇▇▇▇(s).
(b) The Company agrees to permit Janus Capital to use the name of
the Company or the names of any of its affiliates in a general list of customers
of Janus Capital; provided that Company retains the right to withdraw such
permission at any time for any reason by notice to Janus Capital; provided
further that the name of the Company or the names of its affiliates may not,
when so used, be stylized in any manner whatsoever or accompanied by any logo
(i.e., it may simply appear in plain text font as "First Security Benefit Life
Insurance and Annuity Company of New York"). Janus Capital shall make no use of
any Company ▇▇▇▇ belonging to the Company or an affiliate, without the prior
written authorization by the Company. "Company ▇▇▇▇" includes all trademarks,
service marks logos, or tradenames of the Company and its affiliates.
2.5 The Company shall furnish, or cause to be furnished, to the Trust or
its designee, a copy of each Contract prospectus or statement of additional
information in which the Trust or its investment adviser is named prior to the
filing of such document with the Securities and Exchange Commission. The Company
shall furnish, or shall cause to be furnished, to the Trust or its designee,
each piece of sales literature or other promotional material in which the Trust
or its investment adviser is named, at least ten Business Days prior to its use.
No such material shall be used if the Trust or its designee reasonably objects
to such use within ten Business Days after receipt of such material.
2.6 The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust or
its investment adviser in connection with the sale of the Contracts other than
information or representations contained in and accurately derived from the
registration statement or prospectus for the Trust Shares (as such registration
statement and prospectus may be amended or supplemented from time to time),
reports of the Trust, Trust-sponsored proxy statements, or in sales literature
or other promotional material approved by the Trust or its designee, except as
required by legal process or regulatory authorities or with the written
permission of the Trust or its designee.
2.7 The Trust shall not give any information or make any representations
or statements on behalf of the Company or concerning the Company, the Accounts
or the Contracts other than information or representations contained in and
accurately derived from the registration statement or prospectus for the
Contracts (as such registration statement and prospectus may be amended or
supplemented from time to time), or in materials approved by the Company for
distribution including sales literature or other promotional materials, except
as required by legal process or regulatory authorities or with the written
permission of the Company.
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2.8 So long as, and to the extent that the Securities and Exchange
Commission interprets the 1940 Act to require pass-through voting privileges for
variable policyowners, the Company will provide pass-through voting privileges
to owners of policies whose cash values are invested, through the Accounts
(other than variable policyowners whose cash values are invested through an
Unregistered Account which Account is relying on the exclusion from registration
in Section 3(c)(ll) of the 1940 Act), in shares of the Trust. The Trust shall
require all Participating Insurance Companies to calculate voting privileges in
the same manner and the Company shall be responsible for assuring that the
Accounts (other than an Account relying on 3(c)(11) of the ▇▇▇▇ ▇▇▇) calculate
voting privileges in the manner set forth in Section 12(d)(l)(E) of the 1940
Act. With respect to each Account, the Company will vote Shares of the Trust
held by the Account and for which no timely voting instructions from
policyowners are received as well as Shares it owns that are held by that
Account, in the same proportion as those Shares for which voting instructions
are received. The Company and its agents will in no way recommend or oppose or
interfere with the solicitation of proxies for Trust shares held by Contract
owners without the prior written consent of the Trust, which consent may be
withheld in the Trust's sole discretion.
2.9 The Company has determined that the investment restrictions set
forth in the current Trust prospectus are sufficient to comply with all
investment restrictions under state insurance laws that are currently applicable
to the Designated Portfolios as a result of the Accounts' investment therein.
The Company shall notify the Trust of any additional applicable state insurance
laws that restrict the Designated Portfolios' investments or otherwise affect
the operation of the Trust after the date of this Agreement.
ARTICLE III
Representations and Warranties
3.1 The Company represents and warrants:
(a) that it is an insurance company duly organized and in good
standing under the laws of the State of New York and that it has legally and
validly established each Account as a segregated asset account under such
applicable law.
(b) each Registered Account has been registered or, prior to any
issuance or sale of the Contracts, will be registered as a unit investment trust
in accordance with the provisions of the 1940 Act;
(c) the Contracts or interests in the Accounts (1) are or, prior
to issuance, will be registered as securities under the 1933 Act or,
alternatively (2) are not registered because they are properly exempt from
registration under the 1933 Act or will be offered exclusively in transactions
that are properly exempt from registration under the 1933 Act. The Company
further represents and warrants that the Contracts will be issued and sold in
compliance in an material respects with all applicable federal and state laws;
and the sale of the Contracts shall comply in all material respects with state
insurance suitability requirements.
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(d) it is in compliance with all applicable anti-money laundering
laws, rules and regulations including, but not limited to, the U.S.A. PATRIOT
Act of 2001, P.L. 107-56. The Company further represents that it has policies
and procedures in place to detect money laundering and terrorist financing,
including the reporting of suspicious activity.
(e) either the Company or the principal underwriter of any
Unregistered Account holding Shares is a broker or dealer registered under the
Securities Exchange Act of 1934 (the "1934 Act") or is controlled (as defined in
the ▇▇▇▇ ▇▇▇) by a broker or dealer registered under the 1934 Act;
(f) it will not hold any other investment security (as defined in
Section 3 of the ▇▇▇▇ ▇▇▇) in a Subaccount of an Unregistered Account that holds
shares of a Portfolio;
(g) it will seek instructions from holders of interests in an
Unregistered Account holding Shares with regard to the voting of all proxies
solicited in connection with a Portfolio and will vote those proxies only in
accordance with those instructions, or the Company will vote Shares held in its
Unregistered Accounts in the same proportion as the vote all of the Portfolio's
other shareholders; and
(h) it will not substitute another security for Shares held in an
Unregistered Account unless the Securities and Exchange Commission approves the
substitution in the manner provided in Section 26 of the 1940 Act.
Notwithstanding the foregoing, the representations and warranties
contained in Section 3.1(e)(f)(g) and (h) shall not apply to an Unregistered
Account that is relying on the exemption in Section 3(c)(l1) of the ▇▇▇▇ ▇▇▇.
3.2 The Trust represents and warrants:
(a) it is duly organized and validly existing under the laws of
the State of Delaware and that it does and will comply in all material respects
with the 1940 Act, including, without limitation, Rule 38a-l under the 1940 Act.
In addition, the Trust represents and warrants that it is qualified as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Internal Revenue Code,") and that it will maintain such
qualification (under Subchapter M or any successor or similar provisions).
(b) the Trust Shares offered and sold pursuant to this Agreement
will be registered under the 1933 Act and the Trust shall be registered under
the 1940 Act prior to any issuance or sale of such Shares. The Trust shall amend
its registration statement under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its Shares. The Trust
shall register and quality its Shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Trust.
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(c) the investments of each Designated Portfolio has and will
comply with the diversification requirements set forth in Section 817(h) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
thereunder.
(d) The Trust and the Adviser represent and warrant that all of
their trustees/directors, officers, employees, Enhanced Investment Technologies,
LLC and Perkins, Wolf, ▇▇▇▇▇▇▇▇▇ and Company, LLC are and shall continue to be
at all times covered by a blanket fidelity bond or similar coverage for the
benefit of the Trust in an amount not less than the minimum coverage as required
currently by Rule 17g-1 of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
ARTICLE IV
Potential Conflicts
4.1 The parties acknowledge that the Trust's shares may be made
available for investment to other Participating Insurance Companies. In such
event, the Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
Participating Insurance Companies. An irreconcilable material conflict may arise
for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Designated Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Trustees shall promptly inform the Company
if they determine that an irreconcilable material conflict exists and the
implications thereof.
4.2 The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Trustees. The Company will assist the
Trustees in carrying out their responsibilities under the Exemptive Order by
providing the Trustees with all information reasonably necessary for the
Trustees to consider any issues raised including, but not limited to,
information as to a decision by the Company to disregard Contract owner voting
instructions.
4.3 If it is determined by a majority of the Trustees, or a majority of
its disinterested Trustees, that a material irreconcilable conflict exists that
affects the interests of Contract owners, the Company shall, in cooperation with
other Participating Insurance Companies whose contract owners are also affected,
at its expense and to the extent reasonably practicable (as determined by the
Trustees) take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (a) withdrawing the
assets allocable to some or all of the Accounts from the Trust or any Designated
Portfolio and reinvesting such assets in a different investment medium,
including
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(but not limited to) another Designated Portfolio of the Trust, or submitting
the question of whether or not such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
Contract owners the option of making such a change; and (b) establishing a new
registered management investment company or managed separate account.
4.4 If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect to such
Account; provided, however that such withdrawal and termination shall be limited
to the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested Trustees. Any such withdrawal and
termination must take place within six (6) months after the Trust gives written
notice that this provision is being implemented. Until the end of such six (6)
month period, the Trust shall continue to accept and implement orders by the
Company for the purchase and redemption of shares of the Trust.
4.5 If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Trust and terminate this Agreement with
respect to such Account within six (6) months after the Trustees inform the
Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
Trustees. Until the end of such six (6) month period, the Trust shall continue
to accept and implement orders by the Company for the purchase and redemption of
Shares of the Trust.
4.6 For purposes of Sections 4.3 through 4.6 of this Agreement, a
majority of the disinterested Trustees shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Company be required to establish a new funding medium for the Contracts
if an offer to do so has been declined by vote of a majority of Contract owners
materially adversely affected by the irreconcilable material conflict. In the
event that he Trustees determine that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Trust and terminate this Agreement within six (6)
months after the Trustees inform the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the disinterested Trustees.
4.7 The Company shall at least annually submit to the Trustees such
reports, materials or data as the Trustees may reasonably request so that the
Trustees may fully carry out the duties imposed
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upon them by the Exemptive Order, and said reports, materials and data shall be
submitted more frequently if deemed appropriate by the Trustees.
4.8 If and to the extent that Rule 6e-2 and Rule 6e-3(I) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Exemptive Order) on terms and conditions materially different
from those contained in the Exemptive Order, then the Trust and/or the
Participating Insurance Companies, as appropriate, shall take such steps as may
be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such rules are applicable.
ARTICLE V
Indemnification
5.1 Indemnification By the Company. The Company agrees to indemnify and
hold harmless the Trust and each of its Trustees, officers, employees and agents
and each person, if any, who controls the Trust within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Article V) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Company) or expenses
(including the reasonable costs of investigating or defending any alleged loss,
claim, damage, liability or expense and reasonable legal counsel fees incurred
in connection therewith) (collectively, "Losses"), to which the Indemnified
Parties may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in a registration
statement or prospectus for the Contracts or in the Contracts themselves or in
sales literature for the Trust to the extent such sales literature relates to
the Company, Contracts or Accounts and was generated or approved by the Company
on behalf of the Contracts or Accounts (or any amendment or supplement to any of
the foregoing) (collectively, "Company Documents" for the purposes of this
Article V), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that this
indemnity shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon and was
accurately derived from written information furnished to the Company by or on
behalf of the Trust for use in Company Documents or otherwise for use in
connection with the sale of the Contracts or Trust Shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Trust Documents as defined in Section 5.2(a)) or wrongful conduct of the
Company or persons under its control, with respect to the sale or acquisition of
the Contracts or Trust Shares; or
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(c) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Trust Documents as defined in
Section 5.2(a) or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading if such statement or omission was made in reliance upon and
accurately derived from written information furnished to the Trust by or on
behalf of the Company for use in Trust Documents; or
(d) arise out of or result from any failure by the Company to
provide the services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Company.
5.2 Indemnification by the Trust. The Trust agrees to indemnify and hold
harmless the Company and each of its directors, officers, employees and agents
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Article V) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Trust) or expenses
(including the reasonable costs of investigating or defending any alleged loss,
claim, damage, liability or expense and reasonable legal counsel fees incurred
in connection therewith) (collectively, "Losses"), to which the Indemnified
Parties may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the registration
statement or prospectus for the Trust or in sales literature for the Trust to
the extent such sales literature relates to the Trust and was generated or
approved by the Trust (or any amendment or supplement thereto), (collectively,
"Trust Documents" for the purposes of this Article V), or arise out of or are
based upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and was accurately derived from written information
furnished to the Trust by or on behalf of the Company for use in Trust Documents
or otherwise for use in connection with the sale of the Contracts or Trust
Shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of the Trust or persons under its
control, with respect to the sale or acquisition of the Contracts or Trust
Shares; or
(c) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Company Documents or the
omission or 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 if such statement or omission was made in reliance upon
and accurately derived from written information furnished to the Company by or
on behalf of the Trust for use in Company Documents; or
(d) arise out of or result from any failure by the Trust to
provide the services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or arise out
of or result from any other material breach of this Agreement by the Trust.
5.3 Neither the Company nor the Trust shall be liable under the
indemnification provisions of Sections 5.1 or 5.2, as applicable, with respect
to any Losses incurred or assessed against an Indemnified Party that arise from
such Indemnified Party's willful misfeasance, bad faith or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
5.4 Neither the Company nor the Trust shall be liable under the
indemnification provisions of Sections 5.1 or 5.2, as applicable, with respect
to any claim made against an Indemnified Party unless such Indemnified Party
shall have notified the other party in writing 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 or otherwise received by such
Indemnified Party (or after such Indemnified Party shall have received notice of
service upon or other notification to any designated agent), but failure to
notify the party against whom indemnification is sought of any such claim shall
not relieve that party from any liability which it may have to the Indemnified
Party in the absence of Sections 5.1 and 5.2.
5.5 In case any such action is brought against the Indemnified Parties,
the indemnifying party shall be entitled to participate, at its own expense, in
the defense of such action, The indemnifying party also shall be entitled to
assume the defense thereof, with counsel reasonably satisfactory to the party
named in the action. After notice from the indemnifying party to the Indemnified
Party of an election to assume such defense, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it, and the
indemnifying party will not be liable to the Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
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ARTICLE VI
Termination
6.1 This Agreement may be terminated:
(a) At any time by mutual agreement of the parties;
(b) By either party for any reason by delivering six (6) months
advance written notice to the other party.
(c) by any party upon the other party's breach of any material
provision of this Agreement, which breach has not been cured to the satisfaction
of the terminating party within ten (10) days after written notice of such
breach is delivered to the Trust, the Distributor or the Company, as the case
may be.
6.2 Notwithstanding any termination of this Agreement, the Trust shall,
at the option of the Company, continue to make available additional shares of
the Trust (or any Designated Portfolio) pursuant to all of the terms and
conditions of this Agreement for al1 Contracts in effect on the effective date
of termination of this Agreement ("Existing Accounts") provided that the Company
continues to pay the costs set forth in Section 2.3. Additional1y, the Company
shall be permitted to use Janus' ▇▇▇▇, with respect to such Existing Accounts.
6.3 The provisions of Article V shall survive the termination of this
Agreement, and the provisions of Article IV and Section 2.8 shall survive the
termination of this Agreement as long as Shares of the Trust are held on behalf
of Contract owners in accordance with Section 6.2.
ARTICLE VII
Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust:
Janus Aspen Series
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
If to the Distributor:
Janus Distributors LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
If to the Company:
First Security Benefit Life Insurance and
Annuity Company of New York
One Security Benefit Place
Topeka, Kansas 66636
Attention: General Counsel
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ARTICLE VIII
Miscellaneous
8.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
8.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
8.3 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
8.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of State of Colorado.
8.5 The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising, directly or indirectly, under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the assets
of the Trust and that no Trustee, officer, agent or holder of shares of
beneficial interest of the Trust shall be personally liable for any such
liabilities.
8.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the Securities and
Exchange Commission, the National Association of Securities Dealers, Inc., and
state insurance regulators) and shall permit such authorities reasonable access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
8.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
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8.8 The parties to this Agreement acknowledge and agree that this
Agreement shall not be exclusive in any respect.
8.9 Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the prior written approval of the other
party.
8.10 No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties.
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IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Participation Agreement as of the date and year first above
written.
JANUS ASPEN SERIES
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: -----------------------------------
Title: ----------------------------------
JANUS DISTRIBUTORS LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: SVP, MANAGING DIRECTOR
FIRST SECURITY BENEFIT LIFE INSURANCE AND
ANNUITY COMPANY OF NEW YORK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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Schedule A
Separate Accounts and Associated Contracts
Contracts Funded
Name of Separate Account By Separate Account
------------------------ -------------------
Variable Annuity Account A AdvisorDesigns Variable Annuity
Variable Annuity Account B EliteDesigns Variable Annuity
AdvanceDesigns Variable Annuity
SecureDesigns Variable Annuity
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Schedule B
List of Designated Portfolios
Name of Portfolio
All Portfolios of Janus Aspen Series open to new investors (as set forth in the
current prospectus of Janus Aspen Series).
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